In the
United States Court of Appeals
For the Seventh Circuit
Nos. 08-3403 & 09-2071
R EXAM B EVERAGE C AN C OMPANY,
Plaintiff-Appellant,
v.
D AVID F. B OLGER, as Trustee of the
David F. Bolger Revocable Trust, and
C ITY OF F AYETTE, IOWA,
Defendants-Appellees.
Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 06 C 2234—Martin C. Ashman, Magistrate Judge.
A RGUED O CTOBER 8, 2009—D ECIDED A UGUST 24, 2010
Before E ASTERBROOK, Chief Judge, and M ANION and
T INDER, Circuit Judges.
T INDER, Circuit Judge. This commercial landlord-tenant
dispute involves a tenant who overstayed its welcome
at a warehouse with a leaky roof, the replacement of
which both landlord and tenant deny is their responsi-
bility. After the tenant filed an action for declaratory
2 Nos. 08-3403 & 09-2071
judgment against the landlord, the landlord counter-
claimed on several Illinois state law grounds. The
district court, sitting in diversity, ruled in the landlord’s
favor and found the tenant liable for over $1.5 million
in damages, including roughly $400,000 for the replace-
ment of the roof. The district court also awarded the
landlord over $800,000 in attorneys’ fees and costs. The
tenant appeals. We affirm in part, vacate in part, and
remand for proceedings consistent with this opinion.
I. Background
A. Factual
In 1966, plaintiff-appellant Rexam’s predecessor in
interest and defendants-appellees’ predecessor in inter-
est entered into a complex tax-advantaged transaction
under which Bolger’s1 predecessor financed and con-
structed a warehouse in Loves Park, Illinois, and leased
it to Rexam and its predecessors for an extended period
of time. (Loves Park is near Rockford; Rexam refers to
the warehouse as the “Rockford Warehouse.”) Rexam oc-
cupied the warehouse for nearly forty years without
incident, and in late 2005 attempted to extend its tenure
there for another five years. But the lease contained a
provision requiring 180-days’ renewal notice, and Rexam
delayed in notifying Bolger of its intent to renew the
1
We refer to the defendants collectively as “Bolger” and use
the pronoun “he” both for ease of reading and because David
Bolger was the primary actor on behalf of all defendants.
Nos. 08-3403 & 09-2071 3
lease until only about 90 days remained in the current
lease term. Bolger informed Rexam in writing that the
lease would expire at the end of the term, on March 31,
2006, and that Rexam would need to cede possession
to him at that time. He also indicated that some repairs
would need to be made to the property before Rexam
vacated the warehouse.
Two weeks before Rexam was supposed to vacate, it
filed a declaratory judgment action, seeking a ruling
that Bolger had waived any objection to its late renewal
notice. (This appeal stems in part from counterclaims
related to that action.) While the action was pending
before the district court, and even after it was eventually
resolved in Bolger’s favor in July 2007, Rexam remained
in possession of the warehouse. In May 2006, Bolger
notified Rexam that he intended to seek double the
market rental value of the warehouse for each month
that Rexam overstayed the lease. See 735 Ill. Comp. Stat.
5/9-202 (“Holdover Statute”). Apparently undeterred,
Rexam demanded that Bolger honor its lease renewal
request, continued to remit rent payments to Bolger, and
paid the utilities each month. Bolger did not acknowl-
edge the utility payments, which Rexam made directly
to the providers, and he returned all the rent checks
uncashed. Rexam nonetheless continued its occupation
of the warehouse.
Rexam searched for a suitable replacement warehouse
throughout 2006. It ultimately negotiated a lease for
what it maintains was a “superior” facility in Septem-
ber 2006. It agreed to rent that property for a gross rate
4 Nos. 08-3403 & 09-2071
of $2.60 per square foot. (A gross rental rate has insur-
ance, taxes, and utilities built in. “Net” or “triple net”
rates reflect only the cost of the property itself; tenants
typically pay the insurance, taxes, and utilities separately
under so-called net leases.) Bolger’s expert, whose testi-
mony the district court credited over that of Rexam’s
lay witness, valued the Loves Park warehouse at a
gross rate of $4.38 per square foot.
Sometime in mid-April 2007, Rexam moved into its new
premises and informed Bolger that he could take posses-
sion of the warehouse after Rexam finished some repairs
it believed were required under the lease. Between
April and August 2007, Rexam undertook $265,000 worth
of repairs to the Loves Park property. It completed
the repairs on August 30, 2007, and ceded possession to
Bolger on August 31, 2007, seventeen months after the
lease had expired.
Bolger claims that several features of the warehouse
were in disrepair when he retook possession. The roof
is the main one at issue here. Bolger had the roof
inspected on November 28, 2007, and the inspector deter-
mined that the roof flashings and insulation had
been exposed to the weather and noted that the roof
felt spongy when he walked on it. The inspector con-
cluded that the roof would need to be removed and
replaced, a project he estimated would cost $405,470.
Bolger made no attempt to repair or replace the roof.
Instead, on January 16, 2008, he sold the property as-is
for $1,825,000. (The buyer subsequently replaced the
roof at its own expense.) Bolger claims this sale price
Nos. 08-3403 & 09-2071 5
reflected a significant discount for the poor condition of
the roof, and asserts that the condition of the roof ad-
versely affected his negotiations with potential buyers.
B. Procedural
This action is before us as a result of Rexam’s March 14,
2006, attempt to procure a declaratory judgment that
Bolger waived objections to its lease renewal. Rexam, a
citizen of Delaware and Illinois for diversity purposes,
filed its action in Illinois state court, but Bolger, who has
Florida and Iowa citizenship, removed the action to the
Northern District of Illinois on diversity grounds. See 28
U.S.C. §§ 1332, 1441. Bolger also filed Illinois state law
counterclaims for forcible entry and detainer, wrongful
possession, and breach of contract, and sought reimburse-
ment of double rent under the Holdover Statute. On
July 24, 2007, the district court determined that Rexam’s
notice of renewal was untimely and that its holdover
tenancy was “willful” for the purposes of the Holdover
Statute.
After Rexam vacated the property at the end of
August 2007, Bolger amended his counterclaims and
moved to set a termination date for Rexam’s willful
holdover tenancy. The court treated his motion as one
for partial summary judgment, and on January 18, 2008,
concluded that Rexam tendered possession of the
property and ended its holdover tenancy on August 31,
2007. Even after this ruling and another ruling later that
month, several elements of Bolger’s counterclaims re-
6 Nos. 08-3403 & 09-2071
mained unresolved, including the fair market rental
value of the warehouse and Rexam’s liability, if any, for
damage to the property and other alleged violations of
the lease.
The case proceeded to a five-day bench trial, after
which the district court entered final judgment for
Bolger. The court determined that Rexam was liable for
$1,156,232.24 in damages as a result of its holdover
tenancy and the Holdover Statute; this amount was
calculated using the gross rental rate of $4.38 per
square foot and reflected a $101,471.59 setoff for
Rexam’s payment of utilities while it held over. The
court also ordered Rexam to pay $405,470 to cover the
replacement cost of the roof, and $20,306 to replace
some broken dock levelers.
The district court later awarded Bolger $744,726.87 in
attorneys’ fees, $70,000 in supplemental attorneys’ fees (to
cover the expenses associated with his motion for attor-
neys’ fees) and $5338.42 in taxable costs. All told, Rexam
is on the hook for over $2.4 million: $1,582,008.24 in
damages and $820,065.29 in attorneys’ fees and costs.
In this consolidated proceeding, Rexam disputes several
aspects of the district court’s three final judgments, in-
cluding its liability for the roof and Bolger’s proof of dam-
ages thereto, the application of the Holdover Statute
and the calculation of Bolger’s damages thereunder, and
the award and amount of Bolger’s attorneys’ fees. We
consider these issues in turn.
Nos. 08-3403 & 09-2071 7
II. Discussion
A. The Roof
1. Liability
Rexam first challenges the district court’s conclusion
that its lease with Bolger required it to replace the roof.
Rexam argues here, as it did at trial, that it was only
responsible for general maintenance and upkeep of the
property and not for major repairs of the warehouse’s
structural components. It argues that the district court
misconstrued the language of the lease and erroneously
concluded that responsibilities not directly assigned to
the landlord automatically fell to the lessee. Rexam also
asserts that the district court incorrectly read pertinent
clauses of the lease in isolation rather than as part and
parcel of the document as a whole. Bolger counters that
Rexam’s obligation to replace the roof was “plainly
discoverable in the lease,” that the parties intended for
Rexam to bear the cost of such structural changes, and
that the “ordinary wear and tear” clause does not
absolve Rexam of its responsibility to replace the roof.
The district court’s interpretation of contract language is
a question of law that we review de novo. See Int’l
Prod. Specialists, Inc. v. Schwing Am., Inc., 580 F.3d 587,
594 (7th Cir. 2009). We review its interpretation of state
law the same way. Salve Regina Coll. v. Russell, 499 U.S.
225, 239 (1991); Estate of Moreland v. Dieter, 576 F.3d 691,
695 (7th Cir. 2009).
Under Illinois law, which the lease by its terms
renders controlling and which is applicable in this diver-
8 Nos. 08-3403 & 09-2071
sity action, see Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938),
leases are treated no differently than other written con-
tracts, Williams v. Nagel, 643 N.E.2d 816, 822 (Ill. 1994), so
we begin with an analysis of the terms of the lease, see
Kallman v. Radioshack Corp., 315 F.3d 731, 735 (7th Cir.
2002) (applying Illinois law). Though the parties’ dispute
centers on a single paragraph of a twenty-four page
lease, we must ultimately construe the provision as part
of the whole lease, viewing it in light of the others; we
cannot ascertain the intent of the parties from a single
provision in isolation. Gallagher v. Lenart, 874 N.E.2d 43,
58 (Ill. 2007). However, if the language is unambiguous,
that is, not susceptible to more than one meaning, we
confine our analysis to the language of the lease, see id.,
and we read that language according to its ordinary
meaning, Kallman, 315 F.3d at 736 (applying Illinois
law). With these principles in mind, we look first to the
provision at issue.
Article 5(c) of the lease states, in its entirety:
Maintenance and Alteration. Lessor shall have
no obligation with respect to the maintenance
and repair of the Premises or any buildings or
improvements which may be erected or made
thereon. Lessee shall be solely responsible for
the maintenance of such buildings and Premises
and for keeping all of the same in good condition,
order and repair, including all structural and
extraordinary changes that may be required,
reasonable use and ordinary wear and tear ex-
cepted, and Lessee will repair, during the term, all
Nos. 08-3403 & 09-2071 9
injury or damage done by the installation or re-
moval of equipment or property. Lessee may
make structural and other alterations or additions
to the Premises and to any buildings or improve-
ments which may be erected or made thereon,
provided the general character thereof is not
materially changed and the value of the Premises
as a whole is not reduced thereby.
Rexam argues that Article 5(c) obligates it to maintain
the continuing operational state of the warehouse but
not to replace substantial portions of the premises that
wear out notwithstanding ordinary maintenance. It
further contends that Article 5(c), when read as a whole
and in conjunction with Article 11(a) (“Future Improve-
ments”), “contemplate[s] that if in the future there is a
structural or extraordinary change to the building, Rexam
is responsible for the maintenance of that to the same
extent as the rest of the Rockford Warehouse, ‘rea-
sonable use and ordinary wear and tear excepted.’ ”
Appellant’s Br. 23.
We do not read Article 5(c) like Rexam does. According
to its plain, albeit structurally convoluted language,
Article 5(c) places upon Rexam the responsibility for
keeping the entirety of the premises and its structures
“in good condition, order and repair, including all struc-
tural and extraordinary changes that may be required.”
As the rules of normal English grammar dictate, we
read the phrase “including all structural and extra-
ordinary changes that may be required” to modify the
phrase preceding it, not, as Rexam would have it,
10 Nos. 08-3403 & 09-2071
modified by the “ordinary wear and tear excepted” lan-
guage following it. Similarly, we read the “ordinary
wear and tear excepted” language to modify the introduc-
tory clause of the sentence, “Lessee shall be solely re-
sponsible for the maintenance of such buildings and
Premises and for keeping all of the same in good condi-
tion, order and repair.” Pursuant to the plain terms of
Article 5(c), read in accordance with common grammar
rules, Rexam was responsible for keeping the premises
in good—not perfect—repair, and was responsible for
any necessary structural changes as well. The first sen-
tence of Article 5(c), which expressly exempts Bolger
from any obligation to repair or maintain anything on
the premises, further supports this conclusion.
Article 5(c) is more than a mere “general covenant to
repair,” which would bind Rexam only “to make the
ordinary repairs reasonably required to keep the
premises in proper condition; it [would] not require
[Rexam] to make repairs involving structural changes.”
Kaufman v. Shoe Corp. of Am., 164 N.E.2d 617, 620 (Ill. 1960).
This is because the language of Article 5(c) renders
Rexam’s responsibility for structural changes, such as the
replacement of the roof, “plainly discoverable.” Id. Al-
though the term “roof” does not appear explicitly
within Article 5(c), see Sandelman v. Buckeye Realty, Inc.,
576 N.E.2d 1038, 1040 (Ill. App. Ct. 1991), the unambig-
uous phrases “including all structural and extraordinary
changes that may be required” and “Lessor shall have
no obligation with respect to the maintenance and repair
of the Premises,” do, see Kallman, 315 F.3d at 737-38.
Phrases such as these are conspicuously absent from
Nos. 08-3403 & 09-2071 11
the leases in Quincy Mall, Inc. v. Kerasotes Showplace Thea-
tres, LLC, 903 N.E.2d 887, 891 (Ill. App. Ct. 2009), and
Sandelman, 576 N.E.2d at 1039-40, both of which were
found to lack “plainly discoverable” language shifting
the burden of roof replacement to the tenant.
Placing Article 5(c) in the context of the lease as a
whole strengthens our interpretation of it. The phrase
“including all structural and extraordinary changes
that may be required” is not an anomaly localized
solely within Article 5(c). Virtually identical language
appears in Article 5(a) of the lease, which requires
Rexam to comply at its own expense with all “laws,
ordinances, rules, regulations, and requirements . . .
including the making of all structural and extra-
ordinary changes that may be required.” Even looking
beyond Article 5 to Article 11(a), as Rexam suggests, does
not alter our construction of the terms in Article 5(c).
Article 11(a), which contemplates the “erection and
financing” of new structures—not the replacement of
components of existing structures—in no way requires
that Article 5(c) be read as a mere general covenant to
repair. Article 11(a) permits Rexam to construct, at
Bolger’s expense, new “improvements” to vacant areas
of the premises, and provides that after any such
buildings are constructed, that Bolger and Rexam would
be required to “negotiate in good faith regarding the
erection and financing of such improvements.” It says
nothing about fixing or replacing existing improvements,
nor does it mention or reference “repair” or “ordinary
wear and tear.”
12 Nos. 08-3403 & 09-2071
The fact that replacing the roof of a commercial building
is a large and costly project is of no moment. In Illinois,
“[i]t is well established that where a lease contains
a clause making the lessee generally responsible for re-
pairs, the expense of repairing subsequently discovered
deficiencies falls upon the lessee, unless the deficiency
is so substantial and unforeseen as to be termed ‘struc-
tural.’ ” Koenigshofer v. Shumate, 216 N.E.2d 195, 196 (Ill.
1966). Thus even under a more limited general covenant
to repair, a lessee could be responsible for substantial
yet foreseeable repairs. The Illinois Supreme Court deter-
mined that the replacement of a building’s heating
system due to a utility’s discontinuation of steam heat
was “structural” in the unforeseeable sense, Kaufman, 164
N.E.2d at 620, and opined in dictum that the collapse of
a building resulting from a latent defect would be
similarly “structural,” Koenigshofer, 216 N.E.2d at 196. But
the problems with the roof here were not “structural” in
the unforeseeable sense; the commercial lease at issue
here had the potential to last nearly fifty years, and
Rexam could not close its eyes to the near certainty that
the roof would not equal the lease in staying power. Cf.
Sandelman, 576 N.E.2d at 1040 (concluding that it would
be “unfair” to require lessee to replace a roof where “he
could not have foreseen” the need to do so when the
lease term began).
Rexam finally argues that we should construe the
lease against Bolger, a “sophisticated businessman” and
lessor who drafted the lease. See Sears, Roebuck, & Co. v.
Charwil Assocs. Ltd. P’ship, 864 N.E.2d 869, 874 (Ill. App. Ct.
2007). This argument is unsuccessful because we only
Nos. 08-3403 & 09-2071 13
apply rules of construction when a genuine ambiguity
exists in the language, not merely when the parties dis-
agree as to how the language should be interpreted. See
Curia v. Nelson, 587 F.3d 824, 829 (7th Cir. 2009) (applying
Illinois law). Moreover, Rexam is not unsophisticated;
nor was its predecessor in interest that signed the lease.
For the foregoing reasons, we affirm the district court’s
conclusion that Rexam was contractually bound to
replace the roof of the Loves Park warehouse.
2. Damages
The district court awarded Bolger $405,470 in damages
for Rexam’s failure to replace the roof. This amount
was the estimated cost of replacing the roof, which the
district court concluded was equivalent to any diminu-
tion in the fair market value of the property. Rexam
argues that the district court erred in determining the
award, because in its view Bolger offered no evidence
of loss or diminution in the market value of the
property resulting from the faulty roof. The amount of
recoverable damages is a question of fact, while the
measure of damages upon which the factual computa-
tion is based is a question of law. We therefore review
the district court’s damage-computation methodology
de novo, but review the amount of the award only for
clear error. See Whittington v. Indianapolis Motor Speedway
Found., 601 F.3d 728, 732 (7th Cir. 2010); see also Sw. Stain-
less, LP v. Sappington, 582 F.3d 1176, 1183 (10th Cir. 2009)
(“While we review the amount of a damage award for
clear error, the methodology a district court uses in
14 Nos. 08-3403 & 09-2071
calculating a damage award, such as determining the
proper elements of the award or the proper scope of
recovery, is a question of law we review de novo.” (quota-
tion omitted)).
When assessing damages for injury to real property
under Illinois law, the first question is whether the
injury is permanent or temporary. LaSalle Nat’l Bank v.
Willis, 880 N.E.2d 1075, 1093 (Ill. App. Ct. 2007); Meade
v. Kubinski, 661 N.E.2d 1178, 1184 (Ill. App. Ct. 1996).
Put another way, the question is whether the property
is damaged in such a way as to render repair imprac-
ticable. Here, the district court concluded that the ware-
house was damaged, but could be restored to good condi-
tion with a replacement roof. This conclusion was sup-
ported by evidence introduced at trial; Rexam does not
dispute it and we do not disturb it. Instead, we move
forward to the next inquiry required in Illinois: whether
the expense of restoration exceeded the drop in the
market value of the property. See Meade, 661 N.E.2d at
1184; Ceres Terminals, Inc. v. Chi. City Bank & Trust Co., 635
N.E.2d 485, 501-03 (Ill. App. Ct. 1994). If the cost to
repair exceeds the drop in market value attributable to
the lack of repair, the measure of the award should be the
diminution in market value, so as to avoid windfalls
(to landlords) and injustice (to tenants). Meade, 661
N.E.2d at 1184-85 (collecting cases); Ceres Terminals, 635
N.E.2d at 501-02 (quoting Bowes v. Saks & Co., 397 F.2d
113, 116-17 (7th Cir. 1968)).
Contrary to Rexam’s assertions that Bolger offered no
evidence on the matter, the record shows that the
Nos. 08-3403 & 09-2071 15
district court was presented with conflicting evidence
regarding the roof’s impact on the value of the property
as well as the cost to replace the roof. The real estate
broker who sold the warehouse testified that he
adjusted his estimated market price for the property
downward by about $345,000 to reflect its disrepair.
He noted that he took into account other items also in
disrepair when doing so, such as the rail spur and land-
scaping, but maintained that the problems with the
roof were the most significant factor underlying the
adjustment. Other evidence showed the ultimate sales
price for the property was $230,000 below the listing
price. Bolger’s roofing expert testified that it would
cost about $405,470 to replace the roof. The court con-
sidered these divergent figures and ultimately con-
cluded that the decrease in the property’s market value
was neither greater than nor less than but instead was
equivalent to the cost of repairing the roof:
[I]t is possible, in fact likely, that Bolger had to
reduce its asking price in light of the seriously
damaged condition of the property. Therefore,
the asking price cannot be used as a starting
point for measuring the decreased value of the
property. It is also reasonable to infer that any
purchaser would discount its offer in light of the
anticipated costs of repairing the damage Bolger
seeks to recover for here, particularly the roof,
which is a necessity under any conceivable use of
the facility. Therefore, it cannot be said that the
cost to repair exceeds the decrease in market
16 Nos. 08-3403 & 09-2071
value of the facility; rather, the estimated cost of
repair is the only reasonable proxy the Court has
for determining the decreased market value of
the property in its damaged condition. In other
words, the property was diminished in value
by the amount needed to repair it, whether or not
it was actually repaired by Bolger.
Rexam Beverage Can Co. v. Bolger, No. 06 C 2234, 2008 WL
4087441, at *12 (N.D. Ill. Aug. 20, 2005). In other words,
it “assum[ed] that the purchaser reduced the purchase
price by the amount it would have to expend to
rehabilitate the premises.” 349 W. Ontario Bldg. Corp. v.
Palmer Truck Leasing Co., 317 N.E.2d 740, 748 (Ill. App. Ct.
1974). This strikes us as a reasonable rather than
clearly erroneous conclusion to reach.
The general rule in Illinois is that damages due to a
breach of contract are limited to actual losses arising
from the breach. Id.; see also Ceres Terminals, 635 N.E.2d
at 501 (“The goal is to restore the party to the equivalent
of his pre-injury position.” (quotation omitted)). By
finding that the cost of replacing the roof was the same
as the reduction in the property’s value stemming from
its poor condition, the district court linked Bolger’s dam-
ages award to the actual loss he suffered from Rexam’s
breach. Cf. Ceres Terminals, 635 N.E.2d at 503 (refusing
to award damages for injury to a wooden warehouse
where the trial court expressly found that the injury had
no effect on the property’s fair market value). Rexam’s
assertion to the contrary is unavailing.
Nos. 08-3403 & 09-2071 17
The district court appropriately applied Illinois law,
and the damages award it calculated does not leave us
with “the definite and firm conviction that a mistake
has been committed.” Econ. Folding Box Corp. v. Anchor
Frozen Foods Corp., 515 F.3d 718, 720 (7th Cir. 2008) (quota-
tion omitted). We therefore affirm the $405,470 award
to Bolger.
B. The Holdover Statute
1. Applicability
Since 1827, Illinois has had on its books a statute that
permits landlords to recover double the fair market
rental value of their properties from tenants who
willfully hold over on leases. See 735 Ill. Comp. Stat. 5/9-
202. The statute is intended to protect and compensate
landlords. See Granger v. Bd. of Trs. of Ill. & Mich. Canal, 18
Ill. 443 (1857). Because of its penal nature, it is only
applied when tenants know their retention of possession
is wrongful; that is, when they lack a colorable justifica-
tion for remaining in possession. J.M. Beals Enters., Inc.
v. Indus. Hard Chrome, Ltd., 648 N.E.2d 249, 252 (Ill. App.
Ct. 1995).
Here, the district court determined that Rexam’s
entire post-lease stay of seventeen months was both
willful and wrongful and awarded Bolger over $1 million
pursuant to the Holdover Statute. We review de novo
the district court’s determination of the legal standard
for recovery under Illinois law, but because the deter-
mination of whether a holding over was willful is a
18 Nos. 08-3403 & 09-2071
question of fact we review it only for clear error.
Findings of fact are clearly erroneous “only when the
reviewing court is left with the definite and firm convic-
tion that a mistake has been committed.” Econ. Folding
Box Corp., 515 F.3d at 720 (quotation omitted).
Rexam first asserts that the Holdover Statute should
not apply because Bolger failed to conform with its re-
quirements. Though Rexam is correct that landlords
must strictly comply with the Holdover Statute’s terms
to recover, Stride v. 120 W. Madison Bldg. Corp., 477
N.E.2d 1318, 1321 (Ill. App. Ct. 1985), that argument
lacks traction here. The Holdover Statute by its terms
asks very little of landlords who seek to invoke it; it
requires only that they demand possession of the
property in writing. 735 Ill. Comp. Stat. 5/9-202. Rexam
acknowledges in its opening brief that Bolger did just
that: “By letter dated February 27, 2006, Bolger . . . rejected
Rexam’s renewal notice. Bolger instructed Rexam to
surrender the Rockford Warehouse by the end of the
term, March 31, 2006.” Appellant’s Br. 6. Bolger also
took the additional step of notifying Rexam in writing
of his intent to pursue damages under the Holdover
Statute on May 5, 2006, just over a month into Rexam’s
holdover tenancy. Illinois courts have long denied the
benefits of the Holdover Statute to landlords who termi-
nate their tenants’ leases, see Stuart v. Hamilton, 66 Ill.
253 (1872), but Rexam does not allege (and the record
does not support the conclusion) that Bolger affirma-
tively terminated the lease here.
Rexam also makes much of the fact that Bolger de-
manded that it make some repairs to the property. On
Nos. 08-3403 & 09-2071 19
February 16, 2006, and again on February 27, 2006,
Bolger indicated in writing that he expected Rexam to
address a few exterior problems with the warehouse,
specifically some broken windows, a concrete block wall,
and debris and overgrowth on the warehouse’s rail-
road spur. Rexam asserts that Bolger, via these com-
munications, forced it into a “Hobson’s choice” by de-
manding repairs to the property while simultaneously
requiring Rexam to vacate in a timely fashion. See J.M.
Beals, 648 N.E.2d at 253. We fail to see the bind here.
Rexam could have chosen to vacate on time, leaving
some repairs undone, or it could have sought Bolger’s
permission to stay on and complete the requested re-
pairs. It did neither. Rexam was not forced into a
Hobson’s choice; Rexam simply made no choice. Bolger,
on the other hand, chose to give Rexam advance
warning of the repairs he wanted done before the end
of the lease (six weeks’ advance notice, double the
three weeks’ notice provided in J.M. Beals) and then
chose, again with ample notice to Rexam, to pursue
damages under the Holdover Statute. In trying to avoid
the writing on the wall, Rexam painted itself into the
corner in which it now stands. Its Hobson’s choice argu-
ment thus lacks merit.
Rexam’s final argument against the application of the
Holdover Statute is that the district court applied
the incorrect standard when it concluded that Rexam’s
behavior was “willful.” The Holdover Statute does not
define “willful,” see 735 Ill. Comp. Stat. 5/9-202, and Rexam
asserts that the term is best interpreted as requiring
bad faith on the part of the tenant, see Stride, 477 N.E.2d
20 Nos. 08-3403 & 09-2071
at 1321 (“Consistent with its finding that Stride’s hold
over was not in bad faith, the trial court properly denied
double rent . . . .”). But the Illinois Appellate Court more
recently—and explicitly—reached a different conclusion,
one to which the district court properly deferred. In
J.M. Beals, 648 N.E.2d at 252, the Illinois Appellate
Court expressly declined to make “such a broad pro-
nouncement that bad faith is required for all claims
brought under the statute.” It determined that the “better
rule,” the one the district court faithfully looked to
here, was that tenants who remain in possession for
“colorably justifiable reasons . . . should not be charged
under the statute.” Id. The J.M Beals court further
clarified that “the tenant, to be liable under the
statute, must know that his retention of possession is
‘wrongful.’ ” Id. (quoting Stuart, 66 Ill. at 255).
The district court cogently explicated the evidence
and reasoning underlying its conclusion that Rexam
“made a conscious decision to overstay the lease because
it thought the penalty would not be severe.” Rexam, 2008
WL 4087441, at *3. It pointed to Rexam’s testimony that
it was staying to “possibly to try to get new lease terms
in the building,” and its admission in its briefs that
its decision to overstay the lease was the result of a
“calculus.” Id. In light of this evidence, we are not per-
suaded that the district court erred in determining
that Rexam acted willfully in staying on the premises.
We are similarly unconvinced that Rexam’s attempt to
eke out a new lease is the sort of “colorably justifiable”
reason for barring application of the Holdover Statute
that the appellate court contemplated in J.M. Beals. And
Nos. 08-3403 & 09-2071 21
because Rexam was notified in writing that its lease
had expired, and was continually reminded of that fact
by Bolger’s sedulous refusal of its rent payments, we
find no clear error in the district court’s conclusion that
Rexam knew its retention of possession was wrongful.
2. Damages
The Holdover Statute, which the district court correctly
deemed applicable here, provides that a tenant must
pay a penalty of “double the yearly value of the lands”
to a landlord kept out of possession due to the tenant’s
willful holdover. 735 Ill. Comp. Stat. 5/9-202. To cal-
culate Rexam’s penalty, the district court first had to
determine the fair market rental value of the “lands” at
issue here. Both parties offered testimony for the
court’s consideration. Brian Clancy, Rexam’s real estate
consultant, testified that Rexam investigated five
nearby properties when it was looking for replacement
space. Clancy stated that the gross rents for those
facilities ranged in price from $1.75 to $3.00 per square
foot, while the triple net rental rates ranged from $1.75
to $2.25 a square foot. He testified that the ware-
house on the property Rexam selected was a “better
building” than the Loves Park warehouse and came at
a gross rental rate of only $2.60 per square foot. Clancy
estimated that if the lease had been triple net, the rent
would have been about $1.25 lower per square foot. He
did not directly testify as to the value of the Loves
Park property; instead, Rexam contends that the triple
net rental rate should have been about $1.35 per square
22 Nos. 08-3403 & 09-2071
foot—calculated by subtracting the $1.25 gross rate differ-
ential from the $2.60 per square foot rate it secured on
its new facility.
The district court rejected Clancy’s lay testimony and
relied instead on that of Bolger’s expert, Christopher
Hall, the president of the appraisal division of an inter-
national real estate company. Hall conducted a formal
appraisal of the Loves Park property, which involved
an in-person inspection of the property, an evaluation
of the Loves Park-Rockford commercial real estate
market, and an assessment of four comparable properties
in the area. To arrive at his estimates of the fair market
rental value of the Loves Park property, Hall analyzed
the features of the comparable properties and figured
out the contribution each made to the properties’ value.
For instance, he examined the ceiling heights in all
the comparable buildings, determined the impact that
attribute had on their values, and used that information
to adjust his computation of the Loves Park rental rate
accordingly. Hall testified that the fair market rental
value of the Loves Park property was $2.43 per square
foot net, a number that took into account its deteriorated
condition. He further testified that he used that figure
and historical expense information to compute a gross
rental rate of $4.38 per square foot.
The district court used Hall’s valuation of the gross
rental rate to conclude that the annualized gross rental
value of the roughly 101,000-square-foot warehouse
was $443,895.47. Dividing that figure by twelve yields a
monthly gross rental rate of $36,991.29. The district court
Nos. 08-3403 & 09-2071 23
multiplied the monthly rate by seventeen, the number
of months it already found that Rexam had willfully
held over, and doubled the result to arrive at the Hold-
over Statute penalty, $1,257,703.83. The district court
subtracted from this amount the $101,471.59 that Rexam
paid in utilities during the holdover period because
it used a gross rental rate (which includes taxes,
utilities, and insurance), and assessed Rexam a penalty
of $1,156,232.24.
Rexam takes issue with the district court’s calculation.
It first asserts that the district court erroneously con-
cluded that expert testimony was required for it to deter-
mine the fair market value of the warehouse. It rests
this contention on a single sentence of the district court’s
opinion: “The issue of comparability—of the facilities, of
locations, of time, and of lease terms—is one that requires
the type of expert testimony that Rexam declined to
provide in this case.” Rexam, 2008 WL 4087441, at *5.
This argument fails for two reasons. The first is that
Rexam reads too much into the single sentence to which
it points. The overall tenor of the district court’s dis-
cussion of market value indicates that what it was
really doing was making a credibility determination: it
found Bolger’s expert more credible than Clancy, Rexam’s
lay witness. It noted that Rexam’s valuation “lacks a
convincing foundation in fact,” and found its numbers
“unpersuasive.” Id. Contrary to Rexam’s assertions that
its non-expert testimony was inappropriately deemed
inadmissible, the trial transcripts reveal that the district
court allowed Clancy to testify as a lay witness (Rexam
24 Nos. 08-3403 & 09-2071
never sought to have him classified as an expert even
though it now touts his qualifications), and the district
court’s opinion indicates that it thoroughly considered
his testimony in making its determination of the prop-
erty’s value. It is well established that we “will set
aside credibility determinations only if they are clearly
erroneous, which occurs only if the district court has
chosen to credit exceedingly improbable testimony.”
United States v. Smith, 576 F.3d 681, 687 (7th Cir. 2009)
(quotations and citations omitted). Here, the district
court credited Hall’s testimony over Clancy’s, and because
Hall’s testimony about his comparability analysis
and the value of the Loves Park warehouse was not “ex-
ceedingly improbable,” see id. (“[T]estimony will be
found exceedingly improbable only if it is internally
inconsistent or implausible on its face.” (quotations and
citation omitted)), we uphold the district court’s deter-
mination.
Rexam’s argument falls flat even if we read the district
court’s statement about expert testimony as it does.
“Whether the jury”—or, in this case, the court in its role
as factfinder—“needs expert testimony for a particular
claim is a question within the district court’s discretion.”
Talmage v. Harris, 486 F.3d 968, 977 (7th Cir. 2007); cf.
United States v. Jones, 455 F.3d 800, 805 (7th Cir. 2006)
(“Mr. Jones also contends that expert testimony would
have aided the jury . . . . Nevertheless, the district court
was entitled to conclude that such testimony would
have been of limited value in the overall presentation of
his case.”). “Under the Federal Rules of Evidence, expert
testimony is appropriate if specialized knowledge will
assist the trier of fact to understand the evidence or to
Nos. 08-3403 & 09-2071 25
determine a fact in issue.” United States v. Myers, 569
F.3d 794, 798 (7th Cir. 2009) (internal quotations omitted).
Even under Rexam’s reading of the opinion, the district
court merely concluded that expert testimony would
help it determine the appropriate rental value for a com-
mercial property that had not been on the market in
forty years. Cf. Ceres Terminals, 635 N.E.2d at 496 (“[A]
general estimation of the property’s valuation considers
numerous intangible factors which could be weighed
and combined in a wide variety of ways . . . .”). We
do not view this as an abuse of the district court’s discre-
tion or a contravention of the Federal Rules of Evidence.
Rexam next argues that the district court erred in using
a gross rental value rather than a net one as the basis for
its penalty calculation. A gross rental rate has utilities,
taxes, and insurance payments built in; a net rental
rate does not. Consequently, the difference between the
two can be significant even at the square foot level and
is magnified when the rent is doubled under the
Holdover Statute. We review the district court’s inter-
pretation of the Illinois statute de novo. Salve Regina,
499 U.S. at 239; Estate of Moreland, 576 F.3d at 695.
The proper way to calculate damages under the Hold-
over Statute has not been determined by the Illinois
courts, as far as we can tell. The parties did not provide
any authority on the matter, nor were we able to locate
any. Fortunately, the Illinois Supreme Court has been
very clear about how statutory interpretation should
be undertaken, and, as we must apply the law as we
believe that court would, we employ its rules of inter-
26 Nos. 08-3403 & 09-2071
pretation as we conduct our de novo interpretation of
the Holdover Statute.
In Illinois, “[t]he primary objective in statutory inter-
pretation is to give effect to the intent of the legislature.”
Gardner v. Mullins, 917 N.E.2d 443, 448 (Ill. 2009). Because
the most reliable indicator of the legislature’s intent is
the language of the statute, the Illinois Supreme Court
looks there first, applying the “plain, ordinary, and popu-
larly understood meaning[s]” of the statute’s terms. Id.
The Court looks to the dictionary when necessary to
discern the ordinary and popular meanings of words.
Exelon Corp. v. Dep’t of Revenue, 917 N.E.2d 899, 906
(Ill. 2009); People v. Cardamone, 905 N.E.2d 806, 811-12 (Ill.
2009). In addition to the language of the statute, the
Court also considers “the purpose behind the law and
the evils sought to be remedied, as well as the conse-
quences that would result from construing the law one
way or the other.” County of DuPage v. Ill. Labor Relations
Bd., 900 N.E.2d 1095, 1101 (Ill. 2008). It assumes that the
legislature did not intend “absurdity, inconvenience or
injustice,” People v. Glisson, 782 N.E.2d 251, 255 (Ill.
2002), and looks to legislative history if the need arises,
see County of DuPage, 900 N.E.2d at 1101.
The critical portion of the Holdover Statute provides:
“[T]he person so holding over shall, for the time the
landlord or rightful owner is so kept out of possession,
pay to the person so kept out of possession, . . . at the
rate of double the yearly value of the lands . . . .” 735 Ill.
Comp. Stat. 5/9-202 (emphasis added). On its face, the
italicized language seems to refer to the lands and the
Nos. 08-3403 & 09-2071 27
lands alone; the Holdover Statute by its terms awards
landlords double the yearly value of the lands, not the
value of the lands plus utilities, insurance, and taxes.
Indeed, from an economic standpoint, taxes and other
expenses are perceived as detractions from the value of
a parcel of land.
This interpretation is consonant with the dictionary
definition of “annual value”: “[t]he net yearly income
derivable from a given piece of property,” or “[o]ne year’s
rental value of property, less the costs and expenses of
maintaining the property.” Black’s Law Dictionary 1690-
91 (9th ed. 2009). In a gross rent situation, a landlord
needs to use some of the rent payments (or other funds
under his control) to cover utilities, insurance, taxes, and
other “costs and expenses of maintaining the property.”
Thus, the “net yearly income” he actually receives from
the property is more akin, if not equivalent, to the net
rental value of the property rather than the gross
rental value. Our plain reading of the language is also
in accordance with the definition of “land,” which
includes with the property itself only “everything
growing on or permanently affixed to it,” id. at 955, and
does not reach expenses associated with it.
We also look to the purposes and aims underlying the
Holdover Statute. See County of DuPage, 900 N.E.2d at
1101. In 1857, the Illinois Supreme Court noted that it
was enacted “for protection of, and compensation to,
landlords who are kept out of their possession.” Granger,
18 Ill. 443. Those are not its only purposes, however;
it has also been consistently recognized as “penal,” see
28 Nos. 08-3403 & 09-2071
Chapman v. Wright, 20 Ill. 120 (1858) (“This action is, in
its nature, highly penal . . . .”); J.M. Beals, 648 N.E.2d at
253 (“An action to recover double rent under the statute
is highly penal . . . .”), which of course means that it
is intended to punish or penalize, see Black’s Law Dictio-
nary 1246 (9th ed. 2009).
At first blush, all three purposes—landlord protection
and compensation and tenant punishment—would
seem best served by a determination that “double the
yearly value of the lands” may be calculated using
gross rent. After all, the landlord would be more highly
compensated and the tenant would be more severely
punished (and more deterred from overstaying its wel-
come). Yet reading the language this way adds an ele-
ment of injustice, see Glisson, 782 N.E.2d at 255, and
unduly minimizes the consequences that could result,
see County of DuPage, 900 N.E.2d at 1101. A landlord
could receive windfalls above and beyond her due “com-
pensation,” particularly where, as here, the lease that
has been held over is by its terms a net lease, and a
tenant could be overly deterred from holding over even
in situations in which doing so is “bona fide” or
“colorably justifiable.” J.M. Beals, 648 N.E.2d at 252.
When the damages are calculated using net rent, the
Holdover Statute’s purposes are served in a more
efficient manner.
In light of the plain language of the Holdover Statute
and our examination of the purposes underlying it, we
conclude that the intent of the legislature would be
better effected if damages were calculated using net
Nos. 08-3403 & 09-2071 29
rather than gross rent. Simply reversing the district court
on this issue would leave us at an impasse, however. The
district court heard conflicting testimony as to the fair
market net rental value of the Loves Park warehouse, but
the only finding it made was that the gross rental value
was $4.38 per square foot. Bolger conceded at oral argu-
ment that doubling the amount of Rexam’s setoff for
utilities paid during its holdover—to roughly $203,000—
would be appropriate if we upheld the district court’s
usage of the gross rental rate. But because we have deter-
mined that the net rental rate is the proper one to use,
this remedy is inadequate: if the district court were
to credit Hall’s testimony regarding the net value of
the property, Rexam’s penalty would drop by nearly
$400,000, and it might drop further (or less) if the
district court were to credit Clancy’s testimony or
some other estimation of value.
We therefore vacate Bolger’s award of $1,257,703.83
and Rexam’s setoff of $101,471.59 and remand this issue
to the district court so that the fair net rental value of
the property can be determined and the correct penalty
assessed Rexam.
C. The Attorneys’ Fees
Illinois follows the “American Rule” of litigation, under
which successful parties are generally responsible for
their own attorneys’ fees unless a statute or contract
provides otherwise. In re Weinschneider, 395 F.3d 401,
404 (7th Cir. 2005); Taylor v. Pekin Ins. Co., 899 N.E.2d 251,
256 (Ill. 2008). Its courts strictly construe contractual
30 Nos. 08-3403 & 09-2071
provisions permitting the award of attorneys’ fees, but
the decision to award costs and fees pursuant to such
provisions lies within trial courts’ sound discretion. Pa.
Truck Lines, Inc. v. Solar Equity Corp., 882 F.2d 221, 227 (7th
Cir. 1989); Mountbatten Sur. Co. v. Szabo Contracting, Inc.,
812 N.E.2d 90, 104 (Ill. App. Ct. 2004); Powers v. Rockford
Stop-N-Go, Inc., 761 N.E.2d 237, 241 (Ill. App. Ct. 2001). In
this case, the district court concluded that the lease pro-
vided for attorneys’ fees, at least those related to some
of Bolger’s counterclaims, and awarded him $744,726.87
in fees and expenses and $5338.42 in taxable costs. It
later awarded him $70,000 in supplemental attorneys’ fees.
Rexam raises two arguments against the fee award. First,
it asserts that the district court interpreted the lease
incorrectly—in Rexam’s view, neither of the two provi-
sions the court found to permit fee shifting actually does.
Second, assuming the district court properly interpreted
the lease, Rexam asserts that the court awarded Bolger
more fees than he was entitled to because he failed
to specifically allocate them among (covered) claims
arising out of the lease and (uncovered) claims relating
to Rexam’s holdover tenancy. In a closely related argu-
ment, Rexam asserts that Bolger should have only
been awarded attorneys’ fees for his successful con-
tract claims and not his unsuccessful ones. We take up
these challenges in turn, reviewing the district court’s
interpretation of the lease de novo, Int’l Prod. Specialists,
580 F.3d at 594, its interpretation of Illinois law likewise,
Salve Regina, 499 U.S. at 239, and its fee award using our
abuse of discretion standard, Cintas Corp. v. Perry, 517
F.3d 459, 469 (7th Cir. 2008).
Nos. 08-3403 & 09-2071 31
1. Lease Provisions
The district court determined that two lease provi-
sions authorized the award of fees to Bolger. The first,
an exceptionally long sentence denoted Article 9(a), reads:
Indemnification by Lessee. Lessee agrees to
indemnify and save harmless Lessor, its successors
and assigns, against and from any and all liabili-
ties, losses, damages, costs, expenses, causes of
action, suits, judgments and claims by or in behalf
of any person, firm, corporation or governmental
authority arising from the occupation, use, posses-
sion, conduct or management of or from any
work, improvement, demolition or thing whatso-
ever done in or about the Premises or any building
or structure thereon or the equipment thereof
during any term of this Lease, or arising during
said term from any condition of the Premises or
of any street, parking lot or sidewalk adjoining
thereto or of any vaults, passageways or space
therein or appurtenant thereto, or arising from
any act of negligence of Lessee, or any of the
agents, contractors, or employees of Lessee, or
arising from any accident, injury or damage what-
soever, however caused, to any person or to the
property of any person or corporation, occurring
during said term on, in or about the Premises, or
upon or under the sidewalks or streets adjoining
thereto, and from and against all costs, reasonable
counsel fees, expenses and liabilities incurred
in or about any such claim or any action or pro-
32 Nos. 08-3403 & 09-2071
ceeding brought thereon, and against all liabil-
ities, losses, damages, costs, expenses, causes of
action, suits, judgments and claims arising from
any failure by Lessee to perform any of the agree-
ments, terms, covenants or conditions of this
Lease on Lessee’s part to be performed, other
than those occasioned by any tortious or negligent
act on the part of Lessor, its agents or employees
(in no event shall Lessee, its agents, contractors
or employees be considered agents or employees
of Lessor).
Rexam reads this language to require only that it indem-
nify Bolger against claims by third parties. For support,
it relies not on case law but rather on Articles 9(b) and 10
of the lease, in light of which we must interpret Article
9(a). See Gallagher, 874 N.E.2d at 58. Rexam asserts that
Article 9(b), “Liability Insurance,” confirms the third-
party orientation of Article 9(a) with its language
requiring Rexam to “maintain as to the Premises general
liability insurance insuring Lessee, Lessor, and Lessor’s
mortgagee as their interests shall appear . . . .” And it
claims that if Article 9(a) were to reach “breach of
lease” claims by Bolger, Article 10, “Defaults by Lessee,”
would be rendered “redundant.”
We fail to see any language in Article 9(a) that restricts
its application to claims by third parties. See Balcor Real
Estate Holdings, Inc. v. Walentas-Phoenix Corp., 73 F.3d
150, 153 (7th Cir. 1996) (interpreting a similarly prolix
indemnity provision). Under Illinois law, we give clear
and unambiguous contract terms their plain meaning,
Nos. 08-3403 & 09-2071 33
Kallman, 315 F.3d at 736, and “indemnify” means “[t]o
reimburse (another) for a loss suffered because of a
third party’s or one’s own act or default,” Black’s Law
Dictionary 837 (9th ed. 2009) (emphasis added); see also
Balcor, 73 F.3d at 153 (discussing and defining indemnify).
Article 9(a) plainly requires Rexam to reimburse Bolger
for “reasonable counsel fees” he incurs in pursuit of “any
such claim or any action or proceeding” he brings in
relation to “any condition of the Premises.” Even con-
struing the language strictly, as we must do, see Downs
v. Rosenthal Collins Group, LLC, 895 N.E.2d 1057, 1059
(Ill. App. Ct. 2008) (“Illinois cases have established that
attorney fees are only recoverable pursuant to an indem-
nity contract if such terms are specifically provided for
within the contract.”); Powers, 761 N.E.2d at 241, there is
no doubt that Bolger may seek attorneys’ fees incurred
in disputes over property conditions like the ill repair
of the roof. Indeed, we have noted, in a diversity
case applying Illinois law, that indemnity clauses are
“designed to make the wronged party whole—to put it
in the same position it would have occupied had the
other side kept its promise.” Medcom Holding Co. v. Baxter
Travenol Labs., Inc., 200 F.3d 518, 519 (7th Cir. 1999). Here,
if Rexam had repaired the roof and other items it
agreed to repair, Bolger would not have had to incur
attorneys’ fees and legal costs associated with pursuing
the breach of contract (counter)claim.
It is also true that if Rexam had not held over, Bolger
would not have had to incur legal costs associated
with getting Rexam to leave and seeking a penalty
against it under the Holdover Statute. Yet Article 9(a)
34 Nos. 08-3403 & 09-2071
does not stretch so far as to require Rexam to reimburse
Bolger for those attorneys’ fees as well. The provision
protects Bolger from attorneys’ fees he incurs resulting
from “occupation . . . of . . . the Premises,” but
only “during any term of this Lease.” The occupation
he challenged occurred after the expiration of the lease,
not while it was in force; it was for that reason that the
Holdover Statute was relevant and a forcible entry
action was arguably needed. The final portion of Article
9(a) is no more helpful to Bolger in this respect. It con-
ditions Rexam’s indemnification liability on its failure
“to perform any of the agreements, terms, covenants or
conditions of this Lease.” The lease does not require
Rexam to vacate the premises upon its expiration.
Lessees have a common law duty to timely vacate
premises after a lease has terminated, see Perry v.
Evanston Young Men’s Christian Ass’n, 416 N.E.2d 340,
345 (Ill. App. Ct. 1981), but a common law duty is not
synonymous with a contractual one. Thus, we conclude
that Article 9(a) permits Bolger to recover attorneys’ fees
associated with his repair claims but not his claims
related to Rexam’s holdover.
The other contractual articles to which Rexam points
do not change our view. Article 9(b) does nothing more
that outline Rexam’s obligation to insure the premises,
to deliver the policies to Bolger, and to ensure that the
policies cannot be changed without Bolger’s written
consent. It operates to shield both Bolger and Rexam
against claims by third parties, but does not remove
from Rexam the extensive indemnity obligations of
Article 9(a). Article 10, which governs the consequences
Nos. 08-3403 & 09-2071 35
of any “Events of Default” by Rexam and in its view is
the only article that “plainly address[es] lessor-lessee
disputes,” is not rendered redundant in light of our
reading of Article 9(a). There are no conditions prece-
dent to the application of Article 9(a). But Article 10 is
only invoked if Rexam engages in one of six specified
“Events of Default” during the term of the lease. The
provisions may overlap in some cases, but they comple-
ment rather than displace one another. Cf. Outboard
Marine Corp. v. Liberty Mut. Ins. Co., 607 N.E.2d 1204,
1220 (Ill. 1992) (noting that “insurance policies are filled
with words which overlap and complement one an-
other,” and that such words “add contours” to “general
concepts” in the policy).
Indeed, a portion of Article 10—10(d), “Performance
by Lessor”—is the second provision under which the
district court found Rexam liable for Bolger’s attorneys’
fees. It provides:
Performance by Lessor. In the event of the hap-
pening of an Event of Default other than the non-
payment of rent, Lessor shall have the right at
its election, after not less than 30 days’ written
notice to Lessee, to perform the same for the ac-
count of and at the expense of Lessee and if
Lessor at any time is required to pay, or elects to
pay, any sum of money, by reason of such Event
of Default, or if Lessor is required or elects to
incur any expense, including reasonable counsel
fees, in instituting, prosecuting or defending
any action or proceeding instituted by reason
36 Nos. 08-3403 & 09-2071
thereof, the sum or sums so paid or incurred by
Lessor, together with interest at the rate of 6% per
annum shall be due and payable by Lessee to
Lessor as additional rent (in addition to other
rents specified in this Lease) upon demand.
Rexam, after acknowledging that Article 10(d) is the
only part of Article 10 that mentions attorneys’ fees,
asserts that it is inapplicable here because Bolger failed
to establish that Rexam engaged in one of the six
“Events of Default.” It also claims that Bolger did not
demonstrate his compliance with Article 10(d)’s written
notice requirement.
The “Events of Default” are defined in Article 10(a) of
the lease. Rexam is correct that most of the “Events” did
not happen here. Rexam did not file for bankruptcy,
Article 10(a)(i), it did not have a receiver appointed,
Article 10(a)(ii), it did not sell its interest in the premises,
Article 10(a)(iv), it paid its rent without fail even after
expiration of the lease, Article 10(a)(v), and no liquida-
tion or reorganization of it was proposed, Article 10(a)(iii).
The catchall “Event,” Article 10(a)(vi), which reaches
any failure “to perform or observe any other require-
ment, or breach any other covenant or agreement of this
Lease” for thirty days after notice of it, however, could
reach at least some of Bolger’s repair claims. It is undis-
puted that Bolger notified Rexam that some repairs were
needed in February 2006. Additionally, on July 27, 2007,
Bolger sent a fax to Rexam’s Clancy, noting that “the roof
was leaking” as of June 2007 and expressing hope that
“Rexam has cured of [sic] all the repairs and maintenance
Nos. 08-3403 & 09-2071 37
issues.” When Rexam vacated the property on August 31,
2007—more than thirty days after the July 2007 letter
and well over a year after the February 2006 letters—the
repairs remained undone. “By reason thereof” these
incomplete repairs, Bolger “elect[ed] to incur . . . counsel
fees,” placing him within the parameters of Article 10(d).
Again, however, costs Bolger incurred in contesting
Rexam’s holdover are not reimbursable; the catchall
“Event of Default” cannot reach them because Rexam
was not required to vacate by any terms of the lease itself.
We affirm the district court’s conclusion that Articles
9(a) and 10(d) of the lease provide a basis for Bolger to
recover reasonable attorneys’ fees and costs associated
with litigating the repair issues.
2. Award and Allocation of Fees
The district court awarded Bolger over $800,000 in
attorneys’ fees. In light of its interpretation of the lease,
and its recognition of Illinois’s “strict construction” rule
concerning contractual fee-shifting provisions, the
court stated explicitly that Bolger was “not entitled to
any of his fees and costs directly attributable” to his
reentry and wrongful possession claims “because they
were not covered by any of the fee-shifting provisions
contained in the lease.” Rexam Beverage Can Co. v. Bolger,
No. 06 C 2234, 2008 WL 5068824, at *6 (N.D. Ill. Nov. 25,
2008). Yet it also determined that “it [was] not practical
for [it] to attempt to determine which fees were devoted
to which claims” because, after Bolger tossed his breach
of repair claims into the ring on October 11, 2007, “the
38 Nos. 08-3403 & 09-2071
two sets of claims were intertwined.” Id. The court
declined Rexam’s invitation to engage in a “detailed, hour-
by-hour review” of Bolger’s costs, id. (quoting Medcom, 200
F.3d at 521), observed in a footnote that Rexam had
similarly declined its own invitation, and attempted to
split the difference by awarding Bolger all reasonable
fees incurred after October 11, 2007, when he amended
his counterclaim to include a claim based on Rexam’s
duty to repair, id. The court reiterated that it would
exclude costs that were “on their face related only to
Bolger’s claims for double rent.” Id.
Rexam takes issue with the district court’s failure
to divide Bolger’s attorneys’ fees into two categories:
compensable ones relating to its repair claims, and
noncompensable ones relating to all the other issues in
the case. It also asserts that the fees in the former cate-
gory should have been further subdivided into successful
and unsuccessful claims, and that only fees associated
with the successful claims should have been awarded.
We review the fee award for abuse of discretion. That is,
we examine the award for reasonableness and reverse
only if we are persuaded that it is not at least arguably
correct. See United States v. Thouvenot, Wade & Moerschen,
Inc., 596 F.3d 378, 386 (7th Cir. 2010).
In light of the indemnity provisions in Article 9(a) of
the lease, we conclude that Rexam’s second argument,
that Bolger should only receive fees for the repair claims
on which he was successful, is a nonstarter. Rexam may
be correct that Bolger’s unsuccessful repair claims, those
for the rail spur, Bradley sink, and pipes, were in no
Nos. 08-3403 & 09-2071 39
way factually related to his successful repair claims for
the dock levelers and roof. The accuracy of that assertion
is irrelevant here, though, because all of Bolger’s repair
claims arose out of the lease. Article 9(a) provides “rea-
sonable counsel fees” for “any . . . claim or any action
or proceeding” he brings in relation to “any condition of
the Premises,” not just those claims on which he pre-
vails. Illinois law is clear that “[w]hen a contract calls for
the shifting of attorney fees, a trial court should award all
reasonable fees.” J.B. Esker & Sons, Inc. v. Cle-Pa’s P’ship,
757 N.E.2d 1271, 1277 (Ill. App. Ct. 2001). The trial court
found it reasonable to award Bolger all its fees related to
its repair claims, and that decision stands, notwith-
standing Rexam’s observation that the fees amount to
nearly double the amount Bolger successfully recovered
on the claims. See id. (“[A]ttorney fees may be reasonable
even if the fees are disproportionate to the monetary
amount of an award.”).
We are more troubled by the potential entanglement of
attorneys’ fees relating to the repair clams and those not
authorized by the lease. In Illinois, it is “incumbent upon
the petitioner to present detailed records maintained
during the course of the litigation containing facts and
computations upon which the charges are predicated.”
Kaiser v. MEPC Am. Props., Inc., 518 N.E.2d 424, 427-28
(Ill. App. Ct. 1987). In our view, many of the entries
in Bolger’s attorneys’ bills leave much to be desired in
this respect. Entries such as “[r]eviewing case law” and
“[r]eviewing correspondence, deposition transcripts, and
pleadings,” while perhaps adequate to inform Bolger of
his attorneys’ progress, see Mountbatten, 812 N.E.2d at
40 Nos. 08-3403 & 09-2071
105, were insufficiently detailed for the district court to
determine to which cause of action the efforts were di-
rected.
That said, however, we recognize Illinois courts’ deter-
mination that even “terse, and concise” attorneys’ bills can
be “adequate.” Id. Despite their flaws, the bills clearly
indicate which attorney or paralegal performed each
task and how long he or she took to complete it. See
Kaiser, 518 N.E.2d at 427 (requiring only a specification
of “the services performed, by whom they were per-
formed, the time expended thereon and the hourly rate
charged therefor”). And moreover, Bolger paid all the
bills; that is a strong indication that the charges
they contained were reasonable. See Medcom, 200 F.3d
at 520. The district court was not obligated to conduct
a line-by-line review of the bills to assess the charges
for reasonableness.
This does not get us out of the entanglement quagmire,
however. For what Rexam fundamentally challenges is
the reasonableness of the district court’s “split the dif-
ference” approach of dividing the bills into pre- and post-
October 11, 2007 categories. While we do not go so far as
to endorse the district court’s fee award methodology or
its application in future cases, we hold that the district
court did not abuse its discretion in employing a “prac-
tical solution” to the fee division problem posed here. The
district court carefully restricted the award to exclude
items clearly attributable to the extracontractual claims,
and it expressly excluded expenses associated with an
expert who testified only as to the market value of the
Nos. 08-3403 & 09-2071 41
facility. It attempted to ensure that Rexam’s liability
for fees did not attach until there was a fair possibility
that the work being billed was related to Bolger’s con-
tract claims; removing the roughly one-third of the fees
accrued prior to October 11, 2007 was a reasonable step
toward that end. Asking the court to do more here
would place any resultant fee award much further into
the realm of conjecture, see In re Estate of Bitoy, 917
N.E.2d 74, 85 (Ill. App. Ct. 2009), and would undermine
its broad discretionary authority to fashion appropriate
attorneys’ fees.
Under the deferential abuse of discretion standard,
the district court’s award of attorneys’ fees to Bolger
should stand.
III. Conclusion
The judgment of the district court is A FFIRMED except
on the issues of the fair market rental value of the
Loves Park warehouse and the calculation of damages
under the Holdover Statute. With respect to those
issues, we V ACATE Bolger’s Holdover Statute award of
$1,156,232.24 (which includes the $101,471.59 setoff) and
R EMAND for a determination of the fair market net
rental value of the property and the assessment of a
penalty equal to double that value for the duration of
Rexam’s holdover. Because this remand simply requires
a redetermination of the damages award and not a new
trial, Circuit Rule 36 does not apply.
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