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Lincare, Inc. v. Midwest Solutions for Sleep

United States District Court, N.D. Illinois, Eastern Division

May 14, 2015

LINCARE INC., Plaintiff,


ROBERT M. DOW, Jr., District Judge.

Before the Court is Plaintiff's motion for partial summary judgment [29]. For the reasons set forth herein, Plaintiff's motion is denied.

I. Background

The Court takes the relevant facts from the parties' Local Rule 56.1 statements, construing the facts in the light most favorable to the nonmoving party (here, Defendants).[1]

A. Asset Purchase Agreement and Sublease

The issue here is one of contract interpretation, regarding whether Plaintiff successfully triggered the renewal of a commercial lease.

Plaintiff Lincare provides in-home respiratory care, infusion therapy, and medical equipment to patients with respiratory conditions. Defendant Sleep Solutions owned a medical supply company located in Arlington Heights, Illinois. In March of 2012, Plaintiff entered into an Asset Purchase Agreement with Sleep Solutions (and Sleep Solutions employees Daniel Loizzi and Joseph Fike, collectively "Defendants"), wherein Plaintiff acquired substantially all of Sleep Solutions' assets. In conjunction with this transaction, the parties also entered into a sublease whereby Plaintiff took over the lease on Defendants' property in Arlington Heights.

The initial term of the sublease began on the date of the acquisition, running through April 13, 2013. Included in the sublease was an irrevocable option for Plaintiff to extend the term of the lease until April 14, 2014, provided that two conditions were met: (a) Plaintiff was not in default of the sublease at the time it exercised the option, and (b) Plaintiff provided written notice to Defendants on or before December 15, 2012. The full provision reads as follows:

The initial term of this Sublease will commence on the Effective Date and continue for a period ending on April 13, 2013. Sublessee will have the irrevocable option, right, and privilege to extend the term hereof until April 14, 2014 (the master lease expiration date), upon the same terms and conditions as set forth herein, except for the rental amount, without the necessity of executing any further agreements; provided (a) Sublessee is not then in default hereunder at the time it exercises any such option, and (b) on or before December 15, 2012, Sublessee notifies Sublessor in writing that it is exercising such option.

[31, at 2.]

B. The Arlington Heights Property Enters Foreclosure

Six months after the acquisition (on or about October 19, 2012), Plaintiff received a letter from Peak Properties (addressed generally to "Tenants/Occupants of 825 East Golf Road, Arlington Heights, IL"), informing Plaintiff that the property was the subject of a foreclosure action pending in the Circuit Court of Cook County, Illinois (Case No. 12 CH 22713). Peak Properties explained in the letter that Michael Zucker had been appointed as the receiver for the property and that Peak Properties was now acting as the property manager. The letter instructed all recipients to "[p]lease discontinue contact with your current landlord immediately and direct all rent payments and other general questions" to Peak Properties [20-6, at 1], and enclosed a copy of the court order. The court order itself stated, "The receiver is authorized to collect all rents relating to the property, and the tenants of the property are directed to pay rent to the receiver from the effective date of this order, until further notice." [20-6, at 4.] In response to this letter, Plaintiff sent its November and December rent payments directly to Peak Properties, but in January of 2013, reverted back to sending its rent payments to Defendant Sleep Solutions. It is unclear as to why Plaintiff stopped sending its monthly rent payments to the receiver. Plaintiff says, passively, that it "was subsequently redirected to resume payment of rent checks" to Defendants, but it does not mention under whose direction it did so. [See 31, at 8; 33, at 6.]

C. Plaintiff's Notice of Renewal of Lease

Plaintiff alleges that on December 10, 2012- i.e., 5 days before the deadline to renew the Arlington Heights lease-its Corporate Leasing Director Natascha Amster sent a letter to Defendants titled "Lease Agreement for 825 EAST GOLF ROAD, SUITE 1144, ARLINGTON HEIGHTS, IL 60005, " enclosing "two copies of the partially executed lease addendums for the property above, " requesting that Defendants "[p]lease return one fully executed original to [her] attention at the address below." [20-3, at 2.] The addendum is a one-page document that reflects Plaintiff's exercise of its option to extend the term of ...

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