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09/21/89 Fred Jung, v. Harry Zemel

September 21, 1989

FRED JUNG, PLAINTIFF-APPELLEE

v.

HARRY ZEMEL, DEFENDANT-APPELLANT (KWANG MUN, DEFENDANT)



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FOURTH DIVISION

545 N.E.2d 242, 189 Ill. App. 3d 191, 136 Ill. Dec. 718 1989.IL.1464

Appeal from the Circuit Court of Cook County; the Hon. George W. Rothschild, Judge, presiding.

APPELLATE Judges:

JUSTICE LINN delivered the opinion of the court. JOHNSON and McMORROW, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE LINN

Plaintiff, Fred Jung, brought an action in forcible entry and detainer for possession of commercial premises in a building that he owns. His lessee, Harry Zemel, had used the premises for his dry cleaning business for several years. Zemel had entered a written agreement with Kwang Mun under which Mun was designated "manager" of the business. Jung sued both Zemel and Mun on the grounds that the agreement between Zemel and Mun was actually a sublease and that Zemel's failure to obtain Jung's prior written consent to Mun's subtenancy constituted a violation of the lease. The trial court found in favor of Jung.

On appeal, Zemel contends that his agreement with Mun was not a sublease; that even if it could be so construed, Jung waived any objection he had to Mun's tenancy; and that he did not receive proper notice of the termination of his leasehold.

We reverse.

Background

The evidence adduced at trial reveals the following.

In 1977, Zemel entered into a lease with a prior owner, Marco Fernandez. He improved the premises to accommodate his dry cleaning store, putting in tiles, panelling, an electrical system, and fixtures at his own expense. Under the original lease, and renewal options, Zemel remained in possession as lessee from 1978 through 1984. During this period Jung purchased the building and became Zemel's lessor.

Jung and Zemel agreed to continue the leasing arrangement upon the expiration of the original lease in 1984, and they entered into a new lease with a higher rent but essentially the same terms. Zemel also paid Jung $10,000, the purpose of which is not clear in the record, although it was characterized as "back rent" and "unpaid gas and heat." The new lease was dated January 1985 and Zemel continued paying rent under this lease through the time of trial.

After Zemel had finished remodeling the premises in early 1978 he hired a Spanish woman to run the business. Fernandez, the prior lessor, was aware that this woman was operating the business but he never discussed her with Zemel or asked Zemel about the operation of the store.

In April 1981 Zemel entered into an agreement with Kwang Mun. Zemel wrote the agreement in longhand and both parties signed it. Under the terms of the document, Mun was to manage the cleaners for a three-year period. The hours of operation were set out. All profits were to remain with Mun and she was to pay all expenses. In return, Zemel was to receive $75 per month "as a return on Zemel's investment." Zemel retained the power to designate the firm that would handle all dry cleaning and pressing. He retained title to the fixtures and granted Mun first option to buy if Zemel wanted to sell the store. The agreement contained a clause under which Mrs. Mun and her husband agreed not to compete with Zemel's business within a one-half-mile radius for two years following termination of the agreement. The agreement stated that Mun was not Zemel's employee.

Zemel did not give Jung a copy of this agreement, nor did he request Jung's consent to the arrangement he had with Mun. Zemel testified that he never intended to assign his lease. He also testified regarding the extent and nature of his control over the dry cleaning business.

According to Zemel, Jung learned of his agreement with Mun in late 1984, and he and Jung discussed it in December of that year. Zemel told Jung that with the rent increases and the $10,000 Jung had demanded, he was not making any profit from the store. The money that Mun was paying to ...


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