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Shaker and Associates, Inc. v. Medical Technologies Group

June 30, 2000

SHAKER AND ASSOCIATES, INC., PLAINTIFF-APPELLEE
v.
MEDICAL TECHNOLOGIES GROUP, LTD., DEFENDANT-APPELLANT (ANNE GOSE, DEFENDANT).



Appeal from the Circuit Court of Cook County No. 94 L 15459 The Honorable Lee Preston, Judge Presiding.

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

The plaintiff gave the defendant a five-year lease from February 1, 1994, through January 31, 1999, for commercial office space in an office building occupied by numerous tenants. The defendant alleges that once it took possession of the premises it encountered a variety of defects in the building that ultimately rendered the space unusable for its business. The defendant stopped paying rent in September 1994. The plaintiff filed a forcible detainer action on September 26, 1994, but the defendant surrendered possession on December 20, 1994, before the date of the trial.

On December 6, 1994, the plaintiff filed this action seeking all rents until the end of the lease as well as attorney fees. The defendant pled various affirmative defenses and also counterclaimed alleging breach of the lease, fraud and negligence. After the defendant twice amended the counterclaims and affirmative defenses, the trial court dismissed them. On October 7, 1998, the court granted summary judgment for the plaintiff, awarding rents from the time the defendants stopped paying until the time that the plaintiff was able to relet the premises. The court also awarded attorney fees.

The defendant appeals the trial court's summary judgment award of lost rents and attorney fees and the dismissal of its counterclaims. The defendant argues that the court erred: (1) in interpreting the lease so as not to include a duty to repair the alleged defects; (2) in dismissing the defendant's counterclaims and affirmative defenses relating to constructive eviction; and (3) in its assessment of damages, particularly the inclusion of lost rents after the defendant quit the premises.

We affirm.

BACKGROUND

The defendant, Medical Technologies Group, Limited (Medtech), is in the business of reviewing claims for medical benefits. On November 30, 1993, Medtech entered into a five-year lease from February 1, 1994, through January 31, 1999, with the plaintiff, Shaker & Associates, Inc., doing business as Shaker Management Company (Shaker), for commercial office space in Oak Park. The premises were located in an office building shared by numerous tenants. The rent was $4,465 per month. As agreed to under the lease, Shaker built out the premises and made certain improvements in order to make them suitable for Medtech's business. Medtech took possession in mid-January 1994.

Shaker alleges that Medtech was consistently late in its rent payments. In September 1994, Medtech stopped paying rent altogether. Shaker then served Medtech with a five-day notice and filed a forcible detainer action on September 26, 1994. Medtech vacated the premises on December 20, 1994, shortly before the trial date.

On December 6, 1994, Shaker filed this suit seeking to collect all rents until the end of the lease as well as attorney fees. Shaker also named Anne Gose, Medtech's chief executive officer, and Ralph Menezes, another officer of Medtech, as defendants, alleging that they had guaranteed the lease. Shaker found a new tenant for the premises starting on February 1, 1997.

Medtech filed a countercomplaint and affirmative defenses on February 14, 1995. Medtech alleged that from the beginning of its occupancy it encountered various defects in the building, which eventually made it unable to continue its business there. In particular, Medtech alleged that Shaker did not provide adequate air conditioning in the summer or heat in the winter. According to Medtech, this problem caused Gose to be hospitalized for heat exhaustion on July 14, 1994, caused one employee to quit and made various other employees ill, and forced the office to be closed on at least one afternoon. Medtech also alleged that frozen pipes and broken skylights caused flooding of the office and that Shaker failed to provide cleaning service and light bulbs as agreed in the lease.

Medtech set out three counts, alleging: (1) that Shaker had violated the express terms of the lease by not providing heat and air conditioning, not providing cleaning services, not providing light bulbs, not keeping the plumbing in satisfactory condition and not making repairs; (2) that Shaker had committed fraud by agreeing to provide heat and air conditioning when it knew or should have known that the system did not function properly; and (3) that Shaker was negligent in failing to inform Medtech of the defective heating, ventilation and air-conditioning (HVAC) unit. Nevertheless, the counterclaim did not specify how Medtech had been harmed by the alleged defects or when the defects occurred. Upon Shaker's motion the trial court dismissed Medtech's counterclaims and struck its affirmative defenses. The counterclaim based on negligence was dismissed with prejudice, but the other counts and defenses were dismissed with leave to replead.

On December 14, 1995, Medtech filed its first amended counterclaim and affirmative defenses. This pleading contained counts for breach of contract and fraud. The allegations of the original countercomplaint were repeated, but with significantly more detail. The complaint set out a clause of the lease that purportedly obligated Shaker to maintain the heating and cooling system, and then charged:

"Notwithstanding Shaker's contractual obligations, Shaker

breached the agreement by;

(a) Beginning on or around February 1, 1994 and continuing until on or around December 20, 1994, Shaker failed to provide Medtech with sufficient heat to the premises to allow for comfortable occupancy of the building. The temperature on the premises was regularly measured in the ...


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