Wec 98c-3 LLC v. Sfa Holdings Inc ., formerly known as SAKS INC

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 23-1489
WEC 98C-3 LLC,
Plaintiff,
and
4 S TRATFORD S QUARE M ALL HOLDINGS , LLC,
Plaintiff-Intervenor-Appellee,
v.
SFA HOLDINGS I NC ., formerly known as
S AKS I NC .,
Defendant-Appellant.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 1:20-cv-04356 — Harry D. Leinenweber, Judge.
____________________
A RGUED DECEMBER 7, 2023 — DECIDED A PRIL 24, 2024
____________________
Before WOOD, K IRSCH , and JACKSON -A KIWUMI , Circuit
Judges.

-- 1 of 17 --

2 No. 23-1489
JACKSON -A KIWUMI , Circuit Judge. This case involves two
contracts, three litigants, four companies, and millions of dol-
lars of unpaid rent. CPS Partnership operated a department
store at an Illinois mall for over thirty years. The corporate
entities changed over those years but suffice it to say that CPS
leased the retail space from a company called WEC 98C-3
LLC, and Saks1 guaranteed that it would pay the rent if CPS
could not. But when CPS stopped paying rent, Saks did not
send WEC a single payment. The lost income caused WEC to
default on its mortgage, and 4 Stratford Square Mall Hold-
ings, LLC (“Stratford”), the successor in interest to WEC’s
mortgagee, purchased the property at the foreclosure auction.
Initially, WEC sued Saks for damages. Later, Stratford inter-
vened with its own distinct claim for damages. The district
court ruled only on Stratford’s claim for unpaid rent, finding
that it was entitled to payment from Saks. Stratford then
waived its claim for non-basic rent damages, and the district
court certified the judgment in favor of Stratford for immedi-
ate appeal pursuant to Federal Rule of Civil Procedure 54(b).
Saks took up the invitation and urges us to reverse. On the
jurisdictional grounds for reversal that Saks raises, we con-
clude that Stratford did have standing to sue Saks even
though it entered the story much later, and the district court
did properly certify its judgment for appeal under Federal
Rule of Civil Procedure 54(b). On the merits, we conclude that
Saks cannot mount any of its desired defenses: It waived its
right to present affirmative defenses to liability in the
1 The company originally known as Saks Holdings, Inc., merged with
Proffitt’s, Inc., in 1998 to form Saks Inc. Saks Inc. then changed its name to
SFA Holdings during this litigation. We refer to the entity as “Saks”
throughout this opinion.

-- 2 of 17 --

No. 23-1489 3
guaranty that it signed. We therefore affirm the district court’s
judgment.
I
At the heart of this dispute is a rental contract between
CPS and WEC that Saks guaranteed. In 1985, CPS signed a
lease with WEC to operate a Carson Pirie Scott Department
Store at the Stratford Square Mall in Bloomingdale, Illinois.
Under the lease terms, CPS agreed to pay WEC rent in
monthly installments plus a penalty on any overdue rent. The
parties agreed that the penalty would amount to
a rate of interest equal to the lesser of: (a) the
maximum amount of interest permitted under
applicable state law, or (b) the greater of (i) four
percent (4%) in excess of the yield, from time to
time, as quoted daily in the Wall Street Journal
(or if the same is not then published, another
similar national journal selected by Landlord),
of U.S. Treasury Bonds having an maturity clos-
est to that date which is ten (10) years after the
date of the Event of Default, or (ii) sixteen per-
cent (16%) per annum.
CPS and WEC amended the lease twice, in 1994 and 1998.
The second amendment, which extended the rental period
through January 2024, is when Saks entered the picture. At
the same time WEC signed the second amendment, it entered
into a corporate guaranty agreement with Saks’s predecessor
in interest, Proffitt’s, Inc. Under the terms of the guaranty, if
CPS defaulted on its rent, Saks, as its guarantor, would pay
the outstanding rent on CPS’s behalf. The guaranty

-- 3 of 17 --

4 No. 23-1489
established that “the liability and obligation of Guarantor
hereunder shall be absolute and unconditional” and “not sub-
ject to any reduction, limitation, termination, defense, offset,
counterclaim or recoupment” because of CPS’s bankruptcy,
default, or lease rejection.
For the next twenty years, CPS reliably paid rent to its
landlord WEC. But in 2018, CPS’s parent company, Bon-Ton
Stores, filed for bankruptcy. CPS defaulted on its February
2018 rent, and then rejected the lease entirely in August 2018.
So WEC asked Saks to pay the outstanding rent. Saks did not,
even though Saks had reaffirmed its obligation as a guarantor
as recently as 2017.
With neither CPS nor Saks paying rent, WEC fell into ar-
rears on its mortgage. WEC’s mortgagee (Stratford’s prede-
cessor in interest) initiated foreclosure proceedings, and Strat-
ford purchased the property at public auction. Bereft of its
property, in July 2020, WEC sued Saks for breach of the guar-
anty. In October 2020, Stratford, who now owned the prop-
erty, intervened to assert its own breach of guaranty claim
against Saks.
At the time, the district court was overseeing an unrelated
case in which a different party was attempting to hold Saks
liable for breaching a guaranty with identical language to the
guaranty at issue here. See WEC 98C-4 LLC v. Saks Inc., No. 20
C 4363, 2021 WL 5280947 (N.D. Ill. Nov. 12, 2021). In that case,
the district court granted summary judgment to the party in
Stratford’s position, ruling that Saks could not assert affirma-
tive defenses to liability. See id. at *4–5. Consequently, when
Stratford moved for summary judgment in the instant case,
the district court granted the motion with heavy reliance on
the reasoning from the court’s other summary judgment

-- 4 of 17 --

No. 23-1489 5
decision. The court ruled that Saks was liable to Stratford for
CPS’s unpaid rent from February 2018 through September
2022, plus 9% interest on that unpaid rent pursuant to the pen-
alty provision. Finding no just reason for delay, the court cer-
tified its judgment as final for appeal.
Saks now appeals, arguing that (1) Stratford lacked stand-
ing to bring its claim, (2) the district court erred in certifying
its judgment in favor of Stratford for immediate appeal pur-
suant to Rule 54(b), and (3) the district court erred in rejecting
Saks’s affirmative defenses. We evaluate each argument in
turn.
II.
We begin with Saks’s contention that Stratford lacked
standing to sue for rent owed before Stratford even purchased
the property. To establish standing, Stratford must show that
it “(1) suffered an injury in fact, (2) that is fairly traceable to
the challenged conduct of the defendant, and (3) that is likely
to be redressed by a favorable judicial decision.” Taylor v.
McCament, 875 F.3d 849, 853 (7th Cir. 2017) (quoting Spokeo,
Inc. v. Robins, 578 U.S. 330, 338 (2016)). A district court may
only dismiss a case for lack of standing when “there are no set
of facts consistent with the complaint’s allegations that could
establish standing.” Lac Du Flambeau Band of Lake Superior
Chippewa Indians v. Norton, 422 F.3d 490, 498 (7th Cir. 2005).
Saks claims that Stratford failed to show that it suffered an
actual, concrete, and particularized injury because it did not
establish it had the right to recover rent for the period before
it owned the property. Saks is incorrect.
Under Illinois law, a mortgagor may include an assign-
ment-of-rent clause in the mortgage, which gives the

-- 5 of 17 --

6 No. 23-1489
mortgagee an interest in any rent the mortgagor is entitled to
once the mortgagee gains possession of the property. See Mat-
ter of Wheaton Oaks Office Ltd. P’ship, 27 F.3d 1234, 1242 (7th
Cir. 1994). Such affirmative action may include actual posses-
sion of the mortgaged property or constructive possession by
seeking a court-appointed receiver. See BMO Harris Bank N.A.
v. Joe Contarino, Inc., 2017 IL App (2d) 160371, ¶ 42.
Stratford demonstrated that the mortgage included an as-
signment-of-rent clause and that it had constructive and ac-
tual possession of the property. Stratford produced WEC’s
mortgage agreement, which assigned Stratford’s predecessor
in interest the right to CPS’s lease and Saks’s guaranty agree-
ment. The mortgage also provided that the mortgagee could
apply for a receiver to enforce its rights. When CPS rejected
the lease, the Illinois court appointed a receiver, giving Strat-
ford’s predecessor in interest constructive possession and the
right to the outstanding rent. See id. And when Stratford’s pre-
decessor in interest foreclosed on the property, the foreclo-
sure included “all personal property subject to the security in-
terest held by” the mortgagee. Stratford then gained actual
possession of the property and the interest in the rent when it
purchased the foreclosed property in February 2020. As a re-
sult, Stratford owns the mortgagee’s interest in the lease and
guaranty. Saks’s failure to abide by the guaranty harmed
Stratford by depriving it of the rent to which it was entitled.
That concrete harm satisfies our standing inquiry.
III.
We next consider Saks’s assertion that the district court
erred in certifying its judgment for appeal. Under Rule 54(b)
of the Federal Rules of Civil Procedure, a district court “may
direct entry of a final judgment as to one or more, but fewer

-- 6 of 17 --

No. 23-1489 7
than all, claims or parties only if the court expressly deter-
mines that there is no just reason for delay.” Appellate courts
employ a two-step framework to evaluate whether a district
court properly certified a judgment under Rule 54(b). First,
we review de novo whether the district court’s order “was
truly a final judgment.” Peerless Network, Inc. v. MCI Commc’ns
Servs. Inc., 917 F.3d 538, 543 (7th Cir. 2019). Next, we ask
“whether the district court abused its discretion in finding no
just reason to delay the appeal of the claim that was finally
decided.” Id. Appellate courts give “[s]ome deference” to the
opinion of the district court “that the Rule 54(b) requirements
are satisfied.” 10 Wright, Miller & Kane, Federal Practice and
Procedure § 2655 (4th ed. 2023) (citing cases).
A. Finality
A judgment is final under Rule 54(b) when it constitutes
“an ultimate disposition of an individual claim entered in the
course of a multiple claims action.” Curtiss-Wright Corp. v.
Gen. Elec. Co., 446 U.S. 1, 7 (1980). If a party challenges a Rule
54(b) certification, we consider “whether there is too much
factual overlap with claims remaining in the district court.”
Peerless Network, Inc., 917 F.3d at 543. “Even if two claims arise
from the same event or occurrence, they may be separable for
Rule 54(b) purposes if they rely on entirely different legal en-
titlements yielding separate recoveries, rather than different
legal theories aimed at the same recovery.” Marseilles Hydro
Power, LLC v. Marseilles Land & Water Co., 518 F.3d 459, 464
(7th Cir. 2008).
Saks advances two theories why the district court’s judg-
ment was not final. First, it contends that Stratford has out-
standing claims against Saks. Second, it asserts that WEC and

-- 7 of 17 --

8 No. 23-1489
Stratford have overlapping claims against Saks. Neither the-
ory wins the day.
1. Stratford’s allegedly outstanding claims
To understand Saks’s first theory, some background on
Stratford’s lawsuit is necessary. In its intervenor complaint,
Stratford alleged that Saks failed to honor its guaranty obliga-
tion, and Stratford sought money damages as a result. The
district court resolved Stratford’s claim in its entirety by de-
termining that Saks was liable under the guaranty and order-
ing Saks to pay damages for unpaid basic rent from February
2018 through September 2022, the last month for which rent
was owed at the time of the court’s judgment.
On appeal, Saks argues that even though the district court
awarded damages for the entire period under consideration,
the judgment was not final because the court did not resolve
whether Saks owes Stratford rent through January 2024, the
end of the lease period. According to Saks, because Stratford
told the district court that it “reserves the right to seek recov-
ery of these rents at a later date,” Stratford still has unresolved
claims against Saks.
In essence, Saks argues that Stratford is limited to bringing
a single action for all the rent Saks could possibly owe. But
that is not the law in Illinois. (The parties agree that Illinois
state law applies. See Wood v. Mid-Valley Inc., 942 F.2d 425, 427
(7th Cir. 1991) (“Courts do not worry about conflict of laws
unless the parties disagree on which state’s law applies.”).)
In Illinois, landlords can sue for rent as the rent comes due.
The Illinois Supreme Court has held that, “in the case of a
judgment for the payment of money in periodic install-
ments[,] a right of action accrues on each installment as it

-- 8 of 17 --

No. 23-1489 9
becomes due, and [] the period of limitations runs on each in-
stallment only from the time it becomes due.” Light v. Light,
12 Ill. 2d 502, 506 (1957) (emphasis added). Contracts for
monthly rental payments give landlords “the right to sue for
the installments as they come due, the right to sue for several
installments that have accrued, and the right to sue for the en-
tire amount due at the end of the term.” Dorris v. Ctr., 284 Ill.
App. 344, 349 (1936). See also Miner v. Fashion Enterprises, Inc.,
342 Ill App. 3d 405, 417 (2003) (“[A] lessor has the options of
suing for rent as they come due, suing for several accrued in-
stallments, or suing for the entire amount at the end of the
lease term.”).
Stratford chose the second option—suing for several in-
stallments that had accrued—and the district court resolved
that claim. If Saks continues to refuse to honor the guaranty,
Stratford could bring a new claim. Or Saks could pay what it
owes and avoid future litigation. Either way, the hypothetical
possibility of future litigation does not mean that the district
court failed to resolve the claim in front of it. Saks in fact con-
cedes that Stratford can sue for one or more installments of
outstanding rent, calling it a “vanilla proposition.” Saks can-
not credibly claim that Stratford presently has outstanding
claims against Saks.
2. Stratford’s and WEC’s allegedly overlapping claims
Saks’s second theory why the district court’s judgment
was not final rests on the notion that both Stratford and WEC
seek unpaid rent. Therefore, Saks argues, the companies’

-- 9 of 17 --

10 No. 23-1489
claims are inextricably intertwined, and the district court did
not enter a final judgment.
In order to evaluate Saks’s argument, we need to take a
closer look at what happened in the district court. When Strat-
ford intervened in this litigation, both Stratford and WEC did
claim the right to overdue rent, so their claims indeed over-
lapped. But that changed when WEC subsequently dis-
claimed on the record its right to collect unpaid basic rent. At
a November 8, 2022, hearing on Stratford’s motion for entry
of final judgment, WEC stated, “We’re not making a claim for
a basic rent claim as in the related case. It’s for consequential
damages.”
On the record before us, we are satisfied that there is no
overlap between damages for unpaid basic rent (what Strat-
ford sought and was awarded) and consequential damages
(what WEC seeks). Both the lease and the guaranty anticipate
the existence of damages separate and apart from any unpaid
rent. The lease provides that the landlord may be owed “rea-
sonable attorneys’ fees and expenses,” for example, and Saks
agreed under the guaranty to pay “all damages and all costs
and expenses that may arise in consequence” of CPS’s failure
to pay rent. WEC itself told the district court that it expected
consequential damages to consist of “attorneys’ fees that
[WEC] incurred as a result of the foreclosure in this case and
the loss in value and the equity of the property that [WEC]
incurred as a result of the foreclosure.” Unpaid rent is only
relevant to WEC’s claim as a backdrop against which it suf-
fered consequential damages. WEC’s and Stratford’s claims
therefore amount to “entirely different legal entitlements
yielding separate recoveries.” Marseilles Hydro Power, LLC,
518 F.3d at 464. WEC’s remaining claim will neither

-- 10 of 17 --

No. 23-1489 11
strengthen nor weaken Stratford’s rights against Saks, mak-
ing the claims separable for Rule 54(b) purposes.
Certification under Rule 54(b) would only be inappropri-
ate, then, if WEC’s on-the record oral waiver of its claim to
basic rent had no effect. Saks provides no authority suggest-
ing that this is the case. On the contrary, we have repeatedly
credited such waivers. See, e.g., Portalatin v. Blatt, Hasenmiller,
Leibsker & Moore, LLC, 900 F.3d 377, 381 (7th Cir. 2018) (“In
September 2015, Portalatin expressly abandoned her claim for
actual damages against Blatt; her attorney stated in open
court that they were only seeking statutory damages.”); Miller
v. Willow Creek Homes, Inc., 249 F.3d 629, 631 (7th Cir. 2001)
(“A waiver, which can be either expressed or implied, is an
intentional relinquishment of a known right. Here, the re-
quirements of waiver are easily satisfied. In open court, the
Millers’ attorney announced that he had conferred with the
Millers and that they decided not to proceed with the Mag-
nuson-Moss claims.” (internal citation omitted)); McCoy v.
WGN Cont’l Broad. Co., 957 F.2d 368, 370 (7th Cir. 1992)
(“McCoy appeals the judgment below only insofar as it rejects
his discriminatory demotion and discharge claim, having ex-
pressly abandoned his retaliatory discharge claim at oral ar-
gument.”).
In sum, WEC waived its right to unpaid basic rent, distin-
guishing its claim from Stratford’s. That left the district court
free to certify its judgment on Stratford’s claim as final for ap-
peal. The court’s final judgment resolves only Stratford’s
claim and says nothing about WEC’s rights. WEC remains
free to pursue its claim for consequential damages before the
district court. The district court correctly determined that

-- 11 of 17 --

12 No. 23-1489
Stratford and WEC had distinct claims against Saks and
properly entered final judgment pursuant to Rule 54(b).
B. Abuse of discretion
Having determined that the district court’s order was in-
deed a final judgment, we commence step two and evaluate
whether the court abused its discretion by finding no just rea-
son to delay certification under Rule 54(b). We will overturn
a district court’s certification for abuse of discretion only if the
certification was “clearly unreasonable.” Curtiss-Wright Corp.,
446 U.S. at 10. We cannot find that the certification here was.
The district court resolved Stratford’s claim, and correctly de-
termined that Saks had prejudiced Stratford by refusing to
pay rent for over five years. We conclude that further litiga-
tion on this point would not serve “judicial administrative in-
terests” or the parties’ interests. See id. at 8. Accordingly, the
district court did not abuse its discretion in certifying its judg-
ment as final for appeal under Rule 54(b).
IV.
We have now resolved the alleged jurisdictional defects
Saks raised—standing and the judgment’s certification—so
we turn to Saks’s substantive assertions. Saks alleges that the
district court made a legal error by rejecting Saks’s affirmative
defenses and entering summary judgment in favor of Strat-
ford. We review a district court’s grant of summary judgment
de novo, construing all facts and drawing all reasonable infer-
ences in favor of Saks as the non-moving party. See Barnes-
Staples v. Carnahan, 88 F.4th 712, 715 (7th Cir. 2023).
Saks asserted three defenses to liability: failure to mitigate
damages, impossibility, and frustration of purpose. The dis-
trict court found that none of these defenses had merit. It

-- 12 of 17 --

No. 23-1489 13
determined that Saks could not assert failure to mitigate be-
cause Saks did not present any case in which a guarantor can
assert failure to mitigate as a defense under Illinois law. It also
found that the Illinois court-appointed receiver attempted to
mitigate damages, which satisfied any duty to mitigate that
might exist. Lastly, it found that Saks could not meet the legal
elements of frustration of purpose or impossibility.
Because we conclude that Saks waived its right to assert
any defenses under the plain language of the guaranty, we
affirm the district court’s judgment. See O’Brien v. Caterpillar
Inc., 900 F.3d 923, 928 (7th Cir. 2018) (“We may affirm on any
ground supported in the record so long as it was adequately
addressed below and the plaintiffs had an opportunity to con-
test the issue.”).
Under Illinois law, courts evaluate guaranties and sureties
using principles of contract law. See, e.g., People ex rel. Ryan v.
Env’t Waste Res., Inc., 335 Ill. App. 3d 751, 757 (2002) (“The
fundamental principle of surety law is that the surety is
bound by the terms of its contract.”); Blackhawk Hotel Assocs.
v. Kaufman, 85 Ill. 2d 59, 64 (1981) (“A guaranty contract is to
be interpreted ‘according to the standards that govern the in-
terpretation of contracts in general.’” (quoting Restatement of
Security § 88 (1941))). As with any contract, the parties to the
guaranty select its terms, and “[w]here the terms of a guar-
anty are clear and unambiguous, they must be given effect as
written.” Roth v. Dillavou, 359 Ill. App. 3d 1023, 1028 (2005).
The guaranty established that Saks’s liability as a guaran-
tor “shall not be subject to any reduction, limitation, termina-
tion, defense, offset, counterclaim or recoupment” if CPS were
to default on the lease or reject the lease through bankruptcy.
CPS indeed defaulted on the lease in February 2018 and then

-- 13 of 17 --

14 No. 23-1489
rejected the lease through bankruptcy in August 2018. Under
that plain language, Saks waived its right to assert affirmative
defenses to both the default and the rejection.
Our circuit has already implicitly found that this language
waives affirmative defenses. In Hovde v. ISAL Development
LLC, 51 F.4th 771 (7th Cir. 2022), we used the language at issue
here to shed light on the meaning of a different guaranty
agreement. The parties in Hovde disagreed over whether lan-
guage providing that a guarantor’s “obligations under this
Guaranty shall be unconditional, irrespective of . . . any other
circumstance which might otherwise constitute a legal or eq-
uitable discharge or defense of a guarantor” waived the guar-
antor’s right to assert affirmative defenses to liability. Id. at
775–76. We concluded that the language waived affirmative
defenses as to the guarantor’s obligation to the loan, but not to
its liability. See id. at 777. In our analysis, we contrasted the
language of the guaranty at issue there with the “more expan-
sive language that courts frequently encounter in waivers, in
which the language applies not only to defenses as to the ob-
ligation itself but also to defenses to liability or enforcement.”
Id. at 779. Among the waivers that we cited was the exact
waiver in the very case before us: This guaranty states that
“the liability and obligation of Guarantor . . . shall not be subject
to any . . . defense.” Id. (emphasis in original) (quoting WEC
98C-3 LLC v. Saks, Inc., No. 20 C 4356, 2022 WL 474204, at *4
(N.D. Ill. Feb. 16, 2022)). Thus, we have little trouble conclud-
ing that, under the plain language of the guaranty Saks
signed, it waived its right to assert affirmative defenses to li-
ability.
Saks contends that it could not have waived its failure-to-
mitigate defense because failure to mitigate is a statutory

-- 14 of 17 --

No. 23-1489 15
defense. According to Saks, Illinois law requires a “clear
waiver of a statutory right.” But that is not exactly right. Illi-
nois law provides that a party can waive statutory rights, “so
long as the waiver is voluntary, knowing, and intentional.”
Takiff Props. Grp. Ltd. #2 v. GTI Life, Inc., 2018 IL App (1st)
171477, ¶ 13. Saks agreed to the guaranty and, as a sophisti-
cated party, Saks is “presumed to have understood the[] clear
terms” of the guaranty. Cincinnati Ins. Co. v. Leighton, 403 F.3d
879, 887 (7th Cir. 2005).
The cases that Saks relies on, Chemical Bank v. Paul, 244 Ill.
App. 3d 772 (1993), and Gallagher v. Lenart, 226 Ill. 2d 208
(2007), do not support its argument to the contrary. In Chemi-
cal Bank, an Illinois appellate court found that a guaranty stat-
ing “[t]he undersigned hereby warrants and represents that
the undersigned has no defense, offset or counterclaim with
respect to the Guaranty or the obligations of the undersigned
thereunder” did not waive the implied covenant of good
faith. 244 Ill. App. 3d at 781. But that holding applied only to
the implied covenant of good faith. In fact, the court noted
that “[g]uaranty agreements containing waivers of all de-
fenses, including the duty to act in a commercially reasonable
manner, have been upheld as validly binding.” Id. A covenant
of good faith is different because “fair dealing is implied into
every contract, absent express disavowal.” Id. In short, Chem-
ical Bank instructs that the implied covenant of good faith is a
special case that requires express waiver. Parties can waive
other defenses with more general language.
Gallagher, a case about workers’ compensation liens, does
not support Saks’s argument either. See 226 Ill. 2d 208. Gal-
lagher was an employee of Rail Terminal Services who suf-
fered an on-the-job injury when he collided with a truck

-- 15 of 17 --

16 No. 23-1489
operated by Lenart. Following the accident, Gallagher pur-
sued a workers’ compensation claim against Rail Terminal
and a personal injury suit against Lenart. The workers’ com-
pensation case settled, with the parties agreeing to a “full and
final settlement of all claims under the Workers’ Compensa-
tion Act” for injuries associated with the accident. Id. at 212.
Gallagher then settled with Lenart, and Rail Terminal as-
serted a statutory right to impose a lien on that settlement un-
der the Workers’ Compensation Act. Gallagher argued that
although the Workers’ Compensation Act gives employers a
statutory right to liens on workers’ settlements with third par-
ties, Rail Terminal had waived that right pursuant to the
terms of their settlement. The Illinois Supreme Court disa-
greed. It determined that, given “the integral role the work-
ers’ compensation lien plays in the workers’ compensation
scheme . . . the waiver of a workers’ compensation lien must
be explicitly stated.” Id. at 238.
We do not find Gallagher relevant for two reasons. First,
the Gallagher court found that the settlement agreement did
not waive a statutory right to collect on a judgment that arose
from a different court proceeding. That is fundamentally dif-
ferent from the situation here, where the guaranty waived a
statutory right to assert a defense against breach of the very
contract it guarantees. Second, the Gallagher court based its
reasoning on the central role the statutory right to a lien
played in the workers’ compensation scheme. Saks has pro-
vided no evidence that the Illinois statute establishing a land-
lord’s duty to mitigate acts as a linchpin in any larger statu-
tory scheme.
In sum, the plain meaning of the guaranty controls the
outcome here. Saks waived its right to assert affirmative

-- 16 of 17 --

No. 23-1489 17
defenses to liability. The district court’s determination that
Saks had no defense to liability was therefore correct.
V.
Saks’s final claim of error involves the interest rate the dis-
trict court applied to the unpaid rent. The guaranty provision
allows a late penalty based on “the maximum amount of in-
terest permitted under applicable state law.” The Illinois In-
terest Act, 815 ILCS 205, allows “the parties to stipulate or
agree that an annual percentage rate of 9%, or any less sum,
shall be taken and paid upon every $100 of money loaned or
in any manner due.” 815 Ill. Comp. Stat. 205/4. Saks argues,
based on Celotex Corp. v. Discount Roofing Materials, LLC, 2012
IL App (1st) 110614-U, and McGinley Partners, LLC v. Royalty
Properties, LLC, 2018 IL App (1st) 171317, that “maximum
amount of interest” is ambiguous. Those cases do not support
Saks’s position. In both Celotex and McGinley Partners, the
court declined to apply the 9% interest rate because it found
that the statute authorizing the 9% interest rate did not apply
to the transactions at issue. Celotex Corp., 110614-U at ¶ 31;
McGinley Partners, 171317 at ¶ 65. Here, Saks provides no ev-
idence that Section 205/4 does not apply to real estate transac-
tions. Therefore, Statute 205/4 applies, and the district court
did not err in applying a 9% prejudgment interest rate to the
unpaid rent.
For these reasons, we AFFIRM the district court’s judg-
ment.

-- 17 of 17 --