BMO Harris Bank, N.A. v. Porter , 106 N.E.3d 411 ( 2018 )

2018 IL App (1st) 171308
Fifth Division
June 1, 2018
No. 1-17-1308
______________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
FIRST DISTRICT
______________________________________________________________________________
BMO HARRIS BANK, N.A., f/k/a Harris Trust and ) Appeal from the
Savings Bank, ) Circuit Court of
) Cook County.
Plaintiff and Counterdefendant-Appellee, )
) No. 14 CH 10965
v. )
) Honorable
ARLETA A. PORTER, BRIAN R. PORTER, ) Michael Francis Otto,
URBAN PARTNERSHIP BANK, UNKNOWN ) Judge Presiding.
OWNERS, and NON-RECORD CLAIMANTS, )
)
Defendants )
)
(Arleta A. Porter and Brian R. Porter, Defendants and )
Counterplaintiffs-Appellants). )
)
JUSTICE HALL delivered the judgment of the court, with opinion.
Justices Lampkin and Rochford concurred in the judgment and opinion.
OPINION
No. 1-17-1308
¶1 Defendants, Arleta A. and Brian R. Porter, appeal an order of the circuit court of Cook
County that granted plaintiff BMO Harris Bank, N.A.’s 1 (BMO Harris) motion to strike and
dismiss defendants’ third amended counterclaim with prejudice in a mortgage foreclosure action.
For the reasons that follow, we affirm.
¶2 BACKGROUND
¶3 A. History
¶4 Defendants executed a mortgage and equity line of credit agreement with Harris Trust
and Savings Bank on October 29, 2001. The initial credit limit was $100,000, although the
mortgage indicated that the maximum lien amount for the line of credit was $125,000. According
to its terms, the mortgage secured not only the amount then presently advanced under the credit
agreement but also “any future amount which Lender may advance to grantor under the Credit
Agreement within twenty (20) years from the date of [the] Mortgage. The revolving line of credit
obligates Lender to make advances to Grantor so long as Grantor complies with all the terms of
the Credit Agreement and Related Documents.”
¶5 The credit agreement indicated that the term of the credit line began as of the date of the
Agreement and continued until October 29, 2011 (maturity date), and that all indebtedness would
be due and payable upon maturity. The agreement further stated that the lender may renew or
extend the period during which defendants could obtain credit advances or make payments as
well as renew or extend the credit line account itself. Additionally, the credit agreement
indicated, within the “Change in Terms” section, that “[w]e may make changes to the terms of
this Agreement if you agree to the change in writing at that time, if the change will
1
BMO Harris Bank, N.A. is formerly known as Harris Bank, N.A., and Harris Trust and Savings
Bank.
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No. 1-17-1308
unequivocally benefit you throughout the remainder of your Credit Line Account, or if the
change is insignificant (such as changes relating to our data processing systems).”
¶6 The mortgage was in turn secured by real property located at 4505 South Oakenwald in
Chicago, Illinois.
¶7 Plaintiff filed a foreclosure complaint against defendants in the circuit court on July 1,
2014, based on defendants’ failure to pay the loan in full on October 29, 2011. Defendants filed
their answer to the complaint on October 1, 2014, in which they only specifically denied
paragraphs 3(J) and 4 of the complaint, which state:
“3(J). Statement as to defaults: Mortgagors have not paid the monthly
installments of Principal, taxes, Interest and insurance for 10/29/2011,
through the present; the Principal balance due on the Note and the Mortgage
is $80,803.11, plus Interest, costs, advances and fees. Interest accrues pursuant
to the note, and the current per diem is $6.09.
***
4. Plaintiff avers that in addition to persons designated by name herein
and the Unknown defendants herein before referred to, there are other persons,
and/or non-record claimants who are interested in this action and who have or
claim to have some right, title, interest or line in, to or upon the real estate, or
some part thereof, in this Complaint described including but not limited to the
following:
Unknown owners and NonRecord Claimants, if any.”
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¶8 Defendants also filed affirmative defenses, alleging laches and lack of default due to the
creation of a contract implied in law. Plaintiff filed a motion to dismiss the affirmative defenses,
and in response, defendants amended their affirmative defenses and filed a counterclaim.
¶9 Defendants’ counterclaim, filed on February 13, 2015, alleged breach of an implied-in­
fact contract and breach of an implied-in-law contract. Plaintiff moved to dismiss the amended
affirmative defenses and the counterclaim. The trial court set a briefing schedule, and after
briefing by the parties, the trial court struck the count alleging breach of an implied-in-fact
contract claim with leave to replead and struck the count alleging breach of an implied-in-law
contract claim with prejudice.
¶ 10 Defendants subsequently filed an amended counterclaim alleging breach of an implied-
in-fact contract, which plaintiff moved to dismiss. Following briefing by the parties, the trial
court struck the amended counterclaim with leave to replead.
¶ 11 Defendants filed a second amended counterclaim on their breach of an implied-in-fact
contract claim, and plaintiff again moved to dismiss. Following briefing by the parties, including
supplemental briefs, the trial court struck the second amended counterclaim with leave to
replead.
¶ 12 B. Third Amended Counterclaim
¶ 13 On June 16, 2016, defendants filed their third amended counterclaim, which is the subject
of this appeal. The third amended counterclaim alleged breach of the extension of their credit
agreement and breach of an implied-in-fact contract.
¶ 14 Paragraphs 1 through 35 of defendants’ third amended counterclaim relate to defendants’
count I, titled “Breach of Extension of Credit Agreement.”
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¶ 15 In paragraph 3, defendants alleged “[t]hat on October 29, 2011, [defendants] and
[plaintiff] executed a 12-page Mortgage which secured a revolving line of credit of up to
$125,000 with [defendants] as the grantor, and [plaintiff] as the lender.”
¶ 16 In paragraph 4, defendants’ alleged
“[t]he only reference to the time period covered by said Mortgage in paragraph 3, is the
statement ‘this Mortgage…shall secure not only the amount which Lender has presently
advanced to Grantor under the Credit Agreement, but also any future amounts which
Lender may advance to Grantor under the Credit Agreement within twenty (20) years
from the date of this Mortgage to the same extent as if such future advance were made as
of the date of the execution of this Mortgage, or until October 29, 2021.” (Emphasis
added.)
¶ 17 In paragraph 5, defendants alleged “[t]hat the above-referenced Credit Agreement,
secured by the Mortgage at issue, was also executed on October 29, 2001, with a maximum
credit amount of $100,000 payable upon maturity on October 29, 2011.”
¶ 18 In paragraph 6, defendants alleged “[t]hat the time period of the Mortgage at issue is
unequivocally for a 20 year term or until October 29, 2021.” (Emphasis added.)
¶ 19 In paragraph 7, defendants alleged
“[t]hat page 1 of said Credit Agreement further provided in the ‘Term’ paragraph: ‘You
(PORTER) agree that we (Harris Trust and Savings Bank) may renew or extend the
period during which you may obtain credit advances or make payments. You further
agree that we may renew or extend your Credit Line Account.’ Said ‘Term’ paragraph in
the Credit Agreement does not require that a renewal or extension of time of the Credit
Agreement be in writing.” (Emphasis in original.)
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¶ 20 In paragraph 8, defendants alleged
“[t]hat page 3 of said Credit Agreement provides in the ‘Change in Terms’ paragraph
that ‘We (Harris Trust and Savings Bank) may make changes to the terms of this
Agreement if you (PORTER) agree to the change in writing at that time, if the change
will unequivocally benefit you (PORTER) throughout the remainder of your Credit Line
Account, or if the change is insignificant (such as changes related to our data processing
systems).’ Thus, a simple reading of the ‘Change in Terms’ paragraph make it plain that
the sentence structure is an ‘either or’ basis, rather than an ‘either and’ basis. Put another
way, the Bank could only make changes to the Credit Agreement if PORTER agreed in
writing or if the change unequivocally benefitted Porter or if the change would be
insignificant; rather than ‘if PORTER agreed in writing and if the change benefitted
PORTER and if the change was insignificant.’ This language is key, as it clearly
establishes that the only changes to the Credit Agreement which are required to be in
writing are those which will not unequivocally benefit Counter-Plaintiff PORTER.”
¶ 21 In paragraph 10, defendants alleged that they physically went into a BMO Harris branch
and
“expressly asked the female BMO HARRIS agent-employee whom provided service, that
in light of the 20-year period of the actual Mortgage (through October 2021), what steps
should be taken by Counter-Plaintiffs to have Counter-Defendant extend the period
during which to make payments on the outstanding balance of the Credit Agreement
through October 2021, as was contractually provided as an option in the ‘Term’ section
of said Credit Agreement (paragraph 6 above). Said BMO-Harris agent-employee
provided [defendant] with a customer service number ***.”
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¶ 22 In paragraph 11, defendants alleged that they again made payment and contacted plaintiff
via the customer service number previously provided and again
“expressly asked, that in light of the 20-year period of the actual Mortgage (through
October 2021), what steps should be taken by [defendants] to have [plaintiff] extend the
period during which to make payments on the outstanding balance of the Credit
Agreement through October 2021, as was contractually provided as an option in the
‘Term’ section of said Credit Agreement (paragraphs 6 through 8 above). That in direct
response to these inquiries [plaintiff] directed [defendants] to continue to remit regular
monthly payments on the outstanding Credit Agreement balance in order to effectuate an
extension of time through October 2021 in which to pay the outstanding balance.”
¶ 23 Paragraphs 12 and 13 made similar allegations as in paragraph 10 related to payments
made by defendants from November 2011 through January 2012.
¶ 24 Paragraph 14 alleged that defendants tendered “in-person on-site payments each and
every month to BMO Harris agent-employees” located at certain branches (although for 19 of the
payments, defendants indicated “on-site payment location research continues”), and not all of the
payments were equal amounts.
¶ 25 Paragraph 15 alleged that at the time of each payment on the credit agreement
“secured by the 20 year mortgage, brief conversations occurred between [defendants] and
the BMO Harris agent-employees who serviced [them], and during each and every
interchange, the BMO Harris agent-employees reassured [defendants] that continuing to
remit regular monthly payments on the Credit Agreement extended the period of
repayment through the time secured by the concurrent mortgage which runs through
October 2021.” (Emphasis added.)
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¶ 26 Paragraph 16 alleged that plaintiff’s direction to defendants to continue to remit regular
monthly payments constituted an offer by plaintiff to defendants to extend the contractual period
in which to make payments on the outstanding balance through the time secured by the
concurrent mortgage which runs through October 2021.
¶ 27 Paragraph 17 alleged that defendants’ on-site remittance of regular monthly payments to
plaintiff for 31 consecutive months constituted an acceptance of the offer by plaintiff to extend
the contractual period in which to make payments on the outstanding balance of the credit
agreement.
¶ 28 Paragraph 18 alleged that the offer and acceptance described in paragraphs 16 and 17 to
extend the time of repayment under the credit agreement through the period of when the
concurrent mortgage ends in October 2021 unequivocally benefitted defendants and was thus not
required to be in writing.
¶ 29 Paragraphs 19 through 28 alleged that when defendants went to make the June 2014
payment, it was not accepted; plaintiff filed the foreclosure action in July 2014, and that it was
the first time that defendants were made aware that plaintiff was not honoring the extended time
for repayment. At that time, defendants sought a loan modification, which was denied.
Defendants allege that the denial was based on a credit report with negative information
regarding defendants’ repayment of the loan at issue and student loan payment information. In
paragraph 29, defendants alleged
“[t]hat is not routine and customary practice for loan modification requests for homes
with large equity balances, and upon which monthly loan payments have never been
missed, to be rejected on the basis of student loans which have never been in default or in
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collections, and which have been current in excess of 2 years and 5 years respectively.”
(Emphasis added.)
Additionally, defendants alleged in paragraph 30
“[t]hat in fact, [plaintiff] did not use the two aforementioned student loans which have
never been in default or in collections, and which have been current in excess of 2 years
and 5 years respectively, as its basis for rejecting the aforementioned loan modification
request. Rather, [plaintiff] used its own wrongfully created adverse information on the
second mortgage Credit Agreement at issue, after said [plaintiff] was already a party to
a binding implied-in-fact contractual extension of said Credit Agreement.” (Emphasis
added.)
¶ 30 Paragraphs 31 through 33 alleged that plaintiff’s adverse reporting while accepting
regular monthly payments on the “extended implied-in-fact contractual extension of said Credit
Agreement at its own direction,” “failing and neglecting to inform [defendants] that it considered
them in default,” and “reliance on the sole non-current account contained in the Transunion
Consumer Relations report to deny a loan modification, which said [plaintiff] itself wrongfully
created” all amounted to breach of the “implied-in-fact contractual extension of said Credit
Agreement.” In paragraph 34, defendants alleged that the acceptance of regular monthly
payments on the “extended implied-in-fact contract at its own direction” caused them to
detrimentally rely on the fact that they had an extended contract, and that they are now unable to
secure financing on the credit agreement, all of which amounted to breach of contract.
¶ 31 Paragraph 35 alleged that plaintiff’s initiation of the underlying foreclosure action
constituted breach of the extended period of the credit agreement.
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¶ 32 Paragraphs 36 to 38 related to defendants’ count II, titled “Breach of Implied-in-Fact
Contract.” Paragraph 36 incorporated paragraphs 1 to 35. Paragraph 37 alleged that the offer and
acceptance described in paragraphs 16 and 17
“connotes a new a [sic] distinct implied-in-fact contractual agreement on the outstanding
balance of the loan at issue with the original balance satisfied by the new and distinct
agreement, and with repayment of the former balance to be completed in the new and
distinct implied-in-fact contract at the end of the term of the mortgage on October 29,
2021.”
Paragraph 38 alleged that plaintiff’s initiation of the foreclosure action constitutes a breach of
said implied-in-fact contract.
¶ 33 C. Plaintiff’s Section 2-615 Motion
¶ 34 Plaintiff filed a section 2-615 (735 ILCS 5/2-615 (West 2016)) motion to dismiss
defendants’ third counterclaim with prejudice, in which it argued that defendants’ contention of
an implied-in-fact contract conflicts with basic contract law and that the claim was otherwise
insufficiently pled.
¶ 35 In response, defendants’ argued that their counterclaim sufficiently pled a breach of
contract cause of action, that dismissal would not be a proper remedy under section 2-615, and
that plaintiff’s motion was not limited to the face of the counterclaim.
¶ 36 In reply, plaintiff contended that neither the mortgage nor the credit agreement supported
defendants’ claim and that defendants had not, by the admission in their own pleading, sought a
20-year loan but instead sought an extension of time to pay the balance of the matured loan.
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¶ 37 On February 23, 2017, oral argument was held before the trial court on plaintiff’s motion
to dismiss defendants’ third amended counterclaim. 2 The trial court’s order indicated that the
third amended complaint would be disposed of by separate written order. On March 13, 2017,
the court entered a written order which stated in pertinent part:
“IT IS HEREBY ORDERED that
1. Pursuant to this Court’s Order and findings entered February 23, 2017,
the Court finds and holds that:
a. As there is no dispute that money was owed on the subject loan
and the [sic] is no allegation of sufficient consideration raised
to support the claim for an oral contract, there is no binding contract even
taking all facts alleged as true.
b. The Court therefore strikes and dismisses defendants’ Third
Amended Counterclaim with prejudice;
c. There is no just reason for delaying enforcement or appeal or
both of this final order.”
¶ 38 On March 22, 2017, defendants filed a motion to reconsider the February 23, 2017, order,
which was denied on April 27, 2017. Defendants filed a timely notice of appeal on May 22,
2017, seeking a review of the trial court’s order striking their third amended counterclaim with
prejudice. Defendants subsequently filed a motion in this court to stay the trial proceedings
pending review of this interlocutory appeal, which was granted on August 9, 2017.
¶ 39 ANALYSIS
2
No transcript of those proceedings was filed in this appeal.
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¶ 40 On appeal, defendants challenge the trial court’s dismissal of their third amended
counterclaim with prejudice on plaintiff’s motion pursuant to section 2-615.
¶ 41 A. Illinois Supreme Court Rule 342
¶ 42 As a preliminary matter, we admonish defendants to heed the Illinois Supreme Court
Rules regarding briefing. First, Illinois Supreme Court Rule 342 (eff. July 1, 2017) requires
appellants to attach, as an appendix, “a complete table of contents, with page references, of the
record on appeal.” The purported appendix to appellants’ brief is incomplete and does not reflect
the requirements of the rule.
¶ 43 Illinois Supreme Court rules are not advisory suggestions but mandatory rules to be
followed. In re Marriage of Hluska, 2011 IL App (1st) 092636, ¶ 57. While failure to abide by
the rules may result in the brief being stricken, we nevertheless will address the merits of the
appeal. Hluska, 2011 IL App (1st) 092636, ¶¶ 57-58.
¶ 44 B. Guiding Principles
¶ 45 A section 2-615 motion attacks the legal sufficiency of a complaint. Tyrka v. Glenview
Ridge Condominium Ass’n, 2014 IL App (1st) 132762, ¶ 33. When ruling on a 2-615 motion, a
court must accept as true all well-pleaded facts in the complaint, as well as reasonable inferences
that may be drawn from those facts. Tyrka, 2014 IL App (1st), ¶ 33. A trial court should only
dismiss a count or cause of action if it is readily apparent from the pleadings that there is no
possible set of facts that would entitle the plaintiff to the requested relief. Jordan v. Knafel, 355
Ill. App. 3d 534, 539 (2005). The question for the trial court is whether the allegations of the
complaint, when construed in the light most favorable to the plaintiff, are sufficient to establish
the cause of action. Jordan, 355 Ill. App. 3d at 539.
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¶ 46 Our supreme court has emphasized that Illinois is a fact-pleading jurisdiction and that
plaintiffs are required to allege sufficient facts to bring a claim within a legally recognized cause
of action. Marshall v. Burger King Corp., 222 Ill. 2d 422, 429-30 (2006). Although plaintiffs are
not required to set forth evidence in a complaint, they also cannot set forth “simply conclusions.”
Marshall, 222 Ill. 2d at 429-30. Conclusory allegations unsupported by specific facts will not
suffice. Marshall, 222 Ill. 2d at 429-30.
¶ 47 On appeal, our review of a trial court’s section 2-615 dismissal order is de novo. DeHart
v. DeHart, 2013 IL 114137, ¶ 18 (citing Bonhomme v. St. James, 2012 IL 112393, ¶ 34).
De novo consideration means that we perform the same analysis that a trial judge would perform.
Khan v. BDO Seidman, LLP, 408 Ill. App. 3d 564, 578 (2011).
¶ 48 C. Contract Implied in Fact
¶ 49 Defendants contend that their third amended counterclaim sufficiently pleaded a cause of
action for breach of an implied-in-fact contract. Specifically, in support of their claim that they
sufficiently pleaded consideration, they argue that (1) plaintiff’s own complaint and exhibits
were a stipulation and admission that defendants were to pay interest as consideration on the
outstanding loan balance; (2) defendants’ motion for reconsideration stated the new contractual
agreement would require defendants to pay between 6% and 18% annual percentage rate as
consideration on the balance of the outstanding loan for an additional 120 months; and (3)
defendants’ third amended counterclaim plainly stated in paragraphs 11, 12, 16, and 17 that part
and parcel of the asserted offer and acceptance was for defendants to have a loan balance through
the entirety of the new agreement until it ended on October 29, 2021. Defendants also contend
that it is clear, through plaintiff’s representatives, that plaintiff offered a new and/or modified
payment plan of the debt at issue to run until the end of the 20-year mortgage.
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¶ 50 We first note that no transcripts from any of the oral arguments in the trial court were
included as part of the record in this appeal. Specifically, we are without the findings made by
the trial court on February 23, 2017, during the hearing on plaintiff’s motion to dismiss
defendants’ third amended counterclaim, which the court refers to in its March 13, 2017, order. It
is defendants’ duty, as appellant, to present a sufficiently complete record of the trial court
proceedings to support their claim of error. Foutch v. O’Bryant, 99 Ill. 2d 389, 391-92 (1984). In
the absence of such a record, we will presume that the trial court’s judgment was in conformity
with the law and with sufficient factual basis. Foutch, 99 Ill. 2d at 392. Any doubts arising from
the incompleteness of the record will be resolved against the appellant. Foutch, 99 Ill. 2d at 392.
¶ 51 We thus turn our discussion to whether defendants have sufficiently pled facts to
establish a contract implied in fact. Generally, whether a contract implied in fact exists is a
question of law, the determination of which is reviewed de novo. Wood v. Wabash County, 309
Ill. App. 3d 725, 727-28 (1999). The existence of a contract implied in fact, however, depends on
the facts, circumstances, and expressions by the parties demonstrating intent to be bound.
Century 21 Castles by King, Ltd. v. First National Bank of Western Springs, 170 Ill. App. 3d
544, 548 (1988).
¶ 52 A contract implied in fact must contain all elements of an express contract; the only
difference between an express contract and an implied contract is that an implied contract is
inferred from the facts and conduct of the parties, rather than from an oral or written agreement.
In re Marriage of Bennett, 225 Ill. App. 3d 828, 831 (1992). Thus, a contract implied in fact
arises not by express agreement but, rather by a promissory expression that may be inferred from
the facts and circumstances that show intent to be bound. Kohlenbrener v. North Suburban
Clinic, Ltd., 356 Ill. App. 3d 414, 419 (2005). Therefore, to sufficiently plead an implied-in-fact
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contract, defendants had to plead the essential elements of a contract, supplied by implication
from the parties’ conduct or actions. Marriage of Bennett, 225 Ill. App. 3d at 831-32.
¶ 53 The elements of a contract are an offer, acceptance, and consideration. Trapani
Construction Co. v. The Elliot Group, Inc., 2016 IL App (1st) 143734, ¶ 42. Thus, a contract
implied in fact contains all of the elements of a contract, including a meeting of the minds.
Trapani Construction Co., 2016 IL App (1st) 143734, ¶ 42. In reviewing defendants’ third
amended counterclaim, we accept as true all well-pleaded facts and reasonable inferences
therefrom, but we need not accept conclusions or inferences which are not supported by specific
factual allegations. Nuccio v. Chicago Commodities, Inc., 257 Ill. App. 3d 437, 443 (1993).
¶ 54 We reiterate that our review of a section 2-615 motion is de novo. Additionally, we may
affirm on any basis or ground for which there is a factual basis in the record regardless of the
trial court’s reasons. Guinn v. Hoskins Chevrolet, 361 Ill. App. 3d 575, 586 (2005).
¶ 55 An examination of defendants’ third amended counterclaim reveals it is replete with
conclusory statements without sufficient facts to support them. We further note that the
allegations of the third amended counterclaim are nearly identical to those contained in its
predecessors.
¶ 56 Having reviewed defendants’ third amended counterclaim as a whole, we find that it
failed to establish the elements of a contract implied in fact. We find no evidence of offer,
acceptance, or consideration. Nor have defendants shown that there was a meeting of the minds.
¶ 57 1. Offer and Acceptance
¶ 58 In terms of offer, defendants’ conclusion that the maturity date under the terms of the
mortgage was “unequivocally” 20 years is unsupported by any facts. Defendants’ own pleading
indicates that at the time of maturity of the loan, October 2011, they knew they would be unable
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to pay the loan off and sought options. Defendants’ allegation relies on their interpretation of a
contract term within the mortgage, which is itself a conclusion. Defendants made no allegation
that they ever in fact relied on it being a 20-year loan until October 2011, and their interpretation
fails to consider the plain language of the mortgage, credit agreement, and related documents,
which stated that all of the documents were to be considered together and not separately. A court
must consider a contract in the context of the entire agreement. Wilson v. Wilson, 217 Ill. App.
3d 844, 850 (1991). Additionally, the credit agreement specifically stated that it matured on
October 29, 2011. Furthermore, the mortgage indicated that defendants would be in default if
they did not meet the repayment terms of the credit agreement. Thus we find no offer of a 20­
year loan.
¶ 59 Nor were there any facts presented to support defendants’ alternate conclusion that
plaintiff affirmatively extended their credit agreement by accepting late payments, thus satisfying
the element of offer. Defendants’ alleged “brief conversations” with unnamed bank employees at
various locations, some which were undisclosed in the pleadings, while making varying
payments were factually insufficient to support this conclusion. Defendants made no allegation
that these unnamed employees were authorized to offer an extension, and defendants’ own
alleged behavior of asking each and every month contradicts their allegation that they relied on
any perceived extension during the time that they continued to make payments beyond the
maturity date of the loan. Defendants did not identify what employees they spoke to, and the
listing of dates, payments, and locations was incomplete. We also note that the listing of
payments made after October 2011 shows that defendant paid various amounts each month; the
amounts paid ranged from just over $200 up to $725.
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¶ 60 Defendants’ allegations are conclusions; one of which hinges on the construction of
language in the mortgage documents that defendants construe in their own favor without factual
support. The other conclusion hinges on acceptance of defendants’ carving out of certain
provisions of the documents and ignoring others without any factual support or agreement by
plaintiff. A general allegation that a contract exists without a statement of supporting facts is a
mere legal conclusion. Nuccio, 257 Ill. App. 3d at 444.
¶ 61 Illinois is a fact-pleading jurisdiction, and conclusory statements are insufficient to
sustain a cause of action. Marshall, 222 Ill. 2d at 429-30. Defendants’ attempt to adopt certain
portions of their original loan documents while ignoring others is in dereliction of basic contract
law. A contract must be read as a whole, and all parts construed together. J.M. Process Systems,
Inc. v. W.L. Thompson Electric Co., 218 Ill. App. 3d 350, 354 (1991). The mortgage, credit
agreement, and related documents signed by defendants on October 29, 2001, clearly stated that
together they comprise the complete agreement between the parties. Based on a plain reading of
those documents, it is clear that defendants’ loan was a revolving credit line with a 10-year
maturity date (October 29, 2011), at which time the entire balance became due. There was no
automatic extension of the repayment terms under the plain language of the contract, nor were
defendants entitled to an automatic extension of the repayment terms. To the extent that
defendants’ third amended counterclaim makes conclusions on the meaning or intention of the
original loan documents, we find that it contains insufficient facts to establish that the original
mortgage term was 20 years. When interpreting a contract, a court must consider the document
as a whole rather than focus on isolated portions. Cress v. Recreation Services, Inc., 341 Ill. App.
3d 149, 170 (2003).
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¶ 62 Here, the mortgage specifically stated that Lender would not relinquish any of its rights
under the mortgage unless it did so in writing, that “[t]he fact that Lender delays or omits to
exercise any right will not mean that the lender has given up that right,” and that “just because
Lender consents to one or more of Grantor’s requests, that does not mean Lender will be
required to consent to any of Grantor’s future requests.” We believe that plaintiff’s acceptance of
defendants’ payments from 2011-14 was no more than an act of leniency by plaintiff and was not
an offer. At most, it was an exercise of plaintiff’s discretion under the terms of the mortgage. We
therefore conclude that defendants’ third amended complaint failed to show that there was a
valid offer of a 20-year loan initially or that there was an offer to extend the terms of the loan.
¶ 63 2. Consideration
¶ 64 Even if we accepted defendants’ contention that there was an offer and acceptance for
extension, we still would agree with the trial court that defendants’ third amended counterclaim
fails to establish any allegation of consideration.
¶ 65 Valid consideration, on the part of both parties, is one of the essential requirements for
the formation of a contract. Marque Medicos Fullerton, LLC v. Zurich American Insurance Co.,
2017 IL App (1st) 160756, ¶ 65. In support of their claim that they sufficiently pleaded
consideration, defendants contend that (1) plaintiff’s own complaint and exhibits were a
stipulation and admission that defendants were to pay interest as consideration on the
outstanding loan balance; (2) defendants’ motion for reconsideration stated the new contractual
agreement would require defendants to pay between 6% and 18% annual percentage rate as
consideration on the balance of the outstanding loan for an additional 120 months; and (3)
defendants’ third amended counterclaim plainly stated in paragraphs 11, 12, 16, and 17 that part
and parcel of the asserted offer and acceptance was for defendants to have a loan balance through
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the entirety of the new agreement until it ended on October 29, 2021. However, the preexisting
duty rule provides that where a party does what it is already legally obligated to do, there is no
consideration, as there is no detriment. White v. Village of Homewood, 256 Ill. App. 3d 354, 357
(1993). For an extension of the payment of a note to be binding on the parties, it must be for a
definite period and must be supported by consideration. Mitchell v. Peterson, 97 Ill. App. 3d 363,
367 (1981).
¶ 66 According to the terms of the original loan documents, plaintiff was already authorized to
charge between 6% and 18% in interest for installments due under the credit agreement.
Therefore, the interest payments that defendants reference, not in their third amended
counterclaim but in their motion to reconsider, were not additional interest providing
consideration for the alleged extension agreement. See Waters v. Simpson, 7 Ill. 570, 576 (1845)
(payment of interest nothing more than required in original contract is insufficient consideration
to support a promise to forbear the collection of the note; such promise would be a mere gratuity
and could not be enforced). As such, there was no valid consideration to support defendants’
claimed contract implied in fact.
¶ 67 CONCLUSION
¶ 68 For the foregoing reason, we affirm the decision of the trial court.
¶ 69 Affirmed.
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