Court Opinion

ID: 9744518
Source: CourtListenerOpinion
Date Created: 2023-08-26 22:05:01.805844+00
Date Added: 2024-06-11T07:24:49.805860
License: Public Domain

PRESIDING JUSTICE McBRIDE, specially concurring in part and dissenting in part: I write to concur only in that portion of the opinion which affirms the dismissal of Vaidya’s negligence count. As to the portion of the opinion that reverses the trial courts’ grant of summary judgment to Firstar, I respectfully dissent. I would affirm the decision of the trial courts in these consolidated appeals because I believe the rental agreements were not leases of real property subject to the Landlord and Tenant Act (Act) (765 ILCS 705/1 (West 1998)) and the exculpatory clause used in these two agreements was clear and unambiguous and was not otherwise against public policy. Therefore, the rental agreements should be enforced as written. In my opinion, the majority has incorrectly concluded that the rental of a safety deposit box is a lease of real property and thus governed by the Landlord and Tenant Act. To reach this conclusion, the majority has ignored several general rules of contract interpretation. Contrary to the majority, I would not conclude the rental of a safety deposit box is a lease of real property. First, a lease of real property has been traditionally defined as: “ ‘a contract for exclusive possession of lands, tenements or hereditaments for life, for a term of years, or at will, or for any interest less than that of the lessor, usually for a specified rent or compensation. [Citation.] A lease possesses the property of passing an estate in land; it partakes of the nature of an estate, and exclusive possession of the leased premises is essential to its character. [Citations.]’ [Citation.]” Chemical Petroleum Exchange, Inc. v. Metropolitan Sanitary District of Greater Chicago, 81 Ill. App. 3d 1005, 1009, 401 N.E.2d 1203 (1980). Two elements missing from these safety deposit box arrangements are real property and exclusive possession. Although the majority has suggested that a safety deposit box is a “fixture,” and therefore part of the real property, this conclusion is not supported by any statute or any persuasive case law. In my opinion, a safety deposit box is not real property, but rather personalty. The second element, exclusive possession, is also missing from these agreements. Here, the lessees’ access to the safety deposit boxes was not exclusive and was limited by the terms of the rental agreement. The agreement specifically provided that the bank vault, which housed the safety deposit boxes, could be closed for holidays or “for any other reason said bank shall deem such closing prudent or proper.” Thus, unlike a lease of real property, where the tenant enjoys the right to exclusive possession of the property for the term of the lease, the boxholders here only had access to the safety deposit boxes and their contents during bank hours. Because the boxholders did not have exclusive possession of the safety deposit boxes, there can be no lease of real property. Since there was no lease of real property, the Act does not apply. The majority also concludes that because the parties defined their relationship as that of landlord/tenant, they subjected themselves to the Landlord and Tenant Act. In doing so, the majority has accepted Jewelers’ argument that “ ‘[j]ust as parties may choose which state’s substantive law should apply, the parties here chose that this state’s landlord/tenant substantive law should govern their relationship.’ ” 341 Ill. App. 3d at 19. This statement is flawed for a number of reasons. First, the contract does not express this intent. The parties never stated that the Landlord and Tenant Act should govern the contract but only that “the relationship of the bank and the lessee being hereby agreed to be that of landlord and tenant, not as bailee and bailor.” Second, there is no Illinois authority which holds that incorporation of the language cited above into a contract means the parties have subjected themselves to the Landlord and Tenant Act. Third, the Landlord and Tenant Act would seem to exclude from its coverage the safety deposit box leases here because these boxes are not “living spaces.” See Tobin v. McClure, 144 Ill. App. 3d 33, 493 N.E.2d 1215 (1986) (holding that the Security Deposit Return Act (now 765 ILCS 710 (West 1998)) is limited to units of residential real property; a unit of residential real property refers to an identifiable living space within a larger structure). Finally, the City of Chicago ordinance governing the leases of real property (which the majority does not discuss), referred to as the Residential Landlord and Tenant Ordinance (Chicago Municipal Code § 5 — 10—010 (1998)), is clearly limited to dwelling units. A dwelling unit under that ordinance is defined as a “ ‘structure or the part of a structure that is used as a home, residence or sleeping place by one or more persons ***.’ *** Chicago Municipal Code § 5 — 12—030(a) (1990).” Meyer v. Cohen, 260 Ill. App. 3d 351, 355, 632 N.E.2d 22 (1993). Therefore, I would not find the Landlord and Tenant Act governs these contracts. While it is true that exculpatory clauses are generally not favored, the basis for their enforcement is the strong public policy favoring freedom of contract. Rayner Covering Systems Inc., 226 Ill. App. 3d at 512. The rationale for permitting parties to limit liability was described by the supreme court in McClure Engineering Associates, Inc. v. Reuben H. Donnelley Corp., 95 Ill. 2d 68, 72-73, 447 N.E.2d 400 (1983), where it was said: “[D]ecisions of this court have consistently reflected a judicial concern with balancing the need to respect the right to freely contract with the need to protect parties from unfair provisions in contracts involving publicly regulated activities. [Citations.] However, in the nonregulated areas the decisions of this court and those of other jurisdictions reflect a widespread policy of permitting competent parties to contractually allocate business risks as they see fit. [Citations.] ‘This accords to the individual the dignity of being considered capable of making and standing by his own agreements.’ [Citation.]” Here, the parties clearly agreed that the lease agreement was for the rental of the deposit boxes only and the bank would not be an insurer of the contents unless the parties entered into a separate agreement. There seems to be no public policy reason why the parties could not agree to this term since safety deposit companies are not generally insurers of the safety of the box contents. See Hauck v. First National Bank of Highland Park, 323 Ill. App. 300, 302, 55 N.E.2d 565 (1944); Henderick v. Uptown Safety Deposit Co., 21 Ill. App. 2d 515, 517, 159 N.E.2d 58 (1959). The parties agreed that in order for the bank to be the insurer of the contents, it would charge more money to insure the contents. Consequently, if the bank was paid more than the mere rental fee, the risk of loss would be borne by the bank. It is undisputed that the parties never entered into a separate agreement for this insurance. The record shows that Annaco and Ringel were charged about $80 annually to rent the safety deposit boxes. The record also shows that Annaco paid Jewelers $732 for insurance coverage for the contents of its safety deposit box. Ringel was also separately insured but the record does not disclose how much he paid for this coverage. Vaidya did not secure insurance. By its decision, the majority has ignored several rules of general contract construction. First, it has not construed the contract as a whole, giving meaning and effect to every provision thereof, if possible. Martindell v. Lake Shore National Bank, 15 Ill. 2d 272, 283, 154 N.E.2d 683 (1958). Instead, the majority has taken the last paragraph and emphasized it to the exclusion of all the other paragraphs. Second, the majority has failed to give weight to the principal apparent purpose and intention of the parties at the time of contracting. Vole, Inc. v. Georgacopoulos, 181 Ill. App. 3d 1012, 1020, 538 N.E.2d 205 (1989). The principal purpose was the rental of a safety deposit box; it was not to insure the safety of the holders’ contents. The parties clearly understood that the compensation received by the bank, which was about $6.50 a month, was a rental fee, not an insurance premium. The parties expressly stated that if the “lessees” wanted the bank to insure the contents, they were required to enter into a separate agreement and pay an additional sum to justify the risk or liability the bank would thereby assume. Next, the majority has interpreted the contract in a manner that renders the first provision meaningless, which it should not do. USG Corp. v. Sterling Plumbing Group, Inc., 247 Ill. App. 3d 316, 320, 617 N.E.2d 69 (1993). Lastly, it has rewritten the language of the contracts and incorporated into the contracts provisions of the Landlord and Tenant Act. This is in violation of the rule that the rights of parties to a contract are limited by the terms expressed in the contract and courts may not rewrite language or add provisions to make the agreement more equitable. Jewel Cos. v. Serfecz, 220 Ill. App. 3d 543, 548-49, 581 N.E.2d 186 (1991). Although the parties chose to characterize the relationship between themselves as landlord and tenant, I cannot agree that such language transforms the rental agreement of a safety deposit box into a lease of real property. Nor can I agree that the Landlord and Tenant Act applies to these contracts for the reasons stated above. Part of the difficulty with these consolidated appeals is an attempt to characterize these contracts as either a lease of real property or a bailment. Unfortunately, the contracts do not fit neatly into either category. They are not really leases because exclusive possession is lacking. Nor are they, in my opinion, really bailments either, because Firstar did not have possession, custody, or control over the contents of the boxes at any time. Nonetheless, it is clear that a safety deposit boxholder has access to the contents of the box that is at least equal to, and probably greater than, that of the bank. Neither could acquire the box itself without the other, but once acquired, the boxholder has access to the contents in privacy. What is removed from or added to the box is largely a matter that the boxholder alone determines. Therefore, the provision “that there shall be no liability on the part of said bank, for loss of, or injury to, the contents of said box from any cause whatsoever unless lessee and said bank enter into a special agreement in writing to that effect, in which case such additional charges shall be made by said bank as the value of contents of said safe, and the liability assumed thereof may justify,” seems reasonable. Moreover, because the actual rental of safety deposit boxes is not regulated by a particular statute, it does not seem a violation of public policy for the parties to have agreed to the exculpatory language entered into here. Finally, I do not find the first paragraph of these agreements to be ambiguous. The parties agreed the bank would assume “no liability *** for loss of, or injury to, the contents” unless the parties entered into a separate written agreement to “that effect.” In the event that the parties entered into this separate written agreement, the liability of the bank would be limited “to the exercise of ordinary care to prevent the opening” by any unauthorized person. This language, in my opinion, is not ambiguous. I would enforce the contracts as written. Accordingly, I respectfully dissent.