FOURTH DIVISION September 19, 2013
2013 IL App (1st) 120461
No. 1-12-0461
100 ROBERTS ROAD BUSINESS ) Appeal from the CONDOMINIUM ASSOCIATION, ) Circuit Court of ) Cook County. Plaintiff-Appellant, ) ) v. ) No. 10 M3 4333 ) VICTORIA KHALAF and STANLEY HORN ) ) Defendants, ) ) (Judd Azulay, Glenn Seiden, and All) Unknown Occupants, ) Honorable ) Martin S. Agran Defendants-Appellees). ) Judge Presiding
PRESIDING JUSTICE HOWSE delivered the judgment of the court, with opinion. Justices McBride and Taylor concurred in the judgment and opinion.
OPINION
¶ 1 On November 24, 2010, plaintiff 100 Roberts Road Business
Condominium Association filed a forcible entry and detainer
lawsuit against defendants Victoria Khalaf, Stanley Horn, Judd
Azulay, Glenn Seiden and all unknown occupants, claiming that
defendants had failed to pay the common assessments due for a
business condominium since 2004.
¶ 2 On July 28, 2011, following a bench trial, the trial court
entered a judgment for the plaintiff for past-due assessments
against defendants Judd Azulay and Glenn Seiden. However, the 1-12-0461
trial court reduced plaintiff's damage award based on its finding
that plaintiff had failed to mitigate its damages.
¶ 3 Plaintiff filed a motion to reconsider, claiming that it was
inappropriate to reduce plaintiff's award based on its alleged
failure to mitigate damages. On plaintiff's motion for rehearing
the trial court granted plaintiff's motion to reconsider, finding
that defendants had waived their right to argue mitigation based
on the declaration of condominium owners. However, the court then
made a finding that plaintiff had brought the forcible entry and
detainer lawsuit for an improper purpose and dismissed the case
against defendants. Plaintiff appealed. For the reasons that
follow, we reverse the judgment of the circuit court and remand
with directions for further proceedings.
¶ 4 Background
¶ 5 The 100 Roberts Road Condominium building consists of a
three-unit building in Palos Heights, Illinois. The first unit,
10001, is owned by a land trust, with the named beneficiary being
John C. Griffin. Unit 10001 is occupied by the law firm Griffin
and Gallagher, LLC. Unit 10003 is owned by Omer Abuzir and is
occupied by the law firm Abuzir & Mitchell, which is associated
with Victoria Khalaf. Unit 10005, the unit at issue in this
lawsuit, is titled to Victoria Khalaf, Stanley Horn, Glenn Seiden
and Judd Azulay, but has been vacant for a number of years. Unit
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10005 is encumbered with a mortgage signed by Victoria Khalaf,
Stanley Horn, Glenn Seiden and Judd Azulay.
¶ 6 The 100 Roberts Road Business Condominium Association,
plaintiff, consists of three members: Victoria Khalaf, Omer
Abuzir and John C. Griffin. Pursuant to the declaration of
condominium ownership, plaintiff has a duty to maintain the
common areas of the building, estimate the costs associated with
maintaining the common areas and collect assessments from the
unit owners to cover the costs of such maintenance.
¶ 7 Defendants, owners of unit 10005, have not paid common
assessments since 2004, with the exception of $2,000, which was
paid by a Daniel Azulay in 2007.
¶ 8 On June 11, 2010, plaintiff filed a claim for a lien with
the Cook County recorder of deeds in the amount of the unpaid
assessments, $12,910, and mailed the lien to defendants on August
25, 2010. The notice of lien indicated that plaintiff had
retained the law firm Fullest Rosenlund Anderson P.C. to file a
lawsuit and collect the amounts owed in assessments, if
necessary.
¶ 9 On September 23, 2010, plaintiff caused a notice and demand
for possession to be served on all defendants. When there was no
response within the statutory period, plaintiff filed a forcible
entry and detainer lawsuit against defendants on November 24,
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2010. In the lawsuit, plaintiff sought possession, unpaid
assessments, and the payment of costs, late charges, interest and
reasonable attorney fees.
¶ 10 On June 15, 2011, default judgments were entered against
Khalah and Horn. The default judgments were never vacated and
they are not parties to this appeal. On July 6, 2011, Azulay and
Seiden appeared and filed an answer with a general denial of all
allegations.
¶ 11 The trial commenced on July 6, 2011, proceeding against
Azulay and Seiden. There was no court reporter at the trial.
However, in its January 12, 2012 memorandum order, the trial
court recited the facts elicited at trial, which we in turn
recite below.
¶ 12 Plaintiff's first witness, Noreen McInerny, an attorney for
Griffin and Gallagher, LLC, testified that her firm acts as the
attorney and property manager for plaintiff and also rents space
from plaintiff. She testified that the property at issue, unit
10005, is vacant. The warranty deed dated September 2003 states
that the owners of unit 10005 are Victoria Khalaf, Stanley Horn,
Judd Azulay and Glenn Seiden. She testified that with respect to
this litigation, she prepared and filed the notice of liens and
sent copies to defendants; she prepared the demand for possession
and sent copies to defendants; and she filed the complaint on
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November 24, 2010.
¶ 13 McInerny further testified that prior to the weeks leading
up to trial, she had never seen Azulay or Seiden, and she had
never received any checks from either of them. She testified
that the current directors of the association are Khalaf, Abuzir
and Griffin and that Abuzir and Khalaf are in a business
relationship. She testified that the sign on the door of
Abuzir's unit states "Horn, Khalaf, Abuzir & Mitchell."
¶ 14 Next, plaintiff called Mary Corr, the bookkeeper at Griffin
and Gallagher, LLC, who testified that the association pays the
insurance, garbage, fire alarm system and landscaping for the
building. She testified that unit 10005 owes $16,282.15 in
assessments and that since May 2004, she had only received three
checks for assessments, totaling $2,000. She further testified
that when she began doing the book work at Griffin and Gallagher,
LLC, in 2006, unit 10005 was vacant and was $5,000 in arrears.
She was aware that unit 10005 had not paid assessments in years,
but she did not do anything about it. At some point, she was
directed to send notices to Daniel Azulay. She sent several late
notices to Daniel Azulay, but did not send him any claims for
possession.
¶ 15 Defendants called defendant Seiden as a witness. He
testified that he had recently learned that he was an owner of
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unit 10005. He stated that he was never told he was a joint
owner, but acknowledged that his signature was on the mortgage.
He testified that he had known Horn for many years. Seiden and
Horn had been in the practice of law together and Seiden had
entered into about a dozen small investments with Horn. In 2005,
arrangements were made to have Horn dissociate from Seiden's
firm. Ultimately, a lawsuit was filed to effectuate the
dissociation. That litigation is still pending.
¶ 16 In 2006 or 2007, Seiden felt that Khalaf was not fully
accounting for the income she was bringing in at the firm, and
Seiden asked her to take some time off. Khalaf never returned to
the firm. Seiden testified that Daniel Azulay was the brother of
Judd Azulay and they formerly had a law practice together. When
Seiden joined their law firm, Daniel Azulay retained an interest
in the firm, but left the firm shortly thereafter. There had
been bad feelings between the Azulay brothers and Seiden
encouraged the separation.
¶ 17 Following the trial, defendants requested an opportunity to
respond to the issue of title. After this issue was briefed, the
trial court ruled in favor of plaintiff and awarded unpaid
assessments, but reduced the award in two manners. First, the
court deducted from the award the amount of assessments already
paid, $2,000. Second, the court only allowed plaintiff to
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recover unpaid assessments from 2010 to the present because the
court found that plaintiff had failed to mitigate its damages.
¶ 18 Plaintiff filed a motion to reconsider, which was fully
briefed. The trial court granted plaintiff's motion to
reconsider finding that articles XV and XVII of the declaration
of condominium ownership effectively waived defendants' right to
argue mitigation as a defense. However, the trial court
ultimately dismissed the case, ruling in favor of defendants,
finding that plaintiff had filed the lawsuit for an improper
purpose. Specifically, the court found:
"There is strong direct and circumstantial
evidence in this case which leads the court
to believe that the motivation for the suit
against Azulay and Seiden was for reasons
other than the collection of past due
assessments. It appears that Azulay and
Seiden were passive investors in a venture
orchestrated by Horn. According to the
evidence, at the time of the filing of this
case, Horn and Seiden were and continued to
be involved in litigation. Per Seiden's
testimony it appears that in 2006 or 2007
Khalaf left his law firm under a cloud. It
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appears by the sign on the door that Abuzir,
Horn and Khalah are associated in the
practice of law. The evidence produced leads
to the conclusion that 10005 Roberts Road was
never occupied. Khalah along with Abuzir
directed the lawyers to file suit against
Khalaf, Horn, Azulay and Seiden. The
attorneys who filed this case were given an
improper address at which to serve Horn
according to the affidavit of the special
process server. Even though Khalaf and Horn
have never appeared, their attorneys waited
four months to have a default judgment
entered against them. Furthermore, at no
time have Khalaf or Horn petitioned the court
to vacate the default judgment against them."
¶ 19 On February 8, 2012, plaintiff appealed the trial court's
July 28, 2011 order and January 12, 2012 order.
¶ 20 On appeal, plaintiff contends this case must be remanded to
the trial court because: (1) "improper motive" is not an
affirmative defense under Illinois condominium law, (2)
mitigation is not an affirmative defense under Illinois
condominium law, and (3) defendants forfeited both affirmative
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defenses, improper motive and mitigation, because they failed to
plead them.
¶ 21 ANALYSIS
¶ 22 Sections 9(g)(1) and 9(h) of the Condominium Property Act
(the Condominium Act) provide that if a unit owner fails to make
timely payments for common expenses, the amount due shall
constitute a lien on the interest of the unit owner in the
property, which may be foreclosed upon by the board of managers
of the condominium association. See 765 ILCS 605/9(g)(1), (h)
(West 2008). Section 9.2 of the Condominium Act allows a board
of managers to bring a lawsuit pursuant to the Forcible Entry and
Detainer Act (735 ILCS 5/art. IX (West 2008)) to collect unpaid
assessments. See 765 ILCS 605/9.2(a) (West 2008). Conversely,
section 9–102(a)(7) of the Forcible Entry and Detainer Act gives
the board of managers of a condominium association the authority
to maintain a forcible entry and detainer action as a means to
obtain unpaid assessments:
“(a) The person entitled to the
possession of lands or tenements may be
restored thereto under any of the following
circumstances:
* * *
(7) When any property is subject to the
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provisions of the Condominium Property Act,
the owner of a unit fails or refuses to pay
when due his or her proportionate share of
the common expenses of such property, or of
any other expenses lawfully agreed upon or
any unpaid fine, the Board of Managers or its
agents have served the demand set forth in
Section 9–104.1 of this Article in the manner
provided for in that Section and the unit
owner has failed to pay the amount claimed
within the time prescribed in the demand
***.” 735 ILCS 5/9–102(a)(7) (West 2008).
Further, the Forcible Entry and Detainer Act states "when the
action is based upon the failure of an owner of a unit therein to
pay when due his or her proportionate share of the common
expenses of the property, or of any other expenses lawfully
agreed upon or the amount of any unpaid fine, and if the court
finds that the expenses or fines are due to the plaintiff, the
plaintiff shall be entitled to the possession of the whole of the
premises claimed, and judgment in favor of the plaintiff shall be
entered for the possession thereof and for the amount found due
by the court including interest and late charges, if any,
together with reasonable attorney's fees, if any, and for the
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plaintiff's costs." 735 ILCS 5/9-111(a) (West 2008).
¶ 23 In this case, there is no dispute that plaintiff properly
brought this action seeking payment for unpaid assessments under
the Forcible Entry and Detainer Act.
¶ 24 At the outset, we note that there was no transcript
memorializing the trial proceedings and no proper bystander
report certified for review on appeal. Ordinarily, the absence
of a record would require us to uphold the trial court's
findings. Foutch v. O'Bryant, 99 Ill. 2d 389, 391-92 (1984)
("appellant has the burden to present a sufficiently complete
record *** to support a claim of error, and in the absence of
such a record on appeal, it will be presumed that the order
entered by the trial court was in conformity with law and had a
sufficient factual basis"). However, in this case, the trial
court included in its January 12, 2012 memorandum order a
detailed statement of facts summarizing the testimony of each
witness who testified at trial. As such, we have a sufficient
basis in the record to consider the merits of this appeal.
¶ 25 Failure to Plead Affirmative Defenses
¶ 26 Plaintiff argues that because defendants did not plead the
affirmative defenses of mitigation and improper purpose,
defendants should have been barred from presenting evidence of
those issues at trial. The decision whether to allow evidence at
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trial lies within the sound discretion of the trial court and
will not be overturned unless there is an abuse of that
discretion. Webber v. Wight & Co., 368 Ill. App. 3d 1007, 1027-
28 (2006). In the trial court's factual findings, it was clear
that evidence regarding improper motive and mitigation was
presented at trial without any noted objection by the parties.
Any doubts which may arise from the incompleteness of the record
will be resolved against the appellant and in favor of the
judgment below. Foutch, 99 Ill. 2d at 392. Based upon the
record before us, we have no evidence that plaintiff objected to
this testimony at trial and, therefore, find plaintiff has waived
the right to raise the issue on appeal. See Gaston v. Founders
Insurance Co., 365 Ill. App. 3d 303, 311 (2006) (generally,
issues raised for the first time on appeal are waived).
¶ 27 Further, Supreme Court Rule 181(b)(2) provides "[i]n actions
for forcible detainer (see Rule 101(b)), the defendant must
appear at the time and place specified in the summons. If the
defendant appears, he or she need not file an answer unless
ordered by the court; and when no answer is ordered, the
allegations of the complaint will be deemed denied, and any
defense may be proved as if it were specifically pleaded." Ill.
S. Ct. R. 181(b)(2) (eff. Feb. 10, 2006). Given there is no
indication in the record that defendants were ordered to file an
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answer, it appears that evidence in support of these defenses was
also properly presented at trial pursuant to Supreme Court Rule
181(b)(2). Finding that it was proper for defendants to present
evidence of improper motive and mitigation at trial, we must now
determine whether these defenses were germane to plaintiff's
forcible entry and detainer action.
¶ 28 Improper Motive Defense
¶ 29 Plaintiff argues that in filing a forcible entry and
detainer lawsuit against defendants for unpaid assessments,
improper motive was not germane to this action pursuant to the
Forcible Entry and Detainer Act and, therefore, could not legally
serve as a defense to the claims made in the lawsuit. Where we
must ascertain the meaning of a statute, our review is de novo.
Knolls Condominium Ass'n v. Harms, 202 Ill. 2d 450, 454 (2002).
¶ 30 An action under the Forcible Entry and Detainer Act "is a
special statutory proceeding, summary in its nature, in
derogation of the common law, and a party seeking this remedy
must comply with the requirements of the statute." (Internal
quotation marks omitted.) Eddy v. Kerr, 96 Ill. App. 3d 680, 681
(1981). A statute in derogation of the common law cannot be
construed as changing the common law beyond what the statutory
language expresses or is necessarily implied from what is
expressed. Williams v. Manchester, 228 Ill. 2d 404, 419 (2008).
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In construing such a statute, a court will not presume that the
legislature intended an innovation of the common law further than
that which the statutory language specifies or clearly implies.
Id. Indeed, " 'statutes in derogation of common law are to be
strictly construed and nothing is to be read into such statutes
by intendment or implication.' " Id. (quoting Summers v.
Summers, 40 Ill. 2d 338, 342 (1968)).
¶ 31 When entertaining forcible entry and detainer actions, the
court "has limited and special jurisdiction without equitable
powers." Newport Condominium Ass'n v. Talman Home Federal
Savings & Loan Ass'n of Chicago, 188 Ill. App. 3d 1054, 1058
(1988). A forcible entry and detainer proceeding is a summary
statutory proceeding to adjudicate possession rights and should
not be burdened by matters unrelated to the issue of possession.
Bismarck Hotel Co. v. Sutherland, 92 Ill. App. 3d 167, 174
(1980).
¶ 32 The forcible entry and detainer statute provides that "no
matters not germane to the distinctive purpose of the proceeding
shall be introduced by joinder, counterclaim or otherwise.
However, a claim for rent may be joined in the complaint, and
judgment may be entered for the amount of rent found due." 735
ILCS 5/9-106 (West 2008). Accordingly, only matters germane to
the distinctive purpose of a forcible entry claim may be
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introduced by the defendant through affirmative defenses,
counterclaims or otherwise. American National Bank v. Powell,
293 Ill. App. 3d 1033, 1044 (1997); Oak Park Trust & Savings Bank
v. Village of Mount Prospect, 181 Ill. App. 3d 10 (1989). Our
supreme court has defined "germane" as "closely allied ***
closely related, closely connected." (Internal quotation marks
omitted.) Rosewood Corp. v. Fisher, 46 Ill. 2d 249, 256 (1970).
¶ 33 Here, the parties have made it clear throughout the record
that possession is not at issue; the only matter at issue in
plaintiff's forcible entry and detainer action is the payment of
unpaid assessments.1
¶ 34 "Where a claim seeks damages and not possession, [damages to
defendant] is not germane to the distinct purposes of the
forcible entry and detainer proceeding." Sawyier v. Young, 198
Ill. App. 3d 1047, 1053 (1990); Great American Federal Savings &
Loan Ass'n v. Grivas, 137 Ill. App. 3d 267 (1985); Bismarck, 92
Ill. App. 3d 167 (1980); Reid v. Arceneaux, 63 Ill. App. 2d 113
1 When possession is at issue, courts have found the following issues to be germane in forcible entry and detainer actions: "(1) claims asserting a paramount right of possession; (2) claims denying the breach of the agreement vesting possession in the plaintiff; (3) claims challenging the validity or enforceability of the agreement on which the plaintiff bases the right to possession; or (4) claims questioning the plaintiff's motivation for bringing the action." American National, 293 Ill. App. 3d at 1044. Because possession is not at issue, these do not apply in this case.
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(1965). Damages sought by the defendant must be tied to the
issue of possession. Spanish Court Two Condominium Ass'n v.
Carlson, 2012 IL App (2d) 110473, ¶ 33 (2012) ("where possession
is not contested, the defendant may not seek damages at all").
Given that possession is not at issue here, we cannot find that
plaintiff's improper motive was germane to the distinctive
purpose of plaintiff's forcible entry and detainer claim.
¶ 35 In Reid, the plaintiffs filed a forcible entry action to
regain possession of a building on the basis that the defendant
was in default under articles of agreement of the warranty deed.
Reid, 63 Ill. App. 2d at 114. Defendant chose not to contest
possession but instead counterclaimed that the plaintiffs had
committed fraud and misrepresentation by inducing the purchase of
the property. Id. at 116. The court in Reid found that since
the defendant's counterclaim did not dispute possession but
rather sought relief other than possession, its defenses of fraud
and misrepresentation were not germane to the distinctive
purpose of the forcible entry and detainer proceedings. Id.
¶ 36 Similarly, in Sawyier, the court found that the issue of
possession was conceded by the defendant and, therefore, was not
a part of the proceeding. Sawyier, 198 Ill. App. at 1053. As
such, the court held that a defense challenging possession was
not germane and could not be presented in the forcible entry and
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detainer action. Id. at 1053-54.
¶ 37 In this case, possession was no longer an issue at trial and
the distinctive issue to be decided in plaintiff's claim is
whether defendants owe plaintiff unpaid assessments. Defendants
have not cited any cases where improper motive has encompassed a
factual scenario like the one before this court. In the cases
cited by defendants where improper motive has been held to be a
valid defense, possession was an issue and the improper motive
has been equated with retaliatory eviction, i.e., cases where
landlords have attempted to evict tenants from their homes due to
complaints the tenants have made regarding the conditions of
their homes and noncompliance with government ordinances or due
to their refusal to pay rent until their complaints concerning
the condition of the premises are addressed. See American
National, 293 Ill. App. 3d 1033; People ex rel. Department of
Transportation v. Walliser, 258 Ill App. 3d 782 (1994); Jack
Spring, Inc. v. Little, 50 Ill. 2d 351 (1972). In such cases,
there is a clear public policy underlying the defense of
retaliatory eviction. Clore v. Fredman, 59 Ill. 2d 20, 26 (1974)
("The public policy of this State as evidenced by its statutory
law forbids a landlord to terminate or refuse to renew a lease
because a tenant complained to a governmental authority of a bona
fide violation of any applicable building code, health ordinance
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or similar regulation.").
¶ 38 Defendants here do not claim plaintiff filed this case in
retaliation because they complained about the condition of the
property. We find no public policy argument applicable in this
case where the improper motive alleged is bad feelings between
the parties. Defendants have not cited any authority finding that
the defense of improper motive in the context of a forcible entry
and detainer action has been expanded beyond retaliatory
eviction. We are not persuaded that the existence of a dispute
between the owners of a condominium is a valid defense to a
forcible entry and detainer action filed to collect past-due
assessments. We decline to expand the defense of improper motive
beyond the public policy considerations in the cited cases to
include the factual allegations made in this case.
¶ 39 Furthermore, the factual basis of any improper motive in
this case has not been fully developed. It is unclear what the
exact improper motive is alleged to be for filing this lawsuit,
and up to now, any improper motive appears to be based upon
speculation.
¶ 40 We appreciate that there is obvious conflict between these
parties and appreciate the trial court's observations in that
respect. However, we simply can find no authority and no
persuasive reason to expand the meaning of improper motive beyond
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retaliatory eviction. As such, we must reverse the trial court's
order and remand the cause for further proceedings consistent
with this opinion.
¶ 41 Mitigation Defense
¶ 42 Initially, we note that the trial court, in its order
granting rehearing and entering judgment in favor of the
defendants, found that mitigation is not a proper defense in this
case. Defendants did not file a cross-appeal to contest this
initial finding. Accordingly, we find we do not have
jurisdiction to consider defendants' claim that mitigation is a
proper defense in this case. Chicago Title & Trust Co. v.
Brooklyn Bagel Boys, Inc., 222 Ill. App. 3d 413, 421 (1991); Ill.
S. Ct. R. 303 (eff. May 30, 2008).
¶ 43 Assuming arguendo this issue had been properly preserved,
defendants' claim that mitigation is a proper defense is without
merit and would fail. Where we must ascertain the meaning of a
statute, our review is de novo. Knolls Condominium Ass'n, 202
Ill. 2d at 454.
¶ 44 As stated earlier, an action raised under the Forcible Entry
and Detainer Act "is a special statutory proceeding, summary in
its nature, in derogation of the common law, and a party seeking
this remedy must comply with the requirements of the statute."
(Internal quotation marks omitted.) Eddy, 96 Ill. App. 3d at 681.
19 1-12-0461
A statute in derogation of the common law cannot be construed as
changing the common law beyond what the statutory language
expresses or is necessarily implied from what is expressed.
Williams, 228 Ill. 2d at 419. In construing such a statute, a
court will not presume that the legislature intended an
innovation of the common law further than that which the
statutory language specifies or clearly implies. Id. Indeed,
“statutes in derogation of common law are to be strictly
construed and nothing is to be read into such statutes by
intendment or implication.” (Internal quotation marks omitted.)
Id. (quoting Summers, 40 Ill. 2d at 342).
¶ 45 While defendants suggest that because mitigation is required
in landlord-tenant actions pursuant to section 9-213.1 (735 ILCS
5/9-213.1 (West 2008)), it should be required in this case, the
duty of mitigation found in the landlord-tenant statute has never
been extended to cases dealing with condominium associations and
unit owners. See 735 ILCS 5/9-213.1 (West 2008) ("a landlord or
his or her agent shall take reasonable measures to mitigate the
damages recoverable against a defaulting lessee"); St. George
Chicago, Inc. v. George J. Murges & Associates, Ltd., 296 Ill.
App. 3d 285, 290-91 (1998) (stating section 9-213.1 was created
to "require landlords to make reasonable efforts to relet the
premises following a tenant's departure, rather than allowing
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the premises to stand vacant and the landlord to collect rent in
the form of damages").
¶ 46 Rather, contrary to the language in section 9-213.1
pertaining to landlords and tenants, section 9-111.1 of the
Forcible Entry and Detainer Act specifically lays out that a
condominium association has the right, but not the obligation, to
rent out the unit upon an entry of judgment in its favor. 735
ILCS 5/9-111.1 (West 2008) ("the board of managers shall have the
right and authority, incidental to the right of possession of a
unit under the judgment, but not the obligation, to lease the
unit to a bona fide tenant"). As such, we find it evident from
the language of the Forcible Entry and Detainer Act relating to
condominium associations' remedies that plaintiff had no duty to
mitigate damages in this case.
¶ 47 For the above reasons, we reverse the trial court’s order
and remand the cause directing the circuit court to enter
judgment for the plaintiff in the amount of the assessments due
without deduction for the claimed failure to mitigate damages,
and costs and reasonable attorney fees.
¶ 48 Reversed and remanded with directions.