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In-Grid Berg v. Ehome Credit Corp.

January 25, 2012

IN-GRID BERG, PLAINTIFF,
v.
EHOME CREDIT CORP., AND SAXON MORTGAGE SERVICES, INC., DEFENDANTS.



The opinion of the court was delivered by: Judge Sharon Johnson Coleman

MEMORANDUM OPINION AND ORDER

This case comes before the Court on cross motions for summary judgment. The Court heard oral argument on the motions on January 13, 2012. The facts are not in dispute and the sole issue is whether plaintiff In-grid Berg's half interest in property owned by In-grid Berg and her husband Stanley Berg is encumbered by the eHome mortgage. For the reasons stated herein, the Court grants summary judgment in favor of defendant Saxon Mortgage Services Inc.

Background

Although In-grid Berg continues to dispute Saxon's standing, this Court ruled that Saxon had shown sufficient evidence that it is the loan/mortgage servicer of the successor in interest of eHome Credit Corporation. Otherwise, the basic facts are not in dispute.

Stanley and In-grid Berg purchased property in Highland Park, Illinois at a judicial sale on November 10, 2000. The deed was recorded on February 28, 2001. The Bergs executed a mortgage against the property in favor of American Enterprise Bank to secure a $450,000 loan. This loan was refinanced by Stanley Berg through a $470,000 loan from eHome Credit Corp., which was evidenced by a note ("eHome Note"). Stanley Berg is the sole signatory on the eHome Note. The eHome Note was secured by the eHome Mortgage, which is now at issue.

In 2005, Stanley Berg filed for bankruptcy. In-grid Berg did not file for bankruptcy and was not a party to Stanley Berg's bankruptcy proceedings. Judge Schmetterer of the Bankruptcy Court ruled following the adversary proceeding in Stanley Berg's bankruptcy that Stanley Berg's bankruptcy estate held a half-interest of the property and In-grid Berg held the other half interest. With respect to the eHome Mortgage, Judge Schmetterer ruled that Stanley Berg's bankruptcy estate could avoid the lien from the eHome Mortgage because it was not recorded until after Stanley Berg filed his bankruptcy petition. However, Judge Schmetterer did not have jurisdiction to determine whether the eHome Mortgage encumbered In-grid Berg's half-interest in the property. The property was sold under the direction of the Bankruptcy Court and $169,293.10 of the net proceeds (In-grid Berg's half-interest) was deposited with the Clerk of the Court pending resolution of the eHome Mortgage issue.

The parties provided copies of the eHome Mortgage. For purposes of the instant motions, the first page is most important. Under the heading "MORTGAGE" there is type-written language stating: "THIS MORTGAGE ("Security Instrument") is given on July 16, 2004. The mortgagor is STANLEY BERG" underneath which In-grid Berg's name is typed in and is not in all capital letters as is Stanley Berg. Underneath Stanley Berg's and In-grid Berg's names is a handwritten sentence stating "Here by releasing and waiving all rights under and by virtue of the Homestead Exemption Laws of this State," after which is type-written ("Borrower"). In-grid Berg's signature also appears at the end of the document on a line labeled "Borrower" with the same disclaimer as the handwritten sentence on the first page, but here it is typed.

The other provisions worth noting are paragraph 12 and paragraph 23. Paragraph 12 states the following in pertinent part: "Any Borrower who co-signs this Security Instrument but does not execute the Note: (a) is co-signing this Security Instrument only to mortgage, grant and convey that Borrower's interest in the Property under the terms of this Security Instrument; (b) is not personally obligated to pay the sums secured by this Security Instrument; and (c) agrees that Lender and any other Borrower may agree to extend, modify, forbear or make any accommodations with regard to the terms of this Security Instrument or the Note without that Borrower's consent." Paragraph 23 states "Borrower waives all right of homestead exemption in the Property."

Defendant Saxon Mortgage Services Inc. moves for summary judgment asserting that Saxon should be awarded plaintiff In-grid Berg's half the proceeds that were generated from the sale of the property and that are now being held by the Clerk of the Court. At issue is the legal effect of one document, the eHome mortgage that was used to secure the eHome Note signed by plaintiff's husband Stanley Berg. It is undisputed that In-grid Berg is not a party to the eHome Note. Saxon contends however that In-grid Berg is obligated on the eHome mortgage because the first clause of the eHome mortgage document constitutes the definition of "Borrower" and expressly identifies In-grid Berg as a Borrower within the meaning of the contract.

Plaintiff In-grid Berg seeks summary judgment in her favor on the basis that she was not a "Borrower" within the meaning of the eHome mortgage and merely signed the eHome mortgage to waive her homestead rights. In-grid Berg further argues that paragraph 23 already contains a waiver clause for the Borrower and thus she is not a Borrower because that paragraph would be a redundancy. In-grid Berg points out that her name on the first page of the eHome mortgage is in different typeface than Stanley Berg's name. The parties disagree about whether "Borrower" is defined in the eHome mortgage contract and the legal effect of In-grid Berg's signature.

Legal Standard

A party is entitled to summary judgment if all of the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). When considering a summary judgment motion, the Court construes the facts and all reasonable inferences in the light most favorable to the non-moving party. Abdullahi v. City of Madison, 423 F. 3d 763, 773 (7th Cir. 2005). The party who bears the burden of proof on an issue may not rest on the pleadings or mere speculation, but must affirmatively demonstrate that there is a genuine issue of material fact that requires a trial to resolve. Celotex v. Catrett, 477 U.S. 317, 324 (1986). On cross-motions, summary judgment is appropriate only when evidence as a whole shows there is no genuine dispute as to any material fact, Davis v. Time Warner Cable of Southeastern Wis., L.P., 651 F.3d 664, 671 (7th Cir. 2011), regardless to which motion the evidence is attached. Las Vegas Sands, LLC v. Nehme, 632 F.3d 526, 532 (9th Cir. 2011).

Discussion

The parties agree thatIllinois contract law governs this case. "The meaning of a written contract is ordinarily a question of law and not one of fact." Lenzi v. Morkin, 103 Ill. 2d 290, 293, 469 N.E.2d 178 (1984). In the absence of any material questions of fact, the court may independently construe the contract. Ancraft Products Co. v. Universal Oil Products Co., 100 Ill. App. 3d 694, 697-98, 427 N.E.2d 585 (1981); Mazanek v. Rockford Drop Forge Co., 98 Ill. App. 3d 956, 959, 424 N.E.2d 1271(1981). The Court's objective when interpreting a contract is to give effect to the intention of the parties, which must be ascertained by the language utilized in the contract itself and not by construction placed upon it by the parties. Lenzi, 103 Ill. 2d at 293. A contract's meaning must be determined from the words or language used, and a court cannot place a construction on the contract which is contrary to the plain and obvious meaning of the language. Johnstowne Centre Partnership v. Chin, 99 Ill. 2d 284, 287-88, 458 N.E.2d 480 (1983). Extrinsic ...


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