Greenpoint Mortg. Funding, Inc. v. Hirt

2020 IL App (1st) 190832

166 N.E.3d 830

445 Ill.Dec. 400

GREENPOINT MORTGAGE FUNDING, INC., Plaintiff and Counter-Defendant-Appellee,

v.Cynthia HIRT; Mortgage Electronic Registration Systems, Inc.; GreenPoint Mortgage Funding, Inc.; Town Place Condominium Association ; Unknown Owners; and Nonrecord Claimants, Defendants

(Cynthia Hirt, Defendant and Counter-Plaintiff-Appellant).

No. 1-19-0832

Appellate Court of Illinois, First District, SIXTH DIVISION.

Filed March 27, 2020

Rehearing denied April 24, 2020

Douglas M. Matton, of Matton Law Offices, and Stephen E. Brown, both of Chicago, for appellant.

Jeffrey D. Pilgrim and Matthew O. Stromquist, of Pilgrim Christakis LLP, of Chicago, for appellee.

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

¶ 1 This case began as a mortgage foreclosure action by GreenPoint Mortgage Funding, Inc. (GreenPoint) against Cynthia Hirt, who filed affirmative defenses and counterclaims seeking rescission of the loan and damages pursuant to the Truth in Lending Act (Act) ( 15 U.S.C. § 1601 et seq. (2012) ). As the litigation was pending, GreenPoint assigned the mortgage to U.S. Bank National Association (U.S. Bank), U.S. Bank and Hirt agreed to refinance the mortgage, and U.S. Bank dismissed the foreclosure action. GreenPoint and Hirt litigated Hirt's counterclaims for rescission and damages, with the trial court granting summary judgment for GreenPoint regarding rescission in February 2016 and statutory damages in March 2017. On appeal, we affirmed the March 2017 summary judgment on statutory damages but reversed the February 2016 summary judgment on rescission, finding that a question of fact remained as to whether Hirt had three days or three years to seek rescission under the Act. GreenPoint Mortgage Funding, Inc. v. Hirt , 2018 IL App (1st) 170921, ¶ 3, 420 Ill.Dec. 492, 97 N.E.3d 66. On remand, the trial court held an evidentiary hearing in February 2019 and entered judgment for GreenPoint in March 2019.

¶ 2 On appeal, Hirt contends that the March 2019 judgment was against the manifest weight of the evidence and that GreenPoint violated the Act by including in a financing statement fees prohibited by the Act. For the reasons stated below, we affirm.

¶ 3 I. JURISDICTION

¶ 4 GreenPoint filed its foreclosure action in May 2008, and Hirt filed her counterclaim for rescission and damages in April 2009. The foreclosure action was dismissed without prejudice in October 2015. The circuit court granted summary judgment for GreenPoint as to Hirt's rescission claim in February 2016 and statutory damages claims in March 2017. Hirt appealed, and in January 2018, we affirmed in part, reversed in part, and remanded for further proceedings. The circuit court held an evidentiary hearing in February 2019 and entered judgment for GreenPoint on March 22, 2019. Hirt filed her notice of appeal on April 18, 2019. Accordingly, this court has jurisdiction over this matter pursuant to article VI, section 6, of the Illinois Constitution ( Ill. Const. 1970, art. VI, § 6 ) and Illinois Supreme Court Rules 301 (eff. Feb. 1, 1994) and 303 (eff. May 30, 2008).

¶ 5 II. BACKGROUND

¶ 6 Hirt refinanced her mortgage loan on certain real property in Schaumburg, Illinois, in May 2005, and GreenPoint lent Hirt $219,200 secured by the property. Hirt failed to make a required payment on the loan on February 1, 2008. On February 12, 2008, Hirt sent GreenPoint a notice of rescission pursuant to the Act asserting that GreenPoint failed to comply with the Act's various disclosure requirements and that she was therefore entitled to rescind the loan. GreenPoint received Hirt's notice of rescission on February 15, 2008.

¶ 7 A. Initial Litigation

¶ 8 GreenPoint filed a mortgage foreclosure complaint in May 2008 alleging Hirt's failure to make monthly payments from February 1, 2008, onward. A copy of the mortgage was attached.

¶ 9 Hirt filed her appearance, answer, and affirmative defenses in January 2009, denying every allegation in the complaint. Her affirmative defenses alleged that she mailed a notice of rescission to GreenPoint on February 12, 2008, which it received on February 15, because it had failed to comply with "various requirements of" the Act and related regulations (12 C.F.R. § 226 (2008) (Regulation Z)) by not providing "an adequate number of copies of the Notice of Right to Cancel" (hereinafter Notice of Right) or "adequate disclosures" under the Act. She alleged that her notice rendered the note and mortgage void ab initio so that GreenPoint had no security interest in her property and could not maintain a foreclosure action. Hirt asked the court to dismiss the foreclosure action with prejudice, declare the entire loan transaction void, order GreenPoint to refund any money she paid under the transaction, award statutory damages for GreenPoint's alleged failures to make proper disclosure and to honor the rescission, and award costs and attorney fees. Attached were Hirt's rescission letter and a certified mail receipt, with the former stating that Hirt was rescinding because of GreenPoint's "failure to comply with the Truth In Lending Act and its implementing regulations, including, but not limited to, Regulation Z."

¶ 10 In April 2009, Hirt filed her counterclaim against GreenPoint, asserting that it had violated the Act and Regulation Z by failing to (1) provide her with two copies of the Notice of Right and (2) properly and accurately disclose various terms of the loan agreement including the finance charge. Hirt asserted that, due to these violations, her right to rescind under the Act was not three days but three years so that her February 2008 rescission notice was timely. She alleged that GreenPoint failed after the rescission to take any action necessary to terminate the security interest in Hirt's property or to return any money to her. Hirt sought termination of the loan transaction, refund of any money she paid under the transaction, statutory damages for GreenPoint's alleged failures to make proper disclosure and to honor the rescission, actual damages, and attorney fees. Attached to the counterclaim were the mortgage, the loan note underlying the mortgage, and the rescission letter and certified mail receipt.

¶ 11 GreenPoint filed its answer to the counterclaim in May 2009, denying that it violated the Act and Regulation Z and specifically denying that it failed to (1) provide two copies of the Notice of Right or (2) properly disclose the terms of the loan agreement. GreenPoint denied that Hirt timely rescinded the transaction but acknowledged the content of the purported rescission letter and the mailing receipt. GreenPoint acknowledged its refusal to release the mortgage or refund Hirt but denied any impropriety. GreenPoint acknowledged the contents of the note and mortgage and that the loan was not made to finance the purchase or initial construction of Hirt's property. GreenPoint asserted affirmative defenses of limitations, estoppel, laches, and waiver; reiterated that it properly made all disclosures and provided all notices; and claimed that Hirt would be unjustly enriched if she received her relief.

¶ 12 In the course of discovery, Hirt was deposed in August 2009. She acknowledged signing a receipt at the May 2005 closing that she was provided with two copies of the Notice of Right. However, she testified to leaving the closing with only one copy of the Notice of Right, which she did not realize until she reviewed her entire closing packet with her attorney in 2008. After she left the closing with the loan documents in the folder given to her, she went home and placed the folder into a file cabinet where it remained until she gave it to her attorney. She never looked at the folder during that time, nor did she review it before meeting with her attorney. Hirt last made a payment on the mortgage loan in January 2008 and decided to not make further payments because she was in financial difficulty due to medical bills. She acknowledged signing at the closing a disclosure stating and defining the amount financed ($217,609.58), finance charge ($283,262.50), annual percentage rate (5.972%), monthly payment schedule, and total payments ($500,872.08) for the mortgage loan. Hirt understood that, if her rescission claim was successful, her loan and mortgage obligations would end but she would have to repay the amount she borrowed minus finance charges. However, she did not know if she could make that repayment. She did not have more than $200,000 in assets or in any bank account, nor did she own any real property other than the mortgaged property at issue.

¶ 13 GreenPoint moved to substitute U.S. Bank as plaintiff, which the court did in August 2014. U.S. Bank later moved to dismiss the foreclosure complaint without prejudice because Hirt had accepted a loan modification. In October 2015, the court dismissed the foreclosure complaint without prejudice, with each party to bear its own costs and attorney fees.

¶ 14 B. Summary Judgment

¶ 15 In November 2015, GreenPoint moved for summary judgment on Hirt's counterclaim, arguing that (1) it could not grant rescission of the loan and mortgage once it had conveyed its interest to U.S. Bank and (2) Hirt's claim was barred by her "admitted inability to tender repayment of the Loan" as provided in the Act and Regulation Z. GreenPoint also argued that Hirt's counterclaim was barred by the one-year limitation period in the Act for damages claims arising from failing to provide adequate disclosures. 15 U.S.C. § 1640(a), (e) (2012). GreenPoint argued that it did not violate the Act and Regulation Z as alleged because Hirt acknowledged in her deposition that she signed documents (1) stating that she received the requisite two copies of the Notice of Right and (2) disclosing the requisite terms of the loan and mortgage.

¶ 16 Hirt responded to the summary judgment motion, arguing that there was a genuine issue of material fact as to whether she received two copies of...