Real Estate Law

Plaintiff bank filed mortgage-foreclosure complaint and obtained $1.5 million judgment.Plaintiff, in supplementary proceedings, caused issuance of citation to discover assets and a 3rd-party citation to company, owned by Defendant's wife, that collected rents for Defendant's properties. Three local banks sought to intervene in supplementary proceedings, to assert adverse claims on rents held by that company. Court properly found that Plaintiff bank did not have priority over adverse claimants as to rents. Pursuant to Section 31.5 of Conveyances Act, rental agreements such as the forbearance agreements are beyond the reach of a 3rd party such as Plaintiff bank. Section 31.5 provides that assignment of rents is perfected upon recording. Mere recording does not affect who is entitled to rents until assignee enforces assignment under applicable law unless parties agree otherwise. (McLAREN and BURKE, concurring.)

Bank obtained foreclosure judgment on warehouse. Before confirmation, warehouse was destroyed by fire. Plaintiff company demolished remains of warehouse, and Plaintiff recorded a mechanic's lien upon completion of work. Bank was not a bona fide innocent 3rd-party purchaser, because through its conduct it induced Plaintiff to perform the work and file separate action. Plaintiff had a right to intervene in foreclosure action but was not required to do so. Legal remedy of statutory mechanic's lien precluded equitable lien as a potentially viable alternative claim for Plaintiff.(HUTCHINSON and SPENCE, concurring.)

(Court opinion corrected 3/30/17.) Court entered judgment of foreclosure and sale in Plaintiff's favor; and granted motion to confirm judicial sale. Court was within its discretion to deny Defendant's motion for discovery, and in granting Plaintiff's motion for summary judgment. Defendant had significant period of time to engage in discovery and to respond to Plaintiff's summary judgment motion, but failed to take timely action. Court did not err in simultaneously confirming judicial sale and granting its counsel's motion to withdraw. Defendant has not raised any claim of prejudice in confirming sale without allowing 21-day continuance.As Defendant failed to set forth argument under any one of the four bases listed in Section 15-1508(b) of Mortgage Foreclosure Law, court was required to confirm sale. (ELLIS and BURKE, concurring.)

Suit for fraud, breach of contract, and violations of Consumer Fraud Act, arising from purchase of a commercial property. Court erred in dismissing case with prejudice. The "as is" provision in purchase contract is not an affirmative matter that avoids legal effect of or defeats any claims in complaint. Many provisions in contract which delineate seller's duties and warranties must be read in conjunction with the "as is" provision. Affidavits of Defendants do not address Plaintiff's allegations of relationship that may constitute enterprise liability. Record is not yet fully developed, and discovery has not commenced on these issues. Court properly denied motion for attorney fees and sanctions, as there is not yet a "prevailing party" as provided in contract; and pleadings were not frivolous. (MOORE and CHAPMAN, concurring.)

(Modified upon denial of rehearing 5/5/17.) After bank acquired condo unit through foreclosure sale, Condo Association filed forcible entry and detainer action against bank for possession of unit, alleging that payments bank remitted to Association for post-sale common expenses after foreclosure sale were untimely. Section 9(g)(3) of Condominium Property Act is designed to encourage prompt payment of post-sale expenses, by setting their payment as a precondition to extinguishment of association liens for pre-sale expenses. Bank, within 16 months of judicial sale, fully paid amounts it owed for unit's post-sale common expenses, and thereby confirmed the extinguishment of Association's lien for pre-sale common expenses, and with it any entitlement to recovery possessed by Association. Thus, bank was entitled to summary judgment.(HOFFMAN and ROCHFORD, concurring).

(Court opinion corrected 4/27/17.) Plaintiff filed replevin action for Porsche. Court properly ordered possession of Porsche awarded to Plaintiff, as later purchaser had obtained title based on previous owner’s fraudulent lien release letter. (SCHOSTOK and SPENCE, concurring.)

Defendants filed Section 2-1401 petition to vacate personal deficiency judgment entered against them in foreclosure. Court properly struck and dismissed Section 2-1401 petition as barred by Section 15-1509( c) of Illinois Mortgage Foreclosure Law.  Section 15-1509(c ) is clear that all claims of parties to foreclosure are barred, and it does not conflict with other statements in Foreclosure Law.  (HARRIS and MIKVA, concurring.)

Defendant homeowners stopped paying their mortgage and warranty deed bearing Defendants' signatures conveyed home to buyers who obtained mortgage, and some of loan proceeds were used to extinguish Defendants' mortages on property. Once buyers' lender's assignor paid off Defendants' mortgages, assignor was subrogated, by operation of law, and it stepped into the shoes of Defendants' mortgage lenders. Thus, buyers' lender acquired priority interest in subject property. Court properly granted assignor's motion for summary judgment, predicated on doctrine of equitable subrogation. (HYMAN and PIERCE, concurring.)