Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Subway Restaurants Inc. v. Riggs

June 02, 1998


The opinion of the court was delivered by: Presiding Justice McNULTY

Appeal from the Circuit Court of Cook County.

Honorable Willie M. Whiting, Judge Presiding.

Plaintiffs, Subway Restaurants, Inc. and Subway Central, Inc. (both referred to herein as SRI), brought an action for forcible entry and detainer against defendant Dennis W. Riggs as a result of a breach of a sublease between SRI and defendant resulting from defendant's nonpayment of rent due for the premises where he operated his Subway franchise. Defendant filed a motion to dismiss SRI's amended complaint, claiming that SRI did not have legal capacity to sue since it did not have a certificate of authority. 735 ILCS 5/2-619(a)(2) (West 1994). The trial court denied defendant's motion. SRI then filed a motion for summary judgment. Defendant responded to the summary judgment motion and also filed a motion to stay the amended complaint. The trial court granted SRI's motion for summary judgment and denied defendant's motion to stay. Defendant appeals, claiming that the circuit court proceeding should have been stayed and summary judgment in SRI's favor should 1not have been granted since he was inequitably precluded from prosecuting his defense of fraud in the inducement. Defendant also claims on appeal that the trial should have granted his motion to dismiss since plaintiff did not register as a foreign corporation. We reverse and remand.

On March 9, 1994, defendant entered into the Subway franchise agreement with Doctor's Associates, Inc. (DAI), a Florida corporation. On that same date, defendant also entered into a sublease for the premises located at 7740-7748 Milwaukee Avenue, Niles, Illinois, with Subway Restaurants, Inc., a Connecticut corporation, an affiliated company of DAI. The sublease requires the franchisee to assume all of SRI's obligations under the master lease, including payment of rent directly to the landlord who leases the premises to SRI. SRI has the ultimate responsibility for all rental payments due for the premises under the terms and conditions of the master lease.

In 1996, defendant stopped paying rent and other charges due under his sublease for the premises. On May 31, 1996, SRI filed suit in the circuit court seeking to regain possession of the premises and to recover back rent and related charges totaling $10,313.79. On June 18, 1996, defendant and his corporation filed a lawsuit in the United States District Court for the Northern District of Illinois against DAI, Subway Restaurants, Subway Central, and DAI's owners, Fredrick A. DeLuca and Peter H. Buck (federal defendants), alleging fraud in the inducement and seeking damages and rescission under the Illinois Franchise Disclosure Act of 1987 (815 ILCS 705/26 (West 1994)), the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1 (West 1994)), and the common law of Illinois. The federal complaint also alleged that DAI had waived its right to arbitrate by causing SRI to file the eviction action.

DAI then filed in the United States District Court for the District of Connecticut a petition to compel arbitration and a motion to enjoin prosecution of the lawsuit in the northern district of Illinois. On August 21, 1996, the Connecticut district court compelled defendant to arbitrate and enjoined him until further order of the Connecticut district court from commencing or prosecuting or in any way acting in any action related to or arising under any franchise agreement with DAI or any matter or dispute that is or may be subject to the arbitration clause. The district court of Connecticut rejected defendant's claim that he had been fraudulently induced to arbitrate, that the arbitration clause was an unconscionable contract of adhesion, and that DAI had waived its right to arbitration. On June 10, 1997, the United States Court of Appeals for the Second Circuit affirmed this order.

On July 15, 1996, in the circuit court of Cook County, SRI filed its amended complaint for forcible entry and detainer, based on defendant's failure to pay the rent required by the sublease. Defendant moved to dismiss the case on the ground that SRI was not registered to do business in Illinois. The circuit court denied defendant's motion to dismiss.

On September 13, 1997, the owners of the premises (the landlord) were allowed to intervene in the pending action and file a third-party complaint for possession and rent against SRI as a result of SRI's ultimate responsibility for rent due under the master lease. On or about October 31, 1996, defendant vacated the premises. At that time, $17,266.79 in rent and related charges was due and owing the landlord. On November 4, 1996, SRI paid the outstanding amounts in full by tendering a check for $17,266.79. On November 4, 1996, the landlord dismissed its third-party complaint against SRI.

On December 5, 1996, SRI moved for summary judgment against defendant on its claim for unpaid rent and related charges. On January 2, 1997, defendant moved either to stay or dismiss the case. Defendant argued that the Connecticut district court's August 21, 1996, injunction estopped or otherwise precluded the circuit court from rendering judgment for SRI for defendant's breach of the sublease. Defendant also claimed that the sublease, assignment of sublease and franchise agreement are products of fraud in the inducement and, accordingly, are unenforceable as a matter of law.

On February 13, 1997, the circuit court denied the motion to stay and the motion to dismiss and granted SRI's motion for summary judgment in the amount of $17,266.79. The court entered and continued the judgment until April 14, 1997.

On March, 18, 1997, defendant returned to the Connecticut district court for a modification or clarification of the court's injunctions. On April 2, 1997, the district court entered an order denying defendant's motion to modify the injunction. The order stated that the injunction does not pertain to factual legal defenses related solely to the eviction action. However, the order stated that if defendant seeks to inject into the eviction action issues pertaining to the franchise agreement, the injunction is applicable.

On April 14, 1997, defendant moved that the circuit court set aside the order granting summary judgment and stay prosecution of the amended complaint. The court denied the motion and entered final judgment in favor of SRI.

Defendant claims on appeal that the trial court erred in denying defendant's request for a stay and in granting SRI's motion for summary judgment in its action for forcible entry and detainer. Defendant claims that the circuit court's actions were improper since defendant was precluded from asserting fraud in the inducement against plaintiff because of the Connecticut district court's injunction.

A forcible entry and detainer proceeding is a summary statutory proceeding to adjudicate and restore rights of possession and, as such, should not be burdened by matters unrelated to the issue of possession. Sawyier v. Young, 198 Ill. App. 3d 1047, 556 N.E.2d 759 (1990). The only questions that are to be answered in such a proceeding concern which party is entitled to immediate possession and whether a defense that is germane to the distinctive purpose of the action defeats plaintiff's asserted right to possession. First Illinois Bank & Trust v. Galuska, 255 Ill. App. 3d 86, 627 N.E.2d 325 (1993). Claims that are germane to the issue of possession generally fall into one of four categories: (1) claims asserting a paramount right of possession; (2) claims denying the breach of any agreement vesting possession in plaintiff; (3) claims challenging the validity or enforceability of the document upon which ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.