Unpaid Rent

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7^th Circuit Court of Appeals

Case Name: WEC 98C-3 LLC v. SFA Holdings Inc.

Case No.: 23-1489

Officials: Wood, Kirsch, and Jackson-Akiwumi, Circuit Judges.

Focus: Unpaid Rent

This case revolves around a disagreement concerning unpaid rent for a department store located within an Illinois mall. CPS Partnership operated the store, leasing the retail space from WEC 98C-3 LLC. Saks Inc. provided a guarantee to pay the rent if CPS defaulted. However, when CPS ceased rent payments, Saks did not fulfill its obligation to WEC. Consequently, WEC defaulted on its mortgage, leading to the property’s acquisition by 4 Stratford Square Mall Holdings, LLC (“Stratford”) through a foreclosure auction. Initially, WEC sued Saks for damages, but later, Stratford intervened with its own claim. The district court exclusively addressed Stratford’s claim for unpaid rent, ruling in favor of Stratford and ordering payment from Saks.

On appeal, Saks contended that Stratford lacked standing to sue, questioned the district court’s judgment certification for immediate appeal, and disputed the rejection of its affirmative defenses by the district court. The appellate court determined that Stratford possessed the requisite standing to sue Saks and upheld the district court’s certification of its judgment for appeal. Regarding the merits, the appellate court concluded that Saks waived its right to assert affirmative defenses to liability in the guaranty it signed. Consequently, Saks was unable to raise its desired defenses, leading the appellate court to affirm the district court’s judgment.

Affirmed.

Decided 04/24/24

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