The opinion of the court was delivered by: Aspen, District Judge:
MEMORANDUM OPINION AND ORDER
In support of his motions to dismiss and in opposition to
plaintiff's motions for summary judgment, defendant Sheridan
alleges that Illinois law bars this Court from entertaining
plaintiff's claims for a deficiency judgment against the
guarantor in each case. The defendant argues that such a claim
cannot be raised in the same complaint which seeks, albeit in
a separate count, the foreclosure and sale of the mortgaged
real estate at issue. Upon review of the relevant Illinois law,
this Court is satisfied that no such bar exists and defendant's
motion to dismiss must be denied.
As a general proposition in Illinois, "a personal judgment
under a guaranty cannot be obtained in [a forfeiture] action
based on the statutory short form complaint provided in Section
7 of the Illinois Mortgage and Foreclosure Act." Emerson v.
LaSalle National Bank, 40 Ill. App.3d 794, 799, 352 N.E.2d 45
(2d Dist. 1976). Moreover, the initial foreclosure counts of
plaintiff's complaints in these cases were based on the
statutory short form as provided by Illinois law. Ill.Rev.Stat.
1979, ch. 95, § 23.6. The separate counts of these complaints
seeking a deficiency judgment against defendant Sheridan,
however, are separate causes of action under the Illinois Civil
Practice Act. See generally Ill.Rev.Stat. 1979, ch. 110, §
33(2). The general Illinois rule invoked by defendant Sheridan
does not prevent plaintiff from bringing a separate cause of
action against the guarantor in a separate count of the same
complaint seeking forfeiture and sale of the mortgaged
property. National Bank of Austin v. First Wisconsin National
Bank of Milwaukee, 53 Ill. App.3d 482, 491 n. 2, 10 Ill.Dec.
633, 368 N.E.2d 119 (2d Dist. 1977).
In Emerson v. LaSalle National Bank, 40 Ill. App.3d 794,
352 N.E.2d 45 (2d Dist. 1976), cited by both parties, the Illinois
Appellate Court reviewed a complaint similar to those filed in
the present case. The first count of the Emerson complaint
sought foreclosure of a trust deed and substantially conformed
to the statutory short form. The second count, as here, sought
a deficiency judgment from the guarantor. The trial court
ordered the foreclosure and sale of the mortgaged property
pursuant to count one and dismissed count two on the grounds
that resolution of the first count adjudicated all matters
alleged in the complaint and constituted an election of
remedies by the plaintiffs. Id. at 795, 352 N.E.2d 45. The
Appellate Court subsequently reversed and remanded the cause to
the trial court with directions to reinstate the count seeking
a deficiency judgment from the guarantor. This disposition
itself reflects that, under Illinois law, a single complaint
can assert a forfeiture claim on a note in one count and a
deficiency claim predicated on a separate guaranty in another
count.
The significance of Emerson to the present case is heightened
by the fact that the general rule against combining a
forfeiture claim with a deficiency claim in the same cause of
action was cited by the Court in support of its final
disposition of the case. The Court reasoned that because a
forfeiture claim must be a separate and distinct cause of
action from a deficiency claim in Illinois, the trial court's
disposition of the forfeiture count could not itself justify
dismissal of the deficiency count. As the result manifests, the
Court did not hold that the two counts could not be asserted
separately in a single complaint.*fn1 No such doctrine
exists under Illinois law. Accordingly, defendant Sheridan's
motion to dismiss must be denied.
Plaintiff has moved for summary judgment in each of these
cases pursuant to Rule 56 of the Federal Rules of Civil
Procedure on the deficiency counts asserted against defendant
Sheridan as guarantor. It is undisputed in each case that the
underlying trusts have defaulted under the terms of the notes
and that proceeds from the sale of the property ordered by this
Court were insufficient to satisfy the debt. Accordingly, this
Court has previously entered deficiency judgments against
LaSalle Trust No. 47441 in the amount of $67,502.19. LaSalle
Trust Nos. 100456 and 100474 in the amount of $560,011.24 and
LaSalle Trust No. 44669 in the amount of $272,823.62. It is
also undisputed that these debts remain unsatisfied.
In addition to asserting the same theory of pleading advanced
in his motions to dismiss and previously rejected by this
Court, supra, defendant Sheridan has responded to plaintiff's
motions for summary judgment on the deficiency counts by
raising a number of factual issues and affirmative defenses not
raised and, in some instances, contradicted by his answers
filed before this Court. For purposes of this motion, defendant
has not filed any affidavits in support of his factual
allegations or affirmative defenses. After careful review of
those allegations, this Court is unable to find a material
issue of fact and, accordingly, will grant plaintiff's motions
for summary judgment.
In support of a motion for summary judgment, the moving party
has the burden of showing that there is no dispute as to any
genuine issue of fact material to a judgment in his favor as a
matter of law. Cedillo v. International Association of Bridge &
Structural Iron Workers, Local Union No. 1, 603 F.2d 7, 10 (7th
Cir. 1979); Fitzsimmons v. Best, 528 F.2d 692, 694 (7th Cir.
1976). The non-moving party is entitled to all reasonable
inferences that can be made in its favor from the evidence in
the record. United States v. Diebold, Inc., 369 U.S. 654, 655,
82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962); Moutoux v. Gulling
Auto Electric, 295 F.2d 573, 576 (7th Cir. 1961). While the
non-moving party is entitled to all reasonable inferences in
its favor, it must affirmatively set forth specific facts in
affidavits or otherwise demonstrate that there are issues that
must be decided at trial in response to the moving party's
assertions that no genuine material issues of fact exist. First
National Bank of Arizona v. Cities Service Co., 391 U.S. 253,
289-90, 88 S.Ct. 1575, 1592-93, 20 L.Ed.2d 569 (1968); Kirk v.
Home Indemnity Co., 431 F.2d 554, 560 (7th Cir. 1970). The
non-moving party cannot create an issue of material fact
through conjecture or speculation as to what evidence might be
adduced at trial or what might be turned up by further
discovery. Abiodun v. Martin Oil Service, Inc., 475 F.2d 142,
144 (7th Cir.), cert. denied, 414 U.S. 866, 94 S.Ct. 57, 38
L.Ed.2d 86 (1973); Kirk v. Home Indemnity Co., supra; O'Brien
v. McDonald's Corp., 48 F.R.D. 370, 373-74 (N.D.Ill. 1970); 6
Moore's Federal Practice ¶ 56.17 (2d ed. 1966).
In all three cases presently before this Court, defendant
Sheridan has alleged for the first time in his response brief
that a summary judgment would deny him the opportunity to
demonstrate at a full evidentiary hearing that the guaranties
at issue in this case were obtained by duress. Even in these
briefs, however, the defendant has not alleged that the
guaranties were in fact obtained by duress. Moreover, the
defendant has failed to plead or otherwise allege any facts
whatsoever in support of this potential allegation. The
defendant's oblique reference to duress falls far short of the
showing necessary to withstand a motion for summary judgment.
The failure to
plead such an affirmative defense results in the waiver of that
defense. Cf. Roe v. Sears, Roebuck & Co., 132 F.2d 829, 832
(7th Cir. 1943); Federal Savings & Loan Insurance Corp. v.
Szarabajka, 330 F. Supp. 1202, 1203 (N.D.Ill. 1971); First
National Bank of Lincolnwood v. Keller, 318 F. Supp. 339, 345
(N.D.Ill. 1970).
In 80 C 5510, defendant Sheridan also argues for the first
time in his response brief that "no exhibits are attached to
the Complaint demonstrating that Defendant agreed to or
executed an additional guaranty to the first extension [of the
note and mortgage]." Def. Response at p. 2. The defendant fails
to affirmatively allege, however, that he never agreed to or
executed such an additional guaranty. The defendant also fails
to allege or otherwise show any facts supporting this potential
defense. Indeed, as evidenced by exhibits submitted by
plaintiff in support of its motion for summary judgment, the
defendant did, in fact, execute an additional guaranty to the
first extension. Moreover, the "Second Consent of Guarantor,"
executed by the defendant on March 21, 1980, and attached as
Exhibit 12 to the original complaint, expressly acknowledges
the first extension. In this light, the defendant's indirect
suggestion that the complaint is insufficient or that he may
never have agreed to or executed an additional guaranty to the
first extension falls well short of the showing necessary to
survive a motion for summary judgment.
In 80 C 5836, defendant argues that because the copy of the
guaranty attached to the plaintiff's complaint is not signed by
the defendant, the guaranty cannot be enforced against him.
This argument is disingenuous. Again the defendant does not
deny that he signed the guaranty. Indeed, his answer to
plaintiff's original complaint admits that he signed the
guaranty. In this context, under state as well as federal
principles of pleading, the fact that plaintiff attached an
unexecuted copy of the guaranty in the original complaint does
not establish a genuine issue of material fact for purposes of
this motion.
Defendant finally argues that "there is no extension of
guaranty attached to this Complaint that would conform with the
amendment and modification to Junior Mortgage or Modification
to Principal Note." Defendant's Resp. at p. 2. In addition to
failing to allege a material fact in issue, this statement
flatly contradicts the admissions in defendant's answer.
Accordingly, this Court finds no genuine issue of fact
sufficient to deny summary judgment.
For the reasons stated above, the Court denies defendant
Sheridan's motions to dismiss Count III in 80 C 5509 and 80 C
5510 and Count II in 80 C 5836. The Court grants plaintiff's
motions for summary judgment against defendant Arthur Sheridan
in Count III of 80 C 5509 for the amount of $67,509.19 and
costs, in Count III of 80 C 5510 for the amount of $560,011.24
and ...