Norcor Bolingbrook Associates, LLC v. AmeriCash Loans, LLC

2025 IL App (3d) 240360-U

• Court: Appellate Court of Illinois
• Decided: March 27, 2025
• Docket: 3-24-0360
• Status: Unpublished

Opinion

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).

2025 IL App (3d) 240360-U

Order filed March 27, 2025 ____________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

THIRD DISTRICT

NORCOR BOLINGBROOK ASSOCIATES, ) Appeal from the Circuit Court LLC, ) of the 12th Judicial Circuit, ) Will County, Illinois, Plaintiff-Appellant, ) ) Appeal No. 3-24-0360 v. ) Circuit No. 21-L-682 ) ) Honorable AMERICASH LOANS, LLC, ) John C. Anderson, ) Judge, Presiding. Defendant-Appellee. ) ____________________________________________________________________________

JUSTICE BERTANI delivered the judgment of the court. Presiding Justice Brennan and Justice Peterson concurred in the judgment. ____________________________________________________________________________

ORDER

¶1 Held: The circuit court’s finding that defendant demonstrated commercial impracticability sufficient to justify early termination of its lease was not against the manifest weight of the evidence.

¶2 Plaintiff, Norcor Bolingbrook Associates, LLC (Norcor), filed suit against defendant,

AmeriCash Loans, LLC (AmeriCash), for breaching the parties’ lease. After a bench trial, the Will

County circuit court found in favor of AmeriCash, finding that it produced sufficient evidence to

prove that the early termination clause of the lease was triggered by commercial impracticability. Norcor appeals, arguing that AmeriCash did not prove that it made reasonable efforts to conduct

business prior to claiming commercial impracticability. We affirm.

¶3 I. BACKGROUND

¶4 AmeriCash is a payday loan company formerly engaged in offering retail consumer loans

at the premises owned by Norcor. In December 1997 AmeriCash signed a lease with Norcor for

space in Bolingbrook, Illinois, from which AmeriCash intended to operate its business. The

business relationship between AmeriCash and Norcor continued for several years, during which

time the lease received several amendments regarding rent amounts and term extensions. Other

than those term extensions and rent adjustments, no other substantive amendments were

implemented.

¶5 Of relevance to this appeal, the lease provided the following language in Section 41

regarding early termination:

“Termination by Tenant: If federal or state legislation changes such that it becomes

illegal, impossible or commercially impracticable to conduct the business of Tenant

at the Premises, Tenant shall have the option to terminate this Lease upon three (3)

months’ written notice, and neither party shall have any liability either for damages

or otherwise to the other by reason of such termination. Tenant agrees to forfeit its

security deposit in the event of such termination.”

The lease identified “the business of the Tenant” as a retail consumer loan company that provided

short-term payday loans and included that AmeriCash intended to operate this business on the

premises.

¶6 On January 19, 2021, AmeriCash sent Norcor notice of early termination pursuant to

section 41 of the lease. AmeriCash cited to the soon-to-be-enacted Illinois Predatory Loan

2 Prevention Act (PLPA) (815 ILCS 123/15-1-1 et seq.(West 2020)) as legislation that would make

its business “illegal, impossible or commercially impracticable.” Specifically, the PLPA provided

that: “[n]otwithstanding any other provision of law, for loans made or renewed on and after the

effective date of this Act, a lender shall not contract for or receive charges exceeding a 36% annual

percentage rate on the unpaid balance of the amount financed for a loan.” Id. § 15-5-5.

¶7 On February 3, 2021, Norcor sent AmeriCash a notice that it was in arrears in its rent

payments and that an action for forcible entry and detainer would commence if it did not become

current. The PLPA went into effect on March 23, 2021. AmeriCash sent another notice of

termination on April 6, 2021, citing the same lease provision and the PLPA as its reason for early

termination.

¶8 Norcor filed suit against AmeriCash on September 2, 2021, alleging that AmeriCash

breached the terms of their lease by wrongfully terminating the lease and refusing to pay rent. It

further asserted that AmeriCash owed $96,245.68 in rent for the remainder of the lease. AmeriCash

responded, raising section 41 of the lease regarding early termination due to commercial

impracticability as an affirmative defense. It also alleged Norcor had a duty to mitigate damages

and had failed to do so.

¶9 Norcor filed a motion for summary judgment, arguing that section 41 of the lease and the

terms of the PLPA did not excuse AmeriCash’s obligation to pay the rent due. The court partially

granted Norcor’s motion regarding AmeriCash’s defenses of illegality and Norcor’s failure to

mitigate damages. However, it denied Norcor’s motion as it related to the issue of whether

commercial impracticability permitted AmeriCash to terminate the lease early.

¶ 10 The matter proceeded to bench trial on January 16, 2024. AmeriCash called Bonnie

Schoenberg to testify on its behalf. Schoenberg testified regarding AmeriCash’s determination that

3 conducting business under the PLPA would be commercially impracticable. She testified that she

was an AmeriCash board member since the business’s inception and currently acted as its general

counsel. She stated that it was necessary that AmeriCash operate at rates exceeding 300% APR

because the loans the business provided were small and unsecured and it experienced a default rate

of 20%. AmeriCash needed a high interest rate to make a profit due to these factors. Its current

interest rate was around 390%. The PLPA placed a cap on such loans at 36%, which was

significantly lower than the rates AmeriCash routinely used.

¶ 11 Schoenberg further testified the board met in January 2021 when AmeriCash first learned

that the PLPA would soon be enacted to consider the impact of the interest cap on its business. It

concluded that it would not be able to make a profit if it continued its business under this

restriction. Schoenberg testified that “[AmeriCash] ran the numbers and there was no possible way

to make even a slight profit at 36 percent. In fact, it would have been huge losses.” She testified

that the board specifically concluded the company could not earn a profit at the Bolingbrook

location given the limitations imposed by the PLPA.

¶ 12 The circuit court found in AmeriCash’s favor, ruling that it would be commercially

impracticable for the business to continue under the PLPA and that its termination of the lease was

proper under section 41 of the lease. The court referenced in its written order the definition of

commercial impracticability provided by the Restatement (Second) of Contracts, § 261 (1981) to

support its finding. It also stated it based its findings on Schoenberg’s testimony, specifically

noting that AmeriCash loans currently exceeded 300% due to high default rates, that it could not

operate profitably with interest rates below 36%, and that all AmeriCash’s locations in Illinois

closed once the PLPA went into effect. It found Schoenberg credible and concluded AmeriCash

sufficiently demonstrated that the PLPA rendered its business impracticable.

4 ¶ 13 The court denied Norcor’s motion to reconsider, and this appeal followed.

¶ 14 II. ANALYSIS

¶ 15 Norcor argues that the circuit court erred in finding in AmeriCash’s favor regarding

commercial impracticability. It contends AmeriCash was required to conduct business after the

PLPA’s enactment to properly demonstrate commercial impracticability before it could exercise

its early termination rights under section 41 of the lease. Norcor further claims that without

attempting to operate its business under the new law and thereafter providing the results of its

success or failure, AmeriCash did not provide sufficient evidence that it would be commercially

impracticable to continue operations. AmeriCash counters that Schoenberg’s testimony that the

board convened and reviewed its options before determining that there was no way to make a profit

under the PLPA is sufficient proof of commercial impracticability, and that the court did not err in

reaching that conclusion.

¶ 16 When reviewing a decision following a bench trial, we may not disturb the circuit court's

judgment unless it is against the manifest weight of the evidence. Battaglia v. 736 N. Clark Corp.,

2015 IL App (1st) 142437, ¶ 23. A judgment is against the manifest weight of the evidence if the

court’s findings are unreasonable, arbitrary, or not based on the evidence. Id. This deferential

standard of review is appropriate “because the trial court is in a superior position to determine and

weigh the credibility of the witnesses, observe witnesses’ demeanor, and resolve conflicts in their

testimony.” Wade v. Steward Title Guaranty Co., 2017 IL App (1st) 161765, ¶ 59. However, we

review de novo the circuit court’s decision regarding contract interpretation. Marx Transport, Inc.

v. Air Express International Corp., 379 Ill. App. 3d 849, 854 (2008) Thus, to the extent this appeal

requires us to construe the terms of the lease, our review is de novo. Id.

5 ¶ 17 Starting with the terms of the lease, the language in section 41 is clear. If legislation

prohibits AmeriCash’s business or makes it “commercially impracticable,” AmeriCash may

terminate its lease early but must first send notice to Norcor of its intent to do so. The interpretation

of this section hinges on what “commercial impracticability” means under the circumstances and

how AmeriCash must prove it in order to exercise the lease’s early termination clause.

¶ 18 The rationale for raising commercial impracticability as a defense is that the change in

circumstance has rendered further performance under a contract “so vitally different from what

was anticipated that the contract cannot reasonably be thought to govern.” Eastern Air Lines, Inc.

v. McDonnell Douglas Corp., 532 F.2d 957, 991 (5th Cir.1976). Section 261 of the Restatement

(Second) of Contracts provides:

“Where, after a contract is made, a party’s performance is made impracticable

without his fault by the occurrence of an event the non-occurrence of which was a

basic assumption on which the contract was made, his duty to render that

performance is discharged, unless the language or the circumstances indicate the

contrary.” Restatement (Second) of Contracts, § 261 (1981).

¶ 19 The court in Northern Illinois Gas Co. v. Energy Cooperative, Inc., discusses the

Restatement’s definition, finding that a party wishing to use impracticability as a defense must

first use “reasonable efforts to surmount obstacles to performance and performance is

impracticable only if it is so in spite of such efforts.” 122 Ill. App. 3d 940, 956 (1984); Restatement

(Second) of Contracts, § 261 cmt. d. Moreover, a party seeking to excuse certain obligations under

this theory must demonstrate that it can operate “only at a loss,” and that the loss would be so

severe and unreasonable that continuing performance “would result in grave injustice.” Northern

Illinois Gas Co., 122 Ill. App. 3d at 956. Impracticability may also be described as “extreme and

6 unreasonable” difficulty or loss. Restatement (Second) of Contracts, § 261 cmt. d. However, “[a]

mere change in the degree of difficulty or expense * * * unless well beyond the normal range, does

not amount to impracticability.” Id. Other jurisdictions also indicate that strict impossibility is not

a requirement for using impracticability as a defense. See, e.g., International Minerals & Chemical

Corp. v. Llano, Inc., 770 F.2d 879, 886-87 (10th Cir. 1985) (“[S]trict impossibility is no longer

required.”); Gulf Oil Corp. v. Federal Power Comm’n, 563 F.2d 588, 599 (3d Cir. 1977) (“The

crucial question in applying that doctrine to any given situation is whether the cost of performance

has in fact become so excessive and unreasonable that the failure to excuse performance would

result in grave injustice.”), cert. denied 434 U.S. 1062 (1978); Mineral Park Land Co. v. Howard,

156 P. 458, 460 (Cal. 1916) (“[A] thing is impracticable when it can only be done at an excessive

and unreasonable cost.”).

¶ 20 Before turning to the circuit court’s decision, we must first note the similarities between

this matter and Norcor Cicero Associates, LLC v. Title Lenders, Inc., 2024 IL App (1st) 232161-

U. Norcor Cicero found that a different payday lender could not terminate its contract because the

PLPA did not prohibit it from continuing with its business, even if it did affect its profits. Id. ¶ 21.

However, Norcor Cicero does not address commercial impracticability, as that condition was not

included in the lease’s early termination clause. Id. ¶¶ 4, 18. Thus, the court in Norcor Cicero did

not address whether the PLPA created a commercially impracticable situation for the payday

lender; it only discussed whether the PLPA made operating the business illegal or otherwise

prohibited the lender’s business. Id. ¶ 21. That is not the issue before this court—the circuit court

here specifically ruled that AmeriCash was permitted to terminate the lease early for commercial

impracticability, not illegality. Norcor Cicero is therefore an unsuitable comparison for our

analysis.

7 ¶ 21 Norcor argues on appeal that AmeriCash must continue conducting business under the

PLPA before it can claim severe loss and commercial impracticability. Norcor points to Northern

Illinois Gas to support this position and argues that it requires AmeriCash to continue its business

and experience severe loss because a party must make “reasonable efforts” to work within in the

obstacles created. See Northern Illinois Gas Co., 122 Ill. App. 3d at 955-56. However, “reasonable

efforts” does not necessarily require continuing operations before determining impracticability.

See, e.g., Stock & Grove, Inc. v. United States, 493 F.2d 629, 643 (Ct. Cl. 1974) (it is not necessary

to show that performance is literally impossible—difficulty, cost, and time factors can make

performance “commercially impossible”); Sherwin Alumina L.P. v. AluChem, Inc., 512 F. Supp.

2d 957, 973 (S.D. Texas 2007); Tractebel Energy Marketing, Inc. v. E.I. Du Pont De Nemours and

Co., 118 S.W.3d 60, 70 (Texas Ct. of App. 2003) (a party must explain why certain actions were

not reasonable rather than performing an unreasonable act to show impracticability). Norcor’s

position that AmeriCash must attempt to conduct business under the new law before it can argue

commercial impracticability creates an additional requirement that is not present in the lease, nor

is it required under the Restatement (Second) of Contracts or accompanying caselaw. See Northern

Illinois Gas Co., 122 Ill. App. 3d at 955-56; Restatement (Second) of Contracts § 261.

¶ 22 Requiring AmeriCash to continue a business that would not achieve a profit would not be

a “reasonable” prerequisite to early termination of the lease. The reasonable effort to surmount the

obstacle imposed by the PLPA was satisfied by the AmeriCash board’s meeting where it discussed

the potential numbers under the new interest rate cap and determined that no profit could be

obtained by staying in business. It would be unreasonable to require AmeriCash to actually operate

at a total loss before terminating its lease early. AmeriCash must only demonstrate that it assessed

the situation before it and explain why it was not reasonable to conduct business under these new

8 conditions. See Tractebel Energy Marketing, Inc., 118 S.W.3d at 70 (party must explain why

possible action to surmount new obstacle was unreasonable). AmeriCash demonstrated that it

made reasonable efforts to overcome the intervening event of the PLPA’s enactment through

Schoenberg’s testimony that the board held a meeting and evaluated the situation before

determining that it would not be profitable to continue under the PLPA-required interest rate cap.

This testimony was unrefuted, found to be credible by the court, and is sufficient proof of

reasonable efforts to overcome the obstacle prior to determining commercial impracticability.

¶ 23 After reviewing the meaning of commercial impracticability and the evidence presented at

trial, we find that the circuit court’s finding in favor of AmeriCash was not against the manifest

weight of the evidence. Norcor’s position adds requirements to proof of commercial

impracticability that are not supported by precedent. The court’s ruling was sound and grounded

in the evidence presented.

¶ 24 III. CONCLUSION

¶ 25 The judgment of the circuit court of Will County is affirmed.

¶ 26 Affirmed.