Appeal from the Circuit Court of Cook County No. 05 M1 723028; No. 06 CH 12045 ;No. 06 CH 14953 Honorable Daniel A. Riley Judge Presiding
The opinion of the court was delivered by: Justice Murphy
JUSTICE MURPHY delivered the opinion of the court: This appeal
involves the resolution of three consolidated actions concerning real
property located at 7941 South Laflin Street, Chicago, Illinois
(Laflin property). Defendant Shamekia Kimbrough filed a forcible
detainer action against plaintiff, Marilyn Gandy, on September 23,
2005, seeking possession of the Laflin property and payment of $782 in
rent. On June 19, 2006, Gandy sought to quiet title to the Laflin
property in her name. Gandy also sought other relief
based on claims of unconscionability and unjust
enrichment. Gandy included Kimbrough, Salaam Ghafir, American Home
Loan, Mark Mitchell, attorney Gregory Wilson, and Tristar Title as
On July 26, 2006, WM Specialty Mortgage, LLC, assignee of Argent Mortgage Company, LLC, filed the third suit involved in this case. WM Specialty Mortgage filed a complaint to foreclose the mortgage on the Laflin property against Gandy, Kimbrough, Kimbrough's husband Moses Smith III, and Specialized Loan Servicing, LLC. On August 30, 2006, Gandy's motion to consolidate the three actions was granted and the consolidated action was heard in the chancery division of the circuit court of Cook County.
Following discovery, Gandy and Kimbrough filed cross-motions for summary judgment. The trial court denied Kimbrough's motion and granted Gandy's motion. The court found that Kimbrough was not a bona fide good-faith purchaser for value of the Laflin property and that an equitable mortgage existed between Gandy and Ghafir. A comprehensive order was prepared by the parties and entered on January 11, 2010, and a judicial deed was issued conveying the Laflin property to Gandy.
On appeal, Kimbrough argues that the trial court erred in finding that she was not a bona fide purchaser for value and she should take title to the Laflin property free and clear of any equitable interests claimed by Gandy. Kimbrough also contends that the trial court erred in finding there was no genuine issue of material fact concerning the conveyance from Gandy to Ghafir and whether that transaction constituted an equitable mortgage or an actual conveyance of the Laflin property. Defendants WM Specialty Mortgage, LLC, Argent Mortgage Company,
LLC, and Chase Home Finance, collectively the mortgagee, also sought reversal of the trial court's order and adopted Kimbrough's arguments and brief. For the following reasons, we affirm the findings of the trial court.
1. Kimbrough's Forcible Use and Detainer Action Kimbrough filed her forcible use and detainer action against Gandy, seeking to evict Gandy from the Laflin property and recover $782 in unpaid rent on September 23, 2005. Following Gandy's appearance and jury demand, Kimbrough filed a motion for use and occupancy. Kimbrough asserted that she was the owner of the Laflin property and Gandy had been occupying the property without paying rent. Attached to the motion were an affidavit completed by Kimbrough and a letter sent to Gandy on August 29, 2005, indicating that rent would be $1,300 per month and that her alleged right to possession of the Laflin property was based on an invalid agreement with Ghafir.
In response, on January 23, 2006, Gandy filed a motion demanding strict proof and alleging that her right to possession and claimed prepaid rent were pursuant to a written lease. In support, Gandy attached a copy of her lease with Ghafir. She also attached a copy of a cashier's check payable to Ghafir on her behalf for $18,400, the amount she claimed was for two years' prepaid rent at $750 a month. Based on this information, Gandy also filed a motion to dismiss Kimbrough's complaint.
Attached to her response to the motion to dismiss, Kimbrough provided
a copy of the
warranty deed for the Laflin property entered between
her and Ghafir. The trial court denied the motion to dismiss and
granted the motion for use and occupancy, ordering Gandy to pay
Kimbrough rent during the pendency of the action. On June 19, 2006,
Gandy filed a motion to reconsider that order alleging that she
believed she was the victim of fraud and attaching a copy of her quiet
title action. Gandy also sought consolidation of the two causes of
action both in her motion for reconsideration and in a separate motion
to consolidate on August 1, 2006, which was granted on August 30,
2006, with the actions being further consolidated with the foreclosure
action in January 2007.
2. Plaintiff's Quiet Title Action
On June 19, 2006, Gandy filed her action to quiet title to the Laflin property. Gandy alleged that she was the sole legal titleholder of the Laflin property based on her deed recorded in 2001 when she inherited the property from her father free of any mortgage. A former employee of American Home Loans and friends with current employees there, Gandy sought financing to pay for home improvements. Mark Mitchell, a senior loan officer, told Gandy that she did not have sufficient credit, but provided a surrogate buyer, Ghafir, who would secure a mortgage for the home in return for cash payment and rent.
Gandy claimed that attorney Gregory Wilson accompanied her to First
American Title Company on July 26, 2004, to complete what she thought
was a refinancing of her home. Ghafir secured a $76,500 mortgage from
American Home Loans on that date. Gandy alleged that she entered into
an option to repurchase the home from Ghafir and had entered into a
lease with Ghafir to remain in the home. However, in September 2005,
Kimbrough sought rent payments
from Gandy as the alleged new owner of the Laflin
Gandy sought to quiet title against Kimbrough, Ghafir and any other claimants, claiming that the deed transfer to Ghafir should be considered an equitable mortgage and not a formal conveyance of real property. Gandy also claimed that the deed transfer from Ghafir to Kimbrough should be voided based on unconscionability. Gandy alleged that Ghafir was aware of Gandy's continued presence in the building and that he knew of the limited nature of the interest he held as well as the fact her interest in the property would be clearly evident if the sophisticated parties and brokers conducted basic research. She also asserted that the discrepancy in the terms of the agreements between her arrangement and that of Ghafir and Kimbrough demonstrated that she was given a highly disadvantageous equitable loan. Gandy's third claim was for unjust enrichment based on the realization of great benefits based on the discrepancies in values.
3. WM Specialty Mortgage, LLC's Foreclosure Action On July 26, 2006, WM Specialty Mortgage filed its foreclosure action against Kimbrough, Gandy, and others. It alleged that Kimbrough and her husband executed a mortgage to WM Specialty Mortgage as assignee of Argent Mortgage Company, in the sum of $136,000 on August 22, 2005. The complaint further alleged that on April 1, 2006, the Kimbroughs defaulted on the mortgage and $138,749.39 was due WM Specialty Mortgage.
At some point during litigation, American Home Loans ceased
operations, reportedly without any assets. It was not made a party to
the action. Further, neither Mitchell nor Price
could be located to be served and deposed. Therefore,
there is no evidence of record from American Home Loans or its
employees involved in the transaction other than the testimony of the
parties and the loan and sale documents.
Gandy testified that she was born and reared in the Laflin property and lived there most of her life. She had lived there since 2002 after she inherited it from her father. While there was no mortgage on the Laflin property, Gandy talked with Donald Price and Mark Mitchell of American Home Loans about refinancing so that she could renovate her kitchen and bathroom. Gandy had worked for American Home Loans for approximately three months the prior year and Price was recommended by her friend Renee Riggins, who worked at American Home Loans. Price and Mitchell informed her that her credit was not sufficient to qualify for financing, but they could set up a surrogate buyer transaction to achieve her funding goal.
Under this plan Gandy sold the Laflin property to Ghafir on July 26, 2004, for approximately $71,000. Gandy testified that she used $13,000 to pay off a debt to her credit union and $7,000 for consumer debt. She paid home owner's insurance of $864 and renter's insurance of $250 for a year. Gandy understood that rent to be paid Ghafir would be $750 a month and she gave Ghafir a check for $18,400 for prepayment of two years' rent and an additional check for $4,500 for what Ghafir called mortgage payments. Gandy testified that this left her with approximately $20,000 from the transaction.
Gandy testified that Wilson was not her attorney but was assigned to work on the transaction by Price. Gandy identified the warranty deed and lease agreement executed by her and Ghafir. Gandy testified that she did not understand the transaction to be the actual sale of the Laflin property. She stated that she executed the documents because she believed she was entering a financing arrangement and did ...