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02/07/94 NUTRASWEET COMPANY v. AMERICAN NATIONAL

February 7, 1994

THE NUTRASWEET COMPANY, PLAINTIFF-APPELLEE,
v.
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, AS TRUSTEE UNDER TRUST AGREEMENT DATED AUGUST 1, 1984, AND KNOWN AS TRUST NO. 61840; F.E. TROTTER, INC., W.H. MCVAY, INC., P.R. CASSIDAY, INC., AND H.C. CORNUELLE, INC., ALL HAWAII PROFESSIONAL CORPORATIONS ACTING AS TRUSTEES UNDER THE WILL AND OF THE ESTATE OF JAMES CAMPELL, DECEASED; FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF AMERICA AND STEIN & COMPANY MANAGEMENT, INC., AN ILLINOIS CORPORATION, DEFENDANTS-APPELLANTS.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE ARTHUR L. DUNNE, JUDGE PRESIDING.

Rehearing Denied May 27, 1994. Released for Publication July 14, 1994. Petition for Leave to Appeal Denied October 6, 1994.

Campbell, O'connor, Jr., Manning

The opinion of the court was delivered by: Campbell

PRESIDING JUSTICE CAMPBELL delivered the opinion of the court:

This appeal arises as a result of a dispute between plaintiff, The NutraSweet Company (NutraSweet), and defendants, American National Bank and Trust Company of Chicago, as Trustee Under Trust Agreement Dated August 1, 1984, and known as Trust No. 61840 (American National Bank), F.E. Trotter, Inc. W.H. McVay, Inc., P.R. Cassiday, Inc., and H.C. Cornuelle, Inc., First Federal Savings and Loan Association of America; and Stein & Company Management, Inc. (Stein), concerning the scope of plaintiff's obligation to make payments in addition to annual base rent during the first 12 months of a lease entered into between NutraSweet and American National Bank. On November 15, 1991, the trial court entered an order: (1) granting judgment in favor of plaintiff on count I of plaintiff's first amended complaint; and (2) dismissing plaintiff's reformation claim (count II) as moot. Defendants now appeal the trial court's order. For the following reasons, we affirm the judgment of the trial court.

The record reveals the following facts. On February 3, 1987, American National Bank and NutraSweet entered into a lease for office space (Lease) in a newly-constructed building located at 1751 Lake-Cook Road, Deerfield, Illinois. The Lease provided for a term of fifteen (15) years, commencing October 1, 1987, and ending on September 30, 2002.

Section 1 of the Lease establishes an annual Base Rent. Section 2 of the Lease establishes an "Additional Rent" which NutraSweet is required to pay in addition to the Base Rent. Section 2 (c) of the lease defines the parameters of the Additional Rent as follows:

"(c) Payments of Tax and Expense Adjustment; Projections.

Tenant shall pay Tax and Expenses Adjustment to Landlord in the manner hereinafter provided.

(i) Tenant shall make payments on account of the Tax and Expense Adjustment (any such payment with respect to any Adjustment Year being also called "Additional Rent Progress Payment") effective as of the Adjustment Date for each Adjustment Year as follows:

(A) Landlord may, prior to each Adjustment Date or from time to time during the Adjustment Year in which such Adjustment Date falls (but not more often than semi-annually), deliver to Tenant a written notice or notices ("Projection Notice") setting forth (1) Landlord's best good faith estimates, forecasts or projections (collectively, the "Projections") of Taxes and Expenses for such Adjustment Year based on Landlord's budgets of Expenses and estimate of Taxes, and (2) Tenant's Additional Rent Progress Payment for such Adjustment Year based upon the Projections. Landlord's budgets of Expenses and the Projections based thereon may be revised by Landlord from time to time (but subject to the above semi-annual restriction) based on changes in rates and other criteria which are components of budget items. For the first twelve (12) calendar months of the Term, the Additional Rent Progress Payment shall not exceed the product of Five Dollars ($5.00) times the Rentable Area of the Premises. " (Emphasis supplied).

The record indicates that pursuant to provision 2(c)(i)(A), during the first 12 months of the Term, October 1, 1987, through September 1988, NutraSweet paid defendants, in addition to Base Rent, $50,597.08 per month for the first nine months, this amount being the product of "Five Dollars per square foot times the square footage of the Rentable Area of the Leased Premises, prorated on a monthly basis," for calendar year 1988. For the last three months of 1988, NutraSweet paid $92,002.63 per month in Additional Rent ProgressPayments. The record shows that NutraSweet's monthly Additional Rent Progress payments for the first 9 months of 1988 totalled $455,373.72, and for the last three months such payments totalled $276,007.89, for a total payment of additional rent in 1988 of $731,381.01.

By letter dated September 20, 1989, defendant Stein, the manager of the leased premises, notified NutraSweet of a "reconciliation of actual versus estimated operating expenses and real estate taxes for the year 1988." Stein's letter stated that the reconciliation was pursuant to Section 2(d)(i) of the Lease. Section 2(d) provides in relevant part as follows:

(d) Tax and Expense Readjustments The following readjustments with regard to the Tax and Expense Adjustment shall ...


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