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
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
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.
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
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
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
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
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
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 ...