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06/29/94 JEFFREY M. GOLDBERG & ASSOCIATES v.

June 29, 1994

JEFFREY M. GOLDBERG & ASSOCIATES, LTD. (PREVIOUSLY KNOWN AS JEFFREY M. GOLDBERG, LTD.) AND JEFFREY M. GOLDBERG, INDIVIDUALLY, PLAINTIFFS-APPELLANTS,
v.
COLLINS TUTTLE & COMPANY, INC., A FOREIGN CORPORATION, HARRIS TRUST & SAVINGS BANK AS TRUSTEE UNDER TRUST AGREEMENT DATED OCTOBER 27, 1978, KNOWN AS TRUST NO. 39038, 20 NORTH CLARK STREET LIMITED PARTNERSHIP, WILEY TUTTLE, JUTTA STONE, HERBERT PAPOCK, AND HIRO REAL ESTATE COMPANY, A FOREIGN CORPORATION, DEFENDANTS-APPELLEES.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE EDWARD SKLODOWSKI and EDWARD HOFERT, JUDGES PRESIDING.

Rizzi, Tully, Greiman

The opinion of the court was delivered by: Rizzi

JUSTICE RIZZI delivered the opinion of the court:

This action was brought by plaintiffs Jeffrey M. Goldberg & Associates, Ltd. (Goldberg & Associates), and Jeffrey M. Goldberg, individually against defendants Collins Tuttle & Co. (Collins Tuttle), the managing agent of the property located at 20 North Clark Street, in Chicago, Illinois (property/building); Harris Trust and SavingsBank, the legal title holder of the property, as trustee under Trust number 39038 (Harris Trust); 20 North Clark Limited Partnership (Clark Partners), the beneficial owner of the trust; Wiley Tuttle, the president of Collins Tuttle and a general partner in Clark Partners; Jutta Stone, a vice-president and the Chicago manager of Collins Tuttle and a limited partner in Clark Partners; and Herbert Papock, an officer of Collins Tuttle and a general partner in Clark Partners; in a dispute over a lease for office space in suite 3100 of the building. Later, plaintiffs added Hiro Real Estate Company (Hiro) as a defendant. Plaintiffs invoked the doctrine of promissory estoppel and alleged that defendants were guilty of fraud. These claims were dismissed on the basis that plaintiffs' reliance on the words and conduct of defendants was unreasonable as a matter of law. Plaintiffs appeal the dismissal of the pleadings. We reverse and remand.

The issues for review by this court are (1) whether the trial court erred in dismissing plaintiffs' promissory estoppel claims; (2) whether the trial court erred in dismissing plaintiffs' fraud claim; (3) whether the trial court erred in refusing to allow plaintiffs to file a third amended complaint; and (4) whether the judgment of the trial court should be affirmed on the basis of plaintiffs' failure to cite to the record in their statement of facts in their appellate brief.

In April of 1981, plaintiff entered into a lease with Collins Tuttle for office space at 20 North Clark Street. The lease was executed by Jeffrey M. Goldberg on behalf of Goldberg & Associates and Jutta Stone on behalf of Collins Tuttle. In late 1986, plaintiff Goldberg & Associates began to look for a new larger office space in order to meet the requirements of its growing law practice. Stone discovered that plaintiff was considering relocating and she contacted plaintiffs in an effort to retain them as tenants in the building. Stone urged plaintiffs to consider leasing suite 3100. Ultimately, plaintiffs and Stone agreed that the firm would lease suite 3100 pending the completion of drawings for improvements of said suite and the receipt of an estimate for the costs of construction.

In May of 1987, Stone mailed plaintiff a lease. Pursuant to the parties' agreement, plaintiff made an initial payment of $30,000 to Collins Tuttle; employed architects and designers to draft plans for suite 3100; designed and ordered custom built furnishings, woodwork and cabinets for suite 3100; and employed personnel to supervise the construction and improvements. Simultaneously, Collins Tuttle demolished the all impediments in suite 3100 in accordance with the plans and drawings submitted to it by plaintiffs, under the supervision of plaintiffs' architects.

On or about July 13, 1987, plaintiffs returned an executed leaseto Collins Tuttle. Stone acknowledged having received the lease and confirmed that defendants had agreed to it. By this time, Collins Tuttle had spent approximately $100,000 on construction in suite 3100 pursuant to plaintiff's plan and construction was 75% complete. Plaintiff had likewise spent a considerable amount of money for custom built and designed cabinets and telephone and computer systems, and had actually paid for the supervision of the renovation which was performed by Collins Tuttle employees. On July 23, 1987, plaintiffs were informed by Stone that the building was being sold to Hiro but that the lease agreement was binding. Later, on August 20, 1987, plaintiffs were advised that Hiro had refused to permit Collins Tuttle to honor its agreement with plaintiffs. Collins Tuttle, at Hiro's request, attempted to convince plaintiffs to agree to a lease requiring them to pay substantially higher rent.

On August 28, 1987, plaintiffs filed a complaint to enjoin the sale of Collins Tuttle to Hiro. The trial court ordered Collins Tuttle to tender a lease to plaintiffs. Collins Tuttle then tendered a lease to plaintiffs which was identical to a lease that it refused to sign at an earlier date. Goldberg & Associates executed the lease and returned it to Collins Tuttle. Collins Tuttle, however, refused to honor this second lease on the basis that its counsel, Stanton Schuman, had submitted the lease to plaintiff in error. Subsequently, a third lease, containing the objectionable terms requested by Hiro, was tendered to plaintiffs and executed by all of the parties.

On September 16, 1988, plaintiffs filed an amended complaint joining Hiro as a defendant. Collins Tuttle and Hiro moved to dismiss plaintiffs' amended complaint on the basis that plaintiffs' claims were precluded by application of the Statute of Frauds. Defendants' motion was denied.

On November 16, 1989, plaintiffs filed an amendment to their complaint. Defendants responded by attempting to remove the case to federal court. Ultimately, the cause was remanded back to the circuit court of Cook County with an award to plaintiffs of their expenses and costs incurred as a result of the improvement transfer. Thereafter, defendants filed a motion to dismiss the amendment. On September 18, 1990, the trial court denied defendants' motion to dismiss plaintiffs' fraud claim, but dismissed all counts in which plaintiffs alleged breach of contract. The court relied on paragraph 24-J of the lease in dismissing plaintiffs' claims relying on estoppel. Paragraph 24-J reads as follows:

Submission of this lease for examination of signature by tenant does not constitute a reservation or option or agreement to lease, but shall only be binding upon landlord when it has been fully executedand delivered by landlord. This lease contains the entire agreement of the parties and may not be modified except in writing.

On December 3, 1990, plaintiffs moved to reconsider the order of September 18, 1990. The trial court granted plaintiffs leave to file an amended complaint. In so doing, the court noted that plaintiffs would be adding additional allegations in order to support their claim of estoppel, that estoppel is a matter of fact not an issue of law, and that the contract provision requiring execution by both parties would not bar an action based upon estoppel.

On February 6, 1991, plaintiffs filed their second amended complaint. In count I of the second amended complaint, plaintiffs sought specific performance from Collins Tuttle of Collins Tuttle's alleged agreement to lease the premises. In count III, plaintiffs sought damages from defendants for breach of an alleged agreement to lease the premises. Counts I and III were based on the doctrine of promissory estoppel. In count IV, plaintiffs sought damages from defendants for an alleged fraud. Defendants subsequently moved to dismiss the second amended complaint. During a May 9, 1991, hearing on the motions, the trial Judge commented: "I have seen the language, I'm aware of the language, and I am aware of its ...


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