Court Opinion

ID: 9555146
Source: CourtListenerOpinion
Date Created: 2023-08-10 21:04:33.294718+00
Date Added: 2024-06-11T15:41:26.855433
License: Public Domain

2023 IL App (1st) 220787-U

                                         No. 1-22-0787

                                  Order filed August 10, 2023

                                                                                 Fourth Division

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the
limited circumstances allowed under Rule 23(e)(1).

                                            IN THE

                             APPELLATE COURT OF ILLINOIS

                                       FIRST DISTRICT

BUFFALO GROVE VENTURE, LLC,                                 )      Appeal from the
                                                            )      Circuit Court of
       Plaintiff-Appellee,                                  )      Cook County.
                                                            )
              v.                                            )      2020 L 006832
                                                            )
FIVE FIFTHS, LLC, and JULIE CRAWFORD,                       )      Honorable
                                                            )      Thomas R. Mulroy,
       Defendants-Appellants.                               )      Judge, Presiding.

       JUSTICE MARTIN delivered the judgment of the court.
       Presiding Justice Lampkin and Justice Hoffman concurred in the judgment.

                                            ORDER

¶1     Held: Plaintiff-appellee Buffalo Grove Venture, LLC (Buffalo), was not obligated to
             serve defendant-appellant Five Fifths, LLC (Five Fifths) with a five-day notice of
             default for each month that Five Fifths was deficient in its monthly rent payments.

¶2     Buffalo filed a complaint for breach of commercial lease against Five Fifths and its

guarantor Julie Crawford (Crawford). Buffalo sought to recover damages for Five Fifth’s failure

to make full and timely monthly rent payments pursuant to the lease.

¶3     Following a bench trial, the court found that Five Fifths had breached the lease. The court
No. 1-22-0787

awarded Buffalo compensatory damages, denied Five Fifth’s motion to reconsider, and

subsequently awarded Buffalo attorney fees and costs. This appeal followed. We affirm. 1

¶4                                      I. BACKGROUND

¶5      The following facts are taken from the record on appeal, including the parties’ agreed

statement of facts, pursuant to Illinois Supreme Court Rule 323(d) (West 2020) (eff. July 1, 2017).

On March 7, 2016, Five Fifths executed a five-year commercial lease with Buffalo to lease retail

space at the Buffalo Grove Town Center for the purpose of operating a math tutoring franchise

known as “Mathnasium.” The lease term ran from March 1, 2016, through June 30, 2021. It was

secured by a personal guaranty executed by Crawford.

¶6      Pursuant to the lease, Five Fifths was obligated to pay an initial monthly rent of $2317,

plus certain additional charges, including a pro-rata share of real estate taxes, insurance expenses,

and common area maintenance charges (CAM). Rent payments were due on the first of the month,

with a five-day grace period, after which the tenant would be in default.

¶7      Shortly after executing the lease, Five Fifths began making partial monthly rent payments.

Throughout Five Fifths’ tenancy, Buffalo sent financial statements to Five Fifths each month

notifying it of past and current outstanding rent, CAM, taxes, insurance, and late fees. On January

16, 2019, Buffalo served a five-day notice to Five Fifths demanding payment of back rent and

other charges amounting to $7017.68. Subsequently, Five Fifths continued to make partial monthly

rent payments.

¶8      In the spring of 2020, prior to expiration of the lease, Five Fifths stopped making rent

payments and eventually vacated the premises without notice.

¶9      On June 26, 2020, Buffalo filed a two-count complaint for breach of lease against Five

        1
         In adherence with the requirements of Illinois Supreme Court Rule 352(a) (eff. July 1, 2018), this
appeal has been resolved without oral argument upon the entry of a separate written order.
                                                    2
No. 1-22-0787

Fifths and Crawford, in her capacity as personal guarantor. Buffalo sought back rent, along with

late fees and attorney fees. Buffalo subsequently filed an amended complaint to correct a

scrivener’s error.

¶ 10   At trial, Five Fifths argued that Buffalo’s method of applying monthly rent payments to

the previous month’s past-due rent and late fees, leaving an overdue balance, obligated Buffalo to

serve separate five-day notices for each month Five Fifths carried an overdue balance. The trial

court rejected this argument. The court determined that the five-day notice served in January 2019

put Five Fifths on notice that it had been in continuous breach and default of the lease by failing

to make full and timely monthly rent payments.

¶ 11   The parties agreed at trial that Five Fifths owed $60,890.43, representing arrearage and

other charges. Judgment was entered in this amount on July 27, 2021, and Buffalo was granted

leave to file its petition for attorney fees. The court subsequently denied Five Fifth’s motion to

reconsider.

¶ 12   On May 12, 2022, the trial court entered a final judgment in favor of Buffalo for

compensatory damages ($60,890.43), prejudgment interest ($4324.05), costs ($1438.76), and

attorney fees ($11,696), for a total of $78,349.24. This appeal followed.

¶ 13                                    II. ANALYSIS

¶ 14   Resolution of this appeal requires interpretation of the parties’ lease agreement. “The

interpretation of a lease is a question of law, to be determined by the reviewing court independent

of the trial court’s judgment.” Nutrasweet Co. v. American National Bank & Trust Company of

Chicago, 262 Ill. App. 3d 688, 694 (1994). “The rules for construing a lease are the same as the

rules for construing any other contract.” Monroe Dearborn Ltd. Partnership v. Board of Education

of the City of Chicago, 271 Ill. App. 3d 457, 461-62 (1995). “A court’s primary objective in

                                                 3
No. 1-22-0787

construing a contract is to ascertain and give effect to the parties’ intentions as expressed through

the contract’s language.” Nationwide Property & Casualty Insurance Co. v. State Farm Fire &

Casualty Co., 2022 IL App (1st) 210267, ¶ 25. “When presented with clear and unambiguous

language, the intent of the parties must be determined from the language of the contract itself and

given its plain and ordinary meaning.” Storino, Ramello & Durkin v. Rackow, 2015 IL App (1st)

142961, ¶ 18. We consider the contract as a whole, viewing each provision in light of the other

provisions. In re Marriage of Grandt, 2022 IL App (2d) 210648, ¶ 25.

¶ 15    Section 17.1 of the lease provides that a tenant is in default under the following conditions:

any failure to pay any rent or other amount when due for more than five (5) days after written

notice of such failure. Five Fifths admits that it “fell behind in its rent obligations under the Lease,

so that an arrearage of outstanding rent and late fees accrued.” Five Fifths also concedes that it

“never fully paid off the Outstanding Rent and an amount outstanding arrearage existed from the

date the January 2019 Notice of Default was served through the date of trial.”

¶ 16    This case concerns the sufficiency of the five-day notice informing Five Fifths that,

pursuant to section 17.1 of the lease, it was in default for failing to pay past-due rent. “The general

purpose of notice is to apprise the person affected of the nature and purpose of a proceeding.”

Dolan v. O’Callaghan, 2012 IL App (1st) 111505, ¶ 51; see also Bloom Township High School v.

Illinois Commerce Comm’n, 309 Ill. App. 3d 163, 179 (1999) (“the purpose of a notice provision

in either a contract or a statute is to ensure that a party is actually informed”).

¶ 17    Here, Five Fifths acknowledges that Buffalo served it with a five-day notice for past due

rent on January 16, 2019. It argues here, as it argued before the trial court, that Buffalo’s method

of applying monthly rent payments required Buffalo to serve separate five-day notices for each

month Five Fifths carried an overdue balance.

                                                   4
No. 1-22-0787

¶ 18    Thus, the primary issue this court is asked to decide is whether Buffalo was obligated to

serve written notices of default for each month that Five Fifths was behind in its monthly rent

payments. We do not believe that Buffalo was under such an obligation.

¶ 19    Five Fifths argues here, as it argued before the trial court, that Buffalo’s method of applying

monthly rent payments required Buffalo to serve separate five-day notices for each month Five

Fifths carried an overdue balance. We disagree. By the time Buffalo served Five Fifths with the

January 16, 2019 notice, Five Fifths was in arrears in its payment of back rent and other charges

in the amount of $7017.68.

¶ 20    In the ensuing months, Five Fifths made partial rent payments, but never fully paid the

ongoing accruing balance. The record demonstrates that Five Fifths remained delinquent in its

monthly rent payments and continually carried an overdue balance from each prior month. Five

Fifths cites no legal authority nor points to any lease provision which obligated Buffalo to serve a

separate five-day notice each month a balance was due, when the arrears had never been fully

satisfied.

¶ 21    Inasmuch as Five Fifths concedes that it never fully paid the outstanding rent, its argument

that it required additional and separate notice is unavailing. Five Fifths was aware per the January

16, 2019 notice that it was in arrears and admits that it remained so throughout trial. Moreover,

Five Fifths received monthly statements notifying it of past and current outstanding rent, CAM,

taxes, insurance, and late fees. Therefore, we find that the overdue rent requirement is satisfied.

Based on the record before us, we find no error in the trial court’s determination that Five Fifths

was on notice that it was in continuous breach of the lease and that Buffalo reserved its right to

hold Five Fifths in default for such breach.

¶ 22    We also note that in its verified amended complaint for breach of lease, Buffalo sought

                                                  5
No. 1-22-0787

monetary damages rather than possession of the retail space. As Buffalo pointed out in its brief,

the verified complaint was “for a straight forward action for collection of unpaid rent, not a forcible

entry and detainer action.” This court has determined that “[a]n action for rent is founded upon an

express or implied contract.” (Emphasis in original.) Sianis v. Kettler, 168 Ill. App. 3d 1071, 1074

(1988). The notice that is required for an action for possession of real property is not required for

an action for unpaid rent. Id. Therefore, since Buffalo was not seeking possession of the retail

space, it was not required to serve Five Fifths with an additional five-day notice prior to filing its

complaint seeking damages for Five Fifth’s failure to make full and timely monthly rent payments

pursuant to the lease.

¶ 23   Next, we reject Five Fifths’ contention that Buffalo’s acceptance of its partial monthly rent

payments—and failure to serve it with five-day notices for each month it was behind in its monthly

rent payments—indicates that Buffalo waived strict compliance with the lease or somehow lulled

Five Fifths into believing that strict compliance with the applicable provisions of the lease was not

required.

¶ 21   “Waiver is either an express or implied voluntary and intentional relinquishment of a

known and existing right.” Whalen v. K-Mart Corp., 166 Ill. App. 3d 339, 343 (1988). “Waiver

can be established by conduct indicating that strict compliance with the contractual provisions will

not be required.” Midway Park Saver v. Sarco Putty Co., 2012 IL App (1st) 110849, ¶ 20.

¶ 22   Here, the record demonstrates that Buffalo did not conduct itself in any way that could

have led Five Fifths to believe that strict compliance with the applicable provisions of the lease

was not required. Buffalo sent monthly statements to Five Fifths notifying it of past and current

outstanding rent, CAM, taxes, insurance, and late fees, dating back to November 2018. This was

a clear indication to Five Fifths that Buffalo was seeking payment of back rent and other charges.

                                                  6
No. 1-22-0787

¶ 23   Section 23.1 of the lease provides in relevant part that “acceptance of rent by Landlord

shall not be deemed a waiver of any earlier breach by Tenant of any term, covenant or condition

hereof, regardless of the Landlord’s knowledge of such breach when such rent is accepted.” This

court has recognized that “[t]he acceptance of rent, even after a notice to quit has been given, is

not itself a waiver, but merely evidence to be considered in accordance with all the circumstances.”

Wang v. Marcus Brush Co., 354 Ill. App. 3d 968, 970 (2005).

¶ 24   In sum, we find that Buffalo did not waive strict compliance with the lease or conduct itself

in a manner which could have lulled Five Fifths into believing that strict compliance with the

relevant provisions of the lease was not required.

¶ 25                                III. CONCLUSION

¶ 26   For the foregoing reasons, we affirm the trial court’s judgments.

¶ 27   Affirmed.

                                                 7