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02/03/89 Board of Education of the v. Edward A. Gorenstein

February 3, 1989

BOARD OF EDUCATION OF THE CITY OF CHICAGO, PLAINTIFF-APPELLANT

v.

EDWARD A. GORENSTEIN, DEFENDANT-APPELLEE



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIFTH DIVISION

534 N.E.2d 579, 179 Ill. App. 3d 388, 128 Ill. Dec. 397 1989.IL.134

Appeal from the Circuit Court of Cook County; the Hon. Richard L. Curry, Judge, presiding.

APPELLATE Judges:

JUSTICE PINCHAM delivered the opinion of the court. MURRAY, P.J., and LORENZ, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE PINCHAM

Plaintiff, the Board of Education of the City of Chicago (the Board), brought this declaratory action to obtain the court's construction of an 89-year ground lease and a declaration of the rights in the property of the Board as lessor and defendant, Edward Gorenstein, as lessee. Gorenstein also filed a declaratory action in which he also sought construction of the lease and a declaration of the rights of the parties. Following an evidentiary hearing, defendant Gorenstein was granted summary judgment. The Board appeals. We affirm.

The undisputed facts are as follows. The subject of this action is a building constructed over 75 years ago and presently occupied by five commercial stores on the first floor. The second floor is uninhabitable and vacant. At all times pertinent to this litigation the Board owned in fee simple absolute land on which the building is situated. On June 27, 1986, the Board entered into an indenture to lease this land to Edward H. Van Ingen under the terms and conditions of an 89-year ground lease which commenced on May 8, 1896, and expired on May 8, 1985. The ground lease provided that the lessee was obligated to "erect, finish and complete at his own expense . . . upon [and land] a building in a good and suitable manner . . . at a minimum cost of fifty thousand dollars ($50,000.)" Van Ingen constructed a class D building of average quality on the land. On October 17, 1966, defendant Gorenstein acquired a leasehold interest in the premises through mesne conveyances.

Article 6 of the ground lease between the Board and Gorenstein in pertinent part states:

"Provided, However, that in the case the said building shall be destroyed or damaged, at any time during the last five years of the term of this lease, the said lessee may, at his option, either rebuild or repair the said building as aforesaid, or allow the said building to remain in the condition in which it is for the remainder of said term. This provision, however, to in no way effect [ sic ] the liability of the lessee to carry out the other provisions of this lease. Said building, so damaged, to be appraised in the same manner as hereinbefore provided." (Emphasis added.)

Article 18 of the ground lease, in pertinent part, states as follows:

"[Lessee], having fully performed all the covenants and agreements in this lease contained on his part to be performed, shall have the right, at any time within 30 days from the expiration of the said term, to appoint an appraiser . . . and upon notice of such appointment in writing, said lessor shall appoint a third appraiser . . . and said three appraisers so appointed shall appraise the actual cash value of any and all buildings and improvements then on said premises exclusive of and not including the value of the land or ground at the terms of the appraisement so made, and shall . . . notify in writing the said lessor and lessee of the appraisal so made by them, and the decision of the said appraisers or any two of them shall be final and binding."

Pursuant to the terms of article 18 of the ground lease, Gorenstein formally notified the Board, by a letter dated April 24, 1985, that he had appointed an appraiser; the Board formally notified Gorenstein, by a letter dated May 21, 1985, that the Board had appointed an appraiser; and the court, by a general order dated June 14, 1985, appointed an appraiser. In a formal report dated November 12, 1985, and addressed jointly to the Board, Gorenstein and the circuit court of Cook County probate division, the three appraisers issued a unanimous opinion that the actual cash value of the building was $250,000. The Board thereafter advised Gorenstein that the Board "disagreed with the opinion of the three appraisers" and that the Board did not intend to pay Gorenstein $250,000 for the building.

Both parties filed motions for summary judgment, but the Board later withdrew its motion for summary judgment, stating that it had found new evidence which raised a genuine ...


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