UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

PAYLESS SHOESOURCE, INC., )

a Missouri corporation, )

)

Plaintiff, )

)

v. ) 12 C 4159

)

DIMUCCI DEVELOPMENT )

CORPORATION OF CICERO II, )

)

Defendant. )

MEMORANDUM OPINION

CHARLES P. KOCORAS, District Judge:

This matter comes before the Court on the motion of Plaintiff Payless 

ShoeSource, Inc. (“Payless”) for partial summary judgment pursuant to Federal Rule 

of Civil Procedure 56. For the following reasons, the motion is granted.

BACKGROUND

The following facts are derived from the parties’ respective statements and 

exhibits filed pursuant to Northern District of Illinois Local Rule 56.1. The Court 

reviews each Local Rule 56.1 statement and disregards any argument, conclusion, or 

assertion unsupported by the evidence in the record. Payless, a Missouri corporation 

with its principal place of business in Kansas, operates retail stores that sell shoes and 

related accessories. Defendant DiMucci Development Corporation of Cicero II 
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(“DiMucci”) is an Illinois corporation with its principal place of business in Illinois. 

On October 27, 2003, Payless and DiMucci entered into a lease (the “Lease”) under 

which Payless agreed to rent 4,000 square feet of space in the Cicero Marketplace 

Shopping Center (the “Shopping Center”) in Cicero, Illinois.

In addition to the required rent payments, the Lease also calls for Payless to pay 

a proportionate share of DiMucci’s expenses for: (i) common area maintenance 

(“CAM”); (ii) real estate taxes (“Taxes”); and (iii) insurance (“Insurance”) 

(collectively “Pass-Through Expenses”). Section 9.03 of the Lease (“Section 9.03”) 

defines Payless’s obligation with respect to Taxes. According to Section 9.03, 

Payless will pay DiMucci monthly estimates of Taxes, and the two sides then will

reconcile any differences at the end of each year as specified in the lease (“Lease 

Year”). Specifically, within ninety days of the end of each Lease Year, DiMucci is 

required to submit an invoice containing the amount that Payless owes in Taxes, and 

Payless must remit any unpaid Taxes within thirty days of receipt of the invoice. If 

Payless has overpaid any Taxes, DiMucci must deduct this overpayment from future 

charges for Taxes.

Payless is obligated to pay Taxes in a proportionate share, and this share is 

determined pursuant to Section 7.02 of the Lease (“Section 7.02”). According to 

Section 7.02, Payless’s proportionate share of Taxes consists of the space which it 

leases (4,000 square feet) divided by the gross leasable floor area of the Shopping 

Center (37,771 square feet) (approximately 10.59%). The proportionate share of 
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Taxes is limited by a tax cap (the “Tax Cap”). According to the Tax Cap, the 

proportionate share may not exceed the lesser of: (i) actual increases in the taxes; or 

(ii) 105% of Payless’s proportionate share of Taxes for the preceding Lease Year. 

The Tax Cap also limits Payless’s proportionate share to $20,000 during the first 

Lease Year.

Payless has for several years disputed the proportionate share of Taxes charged 

by DiMucci. When DiMucci threatened to commence eviction proceedings against 

Payless for unpaid Taxes, Payless remitted under protest the amount that DiMucci 

demanded. On May 30, 2012, Payless filed a two count first amended complaint 

against DiMucci. Count I alleges breach of contract with respect to the Lease in that 

DiMucci allegedly overcharged for Pass-Through Expenses. Count II seeks a 

declaratory judgment pursuant to 28 U.S.C. § 2201 pertaining to a provision of the 

Lease that is unimportant for purposes of the instant motion. On June 19, 2013, 

Payless filed a motion for partial summary judgment pursuant to Federal Rule of Civil 

Procedure 56 regarding the breach of contract claim. Payless does not seek 

adjudication of issues regarding CAM or Insurance charges; rather, the instant motion 

pertains solely to the Taxes. Payless seeks: (i) damages in the principal amount of 

$72,979.14; (ii) prejudgment interest; (iii) costs; (iv) expenses; and (v) attorneys’ fees.

LEGAL STANDARD

Summary judgment is appropriate when the pleadings, discovery, disclosures, 

and affidavits establish that there is no genuine issue of material fact, such that the 
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movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The movant 

bears the initial burden of showing that no genuine issue of material fact exists. 

Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). The burden then shifts to the nonmoving party to show through specific evidence that a triable issue of fact remains on 

issues on which the movant bears the burden of proof at trial. Id. at 325. The nonmovant may not rest upon mere allegations in the pleadings or upon conclusory 

statements in affidavits; it must go beyond the pleadings and support its contentions 

with documentary evidence. Id. A genuine issue of material fact exists when, based 

on the evidence, a reasonable jury could find in favor of the non-movant. Anderson v. 

Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In considering a motion for summary 

judgment, a court construes all facts and draws all reasonable inferences in favor of 

the non-movant. United States v. King-Vassel, 728 F.3d 707, 711 (7th Cir. 2013).

DISCUSSION

Payless contends that DiMucci has breached the Lease according to its plain 

language because DiMucci has charged Payless for Taxes in an amount that exceeds 

that which is permitted by the Tax Cap. DiMucci does not dispute that the Lease is a 

binding contract or that the Court can interpret the Lease as a matter of law. DiMucci 

does, however, aver that it has not overcharged Payless but rather that it has 

undercharged Payless in the amount of $9,901.87 since 2004, the first year that 

Payless rented from DiMucci and incurred obligations with respect to payment of 

Taxes.
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Payless calculated its alleged damages based upon the assumption that the 

invoices submitted by DiMucci regarding the specific amount of Payless’s 

proportionate share of the Taxes were correct. DiMucci now claims that it mistakenly 

billed Payless for less in Taxes than Payless owed. The error arose, according to 

DiMucci, because another tenant, OfficeMax, who leased a different part of the 

Shopping Center paid 100% of the Taxes on its portion instead of a proportionate 

share like Payless had agreed to pay. Thus, DiMucci claims that it erroneously 

deducted the amount of Taxes paid by OfficeMax from the invoices that it sent to 

Payless, and Payless was able to avoid paying the extra Taxes that Section 7.02 

requires it to pay. This is because, according to DiMucci, Section 7.02 mandates that 

Payless pay Taxes in a proportionate share, which is determined by the amount of 

space that Payless leases divided by the gross amount of floor space in the Shopping 

Center. It is immaterial, DiMucci posits, that OfficeMax agreed to pay its Taxes for 

all of the floor space that it leased, as OfficeMax’s agreement did not alter the plain 

language of the Lease regarding the manner of calculating the Taxes owed by Payless. 

Furthermore, DiMucci asserts, no provision of the Lease prohibits it from seeking 

Taxes that Payless owes, unlike a one-year limitation with respect to CAM charges 

contained in the Lease.

Having carefully read the Lease, the Court must reject DiMucci’s arguments. 

Section 9.03 requires that Payless reimburse DiMucci in a proportionate share for all 

Taxes “paid by landlord.” In its response to Payless’s interrogatories, DiMucci 
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indicated that OfficeMax had paid the Taxes for its share of the Shopping Center and 

not that DiMucci had paid the Taxes. In its response to the instant motion, DiMucci 

has submitted the declaration of Lynn Kennedy (“Kennedy”), stating that DiMucci 

paid the Taxes. The Court is unable to discern why there is a contradiction between 

the declaration and the sworn answers to Payless’s interrogatories. The Court thus 

accepts for the purposes of the instant motion DiMucci’s answers to Payless’s 

interrogatories indicating that OfficeMax paid the Taxes. See Broaddus v. Shields, 

665 F.3d 846, 855-56 (7th Cir. 2012) (later declaration cannot contradict prior sworn 

deposition testimony without sufficient explanation). According to the plain language 

of the Lease, therefore, the Taxes with respect to OfficeMax do not entitle DiMucci to 

reimbursement because they were not “paid by [DiMucci].”

Even if the Court were to accept Kennedy’s declaration and DiMucci had 

adopted its current position (that Payless must reimburse DiMucci for the Taxes that 

OfficeMax ultimately paid) in the beginning of the instant litigation, the interpretation 

of the Lease that DiMucci now propounds is an absurd one. “A contract should be 

construed to avoid absurd results.” Bd. of Educ. v. Orbach, 991 N.E.2d 851, 857 (Ill. 

App. Ct. 2013) (citation omitted). Were the Court to construe the Lease as DiMucci 

suggests, DiMucci would receive reimbursement from Payless for Taxes for which 

OfficeMax had already reimbursed DiMucci. It is unfathomable that a reasonable 

party would enter into an agreement under which it would be required to reimburse 
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another for costs for which the other party had already been reimbursed. The Court 

must, therefore, reject DiMucci’s interpretation of the Lease.

DiMucci has not disputed Payless’s calculation of damages beyond the 

arguments that the Court has already addressed. DiMucci also offers no other 

justification for its having charged in excess of the Tax Cap. As such, the Court 

grants summary judgment to Payless with respect to its breach of contract claim in the 

principal amount of $72,979.14.

CONCLUSION

For the foregoing reasons, Payless’s motion for partial summary judgment is 

granted in the principal amount of $72,979.14.

____________________________________

Charles P. Kocoras

United States District Judge

 November 18, 2013

Dated: ______________________