Illinois Appellate Court Reverses Summary Judgment in Case Where Contract Was Found to be Ambiguous

The Neck & Back Clinic in Chicago was providing physical rehabilitation services to patients. In 1998, the clinic signed a series of leases for exterior building wall space to advertise its services. The clinic leased that advertising space through a company called Travisign, operated by David Travis. The Neck & Back Clinic alleged that Travis “represented that he was authorized to lease certain walls for advertising and that he had secured the requisite permits to place advertisements on the designated walls.”

However, in 2009, the clinic was notified that it had violated the Chicago Municipal Code by putting up advertisements without the proper city permits. The clinic was fined $3,000 and received another notice of violation. The clinic filed suit against Travis claiming breach of contract and fraud.

Travis and the clinic filed motions for summary judgment claiming that the other had failed to live up to its contractual obligations. The Circuit Court judge granted summary judgment in favor of the clinic finding that “Travis never secured the proper permits” and that he “did not perform his contractual obligations.” The Circuit Court judge awarded more than $10,000 in damages to the clinic. After dismissing a secondary claim against another party, Travis appealed.

On appeal, the clinic argued that Travis had chosen not to timely file a post-trial motion, noting that the summary judgment order was entered on June 12, 2013, and that no post-trial motion was filed in the following 30 days.

The appellate court found that the order was not final or appealable until the secondary claim was dismissed on Sept. 23, 2013. The appellate court “in an effort to alleviate the substantial confusion caused by the procedural events,” agreed to review Travis’s arguments on appeal.

On appeal, Travis argued that summary judgment against him was inappropriate because the contract was ambiguous as to whose responsibility it was to acquire the proper city permits and because genuine issues of material fact existed.

The clinic argued that the contract contained an implied covenant that the wall space provided for advertising was legal, because without the implied covenant that the wall space was properly permitted for use in advertising, the lease’s purpose would be illegal and the contract would therefore be void and unenforceable.

The appellate court examined the contract and found genuine ambiguity since the leases did not reference legal or permitted wall space being used. It was argued that unpermitted wall space would not be legal to lease for advertising, but the appellate court disagreed, noting that wall space may be leased contingent upon the lessee obtaining the proper permits and that such contracts are fully legal.

The appellate court concluded that the evidence presented so far “boils down to a “he said, she said’ challenge.” Because genuine issues of material fact remain, the appellate court found that summary judgment was inappropriate. Therefore, the appellate court reversed and remanded the case for further proceedings in the trial court.

Neck & Back Clinic, Ltd. v. David Travis, 2015 IL App (1st) 132995-U (June 30, 2015).

Kreisman Law Offices has been handling contract disputes, business litigation and commercial litigation for individuals, families and businesses for more than 38 years in and around Chicago, Cook County and its surrounding areas, including Rosemont, Inverness, Lake Zurich, Mount Prospect, Prospect Heights, South Holland, Blue Island, Grayslake, Crystal Lake, Des Plaines, Niles and Skokie, Ill.

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