Andersonville S. Condo. Ass'n v. Fed. Nat'l Mortg. Co.

2017 IL App (1st) 161875

91 N.E.3d 404

ANDERSONVILLE SOUTH CONDOMINIUM ASSOCIATION, Plaintiff–Appellee,

v.FEDERAL NATIONAL MORTGAGE COMPANY, Defendant–Appellant

No. 1–16–1875

Appellate Court of Illinois, First District, THIRD DIVISION.

Opinion filed October 11, 2017

Ralph T. Wutscher, Jeffrey T. Karek, and Stuart Miles, of Maurice Wutscher LLP, of Chicago, for appellant.

Daniel Kaufman, of Ira T. Kaufman P.C., of Chicago, for appellee.

JUSTICE FITZGERALD SMITH delivered the judgment of the court, with 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) 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.

¶ 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) ( Ill. S. Ct. R. 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, 398 Ill.Dec. 95, 43 N.E.3d 1005, 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 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) ( Ill. S. Ct. R. 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...