Andersonville South Condominium Association v. Federal National Mortgage Association , 2017 IL App (1st) 161875 ( 2018 )

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Appellate Court Date: 2018.02.08
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Andersonville South Condominium Ass’n v. Federal National Mortgage Co.,
2017 IL App (1st) 161875
Appellate Court ANDERSONVILLE SOUTH CONDOMINIUM ASSOCIATION,
Caption Plaintiff-Appellee, v. FEDERAL NATIONAL MORTGAGE
COMPANY, Defendant-Appellant.
District & No. First District, Third Division
Docket No. 1-16-1875
Rule 23 order filed August 16, 2017
Motion to publish
allowed October 5, 2017
Opinion filed October 11, 2017
Decision Under Appeal from the Circuit Court of Cook County, No. 16-M1-706345;
Review the Hon. Maritza Martinez, Judge, presiding.
Judgment Affirmed.
Counsel on Ralph T. Wutscher, Jeffrey T. Karek, and Stuart Miles, of Maurice
Appeal Wutscher LLP, of Chicago, for appellant.
Daniel Kaufman, of Ira T. Kaufman P.C., of Chicago, for appellee.
Panel JUSTICE FITZGERALD SMITH delivered the judgment of the court,
with opinion.
Presiding Justice Cobbs and Justice Pucinski concurred in the
judgment and opinion.
OPINION
¶1 This cause of action arises from a forcible entry and detainer action (735 ILCS 5/9-101
et seq. (West 2014)) filed by the plaintiff, Andersonville South Condominium Association
(condominium association or association) against the defendant Federal National Mortgage
Association1 (Fannie Mae), seeking possession of the real property located at 1315 West
Winnemac Avenue, Unit 2, Chicago IL 60640 (the condominium unit) and damages for
withholding possession. After the cause was continued several times and discovery was issued
to the condominium association, Fannie Mae filed an emergency motion for a continuance of
the trial date. After Fannie Mae failed to appear in court for presentment of its emergency
motion, the trial court held that the original trial date would stand. After a bench trial, the trial
court awarded judgment in favor of the condominium association against Fannie Mae. On
appeal, Fannie Mae contends that the trial court erred when (1) it denied its request for a
continuance of the trial so that it could obtain discovery from the condominium association
prior to trial; (2) it awarded the condominium association monthly late charges assessed at 4%
of the past due assessments, which ultimately amounted to more than 1.5 times the assessments
owed; and (3) it awarded the condominium association repair costs for the unit, which are not
part of any statutory lien under section 9(a) of the Condominium Property Act (Act) (765 ILCS
605/9(a) (West 2014)). For the reasons that follow, we affirm.
¶2 I. BACKGROUND
¶3 The record before us reveals the following facts and procedural history. The condominium
unit is part of a six-unit condominium building comprising the condominium association and
was originally owned by Steven Meyers. After the original lender filed a mortgage foreclosure
action against Meyers, Fannie Mae purchased the unit at a judicial sale on July 21, 2015 (case
No. 11 CH 27494).
¶4 On April 13, 2016, the condominium association filed a forcible entry and detainer action
against Fannie Mae, seeking possession of the condominium unit and damages in the sum of
$63,513.33, plus future rents for withholding possession between July 21, 2015, and March 4,
2016.2
¶5 On April 27, 2016, the cause was continued to May 11, 2016, for status. On May 11, 2016,
the trial court ordered Fannie Mae to file an appearance, pleadings, motions, or discovery by
May 25, 2016, and set a trial date for June 1, 2016.
1
We note, and the parties do not dispute, that the defendant, Federal National Mortgage Association
(Fannie Mae), was incorrectly sued here as “Federal National Mortgage Company.”
2
It appears from the record that, at this point in time, the condominium association had already filed
and won a forcible entry and detainer action against Meyers and was in possession of the unit.
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¶6 On May 24, 2016, Fannie Mae filed an emergency motion for a continuance of the June 1,
2016, trial date. In that motion, Fannie Mae acknowledged that it was served with a summons
and complaint on April 14, 2016. However, Fannie Mae asserted that—although it was granted
until May 25, 2016, to file an appearance, pleadings, motion, or discovery—a trial date was set
for June 1, 2016, which did not give it sufficient time to prepare for trial. Furthermore, Fannie
Mae alleged that it had served the condominium association with discovery on May 23, 2016,
and needed the association’s responses to that discovery to gather documentation necessary to
prepare for trial. Accordingly, Fannie Mae argued that it lacked material evidence necessary to
present an appropriate defense at trial and asked the trial court to grant a continuance pursuant
to section 2-1007 of the Code of Civil Procedure (Code) (735 ILCS 5/2-1007 (West 2014)),
and Illinois Supreme Court Rule 231(a) (eff. Jan. 1, 1970).
¶7 In support of its emergency motion, Fannie Mae attached numerous exhibits, including,
inter alia, (1) Fannie Mae’s interrogatories and requests to produce and to admit served on the
condominium association on May 23, 2016, and (2) an affidavit by Fannie Mae’s attorney,
attesting to the service of the discovery on that date and the necessity of the responses to
discovery as “material evidence” in the case.
¶8 Fannie Mae’s emergency motion for a continuance was set for presentment on May 31,
2016.
¶9 Prior to the hearing for the presentment of its emergency motion, Fannie Mae, on May 25,
2016, filed its answer and affirmative defenses to the forcible entry and detainer action. In this
pleading, Fannie Mae alleged that, after it purchased the condominium unit at a judicial sale, it
requested from the condominium association a payoff statement for the assessments due and
owing on the condominium unit. In response, on February 1, 2016, Fannie Mae received a
ledger from the condominium association in the amount of $23,895.18 and a signed W-9 tax
form dated February 1, 2016. Fannie Mae further alleged that only a month later, on March 4,
2016, the condominium association sent it a demand for possession (hereinafter the demand
letter), stating that the amount due and owing by Fannie Mae was now $63,213.33. According
to a new ledger attached to the condominium association’s demand letter, the condominium
association owed through February 2016: (1) $25,073.64 for unpaid assessments, (2)
$39,963.23 for late fees, and (3) $8973.57 for “cleaning, repairs, appliances” and other
miscellaneous “unit refurbishment[s].”3 In its pleading, Fannie Mae explained that, according
to the condominium association’s bylaws, the late fees were calculated at 4% of the
outstanding balance from December 2015 through February 2016.
¶ 10 According to the pleading, after Fannie Mae disputed the amount owed, the condominium
association sent Fannie Mae an email claiming that, pursuant to our supreme court’s decision
in 1010 Lake Shore Ass’n v. Deutsche Bank National Trust Co., 2015 IL 118372, the
condominium association held a statuary lien on the condominium unit in the amount of
$63,213.33.
¶ 11 Based on the aforementioned, Fannie Mae asserted three affirmative defenses, namely (1)
that the condominium association failed to provide it with an accurate accounting of the
3
We note that the $63,213.33 amount demanded is less than the addition of unpaid assessments, late
fees, and repair/cleaning costs because, as reflected by the ledger, in coming to that amount, the
condominium association subtracted from the unit’s account all debt payments (presumably paid by the
original unit owner), rental recoupment, and electric and gas bills.
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amounts due and owing and that its claims were barred by the equitable doctrines of waiver,
laches, and/or unclean hands; (2) that the cumulative assessment of late fees constituted an
unenforceable penalty; and (3) that the damages for repairs to the unit were not part of any
permissible statutory lien.
¶ 12 On May 31, 2016, Fannie Mae failed to appear for the presentment of its emergency
motion seeking a continuance of the trial date. Accordingly, the trial court denied the
emergency motion and ordered that the trial date of June 1, 2016, stand.
¶ 13 On June 1, 2016, the matter proceeded to a bench trial. Although we are without a
transcript of that bench trial, Fannie Mae has provided this court with a certified bystanders
report as to what transpired on that date. See Ill. S. Ct. R. 323(c) (eff. Dec. 13, 2005).
According to the bystanders report, before the trial court heard any testimony, Fannie Mae
once again made an oral request for a continuance of the trial date. Fannie Mae argued that it
had issued discovery to the condominium association on May 23, 2016, and that the responses
to that discovery were necessary for it to prepare its defense. Fannie Mae asserted that, without
the outstanding discovery responses, it lacked material evidence and information concerning
exhibits and witnesses, particularly with respect to the amounts of past due assessments and the
calculation of late fees.
¶ 14 Fannie Mae further argued that, because the May 11, 2016, order allowed it to file any
“appearance pleadings motions or discovery” until May 25, 2016, the trial judge entering that
order must not have intended the matter to proceed to trial on June 1, 2016.
¶ 15 After reviewing the common law record half sheet for May 11, 2016, and noting that the
trial judge on call that date was very meticulous with her notes, the trial court stated that the
half sheet did not reflect that discovery was to issue, but did indicate that trial was to proceed
on June 1, 2016. The trial court then inquired from the condominium association’s counsel
whether he reviewed the May 11, 2016, order before it was entered. The condominium
association’s attorney stated that Fannie Mae’s attorney drafted that order, but that he could not
recall whether he reviewed the order before it was entered.
¶ 16 After arguments, the trial court denied Fannie Mae’s motion to continue the trial. The court
stated that Fannie Mae had not complied with either section 2-1007 of the Code (735 ILCS
5/2-1007 (West 2014)), or Illinois Supreme Court Rule 231(a) (eff. Jan. 1, 1970), so as to
permit a continuance. The trial court then passed the matter until the end of its call to conduct
the trial.
¶ 17 According to the bystanders report, at the end of the court call, the matter was recalled for
trial. Fannie Mae again objected to the trial proceedings going forward and requested an
extension of the trial date. The trial court stated that it would proceed to trial, unless the parties
were willing to settle, as the matter was properly set for trial. Fannie Mae stated that it needed
the condominium association’s responses to discovery to determine an appropriate settlement
figure, if possible, and could not settle at this time. Fannie Mae conceded that it owed “some
money” to the condominium association for assessments but explained that it took issue with
the amount of late fees charged and needed information regarding the association’s calculation
of those fees to prepare its defense.
¶ 18 The condominium association objected to a continuance, noting that Fannie Mae had
repeatedly appeared in court with freshly assigned attorneys who were unprepared for court
and Fannie Mae confirmed the same. The condominium association stated that its treasurer,
Stew Peabody, had previously provided Fannie Mae with information regarding the unit’s
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account (including ledgers). In addition, the condominium association argued that Peabody
had taken the day off work to testify at trial. Furthermore, because the association was
comprised of only six units, it argued that any delay in payment of the amounts owed would be
harmful to the association.
¶ 19 The trial court agreed with the condominium association and proceeded with a bench trial.
The condominium association called Peabody as its first and only witness. Over Fannie Mae’s
objection, Peabody testified that he first came into contact with Fannie Mae when Fannie
Mae’s agent posted a notice on the unit’s door in October 2015, indicating Fannie Mae’s newly
acquired ownership of the unit (as required under the Chicago’s Protecting Tenants in
Foreclosed Rental Property Ordinance (Chicago Municipal Code § 5-14-010 (added June 5,
2013)). That notice was introduced as an exhibit into the record. According to Peabody, the
condominium association renovated and repaired the unit to lease it. The association recovered
rents from the unit until Fannie Mae directed the tenants to remit rent payments directly to
Fannie Mae.
¶ 20 Peabody further testified that the amounts owed by Fannie Mae as of February 2016 were
$63,213.33. In support, he produced a ledger which he testified had previously been given to
Fannie Mae and its agents and prior counsel. This ledger, introduced at trial as a business
record, itemizes the expenses (including assessments and late fees) incurred by the association.
Peabody also explained that the rent collected from the leasing of the unit provided an offset
from the total balance for a period of time.
¶ 21 The condominium association next moved for the introduction of its declaration into
evidence. Fannie Mae’s counsel objected on the basis that he had been newly assigned to the
case and had not had the opportunity to review this document. Over counsel’s objection, the
trial court entered the condominium declaration and bylaws into evidence, and Peabody
testified that these documents provided for the imposition of assessments and late fees.
¶ 22 On cross-examination, Peabody was asked to explain the glaring difference between the
$233 monthly assessment and the $930 late fee charged to the unit’s account in February 2016.
Peabody explained that the condominium declaration and bylaws provide for a late fee of 4%
of the total balance due charged to the account on a monthly basis. Peabody acknowledged that
the condominium declaration allowed the late fee to be compounded, but stated that he did not
calculate the late fee that way.
¶ 23 After Peabody’s testimony, the parties proceeded with arguments. The parties agreed that
Fannie Mae could take possession of the unit because it intended to sell it, but disagreed as to
the amount of damages owed by Fannie Mae. Fannie Mae argued, inter alia, (1) that the
condominium association should be able to recover damages only for the period alleged in its
complaint (from July 21, 2015, through March 4, 2016), (2) that the monthly late charges to the
account were unreasonably high compared to the assessments, and (3) that the $8973.57 for
repairs and renovation to the unit were not recoverable because they did not relate to the
assessments concerning the common areas and were therefore not part of any statutory lien.
The condominium association, on the other hand, argued that our supreme court’s decision in
1010 Lake Shore, 2015 IL 118372, permitted it to recover the preforeclosure assessments, as
there was a statutory lien on the unit. In addition, the condominium association argued that the
repairs and renovations were made to the unit for purposes of leasing it, so that the association
could mitigate its damages.
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¶ 24 After hearing arguments, the trial court entered judgment in favor of the condominium
association in the amount of $68,231.45 including assessments, late fees, and costs of repairs
and renovation to the unit. The amount included additional assessments and fees to bring the
unit’s account current to the date of trial. On the issue of possession, which was undisputed, the
trial court entered an order in favor of Fannie Mae. Fannie Mae now appeals.
¶ 25 II. ANALYSIS
¶ 26 A. Motion for a Continuance
¶ 27 On appeal, Fannie Mae first argues that the trial court erred when it denied its request for a
continuance of the trial since, without responses to its timely-issued discovery, it was without
material evidence with which to properly defend the cause of action. We disagree.
¶ 28 “It is well settled that a litigant does not have an absolute right to a continuance.” K&K Iron
Works, Inc. v. Marc Realty, LLC, 2014 IL App (1st) 133688, ¶ 22. The decision to grant or
deny a motion for a continuance is within the sound discretion of the trial court, which will not
be disturbed on appeal absent an abuse of discretion. K&K Iron Works, 2014 IL App (1st)
133688, ¶ 22. An abuse of discretion occurs when the trial court’s ruling is arbitrary, fanciful,
or unreasonable, or when no reasonable person would take the same view. Seymour v. Collins,
2015 IL 118432, ¶ 41. When reviewing for abuse of discretion, the appellate court does not
substitute its judgment for that of the trial court or determine whether the trial court acted
wisely. John Crane Inc. v. Admiral Insurance Co., 391 Ill. App. 3d 693, 700 (2009).
¶ 29 Section 2-1007 of the Code generally states that the court has discretion to grant additional
time for “the doing of any act or the taking of any step or proceeding prior to judgment” on
good cause shown. 735 ILCS 5/2-1007 (West 2014). According to section 2-1007, the
“circumstances, terms and conditions under which continuances may be granted, the time and
manner in which application therefore shall be made, and the effect thereof, shall be according
to rules.” 735 ILCS 5/2-1007 (West 2014).
¶ 30 Illinois Supreme Court Rule 231(f) states that “[n]o motion for the continuance of a cause
made after the cause has been reached for trial shall be heard, unless a sufficient excuse is
shown for the delay.” Ill. S. Ct. R. 231(f) (eff. Jan. 1, 1970). Our courts have interpreted this
rule to mean that, once a case reaches the trial stage, a party seeking a continuance must
provide the court with “especially grave reasons” for the continuance because of the potential
inconvenience to the witnesses, the parties, and the court. K&K Iron Works, 2014 IL App (1st)
133688, ¶ 23 (quoting In re Marriage of Ward, 282 Ill. App. 3d 423, 430 (1996)).
¶ 31 Additionally, a party requesting a motion for continuance on account of an absence of
material evidence must support the motion with an affidavit showing (1) that due diligence has
been used to secure the evidence; (2) what facts the evidence consists of; (3) if in the form of
testimony, the residence of the witness or, if unknown, that due diligence has been used to
discover it; and (4) that the evidence can be obtained if more time is permitted. Ill. S. Ct. R.
231(a) (eff. Jan. 1, 1970). In such an instance, the decisive factor is whether the party moving
for a continuance has shown a lack of diligence in proceeding with the litigation. Ward, 282 Ill.
App. 3d at 431.
¶ 32 In the present case, after a review of the record, we find no abuse of discretion by the trial
court. The record is fraught with evidence of Fannie Mae’s lack of diligence in proceeding
with litigation, so as to warrant the trial court’s refusal to postpone trial. In that respect, the
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record reveals that Fannie Mae made two separate requests for a continuance of the trial, first
by way of a written emergency motion, for whose presentment it flagrantly failed to appear in
court, and second by way of an oral request on the date of trial. During that second oral request,
immediately preceding trial, Fannie Mae admitted to the trial court that, on numerous previous
occasions, counsel freshly assigned to the cause had appeared before the trial court unprepared.
In fact, counsel appearing that day on behalf of Fannie Mae himself admitted that he had just
been assigned to the matter and had not had the opportunity to review even the condominium
association’s declaration and bylaws, which would have been available to Fannie Mae, its
agents, and prior counsel, long before the trial date. Such apparent lack of diligence in
proceeding with the litigation reasonably would have warranted the trial court’s denial of a
request for a continuance. This is particularly true where the condominium association
appeared on the date scheduled for trial ready to proceed and its key witness, association
treasurer, Peabody, had already been inconvenienced by taking a day off work to testify.
Moreover, the only evidence being offered by the condominium association at trial consisted
of its declaration and bylaws and the ledger detailing the amounts owed by Fannie Mae to the
condominium association, which Peabody had tendered to Fannie Mae long before trial. As
such, we find no abuse of discretion in the trial court’s decision to proceed with trial.
¶ 33 B. Late Charges Assessed
¶ 34 On appeal, Fannie Mae next contends that the trial court erred in awarding the
condominium association $68,231.45 in damages, including $43,832.65 in late charges
stemming from delinquent preforeclosure assessments and calculated at 4% of the owed
assessments. Fannie Mae argues that, because the total late charges added to more than 1.5
times the amount of the assessments owed ($24,398.80), they were unreasonably high and
their sole purpose was to ensure performance by the unit owner, so as to constitute an
unenforceable penalty. For the reasons that follow, we disagree.
¶ 35 At the outset, we note that whether the condominium association was entitled to late
charges for preforeclosure assessments under the Act (765 ILCS 605/9(g) (West 2014)) is a
legal question that we review de novo. Wing Street of Arlington Heights Condominium Ass’n v.
Kiss the Chef Holdings, LLC, 2016 IL App (1st) 142563, ¶ 13. The amount of any such late
charges, however, awarded after a bench trial is reviewed for manifest weight of the evidence.
Brynwood Co. v. Schweisberger, 393 Ill. App. 3d 339, 351 (2009).
¶ 36 In awarding the condominium association $68,231.45, including $43,832.65 in late
charges, the trial court relied on our supreme court’s decision in 1010 Lake Shore, 2015 IL
118372, and held that the preforeclosure assessments owed (including any late charges) were a
statutory lien on the property pursuant to section 9(g)(3) of the Act (765 ILCS 605/9(g)(3)
(West 2014)), which Fannie Mae failed to extinguish by not paying any assessments following
its purchase of the unit at the judicial foreclosure sale.
¶ 37 In 1010 Lake Shore, 2015 IL 118372, our supreme court considered whether an
association’s lien for unpaid assessments was extinguished by virtue of a judgment of
foreclosure entered on a condominium unit, notwithstanding the fact that the purchaser at the
judicial sale did not pay assessments beginning the first month following the sale as required
under section 9(g)(3) of the Act (765 ILCS 605/9(g)(3) (West 2014)). In that case, a
mortgagee-bank purchased the unit at a foreclosure sale, but failed to pay assessments that
accrued following the sale. 1010 Lake Shore, 2015 IL 118372, ¶¶ 3-4. The association later
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sought to collect not only the assessments accruing since the date of the sale, but also those that
accrued prior to the sale, including late charges assessed at $50 per month. 1010 Lake Shore
Ass’n v. Deutsche Bank National Trust Co., 2014 IL App (1st) 130962, ¶ 6.
¶ 38 The mortgagee-bank maintained that the association’s lien was extinguished, like other
liens on the property, by virtue of the judgment of foreclosure. Thus, the mortgagee contended
that, notwithstanding its liability for postsale assessments, it could not be held liable for
delinquent presale assessments incurred by the prior owner. 1010 Lake Shore, 2015 IL 118372,
¶ 7.
¶ 39 Our supreme court disagreed, holding that the Act’s provisions conditioned the
extinguishment of the association’s lien for presale assessments on the foreclosure purchaser’s
payment of assessments due following the sale. 1010 Lake Shore, 2015 IL 118372, ¶¶ 24-25.
The court found that the mortgagee-bank’s failure to confirm the extinguishment of the
association’s lien by paying postforeclosure sale assessments rendered it liable for the entirety
of the association’s lien—i.e., the presale assessments, including the late charges. 1010 Lake
Shore, 2015 IL 118372, ¶ 41.
¶ 40 Applying our supreme court’s decision in 1010 Lake Shore, 2015 IL 118372, to the present
case, we find no error in the trial court’s conclusion that Fannie Mae was responsible for the
preforeclosure assessments, including the delinquent late charges, by virtue of the fact that it
failed to pay any postsale assessments so as to confirm the extinguishment of the condominium
association’s lien on the unit.
¶ 41 Fannie Mae nonetheless cites to Hidden Grove Condominium Ass’n v. Crooks, 318 Ill.
App. 3d 945 (2001), for the proposition that the unreasonably high amount of late charges and
the compounding nature in which they were calculated rendered the late charges an
unenforceable penalty. We disagree and find that case inapposite.
¶ 42 In Hidden Grove, the condominium association’s bylaws provided that, if a unit owner did
not timely pay the $88.25 monthly assessment, the association would charge a monthly $25
late fee (i.e., a 28% interest charge). Hidden Grove, 318 Ill. App. 3d at 946. In that case, the
unit owner paid the association $1176 in assessments, covering approximately 14 months of
assessments that she had not paid. Hidden Grove, 318 Ill. App. 3d at 946. However, because
none of those monthly payments had been timely, the association charged the unit owner with
a late fee for every month she failed to pay the assessment. Hidden Grove, 318 Ill. App. 3d at
946. Accordingly, she was charged with $25 for the first month and an additional $25 for each
month thereafter. So for example, when she did not pay her January assessment until October,
the unit owner was charged a $225 late fee (or nine months of continuous late fees) against her
January assessment. Hidden Grove, 318 Ill. App. 3d at 947. After the association successfully
sued the unit owner to recoup the late charges, the unit owner appealed. Hidden Grove, 318 Ill.
App. 3d at 946.
¶ 43 The appellate court overturned the award, finding that the amount was not a reasonable
forecast of just compensation for the amount caused by the breach, and the harm caused by the
late assessments was neither difficult nor impossible to estimate. Hidden Grove, 318 Ill. App.
3d at 947. The appellate court noted that typically an interest charge to recover the lost value of
money ranges between 5% and 10%, but that in that case, the late fee of $25 constituted a 28%
interest charge. Hidden Grove, 318 Ill. App. 3d at 947. The court further held that, while the
initial $25 charge (even at the 28% interest rate) could be justified as reasonable to cover the
amount of expenses, administrative costs, and lost income attributable to pursuing delinquent
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payments, the compounding of an additional $25 late fee (i.e., a 28% interest charge) for each
month the assessment was not paid could not relate to any recoverable expense of a late
payment. Hidden Grove, 318 Ill. App. 3d at 947. Accordingly, the court concluded that the
“compounding nature of the late charge” was “merely an attempt to secure timely payment of
the assessment,” and was therefore unreasonable. Hidden Grove, 318 Ill. App. 3d at 947.
¶ 44 Unlike the 28% late interest charged in Hidden Grove, in the present case, the monthly late
fee was calculated at a 4% interest charge, a rate lower than the 5-10% interest rate the court in
Hidden Grove found acceptable. In addition, unlike Hidden Grove, where the monthly
assessments remained the same over a period of time, the monthly assessments in this case,
progressively increased from $82.29 in December 2005 to $233 in February 2015, but the late
fee assessed remained at 4%. What is more, in Hidden Grove, the harm caused by late
assessments was not difficult to estimate, since the unit owner remained in the unit and
continued to pay her assessments, albeit in arrears. In contrast, according to the ledger
introduced at trial, the unit owner here stopped paying assessments in March 2010, and once
the unit went into foreclosure, no one paid any assessments or late charges even after it was
sold at a judicial sale in July 2015. As such, the harm caused to the association in the instant
case was not simple to estimate. For all of these reasons, we find Hidden Grove inapplicable to
the cause at bar, and find no error in the trial court’s award of $43,832.65 in late charges.
¶ 45 C. Repairs to the Unit
¶ 46 On appeal, Fannie Mae next argues that the trial court erred in awarding the association
$8973.57 in costs and fees incurred in renovating and repairing the unit for lease because those
costs were not part of the association’s “common expenses” and as such were not part of any
statutory lien to the property. The condominium association argues that, based on the evidence
presented at the bench trial, the trial court properly awarded these costs, as incurred by the
association in mitigating its damages. The association asserts that these costs were necessary to
repair the unit so that it could be rented, and that the rental income was used to offset the
amount of past due assessments, as reflected by the unit’s ledger, before Fannie Mae took over
the rental income. For the reasons that follow, we agree.
¶ 47 “The trier of fact is responsible for determining the amount of damages, and its
determination should not be altered unless the determination is not supported by the evidence
or is obviously the result of passion or prejudice.” Todd W. Musburger, Ltd. v. Meier, 394 Ill.
App. 3d 781, 803 (2009) (citing Stein v. Spainhour, 167 Ill. App. 3d 555, 561 (1988)).
¶ 48 Section 9-111.1 of the Forcible Entry and Detainer Act provides that upon entry of a
judgment in favor of the condominium association for possession of a unit under the
Condominium Property Act, the condominium association has the right to rent out the unit to
mitigate damages and apply the newly acquired rental income to any delinquent assessments.
735 ILCS 5/9-111.1 (West 2014) (“the board of managers shall have the right and authority,
incidental to the right of possession of a unit under the judgment, but not the obligation, to
lease the unit to a bona fide tenant”); see also 100 Roberts Road Business Condominium Ass’n
v. Khalaf, 2013 IL App (1st) 120461, ¶ 46.
¶ 49 The testimony offered by the condominium association’s treasurer, Peabody, at the bench
trial established that the condominium association incurred costs to repair and refurbish the
unit so as to rent it and mitigate its damages. Peabody testified from the association’s ledger as
to how much money the association spent in mitigating its damages, and the ledger established
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how those rental amounts were used to offset the delinquent assessments until Fannie Mae
purchased the unit at the judicial foreclosure sale and instructed the tenant to remit all rents to
it. Fannie Mae called no witnesses and presented no evidence to rebut this testimony and
documentary evidence. Instead, when asked by the trial judge why the amount for repairs and
renovations should not be awarded to the association as an attempt to mitigate damages, it
argued that the association assumed the risk of the costs of the repairs and renovations. In
addition, Fannie Mae argued that it would have either undertaken the repairs or sold the unit
“as is.” The trial court rejected Fannie Mae’s argument and ruled in favor of the condominium
association. We find nothing manifestly erroneous in this conclusion. In fact, we believe it
reflects the court’s refusal to permit Fannie Mae, who failed to pay a single assessment for
nearly a year after its purchase of the unit at the judicial sale, to take advantage of the
condominium association’s attempt to mitigate its damages, either by benefiting from the
rental income offsetting the delinquent assessments or by subsequently collecting the rent from
the new tenant, while still litigating the matter with the condominium association. This is
particularly true where the ledger introduced at trial reflects that the rental income recouped by
the condominium association and used to offset the delinquent assessments ($7450) nearly
equals the cost incurred by the association in repairing the unit so that it could be rented
($8973.57).
¶ 50 In coming to this conclusion, we have considered the decision in Lake Hinsdale Village
Condominium Ass’n v. Department of Public Aid, 298 Ill. App. 3d 192 (1998), cited to by
Fannie Mae and find it inapplicable to the facts at bar. That case involved a dispute over the
priority of liens and not a dispute between a condominium association and a purchaser of a unit
at a judicial sale who declined to pay assessments for nearly a year but benefited from the rents
collected on the unit repaired and refurbished by the condominium association to mitigate its
damages.
¶ 51 III. CONCLUSION
¶ 52 For all of the aforementioned reasons, we affirm the judgment of the circuit court.
¶ 53 Affirmed.
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