Country Club Estates Condo. Ass'n v. Bayview Loan Servicing LLC

2017 IL App (1st) 162459

84 N.E.3d 1140

COUNTRY CLUB ESTATES CONDOMINIUM ASSOCIATION, Plaintiff–Appellant,

v.BAYVIEW LOAN SERVICING LLC, Defendant–Appellee

(All Unknown Occupants, Defendants).

No. 1-16-2459.

Appellate Court of Illinois, First District, SECOND DIVISION.

August 8, 2017

Fullett Rosenlund Anderson PC, of Lake Zurich (Stuart A. Fullett, Jeffrey D. Swanson, and Antonio C. Capozzi, of counsel), for appellant.

Noonan & Lieberman, Ltd., of Chicago (James V. Noonan and Robert Reynolds, of counsel), for appellee.

OPINION

JUSTICE MASON delivered the judgment of the court, with opinion.

¶ 1 Defendant Bayview Loan Servicing purchased a condominium unit through a foreclosure sale confirmed in November 2014. At the time of the sale, the unit had accrued nearly $14,000 in unpaid monthly assessments to plaintiff Country Club Estates Condominium Association. But seven months after its purchase, despite a demand from the Association, Bayview refused to pay any assessments, past or present. Thus, in April 2015, the Association filed the present lawsuit against Bayview pursuant to the Forcible Entry and Detainer Act ( 735 ILCS 5/9–101 et seq. (West 2014)), seeking possession of the unit and $18,659.26 in unpaid assessments.

¶ 2 Nearly two months after the lawsuit was filed, and seven months after Bayview acquired the unit, Bayview tendered to the Association a payment of $4,771.85, which represented only the assessments that accrued after the foreclosure sale. Bayview then moved for summary judgment, arguing that under section 9(g)(3) of the Condominium Property Act (Act) ( 765 ILCS 605/9(g)(3) (West 2014)), its tender of assessments accruing after the foreclosure sale extinguished the Association's lien for assessments that accrued before the foreclosure sale. The trial court agreed and granted partial summary judgment to Bayview as to the presale assessments.

¶ 3 We reverse and hold that, in order to extinguish presale assessments under section 9(g)(3), a foreclosure buyer must make prompt payment of assessments after acquiring the property. Summary judgment for Bayview was improper because a material question of fact exists as to whether Bayview's tender, seven months after acquiring the unit, can be considered prompt. We therefore remand for further proceedings.

¶ 4 BACKGROUND

¶ 5 The following facts are undisputed. On November 21, 2014, Bayview acquired title via sheriff's deed to a condominium unit located at 4002 West 193rd Street in Country Club Hills, Illinois. That unit is part of the Association, and, pursuant to the Act, the unit owner is required to pay monthly assessments to the Association. The previous owner had unpaid assessments dating back to January 2011.

¶ 6 After it purchased the property at the foreclosure sale, Bayview failed to pay any assessments. On March 13, 2015, the Association sent Bayview a letter demanding payment of $18,379.26 in past-due assessments that accrued both before and after Bayview acquired the unit. When Bayview still refused to pay, the Association filed this lawsuit on April 27, 2015, seeking (i) possession of the unit and (ii) a judgment against Bayview for $18,659.26, plus late charges, interest, fines, chargebacks, and any assessments accruing after the filing of the action.

¶ 7 On June 22, 2015, Bayview tendered a payment of $4,771.85 to the Association, representing only the assessments that accrued after it purchased the unit. The Association refused the tender, as it was not the Association's policy to accept partial payments. Bayview then moved for partial summary judgment. In its motion, Bayview admitted that it owed $4,771.85 in assessments that accrued since it purchased the unit, but it argued that under section 9(g)(3) of the Act, its tender of the postsale assessments extinguished the Association's lien for the presale assessments.

¶ 8 In response, the Association argued that, under our supreme court's interpretation of section 9(g)(3) in 1010 Lake Shore Association v. Deutsche Bank National Trust Co. , 2015 IL 118372, ¶ 24, 398 Ill.Dec. 95, 43 N.E.3d 1005, a foreclosure buyer is required to make "prompt" payment of postsale assessments in order to extinguish an association's lien for previous unpaid assessments. Although the Association did not file a cross-motion for summary judgment, it further argued that Bayview's tender was not prompt as a matter of law. As stated by the Association's counsel in oral argument: "I don't see a universe where seven months is prompt."

¶ 9 The trial court granted Bayview's motion for partial summary judgment and denied the Association's motion for reconsideration. Following a prove-up, the court granted $5,249.92 in postsale assessments to the Association. The court also entered a finding under Supreme Court Rule 304(a) (eff. Mar. 8, 2016) that there was no just cause to delay the enforcement or appeal of its ruling, and it stayed the issue of the Association's request for attorney fees pending the result of the appeal.

¶ 10 ANALYSIS

¶ 11 The Association argues, as it did before the trial court, that under 1010 Lake Shore , a foreclosure buyer must make prompt payment of current assessments in order to extinguish an association's lien for any presale amounts due and owing. It further argues that Bayview's delay of seven months in tendering payment of postsale assessments was not prompt as a matter of law, or, alternatively, that the reasonableness of Bayview's payment presents a material issue of fact precluding summary judgment.

¶ 12 Bayview argues that, under the plain language of section 9(g)(3), there is no promptness requirement; a foreclosure buyer may withhold assessments for as long as it pleases, regardless of the reasonableness of such action, and still extinguish the association's lien whenever it chooses to pay the postsale assessments. In the alternative, Bayview argues that if 1010 Lake Shore imposes a promptness requirement, it should not be applied retroactively, since 1010 Lake Shore was not decided until more than five months after Bayview's partial tender.

¶ 13 The interpretation of a statute is a question of law that we review de novo ( Taddeo v. Board of Trustees of the Illinois Municipal Retirement Fund , 216 Ill.2d 590, 595, 297 Ill.Dec. 425, 837 N.E.2d 876 (2005) ), as is the propriety of the trial court's grant of summary judgment ( Allegis Realty Investors v. Novak , 223 Ill.2d 318, 330, 307 Ill.Dec. 592, 860 N.E.2d 246 (2006) ). In interpreting a statute, our main goal is to ascertain and effectuate the intent of the legislature. 1010 Lake Shore , 2015 IL 118372, ¶ 21, 398 Ill.Dec. 95, 43 N.E.3d 1005. The best indicator of that intent is the language of the statute itself, given its plain and ordinary meaning. Id. If the language is unambiguous, we apply it as written; but where the language is unclear, we may determine the legislature's intent from other sources, such as legislative history. Krohe v. City of Bloomington , 204 Ill.2d 392, 395, 273 Ill.Dec. 779, 789 N.E.2d 1211 (2003).

¶ 14 Section 9(g) of the Act provides, in relevant part:

"(1) If any unit owner shall fail or refuse to make any payment of the common expenses or the amount of any unpaid fine when due, the amount thereof *** shall constitute a lien on the interest of the unit owner in the property ***.

* * *

(3) The purchaser of a condominium unit at a judicial foreclosure sale *** 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 ***. 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 ***." 765 ILCS 605/9(g) (West 2014).

Under the plain language of this section, it is clear 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." Id. But on the face of the statute, section 9(g)(3) does not contain any time limit for confirming the extinguishment of an association's lien. Thus, we must look beyond the statute's language in order to resolve this issue.

¶ 15 In determining the legislature's intent, we consult the legislative history of section 9(g). See Krohe , 204 Ill.2d at 398, 273 Ill.Dec. 779, 789 N.E.2d 1211 ("legislative history and debates are ‘[v]aluable construction aids in interpreting an ambiguous statute’ ") (quoting Advincula v. United Blood Services , 176 Ill.2d 1, 19, 223 Ill.Dec. 1, 678 N.E.2d 1009 (1996) ). Unfortunately, there is no legislative debate pertaining specifically to the extinguishment clause; the current version of section 9(g)(3), which became effective in 1992, passed unanimously without substantive discussion. P.A. 87–692 (§ 1) (eff. Jan. 1, 1992) (amending Ill. Rev. Stat. 1991, ch. 30, ¶ 309 ); see 87th Ill. Gen. Assem., House Proceedings, May 3, 1991, at 38–39, 41; 87th Ill. Gen. Assem., Senate Proceedings, June 20, 1991, at 109–10; 87th Ill. Gen. Assem., House Proceedings, June 27, 1991, at 74–75. But on other occasions, our legislature has expressed concern about the difficulties faced by condominium associations when a unit owner fails to pay his or her share of common expenses and the unit then goes into foreclosure. For instance, in 2006, the legislature adopted an amendment to section 9(g) that would give greater protection to condominium associations (P.A. 94–1049 (§ 5) (eff. Jan. 1, 2007) (adding 765 ILCS 605/9(g)(4), (5) ). In support of that amendment, Representative Hamos stated:

"[T]he issue here is that within a condo building there are other condominium owners. They were not responsible for the delinquency, they didn't cause the foreclosure, but they as an association are responsible for paying the operating expenses and maintenance costs associated with that building. It's not their fault that there's a foreclosure,

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