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April 3, 1997


Appeal from the Circuit Court of Lake County. No. 95--CH--668. Honorable Jack Hoogasian, Judge, Presiding.

Rehearing Denied May 2, 1997. Released for Publication May 2, 1997.

The Honorable Justice McLAREN delivered the opinion of the court. Bowman and Thomas, JJ., concur.

The opinion of the court was delivered by: Mclaren

JUSTICE McLAREN delivered the opinion of the court:

Plaintiff, Diana L. Rumford (f/k/a Diana L. Leonard), filed a two-count amended complaint against defendant, Countrywide Funding Corporation, alleging breach of contract and violation of the Consumer Fraud and Deceptive Business Practices Act (the Act) (815 ILCS 505/1 et seq. (West 1994)). The parties filed cross-motions for summary judgment. Following a hearing, the court granted defendant's motion. Plaintiff appeals, and we reverse and remand.

Plaintiff filed her amended complaint as a class action on behalf of herself and all others similarly situated. She defined the class as all people who entered into mortgage contracts with defendant, whereby defendant agreed under the terms of the contracts to release the mortgage instruments without charge when the mortgages were paid off, but then imposed an additional charge at the time the mortgages were released.

In her amended complaint, plaintiff alleged that she entered into a mortgage contract with defendant. Plaintiff provided security to defendant for the repayment of a $30,000 note. Paragraph 21 of the mortgage contract provided "Upon payment of all sums secured by this Security Instrument, Lender shall release this Security Instrument without charge to Borrower. Borrower shall pay any recordation costs." On or about November 22, 1993, defendant sent a letter, entitled "STATEMENT OF ACCOUNT FOR PAYMENT IN FULL," (hereinafter account statement or payoff letter) to plaintiff's attorney. Plaintiff attached the payoff letter and the contract to the complaint. In addition to the outstanding principal balance and interest, the payoff letter included a $50 "reconveyance/statement fee" and a $15 "prepayment penalty/other" charge. These amounts were included in the balance of $26,786.21 needed to pay the account in full. Plaintiff paid the total amount due, including the $50 and $15 fees, and obtained a release deed from the defendant.

Count I of the amended complaint alleged breach of contract. Plaintiff alleged that she performed all of the terms and conditions of the mortgage contract, but that defendant breached the contract by charging fees in violation of the contract's express terms. Count II alleged a violation of section 2 of the Act (815 ILCS 505/2 (West 1994)), which declares as unlawful:

"Unfair methods of competition and unfair or deceptive acts or practices, including but not limited to the use or employment of any deception, fraud, false pretense, false promise, misrepresentation or the concealment, suppression or omission of any material fact, with intent that others rely upon the concealment, suppression or omission of such material fact ***." 815 ILCS 505/2 (West 1994).

Defendant moved for summary judgment, relying on the affidavit of one of its first vice-presidents, Rick Wilson. The gist of the motion was that only fees for releasing the mortgage were prohibited, and the fees defendant assessed plaintiff were not for releasing the mortgage. Wilson stated in his affidavit that he has worked in defendant's remittance processing division since February 1992 and has been in the mortgage business for 23 years. Wilson had personal knowledge of defendant's policies with respect to providing account statements to customers. Wilson stated that defendant accepts account statement requests from its customers or its customers' agents. When defendant receives such a request, it generates an account statement by computer. Defendant also updates the customer's file and provides the customer with an amended statement if any changes occur that would affect the amount listed in the original statement.

Wilson further stated that defendant charges its customers $50 for processing the request for an account statement. The charge is intended to compensate defendant for providing an amended statement when necessary. Defendant bills its customers for this service by including the $50 fee on the account statement. Defendant will send the statement to the customer by facsimile if the customer so requests. The fee for doing so is $15. According to Wilson, defendant informs the individual requesting the statement that there is an additional charge for receiving the statement by facsimile and so informed plaintiff's attorney when she requested the account statement.

Wilson's affidavit further stated that defendant releases a customer's mortgage when the principal and interest are paid in full. If a customer pays the principal and interest, but not the $50 and $15 fees, defendant will still release the mortgage even though the customer remains liable for the fees. On hundreds of occasions, defendant has released mortgages when a customer who is liable for statement and facsimile fees did not pay those fees. According to Wilson, plaintiff's attorney requested the account statement. Defendant charged plaintiff $50 for processing the statement request and $15 to send it by facsimile. Plaintiff never asked defendant to release her mortgage without payment of the fees. If she would have paid principal and interest only, defendant would have released the mortgage, but plaintiff still would have been liable for the fees.

In response, plaintiff also moved for summary judgment. In her supporting memorandum, plaintiff reiterated the allegations of her complaint regarding the language of the contract and the payoff letter. She attached the payoff letter to her memorandum. Plaintiff argued that defendant was now trying to rewrite the payoff letter by stating that a "reconveyance/statement fee" is a fee for processing a request for an account statement and that a "prepayment penalty/other" is a facsimile fee. Plaintiff further argued that the explanation for the charges is irrelevant because the contract provides that the mortgage is to be released without charge to the borrower. With respect to Wilson's statement that a mortgage would be released upon payment of only principal and interest, plaintiff pointed out that such an assertion was not made in the payoff letter and that defendant included the charges in the amount necessary to pay the account in full.

Defendant filed a reply in which it argued that Wilson's affidavit was uncontroverted and refuted the allegations of the complaint. Defendant argued that plaintiff was not charged for the release of her mortgage. Defendant further argued that payment of plaintiff's note was to be made in California and that California law allows a mortgagee to charge a fee, not to exceed $60, for an account statement. In support, defendant filed a supplemental affidavit of Rick Wilson. In the affidavit, Wilson states that a customer may find out an account balance by speaking to a customer service agent, by using defendant's automated balance service, by referring to the quarterly report that summarizes the account status, or by requesting an ...

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