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Pembrook Condominium Association-One v. North Shore Trust & Savings

Court of Appeals of Illinois, Second District

December 17, 2013

NORTH SHORE TRUST AND SAVINGS, Defendant-Appellee Jeffrey Powell, Betty Jo Powell, and Unknown Occupants, Defendants.

Appeal from the Circuit Court of Lake County. No. 12-LM-2638, Honorable Michael B. Betar, Judge, Presiding.

Justices McLaren and Schostok concurred in the judgment and opinion.



¶ 1 Plaintiff, Pembrook Condominium Association-One, appeals a judgment granting in part the motion of defendant North Shore Trust & Savings (North Shore) to dismiss plaintiff's complaint (see 735 ILCS 5/2-619(a)(9) (West 2012)) in forcible entry and detainer (see 735 ILCS 5/9-101 et seq. (West 2012)). The complaint sought possession of a condominium unit and the collection of overdue condominium association charges that the owner had incurred before North Shore foreclosed its first mortgage and purchased the unit at a sheriff's sale. Plaintiff argues that the trial court erred in holding that its lien under section 9 of the Condominium Property Act (Act) (765 ILCS 605/9 (West 2012)) was unenforceable. We affirm.

¶ 2 Plaintiff's complaint, filed November 27, 2012, sought possession of a condominium unit in Gurnee. North Shore moved to dismiss the complaint, stating that in 2007 North Shore obtained a first mortgage against the property by lending to the owner, Aimee Zeit. At that time, no other liens had been recorded against the property. On July 26, 2011, North Shore filed a complaint to foreclose its mortgage, naming as defendants Zeit and "Unknown Owners or Parties Interested in or in Actual Possession of Said Land or Lots" (Other Defendants). On July 27, 2011, plaintiff recorded a claim for a lien, against Zeit, based on $1, 607.55 in unpaid association charges. On August 2, 9, and 16, 2011, a newspaper published a notice of the foreclosure action, directed to the Other Defendants.

¶ 3 North Shore's motion alleged further that on October 7, 2011, North Shore received a judgment of foreclosure finding that Zeit owed North Shore $114, 582.19 in principal and interest. On April 13, 2012, at the sheriff's sale, North Shore bought the property for $119, 751.65, and the trial court confirmed the sale and granted North Shore possession. On April 17, 2012, a deed was recorded conveying the property to North Shore. On August 30, 2012, plaintiff recorded another claim for a lien, for $7, 412.22 in association charges, for March 2010 through July 2012, plus any subsequent charges. North Shore sent plaintiff checks for the May, June, and July 2012 association charges, but plaintiff refused them. From August 2012 on, plaintiff accepted North Shore's payments.

¶ 4 North Shore argued in part that plaintiff's complaint was defeated by section 9(g)(3) of the Act (765 ILCS 605/9(g)(3) (West 2012)). Because section 9(g)(1) of the Act (765 ILCS 605/9(g)(1) (West 2012)) is the basis for the lien, we set out the pertinent parts of both sections 9(g)(1) and 9(g)(3). They read:

"(1) If any unit owner shall fail or refuse to make any payment of the common expenses or the amount of any unpaid fine when due, the amount thereof together with any interest, late charges, reasonable attorney fees incurred in enforcing the covenants of the condominium instruments *** and costs of collections shall constitute a lien on the interest of the unit owner in the property prior to all other liens and encumbrances, recorded or unrecorded, except only *** (b) encumbrances on the interest of the unit owner recorded prior to the date of such failure or refusal which by law would be a lien thereon prior to subsequently recorded encumbrances. Any action brought to extinguish the lien of the association shall include the association as a party.
(3) The purchaser of a condominium unit at a judicial foreclosure sale *** shall have the duty to pay the unit's proportionate share of the common expenses for the unit assessed from and after the first day of the month after the date of the judicial foreclosure sale ***. Such payment confirms the extinguishment of any lien created pursuant to paragraph (1) *** of this subsection (g) by virtue of the failure or refusal of a prior unit owner to make payment of common expenses, where the judicial foreclosure sale has been confirmed by order of the court ***." 765 ILCS 605/9(g)(1)(b), (g)(3) (West 2012).

According to North Shore, plaintiff's acceptance of its checks for association charges, after the trial court had confirmed the foreclosure sale, confirmed the extinguishment of any lien that plaintiff had had before April 13, 2012. North Shore also argued generally that nothing enabled plaintiff to obtain from North Shore charges that had been owing before the foreclosure was complete—and thus before North Shore had obtained either possession of or title to the property.

¶ 5 Further, North Shore contended, plaintiff's action was defeated by article 6.10 of the condominium declaration. For clarity, we quote both paragraphs 1 and 10 of article 6:

"6.01 *** The Developer, for each Unit Ownership hereby covenants, and each Owner of a Unit Ownership by acceptance of a deed therefor *** hereby agrees to pay to the Residential Association such assessments or other charges or payments as are levied pursuant to this Declaration. Such assessments, *** together with interest thereon and costs of collection, if any, as herein provided, shall be a charge on the Unit Ownership and shall be a continuing lien upon the Unit Ownership against which each such assessment is made. Each such assessment, *** together with such interests and costs, shall also be the personal obligation of the Owner of such Unit Ownership at the time when the assessment *** becomes due.
* * * 6.10 *** The lien on each Unit Ownership *** for assessments *** shall be subordinate to the lien of any first mortgage on the Unit Ownership recorded prior to the date that any such assessments or other charges or payments become due. Except as hereinafter provided, the lien provided for in Section 6.01 shall not be affected by any transfer of title to the Unit Ownership. Where title to the Unit Ownership is transferred pursuant to a decree of foreclosure ***, such transfer of title shall to the extent permitted by law extinguish the lien for any assessments or other charges or payments under Section 6.01 which became due ...

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