Attorney No.

37952 IN THE CIRCUIT COURT OF THE COOK COUNTY, ILLINOIS COUNTY DEPARTMENT CHANCERY DIVISION EDWARD X. CLINTON, P.C., Plaintiff, v. KUSPER AND RAUCCI CHARTERED, Defendant. ) ) ) ) ) ) ) ) ) ) )

No. 11 CH 19310 Hon. Sebastian Patti

EDWARD X. CLINTON, P.C.s PRE- HEARING MEMORANDUM Plaintiff, Edward X. Clinton, P.C. (the Clinton Firm), by and through its attorneys, hereby submits this Pre-Hearing Memorandum in connection with its Motion For a Preliminary Injunction. This Memorandum will address (a) the factual background; (b) the legal positions of the parties; (c) the requirements for injunctive relief and (d) anticipated defenses. Introduction This case is about access to internal bathrooms and a conference room in a shared law office. In 2009, when the Clinton Firm entered into a Sublease with KRC, the Clinton Firm and all subtenants and their clients were allowed access to the two internal bathrooms of the office suite. In August 2009, KRC locked the bathrooms and barred the subtenants from using them. In 2011, KRC locked its conference room and removed certain shared office equipment. KRC also took other actions designed to harass the Clinton Firm. Throughout the August 2009 to June 2011 time period, the Clinton Firm and its attorneys made their concerns known to KRC on several occasions. KRC did not respond to any of the Clinton Firms inquiries and protests concerning the locked bathrooms, the locked conference room or the removal of the office equipment.

In late May 2011, the Clinton Firm filed suit and on June 14, 2011 obtained, by agreement, a key for one of the two interior bathrooms in the shared office suite. Ed Clinton, Jr., Ed Clinton, Sr. and Mary Winch have used the internal bathroom since June 14, 2011 without incident. The bathroom access has imposed no burden of any kind on KRC. Relevant Facts 1. Plaintiff is a law firm, which in 2009, subleased office space from the Defendant,

Kusper & Raucci Chartered (KRC). 2. Plaintiff has two shareholders: Edward X. Clinton and Edward X. Clinton, Jr.

Plaintiffs administrative assistant is Mary Winch. 3. Edward X. Clinton graduated from John Marshall Law School in 1953, served in

the United States Army, and, after an honorable discharge, has practiced law in Chicago ever since. Clinton has been the principal author of the Illinois Institute of Continuing Legal

Educations Chapter on the State and Federal Securities Laws since the early 1970s. Clinton was a member of Keck, Mahin & Cate, a Chicago law firm, from 1969 to 1992, when he established the Plaintiff as an independent law firm. On July 13, 2011, Clinton will turn 81. Though he works every day, Clinton has experienced difficulty walking in recent years. 4. From 1992 to February 2009, the Clinton Firm was a subtenant of Bullwinkel

Partners, Ltd., a law firm with offices on the 13th floor of the 19 South LaSalle Street building in Chicago, Illinois. 5. In February 2009, Ed Clinton, Jr., Ed Clinton, Sr. and Mary Winch all made visits

to the KRC Office Suite before the Sublease was executed. 6. 7. There were three visits before Ed Clinton, Jr. signed the Sublease. During the visits Defendants office manager, Donna Carlson, showed Clinton,

Jr., Clinton, Sr., and Mary Winch the office suite. Ms. Carlson informed Clinton, Jr., Clinton, Sr. and Ms. Winch that the Clinton Firm could rent space from KRC, including two offices, and one

secretarial cubicle. Moreover, the Clinton Firm would have access to and could use the internal hallways, bathrooms, conference rooms, kitchen, and certain shared office equipment, including a fax machine, copier and shredder. KRC would also arrange to answer the phones of the Clinton Firm. The presence of the two internal bathrooms was crucial to the Clinton Firm in making its decision to sublease from KRC. Ms. Carlson promised Clinton, Jr., Clinton and Ms. Winch that the Clintons and their clients and guests would have access to the internal bathrooms. Clinton, Jr. explained to Ms. Carlson that Clinton, Sr. had a walking issue and that the internal bathrooms would be very convenient for him. 6. On behalf of the Clinton Firm, Ed Clinton, Jr., signed the Sublease on February

20, 2009. The Clintons moved in during March 2009. 7. During the first six months that the Clinton Firm was a subtenant of KRC, the

Clinton Firm had access to the hallways, conference rooms, shared office equipment and the two internal bathrooms. 8. On August 25, 2009, without prior notice, KRC locked the internal bathrooms.

KRC gave keys to the internal bathrooms to its personnel and two subtenants. 9. The Clinton Firm protested in writing the locking of the internal bathrooms and

noted that the action of KRC was a breach of the Sublease. 10. 11. KRC did not respond to the Clinton Firms letter. In 2011, KRC locked one of its internal conference rooms after the conference

room table was damaged. 12. The Clinton Firm protested this action as well, and again, KRC did not respond to

the Clinton Firms letter from its counsel. 13. Thus, KRC has made substantial unilateral changes in the office suite since the

Clinton Firm moved in, by locking the bathrooms and one of the internal conference rooms.

KRC has also removed one piece of the shared office equipment and has taken other actions designed to harass the Clinton Firm for bringing this grievance to the Courts attention. The Claim 14. Plaintiffs claim is simple: Plaintiff wants to have the same degree of access to the

Suite 3400 that it had when it moved in. 15. Plaintiffs claim arises out of the Subleases definition of the term Premises.

According to the lease, Defendant hereby subleases the Premises to [the Clinton Firm] on the terms and conditions set forth in the Sublease. See Exhibit A to Verified Complaint at

Paragraph 3. The Sublease makes clear that the Clinton Firm will share the premises with the other tenants. The Sublease does not give the Clinton Firm exclusive possession of the Premises and does not require KRC to move out. The Sublease contemplates a shared office, where the Subtenants, including the Clinton Firm, will conduct business from the same office as KRC. 16. Plaintiff notes long-standing Illinois law that the courts are to consider the

situation of the parties and the circumstances existing at the time of the execution of a lease in ascertaining the intent of the parties. See Wm. A. Duguid Co. v. Hundman Properties,106 Ill. App. 3d 874, 436 N.E.2d 754 (1st Dist. 1982) (citing Thomas v. Wiggers, 41 Ill. 470 (1866) (holding that the landlord breached a lease when it unilaterally changed the premises by blocking the tenants access to steam used in its business). In addition, the Sublease must be construed against the drafter in this case, KRC. Housing Authority of Joliet v. Keys, 326, Ill. App. 3d 577, 581, 761 N.E. 2d 338, 342 (3rd Dist. 2001); Clarendon America Ins. Co. v. Prime Group Realty, 389 Ill. App. 3d 724, 729, 907 N.E.2d 612 (1st Dist. 2009) The Defense 17. Since the June 14, 2001 hearing, Defendant has raised the defense of mutual

mistake. Defendant argues that the definition of premises, used in every sublease prepared by the Defendant law firm, is a mutual mistake. Defendant argues that it did not intend to lease

the Premises to Plaintiff, but, rather only a discrete area of the premises. Defendant has requested that this Court admit parol evidence so that the Court can properly determine (by clear and convincing evidence) that there was a mutual mistake. 18. KRC faces a daunting burden to establish a mutual mistake. As the Illinois courts

have stated: the burden of proving a reformation suit, which is on the party seeking reformation, is higher than that in an ordinary civil lawsuit. A written agreement is presumed to express the intention of the parties and will not be reformed unless the evidence of mutual mistake or other ground for reformation is strong, clear and convincing. The mistake must be one of fact rather than law, the proof clear and convincing that a mistake was made, and the mistake mutual and common to both parties to the instrument. Benyon Building Corp. v. Natl Guardian Life Insurance, 118 Ill. App. 3d 754, 455 N.E.2d 246 (1st Dist. 1983) (citations omitted) (emphasis supplied). 19. 20. There was no mutual mistake. The term Premises can be construed based upon its plain and ordinary meaning.

Websters Dictionary defines premises as a building or part of a building usually with its appurtenances. 21. The term Premises is so frequently used in leases, that it is almost impossible to

think of a case in which the term Premises would be ambiguous. The Premises to which the Sublease refers are the entire office suite. 21. Plaintiff believes that the term Premises, in the context of a shared law office,

means that all the subtenants have access to their offices and the common areas of the office suite, including the bathrooms. The term Premises signifies a recognition by both parties that the Premises are to be shared.1

Shared law offices are very common in Downtown Chicago. 5

22.

Defendants argument that there was a mutual mistake is an effort by the

Defendant to unilaterally change the parties bargain long after the lease was signed, simply because the Defendant arbitrarily decided to lock some subtenants out of the bathrooms and conference room. KRC is simply attempting to evade its obligations under the Sublease by alleging a nonexistent mutual mistake. The Master Lease 23. With the allegation of mutual mistake, it is clear under Illinois law that the Court

will be required to construe the Sublease. See Robert F. Coleman v. Madison Two Associates, 307 Ill. App. 3d 570, 718 N.E.2d 668 (1st. Dist. 1990) (holding that where the Sublease refers to the Master Lease, the terms of the Master Lease govern). The term Premises is used in almost every lease. Plaintiff believes that the term Premises is commonly used that it had a plain meaning. 24. Illinois law is well-settled that, where the sublease refers to the Master Lease, the

Court must review both documents to properly determine the rights and obligations of the parties under the Sublease. See Coleman at 577-78. In the Coleman case, the Sublease at issue referred to the Master Lease (copies of the Underlying Lease have been delivered to and examined by Sublessee and made part of the Sublease Agreement.). In Coleman, the Court carefully

reviewed the language in the Master Lease and held that terms of the Master Lease governed. See Id. (nevertheless a sublease may contain terms such as a clause specifically incorporating certain portions of the original lease.). It is well established that one instrument can incorporate the terms of another. See Provident Federal Savings & Loan Association v. Realty Centre, Ltd. 97 Ill.2d 187, 192-93 (1983). All that is required is an expression of the parties' intent to incorporate those terms. Pinson v. Allstate, 68 Ill.App.3d 788, 791 (1st Dist. 1979).

Ordinary Rules of Contract Construction Apply to the Sublease 25. In Illinois, the interpretation of a lease is a question of law to be determined by

the Court and in accordance with the general rules of contract construction. Hartwig Transit, Inc. v. Menolascino, 113 Ill. App. 3d 165, 446 N.E.2d 1193 (1st Dist. 1983). As the Court

stated, [o]ur principal function in construing a lease is to give effect to the intention of the parties thereto through consideration of the instrument as a whole and by giving the words used by the parties their common and generally accepted meaning. Id. (omitting citations). 26. Under Illinois law, the Court endeavors to place itself as nearly as possible in the

positions of the parties by considering extraneous evidence of the facts they had in view, including the state of the property involve and objects to be attained. The Court is to review the substance of the transaction and the circumstances of the parties rather than the form of the agreements. Sixty-Third & Halsted Realty Co. v. Goldblatt, 342 Ill. App. 389, 96 N.E.2d 838 (1st Dist. 1951) (holding that one party alleged a mutual mistake to evade its obligations under the sublease.). Argument The Clinton Firm Is Entitled To A Preliminary Injunction Restraining KRC From Closing the Bathrooms and the Large Conference Room. A. The Clinton Firm Has Established All The Elements Required For

Injunctive Relief. The Clinton Firm, pursuant to Sections 11-101 and 11-102 of the Illinois Code of Civil Procedure, 735 ILCS 5/11-101 and 5/11-102, is entitled to the entry of a preliminary injunction against Defendant, Kusper and Raucci, Chartered, (1) restraining it from preventing Plaintiff from using internal bathrooms in the office space subleased by Defendant to Plaintiff; and (2) restraining it from imposing unreasonable, burdensome and oppressive conditions upon Plaintiffs use of the large conference room in the office space subleased by Defendant to Plaintiff.

Emergency injunctive relief should be granted where, as here, the Plaintiff has an ascertainable right which needs protection; will suffer irreparable injury without the protection of the injunction; has no adequate remedy at law; and shows a likelihood of success on the merits. Decker, Berta and Company, Ltd. v. Berta,, 225 Ill.App.3d 24, 27, 587 N.E. 2d 72, 74 (4th Dist. 1992); Continental Cablevision v. Miller,, 238 Ill. App.3d 774, 787, 606 N.E.2d 587, 595 (1st Dist. 1992). An applicant for a preliminary injunction need not make out a case which will entitle him to the ultimate relief he seeks, but need only raise a fair question as to the existence of the claimed right. Lifetec, Inc. v. Edwards,, 377 Ill.App.3d 260, 268, 880 N.E.2d 188, 195 (4th Dist. 2007); Limestone Development Corp. v. Village of Lemont, 284 Ill. App. 3d 848, 853-54, 672 N.E.2d 763, 767-68 (1st Dist. 1996). "The standard for establishing a sufficient legal right is not difficult. The party seeking relief need only raise a fair question as to the existence of the right claimed." Continental Cablevision, 238 Ill.App.3d at 787, 606 N.E.2d at 595 (Emphasis supplied). Here, Plaintiff undeniably has clearly ascertainable rights worthy of protection, given the terms of the Sublease and the condition of the office suite when Plaintiff moved in. Once a protectable interest is established, irreparable injury is presumed if the interest remains unprotected. A-Tech Computer Services, Inc. v. Soo Hoo, 254 Ill.App.3d 392, 400, 627 N.E.2d 21, 27 (1st Dist. 1993); McRand, Inc. v. Van Beelen, 138 Ill.App.3d 1045, 1054, 486 N.E. 2d 1306, 1313 (1st Dist. 1985). Here, failing to restrain the Defendant from its interference with the Plaintiffs use of the Premises that have been leased to it, and allowing the Defendant to continue using portions of the Premises to the exclusion of Plaintiff, its rightful possessor under the Sublease, will plainly cause irreparable injury to Plaintiff because real estate is unique. Sheehy v. Sheehy, 299 Ill.App.3d 996, 1005, 702 N.E.2d 200, 207 (1st Dist. 1998); Cross Wood Products, Inc. v. Suter, 97 Ill.App.3d 282, 286, 422 N.E.2d 953, 957 (1st Dist. 1981).

It is fundamental that the existence of a remedy at law will not preclude injunctive relief unless the remedy at law is clear, complete and as practical and efficient to the ends of justice as is the equitable remedy. K.F.K. Corp. v. American Continental Homes, Inc., 31 Ill. App. 3d 1017, 1021, 335 N.E.2d 156, 159 (2nd Dist. 1975); Bio-Medical Laboratories, Inc. v. Trainor, 68 Ill.2d 540, 549, 370 N.E.2d 233, 227 (1977). In this case, these standards are obviously satisfied, including the fact that no award of money damages would give Plaintiff access to the Premises which have been subleased to the Plaintiff. The purpose of a preliminary injunction is to preserve the status quo, which is the last peaceable and uncontested status preceding the controversy. Eldridge v. Eldridge, 246 Ill.App. 3d 883, 888-9, 617 N.E.2d 57, 62 (1st Dist. 1993); Hanchett Paper Co. v. Melchiorre, 341 Ill.App.3d 345, 351, 792 N.E.2d 395, 400 (2nd Dist. 2003). The last uncontested status here was Plaintiffs ongoing use, without any restrictions or requirements, of the internal bathrooms and the large conference room in Suite 3400. Given the meritorious claims alleged in the Complaint and Plaintiffs rights and interests set forth therein, Defendant should not be permitted to continue taking its actions which violate the Sublease until the merits of this case are decided. Plaintiff is likely to succeed on the merits of its claims, given the clear terms of paragraph 3 of the Sublease. (Exhibit A to the Complaint). The relief sought by Plaintiff presents an actual controversy, as required by Section 5/2-701 of the Code of Civil Procedure, and its claim to the use of the portions of the Premise at issue plainly constitutes a tangible interest that will support a declaratory judgment. LaSalle National Bank v. International Limited, 129 Ill.App.2d 381, 398-99, 263 N.E.2d 506, 515 (2nd Dist. 1970). Preliminary injunctive relief is plainly proper where, as here, the Plaintiff seeks a declaratory judgment as to its rights, Milliken v. Jensen, 4 Ill.App.3d 580, 584, 281 N.E.2d 401, 404 (3rd Dist. 1972), and the Defendant has wrongfully taken over possession of leased premises

in violation of the Sublease. Scholz v. Barbee, 344 Ill.App. 630, 101 N.E.2d 845 (2nd Dist. 1951). Finally, in considering a motion for preliminary injunctive relief, the Court must balance the equities and relative inconvenience to the parties, and determine whether a greater burden will be imposed on the defendant by granting the motion than on the plaintiff by denying it. Decker, Berta and Company, Ltd. v. Berta, supra, 225 Ill.App. 3d at 27, 587 N.E.2d at 74. In this case, these factors clearly favor Plaintiff being given use of the entire Premises in light of the unambiguous terms of the Sublease. The burden on the Defendant, KRC, is virtually nonexistent as KRC need only provide Clinton with a key to the internal bathrooms and the large conference room. Section 11-103 of the Code of Civil Procedure provides that it is within the discretion of the Court to decide whether or not a bond should be required in connection with the granting of injunctive relief. When injunctive relief is issued after notice and hearing, the trial court may issue an injunction without bond. Central Water Works Supply, Inc. v. Fisher, 240 Ill.App.3d 952, 960, 608 N.E.2d 618, 624 (4th Dist. 1993); Falcon, Ltd. v. Corrs Natural Beverages, Inc., 165 Ill.App.3d 815, 822, 520 N.E.2d 831, 835 (1st Dist. 1987). In this case, as well, the temporary restraining order and preliminary injunction should issue without bond. Defendant obviously will suffer absolutely no harm whatsoever if it is prohibited from taking any action to interfere with the office space it subleased to the Plaintiff, so that the status quo before the unlawful conduct commenced may be maintained. There is no question under the Sublease that The Clinton Firm and its clients and guests have the right to use the internal bathrooms and conference rooms of KRC. The internal bathrooms and the conference room are part of the premises at issue. Moreover, before the Clinton Firm moved in, KRCs office manager informed Clinton, Jr and Clinton, Sr. and Mary

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Winch that they and their clients could use the internal bathrooms and conference rooms. She also informed the Clintons that both conference rooms were available for their use. KRC has breached the Sublease by locking the bathrooms and conference room and has also breached the covenant of quiet enjoyment. KRC, however, has not been burdened by the issuance of a key to the bathroom. B. Merit. 1. There Was No Mistake. KRCs Defenses Mutual Mistake and Undue Delay Are Utterly Without

The Clinton Firm has already discussed the mutual mistake defense. See pages 5-6 of this Memorandum. KRC has no evidence of any mutual mistake of fact. Instead, KRC argues that it did not intend to lease the entire premises to Clinton Law and that, therefore, there was a mistake. There is no clear and convincing evidence of a mistake in drafting. Rather the term Premises indicates that KRC understood that it was creating a shared law office and that it was telling tenants that they would have access to the common areas of the office suite. The evidence will show that every KRC subtenant has the same language in its lease. This is consistent with a shared law office, a common arrangement in Downtown Chicago. Thus, the evidence

demonstrates that there was no mutual mistake of fact. Rather, all parties understood what they were leasing. 2. There Was No Undue Delay.

KRC argues that the Clinton Firm waited too long before it filed suit. However, KRC has not sustained any burden by the short delay in bringing suit. Indeed, all KRC had to do was to provide a key to the bathroom, an action which causes no burden on KRC. Thus, because it was not injured by the delay, KRC cannot raise laches as a defense. The Illinois Appellate Court recently explained: Whether the defense of laches is available is to be determined upon the facts and circumstances of each case. Nancys Home of the Stuffed Pizza, Inc. v. Cirrincione, 144 11

Ill.Appp.3d 934, 942, 494 N.E.2d 795 (1986). Like any affirmative defense, the burden is on the defendant to establish laches by a preponderance of the evidence. OBrien v. Meyer, 281 Ill.App.3d 832, 834, 666 N.E.2d 726 (1996). The party asserting estoppel [through laches] must show prejudice or hardship rather than mere passage of time and must demonstrate that the delay induced him to adversely change his position. Gersch v. Department of Professional Regulation, 308 Ill.App.3d 649, 661, 720 N.E.2d 672 (1999). Lack of diligence must result in some inequity to the adverse party such that it would be unfair and unjust to allow the belated assertion of the claim. Nancys Home, 144 Ill.App.3d at 940-41. If the defendant is not injured by the delay, laches is inapplicable. Nancys Home, 144 Ill.App.3d at 941. LaSalle National Bank v. Dubin Residential Communities, 337 Ill. App. 3d 345, 785 N.E.2d 997, 1002 (1st Dist. 2003); see also Novak v. Smith, 197 Ill. App. 3d 390, 554 N.E.2d 652 (1st Dist. 1990). The Clinton Firm notes that it made numerous attempts to resolve these issues without resort to litigation. KRC did not respond to any of the Clinton Firms attempts to resolve these matters through negotiation. behavior. EDWARD X. CLINTON, P.C. By: ________________________________ One of Its Attorneys Dennis C. Waldon LAVIN & WALDON, P.C. 444 North Michigan Avenue, Suite 2600 Chicago, Illinois 60601 (312) 670-4260 Atty. No. 37952 KRC should not be rewarded for its aloof and unresponsive

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