Loukas et al v. Clear Channel Outdoor, Inc. et al

Filing 24

MEMORANDUM Order Signed by the Honorable Milton I. Shadur on 12/27/2013:Mailed notice(air, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
George Loukas, an individual, and
Loukas, Inc., an Illinois
corporation,
Plaintiffs,
v.
Clear Channel Outdoor, Inc.,
a Delaware corporation,
Defendant.

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No. 13 C 7958

MEMORANDUM ORDER
George Loukas and his wholly-owned corporation Loukas, Inc.
(collectively “Loukas,” treated after this sentence as a singular
noun solely for convenience) have sued Clear Channel Outdoor
Holdings, Inc. and Clear Channel Outdoor, Inc. (collectively
“Clear Channel,” similarly treated as a singular noun for
convenience), seeking relief stemming from Clear Channel’s
nonremoval from Loukas’ real estate located at 2422 W. Irving
Park Road, Chicago of a large billboard and its 30-foot-deep
supporting footings.

Clear Channel had leased that real estate

from December 14, 1990 until December 13, 2012, when the Lease
expired in accordance with the provisions of its most recent
extension.
Clear Channel has responded to Loukas’ lawsuit with
motions (1) to dismiss Loukas’ Complaint and (2) to strike
portions of the Complaint, each supported by a memorandum,
coupled with a Counterclaim sounding in breach of contract (Count

I) and replevin (Count II).

This memorandum opinion and order

will address itself to the fully-briefed motions.
Clear Channel’s motion-to-dismiss position is simple -- even
simplistic.

It points to Paragraph 5 of the Lease:1

This agreement is a Lease (not a License), and all
signs, structures and improvements placed on the
premises by or for the Lessee shall remain the property
of the Lessee, and that, not withstanding the fact that
the same constitute real estate fixtures. Lessee shall
have the right to remove the same at any time during
the term of the Lease, or after the expiration of the
Lease.
As Clear Channel would have it, that right of removal created the
negative implication (through silence) that Clear Chanel had (and
now has) no removal obligation.
To that end it cites an over-80-year-old Illinois Appellate
Court case, Savage v. Univ. State Bank of Champaign, 263,
Ill.App.457 461 (3rd Dist. 1931) together with two Court of
Appeals decisions from other states.

But quite apart from the

fact that the one ancient Illinois case sounding in assumpsit had

1

As the Lease plainly reflects, it is a printed contract
of adhesion originally designed and drafted by Clear Channel’s
predecessor as lessee, Patrick Media Group, Inc. Its one-page
single-spaced printed provisions have blank spaces where the
information as to a particular lessor is typed in. If there were
any question as to the contract-of-adhesion label, it would be
dispelled by a number of its terms, including the provisions of
Paragraph 6 that specify its automatic renewal for successive
like terms (here the initial term was made 10 years rather than
the 15-year period specified in the printed form) unless either
party served a written notice at least 90 days before the end of
the term or any renewal term -- but the lessee alone (most
recently Clear Channel) had the right to terminate the lease at
any time on 60 days’ notice.
2

addressed only the contractual posture of the parties (just as
the two cited out-of-state cases have done), Clear Channel’s
position really proves too much.

It fails (or refuses) to

acknowledge the real-world significance of the Lease’s careful
insistence that the improvements at issue are its property, even
though its statements at page 3 of its Motion To Dismiss stress
that fact:
The Lease also makes it clear that the Sign shall
remain the property of the lessee. Affixed property
does not become part of the realty if it was the
intention that it remains personal property.
But that quite proper emphasis renders Clear Channel hoist
by its own petard, for Loukas sues it not in contract but in
tort, not in assumpsit but in trespass.2

And in that respect,

there is no question that Loukas has terminated the consent to
retain the billboard and its substructure on the premises -- and
that makes Clear Channel a trespasser under the law. Look at the
Restatement (Second) of Torts §§158 and 160 (emphasis added):
One is subject to liability to another for trespass,
irrespective of whether he thereby causes harm to any
legally protected interest of the other, if he
intentionally...
(c) fails to remove from the land a thing which he is
under a duty to remove.
* * *
A trespass may be committed by the continued presence

2

Lord Maitland famously observed that “the forms of
action rule us from the grave,” but the distinction stated in the
text is very much alive.
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on the land of a structure, chattel, or other thing
which the actor or his predecessor in legal interest
has placed on the land:
(a) with the consent of the person then in possession
of the land, if the actor fails to remove it after the
consent has been effectively terminated....
It is scarcely surprising that this is not a new problem.
Although no reported Illinois case has dealt with it, Loukas has
adduced a substantial body of authority to support his position.
Most significantly, Manor Enters., Inc. v. Vivid, Inc. 596
N.W.2nd 828 (Wis. Ct. App. 1999) is astonishingly parallel to
this case -- really on all fours.

There too the landowner sued

an outdoor advertising company for trespass after the company had
refused to remove the supporting structures for a billboard, and
there too the advertising company asserted that it was liable for
trespass only if it had an express contractual duty to remove
those support posts.
That position was flatly rejected in Manor Enters. This
opinion need not repeat the careful and persuasive analysis in
that case -- instead it incorporates the legal treatment in that
opinion by reference, for it might well have been written for
this case.
Loukas’ opposition to the Motion To Dismiss goes on to cite
a substantial number of cases from other jurisdictions that,
although they do not contain the same startling parallel to this
case that is presented by Manor Enters., also uphold the right to
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bring trespass actions in analogous situations.

In sum, Clear

Channel’s Motion To Dismiss is flatly denied.
To turn to Clear Channel’s Motion To Strike, there Clear
Channel retreats to posing a challenge to Loukas’ requests for
punitive damages and injunctive relief.

That motion fares no

better.
As for the punitive damages issue, there is no question that
Illinois recognizes the availability of that remedy for trespass
under appropriate circumstances --most recently, see Chicago
Title Land Trust Co. v. JS II, LLC, 2012 IL. App.(1st) 063420,
977 N.E.2nd 198, 219-20 (1st Dist. 2012).

Nor is it essential to

prove maliciousness as such to recover such damages -- instead
the existence or nonexistence of aggravating circumstances is a
matter for factual development, not for a pleading excision.
As for injunctive relief, it is difficult to see how Clear
Channel’s assertion that the availability of a damages claim
negates that remedy can pass the straight-face test.

On that

score Loukas adduces both Illinois state court authority and our
Court of Appeals’ opinion in Okaw Drainage Dist. of Champaign &
Douglas County v. Nat’l Distillers & Chem. Corp. 882, F.2d 1241,
1246 (7th Cir. 1989), all supporting the unexceptionable
proposition that a mandatory injunction is a proper remedy where
a structure encroaches on a landowner’s property.
In sum, then, both Clear Channel motions (Dkt. Nos. 12 and

5

17) are denied.

It is ordered to answer the Complaint on or

before January 13, 2014.

Relatedly, the status hearing

previously set for January 10 is vacated and replaced by a status
hearing at 9 a.m. on January 17, 2014.

Because Clear Channel’s

Counterclaim has not been made the subject of any motion to this
point, this Court anticipates discussing that subject at that
status hearing.

________________________________
Milton I. Shadur
Senior United States District Judge
Dated:

December 27, 2013

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