Court Opinion

ID: 3146175
Source: CourtListenerOpinion
Date Created: 2015-10-22 18:14:00.55043+00
Date Added: 2024-06-11T12:07:36.032448
License: Public Domain

ILLINOIS OFFICIAL REPORTS
                                         Appellate Court

        Campana Redevelopment, LLC v. Ashland Group, LLC, 2013 IL App (2d) 120988

Appellate Court            CAMPANA REDEVELOPMENT, LLC, Plaintiff-Appellee, v.
Caption                    ASHLAND GROUP, LLC, Defendant-Appellant.

District & No.             Second District
                           Docket No. 2-12-0988

Filed                      July 30, 2013

Held                       In a forcible entry and detainer action involving an industrial-space lease,
(Note: This syllabus       the portion of the trial court’s order awarding plaintiff the unamortized
constitutes no part of     improvement costs that defendant was to repay in installments with future
the opinion of the court   rent was vacated, since the Forcible Entry and Detainer Act only allows
but has been prepared      plaintiff to join a claim for past-due rent to the action for possession of
by the Reporter of         the premises and plaintiff’s claim for the improvement costs was not
Decisions for the          germane to the issue of possession, especially when the rent payments in
convenience of the         which the improvement costs were to be included were not past due at the
reader.)
                           time of the trial court’s order.

Decision Under             Appeal from the Circuit Court of Kane County, No. 11-L-720; the Hon.
Review                     Edward C. Schreiber, Judge, presiding.

Judgment                   Affirmed in part and vacated in part.
Counsel on                 Joseph P. Berglund, of Berglund, Armstrong & Mastny, PC, of Oak
Appeal                     Brook, for appellant.

                           Scott G. Richmond, of Ariano Hardy Ritt Nyuli Richmond Lytle &
                           Goettel, of South Elgin, for appellee.

Panel                      JUSTICE BIRKETT delivered the judgment of the court, with opinion.
                           Justices McLaren and Zenoff concurred in the judgment and opinion.

                                            OPINION

¶1          Plaintiff, Campana Redevelopment, LLC, filed a complaint in forcible entry and detainer
        against defendant, Ashland Group, LLC.1 The trial court granted possession to plaintiff and
        entered judgment for plaintiff in the amount of $267,600.21, plus $470.84 in costs and
        $2,044 in attorney fees. Following the denial of its motion for reconsideration, defendant
        timely appealed. On appeal, defendant argues that the court erred in awarding plaintiff
        $119,495.74 in unamortized improvement costs, which plaintiff had provided to defendant
        and which defendant was to repay in installments included in future rent payments. For the
        reasons that follow, we vacate the court’s award of $119,495.74 but otherwise affirm.

¶2                                        I. BACKGROUND
¶3          On December 17, 2008, plaintiff and defendant entered into an industrial-space lease (the
        lease) for premises located at 301 W. Fabyan Parkway in Batavia. Pursuant to Exhibit C of
        the lease, plaintiff provided defendant with an improvement allowance of $153,700. Exhibit
        D of the lease provided that “[plaintiff’s] contribution to [defendant’s] build-out costs has
        been amortized over a ten (10) year period and included in [defendant’s] rent accordingly.”
¶4          The lease had an initial three-year term of April 1, 2009, through March 31, 2012, with
        the following monthly rent schedule:
                     April 1, 2009, through March 31, 2010: $9,213.67
                     April 1, 2010, through March 31, 2011: $9,426.17
                     April 1, 2011, through March 31, 2012: $9,652.83.
        The lease also contained four three-year option periods, which, if exercised, would have
        extended the term through March 31, 2024. With respect to the first three-year option period

                1
                  The complaint also named as defendants Vito Brandonisio and the Brandonisio Family
        Trust. However, those parties were dismissed without prejudice on March 8, 2012.

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     (April 1, 2012, through March 31, 2015), the lease provided as follows:
              “If [defendant] does not exercise its option to extend the term, in addition to any
         other amounts it may owe hereunder, it will pay to [plaintiff] no later than March 31,
         2012[,] a non-renewal fee equal to One Hundred Twenty-Two Thousand Three Hundred
         Fifty and 00/100 dollars ($122,350.00) representing the unamortized cost of its
         Improvements at the end of the initial Lease term ***.”
     The lease further provided:
         “If the Lease is terminated *** because [defendant] is in default or early by [defendant]
         for any reasons, whether or not the term has been renewed, [defendant] will pay to
         [plaintiff] a termination fee equal to the unamortized cost of its Improvements ***.”
¶5       On November 10, 2011, plaintiff sent defendant a five-day notice to pay rent. According
     to the notice, $58,064.71 in rent was due for a portion of June 2011 and for July through
     November 2011. A second notice was sent on November 23, 2011. A third notice was sent
     on December 9, 2011. The third notice sought $69,424.88 in rent and, in addition, advised
     defendant that, if the lease were terminated, the unamortized portion of the costs of
     improvements ($131,086.24) would become immediately due and payable.
¶6       On December 27, 2011, plaintiff advised defendant as follows:
              “You are hereby notified that in consequence of your default, that being the non-
         payment of rent for the premises *** I have elected to terminate your lease, and you are
         hereby notified to quit and deliver up possession of the same to me within ten days of the
         date of this letter.”
¶7       On December 28, 2011, plaintiff filed a complaint in forcible entry and detainer against
     defendant, alleging that defendant was unlawfully withholding possession of the premises
     and was indebted to plaintiff in the sum of $201,493.10 “for rent and other charges plus
     attorneys fees and costs.”
¶8       On May 24, 2012, following a “trial or hearing,” the trial court entered judgment for
     plaintiff in the amount of $267,600.21, plus $470.84 in costs and $2,044 in attorney fees.2
     According to plaintiff’s brief, its manager, Frank Mares, was the only person to testify.
     Plaintiff’s Exhibit 4 established the basis for the $267,600.21 award:
         Rent due upon March 31, 2012, lease expiration:                              $109,451.51
         Estimated rent due for holdover tenancy through June 24, 2012:                  38,652.96
         Estimated unamortized balance of improvements through June 24, 2012: 119,495.74
                                                                                      $267,600.21
     The court stayed execution until July 1, 2012. According to plaintiff’s brief, the court
     “determined that the unamortized improvement costs were a part of rent.”
¶9       Defendant filed a motion for reconsideration, arguing that, although section 9-209 of the

             2
              The record in this case consists of only the common-law record. Neither party filed a
     transcript from the “trial or hearing” or an appropriate substitute under Illinois Supreme Court Rule
     323 (eff. Dec. 13, 2005).

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       Forcible Entry and Detainer Act (the FED Act) (735 ILCS 5/9-209 (West 2010)) permits a
       landlord to join a claim for past-due rent, the unamortized improvement costs were not past
       due and, further, were not rent. In response, plaintiff argued that, under the lease, defendant
       agreed to pay the unamortized improvement costs if the lease options were not exercised, the
       unamortized improvement costs were to be built into the rent payments over the course of
       the lease, and defendant’s failure to pay rent was a default that accelerated the unamortized
       improvement costs.
¶ 10       On August 9, 2012, following a hearing on defendant’s motion for reconsideration, the
       court denied the motion.3 Defendant timely appealed.

¶ 11                                       II. ANALYSIS
¶ 12       Defendant argues that the plain language of the FED Act does not allow for a landlord
       to collect anything other than past-due rent and, further, that plaintiff’s claim to the
       unamortized improvement costs is not germane to the issue of possession. We agree.
¶ 13       “The purpose of the [FED Act] is to provide a speedy remedy to allow a person who is
       entitled to the possession of certain real property to be restored to possession.” Wells Fargo
       Bank, N.A. v. Watson, 2012 IL App (3d) 110930, ¶ 14. It is “a limited proceeding, focusing
       on the central issue of possession.” American National Bank v. Powell, 293 Ill. App. 3d
1033, 1044 (1997). “The only questions that are to be answered in such a proceeding concern
       which party is entitled to immediate possession and whether a defense that is germane to the
       distinctive purpose of the action defeats plaintiff’s asserted right to possession.” Subway
       Restaurants, Inc. v. Riggs, 297 Ill. App. 3d 284, 287 (1998).
¶ 14       Nevertheless, under section 9-209 of the FED Act, the landlord may couple the claim for
       possession with a claim for unpaid rent. Section 9-209 provides as follows:
           “Demand for rent–Action for possession. A landlord or his or her agent may, any time
           after rent is due, demand payment thereof and notify the tenant, in writing, that unless
           payment is made within a time mentioned in such notice, not less than 5 days after
           service thereof, the lease will be terminated. If the tenant does not within the time
           mentioned in such notice, pay the rent due, the landlord may consider the lease ended,
           and sue for the possession under the statute in relation to forcible entry and detainer, or
           maintain ejectment without further notice or demand. A claim for rent may be joined in
           the complaint, and a judgment obtained for the amount of rent found due, in any action
           or proceeding brought, in an action of forcible entry and detainer for the possession of
           the leased premises, under this section.
               Notice made pursuant to this Section shall, as hereinafter stated, not be invalidated
           by payments of past due rent demanded in the notice, when the payments do not, at the
           end of the notice period, total the amount demanded in the notice. The landlord may,
           however, agree in writing to continue the lease in exchange for receiving partial payment.

              3
                The record does not contain a transcript of the hearing or an acceptable substitute under
       Rule 323.

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           To prevent invalidation, the notice must prominently state:
               ‘Only FULL PAYMENT of the rent demanded in this notice will waive the
           landlord’s right to terminate the lease under this notice, unless the landlord agrees in
           writing to continue the lease in exchange for receiving partial payment.’
               Collection by the landlord of past rent due after the filing of a suit for possession or
           ejectment pursuant to failure of the tenant to pay the rent demanded in the notice shall
           not invalidate the suit.” 735 ILCS 5/9-209 (West 2010).
       The parties agree that the issue of whether the trial court properly awarded the unamortized
       improvement costs is a question of law that should be reviewed de novo, as it requires us to
       construe the language of the statute and of the lease. See Alvarez v. Pappas, 229 Ill. 2d 217,
       220 (2008) (interpretation of a statute); NutraSweet Co. v. American National Bank & Trust
       Co. of Chicago, 262 Ill. App. 3d 688, 694 (1994) (interpretation of a lease).
¶ 15       Plaintiff argues that the trial court properly determined that the unamortized improvement
       costs were rent under the lease. According to plaintiff, under Exhibit D of the lease, the costs
       were “specifically included as a component of rent over the first 10 years of the Lease.”
       Plaintiff relies on American Management Consultant, LLC v. Carter, 392 Ill. App. 3d 39
       (2009). In Carter, the court in dicta suggested that, although utility payments were not
       specifically designated as rent in the parties’ lease, the landlord could recover the amounts
       due in an action under the FED Act. Id. at 47-48. While Carter certainly supports the trial
       court’s award of the amortized improvement costs in the past-due rent that was awarded
       through June 24, 2012, we fail to see how it supports the award of the unamortized
       improvement costs, as the rent payments in which they were included were not past due at
       the time of the award. Neither Carter nor the plain language of the FED Act allows for the
       award of rent not yet due.
¶ 16       Nevertheless, plaintiff argues that the issue of the recovery of the unamortized
       improvement costs was “germane” to the issue of possession. Section 9-106 of the Act
       provides:
               “The defendant may under a general denial of the allegations of the complaint offer
           in evidence any matter in defense of the action. Except as otherwise provided in Section
           9-120 [involving leased premises used in furtherance of a criminal offense], no matters
           not germane to the distinctive purpose of the proceeding shall be introduced by joinder,
           counterclaim or otherwise. However, a claim for rent may be joined in the complaint, and
           judgment may be entered for the amount of rent found due.” 735 ILCS 5/9-106 (West
           2010).
       Claims that are germane to the issue of possession generally fall into one of four categories:
       (1) claims asserting a paramount right to possession; (2) claims denying a breach of the
       agreement on which the plaintiff bases the right to possession; (3) claims challenging the
       validity or enforceability of the agreement; and (4) claims questioning the plaintiff’s
       motivation for bringing the action. Avenaim v. Lubecke, 347 Ill. App. 3d 855, 862 (2004).
¶ 17       Relying on the supreme court’s definition of “germane” as “ ‘closely allied; closely
       related, closely connected; *** appropriate’ ” (Spanish Court Two Condominium Ass’n v.
       Carlson, 2012 IL App (2d) 110473, ¶ 20 (quoting Rosewood Corp. v. Fisher, 46 Ill. 2d 249,

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       256 (1970))), plaintiff argues that the improvement costs were directly related to possession,
       because but for the improvement costs defendant would not have been able to occupy the
       premises. However, although that might be true, the issue is whether the unamortized
       improvement costs were related to plaintiff’s right to possession under the FED Act. The
       basis of plaintiff’s claim to possession was defendant’s failure to pay past-due rent. The basis
       of the claim had nothing to do with defendant’s payment of the unamortized improvement
       costs, which were included in rent not yet due.
¶ 18       Plaintiff also argues that, because defendant failed to exercise its option to extend the
       lease on March 31, 2012, the lease expired, and thus plaintiff was entitled to recover the
       unamortized improvement costs. However, whether plaintiff was entitled to recover the
       unamortized improvement costs is not the issue; the issue is whether plaintiff was entitled
       to do so under the FED Act. It was not.

¶ 19                                III. CONCLUSION
¶ 20      Based on the foregoing, we vacate the court’s order to the extent that it awarded
       $119,495.74 in unamortized improvement costs, and we otherwise affirm.

¶ 21      Affirmed in part and vacated in part.

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