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GREAT OAK, L.L.C. v. BEGLEY COMPANY

March 3, 2003

GREAT OAK, L.L.C., PLAINTIFF,
v.
BEGLEY COMPANY, DEFENDANT.



The opinion of the court was delivered by: Ronald A. Guzman, United States Judge

MEMORANDUM OPINION AND ORDER

Pending is Defendant Begley Company, L.L.C.'s motion to dismiss counts I-VII of Plaintiff's complaint. For the reasons provided in this Memorandum Opinion and Order, Defendant's motion is granted in part and denied in part.

FACTS

Plaintiff, Great Oak, L.L.C., owns a shopping center in Kankakee, Illinois known as the Meadowview Center. (Pl.'s Compl. 1). The complaint centers on Great Oaks's allegation that Defendant's dry cleaning operations led to the release of hazardous substances into the subsurface soils and groundwater, which allegedly will cause Plaintiff to incur over $2 million in investigation and remediation costs, and will devalue the property. (Id., ¶ 9).

Plaintiff bought the Meadowview Center from Brookview Corporation which first leased 57 Meadowview Center to Meadowview 1 Hour Cleaners on September 29, 1975. (Id., ¶ 1-2). In 1979, this lease was assigned to the Defendant. (Id., ¶ 3). The lease was extended in 1985 to provide for two successive five-year periods and again in 1995 for a three-year period bringing the lease term to September 30, 2001. (Id., ¶ 4-5).

A key term of the lease, which remained the same throughout the extensions of the lease, was paragraph 11 which states:

Upon acceptance and occupancy of this building by Lessee, it is agreed that Lessee at their own expense will keep all improvements otherwise in good repair (injury by fire, or other causes beyond Lessee's control excepted) as well as in a good tenantable and wholesome condition, and will comply with all local or governmental regulations, laws, and ordinances applicable thereto, as well as lawful requirements of all competent authorities in that behalf. Lessee will, as far as possible, keep said improvements from deterioration due to ordinary wear and from falling temporarily out of repair.
(Pl.'s Compl., Ex. 1).

The dry cleaners that was operated on the premises and owned by Begley used toxic chemicals that where allegedly disposed of improperly and caused environmental damage that had to be, or will have to be, investigated and remediated by the Plaintiff. (Pl.'s Compl., ¶ 9, 11). As a result, Great Oak filed a seven-count complaint. Id. Count I alleges breach of lease, mentions paragraph 11 of the lease, and refers to the lease as Exhibit 1. (Pl.'s Compl. ¶ 1-13). Counts II and III allege Nuisance and Negligence, respectively and Counts IV-VII all allege violations of the Illinois Environmental Protection Act. (Pl.'s Compl., pgs. 4-8).

DISCUSSION

In considering Begley's 12(b)(6) motion to dismiss the Court will accept all well-pleaded allegations as true. Dawson v. Gen. Motors Corp., 977 F.2d 369, 372 (7th Cir. 1992). Moreover, this court will consider exhibits to the complaint that are in the form of written instruments as part of the pleadings for the purposes of a motion to dismiss. FRCP 10(c); see also, Bankcard Am. Inc. v. Universal Bancard Sys. Inc., 904 F. Supp. 753 (N.D.Ill. 1995); Cagan v. Intervest Midwest Real Estate Corp., 774 F. Supp. 1089 (N.D.Ill. 1991). After considering all well-pleaded facts, including exhibits in the form of written instruments, this Court will grant a motion to dismiss only where "it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Cushing v. City of Chicago, 3 F.3d 1156, 1159 (7th Cir. 1993) (quoting Hishon v. King & Spalding, 467 U.S. 69, 73 (1984)).

In Count I, entitled "Breach of Lease," Plaintiff alleges that because of Defendant's "failure to comply with and perform the requirements of Paragraph No. 11 of the Lease" Plaintiff has been damaged in an amount exceeding $2 million. (Compl., Count I, ¶¶ 9-12). Specifically Plaintiff alleges that Defendant's dry cleaning operations led to releases of hazardous substances into the subsurface environment, which violates certain sections of the Illinois Environmental Protection Act, 415 ILCS 5/1 et seq thereby breaching paragraph 11. (Complaint, Count I, ¶¶ 9-12).

COUNT I

Defendant puts forth that Count I fails to state a claim for multiple reasons: (1) Paragraph 11 of the lease applies only to improvements to the real property, and does not encompass a tenant's trade fixtures or personal property at issue here; (2) neither Paragraph 11 nor any other part of the lease says anything about environmental liabilities; (3) a "compliance with laws" provision, standing alone, does not require a tenant to comply with laws requiring substantial corrective measures; and (4) any ambiguities in the scope of Paragraph 11 must be construed against the lessor.

It is undisputed that the Lease fails to specifically address the issue of potential environmental liabilities. Defendant first argues that Plaintiff's complaint fails to state a claim for breach of contract because Paragraph 11, the paragraph Plaintiff relies upon to state a claim for breach of contract relates only to improvements to the property rather than environmental contamination. Defendant argues that Plaintiff's alleged interpretation of ...


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