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BERCOON, WEINER, GLICK & BROOK v. MANUFACTURERS HA

March 19, 1993

BERCOON, WEINER, GLICK AND BROOK, an Illinois partnership, Plaintiff,
v.
MANUFACTURERS HANOVER TRUST COMPANY, a New York Corporation, Defendant,



The opinion of the court was delivered by: BRIAN BARNETT DUFF

 FACTS AND BACKGROUND

 In October 1990, the plaintiff, Bercoon, Weiner, Glick and Brook ("BWGB") entered negotiations with the defendant, Manufacturers Hanover Trust Co. ("Manufacturers Hanover") to sublease from defendant space at 10 N. LaSalle Street, Chicago. At that time, plaintiff leased space at 225 N. Michigan Street in Chicago. The lease on the 225 N. Michigan premises was not due to expire until January 31, 1997, but provided an option for early January 31, 1992 termination, exercisable by plaintiff if it gave notice by January 31, 1991 and paid $ 92,815.46 in buyout costs. During these negotiations, various offers and counter-offers were made regarding leasing the 10 N. LaSalle premises.

 On January 25, 1991, six days before the option expiration date, the defendant delivered to the plaintiff an eight page document identified as a "revised proposal", "superseding [all] previous offers" to plaintiff. This proposal contained numerous detailed terms and conditions relating to the lease of the 10 N. LaSalle space. It is not disputed that substantially all of the pertinent details relevant to the lease were included. Of central importance in this revised proposal was the security deposit provision, which required plaintiff to apply for a standby $ 95,000 letter of credit within three days after plaintiff signed the formal sublease. In addition, the proposal provided that defendant would reimburse plaintiff for its 225 N. Michigan lease buyout costs after "a mutually agreeable sublease has been executed and delivered by both parties . . . subject to Overlandlord's written approval of the sublease." Finally, the last paragraph of this revised proposal read:

 
Notwithstanding anything to the contrary herein contained, this proposal constitutes the general economic terms of Manufacturers Hanover's proposal to enter into a lease for the subject space. No legal or equitable obligations are imposed on either Manufacturers Hanover or BWGB unless and until a sublease is executed and delivered by Manufacturers Hanover and BWGB.

 The proposal requested plaintiff to sign and return "the letter" if it found the revised terms and conditions acceptable, and to indicate any required additions or clarifications to the proposal. Plaintiff signed the revised proposal on January 26, 1991, after making and initialing several revisions to it. Notably, plaintiff proposed revising its obligation to apply for security deposit funds from three days after it signed a formal lease to three days after Manufacturers Hanover delivered a fully executed lease to BWGB. Along with a cover letter stating "The additions to the letter are for clarification only", plaintiff's attorney delivered the signed revised proposal to defendant on January 28, 1991.

 On January 31, 1991, plaintiff exercised its option to terminate its lease at 225 N. Michigan, paying the buyout costs. On February 1, 1991, Manufacturers Hanover sent BWGB a formalized draft of the sublease for BWGB's review which contained terms in substantial accordance with those in the January 25, 1991 proposal. Subsequently, on approximately February 20, 1991, defendant informed plaintiff that a $ 700,000 letter of credit would be required as a security deposit before the sublease could be executed. Plaintiff refused to pay this amount. Because BWGB had already exercised its lease termination option, effective February 1, 1992, it was required to seek other leasing arrangements on short notice. BWGB eventually leased space at 125 S. Wacker Drive in Chicago.

 DISCUSSION

 The standard governing a decision on a Rule 12(b)(6) motion to dismiss is well established. Only if the allegations of the complaint, and all reasonable inferences drawn therefrom, cannot support any cause of action may this court grant the motion. See generally, Charles Wright & Arthur Miller, 5A Federal Practice and Procedure: Civil 2d § 1357 (West Publishing, 2d ed. 1990). The court must interpret ambiguities in the complaint in favor of the plaintiff, and plaintiffs are free, in defending against the motion, "to allege without evidentiary support any facts [they] please[] that are consistent with the complaint in order to show that there is a state of facts within the scope of the complaint that if proved . . . would entitle [them] to judgment." Early v. Bankers Life & Casualty Co., 959 F.2d 75, 79 (7th Cir. 1992). Under this standard of review, a Rule 12(b)(6) motion to dismiss will be granted when it appears that the plaintiff can prove no set of facts entitling it to relief. Hishon v. King & Spalding, 467 U.S. 69, 73, 81 L. Ed. 2d 59 , 104 S. Ct. 2229 (1984).

 Count I: Breach of Contract

 BWGB alleges that the January 25, 1991 revised proposal constituted a binding contract to lease the space at 10 N. LaSalle St. To properly assert a breach of contract under Illinois law, the complaint must allege facts that reasonably infer that: (1) a contract existed between the plaintiff and defendant; (2) plaintiff performed its obligations under the contract; (3) defendant breached its obligations under the contract; and (4) plaintiff suffered damages as a proximate result of the breach. Berg and Assoc., Inc. v. Nelsen Steel & Wire Co., 221 Ill. App. 3d 526, 536, 162 Ill. Dec. 779 , 580 N.E.2d 1198 (1991), appeal denied, 143 Ill. 2d 635 (1992). Plaintiff's Complaint fails to allege the first of these elements, the existence of a contract.

 Illinois law holds that the intent of the parties controls the question of whether a contract exists. Connecticut Gen. Life Ins. Co. v. Chicago Title & Trust Co., 714 F.2d 48, 50 (7th Cir. 1983). Intent is to be measured objectively, and when a written document is the basis for plaintiff's allegations that a binding contract exists, intent must be "determined solely from the language used when no ambiguity in its terms exists." Empro Mfg. Co. v. Ball-Co Mfg., Inc., 870 F.2d 423, 424 (7th Cir. 1989). Where there is no ambiguity in the writing, a court cannot entertain parol evidence as an aid to divining the parties intent. Quake Constr., Inc. v. American Airlines, Inc., 141 Ill.2d 281, 288, 152 Ill. Dec. 308 , 565 N.E.2d 990 (1990).

 The revised proposal signed by BWGB and Manufacturers Hanover is exactly the type of unambiguous writing alluded to in Empro and in Quake Construction. The words of this proposal, as well as plaintiff's proposed amendments to it, indicate neither party contemplated that it was binding upon them. Manufacturers Hanover prefaced the revised proposal by requesting that BWGB note any places it felt additions to or clarifications of the terms were necessary. In addition, Manufacturers Hanover concluded the revised proposal by stating its "proposal" constituted "general economic terms" (emphasis added) and that no obligations, legal or equitable, would be imposed on either party until a formal sublease had been executed by them. Taken together, these terms do not reasonably ...


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