The opinion of the court was delivered by: Justice Greiman
Appeal from the Circuit Court of Cook County. The Honorable Stephen A. Schiller, Judge Presiding.
Plaintiff Edward F. Napleton sought a declaratory judgment establishing his rights regarding an option to purchase certain real estate that he leased from defendant Ray Buick, Inc. The circuit court granted summary judgment in plaintiff's favor, determining that plaintiff properly exercised the option and that the lease and any unexercised options to extend the lease must be considered in applying the formula to establish the purchase price of the real estate. Defendant now appeals.
For the reasons that follow, we affirm.
On November 26, 1996, plaintiff filed a declaratory judgment action alleging that in July 1975 defendant owned certain real property commonly known as 6550 West 95th Street in Oak Lawn. Plaintiff alleged that defendant leased the property to LaSalle National Bank, as trustee, and that the lease contained an option to purchase at any time after the tenth lease year upon the lessee giving 90 days' prior written notice of its election to exercise the option. Plaintiff alleged that under the lease, if the lessee elected to purchase the property, the purchase price would be the appraised value of the property exclusive of the value of certain improvements as determined by appraisers selected and qualified pursuant to the lease.
The complaint further alleged that plaintiff purchased the leasehold interest in the property and on September 25, 1996, plaintiff sent a letter notifying defendant that he exercised the option to purchase. Plaintiff also notified defendant that he had appointed an appraiser for the purposes of determining the purchase price. Plaintiff alleged that defendant failed to appoint an appraiser within a reasonable time.
In count I, plaintiff asked the court to declare that defendant waived its right to appoint an appraiser, and in count II, plaintiff asked the court to declare that defendant is estopped from appointing an appraiser. In count III, plaintiff alleged that defendant agreed to sell the real estate to plaintiff for the "appraised value," which plaintiff alleged was the fair market value of the real estate, "including all encumbrances." Plaintiff asked the court to declare that the fair market value should take into account the ground lease and all other encumbrances.
The ground lease agreement contains the following relevant provisions:
*** The Land together with the rights, privileges and easements thereunto belonging or in anywise thereunto appertaining, is hereinafter collectively referred to as the 'Demised Premises'.
PRIMARY TERM AND RENEWAL TERMS
Section 3. Lessee shall have three (3) options to extend the primary term for three successive periods of five (5) years each; each of which said options to extend shall be exercised by Lessee giving to Lessor written notice of Lessee's election so to do not less than one hundred eighty (180) calendar days prior to the expiration of the primary term, or the then current renewal term, as the case may be. All provisions of this lease applicable to the primary term shall apply to each of the renewal terms.
BASIC RENT Section 1. Lessee covenants and agrees to pay Lessor *** installments of rent (hereinafter called 'Basic Rent') as follows:
*** C.During each lease year of each of the following 5-year periods, [after the initial ten years,] *** Lessee shall pay to Lessor annual rent, in an amount equal to Ten percent (10%) of the appraised value of the Demised Premises (exclusive of the value of all Improvements) determined immediately prior to the commencement of each such 5-year period in accordance with the provisions of Section 2 of this Article IV ***.
*** Section 2. The appraised value of the Demised Premises shall be determined jointly by an appraiser appointed by Lessor and an appraiser appointed by Lessee. Said appraisers shall be appointed by Lessor and Lessee respectively not less than one hundred twenty (120) days prior to the date upon which the next basic rent adjustment is to become effective.