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04/27/89 Community Convalescent v. First Interstate Mortgage

April 27, 1989




Before addressing the issues raised by plaintiff, we first consider defendants' contention that the trial court's interpretation of the note is irrelevant since plaintiff voluntarily paid the sum, and, under Illinois Merchants Trust Co. v. Harvey (1929), 335 Ill. 284, plaintiff cannot recover. Defendants also cite Kanter & Eisenberg v. Madison Associates (1987), 116 Ill. 2d 506, 512, for the proposition that under the voluntary-payment doctrine, any payment made with knowledge of the relevant facts cannot be recovered unless the payment was made under duress or compulsion.


537 N.E.2d 1162, 181 Ill. App. 3d 996, 130 Ill. Dec. 833 1989.IL.615

Appeal from the Circuit Court of Du Page County; the Hon. Anthony M. Peccarelli, Judge, presiding.


JUSTICE INGLIS delivered the opinion of the court. UNVERZAGT, P.J., concurs. JUSTICE REINHARD, Dissenting.


Plaintiff, Community Convalescent Center of Naperville, Inc., appeals from the order of the circuit court granting summary judgment in favor of defendants, First Interstate Mortgage Company of Illinois (First Interstate), Household Bank, Cragin Federal Savings and Loan Association (Cragin), Regency Savings Bank (Regency), Olympic Federal Savings and Loan Association (Olympic), Gibson Federal Savings and Loan Association (Gibson), and Champion Federal Savings and Loan Association (Champion). The issue raised on appeal is whether the court erred in finding that plaintiff was not entitled to recover for 30 days' interest it paid under an installment note and mortgage. We reverse and remand this cause for further proceedings.

On April 15, 1981, the parties entered into an agreement for an installment note and mortgage to plaintiff in the sum of $2,036,379.90. First Interstate acted as the collection agent for defendants. Under the terms of the note, plaintiff was entitled to prepay the balance due at any time on 30 days' prior written notice to defendants. The note further provided that plaintiff would be required to pay 90 days' interest if it exercised its right to prepay the note.

Prior to May 2, 1986, plaintiff orally notified defendants that plaintiff was exercising its right to prepay the balance. On May 2, 1986, plaintiff requested a payoff letter to memorialize the payment. On or about May 5, 1986, plaintiff received the payoff letter from First Interstate stating the amount required for payment in full of the loan. That letter included a prepayment penalty of 120 days' interest on the balance due on the note. On May 6, 1986, plaintiff notified First Interstate that it objected to the amount represented as prepayment penalty and was therefore paying the entire amount requested by defendants under protest. Plaintiff paid the entire amount on that date.

Plaintiff filed suit in the circuit court of Du Page County seeking return of 30 days' interest, which amounted to $19,924.50. Defendants answered, and the parties subsequently made oral motions for summary judgment. Plaintiff argued that the note provided for only 90 days' interest as a condition of prepayment while defendants charged plaintiff 120 days' interest. Plaintiff also argued that defendants' acceptance of the prepayment constituted a waiver of their right to require 30 days' written notice. Defendants responded that they were entitled to the additional 30 days' interest on the basis that had plaintiff given 30 days' written notice as required by the note, defendants would have collected the interest accrued on the note during that 30 days. Defendants argued that they should not suffer any loss as a result of plaintiff breaching the contract by violating the notice provision. Defendants also argued that plaintiff could not recover because it voluntarily paid the sum.

In its letter of opinion, the trial court found that the note was unambiguous and, for the privilege of prepaying the entire note at any time, plaintiff was "required to give 30 days notice and pay 90 days interest; therefore, Defendants were entitled as their part of the bargain to 120 days interest." The trial court entered an order granting defendants' motion for summary judgment, and plaintiff brought this timely appeal.

Initially, we note that the brief of defendants First Interstate, Household Bank, Olympic, Gibson, and Champion is not in conformity with Supreme Court Rule 341(e)(7) in that it is devoid of any citation to the record. (See 113 Ill. 2d R. 341(e)(7).) This court is distressed by the increased frequency with which our supreme court rules have been ignored. We note these violations of our supreme court rules as part of an on-going process to alert the bar that future violations will be met with appropriate sanctions.

This cause was disposed of in defendants' favor on cross-motions for summary judgment. Summary judgment should be granted only when the pleadings, depositions, admissions on file, and affidavits present no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. (Ill. Rev. Stat. 1987, ch. 110, par. 2-1005(c).) Summary judgment is an expeditious method of disposing of a lawsuit and should only be granted when the right of the moving party is clear and free from doubt. Kelman v. University of Chicago (1988), 166 Ill. App. 3d 137, 141.

Defendants' reliance on Kanter and Illinois Merchants Trust Co. is misplaced. In Kanter, the court stated that "there [was] no reason to extend the concept of voluntariness, as the court in Illinois Merchants apparently did, to encompass any payment not preceded by a formalistic demand for equitable relief." (Kanter, 116 Ill. 2d at 514.) Thus, the court in Kanter recognized that involuntariness was a broader concept than the Illinois Merchants Trust Co. court held it to be. Indeed, our supreme court has stated that "protest is the best evidence of an unwillingness to pay" and therefore "precludes a finding of voluntariness, which is a prerequisite to the application of [the voluntary-payment] doctrine." (Isenstein v. ...

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