Court Opinion

ID: 9722477
Source: CourtListenerOpinion
Date Created: 2023-08-26 09:35:11.687404+00
Date Added: 2024-06-11T18:24:36.012192
License: Public Domain

JUSTICE COOK, dissenting: I respectfully dissent. I would reverse, and hold that Buffalo Wild Wings is a restaurant facility whose primary food product is chicken and accordingly barred by the contract. Parol evidence should not be considered in this case. This contract contains an integration clause. Paragraph 8.2 provides: “Entire Contract. This [cjontract constitutes the entire agreement between [s]eller and [b]uyer, and there are no other covenants, agreements, promises, terms and provisions, conditions, undertakings or understandings either oral or written, between them concerning the [p]roperty other than those herein set forth.” When a contract contains an integration clause, it is improper to consider extrinsic evidence of prior negotiations to create an extrinsic ambiguity. Air Safety, Inc. v. Teachers Realty Corp., 185 Ill. 2d 457, 462-64, 706 N.E.2d 882, 884-85 (199-9) (“four corners” rule). Paragraph 4.1(h) of the contract prohibits use of the real estate for the purpose of conducting “any fast[-]food (QSR) restaurant or restaurant facility whose principal food product is chicken.” The language seems clear. A fast-food restaurant, like KFC, whose principal food product is chicken, is specifically prohibited. More broadly, any restaurant facility whose principal food product is chicken is also prohibited. The trial court found Buffalo Wild Wings not to be a fast-food restaurant, but there is no dispute that Buffalo Wild Wings’s principal food product is chicken. The parties agree that the words “whose principal food product is chicken” modify both “restaurant” and “restaurant facility.” Regency argues the words “fast food (QSR)” modify both “restaurant” and “restaurant facility.” The problem with Regency’s argument is that there appears to be no difference between a fast-food “restaurant” serving primarily chicken and a fast-food “restaurant facility” serving primarily chicken. The parties agree there are two categories here and there has to be a difference between them, otherwise one of the categories is surplusage. The obvious difference is that “fast food” modifies only the word it precedes, not the words “restaurant facility” which follow later, after the word “or.” Regency, however, attempts to create a distinction between the two categories by a narrow and unusual definition of “restaurant facility” as “a limited food[-]service operation located in a multi-outlet food court, or embedded in a department store, shopping center, or similar retail setting.” That definition is found only in the self-serving affidavit of Regency’s president, and is contradicted elsewhere in the agreement where KFC itself (a stand-alone restaurant) is referred to as a “restaurant facility.” A “facility” is something that is built to serve a particular purpose, such as a medical facility, an educational facility, or a recreational facility. See Merriam Webster’s Collegiate Dictionary 415 (10th ed. 2000) (“facility”: “4b: something (as a hospital) that is built, installed, or established to serve a particular purpose”). There is no requirement that a “facility” be embedded in some other operation. The affidavit of Regency’s president, which is relied on to show ambiguity, is extrinsic evidence used to create an extrinsic ambiguity in violation of the parol evidence rule. Air Safety, 185 Ill. 2d at 463-64, 706 N.E.2d at 885. There is no indication in the contract that the parties were concerned with embedded food operations. They were concerned with food operations like KFC, that served primarily chicken. Our construction of contracts seems to vary between extremes. If we declare the contract not to be ambiguous, that is the end of the matter and we make no attempt to construe, interpret, or understand it. Dusthimer v. Board of Trustees, 368 Ill. App. 3d 159, 857 N.E.2d 343 (2006); Berryman Transfer & Storage Co. v. New Prime, Inc., 345 Ill. App. 3d 859, 863, 802 N.E.2d 1285, 1288 (2004). If we declare the contract to be ambiguous, we ignore the language of the contract and turn to any and all extrinsic evidence, even preliminary negotiations between the parties barred by the parol evidence rule. 373 Ill. App. 3d at 275. There should be a middle ground, where we focus on the language of the contract. See, e.g., the Uniform Commercial Code (810 ILCS 5/2 — 202 (West 2004)), which allows terms to be explained or supplemented by usage of trade, or course of performance, but not contradicted by evidence of any prior agreement. We should be reluctant to discard the parol evidence rule. The parol evidence rule bars the introduction of the most questionable form of extrinsic evidence — self-serving testimony by one of the parties as to what the parties “really” agreed to in the negotiations leading up to the signing of the contract. R. Posner, The Law and Economics of Contract Interpretation, 83 Tex. L. Rev. 1581, 1600 (2005). The testimony of independent experts, however, may be considered. White City Shopping Center, LP v. PR Restaurants, LLC, 21 Mass. L. Rptr. 565 n.4 (October 31, 2006) (a burrito is not a sandwich). Paragraph 4.1(h) identifies some (but not all) specifically prohibited businesses, all of which seem to be fast-food chicken restaurants. The paragraph goes on to describe another prohibited category: “Other than the aforementioned restaurants which shall absolutely be prohibited, a restaurant shall be deemed to ‘feature boneless chicken or chicken sandwiches’ only if the primary business of such restaurant is the sale of such items.” That language is consistent with the construction that fast-food restaurants whose principal food product is chicken are specifically prohibited, and more broadly, any restaurant facility whose principal food product is chicken is also prohibited. Paragraph 4.1(h) goes on to list some types of restaurants that are not prohibited, like dinner houses, seafood restaurants, Italian restaurants and “casual dining” restaurants. Those restaurants apparently do not primarily feature chicken. It is interesting that none of the examples given make any distinction between stand-alone restaurants and embedded restaurants, which Regency argues is the meaning of “restaurant facility.” Even if we were to consider the negotiations of the parties, those negotiations support Lopax’s argument that there are two categories here, fast-food restaurants, and more broadly, any restaurant facility. Lopax wanted to “prohibit all fast-food restaurants, not just those serving primarily chicken.” 373 Ill. App. 3d at 277. Lopax also wanted to prohibit all restaurant operations serving chicken. “Indeed, Lopax’s concern consistently was not over the level of service but the serving of chicken.” 373 Ill. App. 3d at 277. Regency/Arbours wanted to limit the prohibitions. Regency/Arbours refused to go along with a prohibition on all fast-food restaurants such as McDonald’s. Regency/Arbours insisted that only restaurants “whose principal food product is chicken” (emphasis added) would be prohibited. From the beginning, the parties were discussing two categories, fast-food restaurants and restaurants in general. Regency/Arbours added similar restrictions to both categories, but the parties never expressed the intent to limit the contract to fast-food restaurants, as they could have done by eliminating the second category. The memoranda recorded April 17, 2002, and August 6, 2002, did not amend the contract. The purpose of recording a memorandum of contract is to put the public on notice that a contract exists. It is not necessary that the entire contract be recorded. A prospective buyer has the duty to investigate and determine the provisions of the contract. Smith, 402 Ill. at 465, 84 N.E.2d at 428 (“Under the circumstances present in this case, a prudent person would have sought light from [the] plaintiff. This, [the] defendants failed to do. They were not innocent purchasers for value”). The original memorandum here summarized the provisions of paragraph 4.1(h) in a single sentence. The amended memorandum discussed some of the paragraph’s limitations (within one mile of the real estate; shall expire if use ceases for 90 days; dinner houses are allowed), perhaps because Regency was concerned that prospective buyers would see the recorded memorandum and not inquire further. The majority’s construction of the memoranda does not read “restaurant facility” to mean embedded restaurant, as Regency argues, but instead serves to strike the term from the contract.