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V&T Investment Corp. v. West Columbia Place Condominium Association

Court of Appeals of Illinois, First District, Sixth Division

May 18, 2018


          Appeal from the Circuit Court of Cook County. No. 14 M1138150, Honorable Diana Rosario, Judge Presiding.

          CONNORS JUSTICE delivered the judgment of the court, with opinion. Justices Cunningham and Delort concurred in the judgment and opinion.



         ¶ 1 Plaintiff V&T Investment Corporation (V&T), a real estate investment company, was the foreclosure sale purchaser of the subject condominium unit located at 1637 West Columbia Avenue in Chicago. Defendant, West Columbia Condominium Association (West Columbia), is the agency in charge of maintaining and administering the common elements of the condominium building, as well as enforcing the covenants and restrictions of the association and collecting and disbursing its assessments. Several months following the foreclosure sale of the subject unit, V&T requested from West Columbia a paid assessment letter. West Columbia issued a paid assessment letter, stating that $7803.97 was due and owing on the account. V&T paid the total amount under protest. V&T then filed a complaint in assumpsit. Both parties filed motions for summary judgment. The trial court denied both motions, but found that section 9(g)(4) of the Condominium Property Act (Act) (765 ILCS 605/9(g)(4) (West 2012)) would apply to the matter at hand. The case then proceeded to trial, where the trial court found in favor of West Columbia. V&T now appeals. For the following reasons, we reverse and remand.

         ¶ 2 BACKGROUND

         ¶ 3 Both parties state in their respective appellate briefs that the facts of this case are not contested. Indicative of this is the bystander's report, which contains an agreed-upon statement of what took place at trial and the trial exhibits deemed necessary for this appeal. However, before we discuss the testimony and evidence presented at trial, a review of the facts leading up to the trial is necessary.

         ¶ 4 On November 12, 2009, West Columbia filed an action against Richard Dresmann, one of its unit owners, based on his failure to pay his share of the common expenses. Thereafter, the unit became subject to a foreclosure action. On October 16, 2013, V&T purchased the subject condominium unit at a judicial foreclosure sale. The sale was confirmed by court order on December 16, 2013, and the deed was issued to V&T on December 31, 2013. On February 6, 2014, V&T tendered its first assessment payments to the association for the months of January and February 2014. In June, V&T was preparing to sell the property, so it requested a paid assessment letter. On June 19, 2014, West Columbia's property manager issued a paid assessment letter to V&T, advising it that a balance of $7803.97 was due and owing. V&T paid the amount under protest so that it could sell the unit unencumbered, but subsequently filed the present action against West Columbia on July 22, 2014, seeking a judgment in the amount of $7803.97.

         ¶ 5 In its complaint in assumpsit, V&T argued that it became responsible for assessments beginning in January 2014 and that it paid all the assessments that became due thereafter. V&T further argued that it was not responsible for any assessments left unpaid by the former owner because West Columbia obtained a judgment from the former owner in the November 2009 action.

         ¶ 6 West Columbia filed affirmative defenses in its answer to V&T's complaint. In its first affirmative defense, based on section 9(g) of the Act, West Columbia stated that it had filed an action on November 12, 2009, based on the failure of the former owner to pay his share of the common expenses. West Columbia stated that on November 15, 2012, the circuit court of Cook County "confirmed the existence of an arrearage regarding the unit owner's proportionate share of common expenses." West Columbia contended that, thereafter, there were no payments made to the account until February 2014. West Columbia argued that after filing an action to collect unpaid assessments, accruing assessments and reasonable attorney fees, and "being awarded judgment by the court, " West Columbia was entitled to seek assessments from the first day of the month after the sale as well as six months' worth of assessments preceding the institution of an action "and attorney's fees." West Columbia also filed two counterclaims, which were later dismissed.

         ¶ 7 V&T filed an amended complaint on December 16, 2015, adding a count for breach of fiduciary duty. V&T argued that West Columbia breached its fiduciary duty toward plaintiff by forcing it to pay money it did not legally owe and which West Columbia knew or should have known V&T did not owe.

         ¶ 8 Thereafter, West Columbia filed a motion for summary judgment. West Columbia argued that V&T owed common assessments beginning on November 1, 2013, not January 1, 2014, and that by not making a payment until February 6, 2014, V&T failed and refused to comply with section 9(g)(3) of the Act. West Columbia stated that the arrearage amount left unpaid by the former owner was "never cured" and that the court had confirmed the continued existence of an arrearage amount. Citing section 9(g)(4) of the Act, West Columbia further argued that because that money was never paid, V&T had to pay the amount in assessments that would have been due during the six months preceding the institution of the prior action to collect assessments. And finally, West Columbia argued that V&T, as a foreclosure sale purchaser, had the duty to pay legal fees required by subsections (1) and (5) of section 9(g) of the Act. West Columbia claimed that V&T offered "no factual allegations, by way of affidavits, account ledgers, or proof of payments, to suggest that the amounts West Columbia had demanded were inaccurate."

         ¶ 9 V&T then filed a response to West Columbia's motion for summary judgment, stating that West Columbia had obtained a judgment of $3011.12 in the action West Columbia had initiated against the former unit owner, "with an ad damnum of $2, 219.94." V&T stated that the judgment date was February 1, 2010, and that there were also costs allowed in that case. V&T stated, "See Exhibit A, 'Condominium Statement' and Exhibit B 'West Covina Condo Assoc. v. Dresmann Docket.' " Attached to the answer was Exhibit A, a statement of accounting for the subject property for the time period from January 31, 2009, to July 1, 2014. There was no indication of the amounts stated by V&T in that document. Exhibit B was a printout of an electronic docket search of the previous case, which also did not state the judgment amount or that one was obtained. It merely stated that the amount of damages sought was $2219.94. There was also an attached affidavit by John Cloutier, the attorney for V&T in the foreclosure sale, which stated: "As indicated in the court records the association only filed one action against the former owner and obtained a judgment of $3, 011.82."

         ¶ 10 West Columbia filed a reply to V&T's response to its motion for summary judgment, stating that the only circumstance where a foreclosure purchaser "would not be required to comply with 9(g)(4) is if the 'outstanding assessments' were paid ***. That does not apply here, because in the case at hand, the outstanding balance at the time of the sale was $9, 630.34." West Columbia explained the accounting of the $7803.97 that appeared in the demand letter by stating that a "significant portion" of that amount was incurred after the foreclosure sale ($2580.45), and that there was $2791 in "legal fees associated in the underlying action." West Columbia further stated that, upon review, "it does appear that [V&T] was overcharged in the amount of $849.96" because the actual amount of six months of back assessments totaled $1582.56, instead of $2357.52. West Columbia included those three amounts in an attached exhibit.

         ¶ 11 On February 19, 2016, V&T filed a reply, arguing that the exhibit containing the three numbers that allegedly made up the amount claimed in the demand letter should be stricken because "there is no indication as to where the numbers came from."

         ¶ 12 A hearing was held on the motions on April 12, 2016, where the trial court ruled that questions of fact existed and denied both motions, but found that section 9(g)(4) of the Act would apply to the matter at hand.

         ¶ 13 The matter proceeded to trial, which was held on July 20, 2016. The parties stipulated to a bystander's report, which contained the following information. Counsel for V&T argued in its opening statement that the deed for the subject unit was issued to V&T on December 31, 2013, and that therefore V&T became liable for assessments beginning in January 2014, under the rulings in Household Bank, FSB v. Lewis, 229 Ill.2d 173 (2008), and Pembrook Condominium Ass'n-One v. North Shore Trust & Savings, 2013 IL App (2d) 130288. Counsel argued that evidence would show that V&T paid its assessments owed each month for January 2014 through June ...

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