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PRIME NORTHGATE PLAZA L.P. v. LIFECARE ACQUISITION

November 25, 1997

PRIME NORTHGATE PLAZA LIMITED PARTNERSHIP, a Delaware Limited Partnership, Plaintiff,
v.
LIFECARE ACQUISITIONS CORPORATION, a Florida Corporation and LIFECARE INVESTMENTS, INC., a Florida Corporation, Defendants.



The opinion of the court was delivered by: NORGLE

 CHARLES R. NORGLE, SR., District Judge:

 Before the court is Plaintiff's Motion for Summary Judgment and Defendants' Cross-Motion for Summary Judgment. For the following reasons, Plaintiff's motion is granted in part and denied in part and Defendants' Cross-Motion for Summary Judgment is denied. *fn1"

 I. BACKGROUND

 On December 15, 1992, Defendant Lifecare Acquisition Corporation ("Lifecare Acquision") entered into a ten-year lease agreement with American National Bank and Trust Company of Chicago ("American National Bank"). As part of the lease, Defendant Lifecare Investments, Inc. ("Lifecare Investments") guaranteed "full, faithful and timely payment and performance" by Lifecare Acquisition Corporation (hereinafter Defendants collectively referred to as "Lifecare"). At some time after the lease and guarantee agreement were executed, American National Bank assigned all its rights and interest under the lease to Plaintiff Prime Northgate Plaza Limited Partnership ("PNP"). *fn2"

 During the first year of the lease, Lifecare's rental payments were based on a percentage of gross sales. For the remaining nine years, rental payments were calculated on the square footage occupied by Lifecare. In turn, PNP provided Lifecare with space in the Northgate Plaza to run a child daycare center. It was Lifecare's intent at the time it executed the lease to eventually assign the lease to one of its franchisees. However, by June 1995, no assignment of the December 15, 1992 lease had occurred and Lifecare failed to make any rental payments. Nevertheless, on July 24, 1995, PNP and Lifecare agreed to amend the lease.

 The amendment essentially restructured Lifecare's monthly rental obligations. Although the dollar amount multiplied per square foot increased for all remaining lease years, Lifecare was permitted to pay its pre-July 1995 arrears, $ 53,287.48, in 21 monthly installments of $ 2,537.48. Lifecare's duty to make installment payments ran concurrently with its regular monthly rental obligations. Lifecare Acquisition, as lessee, and Lifecare Investments, as guarantor, executed the amendment. The sections of the lease not addressed in the amendment "remained in full force and effect."

 On October 2, 1995, pursuant to section 16.4 of the lease agreement, *fn3" Lifecare assigned its "rights, liabilities, and duties" under the lease to its franchisee, Miyuki & Tyrone Corp. ("M & T"). The assignment and assumption agreement states that M & T "accepts the foregoing assignment and assumes the liability and duty to perform, fulfill and observe all the terms and conditions of the Lease on the part of [Lifecare] to be performed." In accordance with the lease, Lifecare delivered notice and a copy of the assignment to PNP. At the time of assignment, Lifecare still had not made any payments pursuant to the lease amendment.

 In December 1995, PNP received the first rental payment since the lease was first executed in December 1992. M & T delivered a check in the amount of $ 347.58, although more than $ 29,000.00 was owed at the time. For the following sixteen months, M & T submitted monthly checks substantially less than what was owed under the lease amendment. In fact, by March 1997, M & T had paid PNP a total of $ 39,262.57. However, more than $ 340,000.00 was still due. Thus, on February 29, 1996, PNP sent Lifecare notice of default. On March 25, 1996, PNP filed a two count complaint against Lifecare for breach of the lease and guarantee agreement.

 On March 21, 1997, PNP moved for summary judgment. In its motion, PNP claims that Lifecare is contractually bound by the lease and guarantee agreement to pay monthly rental charges. Lifecare in its cross-motion for summary judgment, claims that it does not owe any sums of money because its duty to pay rent was extinguished when M & T became assignee. Furthermore, Lifecare claims that PNP breached the lease by failing to maintain Northgate Plaza in a manner compatible with a children's daycare center.

 II. DISCUSSION

 Federal Rule of Civil Procedure 56(c) provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c); see also Salima v. Scherwood South, Inc., 38 F.3d 929, 931 (7th Cir. 1994). "One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims and defenses." Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986).

 When considering all the evidence presented in a motion for summary judgment, a court cannot make credibility determinations nor can it choose between competing possible inferences. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). The court views the record, and resolves all reasonable inferences drawn from the record, in the light most favorable to the non-moving party. Plair v. E.J. Brach & Sons, Inc., 105 F.3d 343, 346 (7th Cir. 1997). Accordingly, if the evidence presented by the parties is subject to conflicting interpretations, or if reasonable minds could differ as to its significance, summary judgment must not be granted. See O'Connor v. Chicago Transit Auth, 985 F.2d 1362, 1366 (7th Cir. 1993).

 Yet, the standard does nothing to alter the burden of proof. "If the non-moving party bears the burden of proof on an issue, . . . that party may not rest on the pleadings and must instead show that there is a genuine issue of material fact." Sample v. Aldi, Inc., 61 F.3d 544, 547 (7th Cir. 1995). The non-moving party, therefore, will not survive summary judgment with merely a scintilla of evidence supporting its position. Essex v. United Parcel Serv. Inc., 111 F.3d 1304, 1308 (7th Cir. 1997). Instead, "the question is whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Id. Finally, "summary judgment is ...


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