IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

WEC 98C-4 LLC,

 Plaintiff,

v.

SAKS INCORPORATED,

 Defendants.

Case No. 20 C 4363

Judge Harry D. Leinenweber

MEMORANDUM OPINION AND ORDER

The Plaintiff, WEC-4 LLC (“WEC”), has moved for summary 

judgement against Defendant, Saks Incorporated (“Saks”) on the 

issue of damages. (Dkt. No. 65.) This case involves the claim of 

WEC, the former landlord of a Saks subsidiary, CPS Stores (“CPS”),

for consequential damages resulting from the failure of Saks to 

honor its corporate guaranty of CPS’s rent under a lease at a 

shopping mall in Riverside, Illinois.

This Court previously laid out the facts leading to this 

dispute in its November 11, 2021, opinion granting PlaintiffIntervenor’s motion for summary judgment. (Dkt. No. 63.) As a 

result, the Court will only provide the relevant facts in this 

opinion. 

WEC purchased the shopping center in 1998 with a mortgage 

loan from the intervenor, TOCU. (Assumption and Modification

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Agreement, Donahue Aff., Ex. 5, Dkt. No. 43-8.) At the same time,

it was assigned the original Lease which was then amended with The 

Second Amendment to Lease, dated August 5, 1998. (Mortg. Contract,

Donahue Aff., Ex. 3, Dkt. No. 43-6.) In August 1998, Saks executed 

the corporate guaranty covering the Carson lease that has been the 

subject of numerous court rulings in this case. (Def.’s Resp. to 

Intervenor Pl.’s Stmt. of Facts (“DSOF”) ¶ 24 Dkt. No. 51.) The 

Court will not go into any details over the Guaranty’s terms other 

than to state that, based on a Guarantor Estoppel certificate 

issued by Saks, WEC was assured that the Guaranty was in “full 

force and effect” at that the lease was executed. (Id. ¶ 32.)

Less than a year later, Carson’s immediate parent company, 

Bon Ton Stores, filed for bankruptcy protection, and Carson’s 

discontinued paying rent and rejected the lease. (Id. ¶¶ 33, 36–

37.) Pursuant to the Guaranty WEC notified Saks of Carson’s default 

and demanded Saks honor the Guaranty. (Id. ¶ 34.) Ultimately, TOCU 

commenced foreclosure proceedings against WEC in 2018. (Id. ¶ 39.)

In July 2020, WEC sued Saks under the Guaranty in this Court

and TOCU was subsequently allowed to intervene based on its 

mortgage with WEC. (Dkt. Nos. 1, 22.) The Court subsequently 

granted summary judgment to TOCU on the issue of Saks’ liability

under the Guaranty. (Dkt. No. 63.) WEC has now moved for summary 

judgment on the issue of consequential damages and attorneys’ fees

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under the Guaranty. However, WEC has not moved for summary judgment

on the issue of liability under the Guaranty. This does not pose 

an issue because WEC is also a party to the Saks Guaranty. 

The issue of consequential damages and attorneys’ fees is 

also not a problem because the lease specifically provides for 

them in the event of a default in lease payments. The lease

specifically provides that Lessee shall be obligated to pay “All 

costs and expenses incurred by or on behalf of Landlord, including, 

without limitation, reasonable attorneys’ fees and expenses, 

occasioned by any default by Tenant under this Lease which shall 

constitute additional rent hereunder.” (Second Amend. Lease at p.

9, Compl. Ex. 3, Dkt. No. 1-1.) In addition, the Guaranty also 

provides that the Guarantor shall be responsible to “pay to 

Landlord all damages and all costs and expenses that may arise in 

consequence of any default by guarantor hereunder (including, 

without limitation, all reasonable attorneys’ fees incurred by 

Landlord or caused by any such default and/or by the enforcement 

of this Guaranty.” (Guaranty at p. 2, Compl. Ex. 4, Dkt. No. 1-

1.)

WEC claims that it is entitled to consequential damages for 

lost value of the property. Saks claims that such damages are not 

allowed because they were not foreseeable at the time of the 

execution of the Guaranty, which it claims is the test for 

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consequential damages in the Seventh Circuit, citing Rexnord v. 

DeWolff Boberg and Associates, Inc., 286 F.3d 1001, 1004 (7th Cir. 

2002). 

The Court disagrees. The lease agreement between WEC and Saks’ 

subsidiary specifically provides for damages to WEC upon 

termination of the Lease prior to expiration. Paragraph 2.27 of 

Second Amendment to Lease between WEC and CPS Department Stores, 

Inc., effective August 5, 1998, entitled “Survival of Tenant’s 

obligations: Damages,” appears to provide the measure of damages 

to which WEC is entitled in the event of the termination of the 

lease by the landlord. (Second Amend. Lease at p. 10.)

Paragraph 24.3 reads as follows:

24.3 Damages – Termination of Lease. In the event 

of the termination of this Lease by Landlord as provided 

in section 20, Landlord shall be entitled to recover 

from Tenant all of the Basic Rent, additional rent and 

other sums to be paid by Tenant under this Lease accrued 

and unpaid for the period up to such termination date, 

as well as all other additional sums payable by the

Tenant, or for which Tenant is liable or in respect

of which Tenant has agreed to indemnify Landlord under

any of the provisions of this Lease which may be then

owing and unpaid for the period up to such termination

date, and all costs and expenses, including court

costs and attorneys’ fees incurred by Landlord in the

enforcement of its rights and remedies hereunder, and

in addition Landlord shall be entitled to recover as

liquidated and final damages for loss of the bargain

and not as a penalty the aggregate sum which at the

time of such termination represents the excess, if

any, of the then present value of the Basic Rent,

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additional rent and other sums to be paid by Tenant

under this Lease for the remainder of the Demised Term

(determined as if this Lease had not been terminated),

over the then present value of the then aggregate fair

rental value of the Demised Premises for the balance

of the Demised Term (determined as if this Lease had

not been terminated), such present value to be

computed in each case on the basis of a per annum

discount at seven and sixteen one-hundredths percent

(7.16%) from the respective dates upon which such

amounts would have been payable hereunder had this

Lease not been terminated.

If any statute or rule of law shall validly limit the 

amount of such liquidated final damages to less than

the amount above agreed upon, Landlord shall be

entitled to the maximum amount of such damages 

allowable under such statute or rule of law.

emphasis added) (Id. at pp. 9—10.)

Therefore, the Court finds that the damages were foreseeable 

here.

Saks claims it needs discovery to figure out the appropriate

damage calculations and has moved pursuant to Rule 56(d) for such 

discovery. (Dkt. No. 73.) The Court has previously granted Saks 

Rule 56(d) discovery for TOCU’s damage claim, and the Court now 

grants Saks sixty (60) days to complete discovery on WEC’s Summary 

Judgment Motion.

WEC’s Motion for Summary Judgment on consequential damages 

(Dkt. No. 65) is granted. Saks’ Motion for Discovery (Dkt. No. 73) 

is also granted. The parties shall have sixty (60) days to complete 

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damages discovery. Telephonic status hearing is set for 10/19/22 

at 9:15 a.m. 

IT IS SO ORDERED.

Harry D. Leinenweber, Judge

United States District Court

Dated: 8/9/2022

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