The Takiff Properties Group Ltd. 2 v. GTI Life, Inc.
The Takiff Properties Group Ltd. 2 v. GTI Life, Inc.
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
¶ 11 "After January 1, 1984, a landlord or his or her agent shall take reasonable measures to mitigate the damages recoverable against a defaulting lessee."
Id.
The doctrine of mitigation is often characterized as imposing a "duty" on an injured party, but this characterization is inaccurate.
St. George Chicago, Inc. v. George J. Murges & Associates, LTD.
,
¶ 12 Moreover, as this court has previously observed, section 9-213.1 left out many details.
Snyder v. Ambrose
,
¶ 13 Tenant contends that as a categorical rule, parties cannot waive statutory requirements. Our supreme court, however, has held that they can.
Smith v. Freeman
,
¶ 14 Given that section 9-213.1 is riddled with ambiguities, we now consider the legislative history of this statute, something that the handful of cases addressing this statute have not previously done. See
Commonwealth Edison Co. v. Illinois Commerce Comm'n
,
¶ 15 Pursuant to the common-law doctrine of mitigation of damages, a plaintiff asserting a breach of contract claim cannot recover losses that it could have reasonably avoided.
Boyer v. Buol Properties
,
¶ 16 In 1983, the House of Representatives presented the statute in question, which remains substantially the same today. According to Representative Preston:
"House Bill 986 amends the Code of Civil Procedure to require a landlord to take reasonable steps to mitigate damages against a tenant who is in default. * * * In all areas of contract law in this state, without exception, except for the one that I'm going to mention, the nondefaulting, the nonbreaching party has a duty, imposed by law, to take reasonable steps to try to reduce the damages *247 *16 against the party who is in default. That is true in every contract in Illinois and throughout the United States, except in Illinois for landlord-tenant contract, which we normally call leases. Through a throwback to Old English Common Law, a landlord does not have to do anything to try to reduce the damages against a tenant in default. As a matter of fact, landlords do it anyway, even though they don't have to, because it's, frankly, crazy not to try to do something to reduce your damages * * *. * * * I have to take reasonable measures to try to mitigate or reduce those damages. That is all that this Bill does in landlord-tenant lease situations. It requires reasonable measures to try to reduce the amount of damages. Now, this sounds like this is really changing the law a great deal, but, in fact, it's not changing the law almost at all." 83 Ill. Gen. Assem., House Proceedings, May 12, 1983, at 63 (statements of Representative Preston).
¶ 17 Representative Preston's remarks show that the legislature enacted section 9-213.1 to ensure that landlords have the same duty to mitigate damages that other contracting parties have. To the extent that the trial court drew a distinction here between a landlord's common law duty to mitigate and its statutory duty to mitigate, no meaningful distinction exists. The statute adopted the same common law duty that applied to every other contracting party: no more, no less. A lack of mitigation remains an affirmative defense. Furthermore, prior decisions applying section 9-213.1 do not change our determination.
¶ 18 In
Snyder
, the defendant-tenant's attorney attempted to cross-examine the plaintiff-landlord as to his efforts to mitigate damages.
Snyder
,
¶ 19 The reviewing court found that a landlord should shoulder the burden of showing mitigation given that such evidence was chiefly within the landlord's control.
Id. at 166,
¶ 20 Four years after
Snyder
, in
St. George Chicago, Inc.
, the appellate court revisited section 9-213.1. The contractual provision there entitled the plaintiff-landlord
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to recover the present value of the lease rent for the unexpired term less the present fair rental value for the unexpired term.
St. George Chicago, Inc.
,
¶ 21 The reviewing court found that while a defaulting tenant could theoretically extinguish liability if a property was immediately relet, this was unlikely and the challenged lease provision created a best case scenario by limiting any liability to the excess of the lease rate over the market rate. Consequently, the lease provision accomplished what the statute intended without any risk to the tenant that efforts to relet might be unsuccessful.
Id. at 291,
¶ 22 To assist the trial court on remand, the court in
St. George Chicago, Inc.
agreed with
Snyder
that a landlord should bear the burden of demonstrating mitigation, contrary to the general rule requiring a defendant to plead and prove a lack of mitigation.
Id. at 292-93,
¶ 23 We question aspects of both Snyder and St. George Chicago, Inc. We disagree with Snyder's suggestion that section 9-213.1 transformed the mitigation doctrine into something other than an affirmative defense to be alleged, if not proven, by the defendant-tenant. See also Timothy J. Patenode & William J. Dorsey, Tenant Defaults and Landlord Remedies , in Commercial Landlord-Tenant Practice § 8.23, at 8-18 to-19 (Ill. Inst. for Cont. Legal Educ. 2015) (stating "[t]he authors believe that there is a good-faith basis for reversing the holdings of St. George and Snyder " because the statute could have been intended to merely reconcile the differing lines of authority regarding a landlord's duty to mitigate). Contrary to Snyder , we also find that having notice of one's obligations outside the courtroom is substantially different from having notice of what one must be prepared to defend against inside the courtroom. Furthermore, St. George Chicago, Inc. considered mitigation of the tenant's liability, not the landlord's mitigation of its damages, as called for by *249 *18 the statute. Because neither case considered whether a tenant may contractually waive its statutory right to assert a lack of mitigation as an affirmative defense, we find those cases do not preclude contractual waiver of the statute. But see Timothy J. Patenode & William J. Dorsey, Tenant Defaults and Landlord Remedies , in Commercial Landlord-Tenant Practice § 8.23, at 8-18 (Ill. Inst. for Const. Legal Educ. 2015) (stating that "[a]lthough there is no case clearly on point, the careful practitioner should assume that the enactment repeals earlier cases holding that the duty of mitigation is waivable by the tenant). Simply put, tenant has not shown that parties cannot contractually waive the obligation and corresponding right found in section 9-213.1. With that, we turn to the case before us.
¶ 24 B. Contractual Waiver
¶ 25 Tenant contends that landlord waived its right to assert the contractual provision that excused it from reletting the property. While we agree with landlord that this argument lacks cohesion (see
Velocity Investments, LLC, v. Alston
,
¶ 26 A contracting party may waive a contractual provision intended to benefit that contracting party.
Barker v. Leonard
,
¶ 27 Landlord first disputes that by neglecting to respond to the affirmative defense, landlord admitted it failed to mitigate damages. See 735 ILCS 5/2-610 (West 2014) ;
Pancoe v. Singh
,
¶ 28 Tenant responds, however, that defense counsel questioned Freeman regarding his inability to testify regarding landlord's efforts to mitigate damages, not landlord's actual lack of effort to mitigate damages. We are not persuaded. Not only is tenant splitting hairs, but there would be no reason to ask Freeman about his knowledge of mitigation, or lack thereof, unless defense counsel was attempting to show that landlord had not engaged in mitigation. Thus, tenant waived the right to require an answer to its affirmative defense. It follows that landlord did not admit that it failed to mitigate damages. Furthermore, landlord's lack of response did not unequivocally reflect an intention *250 *19 to waive its contractual right not to relet the premises.
¶ 29 Here, two commercial parties entered into a commercial lease purporting to waive tenant's right to have landlord attempt to relet the property upon tenant's default. Tenant has identified no policy preventing the enforcement of the contract in these particular circumstances. See
Mohanty v. St. John Heart Clinic, S.C.
,
¶ 30 III. Conclusion
¶ 31 Section 9-213.1 merely extended to tenants the same common law affirmative defense previously available to every other litigant. Here, however, tenant contractually waived that affirmative defense. Absent any reason why this contractual waiver should not be enforced, we affirm the trial court's judgment. In light of our determination, we need not consider whether landlord presented sufficient evidence that it mitigated its damages.
¶ 32 For the foregoing reasons, we affirm the trial court's judgment.
¶ 33 Affirmed.
Presiding Justice Mason concurred in the judgment and opinion.
Justice Hyman specially concurred, with opinion.
¶ 34 JUSTICE HYMAN, specially concurring:
¶ 35 I concur in the result but write separately because I disagree with the majority's consideration of-much less reliance on-"legislative history" in determining whether the landlord had a duty under section 9-213.1 to mitigate damages. 735 ILCS 5/9-213.1 (West 2014). The majority writes that section 9-213.1 is "wanting" in detail and "riddled with ambiguities" and turns to comments made during debate in the House of Representatives to divine its meaning. I would refrain from doing so because, as a tool of construction, legislative history renders a narrative of little value and, besides, is unnecessary to resolve the issue before us.
¶ 36 The use of legislative history in construing a statute's meaning is often problematic even when interpreting an ambiguous statute. As Justice Scalia noted, "[w]e are governed by laws, not by the intentions of legislators."
Conroy v. Aniskoff
,
¶ 37 Moreover, statements made by individual legislators during floor debates or in committee reports do not necessarily reflect
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*251
the intent of those who ultimately voted to enact the law. For instance, the majority focuses solely on the remarks of Representative Preston. The comments of one legislator cannot be deemed reflective of the views of the entire body. Indeed some, if not many, legislators might not have heard the comments or been aware of them when they voted. See,
e.g.
,
Krohe v. City of Bloomington
,
¶ 38 And comments by legislators may not express their own views about the meaning and intent of a statute but the views of third parties, such as interest groups and lobbyists. See Jack Schwartz & Amanda Stakem Conn,
The Court of Appeals at the Cocktail Party: The Use and Misuse of Legislative History
,
¶ 39 A court's primary function in interpreting a statute involves determining and giving effect to the legislature's intent in enacting the statute. And legislative intent best reveals itself through the language of the statute. See
Walker v. Rogers
,
¶ 40 Furthermore, the majority's resort to legislative history does nothing to clarify the waiver issue. Our supreme court has held that parties may waive statutory requirements, such as the section 9-213.1's directive that a landlord take reasonable measures to mitigate damages. See
Smith v. Freeman
,
For purposes of this opinion, "tenant" will refer to both GTI Life, Inc. and Iantoni.
We note there is no suggestion that landlord terminated the lease upon tenant's abandonment.
Another contractual provision purported to excuse the landlord from reletting the property if the lease itself was not terminated.
Id. at 291,
Case-law data current through December 31, 2025. Source: CourtListener bulk data.