United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
JORGE L. ALONSO, District Judge.
Plaintiff sues defendant for its alleged breach of service station leases (Counts I-IV) and for a declaration regarding defendant's lease-end obligations (Count V). The case is before the Court on plaintiff's motion for judgment on the pleadings as to Count V. For the reasons set forth below, the Court denies the motion.
On March 5, 1996, plaintiff, as landlord, and defendant's predecessor in interest, CRM, as tenant, entered into leases for nine retail service station properties in Northern Illinois and a sublease for a tenth retail service station property. (Answer ¶¶ 1, 8-9.) On the same date, and in connection with the lease transactions, plaintiff sold certain equipment to CRM. ( See Compl., Ex. L, Bill of Sale at 1.) The Bill of Sale states that "Purchaser and Seller agree that upon termination or expiration of the Leases, Purchaser will sell the Equipment back to Seller for One Dollar ($1.00)." (Id. )
The leases, which are virtually identical, expire on March 4, 2016. (Answer ¶ 32; see Compl. Exs. B-J, Leases § 2.2; id., Ex. K Sublease § 2.) Each lease requires defendant "[to] keep the Demised Premises, all improvements thereon and all of the Equipment and the Leased Personal Property in a clean and safe condition and in accordance and in compliance with all applicable laws during the Lease Term." (Answer ¶ 12; Compl., Exs. B-J, Leases § 9.2.) In addition, each lease states that:
Upon the termination of this Lease whether by lapse of time or otherwise, Tenant will yield up the Demised Premises, all improvements thereon and all of the Equipment and the Leased Personal Property to Landlord, in the same condition and repair as existed as of the Commencement Date of this Lease....
(Answer ¶ 15; Compl., Exs. B-J, Leases § 9.2.)
On July 23, 2003, the parties executed a Reaffirmation of Lease Obligations Agreement in which defendant acknowledged that it was the legal successor to CRM and "unconditionally reaffirm[ed] its obligations as a principal obligor" under the leases and sublease. (Answer ¶ 11; Compl., Ex. M, Reaffirmation Agreement ¶ 2.)
Plaintiff alleges that "[r]ecent drive-by examinations of various of the Leased Properties... has revealed that substantial repairs will be needed" to return them to the condition they were in at the start of the leases, an allegation defendant denies. (Compl. ¶ 35; Answer ¶ 35.) Plaintiff also alleges that:
[Defendant] has denied that it must return the Leased Properties... to [plaintiff] "in the same condition and repair as existed as of the Commencement Date of this Lease" and incorrectly contends that each Lease contains an implied provision that the Leased Properties... shall be returned to [plaintiff] in a condition subject to twenty years of wear and tear.
(Compl. ¶ 36.) In response to this allegation, defendant "admits that it has disagreed with [plaintiff] regarding interpretation of certain provisions of the Leases" and "contends that it should not be responsible for ordinary wear and tear under the Leases." (Answer ¶ 36.)
Based on these allegations and answers, plaintiff seeks a declaration that defendant: (1) "is obligated at the conclusion of each of the Leases to return each of the Leased Properties, and their improvements and equipment, to [plaintiff] in the same condition that existed as of March 5, 1996; (2) "is obligated at lease-end to replace or repair all equipment at each of the leased Properties that has become worn out, damaged or destroyed"; (3) "is obligated at lease-end to sell back to [plaintiff] for one dollar ($1.00) all equipment specified in the Bill of Sale"; and (4) "is obligated to address and remediate any adverse environmental conditions at the Leased Properties which have come to be present since the inception of the Leases." (Compl., Prayer for Relief.)
When, as here, a party uses Rule 12(c) "to attempt to dispose of [a claim] on the basis of the underlying substantive merits[, ].... the appropriate standard is that applicable to summary judgment, except that the court may consider only the contents of the pleadings." Alexander v. City of Chi., 994 F.2d 333, 336 (7th Cir. 1993); see N. Ind. Gun & Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d 449, 452 (7th Cir. 1998) ...