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First Bank & Trust v. Village of Orland Hills
State: Illinois
Court: 1st District Appellate
Docket No: 1-01-3539 Rel
Case Date: 03/17/2003

No. 1-01-3539 

FIRST DIVISION

March 17, 2003




FIRST BANK AND TRUST COMPANY OF ILLINOIS, ) Appeal from the Circuit
as Trustee u/t/a dated March 28, 2000, and Known as ) Court of Cook County,
Trust No. 10-2377; FIRST BANK AND TRUST ) Illinois, Chancery Division.
COMPANY OF ILLINOIS, as Trustee u/t/a dated )
April 11, 2000, and Known as Trusts No. 10-2395 and )
No. 10-2396; and GLENBROOK DEVELOPMENT OF )
NML, L.L.C., an Illinois Limited Liability Company, )
)
                 Plaintiffs-Appellants, ) No. 00 CH 17270
)
v. )
)
)
THE VILLAGE OF ORLAND HILLS, ) The Honorable
) Nancy J. Arnold,
                Defendant-Appellee. ) Judge Presiding.

 

JUSTICE GORDON delivered the opinion of the court:

Plaintiffs-appellants First Bank and Trust Company of Illinois, as trustee under trustagreement dated March 28, 2000, and as trustee under trust agreement dated April 11, 2000, andGlenbrook Development of NML (collectively Glenbrook, or as named) appeal from the trialcourt's order granting defendant-appellee Village of Orland Hills' (Orland Hills) motion todismiss with prejudice. Glenbrook asks that we reverse the court's dismissal of its complaint andenter judgment in its favor or, alternatively, that we reverse and remand this cause for furtherproceedings. For the following reasons, we affirm.

BACKGROUND

This cause involves property located at 171st Street and LaGrange Road, which wasdivided into lots 1, 2, 3 and 4. A&M Limited Partnership (A&M) was the original owner andFormula Outdoor, Inc. (Formula), was the original developer of the property.(1) On November 3,1999, Orland Hills entered into an annexation agreement with A&M and Formula for theproperty, binding these parties and their successors in interest. Under the annexation agreement,Orland Hills is responsible for extending all water service to the property. In addition, section 7of the agreement states, in pertinent part:

"SECTION 7: Disconnection. *** After closing developer may petition to disconnect on or before December 30, 2000 and [Orland Hills] will grant such petition."

Citizens Utilities Company of Illinois (Citizens) provided water service to Orland Hills,as well as to other neighboring cities, such as the Village of Tinley Park (Tinley Park). Soonafter Orland Hills entered into the annexation agreement, it sought to have Citizens extend waterservice to the property. Citizens and Tinley Park were opposed to this extension. Orland Hillsfiled a complaint for declaratory judgment against Citizens and Tinley Park, seeking adeclaration that Citizens be obligated to provide water to the property (the Citizens litigation).(2)

Meanwhile, Tinley Park filed a motion for preliminary injunction to contest the validityof Orland Hills' annexation of the property. During a hearing conducted on January 24, 2000,Formula's president, Douglas Engberg, testified with respect to the annexation agreement. Hestated that Formula had contracted to buy the property from A&M and that, once ownership wastransferred, Formula planned to sell a portion of the property (lots 2, 4 and part of 1) toGlenbrook. Engberg also testified that Formula and Orland Hills had entered into an amendmentto the annexation agreement affecting Formula's right, as developer, to petition for disconnectionof the property. Engberg averred that the amendment, once finalized, would eliminate thelanguage in the annexation agreement with respect to the right to disconnect. Engberg testifiedthat, instead, the right to disconnect would be dependent upon the resolution of the Citizenslitigation; if Orland Hills were victorious, the disconnection right could not be exercised. At theclose of the hearing, Tinley Park's motion was denied and summary judgment was entered infavor of Orland Hills.(3)

On February 9, 2000, A&M completed its sale of the property to Formula, which wasnow both owner and developer. On that same date, Orland Hills and Formula finalized theiramendment to the annexation agreement. The amendment contains five recitals, A through E. Recital A refers to the original annexation agreement. Recital B refers to the then-pendingCitizens litigation and Orland Hills' efforts to effect a judicial declaration that Citizens isobligated to provide water to the property. Recital C cites that language in the annexationagreement (section 7) that gave the developer the right to disconnect on or before December 30,2000. Recital D states that the parties "acknowledge that the reason for granting a right ofdisconnection is directly related to the possibility that Citizens be found not obligated to servicethe *** property with water." Recital E concludes that if Orland Hills were to prevail in theCitizens litigation, thereby obligating Citizens to provide water to the property by final courtorder, then Orland Hills would immediately proceed with any construction for water service andthe owner and developer would waive their right to disconnect. The body of the amendmentbinding the parties and their successors in interest states:

"That upon entry of a final order in [the Citizens litigation] *** declaring that [Citizens] is obligated to provide water service to the property which is the subject matter of this Annexation Agreement and Amendment thereto, Owner and Developer agree to release and waive their right to disconnect from [Orland Hills]. Developer and Orland Hills will immediately do all things necessary to initiateand complete the construction of the necessary infrastructure to bring sewer and water to the lot line of the *** property."

At some point thereafter, Orland Hills and Formula signed a letter of interpretation(Letter) comprised of three numbered paragraphs discussing the amendment and the right todisconnect. Paragraph one states that the December 30, 2000, disconnection date in the originalannexation agreement was designed to accommodate the possibility that Orland Hills would notbe able to provide water to the property. Paragraph two states that the purpose of the amendment"is to eliminate the December 30, 2000 deadline and relate the Developer's right to disconnect tofinal adjudication of the issues pending in" the Citizens litigation. Finally, paragraph three statesthat by executing the amendment, the parties thereto intend to "measure" the right to disconnectonly by the results of the Citizens litigation and not by any specific date, leaving the developerwith the ability to exercise his right to disconnect only if Orland Hills were to lose that litigation.

On April 4, 2000, after the amendment to the annexation agreement was executed andafter the Letter was signed by Orland Hills and Formula, Formula sold a portion of the property(lots 2, 4 and part of 1) to First Bank and Trust Company, as trustee of trust number 10-2377,which in turn conveyed separate parts of this portion of the property to trust number 10-2395 andtrust number 10-2396. By these conveyances, Glenbrook Development became the successordeveloper of this portion of the property.

On May 25, 2000, Glenbrook petitioned Orland Hills to disconnect its portion of theproperty, citing the annexation agreement and noting that it was exercising its right to disconnectbefore the December 30, 2000, deadline. Orland Hills denied Glenbrook's petition. Glenbrookfiled a complaint against Orland Hills, asking the trial court to order Orland Hills to grant itspetition to disconnect. In response, Orland Hills moved to dismiss pursuant to section 2-619 ofthe Code of Civil Procedure (735 ILCS 5/2-619 (West 1998)) (Code), asserting that under theamendment, Glenbrook's right to disconnect was dependent upon the outcome of the pendingCitizens litigation.

The trial court granted Orland Hills' motion with prejudice, finding that there were nogenuine issues of material fact precluding it from ruling on the interpretation of the annexationagreement and the amendment. The court found that these documents were unambiguous andthat it was clear that the amendment modified the original annexation agreement by "extend[ing]the time to disconnect further, not to a specific date but until a specific event occurs," namely, aresolution of the Citizens litigation that is adverse to Orland Hills. The court concluded thatthese documents were "susceptible to no other meaning."

ANALYSIS

Glenbrook appeals the trial court's grant of Orland Hills' section 2-619 motion to dismiss. We review an appeal from the grant of a section 2-619 motion on a de novo basis in order todetermine whether the trial court correctly found no genuine issue of material fact existed andjudgment as a matter of law was proper. See Kedzie & 103rd Currency Exchange, Inc. v. Hodge,156 Ill. 2d 112, 116 (1993); accord Spirit of Excellence, Ltd. v. Intercargo Insurance Co., 334 Ill.App. 3d 136, 145, 777 N.E.2d 660, 668 (2002). Dismissing a cause pursuant to section 2-619 ofthe Code allows for the disposal of issues of law or easily proved facts early in the litigationprocess. See Coles-Moultrie Electric Cooperative v. City of Sullivan, 304 Ill. App. 3d 153, 158,709 N.E.2d 249, 252 (1999).

On appeal, Glenbrook makes two contentions of error on the part of the trial court. First,Glenbrook contends that the court improperly construed the amendment, because the amendmentdid not replace section 7 of the annexation agreement (Agreement) but, rather, only added acondition to Glenbrook's right to disconnect. Glenbrook claims that the plain language of thesedocuments grants it the right to disconnect (1) if it files its petition on or before December 30,2000, and (2) if it files its petition before entry of an order in the Citizens litigation obligatingCitizens to provide water to the property. Second, Glenbrook contends that the trial courterroneously relied on certain extrinsic evidence in construing the Agreement and amendment. We disagree with both contentions. We address first Glenbrook's arguments with respect to thetrial court's interpretation of the documents at issue.

The principle objective in construing an agreement is to give effect to the intent theparties possessed at the time they entered into that agreement. See Pennsylvania Life InsuranceCo. v. Pavlick, 265 Ill. App. 3d 526, 529, 637 N.E.2d 1160, 1162 (1994); accord USG Corp. v.Sterling Plumbing Group, Inc., 247 Ill. App. 3d 316, 318, 617 N.E.2d 69, 70 (1993). When theagreement's provisions are unambiguous, we are to ascertain the parties' intent from the languageof the agreement. See Coles-Moultrie Electric, 304 Ill. App. 3d at 159, 709 N.E.2d at 253;Pennsylvania Life Insurance, 265 Ill. App. 3d at 529, 637 N.E.2d at 1162. The agreement is to beconstrued as a whole, giving meaning and effect to every provision when possible. See Coles-Moultrie Electric, 304 Ill. App. 3d at 159, 709 N.E.2d at 253. When parties agree to and insertprovisions into their agreement, we presume that this is done purposefully and that the languageemployed is to be given effect. See Coles-Moultrie Electric, 304 Ill. App. 3d at 159, 709 N.E.2dat 253 ("[i]t is presumed the provisions are purposefully inserted and the language is notemployed idly"). A court will not interpret an agreement in a way that would nullify itsprovisions or render them meaningless. See Coles-Moultrie Electric, 304 Ill. App. 3d at 159, 709N.E.2d at 253 (courts are to interpret contracts so as not to render provisions meaningless or ofsurplus); accord USG Corp., 247 Ill. App. 3d at 320, 617 N.E.2d at 71-72.

We agree with the trial court, as well as with both Glenbrook and Orland Hills on appeal,that the language of the Agreement and amendment is clear and unambiguous. See USG Corp.,247 Ill. App. 3d at 318, 617 N.E.2d at 71 (mere fact that parties do not agree on documents'interpretation does not create an ambiguity). Moreover, we find that the trial court properlyaccepted Orland Hills' interpretation as the meaning of the Agreement and amendment intendedby the signatories at the time they were entered into.

Initially, owner A&M and developer Formula sought to have their property annexed tothe Village of Orland Hills. They entered into the Agreement with Orland Hills to annex theproperty, and one responsibility assumed by Orland Hills thereunder was the extension of waterservice to the property. At this time, A&M, Formula and Orland Hills agreed that Formulawould have a right to disconnect tied to a date certain: December 30, 2000. That is, based on thecircumstances as they existed at the time these parties signed the Agreement, Formula was giventhe right to disconnect if it petitioned to do so on or before December 30, 2000.

The language of the amendment, however, exhibits a different intent surrounding theright to disconnect at the time it was entered into, three months after the formation of theAgreement. A&M had sold its interest to Formula, making it both the owner and developer. This left only Formula, Glenbrook's predecessor in interest, and Orland Hills as parties to theAgreement. Water service for the project was now in jeopardy, as Citizens refused to extend itsexisting service in the Village of Orland Hills to the newly annexed property. Therefore, OrlandHills began the Citizens litigation. At this time, Formula and Orland Hills drafted and signed theamendment. As noted above, the body of the amendment provides a reference to the Agreementand states that, if a final order is entered in the Citizens litigation obligating Citizens to providewater to the property, Formula will release and waive its right to disconnect. The intent of theparties at the time they entered into this amendment is clear from the plain language of the bodyof the amendment. As its words express, the amendment's purpose was to now tie Formula'sright to disconnect to an event, namely, the resolution of the Citizens litigation which waspending at that time. No date certain, such as December 30, 2000, was included in theamendment because it was unclear to either party at this point in time when the Citizens litigationwould be resolved. The language also shows Formula's desire to remain a part of the project aslong as Orland Hills could meet its responsibility to provide water to the property. After statingthat Formula will release and waive its disconnection right upon Orland Hills' success in theCitizens litigation, the second sentence of the body of the amendment states that, if the litigationis resolved in Orland Hills' favor, Formula will "immediately do all things necessary" inconjunction with Orland Hills to initiate and complete water connection to the property. Bysigning the amendment, Formula consciously changed the "trigger" of its ability to exercise itsright to disconnect from a date certain to a time when, and if, Orland Hills was unsuccessful inthe Citizens litigation.

To interpret the language of the amendment as Glenbrook would have us do would renderthe amendment meaningless and nullify its operation. Under Glenbrook's interpretation,Glenbrook would be able to disconnect at any time before December 30, 2000, without anyregard to the Citizens litigation or its outcome. This would defy the purpose of the amendmentand Formula and Orland Hills' intent at the time of its execution. To those signatories, thecommencement of the Citizens litigation became central to their original Agreement andFormula's right to disconnect, so much so that they executed the amendment changing the triggerof the ability to exercise that right from a date certain to the outcome of the litigation. Byallowing Glenbrook the ability to exercise its right to disconnect at any time before December 30,2000, so long as no final order was entered in the Citizens litigation, Orland Hills would virtuallyreceive no benefit from the amendment, thereby rendering it superfluous insofar as it wasconcerned. Therefore, Glenbrook's interpretation is unsupported and we find that the trial courtproperly accepted Orland Hills' interpretation as the clear and unambiguous meaning of theAgreement and amendment. See Coles-Moultrie Electric, 304 Ill. App. 3d at 159, 709 N.E.2d at253; USG Corp., 247 Ill. App. 3d at 320, 617 N.E.2d at 71-72.

Glenbrook asserts that the trial court's interpretation is erroneous because it leads to the"absurd result" of creating an indefinite disconnection right and because it ignores certainbenefits to Orland Hills. We disagree. First, interpreting the amendment as making the exerciseof the right to disconnect dependent on the outcome of the Citizens litigation rather than on adate certain does not lead to an absurd result or create an "indefinite" right. Contrary toGlenbrook's contention, it does possess a right to disconnect. The amendment simply affects thetrigger of Glenbrook's ability to exercise that right. This is what Orland Hills and Formula,Glenbrook's predecessor in interest, agreed to when they amended the Agreement; the developerwill "release and waive [its] right to disconnect" if a final order is entered obligating Citizens toprovide water to the annexed property. Therefore, what has yet to be determined is not whetherGlenbrook has the right to disconnect, but rather when it may exercise it. If and when a finalorder is entered obligating Citizens to provide water, Glenbrook must "release and waive" itsright to disconnect. However, if and when a final order is entered not obligating Citizens toprovide water, Glenbrook can exercise its right and disconnect the property. There is nothingabsurd with tying the exercise of this right to the outcome of the pending Citizens litigation.

Moreover, we fail to understand Glenbrook's argument with respect to "benefits." Glenbrook asserts that the trial court erred because its interpretation "failed to recognize that theplain language of the amendment conferred important benefits to Orland Hills." Glenbrookclaims that under its own interpretation, Orland Hills would benefit in two ways, namely, that"the time period for disconnection could be shortened if Orland Hills prevailed in the Citizens[l]itigation," and Orland Hills' "obligation to construct the infrastructure improvements to bringutilities to" the property would be "deferred" until after the resolution of the Citizens litigation,when Orland Hills would know for sure whether Citizens would be legally compelled to providewater service. However, as for the first "benefit" of shortening the time period for disconnection,it is not clear that Orland Hills even intended this as a consequence in signing the amendment. Rather, by tying the developer's exercise of its right to disconnect to the resolution of the Citizenslitigation in the amendment, Orland Hills was not seeking to "shorten" the time period, butinstead to secure the developer's participation in the project at least until Orland Hills proceededthrough the Citizens litigation to a final resolution. Shortening the time period was of no concernto Orland Hills; rather, the concern was to have a commitment from a developer while it incurredthe time and expense of litigation against Citizens. Thus, we fail to see how shortening the timefor disconnection would be a "benefit" to Orland Hills, which was in the midst of a lawsuitinvolving an issue so central to the property as a water supply.

Moreover, as for the second "benefit" Glenbrook cites with respect to a deferredobligation on the part of Orland Hills to construct the infrastructure on the property, we do notsee how this would be a benefit to Orland Hills only under Glenbrook's interpretation of theamendment that the right to disconnect is tied to December 30, 2000. To the contrary, in ourview, this benefit to Orland Hills applies more so under the trial court's interpretation thatexercise of the right to disconnect is tied to the outcome of the Citizens litigation. The languageof the amendment states that the developer cannot exercise its right to disconnect until and unlessthe Citizens litigation is resolved against Orland Hills. The amendment also states that at thetime of resolution, if Orland Hills is victorious, then the developer must aid it "to initiate andcomplete the construction of the necessary infrastructure." Any obligation on the part of OrlandHills, then, to begin constructing the infrastructure at the property is deferred by the amendmentuntil resolution of the Citizens litigation. Glenbrook concedes as much in its brief on appeal. Therefore, we do not understand its claim that this benefit of a deferral of Orland Hills'obligation is something that arises only under its interpretation and was a benefit ignored by thetrial court resulting in reversible error.

We now turn to Glenbrook's second contention on appeal. Glenbrook asserts that the trialcourt erroneously considered three items of extrinsic evidence in construing the unambiguouslanguage of the Agreement and amendment: (1) Engberg's testimony given at the hearing onTinley Park's motion for preliminary injunction to stop Orland Hills from annexing the property,(2) the Letter signed by Engberg and Orland Hills after having executed the amendment, and (3)the recitals to the amendment. Glenbrook also asserts error on the part of the trial court in citingand relying on the case of In re Estate of Constantine, 305 Ill. App. 3d 256, 711 N.E.2d 1190(1999), for the proposition that courts may view unambiguous contracts in light of the context inwhich they were formed.

We first note that Glenbrook's contention with respect to extrinsic evidence relied uponby the trial court in reaching its interpretation of the operational provisions of the Agreement andamendment is only correct as to the trial court's reference to the recitals. The trial court nevermade any reference to Engberg's testimony in its colloquy, nor did it ever mention any portion ofwhat occurred at the hearing on Tinley Park's motion for preliminary injunction. Moreover,Glenbrook provides us with no citation to the record wherein the court stated that this was one ofthe factors it was considering in forming its interpretation of the Agreement and amendment, andour review of the trial court's analysis has discovered none. The same can be said about theLetter signed by Engberg and Orland Hills after these parties executed the amendment. The trialcourt did not make any reference to the Letter in its colloquy stating its interpretation of theAgreement and the amendment. In fact, contrary to Glenbrook's contention, the record indicatesthat the court dismissed any consideration of the Letter. When presented with the Letter byOrland Hills' attorney, the court noted that the Letter was not dated and asked the attorney if hebelieved it comprised part of the Agreement and amendment between the parties. The attorneystated that it was not part of these documents which comprised the contractual relationshipbetween the parties, and the court agreed. Other than this exchange, the court did not mentionthe Letter as a factor in its decision.

As for the recitals to the amendment, Glenbrook is correct in its statement that the recitalswere not incorporated into the amendment or made operational by any language containedtherein. Glenbrook is also correct in its statement that the trial court mentioned the recitals in itscolloquy, relying on Estate of Constantine for the proposition that it could view the Agreementand amendment in light of the contexts in which they were formed. The court quoted some ofthe language used in the recitals and at one point stated that the only way Glenbrook'sinterpretation of the Agreement and amendment could exist is if one were to "ignore the recitalsin paragraph c and d in the amendment" and "[t]his cannot be done." However, contrary toGlenbrook's contention, we find that the trial court's mention of the recitals and its reliance onEstate of Constantine does not constitute error.

Recitals to a contract provide explanations of those circumstances surrounding theexecution of the contract. See Illinois Housing Development Authority v. M-Z ConstructionCorp., 110 Ill. App. 3d 129, 144, 441 N.E.2d 1179, 1189 (1982); accord Regnery v. Meyers, 287Ill. App. 3d 354, 360, 679 N.E.2d 74, 78 (1997). Ordinarily, recitals are only preliminary innature and will not, of themselves, be considered binding obligations on the parties or aneffective part of their agreement unless referred to in the operative portion of their agreement. See Regnery, 287 Ill. App. 3d at 360, 679 N.E.2d at 78; Illinois Housing Development Authority,110 Ill. App. 3d at 144-45, 441 N.E.2d at 1189 (preliminary recitals in agreement of themselvesare not binding unless referred to in operative portion agreement "as to show a design [that] theyshould form a part of it").

As noted, the amendment in the instant case contained five recitals. The amendment,however, did not contain any language in its preamble referring to the recitals or indicating thatthe amendment was to operate in relation to or in consideration of the recitals. See Wilson v.Wilson, 217 Ill. App. 3d 844, 852, 577 N.E.2d 1323, 1329 (1991) (recitals of themselves becomeoperative when preamble to contract includes language indicating that contract is being formed inconsideration of those recitals); American National Bank & Trust Co. of Chicago v. ChicagoTitle & Trust Co., 134 Ill. App. 3d 772, 776-77, 481 N.E.2d 71, 74 (1985) (recitals of themselvesdeemed operative when contract stated " '[f]or and in consideration of the premises set forth inthe foregoing Recitals' "). Despite this, the trial court here discussed the recitals in its colloquy,relying on Estate of Constantine. While the language of the amendment's preamble did notexplicitly dictate the inclusion of the recitals, we believe the court's consideration of them wasnot erroneous.

The operational portion of the amendment (i.e., its body) effectively repeats all theinformation contained in the five recitals. For example, as noted earlier, recital A refers to theoriginal Agreement between Formula and Orland Hills and the property affected by it, as does thebody of the amendment. Recital B refers to the pending Citizens litigation and the issue ofwhether Orland Hills could legally obligate Citizens to provide water to the property. Again, thefirst sentence of the body of the amendment cites this same pending litigation. Recital C merelyrefers to the developer's right to disconnect as stated in the Agreement. This Agreement wasalready before the trial court as part of the contract between the parties, not as extrinsic evidence. Recitals D and E state that the right of disconnection is to be related to the outcome of theCitizens litigation wherein, if Orland Hills were to prevail, the developer would waive its right todisconnect and construction for water service would immediately proceed. Upon examining thelanguage of the amendment, as we have already done, it is clear that the operative language in itsbody tracks the concepts in these last two recitals. Therefore, although there was no explicitlanguage in the preamble of the amendment giving effect to the recitals, the body of theamendment tracked their language and we find no error on the part of the trial court inconsidering them in interpreting the Agreement and amendment.

Moreover, we find no error with respect to the trial court's reliance on Estate ofConstantine as a justification for its consideration of the recitals. Glenbrook asserts that Estate ofConstantine is not controlling here because it "deals with the imprecise and incorrectdenomination of a covenant not to sue as a release." While we note that the facts in that case aredifferent than those of the instant case because they involve a different type of contract betweenthe parties, we believe the reasoning in that case is pertinent to what occurred here. In Estate ofConstantine, two partners in a law firm and another attorney leased space with the landlord of abuilding. Under the lease, the attorney paid rent to the partners, who in turn paid rent to thelandlord. When the attorney died, his estate continued to pay his share of the rent to the partners. Eventually, however, the estate ceased the payments. Two lawsuits then arose: the landlord suedthe estate to determine the estate's potential liability, and the partners sued the estate seeking thebalance of the estate's rent obligation under the lease. The landlord and the estate reached asettlement, and the landlord signed a release agreement in favor of the estate. At this point, thepartners amended their claim against the estate to add the landlord, asserting that the releaseagreement signed by the landlord and the estate acted as a release not only as to the estate, but asto the partners as well. The trial court interpreted the release agreement as a covenant not to sue,applicable only to the estate and not the partners. On appeal, the partners did not dispute thefacts, but presented the issue of whether the trial court had correctly interpreted the releaseagreement. Our court on review cited the state supreme court case of Batteast v. WyethLaboratories, Inc., 137 Ill. 2d 175 (1990), and concluded that in interpreting an agreement, acourt could look to the circumstances surrounding its execution for the purpose of aiding in thedetermination of the parties' intent. See Estate of Constantine, 305 Ill. App. 3d at 260, 711N.E.2d at 1193. We then stated:

"When we consider the surrounding circumstances we do not change the terms of the [agreement] or create an ambiguity where none exists. [Citation.] Instead, we consider the circumstances surrounding execution of the document as part of the agreement, reflecting the clear intent of the signators. We believe that is what the supreme court did in Batteast." Estate of Constantine, 305 Ill. App. 3d at 260, 711 N.E.2d at 1193.

See also Batteast, 137 Ill. 2d at 183 ("[i]n interpreting a contract, we look to the circumstances todetermine the parties' intentions"). Our court examined the circumstances surrounding theexecution of the release agreement, not just the language therein. These circumstances includedthe time when the agreement was signed, the agreement's reference to the settlement between thelandlord and the estate, and provisions of the original lease. Based on these surroundingcircumstances, we held that the trial court's interpretation was correct because there was noquestion that the release was intended to be a covenant not to sue, applicable to the estate only. See Estate of Constantine, 305 Ill. App. 3d at 260, 711 N.E.2d at 1193; Batteast, 137 Ill. 2d at183 (in addition to agreement's language, surrounding circumstances, such as what was occurringbetween parties when agreement was executed, "indicate[d] clearly" the parties' intent inexecuting the agreement).

In the instant case, the trial court stated that it was considering the recitals specificallybecause they "recite[] the circumstance, i.e., the context in which the amendment was made." Asthe court noted, these circumstances included the fact that the amendment was executed soonafter Orland Hills initiated the Citizens litigation, in response to the "unknown exigency" ofwhether Citizens would be obligated to provide water service. Thus, the court found that thiscircumstance surrounding the execution of the amendment clearly showed the intent of theparties to tie the exercise of the right to disconnect to the resolution of the litigation rather than toa date certain as was previously contained in the original Agreement when the Citizens litigationhad not yet been contemplated. Based on Estate of Constantine, we find no error in this portionof the trial court's interpretation of the Agreement and amendment.

We note here that Estate of Constantine is but one example of the recent trend pursuant towhich our courts have moved away from the "four corners" rule of contract interpretation asadvocated by Glenbrook and toward a more liberal approach. See Ahsan v. Eagle, Inc., 287 Ill.App. 3d 788, 790, 678 N.E.2d 1238, 1240 (1997) (courts have come to disfavor strict contractinterpretation and the limits placed on the introduction of extrinsic evidence to demonstrate theintent of the parties); accord USG Corp., 247 Ill. App. 3d at 318, 617 N.E.2d at 71; URS Corp. v.Ash, 101 Ill. App. 3d 229, 234, 427 N.E.2d 1295, 1299 (1981). While our courts have notproposed a complete elimination of the general rule calling for adherence to the plain meaning ofthe words used by the parties in an agreement, our courts have recognized that, as part of theirduty to evaluate the intent of the parties, the circumstances surrounding the agreement'sexecution should be considered. See 5 M. Kniffin, Corbin on Contracts

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