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UNITED STATES v. THOMAS

August 27, 1985

UNITED STATES OF AMERICA, PLAINTIFF,
v.
DORIS THOMAS, ET AL., DEFENDANTS. DORIS THOMAS, CROSS-PLAINTIFF, V. VILLAGE OF MAYWOOD, ET AL., CROSS-DEFENDANTS. CAROL JAROCKI, ET AL., INTERVENORS-PLAINTIFFS, V. UNITED STATES OF AMERICA, DEFENDANT.



The opinion of the court was delivered by: Holderman, District Judge:

MEMORANDUM OPINION AND ORDER

This is an action to foreclose several mortgage liens on property located in the Village of Maywood, Cook County, Illinois (the "property"). The property houses a restaurant-banquet facility and several apartment units which are operated by defendant Doris Thomas Anderson ("Anderson").*fn1

The United States has moved for reconsideration of its motion for summary judgment, originally presented to Judge Leighton of this Court. Intervening plaintiffs Carol Jarocki, Emil Marunde, Trudy Smith and Rudolph Kullmann and Richard Kullmann, as co-administrators of the estate of Margarethe Marunde (hereinafter "Intervenors") have also moved for summary judgment.

For the reasons stated below, the United States' motion for reconsideration is granted; summary judgment will be entered for the United States. The Intervenors' motion for summary judgment is also granted.

DISCUSSION

I. Intervenors' Motion.

Intervenors were the beneficiaries of a land trust which formerly held title to the property. On January 14, 1978, at the direction of the beneficiaries, the Chicago Title and Trust Company conveyed title to Anderson in fee simple. In return, Anderson executed a note (the "Note") in the principal amount of $40,000, bearing interest at the annual rate of nine and one-half percent. Monthly payments, commencing January 15, 1978, were due on the 15th day of each month in the amount of $372.86, with the principal balance remaining due and unpaid on December 15, 1987 to be paid on that date. The Note was secured by a trust deed in the nature of a mortgage which was duly recorded.

Payments were made on the Note on a regular basis (although in irregular amounts) from January of 1978 through July of 1979. Payment then ceased until October of 1979, then ceased again. Anderson again made regular payments on the Note from January of 1980 through March of 1981. Payment on the Note then came to a halt until November of 1981 when Anderson made one final payment of $765.12.

Intervenors have calculated that had Anderson made regular monthly payments in accordance with the Note's provisions, the remaining balance on the mortgage would have been $36,704.92 on August 15, 1981. Instead, on that date the principal and interest due amounted to $36,762.25. This state of default was not cured by Anderson's last payment in November of 1981. As of March 15, 1985, Intervenors contend, Anderson owed Intervenors the sum of $35,362.50 in principal and $12,672.60 in interest. In addition, interest continues to run at the per diem rate of $9.33.

Anderson does not dispute that she is in default under the Note. As a defense to summary judgment, Anderson states that she discontinued payment "due to the uncertainty with respect to the rehabilitation of the subject property." Anderson's brief in response to Intervenors' motion for summary judgment states that she intended to tender to Intervenors the sum of $26,477.13 (the amount which Anderson contends would be due had she not defaulted) within forty-five days of the date of her brief.

Anderson's "uncertainty" with respect to rehabilitation of the property, of course, is no excuse for nonpayment of the Note. In fact, Anderson executed the Note and was obliged to make payment thereunder before she was even aware that government funds were available for rehabilitation. Similarly, Anderson's tardy tendering of part of the amount in default is not a basis upon which this Court can deny Intervenors' right to foreclose.

The trust deed securing Intervenors' mortgage provided as follows:

  Mortgagors shall pay each item of indebtedness herein
  mentioned, both principal and interest, when due according to
  the terms hereof. At the option of the Holders of the Note, and
  without notice to Mortgagors, all unpaid indebtedness secured
  by this Trust Deed shall, notwithstanding anything in the Note
  or in this Trust Deed to the contrary, become due and payable
  (a) immediately in the case of default in making payment of any
  installment of principal or interest on the Note or (b) when
  default shall occur and continue to three days in the
  performance of any other agreement of the Mortgagors herein
  contained. (emphasis added)

Intervenors exercised their right to accelerate by filing their complaint.

Summary judgment, of course, is appropriate only when the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). No genuine issue of material fact exists regarding Intervenors' right to foreclose their mortgage. No other party to this action has contested Intervenors' right to summary judgment foreclosing their mortgage or Intervenors' right to a declaration that their lien on the property is superior to the equitable interest of any other party to this action. Summary judgment for Intervenors, therefore will be granted.*fn2

II. HUD's Motion.

The heart of this case, however, is unrelated to the Intervenors' Note and mortgage. The case commenced when the United States, acting through the Department of Housing and Urban Development ("HUD"), filed suit to foreclose on its mortgage on the property. The ...


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