CONCLUSION
IT IS THEREFORE ORDERED that Plaintiff’s Motion for Summary
Judgment be, and the same hereby is, GRANTED with respect to
liability and DENIED with respect to damages, attorneys’ fees,

and costs.

DATED: July 1, 2003 ENTER:

ARLANDER KEYS

United States Magistrate Judge

13


material fact and that the moving party is entitled to a judgment
as a matter of law. Fed.R.Civ.P. 56(c) (2003). A genuine issue
of material fact exists if the evidence is such that a reasonable
jury could return a verdict for the nonmoving party. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In determining
whether a genuine issue of material fact exists, the Court views
the facts in the light most favorable to the nonmoving party and
draws all reasonable inferences in the nonmoving party’s favor.
Shank v. William R. Hague, Inc., 192 F.3d 675, 681 (7th Cir.
1999).

The moving party in a motion for summary judgment bears the
initial burden of demonstrating that no genuine issue of material
fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
If the moving party’s burden is met, then the nonmoving party
must set forth specific facts showing that there is a genuine
issue for trial in order to survive summary judgment. Schacht v.
Wisconsin Dep’t of Corrs., 175 F.3d 497, 504 (7th Cir. 1999). In
a summary judgment proceeding, the Court will disregard all facts
not properly supported by the record. Brasic v. Heinemann’s
Inc., 121 F.3d 281, 284 (7th Cir, 1997).

Furthermore, pursuant to Local Rule 56.1(a) (3), the party
moving for summary judgment must provide a statement of material
facts, asserting that there are no genuine issues of material
fact in dispute. The statement must be structured in the form of

numbered paragraphs. Loc. R. 56.1(a). The opposing party must


a

of mitigation bars the landlord from recovering against the
tenant. Snyder v. Ambrose, 266 Ill. App. 3d 163, 167, 639 N.E.2d
639, 641 (2nd Dist. 1994) (establishing a burden upon the
landlord to prove mitigation of damages as a “prerequisite” to
recovery); St. George Chicago, Inc., 296 Ill. App. 3d at 293, 695
N.E.2d at 509 (ist Dist. 1998) (holding that a landlord’s failure
to mitigate damages will not bar recovery, but will cause
otherwise recoverable damages to be reduced).

To date, the Illinois Supreme Court has not ruled on this
issue. Accordingly, this Court may look to intermediate
appellate court decisions as helpful, but not binding, evidence
of what the Illinois Supreme Court would do in this situation.
Green v. J.C. Penney Auto Insurance Co., Inc., 806 F.2d 759, 761
(7th Cir. 1986). The Court finds the reasoning of the St. George
court to be the more persuasive, and finds that, although the
landlord has the burden of presenting evidence that it took
reasonable measures to mitigate, a failure to do so will not
completely bar recovery. See Amcor Trust Co. v Minnesota
Diversified Prods., Inc., No. 97 C 0614, 1998 WL 433770, at *5
(N.D.I11. July 29, 1998) (applying Illinois law and finding that
the landlord’s failure to mitigate damages is not an automatic
and absolute bar to recovery).

In the instant case, a genuine issue of material fact exists
as to whether Manulife took reasonable measures to mitigate the

damages caused by Mascon’s breach. Manulife’s Rule 56 Statement


DISCUSSION

Having determined that Mascon has admitted all of the
material facts set forth in Manulife’s Rule 56.1 Statement of
Material Facts, the Court turns to Manulife’s substantive
arguments. Manulife argues that the Court should grant
Manulife’s Motion for Summary Judgment, because Mascon breached
the lease agreement by failing to pay base rent, real estate
taxes, and other charges for the time period required by the
lease.
A. Illinois Law Applies

The law that governs a case based on diversity jurisdiction
is determined by looking to the conflict-of-law rules of the
state in which the federal court sits. Jean v. Dugan, 20 F.3d
255, 261 (7th Cir 1994) (citing Klaxon Co. v. Sentor Electric
Mfg. Co., 313 U.S. 487, 496 (1943)). In Illinois, “{a] lease is
an agreement which gives rise to the relationship of landlord and
tenant. It is essentially a type of contract and, as such, it is
governed by the rules which govern contracts generally.”
Williams v. Chicago Housing Auth., 144 F.3d 544, 547 (7th Cir.
1998) quoting Midland Mgmt. Co. v. Helgason, 158 Ill. 2d 98, 103
630 N.E.2d 836, 839 (1994) (citations omitted). In breach of
contract cases, the Illinois Supreme Court applies the “most
significant contacts” test of the Restatement (Second) of
Conflicts of Law. Bradley v. INT Skypack, Inc., 983 F. Supp.

1147, 1149 (N.D.I11. 1997). The contacts relevant to a choice-


respond to each paragraph by either admitting or denying the
allegations and specifically citing to supporting materials
showing the existence of a genuine factual dispute. Loc. R
56.1(b) (3) (A).

Once properly supported, “all material facts set forth in
the statement required of the moving party will be deemed
admitted unless controverted by the statement of the opposing
party.” Loc. R. 56.1(b) (3) (B). Similarly, all material facts
properly supported in the opposing party’s Rule 56.1(b) (3) (B)
statement “will be deemed admitted unless controverted by the
(reply) statement of the moving party.” Loc. R 56.1(a). Failing
to support one’s statement with a citation to the record is
equivalent to an admission of the others party’s factual
assertions. Garrison v. Burke, 165 F.3d 565, 567 (7th Cir.1999).

In the instant case, Mascon did not file a Response Brief to
the Motion for Summary Judgment or a Rule 56.1 Statement in
Response to Plaintiff’s Statement of Material Facts. By letter,
dated April 29, 2003, Mascon’s counsel acknowledged that Mascon
had not responded to the instant motion, because it could not
contest the motion. The Court finds that Mascon’s failure to
respond results in its admission of all facts asserted in, and
properly supported by, Manulife’s Rule 56.1 Statements of

Material Facts.


(N.D.I11. 1999) (a material breach occurs when a party to the
contract "fails to perform an element of the agreement without
which the contract would not have been made.”). Notably, Mascon
admits to breaching the contract and does not allege that
Manulife failed to perform its obligations under the lease. And
there is no dispute that Manulife was injured by the breach.
Therefore, the Court grants Manulife’s Motion for Summary
Judgment with respect to liability.
ion Damages

Although Manulife appears to have satisfactorily performed
all of its obligations as required by the lease, it is not clear
whether Manulife satisfactorily performed all of its obligations
as required by Illinois law. Manulife fails to present any
evidence that it took reasonable measures to mitigate the damages
caused by Mascon’s breach. Under Illinois law, “a landlord or
his agent shall take reasonable measures to mitigate the damages
recoverable against a defaulting lessee.” 735 ILCS 5/9-213.1
(West 1996). Furthermore, in Illinois, the landlord has the
burden of proving mitigation of damages. St. George Chicego,
Inc. v. George J. Murges & Associates, Ltd., 296 Ill. App. 3d
285, 292, 695 N.E.2d 503, 508 (1% Dist. 1998); St. Louis North
Joint Venture v. P & L Enterprises, Inc., 116 F.3d 262, 265 (7th
Cir. 1997) (applying Illinois law).

There is currently a split amongst the Illinois appellate

courts regarding whether a landlord’s failure to present evidence


Mina Onder Form (0497)

United States District Court, Northern District of Illinois

(10)

ce)

Nive Magistrate Judge Arlander Keys “than Assigned Judge

CASE NUMBER 02 C 6476 DATE 7/1/2003
CASE Manufacturers Life Ins. Co, vs. Mascon Information Technologies
TITLE

Un the following box (a) indicate the party filing the motion, ¢.g,, plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

MOTION: of the motion being presented.)

DOCKET ENTRY:

qd) im) Filed motion of [ use listing in “Motion” box above.]

(2) a Brief in support of motion due

@) Oo Answer brief to motion due. . Reply to answer briefdue__

(4) Oo Ruling/Hearing on set for at

(5) im] Status hearing[held/continued to] [set for/re-set for] on setfor_ at

(6) Oo Pretrial conference[held/continued to] [set for/re-set for]on___—s—ssetfor_ at.

7) oO Trial[set for/re-set for] on__at

(8) is] [Bench/Jury trial] [Hearing] held/continuedto____at

(9) im This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

OOFRCP4(m) CLocal Rule 41.1 GFRCP41(a\(1) OFRCP41(a)(2).

a [Other docket entry] Memorandum Opinion and Order entered. Plaintiff’s Motion for Summary
Judgment [#20] is granted in part and denied in part, Status hearing set for 7/16/03 at 9:00 a.m. A

a [For further detail see order attached to the original minute order.]

b

No notices required, advised in open court
2

No notices required, umber of notices,

Notices mailed by judge’s staff. JUL - 2 2003

Notified counsel by telephone dave dooketed

Docketing to mail notices. } Ss

Mail AO 450 form. docketing deputy initials

Copy to judge/magistrate judge. Lunes I LS ia°s'f _
courtroom 4S tll HY { - Wh 1% date mailed notice

FT, yy deputy’s
initials

prcuimcgetemte OS WS | ansnur ain



mitigation. Instead, absent a stipulation on the mitigation
issue, the parties will now be obligated to participate in
further proceedings, prior to the Court being able to determine
damages - an expense that could have been easily avoided by
properly documented summary judgment briefs’.
D. Attorneys’ Fees

Manulife further argues that Mascon is liable for Manulife’s
attorneys’ fees and costs as agreed to in the lease agreement.‘
The general rule in Illinois is that, in the absence of a statute
or an agreement, the successful litigant in a civil action may
not recover attorneys’ fees or the ordinary expenses of
litigation from his adversary. Losurdo Bros. v. Arkin Distrib.
Co., 125 Ill. App. 3d 267, 274, 465 N.E.2d 139, 144 (1984).
Provisions in contracts for awards of attorneys’ fees and costs
are an exception to this rule. Id. at 275; Fox v. Fox Valley

Trotting Club, 8 Ill. 2d 571, 579, 134 N.B.2d 806, 810-11 (1956

3 Left to their own devices, both sides were apparently
comfortable with having this Court resolve this lawsuit without
addressing the issue of mitigation. It was only the Court’s
independent research that prevented the issuance of a ruling
based upon an error of law. And while the Discussion focuses
upon Manulife’s legal burden, clearly, there is plenty of blame
to share. Mascon had much to benefit from pursuing the
mitigation issue; its counsel’s failure to brief the issue falls
far short of the level of zealous advocacy to which most
attorneys aspire.

* Section 10(D) (c) of the lease states, “The Tenant shall pay to
the Landlord on demand all costs and expenses including lawyers
fees incurred by the Landlord in enforcing any of the obligations
of the Tenant under this Lease. (Lease Section 10(D) (c).)

11


of Material Facts does not alleged that it attempted to mitigate
its damages, nor has Manulife directed the Court’s attention to
any evidence supporting such a conclusion. “A determination as
to whether a landlord took reasonable measures to mitigate
damages is generally a question of fact to be determined by the
trier of fact upon evaluation of ali of the evidence in the
case.” Amcor Trust Co., 1998 WL 433770, at *6. Because there is
a material fact in dispute, Manulife’s Motion for Summary
Judgment with respect to damages is denied.

As noted previously, Manulife has the burden of presenting
evidence to show that it took reasonable measures to mitigate the
damages caused by Mascon's breach. Inexplicably, Manulife’s
attorneys failed to mention mitigation in any of their filings.
If Manulife’s own research had failed to reveal the importance of
the mitigation issue under Illinois law, Defendant Mascon’s
(albeit passing) reference to Manulife’s lack of mitigation in
its Answer to the Second Amended Complaint should have alerted
Manulife that its mitigation measures (or lack thereof) needed
to be addressed. Perhaps counsel remained silent because he knew
that his client had not mitigated’. Perhaps the oversight was
just that - an oversight. But it is not within this Court’s
province to resolve the speculation in the absence of evidence on

2? Illinois Rule of Professional Conduct 3.3(a) (3) imposes an

ethical obligation on counsel to cite all legal authority in the
controlling jurisdiction that is directly adverse to the client’s
claims.

10


of-law decision include the place of contracting, negotiation,
performance, location of the subject matter of the contract and
the domicile, residence, place of incorporation, and business of
the parties. Id.

In the present case, the subject property is located in
Schaumburg, Illinois, and Mascon’s principal place of business is
in Schaumburg, Illinois. (Mascon's Answer, at 1-2.) Neither
party has suggested that any other jurisdiction has more
significant contacts in this matter than Illinois. Therefore,
the Court finds that Illinois law governs the claims in this
case.

B, Breach of Contract

Manulife argues that the Court should grant its Motion for
Summary Judgment, because Mascon breached its contract with
Manulife. Under Illinois law, to state a cause of action for
breach of contract, a plaintiff must show: (1) the existence of a
valid contract; (2) the performance of the contract by plaintiff;
(3) the breach of the contract by defendant; and (4) a resulting
injury to the plaintiff. Priebe v. Autobarn Ltd., 240 F.3d 584,
587 (7th Cir. 2001).

In the instant case, the lease between Manulife and Mascon
formed a valid contract between the two parties, and Mascon’s
failure to pay base rent, real estate taxes, and other
obligations under the contract constituted a material breac

MAN Roland Inc. v. Quantum Color Corp., 57 F.Supp.2d 568, 570


November 2001, December 2001, and January 2002. (Id. 7 9.)
Mascon paid the judgment to Manulife and subsequently paid rent
to Manulife for February 2002 and part of March 2002. (Id.)

In March 2002, Mascon once again ceased making rent payments
to Manulife. (ZId.) In addition to failing to pay base rent,
Mascon failed to pay real estate taxes and other charges due
under the lease for the remainder of March 2002, and for the
months of April 2002 through December 2002. (Mascon’s Answer, at
3.) Mascon admits to breaching the lease with Manulife by
failing to perform its obligations as required by the lease.
(Id.}

On September 11, 2002, Manulife filed this lawsuit to
recover damages resulting from Mascon’s breach of contract. The
case was initially assigned to Judge Rebecca Pallmeyer, but on
December 20, 2002, both parties consented to proceed before this
Court.

Manulife then filed a Motion for Summary Judgment, alleging
that Manulife should be awarded damages as a result of Mascon’s
failure to perform its obligations as defined by the lease as a
matter of law. (Plaintiff’s Motion for Summary Judgment, at 1.)
Manulife alleges that the total amount owed by Mascon is
$163,147.72. (Marino Aff. { 13.)

STANDARD OF REVIEW
The Court will grant summary judgment only if the pleadings

and supporting documents show that there is no genuine issue of


(hereinafter “Manulife’s Statement”) 7 1.) Mascon is a
corporation incorporated under the laws of the State of Delaware,
with its principal place of business in Schaumburg, Illinois.'
(Mascon’s Answer to Second Amended Complaint (hereinafter
“Mascon’s Answer”), at 1.)

On August 25, 1997, Manulife, as landlord, and Mascon, as
tenant, entered into a lease for the premises located at 1515
Woodfield Road, Suite 450, Schaumburg, Illinois. (Mascon’s
Answer, at 2.) The parties amended the lease on November 5,
1998, by executing the Amendment to Lease Agreement
(collectively, the “Lease”). (Plaintiff’s Statement 9 7.) The
term of the lease ran from January 1, 1998 to December 31, 2002.
(Id. J 8.)

Mascon initially ceased making rent payments due under the
lease in November 2001. (Manulife’s Second Amended Complaint
(hereinafter “Manulife’s Complaint”) J 8.) In January 2002, as a
result of Mascon’s failure to pay rent, Manulife filed a forcible
detainer action in the Circuit Court of Cook County for eviction
and rent for the period of November 2001 through January 31
2002. (Id.) The Circuit Court of Cook County entered judgment
in favor of Manulife and ordered Mascon to pay the amount of

$51,738.36, representing the amount of rent due for the months of

' The amount in controversy in this matter exceeds the sum of
$75,000 and the litigants satisfy the requirements for diversity;
therefore, this Court has subject-matter jurisdiction over this
matter pursuant to 28 U.S.C. §1332.

2


UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

THE MANUFACTURERS LIFE
INSURANCE COMPANY (U.S.A.),

)
)
)
Plaintiffs, ) No. 02 C 6476
)
v. )
) Magistrate Judge Arlander
) Keys
MASCON INFORMATION TECHNOLOGIES  )
LIMITED, )
)
Defendants. )
)

MEMORANDUM OPINION AND ORDER

Plaintiff, The Manufacturers Life Insurance Company (U.S.A.)
(“Manulife”), moves this Court for Summary Judgment, pursuant to
Rule 56 of the Federal Rules of Civil Procedure. Manulife
alleges that Defendant, Mascon Information Technologies Limited
(“Mascon”), breached a lease agreement with Manulife for the
rental of commercial real property and is liable to Manulife for
damages. For the reasons set forth below, the Court grants
Plaintiff’s Motion for Summary Judgment with respect to
liability, but denies Plaintiff's Motion with respect to damages,
attorneys’ fees, and costs.

BACKGROUND FACTS

Manulife is a corporation incorporated under the laws of the

State of Michigan, with its principal place of business in

Boston, Massachusetts. (Manulife’s Statement of Material Facts


(holding that a defendant who breached a lease was liable for
attorneys’ fees because the defendant agreed to pay the fees in
the lease).

Although Section 10(D) (c) of the lease between Manulife and
Mascon contains a provision for awarding fees to Manulife in the
event of Mascon’s breach, Manulife has not yet presented evidence
indicating the total amount of hours expended, counsel's
reasonable hourly rate, or the costs associated with enforcing
Mascon’s contractual obligations. Losurdo Bros., 125 Ill. App.
3d at 275, 465 N.E.2d at 145 (holding that the foundation for an
award of attorneys’ fees is the amount of time spent by the
lawyer on a case, the lawyer’s ability, and the complexity of the
work). A party requesting fees must specify the amount of time
expended and describe the work performed. Id. Because
Manulife’s attorneys have not presented detailed billing records
indicating their time spent on this matter, the Court will
postpone deciding the issue of attorneys’ fees and costs until
the Court is presented with time records and other itemized

costs.

12