JMB Properties Urban Co. v. Paolucci

Alfred Paolucci (defendant) opened a jewelry store in an Illinois mall in 1978. In November 1984, Barretts Audio and Video Store (Barretts) opened next door to Paolucci’s store. Barretts made considerable noise, making the jewelry store’s walls shake and its display cases vibrate and topple over. The jewelry store’s employees had to wear ear plugs, and its customers complained. In 1985, Carlyle Real Estate Limited Partnership XIV (Carlyle) (plaintiff) purchased the mall and hired JMB Properties Urban Company (JMB) (plaintiff) to manage it. Also in 1985, at Carlyle’s direction, Barretts insulated the common wall in an attempt to soundproof it, which did not help. The jewelry store lost profits. In August 1986, Paolucci entered into a new six-year lease with Carlyle, requiring Paolucci to operate the jewelry store for the entire term of the lease and refrain from operating any similar business within five miles of the mall. Barretts moved out of the mall in February 1990. However, Paolucci failed to pay rent for July 1990 and abandoned the premises in August 1990, two years before the end of the lease. Paolucci moved to a new business location within five miles of the mall. Carlyle and JMB sued Paolucci for unpaid rent and other damages resulting from Paolucci’s breach of lease. The trial court found Paolucci had been constructively evicted. Carlyle and JMB appealed.