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St. George Chicago Inc. v. Murges

May 05, 1998

ST. GEORGE CHICAGO, INC. AND ST. GEORGE INTERNATIONAL, INC., PLAINTIFFS-APPELLANTS,
v.
GEORGE J. MURGES & ASSOCIATES, LTD., GEORGE J. MURGES, LANE A. CORDAY, AND JOHN T. BOWMAN, DEFENDANTS-APPELLEES.



The opinion of the court was delivered by: Justice Hourihane

Appeal from the Circuit Court of Cook County. No. 93 L 1576

The Honorable Kenneth L. Gillis, Judge, Presiding.

Plaintiff, St. George International, Inc., leased office space to the law firm of Murges, Bowman & Corday, Ltd. (MBC). Following the firm's abandonment of the premises, plaintiff sued MBC for damages under the lease. The matter was tried to a jury, which entered a general verdict in favor of plaintiff and awarded damages of $171,553. The trial court found that the verdict was inconsistent with the jury's answers to three special inter-rogatories, which indicated that plaintiff had failed to mitigate damages, and entered judgment on the special interrogatories in favor of defendants. Plaintiff appeals.

We reverse and remand for a new trial.

BACKGROUND

Plaintiff leased 3,755 square feet of office space to MBC in plaintiff's building located at 33 North Dearborn Street in Chicago. Defendants George J. Murges, Lane A. Corday, and John T. Bowman each guaranteed MBC's lease obligations. Under the ten-year lease, which commenced October 1, 1988, MBC was entitled to a rent abatement for the first 33 months. During this period, MBC paid only its pro rata share of taxes and operating expenses.

In January 1992, Bowman and Corday left MBC and established a law firm at another location. Murges remained in the MBC suite at 33 North Dearborn, but was unable to satisfy MBC's lease obligations. In April 1992, Murges vacated the leased premises. On May 12, 1992, plaintiff served MBC with a landlord's five-day notice, and on August 4, 1992, plaintiff terminated the lease for non-payment of rent, reserving its right to sue for damages under the lease. Plaintiff subsequently filed suit for breach of contract against MBC (now known as George J. Murges & Associates, Ltd.) and the individual lease guarantors. Defendants asserted several affirmative defenses, including the failure to mitigate damages.

Prior to trial, plaintiff moved, pursuant to section 2-1005(d) of the Code of Civil Procedure (Code) (735 ILCS 5/2-1005(d) (West 1996)), for a summary determination that the damages formula in section 21.06 of the lease satisfied its duty to mitigate damages. Section 21.06 states:

"In the event of the termination of this Lease by Landlord as provided for by subparagraph (a) of Section 21.02 or otherwise, Landlord shall be entitled to recover from Tenant all Monthly Base Rent and Operating Expense Adjustments accrued and unpaid for the period up to and including such termination date, as well as all other additional sums payable by Tenant hereunder. In addition, Landlord shall be entitled to recover as damages for loss of the bargain and not as a penalty the sum of (x) the unamortized cost to Landlord, computed and determined in accordance with generally accepted accounting principles, of any tenant improvements, provided by Landlord at its expense, (y) the aggregate sum which at the time of such termination represents the excess if any of the present value of the aggregate Monthly Base Rent and Operating Expense Adjustments at the same annual rate for the remainder of the Term as then in effect over the then present value of the then aggregate fair rental value of the Premises for the balance of the Term, immediately prior to such termination, such present worth to be computed in each case on the basis of a three percent (3%) per annum discount from the respective dates upon which rentals would have been payable hereunder had the Term not been terminated and (z) any damages in addition thereto, including reasonable attorneys' fees and court costs, which Landlord shall have sustained by reason of the breach of any of the covenants of this Lease other than for the payment of Rent." (Emphasis added.)

The trial court denied plaintiff's motion for summary determination, finding in part that section 21.06 is ambiguous and must be construed against plaintiff.

At trial, plaintiff sought to recover $340,264.64 in damages: $33,069.72 for unpaid rent for April through July 1992; $78,712.92 for unamortized tenant improvements; and $228,482 for the "rent differential" pursuant to section 21.06 of the lease.

The jury returned a verdict in favor of plaintiff, awarding damages only on plaintiff's rent differential claim in the amount of $171,553. The jury also answered three special inter-rogatories, each indicating that plaintiff had failed to mitigate damages. The trial court granted defendants' motion for judgment on the special interrogatories and denied plaintiff's subsequent motion for judgment notwithstanding the judgment entered on the special interrogatories or in the alternative for a new trial. Plaintiff appeals. 155 Ill. 2d R. 301.

ANALYSIS

Preliminarily, we consider the motion of defendants Bowman and Corday to strike plaintiff's statement of facts as not in conformity with Supreme Court Rule "341(6)". 155 Ill. 2d R. 341(e)(6). Defendants do not elaborate in what respect the statement of facts is improper or specify the offending portions. Accordingly, the motion will be denied. To the extent plaintiff has failed to provide adequate record citations or engaged in improper argument, such statements will be disregarded. See Rockford Metropolitan Exposition Auditorium & Office Building Authority v. Illinois State Labor Relations Board, 224 Ill. App. 3d 1007, 1012, 586 N.E.2d 1361 (1992).

Plaintiff requests that the judgment be reversed and the cause remanded for entry of judgment in favor of plaintiff for the full amount of its damages. Alternatively, plaintiff asks that the jury verdict be reinstated, or that the judgment be vacated and the case remanded for a new trial. Although plaintiff claims numerous errors by the trial court, the gravamen of its appeal is that the trial court erred when it ruled that the provisions of section 21.06 of the lease did not, as a matter of law, satisfy plaintiff's duty to mitigate damages. We agree.

Because the case was tried under an incorrect theory of law, the appropriate action is to reverse and remand for a new trial, which we do. Sparling v. Peabody Coal Co., 59 Ill. 2d 491, 496, 322 N.E.2d 5 (1974); Gilbert's Ethan Allen Gallery v. Ethan ...


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