The opinion of the court was delivered by: Samuel Der-yeghiayan, District Judge
This matter is before the court on Plaintiff MB Financial Bank N.A.'s (MB) motion for summary judgment. For the reasons stated below, the court grants MB's motion for summary judgment.
MB alleges that Defendant Sanjay Patel (Patel) is the controlling member of Hiren, LLC (Hiren), and that Hiren is currently in the midst of bankruptcy proceedings. MB also alleges that Broadway Bank made a $7,700,000.00 loan (Loan) to Patel and Hiren as co-borrowers who were jointly and severally liable for the debt pursuant to two mortgage notes (Notes). MB alleges that the Notes were later modified and that sometime thereafter, MB became the legal holder of the Notes, as modified, through an assignment.
In addition, MB alleges that the Notes, as modified, provide that if Patel failed to make any payments when due, any unpaid principal and any accumulated interest would "become immediately due and payable without notice or demand . . . and bear interest at the Default Rate." (Compl. Par. 11). MB further alleges that Patel is in default on the Notes because Patel failed to make the required monthly payment on February 1, 2010, and has not made any payments thereafter. MB allegedly notified Patel of the default and demanded payment on the Notes, but Patel has allegedly refused to pay the amount owed on the Notes. MB includes in its complaint breach of contract claims relating to the Notes, as modified. MB has moved for summary judgment on its claims.
Summary judgment is appropriate when the record, viewed in the light most favorable to the non-moving party, reveals that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Smith v. Hope School, 560 F.3d 694, 699 (7th Cir. 2009). A "genuine issue" in the context of a motion for summary judgment is not simply a "metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, a genuine issue of material fact exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Insolia v. Philip Morris, Inc., 216 F.3d 596, 599 (7th Cir. 2000). In ruling on a motion for summary judgment, the court must consider the record as a whole, in a light most favorable to the non-moving party, and draw all reasonable inferences in favor of the non-moving party. Anderson, 477 U.S. at 255; Bay v. Cassens Transport Co., 212 F.3d 969, 972 (7th Cir. 2000).
Patel argues that MB's motion for summary judgment should be denied, contending that there are genuine issues of material fact regarding whether the modifications to the Notes (Modifications) extinguished his individual obligation to re-pay the Loan, and regarding the amount of money currently owed under the Notes. As evidence, Patel has offered an affidavit signed by him, which indicates that he had an oral agreement with the bank releasing him from liability under the Notes and that his signature as "President" on the Modifications was meant to give effect to the oral agreement. (Patel Aff. Par. 3-7, 9-11).
I. Effect of Modifications
Patel argues that there is a genuine issue of material fact regarding whether the
Modifications released Patel from his individual obligations under the Notes. MB contends that Patel has waived the affirmative defense of release, that such defense is precluded by the Illinois Credit Agreements Act (ICAA), 815 ILCS 160/1 et seq., and that the Modifications clearly do not release Patel from his individual obligation to repay the Loan.
A. Whether Release Has Been Waived as a Defense
MB argues that Patel cannot assert the affirmative defense of release for the first time in response to MB's motion for summary judgment. Pursuant to Federal Rule of Civil Procedure 8(c) (Rule 8(c)), "a party must affirmatively state any avoidance or affirmative defense, including . . . release," in responding to a pleading. Fed R. Civ P. 8(c). The purpose of Rule 8(c) "is to avoid surprise and undue prejudice to the plaintiff by providing [the plaintiff] notice and the opportunity to demonstrate why the defense should not prevail." Venters v. City of Delphi,123 F.3d 956, 967 (7th Cir. 1997). If a defendant ...