The Takiff Properties Group Ltd. 2 v. GTI Life, Inc.

2018 IL App (1st) 171477, 124 N.E.3d 11, 429 Ill. Dec. 242
Appellate Court of Illinois·Decided December 26, 2018·No. 1-17-1477·Published·Cited by 6 cases

Opinion

JUSTICE LAVIN delivered the judgment of the court, with opinion.

*243 ¶ 1 The Takiff Properties Group Ltd. # 2, the plaintiff-landlord in this dispute, entered into a commercial lease with GTI Life, Inc., the defendant-tenant. Defendant Guy Iantoni served as tenant's guarantor. 1 Following a bench trial, the court entered judgment in landlord's favor with respect to its claim that tenant, which had abandoned the property, owed overdue rent. The court also found that the lease contractually waived landlord's obligation to mitigate damages under section 9-213.1 of the Code of Civil Procedure ( 735 ILCS 5/9-213.1 (West 2014) ). On appeal, tenant asserts that the trial court should have entered *13 *244 judgment in its favor because parties cannot contractually negate section 9-213.1 and, even if they can, landlord waived its right to assert any contractual waiver. Tenant also contends landlord failed to present evidence that it attempted to mitigate its damages. For the following reasons, we affirm the trial court's judgment.

¶ 2 I. Background

¶ 3 In 2008, landlord leased to tenant the property located at 633 Skokie Boulevard, Suite 250, Northbrook, Illinois. Although the lease was initially for one year, it was extended through October 31, 2014, with an eventual increase in rent to $2167 per month. The lease contained several cumulative remedies benefitting landlord, including the following:

" If the Lessee abandons the premises or otherwise entitles the Lessor so to elect, and the Lessor elects to terminate the Lessee's right to possession only, without terminating the lease, the Lessor may, at the Lessor's option enter into the premises,* * * and take and hold possession thereof. * * * Upon and after entry into possession without termination of the lease, the Lessor may, but need not, relet the premises or any part thereof for the account of the Lessee to any person, firm or corporation other than the Lessee for such rent, for such time and upon such terms as the Lessor in the Lessor's sole discretion shall determine, and the Lessor shall not be required to accept any Lessee offered by the Lessee or to observe any instructions given by the Lessee about such reletting." 2 (Emphases added.)

¶ 4 On June 25, 2015, landlord filed a complaint alleging that tenant owed $18,309.97 in unpaid rent as well as attorney fees and costs. Ultimately, tenant filed an answer admitting that "a certain amount of money" had not been paid but denying that the amount due was $18,309.97. As an affirmative defense, tenant alleged that landlord failed to exercise reasonable diligence to mitigate its damages. Specifically, landlord knew or should have known that tenant no longer possessed the premises after March 2014. Yet, landlord made no effort to relet the premises until approximately the summer of 2014. Tenant alleged that because landlord failed to mitigate damages, it was not entitled to any unpaid rent. Landlord did not file a response to the defense raised.

¶ 5 The matter proceeded to trial on February 15, 2017. No court reporter was present but the parties submitted bystander reports for the trial court's approval. According to landlord's proposed bystander's report, Steve Freeman testified on landlord's behalf that it relet the premises on August 1, 2014, prior to the lease expiration, and did not charge tenant rent for the remaining period. On cross-examination, "Freeman testified that he had no personal knowledge of the specific steps that [landlord] took to relet the Premises but that he believed the Premises were listed." Landlord's bystander report further stated that Iantoni testified, on tenant's behalf, that certain personal property left on the premises was not returned.

¶ 6 The bystander's report submitted by landlord concluded that after hearing argument and considering the testimony as well as the documents admitted into evidence, the court entered judgment in landlord's favor for $21,616.30. In addition, "[t]he court found that [tenant] had contractually waived [landlord's] duty to mitigate," and the court rejected the suggestion *14 *245 that such duty could not be contractually waived. The trial court subsequently certified landlord's bystander's report, to the exclusion of the report submitted by tenant, and added that tenant "provided no legal authority for [its] position that the waiver of mitigation in the lease is unenforceable."

¶ 7 Tenant moved for the court to reconsider, arguing that Freeman admitted he had no knowledge of any actions taken to mitigate landlord's damages and that parties could not contract away landlord's "statutory duty to mitigate damages." See id. They argued that landlord attempted to contract itself out of its statutory duty through the lease's language stating that the landlord could, but was not required to, relet the premises. Tenant did not, however, identify any case stating that a statutory duty, let alone, this statutory duty, could not be contractually waived. According to the proposed bystander's report certified by the court, the trial court denied the motion reconsider, finding that tenant had not pled that landlord had a statutory duty to mitigate, as opposed to a common law duty.

¶ 8 II. Analysis

¶ 9 On appeal, tenant asserts that (1) landlord failed to present evidence of mitigation, (2) landlord waived its right to assert the contractual provision excusing it from reletting the premises, and (3) the parties could not have contracted away landlord's statutory duty to mitigate damages. We first examine the nature of section 9-213.1.

¶ 10 A. Section 9-213.1: Duty or Defense

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The Takiff Properties Group Ltd. 2 v. GTI Life, Inc., 2018 IL App (1st) 171477, 124 N.E.3d 11, 429 Ill. Dec. 242 (Ill. Ct. App. 2018).

2018 IL App (1st) 171477 (The Takiff Properties Group Ltd. 2 v. GTI Life, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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The Takiff Properties Group Ltd. 2 v. GTI Life, Inc.
2018 IL App (1st) 171477 (Appellate Court of Illinois, 2018)