HARP – On This. . .

R Kymn Harp Joins Buchalter – January 2025

Buchalter is pleased to announce the opening of its newest office in Chicago, Illinois
with the addition of lawyers and staff previously comprising the Chicago office of Robbins DiMonte, Ltd joining Buchalter. The Chicago office has 25 attorneys and support staff, including Shareholders Thomas Jefson, Steven Jakubowski, Patrick Owens, David Resnick, R. Kymn Harp, James Mainzer, Justin Weisberg, and Thomas Yardley Jr. Joining them are Jennifer Barton, Emily Kaminski, Teresa Minnich, Christine Walsh, Marko Van Buskirk, Timothy Hameetman, and Richard Stavins. In addition, Shareholder Pamela Webster will also spend a significant amount of time in the Chicago office. The team of highly experienced attorneys have deep roots and a long history of achieving exceptional results for clients.

“As the third-largest city in the country, having a Chicago office has been a long-term goal for the firm,”
said Adam Bass, President and Chief Executive Officer of Buchalter. “The city’s thriving real estate,
financial services, private equity, and technology sectors, along with its ideal geographic location,
present tremendous opportunities and strengthens Buchalter’s national presence. Finding the right
lawyers was essential, and the highly respected group joining us in Chicago are an excellent business and
cultural fit.”

Buchalter’s expansion into Chicago marks a strategic move as the firm continues to bolster its national
footprint in key markets across the country. The firm established a presence in the Southeast with the
opening of its Nashville office in 2023 that has grown to 25 lawyers, followed by an office in Atlanta in 2024.

With the additions of the new lawyers in Chicago, the firm offers clients a deeper bench in practices it is well-known for, including real estate, banking and finance capabilities, trusts and estate matters, and complex litigation.

As the Office Managing Shareholder of Buchalter’s Chicago office, Thomas Jefson has extensive experience handling all aspects of complex trust and estate matters including, estate planning for High and Ultra-High Net Worth families, asset protection, probate and trust administration services, complex litigation involving disputed trusts and estates, claims against decedents as well as designing strategies to maximize tax savings. As a trusted legal advisor for over 22 years, Jefson regularly represents families, business owners and executives, investors, and individuals in sophisticated matters to preserve wealth and protect assets that help achieve their objectives for years to come. Additionally, he counsels financial institutions, business leaders within diverse industries in the areas of tax planning, charitable endeavors, fiduciary duty compliance, and other business transactional matters. 

“We are thrilled to join Buchalter, and I’m honored to lead the Chicago office,” said Jefson. “Joining
Buchalter provides us with the perfect opportunity to strengthen the support we provide to our clients, expand the services they count on, and collaborate with an impressive team of attorneys.”

R. Kymn Harp has over 40 years of experience representing investors, developers, business owners, and
other stakeholders in all aspects of commercial real estate transactions and development. He applies a
practical approach to project and transaction management through clear identification of transaction
objectives and challenges, focused due diligence and creative problem-solving, and personal hands-on
transaction management. He also is actively engaged in the complementary practice of business
management law, representing businesses, and business owners and investors.

James Mainzer also has over 40 years of experience practicing in the areas of taxation, business
representation, real estate, and trusts and estates. His federal tax practice includes a heavy emphasis on
sophisticated partnership taxation and tax deferred exchanges. He represents private sector clients in
tax collection defense, audit, income tax, and estate tax matters. He also has substantial experience
dealing with IRS agents, revenue officers and IRS tax counsel regarding audits, tax appeals, and Federal
Tax Court matters.

David Resnick maintains a national practice concentrated in commercial real estate development, and
leasing and finance matters. He has over 24 years of experience handling all facets of commercial real
estate transactions, including the acquisition, sale, financing and leasing of industrial, office, residential,
retail and mixed-use properties. He also provides legal services to hospitality clients with respect to their
real estate, finance and operational matters.

Steve Jakubowski concentrates his practice in distressed financings and workouts, bankruptcies,
receiverships, and related ancillary litigation. He has been lead and co-counsel in bankruptcy cases
nationwide, stretching from Delaware to Hawaii, including in multiple high profile cases nationwide on behalf of lenders, debtors, creditors and equity committees, acquirers, and litigation targets. These matters have involved a variety of industries, including: biotech; commercial real estate; premium fitness clubs; farming; department stores; restaurant chains; convenience stores; metal fabricators; equipment lessors; and wholesale food manufacturing, packaging, and distribution.

Patrick Owens possesses extensive expertise in estate planning for young professionals to established
high net worth clients.  This experience also extends to managing a diverse array of estates, from
modest, nontaxable ones to those that are significantly large and complex, involving tax liabilities. His
involvement spans the full spectrum of trust and estate administration and oversight. He expertly
navigates these trusts and estates through their lifecycle, handling or overseeing all requisite income,
gift, and estate tax filings with meticulous attention to detail.

Justin Weisberg has over 30 years of legal experience with a national construction law and commercial
litigation practice. He represents private, public, local, and international clients in a variety of
construction-related transactions and litigation matters. His legal experience has included contract
negotiation and drafting of design, design-build, IPD, P3, and construction contracts as well as
mediation, arbitration and litigation including both bench and jury trials of numerous disputes involving
design and construction matters.

Thomas Yardley Jr. concentrates his practice in the areas of litigation, business transactions, creditors’
rights and bankruptcy, and employment and construction law. With over 30 years of experience, he has
handled diverse litigation matters for small business owners, high net worth individuals and
corporations. He has successfully represented clients in both state and federal court including:
commercial and contractual disputes, corporate litigation, minority shareholder oppression matters,
other employment cases, construction matters, condominium and real estate disputes, bankruptcy and
creditors’ rights matters, among others.

“We are thrilled to welcome Tom and the entire Chicago team to Buchalter,” added Bass. “We have
immediate plans to expand the office and are looking forward to the future.”

The Chicago office of Buchalter is located in Chicago’s central business district, at 180 N. LaSalle St., Chicago, Illinois 60601 – temporarily in Suite 3300, while it awaits completion of its new ultra-modern suite of offices on the 23rd floor of the same building, expected to be ready for occupancy in late Spring 2025,

Buchalter is a full-service business law firm representing local, regional, national, and international
clients in a multitude of practice areas and their subspecialties, among them: Bank and Finance,
Corporate, Health Care, Litigation, Insolvency and Financial Law, Intellectual Property, Labor and
Employment, Real Estate, and Tax and Estate Planning. Buchalter has approximately 550 attorneys with
offices in California, Arizona, Colorado, Georgia, Illinois, Oregon, Tennessee, Utah, and Washington. For
more information about the firm, visit: buchalter.com.

Synopsis:

An Illinois landlord under a commercial lease must take reasonable measures to mitigate damages,

. . . but only if mitigation of damages is required – which is not always.

The General Duty to Mitigate

      Illinois landlords and their agents are required to use reasonable measures to mitigate damages recoverable against a defaulting lessee. 735 ILCS 5/9-213.1. The term “reasonable measures” is not defined by statute, and Illinois courts have held that whether the landlord has complied with the reasonable-measures standard is a question of fact, to be determined on a case-by-case basis. Danada Square, LLC v. KFC National Management Co., 392 Ill.App.3d 598, 913 N.E.2d 33, 41, 332 Ill.Dec. 438 (2d Dist. 2009).

      Section 9-213.1 of the Code of Civil Procedure, 735 ILCS 5/1-101, et seq., is mandatory, however, and it is the responsibility of the landlord, when proving damages, to also prove that it took reasonable measures to mitigate damages, whether or not the landlord’s requirement to mitigate damages was raised as an affirmative defense by the tenant. St. George Chicago, Inc. v. George J. Murges & Associates, Ltd., 296 Ill.App.3d 285, 695 N.E.2d 503, 508 – 509, 230 Ill.Dec. 1013 (1st Dist. 1998); Snyder v. Ambrose, 266 Ill.App.3d 163, 639 N.E.2d 639, 640 – 641, 203 Ill.Dec. 319 (2d Dist. 1994).

      The landlord has the burden to prove mitigation of damages as a prerequisite to recovery. Snyder, supra, 639 N.E.2d at 641; St. Louis North Joint Venture v. P & L Enterprises, Inc., 116 F.3d 262, 265 (7th Cir. 1997). Losses that are reasonably avoidable are not recoverable. Nancy’s Home of Stuffed Pizza, Inc. v. Cirrincione, 144 Ill.App.3d 934, 494 N.E.2d 795, 800; 98 Ill.Dec. 673 (1st Dist. 1986); Culligan Rock River Water Conditioning Co. v. Gearhart, 111 Ill.App.3d 254, 443 N.E.2d 1065, 1068, 66 Ill.Dec. 902 (2d Dist. 1982).

      In dicta, the court in St. George, supra, stated that failure to take reasonable measures to mitigate damages may not necessarily bar recovery by the landlord, but it will result in the landlord’s recovery being reduced. 695 N.E.2d at 509. How this would work from an evidentiary standpoint, however, is not entirely clear. Presumably, the landlord could introduce evidence at trial that, although the landlord did not take reasonable measures to mitigate damages, if it had, damages would have been reduced by some specified amount. If the landlord fails to introduce even that evidence, however, the question appears to remain open as to whether the landlord adequately proved damages — since the burden of proof of damages remains with the landlord and there is no suggestion that the statutory requirement to prove mitigation shifts to the tenant.

      At least one recent case has, in dicta, questioned aspects of both St. George and Snyder, supra, disagreeing that proof of mitigation must be demonstrated by the landlord as a prerequisite to recovering damages and has suggested that the issue of mitigation of damages is an affirmative defense that must be raised by the tenant, or it is waived. Takiff Properties Group Ltd. #2 v. GTI Life, Inc., 2018 IL App (1st) 171477, ¶23; 124 N.E.3d 11; 429 Ill.Dec. 242.

      Further, as a matter of first impression, the court in Takiff went on hold that the landlord’s obligation to mitigate can be contractually waived by a commercial tenant Takiff, at ¶29, and, as determined by the trial court, was in fact contractually waived by the tenant, rendering the issue of mitigation moot. 2018 IL App (1st) 171477 at ¶31.

      Possession as a Condition Precedent to Landlord’s Duty to Mitigate.

      Notwithstanding any general duty of landlord to mitigate damages, a landlord has no duty to mitigate until the landlord comes into possession. 2460-68 Clark LLC v. Chopo Chicken, LLC, 2022 IL App (1st) 210119, ¶34; Block 418, LLC v. Uni-Tel Communications Group, Inc.  398 Ill.App.3d 586, 925 N.E.2d 253, 258 ((Ill. App. 2 Dist. 2010); St. George Chicago, Inc. v. George J. Murges & Associates, Ltd., 296 Ill.App.3d at 290-91.

      Discussing the application of this principal, the Chopo Chicken court noted that an eviction proceeding is a summary proceeding to recover possession. Since a landlord has no duty to mitigate until the landlord is in possession, and, in an eviction action, a landlord is not in possession until the eviction court grants the landlord an order of possession and landlord recovers possession, landlord’s efforts to mitigate, or the lack thereof, are not relevant.  Chopo Chicken, supra ¶34

      Liquidated Damages Provision Makes Mitigation Irrelevant. 

      It is the general rule in Illinois that, in the case of an enforceable liquidated damages provision, mitigation is irrelevant and should not be considered in assessing damages. Chopo Chicken at ¶33. A liquidated damages provision is an agreement by the parties as to the amount of damages that must be paid in the event of default. Chopo Chicken at ¶33. Liquidated damages in commercial leases are not uncommon.

      In Chopo Chicken, the court considered a provision that included an itemization of damages recoverable by landlord from tenant including “a sum equal to the amount of unpaid rent and other charges and adjustments called for herein for the balance of the term hereof, which sum shall be due to Landlord as damages by reason of Tenant’s default hereunder” which, the court found, constituted a liquidated damages provision. 

      Similarly, in the St. George case, 296 Ill.App.3d 285; 695 N.E.2d 503, 507 the court found that a so-called “rent differential” formula (i.e. amount determined by the excess if any of the present value of the aggregate Monthly Base Rent and Operating Expense Adjustments for the remainder of the Term as then in effect over the then present value of aggregate fair rental value of the Premises for the balance of the Term the present value calculated in each case at 3%) constituted a liquidated damages provision.

            The Summary Rule regarding Mitigation

      Based upon the foregoing cases, the actual Illinois rule governing mitigation of damages in commercial lease disputes appears to be as follows: A landlord must take reasonable measures to mitigate damages, if mitigation of damages is required – but mitigation of damages is not required (i) until the landlord is placed in possession of the leased premises, or (ii) when the lease includes a liquidated damages provision.