Golf Management Co. v. Evening Tides Waterbeds, Inc.

572 N.E.2d 1000, 213 Ill. App. 3d 355, 157 Ill. Dec. 536, 1991 Ill. App. LEXIS 648
CourtAppellate Court of Illinois
DecidedApril 24, 1991
Docket1-89-0866
StatusPublished
Cited by6 cases

This text of 572 N.E.2d 1000 (Golf Management Co. v. Evening Tides Waterbeds, Inc.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Golf Management Co. v. Evening Tides Waterbeds, Inc., 572 N.E.2d 1000, 213 Ill. App. 3d 355, 157 Ill. Dec. 536, 1991 Ill. App. LEXIS 648 (Ill. Ct. App. 1991).

Opinion

JUSTICE WHITE

delivered the opinion of the court:

Plaintiff and counterdefendant Golf Management Company, Inc. (Golf), appeals from a jury verdict and award of damages in favor of defendant and counterplaintiff Evening Tides Waterbeds, Inc. (Evening Tides).

On August 11, 1981, Golf and Evening Tides entered into a commercial lease for property located at 1735-39 West Golf Road in the Golf Plaza Shopping Center in Mt. Prospect, Illinois. The lease ran from October 1, 1981, until September 30, 1986, and provided that the property could not be subleased without the previous written consent of Golf. The lease also provided for a base rent of $6.25 per square foot which, together with insurance, real estate taxes, and other expenses, amounted to a monthly payment of $5,184.75. In addition, Evening Tides agreed to pay as rent 5% of its sales in excess of a certain amount.

On July 1, 1984, 25 months before the expiration of its lease, Evening Tides vacated the property and stopped paying rent. In June 1985, Golf filed suit against Evening Tides charging it with breach of the lease contract and seeking to recover $67,124.35 in unpaid rent.

Evening Tides filed an answer and affirmative defense alleging that Golf had breached the terms of the lease by unreasonably refusing to accept the subtenants proffered by Evening Tides. Evening Tides argued that Golf’s breach relieved Evening Tides of any obligations and duties under the lease. Evening Tides also filed a counterclaim against Golf, seeking damages for Golf’s refusal to accept the proposed subtenants.

At trial, Golf called Robert Krueger, president of Evening Tides, as an adverse witness. Krueger testified that on August 11, 1981, he entered into a five-year lease with Golf for the property located at 1735-39 Golf Road in Mount Prospect; that he operated a furniture store at that location; that he was frequently late in paying the rent on the property; and that after paying the June 1984 rent he made no further payments under the lease. Krueger was Golf’s only witness and following his testimony, Golf rested its case.

Evening Tides’ first witness was Salvatore DiMucci, president of Golf. DiMucci testified that he received three offers for a sublease of the Evening Tides property. The first offer was made by Prakash Jotwani and Ram Shahani. DiMucci stated that he refused this offer because Jotwani and Shahani wanted to sublease only a portion of the space.

DiMucci stated that an offer to sublease the Evening Tides space also was made by John Torris. DiMucci stated that he refused this offer because Torris wanted to use the space for a bar and restaurant and the property was not zoned for the sale of liquor.

DiMucci testified that another offer for a sublease was made by Jerome Weinberg, who wanted to operate a furniture store in the Evening Tides space. DiMucci stated that Golf entered into a new lease with Weinberg at a base rent of $5,696, or approximately $10 per square foot, but Weinberg never took possession of the property. DiMucci stated that he entered into a new lease with Weinberg rather than a sublease because Weinberg requested a new lease.

In June 1986, a portion of the property was leased to a bakery at a rental equal to $8.40 per square foot. DiMucci stated that the bakery’s rent was lower than Weinberg’s because the space was smaller and in the rear of the shopping center.

Evening Tides’ other witnesses included Martin Meadow, a former Golf employee who testified that it was DiMucci’s policy to refuse subleases. Also testifying for Evening Tides were Krueger, Ram Shahani, John Torris, and Jerome Weinberg.

Shahani, Torris, and Weinberg all testified that they were interested in subleasing Evening Tides’ property, but were told that they would have to enter into new leases at a higher rent. In addition, all testified that before entering into negotiations with Golf for a new lease, they were required to pay $50 for a credit investigation.

According to Evening Tides’ witnesses, in March 1984 Jotwani and Roshani met with Krueger, and expressed an interest in subleasing the property for operation of a “Computerland” franchise. Initially, Jotwani and Roshani wanted to lease only a portion of the property, but after being told that DiMucci would not allow the space to be divided, they agreed to take the entire space. Krueger testified that he, Jotwani; and Shahani negotiated a sublease under which Jotwani and Shahani agreed to pay $4,737 of the monthly rent and Krueger agreed to pay the difference between that amount and the gross monthly rent of $5,184. The agreement was reduced to writing in a letter of intent signed May 9,1984.

The letter of intent stated that the agreement was conditioned upon Jotwani and Shahani obtaining an option to renew the lease after September 1986 and upon the lease being approved by Computerland’s national headquarters. In addition to the letter of intent, Jotwani and Shahani presented personal financial statements to Golf. These statements showed Jotwani’s net worth to be $281,605 and Shahani’s to be $266,595.

Krueger testified that when he presented the letter of intent to Golf’s employee Tom Gimino, Gimino informed him that a sublease would not be allowed and that Jotwani and Shahani would have to enter into a new lease. Shahani testified that he was told that Golf wanted a direct lease rather than a sublease and that the rent under the new lease would be $13 per square foot, more than twice the amount Evening Tides was paying. Jotwani and Shahani did not enter into a new lease with Golf, but leased property elsewhere. Shahani testified that this was because the rent Golf requested was too high.

In July 1984, after Evening Tides vacated the Golf Road property, Krueger made a second attempt to sublease. Krueger entered into negotiations with John Torris, who wanted to operate a restaurant and bar. Both Torris and Krueger testified that Torris wanted to sublease the property, but that this was not allowed. Krueger testified that Torris originally agreed to sublease the property from Krueger for $6,500 per month at a profit to Krueger of approximately $1,300 per month. After Golf refused to allow the sublease, Torris agreed to enter into a new lease with Golf.

On July 16, 1984, Krueger and Torris signed a letter of intent, in which Torris agreed to enter into a new three-year lease at a rent of $6,500 per month. The letter also stated that Torris’ offer was subject to his obtaining a liquor license. Torris never signed the new lease, and in a letter dated July 30, 1984, he stated that this was because he was unwilling to pay annual increases in the $6,500-per-month rent. Torris testified that another reason he did not sign the lease was because he did not like some of the terms it contained, including requirements that he pay Golf 8% of his gross sales, that Golf approve the cash registers used in the store, and that he submit to arbitrary audits of his gross sales.

In August 1984, Krueger was contacted by Weinberg, who expressed an interest in subleasing the property for operation of a furniture store.

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Bluebook (online)
572 N.E.2d 1000, 213 Ill. App. 3d 355, 157 Ill. Dec. 536, 1991 Ill. App. LEXIS 648, Counsel Stack Legal Research, https://law.counselstack.com/opinion/golf-management-co-v-evening-tides-waterbeds-inc-illappct-1991.