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03/10/95 J.M. BEALS ENTERPRISES v. INDUSTRIAL HARD

March 10, 1995

J.M. BEALS ENTERPRISES, INC., PLAINTIFF-APPELLEE,
v.
INDUSTRIAL HARD CHROME, LTD., F/K/A C.G. THERKILDSEN, INC., CHARLES GEORGE THERKILDSEN, DEFENDANTS-APPELLANTS.



Appeal from the Circuit Court of Cook County. The Honorable Marvin Ruttenberg, Judge Presiding.

Released for Publication April 13, 1995.

The Honorable Justice Egan delivered the opinion of the court: McNAMARA, P.j., and Zwick, J., concur.

The opinion of the court was delivered by: Egan

JUSTICE EGAN delivered the opinion of the court:

The defendant, Industrial Hard Chrome, Ltd. (IHC), appeals from an order of summary judgment in favor of the plaintiff, J.M. Beals Enterprises, Inc. (Beals), who filed a complaint alleging that the defendant was a holdover tenant pursuant to the Illinois Holdover Statute (735 ILCS 5/9-202 (West 1992)). The order assessed damages for double rent in the sum of $35,519.40. IHC argues that summary judgment was improperly granted because, it maintains, questions of material fact remain unresolved.

The material facts are not in dispute and are based on the pleadings, exhibits, excerpts of the depositions of George Therkildsen, the owner of IHC, James M. Beals, the owner of Beals, Jeffrey Hayes and Sieghard Strelau, employees of IHC, and Gary Gunderson, a general contractor hired by Beals, and the affidavit of Jeffrey Hayes.

Therkildsen purchased IHC from Beals in 1985 after working for Beals as its manager for ten years. The real property was not purchased, and Therkildsen entered into a lease for the premises on or about October 18, 1985. The lease was for a term of seven years and was to expire on December 31, 1992. In July 1992, a dispute arose between Beals and IHC about what equipment and materials belonged to IHC under the purchase agreement and what IHC's responsibilities were with respect to the condition of the premises at the end of the lease.

When Beals and IHC were unable to resolve the dispute, Beals filed an action for a temporary restraining order and preliminary injunction in November, 1992, to prevent IHC from removing certain equipment and materials from the premises. IHC agreed to the temporary restraining order and entered into negotiations with Beals that resulted in a settlement agreement, dated December 10, 1992, which provided that certain equipment was to remain on the premises and that IHC was required to move certain other equipment. All removal work was to be completed by IHC by December 31, 1992, which was also the date of the expiration of its lease.

IHC tried to complete the work pursuant to the settlement agreement, but "despite its best efforts to do so, it was unable to complete the work" and requested an extension from Beals. IHC stayed on the premises after December 31, 1992, "solely to fulfill its obligations pursuant to the settlement agreement." IHC's request for an extension from Beals to complete the work was denied by Beals, which served a demand for possession of the premises on December 31, 1992. IHC relinquished the keys to the property on January 11, 1993, pursuant to Beals' first request for keys. Beals had access to the premises any time after December 31, 1992, and brought a generalcontractor, sub-contractors and real estate personnel onto the premises between December 31, 1992, and January 18, 1993. Additionally, Beals gave keys to the premises to his general contractor.

IHC had moved its business operations to Geneva, Illinois, some time in October, 1992, with a complete start-up during the last week of December, 1992. After December 31, 1992, all of IHC's equipment was out of Beals' premises, and only maintenance people were on the premises. On January 18, 1993, IHC left the premises under the belief that it had completed the work required in the settlement agreement. However, Beals was not satisfied with the condition of the premises on January 18; and IHC had to return in March. It supplied two workers who worked full time for one week to complete work on the premises requested by Beals. The work was done without disruption to the plaintiff's use or possession of the premises.

On January 26, 1993, Beals filed a complaint seeking recovery under the Holdover Statute and for recovery of attorney fees and costs pursuant to the terms of the settlement agreement. On May 11, 1993, Beals filed a motion for summary judgment. After IHC filed its response in opposition, and Beals filed its reply and the judge heard oral argument, the judge granted Beals' motion for summary judgment on August 19, 1993. He granted Beals' prayer for double rent under the Holdover Statute but denied the claim for attorney fees. Beals does not appeal the order denying its prayer for attorney fees.

The Holdover Statute (735 ILCS 5/9-202, (West 1992), the interpretation of which is the heart of this case, provides as follows:

"Wilfully holding over. If any tenant or any person who is in or comes into possession of any lands, tenements or hereditaments, by, from or under, or by collusion with the tenant, wilfully holds over any lands, tenements or hereditaments, after the expiration of his or her term or terms, and after demand made in writing, for the possession thereof, by his or her landlord, or the person to whom the remainder or reversion of such lands, tenements or hereditaments belongs, the person so holding over, shall, for the time the landlord or rightful owner is so kept out of possession, pay to the person so kept out of possession, or his or her legal representatives, at the rate of double the yearly value of the lands, tenements or hereditaments so detained to be recovered by a civil action."

The issues as raised by IHC are two-fold: Does the record disclose, as a matter of law, that IHC withheld possession from Beals; and, if so, does the record disclose, as a matter of law, that IHC's holding over was willful within the meaning of the Holdover Statute? We have found no case in Illinois or in any other jurisdiction factuallyprecisely in point; but the question of what constitutes a holdover tenancy has been considered in many cases throughout the country and sometimes with inconsistent results. (See Holdover Tenancy, 13 A.L.R. 5th 169 (1993).) Similarly, the question of whether the holding-over was willful under the Illinois statute and similar statues has been considered in many cases throughout the country, again sometimes with inconsistent results. (See Damages-Tenants Willful Retention, 7 A.L.R. 4th 589 (1981).) One general principle recognized everywhere is that whether a tenant is a holdover and whether the holding-over was willful are questions of fact. (See e.g., Consumers Distributing Co. v. Hermann (Nev. 1991) 107 Nev. 387, 812 P.2d 1274 (whether tenant was a holdover is a question of fact to be decided in light of the surrounding circumstances); Chapman v. Woolsey (1955), 4 Ill. App. 3d 261, 124 N.E.2d 366 (whether there was a willful holding-over was a question for the jury).) We do not agree with Beals' contention that Chapman v. Woolsey does not represent the law in Illinois. The case cited by Beals, Murphy v. Texaco, (N.D. Ill. 1983), 567 F.Supp. 910, is not at odds with Chapman v. Woolsey. In Murphy, which involved an action for rent and did not involve the holdover statute, the district court ...


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