United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
JOHNSON COLEMAN, UNITED STATES DISTRICT COURT JUDGE.
PNC Bank filed this mortgage foreclosure and breach of
contract lawsuit against defendants Samuel G. Boytor, Carol
A. Boytor, BMO Harris Bank, and CitiBank (South Dakota).
Before the Court is PNC Bank's motion for summary
judgment under Federal Rule of Civil Procedure 56(a). For the
reasons explained below, the Court denies PNC Bank's
April 20, 2006, the Boytors executed a Promissory Note in
favor of Mid America Bank, PNC Bank's predecessor, in the
principal amount of $200, 000.00 at 0% interest (“Note
1”). Note 1 did not require payments and there was no
disbursement of funds. Although the maturity date for Note 1
was originally April 3, 2009, Note 1 was modified pursuant to
a Note Modification Agreement (“Modification”)
whereby the maturity date was extended to April 3, 2011. The
parties did not execute a mortgage to secure Note 1.
April 24, 2006, the Boytors executed a second Promissory Note
in the principal amount of $203, 000.00, also at 0% interest
(“Note 2”). The maturity date on Note 2 was April
3, 2009. To secure the indebtedness of Note 2, the Boytors
executed a Mortgage (“Mortgage”) in favor of Mid
America Bank pledging the real property at 822 Tipperary
Street, Gilberts, Illinois (“Property”). The
Mortgage was recorded with the Kane County Recorder of Deeds
Office on May 3, 2006.
the bankers who managed the Boytors' loans, Jacalyn
Brennan, testified at her deposition that Note 1 and Note 2
were related to a different, larger loan. Evidence in the
record reveals that the other loan was for $600, 000 and
related to commercial real estate the parties call the
Rippburger Property. Notes 1 and 2 were bullet or back-up
notes that did not bear interest or require payments, but
instead served as liens on the Rippburger Property.
Bank asserts that the Boytors defaulted under the terms and
provisions of Note 1 by failing to pay all money due and
owing by the maturity date of April 3, 2011. Likewise, PNC
Bank contends that the Boytors defaulted under the terms and
provisions of Note 2 by failing to pay all money due and
owing by the maturity date of April 3, 2009. PNC Bank further
maintains that pursuant to their default under Note 2, the
Boytors defaulted under the Mortgage.
Boytors, on the other hand, present evidence, including
Brennan's testimony, that PNC Bank's predecessor
moved Note 2 to dead status and forgave the $203, 000.00 loan
on April 3, 2009.
an internal “managed assets status change and 1099
reporting form” signed by Brennan stated:
MAF [loan system] had done a workout by doing a forbearance
agreement. The agreement was to take monies owed and put
these funds in a zero percent interest balloon note taking a
lien on their home. A note and mortgage was completed
4/20/2006. The note was signed and the mortgage was not
because it was determined that the note and mortgage should
have been for $203, 000. A new note and mortgage was
completed on 4/24/2006. The forbearance agreement was never
changed to refle[ct] the changed note amount. The note was
signed and the mortgage was recorded. In error, both notes
got booked. Because the forbearance agreement was never
changed, we are going to keep the $200, 000 note and leave
the $203, 000 note to Dead status.
(R. 66-1, Brennan Dep. Ex. #7.) There is also evidence in the
record, namely, Samuel Boytor's affidavit, that the
parties entered into a forbearance agreement conditioning the
payment of the $200, 000.00 Note on the sale of the
judgment is appropriate “if the movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a); see also Celotex Corp. v.
Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91
L.Ed.2d 265 (1986). A genuine dispute as to any material fact
exists if “the evidence is such that a reasonable jury
could return a verdict for the nonmoving party.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248,
106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). When determining
whether a genuine issue of material fact exists, the Court
must view the evidence and draw all reasonable inferences in
favor of the nonmoving party. Id. at 255; Palmer
v. Franz, 928 F.3d 560, 563 (7th Cir. 2019). After
“a properly supported motion for summary judgment is
made, the adverse party ‘must set forth specific facts
showing that there is a genuine issue for ...