U.S. Bank N.A. v. Quadrangle House Condominium Ass'n , 2018 IL App (1st) 171711 ( 2018 )

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Appellate Court Date: 2018.08.16
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U.S. Bank, N.A. v. Quadrangle House Condominium Ass’n,
2018 IL App (1st) 171711
Appellate Court U.S. BANK, N.A., as Legal Title Trustee for Truman 2012 SC2 Title
Caption Trust, Plaintiff and Counterdefendant-Appellee, v. QUADRANGLE
HOUSE CONDOMINIUM ASSOCIATION, Defendant and
Counterplaintiff-Appellant.
District & No. First District, Second Division
Docket No. 1-17-1711
Filed June 26, 2018
Decision Under Appeal from the Circuit Court of Cook County, No. 16-CH-04811; the
Review Hon. Celia Gamrath, Judge, presiding.
Judgment Affirmed.
Counsel on Jeffrey S. Youngerman, Terry A. Fox, and Timothy P. Mahoney, of
Appeal Flaherty & Youngerman, P.C., of Chicago, for appellant.
Plunkett Cooney, P.C., of Chicago (Timothy P. Collins, of counsel),
for appellee.
Panel JUSTICE PUCINSKI delivered the judgment of the court, with
opinion
Presiding Justice Mason and Justice Hyman concurred in the
judgment and opinion.
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 (Parkvue) 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,
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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, ¶ 3 n.1. On November 13, this court denied U.S. Bank’s motion to
dismiss the appeal as moot by application of Illinois Supreme Court Rule 305(k) (eff. July 1,
2017).
¶ 12 ANALYSIS
¶ 13 We initially reject U.S. Bank’s contention that this appeal is moot because the Association
failed to file an appeal bond. See, e.g., Jack Spring, Inc. v. Little, 50 Ill. 2d 351, 355-56 (1972)
(the right to appeal may not be conditioned upon posting an appeal bond); Downstate National
Bank v. Elmore, 224 Ill. App. 3d 1075, 1083 (1992) (finding that controversy existed as to
plaintiff’s lien rights against property and question not mooted by foreclosure action that
excluded nonparty); O’Brien v. Cacciatore, 227 Ill. App. 3d 836, 842 (1992) (failure to obtain
a stay does not, alone, render an issue moot). Moreover, an order granting summary judgment
in a declaratory judgment action is final, and a notice of appeal must be filed within 30 days of
the entry of the order, as occurred in this case. Universal Underwriters Insurance Co. v. Judge
& James, Ltd., 372 Ill. App. 3d 372, 379-80 (2007).
¶ 14 On the merits, the Association solely contends that U.S. Bank’s payment of
postforeclosure sale assessments several months after purchasing unit 5B at a judicial
foreclosure sale did not extinguish the Association’s lien for preforeclosure sale assessments,
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pursuant to section 9(g)(3) of the Act and as construed by our supreme court in 1010 Lake
Shore Ass’n, 2015 IL 118372.
¶ 15 Because this case was disposed of by the circuit court pursuant to cross-motions for
summary judgment, our review is de novo. Quadrangle House Condominium Ass’n v. U.S.
Bank, N.A., 2018 IL App (1st) 171713, ¶ 8. On cross-motions for summary judgment, the
parties concede that only a question of law is presented and invite the court to decide the issue
on the record. Id. “Summary judgment is appropriate when there is no genuine issue of
material fact and the moving party is entitled to judgment as a matter of law.” Virginia Surety
Co. v. Northern Insurance Co. of New York, 224 Ill. 2d 550, 556 (2007); 735 ILCS 5/2-1005(c)
(West 2016).
¶ 16 The Association argues that it is difficult to read our supreme court’s construction of
section 9(g)(3) in 1010 Lake Shore Ass’n as anything other than requiring U.S. Bank to begin
paying postforeclosure sale assessments the month after the foreclosure sale in order to
confirm the extinguishment of the Association’s lien for preforeclosure sale assessments.
Because U.S. Bank failed to begin paying postforeclosure sale assessments for unit 5B the
month after the foreclosure sale, the Association argues that U.S. Bank’s tardy payments did
not confirm the extinguishment of the Association’s lien.
¶ 17 Section 9(g)(3) states:
“(3) The purchaser of a condominium unit at a judicial foreclosure sale, or a
mortgagee who receives title to a unit by deed in lieu of foreclosure or judgment by
common law strict foreclosure or otherwise takes possession pursuant to court order
under the Illinois Mortgage Foreclosure Law, shall have the duty to pay the unit’s
proportionate share of the common expenses for the unit assessed from and after the
first day of the month after the date of the judicial foreclosure sale, delivery of the deed
in lieu of foreclosure, entry of a judgment in common law strict foreclosure, or taking
of possession pursuant to such court order. Such payment confirms the extinguishment
of any lien created pursuant to paragraph (1) or (2) of this subsection (g) by virtue of
the failure or refusal of a prior unit owner to make payment of common expenses,
where the judicial foreclosure sale has been confirmed by order of the court, a deed in
lieu thereof has been accepted by the lender, or a consent judgment has been entered by
the court.” 765 ILCS 605/9(g)(3) (West 2016).
¶ 18 In 1010 Lake Shore Ass’n, 2015 IL 118372, ¶ 24, our supreme court stated that the first
sentence of section 9(g)(3) “plainly requires a foreclosure sale purchaser to pay common
expense assessments beginning in the month following the foreclosure sale.” The supreme
court stated that the second sentence of section 9(g)(3) “provides an incentive for prompt
payment of those postforeclosure sale assessments.” Id. The supreme court concluded that
pursuant to the plain language of section 9(g)(3), “the payment of postforeclosure sale
assessments formally approves and makes certain the cancellation of the condominium
association’s lien.” Id.
¶ 19 In Country Club Estates Condominium Ass’n v. Bayview Loan Servicing, LLC, 2017 IL
App (1st) 162459, ¶ 12, pet. for leave to appeal denied, No. 122687 (Ill. Nov. 22, 2017), we
considered the argument that there is no promptness requirement under the plain language of
section 9(g)(3). We noted that, although the plain language of this section clearly provides that
a foreclosure buyer’s duty to pay monthly assessments begins on “the first day of the month
after the date of the judicial foreclosure sale,” this section does not expressly include a deadline
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for confirming the extinguishment of an association’s lien. Id. ¶ 14. We found no legislative
debate about the “extinguishment clause” but noted occasions where our legislature expressed
concern about the difficulties met by condominium associations when a unit owner fails to pay
common expenses and the unit goes into foreclosure. Id. ¶ 15. Although that concern was
expressed during discussions about the 2006 amendment to the Act, we stated it was still
pertinent to the interpretation of section 9(g)(3). Id. ¶ 16. We then stated that our supreme
court’s construction of section 9(g)(3) in 1010 Lake Shore Ass’n “acknowledges that a time
requirement is implicit in section 9(g)(3), insofar as that section gives foreclosure buyers an
‘incentive for prompt payment.’ If as Bayview argues, a foreclosure sale buyer could withhold
payment of postforeclosure sale assessments indefinitely and still obtain the benefit of section
9(g)(3), the statute would not provide any such incentive.” Id. ¶ 18. Based on the statements of
our supreme court in 1010 Lake Shore Ass’n and our legislature regarding the policies
“animating” this section, we held “that in order to extinguish an association’s lien for
preforeclosure sale assessments, a foreclosure buyer must make ‘prompt’ payment of current
assessments.” Id. ¶ 21. We stated that “1010 Lake Shore [Ass’n] did not create a requirement
of promptness; it merely articulated the requirement that was already implicit in the purpose
underlying section 9(g)(3).” (Emphasis in original.) Id. ¶ 30.
¶ 20 Eight months after we filed our opinion in Country Club Estates Condominium Ass’n, the
Sixth Division of this court filed its opinion in Quadrangle House Condominium Ass’n, 2018
IL App (1st) 171713, ¶ 11 (filed April 20, 2018), rejecting the condominium association’s
argument that U.S. Bank was required to begin paying postforeclosure sale assessments in the
month following the sale in order to extinguish the association’s lien for unpaid preforeclosure
sale assessments. The Sixth Division stated, “[c]ontrary to our colleagues in [Country Club
Estates Condominium Ass’n], we do not believe that the cited sentence in 1010 Lake Shore
[Ass’n] means that payment of post-purchase assessments must be prompt in order to
constitute a confirmation of the extinguishment of any lien created under subsection 9(g)(1) for
any unpaid pre-sale assessments.” Id. ¶ 13. However, about one month later, the Sixth Division
filed V&T Investment Corp. v. West Columbia Place Condominium Ass’n, 2018 IL App (1st)
170436, ¶ 30 (filed May 18, 2018), citing our opinion in Country Club Estates Condominium
Ass’n, as guidance on determining when a foreclosure buyer’s payment of assessments is
prompt. We see no reason to depart from our holding in Country Club Estates Condominium
Ass’n and proceed with our analysis to determine whether U.S. Bank made prompt payment of
postforeclosure sale assessments.
¶ 21 The circuit court in this case entered an order on July 20, 2015, confirming the sale and
granting U.S. Bank possession of unit 5B. U.S. Bank provided the Association with a copy of
the judicial deed and an address where assessment invoices were to be sent in early September
2015. U.S. Bank then commenced paying postforeclosure sale assessments on October 6,
2015, about two months after its liability for postforeclosure sale assessments began, but the
Association claimed that it was never received and then acknowledged having received the
check in November. Under these circumstances, we conclude that U.S. Bank made prompt
payment of postforeclosure sale assessments and extinguished the Association’s lien for
preforeclosure sale assessments. Cf. Country Club Estates Condominium Ass’n, 2017 IL App
(1st) 162459, ¶ 31 (“We cannot discern from the record what reasons, if any, existed for
Bayview’s delay in payment. And the Association did not file a cross-motion for summary
judgment, so we are not in a position to say that Bayview’s tender was not prompt as a matter
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of law.”); see generally V&T Investment Corp., 2018 IL App (1st) 170436, ¶ 30.
¶ 22 CONCLUSION
¶ 23 For the reasons stated, we affirm the judgment of the circuit court of Cook County granting
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.
¶ 24 Affirmed.
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