Livaditis v. Pathways Management Group, Inc.

Filing 45

ORDER: This Court grants Pathways' Partial Motion to Dismiss the Complaint 21 . Status hearing set for 1/26/2018 at 9:00 AM to stand. (For further details see Statement.) Signed by the Honorable Sharon Johnson Coleman on 1/22/2018. Mailed notice.(ym, )

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
ATHANASIOS LIVADITIS,
Plaintiffs,
v.
PATHWAYS MANAGEMENT GROUP, INC.,
Defendant.

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Case No. 17 cv 5872
Judge Sharon Johnson Coleman

ORDER
Defendant Pathways Management Group, Inc.’s (“Pathways”) moves to dismiss in part [21]
the complaint to the extent that it claims Pathways violated the lease by terminating it more than 120
days after the lease commenced. For the reasons stated herein, the Court grants the motion.
Statement
Athanasios “Tom” Livaditis claims that Pathways breached its lease and Pathways claims
that Livaditis is improperly withholding the security deposit. In June 2014, the parties entered into a
ten-year commercial lease agreement for space at 4810-4820 N. Western Ave., Chicago, Illinois, for
the purpose of operating a charter school. On January 28, 2016, Pathways sent Livaditis a letter
purporting to terminate the lease under Section 2.3 of the Lease. Livaditis alleges that Pathways
breached the lease agreement, by not paying its obligations under the agreement and by making
unauthorized alterations to the premises that interfered with Livaditis’ ability to lease the second
floor space to other tenants. Livadits alleges that the alterations to the premises rendered the entire
building unsuitable for any use other than a charter school.
Although Livaditis does not specifically allege late termination as a material breach of the
lease, he does assert that Pathways could not terminate the lease after the 120 day period set forth in

Section 2.3 without consequences. (Dkt. 1-1, Complaint at ¶¶ 24-27, 38). Pathways moves to
dismiss, arguing that Section 2.3 of the lease stipulates a condition that allows either party to
terminate the lease by written notice if the condition is not met.
A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the complaint, not its
merits. Fed. R. Civ. P. 12(b)(6); Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). When
considering the motion, the Court accepts as true all well pleaded facts in the plaintiff’s complaint
and draws all reasonable inferences from those facts in the plaintiff’s favor. FSB v. Hofer, 649 F.3d
610, 614 (7th Cir. 2011). To survive dismissal, the complaint must not only provide the defendant
with fair notice of a claim’s basis, but must also be facially plausible. Ashcroft v. Iqbal, 556 U.S. 662,
678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555,
127 S.Ct. 1955, 167 L. Ed. 2d 929 (2007).
Illinois follows the “four-corners” rule: if the contract language is clear and unambiguous,
extrinsic evidence will not be considered. Air Safety, Inc. v. Teachers Realty Corp., 185 Ill.2d 457, 462
(1999). “A contract term is ambiguous if it can reasonably be interpreted in more than one way due
to the indefiniteness of the language or due to it having a double or multiple meaning.” William Blair
and Co., LLC, v. FI Liquidation Corp., 358 Ill.App.3d 324, 334 (2005). However, the mere fact that the
parties disagree over the meaning of a contractual term does not make that term ambiguous. Id.
The provision at issue, Section 2.3 of the Lease Agreement is attached to both the complaint
and Pathways’ motion to dismiss. It states in relevant part:
Tenant is a school management organization and is entering into the
Lease for the operation and management of a Pathways In Education
school (“Pathways”). The parties agree and acknowledge that this
Lease shall be contingent upon Pathways obtaining a Special Use
Permit (“SUP”) for its Use, if the SUP is required by the City of
Chicago. If Pathways cannot obtain the SUP within one hundred
twenty (120) days from the Lease Reference Date, this Lease may be
terminated by either party, without penalty, upon written notice to
the other party.

Pathways argues that this provision is unambiguous and allows either party to terminate the
lease with written notice to the other party if the condition that Pathways obtains the SUP within
120 days of the Lease Reference Date is not met. Livaditis counters that the provision is ambiguous
and Pathways’ interpretation leads to an absurd result. Livaditis contends that Pathways’ reading
would mean it could terminate the lease after four years had passed despite having obtained the SUP
in more than 120 days and operated a school. Livaditis urges the Court to interpret the provision as
requiring both the SUP permit and, if Pathways cannot obtain a permit, the notice of termination be
provided within 120 days. This reading contradicts the express language of the provision, however,
by attaching the 120 days to the notice requirement contained in a different clause in the sentence.
“[A] court cannot alter, change or modify the existing terms of a contract or add new terms
or conditions to which the parties do not appear to have assented, write into the contract something
which the parties have omitted or take away something which the parties have included.” Gallagher v.
Lenart, 367 Ill. App. 3d 293, 301, 854 N.E.2d 800, 807 (1st Dist. 2006), aff'd, 226 Ill. 2d 208, 874
N.E.2d 43 (2007) (citing 12A Ill. L. & Prac. Contracts § 233 (1983)). Courts presume that a contract
contains all material terms and does not read in provisions that easily could have been included in
the contract but were not. Id. (citing Lee v. Allstate Life Insurance Co., 361 Ill.App.3d 970, 979, 297
Ill.Dec. 528, 838 N.E.2d 15, 24 (2005)). Here, Livaditis is asking the Court to include a specific time
requirement for the written notice where the language clearly applies the 120 days to the obtaining
of a permit as a condition rather than as a deadline for providing notice.
To conclude otherwise would mean that Pathways would be bound to a ten-year lease that
limited the use of the premises to the operation of a school regardless of whether or not Pathways
was able to obtain a permit to operate the school unless Pathways provided written notice within the
same 120 days it has to obtain the permit. Moreover, the provision clearly states that “this Lease may
be terminated by either party, without penalty, upon written notice to the other party.” This is

permissive language as opposed to mandatory language like “shall,” and gives Livaditis the same
ability to terminate the contract if Pathways was unable to obtain a permit within 120 days thereby
alleviating some of his risk.
This Court finds the language in Section 2.3 of the Lease clearly and unambiguously allows
either party to terminate the lease if the condition of obtaining a SUP from the City was not met
within 120 days. Accordingly, any allegation that Pathways breached the Lease by providing written
notice of termination after 120 days had elapsed is contradicted by the express terms of the contract.
Conclusion
Based on the foregoing, this Court grants Pathways’ Partial Motion to Dismiss the
Complaint [21]. Status hearing set for 1/26/2018 at 9:00 AM to stand.
IT IS SO ORDERED.
ENTERED:
Dated: 1/22/2018

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SHARON JOHNSON COLEMAN
United States District Judge