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5510 Sheridan Road Condominium Association v. U.S. Bank

Court of Appeals of Illinois, First District, Sixth Division

March 31, 2017

5510 SHERIDAN ROAD CONDOMINIUM ASSOCIATION, Plaintiff-Appellee,
v.
U.S. BANK, Defendant-Appellant.

         Appeal from the Circuit Court of Cook County. No. 15 M1 702180 Honorable Martin Paul Moltz, Judge Presiding.

          JUSTICE DELORT delivered the judgment of the court, with opinion. Presiding Justice Hoffman and Justice Rochford concurred in the judgment.

          OPINION

          DELORT, JUSTICE

         ¶ 1 After defendant U.S. Bank acquired a condominium unit through a foreclosure sale, plaintiff 5510 Sheridan Road Condominium Association (association) filed this lawsuit against U.S. Bank pursuant to the Forcible Entry and Detainer Act (FED Act) (735 ILCS 5/9-101 et seq. (West 2014)) seeking possession of the unit, pre-sale common expenses, and attorney fees. The association's theory of recovery was that payments U.S. Bank remitted to the association for post-sale common expenses months after the foreclosure sale were untimely under section 9(g)(3) of the Condominium Property Act (Act) (765 ILCS 605/9(g)(3) (West 2014)) and thus did not extinguish the association's lien for pre-sale expenses. The circuit court agreed and granted summary judgment to the association and an order of possession which included a judgment for unpaid pre-sale expenses. We reverse those orders and enter summary judgment in favor of U.S. Bank.

         ¶ 2 BACKGROUND

         ¶ 3 The following facts are drawn from the pleadings and motions contained in the record, and a joint stipulation which the parties submitted to the circuit court at the summary judgment stage. On February 23, 2012, defendant U.S. Bank sued Thomas and Marilyn Hoffman to foreclose on the bank's mortgage encumbering the Hoffmans' interest in a condominium unit at 5510 North Sheridan Road in Chicago. U.S. Bank National Association, as Trustee for the Certificate Holders of the LXS 2007-15N Trust Fund v. Hoffman, 2012 CH 6382 (Cir. Ct. Cook. Co.). The association was named as a defendant in the foreclosure case but never appeared. On June 14, 2012, the court entered a judgment of foreclosure and sale and defaulted the association.

         ¶ 4 On December 26, 2012, before the property was sold pursuant to the foreclosure court's order, the association sued the Hoffmans pursuant to the FED Act. 5510 North Sheridan Road Condominium Association v. Hoffman, 2012 M1 731922 (Cir. Ct. Cook. Co.). On April 17, 2013, the court hearing that case entered an order of possession in favor of the association.

         ¶ 5 Pursuant to the foreclosure court's order, the unit was set for a judicial sale to be held on May 27, 2014. U.S. Bank was the successful bidder. On June 25, 2014, notwithstanding the forcible entry and detainer court's April 17, 2013 possession order in favor of the association, the foreclosure court confirmed the sale and granted possession to U.S. Bank. U.S. Bank acquired title to the property on July 3, 2014 through a deed issued pursuant to the foreclosure court's confirmation order.

         ¶ 6 On October 31, 2014, the association transmitted a 30-day notice to U.S. Bank, claiming that the bank was "in default in the payment of [its] proportionate share of the common expenses." The association demanded payment of $81, 400.35, which included, among other things, regular and special assessments, parking fees, and late fees which had accrued from October 1, 2012 through October 1, 2014. In January 2015, U.S. Bank paid $14, 968.76 to the association, representing only the post-sale expenses that had accrued from August 2014 to January 2015.

         ¶ 7 On January 30, 2015, the association filed this lawsuit under the FED Act demanding payment from U.S. Bank for the pre-foreclosure sale common expenses for the unit which were in arrears and for possession. The association's theory of recovery was that its "lien for all past due assessments has not been extinguished and remain[ed] valid" because U.S. Bank "failed to [timely] pay the condominium association assessments, parking fees, late fees and other charges the month after the date of the judicial foreclosure sale" as required by section 9(g)(3) of the Act.

         ¶ 8 On July 24, 2015, U.S. Bank and the association filed cross-motions for summary judgment. In its motion, U.S. Bank argued that section 9(g)(3) did not contain a timing requirement and that its January 2015 payment for post-sale expenses therefore extinguished the association's lien against the unit for pre-sale expenses. The association, in contrast, insisted that section 9(g)(3) did contain a timing requirement with which U.S. Bank failed to comply. As a result, the association reasoned, U.S. Bank's January 2015 payment did not extinguish the association's lien. The association claimed that U.S. Bank owed it $94, 873.79, consisting of: (1) $48, 308.17 for pre-sale expenses from October 2012 through May 2014, (2) $25, 816.88 for post-sale expenses from June 2014 through September 2015, (3) $11, 980.06 for a 2014 special assessment, (4) $6, 253.28 for a 2014 special assessment, and (5) $2, 515.40 for legal fees.

         ¶ 9 On September 11, 2015, U.S. Bank transmitted two checks to the association for $24, 989.60 and $827.28. The checks were accompanied by a letter from U.S. Bank's counsel stating that they were being "tendered as payment in full of all outstanding amounts due for the Unit from June 2014 through and including September 2015."

         ¶ 10 In its response in opposition to U.S. Bank's motion for summary judgment, the association argued that the September 2015 payments did not extinguish its lien for pre-sale expenses because U.S. Bank made them in "bad faith." By contrast, in its response in opposition to the association's motion for summary judgment, U.S. Bank argued that the association's lien for pre-sale expenses had been extinguished by the January and September 2015 payments. In its reply in support of its motion for summary judgment, the association acknowledged U.S. Bank's January and September 2015 payments, but contended they were "partial payments."

         ¶ 11 On December 28, 2015, the circuit court entered two orders. The first order: (1) granted the association's motion for summary judgment, (2) denied U.S. Bank's motion for summary judgment, and (3) granted the association leave to file a petition for attorney fees. The second was an order for possession which awarded the association possession of the unit (stayed for three months) and $73, 364.55 representing damages for unpaid pre-sale and post-sale common expenses. On January 8, 2016, the association ...


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