In re Hartwig

222 B.R. 839, 1998 Bankr. LEXIS 920, 1998 WL 427607
United States Bankruptcy Court, C.D. Illinois·Decided July 13, 1998·No. Bankruptcy No. 95-71434·Published

Opinion

BASIL H. COUTRAKON, Bankruptcy Judge.

OPINION

Before the Court is Debtor’s Objection to the unsecured non-priority claim of Lincoln Heritage Investment Corporation (“Lincoln Heritage”) in the amount of $16,866.12. An evidentiary hearing was held on June 2,1998, at the conclusion of which the Court took the matter under advisement.

Debtor filed her voluntary petition pursuant to Chapter 13 of the Bankruptcy Code on August 25,1994. Debtor listed Lincoln Heritage on her Schedule F — Creditors Holding Unsecured Nonpriority Claims — as having a disputed claim of $13,958.94. On August 29, 1994, the Court sent a Notice of Commencement of Case to Debtor’s creditors, indicating that the deadline for filing claims was January 19, 1995. On December 2, 1994, Debtor filed her Modified Chapter 13 Plan, which proposed to pay the Trustee $860 per month for 60 months. The Plan was confirmed on December 21, 1994, and the Order Confirming Plan provided, inter alia, that “[t]he Trustee need not file an objection to any late filed claim, but said claim shall be automatically barred except if said creditor obtains an order to the contrary.” Order at p. 2.

[841] On February 6, 1997, Lincoln Heritage filed its proof of claim in the amount of $16,866.12 and listed the basis for the claim as rent due and owing. On November 18, 1996, Lincoln Heritage filed its Motion to Allow Proof of Claim. Over Debtor’s objection, on February 6, 1997, the Court allowed Lincoln Heritage’s late-filed claim but subordinated the claim to all timely filed claims. The Order further provided that Debtor would be entitled to fully contest the entire claim if and when it became apparent that there would be funds available from which to pay all or part of Lincoln Heritage’s claim.

As a result of a favorable divorce settlement, Debtor was able to pay all of the timely-filed claims early, and her last regular plan payment was made on November 6, 1997. On December 30, 1997, Debtor filed her Objection to Claim of Lincoln Heritage. On June 2, 1998, an evidentiary hearing was held in this matter.

The facts in this case are not in serious dispute. On February 1, 1990, Debtor entered into a lease with Lincoln Heritage for a commercial space in a strip mall located at 1220 Woodlawn Road, Lincoln, Illinois. Debtor ran Sunspot Tanning Spa in that location until she vacated the premises on July 31, 1994. At some point in time after taking possession, Debtor began experiencing problems with the premises, particularly with the roof. According to Debtor, in the spring of 1992, the roof began leaking in no fewer than four places. Debtor contacted Glendean Garrison, the property manager, to advise of the problem, and the roof was patched at that time. In March, 1993, the roof again began to leak and, although some patchwork was performed, the problem was never fully corrected to the satisfaction of Debtor. In addition, Debtor identified certain other problems with the premises which arose at or around that time, including a broken window, a broken door, holes in the parking lot, and unsightly weeds and trash in and around the parking lot. There were also several other minor aesthetic and functional complaints.

For much her tenancy, Debtor did not pay her rent. In fact, after September, 1992, Debtor never made a full rent payment. At the time she vacated the premises, Debtor’s rent arrearage was $16,866.12, the amount for which Lincoln Heritage’s proof of claim was filed.

In objecting to the claim of Lincoln Heritage, Debtor argues that she was constructively evicted from the premises and that her obligation to pay rent for the premises was therefore relieved. Debtor correctly points out that the lease between the parties provides that Lincoln Heritage was required to keep the roof in good repair. Debtor contends that Lincoln Heritage failed in that regard and that the frequently-leaking roof, along with all of the other problems, prevented her from being able to profitably operate her tanning spa business, which resulted in her constructive eviction from the premises.

Constructive eviction is defined as “something of a grave and permanent character done by the landlord with the intention of depriving the tenant of the enjoyment of the premises.” Gillette v. Anderson, 4 Ill.App.3d 838, 842, 282 N.E.2d 149, 151-52 (1972) citing Morgan v. Cook, 213 Ill.App. 172, 175 (1919); Estate of Corbin v. McKey and Poague, Inc., 105 Ill.App.2d 120, 245 N.E.2d 117, 118 (1969). There can be no constructive eviction, however, without the vacating of the premises. Gillette, supra, 4 Ill.App.3d at 838, 282 N.E.2d at 152; Automobile Supply Co. v. Scene-In-Action Corp., 340 Ill. 196, 201, 172 N.E. 35, 38 (1930). The burden of showing that the vacation of the leased premises took place in a reasonable time is on the tenant. Automobile Supply Co., 340 Ill. at 203, 172 N.E. at 38; JMB Properties Urban Co. v. Paolucci, 237 Ill.App.3d 563, 566, 178 Ill.Dec. 444, 446, 604 N.E.2d 967, 969 (1992) (citation omitted), appeal denied 148 Ill.2d 643, 183 Ill.Dec. 21, 610 N.E.2d 1265 (1993). Whether the abandonment was within a reasonable time is ordinarily a question of fact dependent on the circumstances of each case. Automobile Supply Co., 340 Ill. at 202, 172 N.E. at 38.

Where a tenant fails to surrender possession after the landlord’s commission of acts justifying the abandonment of the premises, the liability for rent will continue so long as possession of the premises is contin[842] ued. Id., 340 Ill. at 201-02, 172 N.E. at 38 (citations omitted); accord Zion Industries, Inc. v. Loy, 46 Ill.App.3d 902, 906, 5 Ill.Dec. 282, 361 N.E.2d 605, 608 (1977). Although a reasonable time in which to vacate is afforded the commercial tenant, the duty to pay rent is not suspended while the tenant continues to occupy the premises. City of Chicago v. American National Bank, 86 Ill.App.3d 960, 963, 42 Ill.Dec. 1, 408 N.E.2d 379, 381 (1980).

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In re Hartwig, 222 B.R. 839, 1998 Bankr. LEXIS 920, 1998 WL 427607 (Ill. 1998).

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Related

J M B Properties Urban Co. v. Paolucci
604 N.E.2d 967 (Appellate Court of Illinois, 1992)
Gillette v. Anderson
282 N.E.2d 149 (Appellate Court of Illinois, 1972)
Zion Industries, Inc. v. Loy
361 N.E.2d 605 (Appellate Court of Illinois, 1977)
In RE ESTATE OF CORBIN v. McKey & Poague, Inc.
245 N.E.2d 117 (Appellate Court of Illinois, 1969)
City of Chicago v. American National Bank
408 N.E.2d 379 (Appellate Court of Illinois, 1980)
Automobile Supply Co. v. Scene-In-Action Corp.
172 N.E. 35 (Illinois Supreme Court, 1930)
Morgan v. Cook
213 Ill. App. 172 (Appellate Court of Illinois, 1919)