Background
In May 2016, Mindful Life of Arlington Heights, LLC entered into a commercial lease to operate an Anytime Fitness franchise in Arlington Heights, Illinois. Swinford, Mindful Life’s president, signed a personal guaranty agreement covering “the first seven (7) years of the lease.” The guaranty agreement identified the lease’s effective date as May 26, 2016—the date the lease was executed. However, due to substantial buildout required by the landlord, a separate commencement date agreement executed in July 2017 set May 20, 2017 as the actual commencement date and rent commencement date.
In August 2020, amid COVID-19 financial hardship, the parties amended the lease to permit deferral of over $70,000 in rent and common area maintenance charges. Swinford reaffirmed her guaranty obligations notwithstanding the amendment. In April 2023, facing financial difficulties, Swinford notified the landlord that she would close the facility at month’s end. Mindful Life vacated in May or June 2023, leaving approximately $40,000 in deferred amounts unpaid. Plaintiff filed suit in November 2023 seeking recovery from both Mindful Life and Swinford under the lease and guaranty.
In December 2024, the parties filed cross-motions for partial summary judgment on a critical question: whether Swinford’s guaranty obligations expired in May 2023 (seven years from the May 26, 2016 lease execution date) or May 2024 (seven years from the May 20, 2017 commencement date). The trial court ruled for plaintiff, finding the guaranty ran from commencement date to commencement date, and granted plaintiff’s motion while denying Swinford’s cross-motion.
The Illinois Appellate Court reversed the trial court’s summary judgment ruling, holding that the guaranty agreement clearly and unambiguously expired in May 2023. The court concluded that the guaranty agreement, viewed either as a standalone contract or as part of the overall lease package, explicitly stated it covered “the first seven (7) years of the lease” and referenced the lease’s “effective date” of May 26, 2016. The court rejected plaintiff’s argument that the commencement date should control, finding that the guaranty agreement made no reference to the commencement date, rent commencement date, or possession date mentioned in the lease itself. The plain language of the guaranty agreement unambiguously tied the seven-year term to the effective date of May 26, 2016, making the expiration date May 26, 2023.
The court applied standard Illinois contract interpretation principles: when contract language is clear and unambiguous, courts must enforce it as written without resorting to extrinsic evidence. The court rejected the trial court’s “illogical” reasoning that a guaranty should not run before rent commenced, noting that the guaranty covered all lease obligations, not merely rent payments. The court found that the commencement date agreement did not modify the guaranty agreement—it merely specified dates that had been left general in the original lease due to the pending buildout. Finally, the court upheld the trial court’s finding that plaintiff had reasonably attempted to mitigate damages but vacated and remanded the damages award for recalculation, as damages accruing after May 2023 should not be assessed against Swinford under the guaranty.