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U.S. Bank, N.A. v. Quadrangle House Condominium Association

Court of Appeals of Illinois, First District, Second Division

June 26, 2018

U.S. BANK, N.A., as Legal Title Trustee for Truman 2012 SC2 Title Trust, Plaintiff and Counterdefendant-Appellee,
QUADRANGLE HOUSE CONDOMINIUM ASSOCIATION, Defendant and Counterplaintiff-Appellant.

          Appeal from the Circuit Court of Cook County. No. 16 CH 04811 The Honorable Celia Gamrath, Judge Presiding.

          JUSTICE PUCINSKI delivered the judgment of the court, with opinion Presiding Justice Mason and Justice Hyman concurred in the judgment and opinion.



         ¶ 1 Defendant Quadrangle House Condominium Association (Association) appeals from an order of the circuit court of Cook County granting plaintiff U.S. Bank's motion for summary judgment on its complaint for a declaratory judgment and denying the Association's cross-motion for summary judgment on its counterclaim for unpaid assessments. The sole question of law presented for consideration is whether U.S. Bank's payment of postforeclosure sale assessments, several months after purchasing a condominium unit at a judicial foreclosure sale, extinguished the Association's lien for preforeclosure sale assessments, pursuant to section 9(g)(3) of the Condominium Property Act (Act) (765 ILCS 605/9(g)(3) (West 2016)), and as interpreted by 1010 Lake Shore Ass'n v. Deutsche Bank National Trust Co., 2015 IL 118372. We affirm the judgment of the circuit court for the reasons that follow.

         ¶ 2 BACKGROUND

         ¶ 3 The subject property, unit 5B, is located at 6700 South Shore Drive, in Chicago, Illinois, and was previously owned by Betty Colvin. In 2011, U.S. Bank's predecessor in interest, Wells Fargo Bank, commenced an action to foreclose a mortgage lien interest encumbering unit 5B. The matter was filed in the Chancery Division and captioned Wells Fargo Bank v. Colvin, No. 11 CH 19139 (Cir. Ct. Cook County).

         ¶ 4 On July 29, 2015, the circuit court entered an order confirming the sale and granting possession of unit 5B to U.S. Bank as the successful bidder at a judicial sale held on June 24, 2015. The circuit court's order was captioned U.S. Bank N.A. v. Colvin, No. 11 CH 19139 (Cir. Ct. Cook County, July 29, 2015). A judicial deed granting U.S. Bank title to unit 5B was issued pursuant to the order approving the sale and was recorded by the Cook County Recorder of Deeds on August 28, 2015. Shortly thereafter, U.S. Bank retained Parkvue Realty to recover possession of and market unit 5B. U.S. Bank asked Parkvue to contact the Association for information about the payment of postforeclosure sale assessments. Early in September 2015, Parkvue provided the Association with a copy of the judicial deed and informed the Association that any correspondence and assessment invoices were to be sent to U.S. Bank at P.O. Box 830, Armonk, New York 10504.

         ¶ 5 On September 24, after receiving no response from the Association, U.S. Bank asked the Association for an invoice reflecting the postforeclosure sale assessments due for unit 5B. However, the Association sent U.S. Bank a resident ledger for Gloria Carter, who possessed no interest in unit 5B.

         ¶ 6 In October, U.S. Bank received the invoice it had requested along with a resident ledger for unit 5B, both showing the amount due from U.S. Bank was $3079.62 for its proportionate share of common expenses beginning July 1, 2015. U.S. Bank also received a resident ledger addressed to Mrs. Colvin, which showed a $62, 579.35 amount due for preforeclosure sale assessments.

         ¶ 7 According to U.S. Bank, it immediately sent the Association a $3919.34 check, dated October 6, 2015, comprising the $3079.62 amount due and $839.72 in assessments for the upcoming month of November. The Association initially claimed that it was never received but then acknowledged having received the check in November, when U.S. Bank placed a stop payment order on the check. On November 6, U.S. Bank issued another $3919.34 check, which the Association received and credited to U.S. Bank. From December 2015 to February 2017, the Association sent invoices that U.S. Bank paid in full.

         ¶ 8 In 2016, U.S. Bank requested a paid assessment letter from the Association, and the Association issued a letter on January 25 stating that a $63, 464.07 lien in favor of the Association existed under section 9(g)(1) of the Act (765 ILCS 605/9(g)(1) (West 2016)) for the period from May 1, 2009, to January 25, 2016. The letter stated that U.S. Bank had not extinguished the lien by payment of assessments under section 9(g)(3) of the Act (id. § 9(g)(3)). The letter stated that the amount due from U.S. Bank under section 9(g)(4) of the Act (id. § 9(g)(4)) was the $63, 464.07, "due to failure of purchaser at judicial sale to confirm extinguishment of lien, the extinguishment of lien by lender will render the amount owed by the subsequent purchaser to be $0."

         ¶ 9 In March, the Association sent U.S. Bank a notice and demand for possession of unit 5B as a condition precedent to an action for forcible entry and detainer. In April, U.S. Bank filed the underlying complaint for declaratory judgment in case number 16 CH 04811, asking for a determination that the Association's lien had been extinguished. In June, the Association filed a counterclaim for unpaid assessments totaling $63, 464.07, "inclusive of the Colvin Balance." In July, U.S. Bank filed an amended complaint for declaratory judgment.

         ¶ 10 In 2017, the parties filed cross-motions for summary judgment, and the circuit court entered an order granting summary judgment in favor of U.S. Bank on June 28. The Association filed a timely notice of appeal from the June 28 order, which declared that U.S. Bank had paid all postforeclosure sale assessments required under section 9(g)(3) of the Act and extinguished the Association's lien on the Colvin balance for the period before July 1, 2015.

         ¶ 11 We take judicial notice that, after the Association filed its notice of appeal, U.S. Bank sold unit 5B to a nonparty on July 31 and the special warranty deed conveying unit 5B was recorded on August 3 as document number 1721557092. See generally City of Chicago v. Soludczyk, 2017 IL App (1st) 162449, ΒΆ 3 n.1. On November 13, this court denied U.S. Bank's motion ...

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