Court of Appeals of Illinois, First District, First Division
BENEFICIAL ILLINOIS, INC., d/b/a BENEFICIAL MORTGAGE CO. OF ILLINOIS, Plaintiff-Appellee,
RANDALL PARKER a/k/a RANDALL W. PARKER; MARVELENE PARKER; UNKNOWN OWNERS and NON-RECORD CLAIMANTS, Defendants. (Randall Parker a/k/a Randall W. Parker, Defendant-Appellant).
from the Circuit Court of Cook County No. 09 CH 39557
Honorable Anthony Kyriakopoulos, Judge Presiding.
HARRIS, JUSTICE delivered the judgment of the court, with
opinion. Justices Simon and Mikva concurred in judgment and
1 Defendant-appellant, Randall Parker (hereinafter Randall),
refinanced his home loan mortgage with plaintiff-appellee,
Beneficial Illinois Inc., d/b/a Beneficial Mortgage Company
of Illinois (hereinafter Beneficial), in July 2007. In
October 2008, he stopped making the required payments and
Beneficial instituted a foreclosure proceeding in October
2009. In June 2010, Randall attempted to rescind the mortgage
by mailing a letter to Beneficial. Beneficial never responded
and proceeded with the foreclosure litigation. In September
2010, Randall filed a counterclaim and affirmative defenses.
After briefing, the circuit court dismissed the counterclaims
and affirmative defenses as untimely. Eventually, Beneficial
voluntarily dismissed its foreclosure proceeding and Randall
now appeals the dismissal of his affirmative defense and
2 For the following reasons, we agree that Randall properly
invoked the rescission mechanism when he sent Beneficial the
rescission letter. We also reverse the dismissal of
Randall's counterclaim related to Beneficial's
failure to honor the rescission letter. However, his
counterclaim related to Beneficial's failure to disclose
certain information when the loan closed is time barred.
4 Beneficial filed this foreclosure action on October 15,
2009. On September 1, 2010, Randall filed an answer,
affirmative defense, and counterclaims. On September 5, 2014,
the circuit court granted Beneficial's motion to dismiss
Randall's affirmative defense and counterclaims. On
December 15, 2015, the circuit court granted Beneficial's
motion to voluntarily dismiss the foreclosure action.
Thereafter, on January 14, 2016, Randall filed his notice of
appeal. Accordingly, this court has jurisdiction over this
matter pursuant to Article VI, Section 6 of the Illinois
Constitution, and Illinois Supreme Court Rules 301 and 303.
Ill. Const. 1970, art. VI, § 6; Ill. S.Ct. R. 301 (eff.
Feb. 1, 1994); Ill. S.Ct. R. 303 (eff. May 30, 2008).
6 On July 9, 2007, Beneficial made a loan to Randall and his
wife. The loan was secured with a mortgage
against Randall's home. In connection with the loan,
Beneficial tendered to Randall a Loan Agreement outlining the
terms of the loan. Based on the terms of the loan, Randall
was required to start making payments on August 9, 2007.
7 The Loan Agreement contained a Truth In Lending Disclosure
(TILD). The TILD disclosed estimated terms of the loan,
including the finance charges, total number of payments, and
when payments are due. In October 2008, Randall and his wife
failed to make the required loan payment as set forth in the
Loan Agreement. Thereafter, on October 15, 2009, Beneficial
filed a foreclosure action seeking to foreclose on
8 On June 16, 2010, Randall, through counsel, wrote to
Beneficial to provide notice that Randall elected to rescind
the Loan Agreement. The letter requested that Beneficial
acknowledge Randall's right to rescission as required by
the Truth in Lending Act (TILA) (15 U.S.C. § 1601 et
seq. (2012)). The letter also requested that Beneficial
provide Randall with a loan history so he could determine
what amount he might have to repay. Beneficial did not
respond to Randall's rescission notice and continued to
proceed with the foreclosure proceeding. On September 1,
2010, Randall filed an answer, an affirmative defense, and
two counterclaims against Beneficial. In his affirmative
defense, Randall argued that he timely delivered a letter
rescinding the Loan Agreement, thereby extinguishing the
mortgage. In addition, his counterclaims sought actual and
statutory damages for Beneficial's failure to honor the
rescission and for making improper disclosures when the loan
9 Beneficial eventually filed a motion to dismiss both the
affirmative defense and the counterclaims. Beneficial argued
that all of the claims were time barred by TILA's three
year statute of repose. Additionally, Beneficial argued that
the two counterclaims were barred by TILA's one year
statute of limitations. After briefing, the circuit court
agreed with Beneficial and found the affirmative defense and
counterclaims time barred. Specifically, the circuit court
found Randall's failure to file a court action seeking
rescission within three years of the loan being made barred
his rescission affirmative defense. The court also found
Randall's damage counterclaim based on misleading
disclosures was also time barred. The circuit court did not
specifically rule on the counterclaim related to failing to
respond to the rescission letter.
10 The foreclosure proceeding continued until Beneficial
voluntarily agreed to dismiss the foreclosure action on
December 15, 2015. Randall filed a notice of ...