Loyola Univ. of Chi. v. Onward MSO, LLC

1

2024 IL App (1st) 230708-U

LOYOLA UNIVERSITY OF CHICAGO, Plaintiff-Appellee, v. ONWARD MSO, LLC, and ANY AND ALL UNKNOWN OCCUPANTS, Defendants

Onward MSO, LLC, Defendant-Appellant.

No. 1-23-0708

Court of Appeals of Illinois, First District, Third Division

October 30, 2024

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

Appeal from the Circuit Court of Cook County. No. 2021 M1 701604 The Honorable Robert F. Harris, Judge Presiding.

JUSTICE REYES delivered the judgment of the court. Presiding Justice Lampkin and Justice Martin concurred in the judgment.

ORDER

REYES JUSTICE

¶ 1 Held: The trial court's judgment is reversed, where the trial court abused its discretion in denying a continuance based on the illness of defendant's trial counsel immediately prior to trial. As the issue of possession has been rendered moot by the subsequent execution of the eviction order, the matter is remanded for a new trial to determine whether defendant is liable for past-due rent.

¶ 2 The instant appeal arises from a forcible entry and detainer lawsuit filed by plaintiff Loyola University of Chicago against defendant Onward MSO, LLC, a company which operated a restaurant on the premises owned by plaintiff. Defendant's counsel had health issues during the proceedings, resulting in two continuances; after the second one, the trial court indicated that it would grant no further continuances and suggested that defendant retain additional or alternate counsel. Shortly before trial, defendant's counsel had a health emergency which was unrelated to his prior condition, which resulted in his hospitalization. The trial court, however, denied defendant's requests for a continuance and the matter proceeded to a jury trial. At trial, defendant was unable to present its case, as it was not represented by an attorney, and the trial court ultimately entered a directed verdict at the end of plaintiff's case. On appeal, defendant primarily contends that the trial court erred in (1) denying its requests for a continuance, (2) permitting the trial to go forward without defendant being allowed to present its case, and (3) denying his petition for rule to show cause, which was based on plaintiff's unilateral altering of the address on the premises in question. For the reasons that follow, we reverse and remand the matter for a new trial.

¶ 3 BACKGROUND

¶ 4 Lease

¶ 5 On March 22, 2017, plaintiff, as landlord, and defendant as tenant, entered into a lease agreement for defendant's use of certain property owned by plaintiff; the lease was signed on behalf of defendant by Michael Olszewski defendant's owner and sole member. According to the lease, plaintiff and Albion Hotel, LLC (Albion), had developed a six-story multiuse building "commonly known as 6566-90 N. Sheridan Road/1209 W. Albion Avenue, Chicago, Illinois." The building was vertically subdivided into four parcels, two owned by plaintiff and two owned by Albion. The lease provided that "[t]he premises to be leased to Tenant consists of that portion of the Loyola Retail Improvements designated as 'Retail Space #A' and 'Retail Space #B' on the site plan attached hereto."

¶ 6 The term of the lease was to begin on the "Rent Commencement Date," which was defined as the earlier of (1) the date that defendant opened for business to the public or (2) November 26, 2017, and was to extend for a period of 10 years. The lease provided for one year of rent abatement, with monthly rent payments of $10,000 commencing during the second year of the lease.

¶ 7 Under the lease, defendant was to use the property solely for the operation of a sit-down restaurant, and was responsible for all work and improvements on the premises at its sole expense, which was estimated to be in excess of $1 million. Upon expiration of the lease, "[a]ll personal property, furnishings, machinery and trade fixtures, equipment and improvements that [defendant] install[ed] in the Premises [would] remain the property of [defendant]," and defendant would be responsible for removing such items from the property.

¶ 8 Upon the commencement of defendant's rent payment obligation, defendant was required to pay rent on the first day of each calendar month. Past-due rent would incur interest charges, as well as a $200 late charge. The lease provided that a failure to pay rent which continued for five days after defendant's receipt of written notice from plaintiff would constitute a default under the lease. Under the lease, "[e]xcept for the payment of Rent," if either party was delayed or prevented from the performance of any of its obligations under the lease by, inter alia, an act of God, the period for its performance would be extended for a time equivalent to the period of such delay.

¶ 9 On May 1, 2018, the parties amended the lease to confirm that the rent commencement date of the lease would be November 26, 2017, and that the lease term would extend to November 25, 2027. The amendment further provided defendant with an additional month of rent abatement, through December 25, 2018 (i.e., the first month of the second year of the lease term). Accordingly, defendant would first be required to pay rent in January 2019.

¶ 10 Performance Under Lease

¶ 11 The record reflects that defendant's restaurant opened on December 20, 2018. Defendant did not make a rent payment in January 2019, which was the first payment owed under the lease. Between February 2019 and January 2020, defendant made only 10 rent payments, totaling $100,000.

¶ 12 The restaurant was forced to close in March 2020 due to the COVID-19 pandemic and never reopened. Defendant did not make any rental payments after the restaurant's closure in March 2020.

¶ 13 On April 13, 2021, plaintiff sent defendant a notice of default, claiming that defendant's rent payment was in arrears in the amount of $169,889.84, and provided that defendant had until April 30, 2021, to cure the default before the lease would be terminated. Defendant did not make such a payment.

¶ 14 Complaint

¶ 15 On May 4, 2021, plaintiff filed a forcible entry and detainer action against defendant, alleging that plaintiff was entitled to possession of "6850 North Sheridan Road" in Chicago, as well as $258,014 in unpaid rent for the period from September 1, 2019, through May 31, 2021; the complaint was later amended to change the subject address to "6580 N. Sheridan Road." Plaintiff also filed a motion for use and occupancy payments during the course of the litigation, which was granted in part; defendant, however, did not make any use and occupancy payments during the course of the proceedings.

¶ 16 On October 6, 2021, defendant filed an answer and affirmative defenses to the amended complaint, as well as several counterclaims. Defendant raised a total of 14 affirmative defenses, including (1) waiver, (2) novation, (3) estoppel, (4) fraud, (5) unclean hands, (6) setoff, (7) frustration of purpose, (8) impossibility of performance, (9) equitable rescission due to mutual mistake, (10) force majeure, (11) failure of consideration, (12) unjust enrichment, and (13) laches. Defendant also filed counterclaims for (1) breach of contract, (2) declaratory relief, (3) rescission, (4) reformation, (5) "money had and received," and (6) unjust enrichment. Defendant's claims were primarily based on his allegations that the COVID-19 pandemic had frustrated the purpose of the contract and had made it impossible to operate a sit-down, fine dining restaurant.

¶ 17 Plaintiff filed a motion to dismiss certain of defendant's affirmative defenses and all of his counterclaims pursuant to section 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/2619 (West 2020)), claiming that they were not germane to the forcible entry and detainer proceedings. In December 2021, the trial court dismissed each of defendant's counterclaims, as well as four of his affirmative defenses (for setoff, equitable rescission, failure of consideration, and unjust enrichment), leaving defendant with 10 affirmative defenses.

¶ 18 Pretrial Proceedings

¶ 19 The parties proceeded to engage in discovery and other pretrial matters; as the various delays in pretrial proceedings are the subject of the instant appeal, we relate them in some detail. On May 2, 2022, the trial court entered an initial order setting the matter for a pretrial hearing on June 27, 2022, and setting a trial date of July 6, 2022; the matter was continued to June 9, 2022, for status on depositions.

¶ 20 On May 31, 2022, defendant filed a motion to extend the discovery schedule. Defendant claimed that Olszewski defendant's owner and sole member, had been in a vehicular accident on April 9, 2022, which "left him in significant pain, and required protracted medical treatment, rendering him entirely unavailable to counsel for participation or consultation." Defendant therefore sought an extension of the discovery schedule by 45 days. In response, plaintiff expressed doubt on the claims as to Olszewski's health, noting that defendant had not raised the issue when the discovery schedule was initially set in early May and that Olszewski had participated in two site visits in late April and early May, during which he was walking and otherwise active without any medical devices. On June 9, 2022, the trial court extended the discovery schedule, setting a pretrial date of August 29, 2022, and setting the matter for trial on September 13, 2022.

¶ 21 On August 12, 2022, defendant filed a motion to continue the trial schedule, in which defendant's counsel, a sole practitioner, indicated that he was "presently amidst a personal health crisis, which has largely incapacitated him."^[1] Couns...