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03/31/87 Lyons Savings & Loan, v. Lyons Savings & Loan

March 31, 1987




506 N.E.2d 652, 153 Ill. App. 3d 848, 106 Ill. Dec. 852 1987.IL.407

Appeal from the Circuit Court of Du Page County; the Hon. Richard A. Lucas, Judge, presiding.


Justice Reinhard delivered the opinion of the court. Unverzagt and Inglis, JJ., concur.


Plaintiff, Inland Real Estate Corporation, appeals from the dismissal of its complaint against defendant, Lyons Savings and Loan, an Illinois savings and loan corporation.

Plaintiff raises the following issues for review: (1) whether the trial court can properly consider additional motions to dismiss once it has denied a motion to dismiss, (2) whether the motions to dismiss pursuant to section 2-619 of the Code of Civil Procedure (Ill. Rev. Stat. 1985, ch. 110, par. 2-619) raise factual issues in defense which conflict with the well-pleaded facts in the complaint thereby precluding dismissal under a section 2-619 motion, and (3) whether an affidavit filed with one of the motions to dismiss was conclusory and should have been stricken.

Plaintiff's complaint alleges that in October 1983, plaintiff negotiated for a $3,750,000 line of credit by applying for a loan with two mortgage brokers, B. A. Mortgage Company of Chicago and G. H. Graff and Associates, Inc.; that plaintiff agreed to pay each mortgage broker 1% of the amount of the line of credit if a loan commitment was obtained; and that plaintiff would pay the lender of such a loan an additional 1% of the commitment amount. It also alleges that defendant obtained plaintiff's application from these mortgage brokers and issued a commitment letter dated November 1, 1983. It further alleges that certain modifications were negotiated and incorporated into the commitment by a letter from defendant dated November 4, 1983; that plaintiff accepted the commitment on November 10, 1983; that defendant confirmed its acceptance on or about November 15, 1983, as indicated by a letter from one of the mortgage brokers attached to the complaint; and that plaintiff paid $37,500 to each mortgage broker and $37,500 to defendant for the issuance of the loan commitment. Both the commitment letter and the modifying letter were attached to the complaint. Plaintiff alleges that these two attachments constitute the entire agreement between the parties concerning the $3,750,000 commitment for a line of credit.

Plaintiff also alleges in the complaint that it drew $1,250,000 on the line of credit in May 1984; that several other requests for draws on the remainder of the line of credit were made by plaintiff but were rejected by defendant; that the commitment was to remain in full force for one year from the date of acceptance, November 10, 1983; that on October 22, 1984, plaintiff advised defendant that it was in need of a draw of $1,995,000 on the line of credit; that plaintiff, on November 9, 1984, provided defendant "with all documents and materials necessary and required to fund" the loan and performed "all things required to be performed pursuant to the commitment" to obtain the loan; and that defendant failed and refused to fund the loan. Plaintiff then alleges that defendant was unable to meet certain government regulations to be able to fund the entire $3,750,000 commitment; that defendant, knowing of its inability to fund the loan, did not inform plaintiff of this inability; that this failure to advise created a failure of consideration entitling plaintiff to a refund of the commitment fee paid; and that the defendant's failure to fund the latest draw request defeated the entire purpose of the total commitment, damaging plaintiff in the amount of the commitment fee paid.

The letter of commitment purportedly issued by defendant on November 1, 1983, attached as "Exhibit A" to the complaint, indicates, in pertinent part, that defendant agreed to furnish a $3,750,000 line of credit to be used to fund second and third mortgages for plaintiff, that this line of credit would be available for 12 months from the date of acceptance, that plaintiff would pay a $37,500 fee for the 12-month term and an additional $37,000 fee for a once-only 12-month extension of the time period if it chose, that each funding on the line of credit was subject to the submission of an MAI appraisal acceptable to defendant, and that this offer only was open until November 3, 1983. Plaintiff's acceptance of this commitment is purported to be indicated by a letter dated November 4, 1983, written to a mortgage company by defendant, attached as "Exhibit B" to the complaint, which included modifications to defendant's offer and an acknowledgement of the $37,500 commitment fee. "Exhibit C" to the complaint is purported to be an acknowledgement of the existence of the line of credit agreement.

Defendant filed a motion to dismiss under section 2-619(a)(9) of the Code of Civil Procedure (Ill. Rev. Stat. 1985, ch. 110, par. 2-619(a)(9)) contending that plaintiff was barred from recovery as it failed to request the funds within the time period provided for in the agreement. Specifically, the motion asserts that the line of credit agreement governing the transaction was entered into on May 9, 1984, that this line of credit was available only until November 1, 1984, that the agreement required a 30-day notice prior to the request for funds, that plaintiff did not give the proper 30-day notice prior to the expiration of the credit period, and that the required documentation was not provided by plaintiff until after the time period had expired. This motion was supported by the affidavit of William Hale. The affidavit asserted that Hale is the in-house counsel for defendant and that the line of credit agreement, attached to the affidavit and dated May 9, 1984, embodied the terms and conditions of the line of credit established for plaintiff by defendant. The form of this agreement does not resemble the agreement attached to plaintiff's complaint.

The trial court granted plaintiff's motion to strike the Hale affidavit and allowed defendant 14 days to file an amended affidavit. The court also set the hearing date on defendant's motion to dismiss for June 3, 1985. On May 21, 1985, defendant filed the amended affidavit of Hale. It was alleged that the facts alleged therein were within his personal knowledge and that the documents attached to the affidavit were business records of defendant kept in the ordinary course of business. Attached to this second Hale affidavit was, again, the "Line of Credit Agreement" along with seven other documents asserted to be business records of defendant which pertained to the credit agreement at issue between plaintiff and defendant.

On May 24, 1985, defendant filed a second section 2 -- 619(a)(9) motion to dismiss contending that, as plaintiff failed to comply with a condition precedent of the letter of commitment requiring plaintiff to submit to defendant an acceptable MAI appraisal of the property for which the funds would be used, the complaint should be dismissed, apparently because the agreement relied upon by plaintiff in the letter of commitment ceased to exist. Attached to this motion was the affidavit of Michael Maslanka, vice-president of the commercial real estate division with defendant and defendant's chief real estate appraiser. Maslanka asserted in the affidavit that the MAI real estate appraisal submitted by plaintiff was rejected in October or November 1984 because the appraisal was premised on incorrect and improper information, including the utilization of the wrong definition of "market value." Also attached was a portion of this appraisal and defendant's definition of "market value."

On the same day, defendant filed a third section 2 -- 619(a) motion to dismiss. This third motion set forth three reasons for the dismissal of the complaint: the failure to attach the entire and relevant documents to the complaint; the omission of language in the letter of commitment attached to the complaint; and the failure to timely forward the necessary documents to defendant to qualify for the funding. No affidavit was attached to this motion although it referred to the documents attached to the Hale affidavit.

On June 3, 1985, plaintiff filed another motion to strike the second Hale affidavit, arguing that it was both conclusory and insufficiently supported with facts to serve as the foundation for submitting the exhibits attached to the affidavit. The trial court heard the arguments of the parties on plaintiff's motion to strike the Hale affidavit followed by arguments on defendant's second motion to dismiss the complaint for failing to comply with a condition precedent of the agreement. Plaintiff appeared to object to proceeding on this motion as it was not the first motion to dismiss filed, but proceeded anyway. The court denied ...

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