M X L Industries, Inc. v. Mulder

623 N.E.2d 369, 252 Ill. App. 3d 18, 191 Ill. Dec. 124, 1993 Ill. App. LEXIS 1632
CourtAppellate Court of Illinois
DecidedNovember 4, 1993
Docket2-93-0008
StatusPublished
Cited by46 cases

This text of 623 N.E.2d 369 (M X L Industries, Inc. v. Mulder) 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
M X L Industries, Inc. v. Mulder, 623 N.E.2d 369, 252 Ill. App. 3d 18, 191 Ill. Dec. 124, 1993 Ill. App. LEXIS 1632 (Ill. Ct. App. 1993).

Opinion

JUSTICE DOYLE

delivered the opinion of the court:

Plaintiff, MXL Industries, Inc., filed an action for declaratory judgment against defendant, Bernard H. Mulder, in the circuit court of Du Page County, seeking a determination that it satisfied its obligations, as a tenant, under an early termination provision of a commercial building lease. Defendant counterclaimed seeking damages for accrued rent arrearages and physical damage to the building. Plaintiff timely appeals from various orders of the circuit court which collectively held in substance (1) that plaintiff did not properly terminate its lease obligation with defendant; (2) that defendant was entitled to $211,230.64 in unpaid rent, interest, and post-verdict statutory interest; and (3) that defendant was entitled under the terms of the lease to $67,277.11 in attorney fees and costs.

Plaintiff raises the following issues on appeal: (1) whether it substantially performed the obligations necessary for early termination of the lease; (2) whether it settled the sole condition precedent to terminating the lease; (3) whether defendant waived any objection to plaintiff’s tender; and (4) whether there was sufficient evidence in the record to support the conclusion that defendant made a reasonable attempt to mitigate his damages.

Plaintiff (tenant) and defendant (landlord) entered into a five-year commercial real estate lease, commencing March 1, 1987, for approximately 9,000 square feet of industrial space located in Clarendon Hills, Illinois. Section 2 of the lease provided for plaintiff to pay defendant $3,000 per month during the first year of occupancy and $3,600 per month during the remaining years. Section 3 required a $3,000 security deposit. Section 7(b) required plaintiff to maintain the premises in good repair, normal wear and tear excepted. Additionally, the lease contained the following early termination provision:

“(a) The term of this Lease shall be for a period of five (5) years commencing on the 1st day of March, 1987 and ending on the 29th day of February, 1992 (hereinafter referred to as ‘the term of this Lease’). Notwithstanding the foregoing provisions of this Subsection 1 (a), at any time after the 29th day of February, 1988, Lessee may terminate this Lease by paying to Lessor all sums then due pursuant to the provisions of this Lease and an additional sum equal to four (4) months’ rent specified in Section 2 hereof. If Lessee exercises such right, the term of this Lease shall end on the date on which Lessor receives such payment from Lessor [sic].”

Approximately one year following the inception of the lease, plaintiff, in a letter dated February 24, 1988, notified defendant of its intention to exercise its rights under the early termination provision. The letter stated that plaintiff “has vacated the premises as of February 26, 1988,” that all accrued rent through February 1988 was paid, and that the net proceeds due under the lease terms would be available on the 29th of February. According to plaintiff’s letter, the amount purportedly due defendant was $11,400, which represented four months’ rent ($14,400) less the security deposit ($3,000). The correspondence further provided that “under the circumstances *** it was imperative that a release of the Lease be executed by each of the parties upon payment of the amounts due” to defendant.

The release agreement provided that in consideration of payment of the release fee the parties agreed to release and discharge one another from all further rights and obligations with respect to the lease, including plaintiff’s obligation to pay rent. The agreement provided for a certified check in the amount of $11,400 plus a release of the security deposit ($3,000), thus equaling four months’ rent at the rate commencing March 1, 1988. Following the transmittal of the February 24 letter and release, and prior to February 29, 1988, plaintiff deposited with its attorney, John Mulherin, the sum of $11,400.

Defendant testified that upon his receipt of the February 24 letter he contacted Frank Yohe, an MXL vice-president, and explained that MXL owed him March rent and that he would be sending a punch list of physical discrepancies. Mulherin testified that he received a phone call from defendant, wherein defendant expressed his concerns about the condition of the premises and advised Mulherin that he was sending a list of discrepancies. Defendant further testified that he advised Mulherin of MXL’s obligation for March rent.

On or about March 3, defendant transmitted to plaintiff a list of maintenance discrepancies which he considered plaintiff responsible for under the terms of the lease. Mulherin subsequently notified defendant, by letter dated March 15, 1988, that it was his understanding that plaintiff completed all of the items on the discrepancy list. Defendant testified that he contacted Mulherin to inform him that the contemplated repair work had not been completed. Defendant proposed that plaintiff pay defendant $3,000, and he would have his personnel complete the repair work.

Following their conversation, Mulherin wrote defendant and informed him that he wanted it made perfectly clear that his client, plaintiff, was no longer in possession of the premises and that it would not assume any liability for possession of the premises. Defendant testified that at the time he made the $3,000 offer he noted that there was a deficiency in the amount of the settlement because it did not include March rent. According to defendant, in order to resolve the matter, he required four months’ rent, March rent, and compensation for damage to the building. Defendant also testified that he and Mulherin had conversations regarding items of property he believed MXL left on the premises, specifically, a scrap metal dumpster, a camper, and a boat and trailer. Joseph Richenberger, a tow truck operator, testified that on March 1, 1988, he removed a cooling tower from the roof of the building at the request of Woodland Tool.

Defendant further testified that, on or about March 21, and “in order to make this thing go,” he proposed a reduction in the settlement amount to $2,000. According to his testimony, defendant, at that point, wanted four months’ rent, March rent, and $2,000 for damage to the building. Defendant further stated that he told Mulherin that it was getting near the end of the month, and if the matter was not resolved, MXL would owe rent for April. Mulherin testified that following defendant’s initial mention of rent, defendant never mentioned it again to him.

Mulherin subsequently informed defendant, by letter dated March 25, 1988, that plaintiff had accepted defendant’s proposal to pay the additional $2,000 in consideration of the full settlement and release of the lease. The letter further stated that upon receipt of the signed release agreement from defendant, which was attached to the letter, Mulherin would forward a check or wire transfer in the amount of $13,400 ($11,400 plus the additional $2,000) to any bank or individual at defendant’s direction.

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Cite This Page — Counsel Stack

Bluebook (online)
623 N.E.2d 369, 252 Ill. App. 3d 18, 191 Ill. Dec. 124, 1993 Ill. App. LEXIS 1632, Counsel Stack Legal Research, https://law.counselstack.com/opinion/m-x-l-industries-inc-v-mulder-illappct-1993.