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04/12/96 RICHARD J. SZPILA v. CHRIS BURKE

April 12, 1996

RICHARD J. SZPILA, PLAINTIFF-APPELLANT,
v.
CHRIS BURKE, CHARLES H. HODGES, AND MARGUERITE A. BURKE, A/K/A HTB PARTNERSHIP, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County. The Honorable Patrick F. McLaughlin, Judge Presiding.

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

The opinion of the court was delivered by: Egan

The Honorable Justice EGAN delivered the opinion of the court:

This is an appeal by the lessee-plaintiff, Richard J. Szpila, from a judgment in favor of the lessor-defendants and involves the interpretation of the Residential Landlord and Tenant Ordinance of the City of Chicago (Chicago Municipal Code ยงยง 5-12-010 to 5-12-200 (1992)) (RLTO). The case was decided on summary judgment. The following facts are undisputed except where noted.

On May 1, 1989, the plaintiff entered into a written lease with the defendants for an apartment at 3729 N. Magnolia in Chicago. Chris Burke signed the lease on behalf of the HTB partnership; the other members of the partnership were his wife, Marguerite, and Charles Hodges. There were three dwelling units in the apartment building, and the owners did not live in the building while the plaintiff lived there.

The term of the lease was from May 1, 1989, to May 1, 1990, and the amount of rent was $975 per month. The security deposit the plaintiff paid was also $975. After the expiration of the lease term, the parties orally agreed to renew the lease. The plaintiff claims that they agreed to a month-to-month lease, but the defendants claim it was a year-to-year lease. The rent increased after the first year the plaintiff lived in the building, but the security deposit did not increase. The defendants deposited rent money they collected into the same account in which they held the plaintiff's security deposit.

The plaintiff provided the defendants with 30 days advance notice that he intended to vacate the apartment on September 30, 1993. The defendants agreed to this, and the plaintiff vacated the apartment on September 30, 1993. Although the plaintiff alleged that he left the premises in good condition, normal wear and tear excepted, the defendants claimed that the plaintiff had admitted breaking a key off in the lock of an outdoor gate and had requested that the defendants deduct the cost of the lock repair from his security deposit.

By October 11, 1993, the defendants refunded the plaintiff $926 of his security deposit. They had deducted $49 from the deposit for the repair of the lock. They did not send the plaintiff a receipt for this repair. At no time during the plaintiff's tenancy or before February 1994 did the defendants pay the plaintiff interest on his security deposit. Before filing his complaint, the plaintiff did not ask the defendants for interest on his security deposit or for the $49 they deducted from his security deposit.

On December 6, 1993, the plaintiff filed a complaint against "Chris Burke a/k/a HTB partnership" and later added the other defendants. In the first count of his seven-count complaint, the plaintiff alleged that the defendants violated section 5-12-080(d) of the RLTO by deducting $49 from the $975 security deposit for the lock repair and by failing to send him the receipt for this repair. Section 5-12-080(d) provides that the landlord shall return the tenant's security deposit within 45 days after the tenant vacates the dwelling unit but that the landlord may deduct from the security deposit a reasonable amount necessary to repair any damage. The landlord is required to deliver or mail to the last known address of the tenant an itemized statement of the damages allegedly caused and to attach copies or paid receipts for the repair or replacement.

Counts II through V contained allegations that by failing to pay yearly interest on his security deposit the defendants violated section 5-12-080(c) of the RLTO, which requires a landlord to pay his tenant 5% interest on a security deposit within 30 days after the end of each 12-month rental. Each count II through V corresponded to one of the years, 1990 to 1993, for which the plaintiff alleged that the defendants did not pay him interest on his security deposit.

In count VI the plaintiff alleged that the defendants violated section 5-12-080(a) by keeping his security deposit in the same account with their rent funds. Section 5-12-080(a) provides that a landlord shall hold all security deposits in a federally insured interest-bearing account in a financial institution, and the security deposits shall not be commingled with the assets of the landlord.

In count VII the plaintiff alleged that the defendants did not provide him with a summary of the RLTO as required under section 5-12-170, which provides that a copy of the summary shall be attached to each written rental agreement when the agreement is initially offered to any tenant or prospective tenant.

For each of the counts of the complaint, the plaintiff requested court costs and attorney fees under section 5-12-180 of the RLTO. In addition to court costs and attorney fees the plaintiff requested the following relief: For each of the counts I to VI, the plaintiff requested two times the security deposit ($1,950) as a penalty under section 5-12-080(f) of the RLTO. For count I, the plaintiff also requested a return of the $49 the defendants had deducted from his security deposit. For each of the counts II to V, the plaintiff also requested $48.75 as yearly interest at 5% on his security deposit. For count VII, the plaintiff requested $100 as a penalty under section 5-12-170.

The defendants filed an answer in which they asserted the affirmative defense of laches. The defendants admitted that they had failed to send the plaintiff a receipt for the repair when they returned his security deposit, admitted that they did not pay him interest on his security deposit, admitted depositing rent and the plaintiff's security deposit in the same account and admitted not providing the plaintiff with a summary of the RLTO. They added that, on December 30, 1993, they had offered to settle the case for $3000, which amount would have compensated the plaintiff for the amount they had deducted from his security deposit for the cost of the gate repair, the interest they owed on the security deposit, court costs, attorney fees and an amount equal to two times the security deposit, which they admitted they owed the plaintiff for violating section 5-12-080 of the RLTO.

On February 15, 1994, the plaintiff filed a motion for partial summary judgment on counts II through VII of his complaint. The defendants filed a response to this motion, to which they attached an affidavit by Chris Burke. In this affidavit, Chris Burke asserted that, on February 16, 1994, he issued a $219.38 check to the plaintiff for the interest on the security deposit. It appears that the plaintiff accepted this check because, in his reply to the defendants' response to his motion for summary judgment, he argued that "payment of this amount was understood by all parties [not to] prejudice anyone's rights in the litigation."

The defendants' response also alleged that the defendants were unaware of the provisions of the RLTO that required payment of interest, maintenance of the security deposit in an interest-bearing account separate from the assets of the defendant and the provision requiring that the plaintiff be given a summary of the RLTO. The defendants ...


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