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PNC Bank, National Association v. Boytor

United States District Court, N.D. Illinois, Eastern Division

January 16, 2020

PNC BANK, NATIONAL ASSOCIATION, Plaintiff,
v.
SAMUEL G. BOYTOR, CAROL A. BOYTOR, BMO HARRIS BANK, N.A., successor to Amcore Bank, N.A., CITIBANK South Dakota N.A., Defendants.

          MEMORANDUM OPINION AND ORDER

          SHARON JOHNSON COLEMAN, UNITED STATES DISTRICT COURT JUDGE.

         Plaintiff 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 motion.

         Background

         On 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.

         On 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.

         One of 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.

         PNC 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.

         The 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.

         Specifically, 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 Rippburger Property.

         Legal Standard

         Summary 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 ...


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