SECOND DIVISION

March 31, 2003

Nos. 1-00-1670 and 1-00-1766, Consolidated

JUSTICE CAHILL delivered the opinion of the court:

In the fall of 1996, more than $1 million worth of loose diamonds and fine jewelry werestolen from three safety deposit boxes that defendant Firstar Bank Illinois (Firstar) rented tojewel dealers at one of its Chicago branches. Plaintiff Jewelers Mutual Insurance Company(Jewelers Mutual), a subrogee of boxholders Annaco Corporation (Annaco) and Irving M.Ringel, Inc. (Ringel), sued the bank under theories of breach of contract and negligence for theloss of the boxes' contents. In a separate action, the third boxholder, plaintiff Bachu Vaidya,sued the bank under the same theories. In both cases the bank moved for and was grantedsummary judgment based on an exculpatory clause in the box rental contract. In thisconsolidated appeal, plaintiffs argue that under the public policy of Illinois even a clearly wordedexculpation of negligence is void. Plaintiff Jewelers Mutual also appeals the denial of its cross-motion for summary judgment. Plaintiff Vaidya argues that the trial court abused its discretion indenying his motion for reconsideration of the grant of summary judgment and erred earlier indismissing count II of his complaint in reliance on Moorman Manufacturing Co. v. NationalTank Co., 91 Ill. 2d 69, 88-89, 435 N.E.2d 443 (1982).

The procedural histories of these two cases differ slightly. Jewelers Mutual, as subrogeeof Ringel and Annaco, filed its four-count complaint on May 13, 1997, alleging breach ofcontract and negligence. The bank argued that an exculpatory clause in the contract was validand that the negligence counts were barred by the Moorman doctrine. On April 13, 2000, thetrial court granted the bank's motion for summary judgment on all counts, but made no specificfindings on the Moorman issue orally or in its written order.

Plaintiff Vaidya filed his two-count complaint on June 29, 1999, also alleging breach ofcontract and negligence. The bank filed a motion to dismiss the negligence count, which thecourt granted based on Moorman on October 13, 1999. The court then granted the banksummary judgment on the breach of contract count on January 21, 2000. Vaidya filed a motionto reconsider the grant of summary judgment, which was denied on April 28, 2000.

We affirm the dismissal of count II of plaintiff Vaidya's complaint. In both cases wereverse the grants of summary judgment in defendant's favor on the breach of contract counts. We grant partial summary judgment to plaintiffs on their breach of contract counts and remand tothe trial court to assess damages.

Diamond dealers Annaco and Ringel rented safety deposit boxes at the Firstar branchoffice at 30 North Michigan Avenue in Chicago for $82 and $72 per year, respectively. Eachsigned a form contract that stated:

"1. It is understood that said bank has no possession or custody of, norcontrol over, the contents of said safe and that the lessee assumes all risks inconnection with the depositing of such contents; that the sum above mentioned isfor the rental of said safe alone, and that there shall be no liability on the part ofsaid bank, for loss of, or injury to, the contents of said box from any causewhatever unless lessee and said bank enter into a special agreement in writing tothat effect, in which case such additional charges shall be made by said bank asthe value of contents of said safe, and the liability assumed thereof may justify. The liability of said bank, is limited to the exercise of ordinary care to prevent theopening of said safe by any person not authorized and such opening shall not beinferable from loss of any of its contents." (Emphasis added.)

Neither Annaco nor Ringel entered into the "special agreement" mentioned in thecontract. Each insured its inventory through Jewelers Mutual and paid an additional fee for aspecial endorsement covering the contents of a safety deposit box.

The contract further stated:

"8. Relationship defined, the relationship of the bank and the lessee beinghereby agreed to be that of landlord and tenant, not as bailee and bailor."

The contents of the boxes were removed by unauthorized persons in late September orearly October 1996. Jewelers Mutual paid $805,552.37 toward Annaco's claimed loss of loosediamonds, and $81,848 toward Ringel's claimed loss of fine jewelry. Jewelers Mutual thenobtained subrogation rights from both of them. The bank admitted in its answer to the complaintthat it was negligent in allowing unauthorized persons access to the safety deposit box.

The court's summary judgment order noted that the exculpatory clause stated the bankwould not be liable for loss of the contents of the box unless the renter paid additional chargesfor a special agreement to that effect and that neither insured entered into the special agreement. The trial court also found that the contract: (1) was not a lease of real property subject to theLandlord and Tenant Act (the Act) (765 ILCS 705/1 (West 1998)); (2) was not otherwise againstIllinois public policy; and (3) was not ambiguous.

Diamond dealer Vaidya had rented a box for $26 a year at the bank's 30 North MichiganAvenue branch. He signed the form contract quoted above but did not opt for the additional"special agreement." Vaidya sued the bank for an unspecified amount to be proven, but at least$50,000, for diamonds and jewelry discovered missing in late September 1996. The bank againadmitted that it failed to exercise ordinary care as required under the contract. The bank movedfor dismissal of Vaidya's negligence count under Moorman, 91 Ill. 2d at 88-89, and for summaryjudgment on his breach of contract count based on the contract's exculpatory language. After thetrial court granted both motions, Vaidya filed a motion to reconsider the grant of summaryjudgment. He argued that the Act (765 ILCS 705/1 (West 1998)) governed the parties'relationship and voided the exculpatory clause. The trial court's findings were identical to thosein the Jewelers Mutual action. The court found that the box rental agreement: (1) was not a leaseof real property subject to the Act (765 ILCS 705/1 (West 1998)); (2) was not otherwise againstIllinois public policy; and (3) was not ambiguous.

We review the grant of summary judgment de novo. Outboard Marine Corp. v. LibertyMutual Insurance Co., 154 Ill. 2d 90, 102, 607 N.E.2d 1204 (1992).

We first note an ambiguity in this contract that affects our analysis of the consequences ofa possible breach of the contract by the bank. The contract early on states that "there shall be noliability." But the contract later states that "the liability of said bank is limited to the exercise ofordinary care." Ambiguity in a contract may be construed against the drafter, in this case, thebank. Signal Capital Corp. v. Lake Shore National Bank, 273 Ill. App. 3d 761, 772, 652 N.E.2d1364 (1995). In resolving an ambiguity we may look to the agreement itself. See DuQuoinNational Bank v. Vergennes Equipment, Inc., 234 Ill. App. 3d 998, 1003, 599 N.E.2d 1367(1992) (court looks to agreement as a whole to determine intent of parties, and if ambiguous, tothe circumstances under which the contract was made). Here, the parties unambiguously definedtheir relationship in the contract as landlord and tenant, but then sent mixed signals aboutliability.

By defining their relationship as landlord and tenant, the parties subjected theirrelationship to the Act (765 ILCS 705/1 (West 1998)). The Act invalidates exculpatory clausesthat excuse a landlord from liability for his own negligence. Courts presume parties contract inlight of existing law. Allstate Insurance Co. v. Boston Whaler, Inc., 157 Ill. App. 3d 785, 790,510 N.E.2d 1100 (1987). If they claim to define their relationship by contract as that of landlordand tenant, we must presume that they intended to take advantage of the benefits conferred by theAct, along with the limitations imposed by the Act. Lastly, logical inference would negate anintent to exculpate the bank from its own negligence since the whole purpose of renting a safedeposit box is for reasons of security.

All that aside, even if the contract was not ambiguous with regard to the bank's attempt toexculpate itself from liability, such effort would fail by reason of its invocation of the Act (765ILCS 705/1 (West 1998)). In the absence of contractual language to the contrary, laws andstatutes in existence at the time the contract is executed are considered part of the contract. Larned v. First Chicago Corp., 264 Ill. App. 3d 697, 636 N.E.2d 1004 (1994).

Exculpatory clauses pit two public policy interests against each other: (1) a person shouldbe liable for negligent breach of a duty that he owes another; and (2) a person should have theright to freely contract about his affairs. Simmons v. Columbus Venetian Stevens Buildings,Inc., 20 Ill. App. 2d 1, 11-12, 155 N.E.2d 372 (1958). "[E]xculpatory or limitation of damagesclauses are not favored and must be strictly construed against a benefitting party ***." RaynerCovering Systems, Inc. v. Danvers Farmers Elevator Co., 226 Ill. App. 3d 507, 512, 589 N.E.2d1034 (1992). General language is not sufficient to indicate an intention to absolve a party fromliability for negligence; the language should be clear, explicit and unequivocal. Calarco v.YMCA of Greater Metropolitan Chicago, 149 Ill. App. 3d 1037, 1043-44, 501 N.E.2d 268(1986). "In this way the plaintiff will be put on notice of the range of dangers for which heassumes the risk of injury, enabling him to minimize the risk by exercising a greater degree ofcaution." Garrison v. Combined Fitness Centre, Ltd., 201 Ill. App. 3d 581, 585, 559 N.E.2d 187(1990). The precise occurrence that results in injury, however, need not have been contemplatedby the parties at the time of contracting. Garrison, 201 Ill. App. 3d at 585.

We agree with Jewelers Mutual that, "[j]ust as parties may choose which state'ssubstantive law should apply, the parties here chose that this state's landlord/tenant substantivelaw should govern their relationship." Jewelers Mutual also argues that the bank, as drafter,effectively subjected itself to the Act, which states:

"Every covenant, agreement or understanding in or in connection with ***any lease of real property, exempting the lessor from liability for damages forinjuries to person or property caused by or resulting from the negligence of thelessor, *** in the operation or maintenance of the demised premises or the realproperty containing the demised premises shall be deemed to be void as againstpublic policy and wholly unenforceable." 765 ILCS 705/1 (West 1998).

The bank argues that the statute does not apply because the contract at issue did notinvolve the lease of real property. An essential characteristic of such a lease is " 'exclusivepossession of the leased premises' " in the lessee. Chicago Petroleum Exchange, Inc. v.Metropolitan Sanitary District of Greater Chicago, 81 Ill. App. 3d 1005, 1009, 401 N.E.2d 1203(1980), quoting Urban Investment & Development Co. v. Maurice L. Rothschild & Co., 25 Ill.App. 3d 546, 550 (1975). The bank claims it never relinquished possession or control of its vaultthat contained the box, so a statute pertaining to the lease of real property does not apply.

We find this argument difficult to follow. The rental here did not apply to the vault as awhole, but only to particular safety deposit boxes within the vault. The lessees rented the spaceinside the box, over which they had exclusive possession for the duration of the contract. Thesafety deposit box is a fixture attached to the bank vault. "A fixture is often thought of as aformer chattel which, while retaining its separate physical identity, is so connected with the[realty] that a disinterested observer would consider it a part thereof. A common example ofsuch a fixture is a furnace. *** A fixture is, by definition, part of the real property." St. Louis v.Rockwell Graphic Systems, Inc., 153 Ill. 2d 1, 4, 605 N.E.2d 555 (1992). "To determine whetheran item is personalty and not part of the realty, three factors are considered: (1) the nature of itsattachment to the realty; (2) its adaptation to and necessity for the purpose for which thepremises are devoted; and (3) whether it was intended that the item in question be consideredpart of the realty." A&A Market, Inc. v. Pekin Insurance Co., 306 Ill. App. 3d 485, 488, 713N.E.2d 1199 (1999).

Here, the safety deposit boxes could not be taken out of the bank vault, though they couldbe removed from the vault wall. Renters had to go to the bank to deposit or remove items from abox. Nor would the boxes be useful unless they were kept inside the vault.

The interesting issue here is whether parties to a contract may define their relationship assomething other than what it would be in the absence of an express contractual term. Althoughthe dissent focuses on the characterization of the safety deposit box rental, our analysis turns onthe parties' own definition of their relationship. In the context of this case, whether a safetydeposit box is real property or personalty is largely irrelevant. If the contract between the bankand the renters of the boxes had not expressly defined their relationship as landlord and tenant,the law would require us to look at the nature of the relationship and define it as the law hasdefined such relationships in the in past-generally, in the case of safety deposit boxes, as bailorand bailee. We find instructive Motors Insurance Corp. v. American Garages, Inc., 98 Misc. 2d887, 414 N.Y.S.2d 841 (N.Y. App. Term 1979). A customer garaged a car under a contract thatprovided "that the relationship between the garage and the customer was to be considered that oflandlord and tenant, not bailor and bailee." Motors Insurance, 98 Misc. 2d at 889, 414 N.Y.S. 2dat 842. The court held that, although "[t]he ordinary relationship between a customer and agarage owner is that of bailor and bailee," the parties were free to define their relationshipotherwise by contract. Motors Insurance, 98 Misc. 2d at 889-90, 414 N.Y.S. 2d at 842. Wherethe language of the agreement clearly shows an intent to create a landlord-tenant relationship, thecontract may be conclusive of that relationship. See Manahan v. Daily News-Tribune, 50 Ill.App. 3d 9, 14, 365 N.E.2d 1045, 1049 (1977) ("The parties may enter into a written contractwhich states their respective rights and duties"); United States v. Myra Foundation, 382 F.2d107, 110 (8th Cir. 1967) ("The written contract *** contains provisions usually found in leasesand makes frequent use of the words 'lease' and 'rent.' The contract as a whole appears to clearlyreflect the intention of the parties to create a landlord-tenant relationship"); Quality ManagementServices, Inc. v. Banker, 291 Ill. App. 3d 942, 945-46, 685 N.E.2d 367 (1997) (language inoccupancy agreement contained language typically found in leases); but see Central Terrace Co-Operative v. Martin, 211 Ill. App. 3d 130, 133-34, 569 N.E.2d 944 (1991) (language inoccupancy agreement showed no intent to form a landlord-tenant relationship).

Construing the contract as a whole, we cannot agree that the parties' relationship was thatof bailor and bailee where the contract specifically provides that the parties' relationship is that oflandlord and tenant. We are aware of the line of Illinois cases characterizing the lease of a safetydeposit box as a bailment. See Schaefer v. Washington Safety Deposit Co., 281 Ill. 43, 117 N.E.781 (1917); National Safe Deposit Co. v. Stead, 250 Ill. 584, 593, 95 N.E. 973 (1911); Hauck v.First National Bank of Highland Park, 323 Ill. App. 300, 302, 55 N.E.2d 565 (1944); Paset v. OldOrchard Bank & Trust Co., 62 Ill. App. 3d 534, 538, 378 N.E.2d 1264 (1978). The onlyrelevance of a bailor-bailee argument as opposed to a landlord-tenant argument in the context ofthis case (the property went missing whether it was bailed or not) is whether the exculpatoryclause is valid. If the parties are bailor and bailee, the exculpatory clause is valid. If landlordand tenant, the exculpatory clause is against public policy. Here the parties chose to define theirrelationship by contract. We note in passing that the contract was drafted by the bank, whichchose its terms. Duldulao v. Saint Mary of Nazareth Hospital Center, 115 Ill. 2d 482, 493, 505N.E.2d 314 (1987) (ambiguous language is generally construed against the drafter)."Undoubtedly, the relation being contractual, the plaintiff and defendant might by contract definetheir respective duties or limit the liability of the defendant, provided the contract was not inviolation of law or public policy." Schaefer, 281 Ill. at 50.

Here, the paragraph defining the parties' relationship as landlord and tenant was not inviolation of law or public policy. But in so defining their relationship they subjected themselvesto the law governing landlord and tenant. That law in Illinois is the Act (765 ILCS 705/1 (West1998)). The dissent notes that the contract does not expressly state that the Act should govern. But we believe that, by agreeing to a landlord-tenant relationship, the parties necessarily agree tobe bound by the laws governing that relationship. A contrary result would require that we ignorethe landlord-tenant language in the contract. The trial courts erred in granting defendantssummary judgment based on the exculpatory clause.

Vaidya also argues that the trial court erred in dismissing count II of his complaint underMoorman, 91 Ill. 2d at 88-89. We disagree. Count II alleged that the bank was negligent byfailing to properly monitor the vault and prevent unauthorized persons from gaining access to hissafety deposit box. Moorman held that "[t]ort theory is appropriately suited for personal injury orproperty damage resulting from a sudden or dangerous occurrence ***. The remedy foreconomic loss, loss relating to a purchaser's disappointed expectations due to deterioration,internal breakdown or nonaccidental cause, on the other hand, lies in contract." (Emphasisadded.) Moorman, 91 Ill. 2d at 86. The exception to the rule that purely economic loss is notrecoverable under a tort theory is "where one intentionally makes false representations [citation],and where one who is in the business of supplying information for the guidance of others in theirbusiness transactions makes negligent representations [citation]." Moorman, 91 Ill. 2d at 88-89. These exceptions do not apply here.

Vaidya cites Scott & Fetzer Co. v. Montgomery Ward & Co., 112 Ill. 2d 378, 493 N.E.2d1022 (1986), in which the plaintiffs sought damages "resulting from the loss of audio equipment,paint sprayers, speakers, inventory, supplies, and stock" in a fire. Scott & Fetzer, 112 Ill. 2d at388. The supreme court held that the alleged losses did not meet the definition of economic lossestablished in Moorman and so were recoverable under tort theory. Scott & Fetzer, 112 Ill. 2d at388. Because the loss in Scott was caused by fire-a "sudden or dangerous occurrence"-it isdistinguishable from the loss here. Here, Vaidya sought damages for the loss of personalproperty held in the safety deposit box. "'But where there is no accident, and no physicaldamage, and the only loss is a pecuniary one, through loss of the value or use of the thing sold, orthe cost of repairing it, the courts have adhered to the rule *** that purely economic interests arenot entitled to protection against mere negligence, and so have denied the recovery.'" Moorman,91 Ill. 2d at 86, quoting W. Prosser, Torts