Lakeview East Cooperative v. Ohiku

2023 IL App (1st) 220130-U
Appellate Court of Illinois·Decided March 10, 2023·No. 1-22-0130·Unpublished

Opinion

2023 IL App (1st) 220130-U

SIXTH DIVISION

March 10, 2023

No. 1-22-0130

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).

IN THE

APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT

LAKEVIEW EAST COOPERATIVE, ) Appeal from the ) Circuit Court of

Plaintiff-Appellant, ) Cook County.

)

v. ) No. 19 M1 704999 )

ESTHER OHIKU, ODALO OHIKU, and UNKNOWN ) Honorable OCCUPANTS, ) Jean M. Golden, ) Judge Presiding.

Defendants-Appellees. )

PRESIDING JUSTICE MIKVA delivered the judgment of the court.

Justices C.A. Walker and Tailor concurred in the judgment.

ORDER

¶1 Held: Where a cooperative housing association seeking to evict its former board president failed to rebut evidence establishing compliance with the occupancy agreement with counterevidence sufficient to create a genuine issue of material fact, summary judgment in her favor was proper.

¶2 Plaintiff Lakeview East Cooperative (Lakeview East), a cooperative housing association, sought to evict its board president, defendant Esther Ohiku, on the grounds that she violated her occupancy agreement by failing to continuously use her unit in the cooperative’s building as her primary residence. The parties filed cross-motions for summary judgment on this issue. In support

of her motion, Ms. Ohiku provided affidavits, voter registration records, and tax documents evidencing her continuous residency. Lakeview East countered that evidence with the documents it had attached to its complaint: (1) a mortgage agreement showing that when Ms. Ohiku signed as the borrower for the purchase of a condominium for her adult son and his family, she promised to occupy that property as her principal residence and (2) statements Ms. Ohiku purportedly made during a 2017 audit conducted by the Office of the Inspector General for the Department of Housing and Urban Development (HUD OIG), which were included in an unauthenticated report prepared by employees of that agency.

¶3 The circuit court ruled that without a proper foundation, the report prepared by HUD OIG, and any statements therein purportedly made by Ms. Ohiku, were inadmissible. Even if the report could be considered, the court concluded, Lakeview East’s rebuttal evidence was insufficient to raise a genuine issue of material fact regarding Ms. Ohiku’s continuous residency. The mortgage documents showed, at most, that she promised to make another property her primary residence, not that she ever actually did so, and the statements in the report that Lakeview East sought to rely on were the same ones the cooperative had insisted were inaccurate in its contemporaneous response to the auditors.

¶4 Lakeview East now appeals. For the reasons that follow, we affirm the judgment of the circuit court.

¶5 I. BACKGROUND

¶6 Lakeview East owns and operates the apartment complex located at 707 W. Waveland Avenue (Waveland Avenue property) in Chicago through a land-grant agreement with HUD. Ms. Ohiku has lived in that building since the 1970s, when it was operated by HUD as subsidized housing, and has served in several capacities on the cooperative’s board, including most recently

as its president. Lakeview East notified Ms. Ohiku on February 28, 2019, that it was terminating her right of occupancy to Unit 511 of the Waveland Avenue property, citing alleged violations of her duties as board president, misuse of funds, and Ms. Ohiku’s failure to maintain the unit as her primary residence. Soon after, Lakeview East initiated this eviction action against Ms. Ohiku, her son Odalo, and any unknown occupants of Unit 511. The circuit court dismissed the cooperative’s breach of duty and misappropriation claims without prejudice, concluding that they were not germane to the issue of possession. Lakeview East refiled those claims independently, and we understand they have been resolved by agreement of the parties. They are not a part of this appeal.

¶7 The only remaining issue in this case was Ms. Ohiku’s right to possess her unit in the Waveland Avenue property. Lakeview East attached to its complaint the occupancy agreement Ms. Ohiku had signed and agreed to abide by as a condition of possession. Paragraph 7 of that agreement provided as follows:

“7. Occupancy Requirements/No Subletting.

a. Occupancy. Lessee hereby agrees to occupy the Apartment at all times as a primary residence at least until the date Lessee sells Lessee’s membership in the Corporation. Lessee may not lease, sublease or otherwise make available his Apartment for occupancy by Persons other than the Lessee’s immediate family. Lessee must sign a certified statement that the Apartment will be used and occupied as his principal residence.”

Paragraph 13 further provided that in the event of a default, the cooperative could terminate the agreement on ten days’ notice, provided the lessee did not cure the default.

¶8 Accompanying the occupancy agreement was a copy of the cooperative’s bylaws, section 2.1 of which stated: “[m]embership in the cooperative shall be restricted to natural persons

approved by the Board of Directors who have executed and are occupying Apartments in the Building in accordance with *** an Occupancy Agreement.”

¶9 The cooperative also attached a copy of its Member Handbook, paragraph I.A. of which provided the following, under the heading “Occupancy and Usage”:

“Dwelling units are to be used as private dwelling units only. Commercial use of the unit is not permitted. The apartment must be the primary residence for all persons listed with the Management Office. The persons listed on the HUD 50059 form, the Purchase Application, or the Household Composition form are the only persons authorized to occupy the unit. No additions to the household may be made without prior written authorization from Management. Changes to the household composition due to marriage or the natural birth or legal adoption of a child must be reported to Management immediately.”

¶ 10 In support of its allegation that Ms. Ohiku failed to maintain her unit in the Waveland Avenue property as her primary residence, Lakeview East attached a September 5, 2017, report prepared by HUD OIG at the conclusion of an audit it conducted to determine if Lakeview East was operating the building in accordance with its land grant agreement (HUD OIG report). At the time of the audit and the report, Ms. Ohiku was the cooperative’s board president. On page 8, under the heading “Other Requirements of the Program Were Not Followed,” the report stated:

“[T]he president of the board said that two members, one of whom was on the Cooperative’s board, associated with another unit did not always maintain the unit as their principal residence. One member moved out of the unit around 2002, and the board member did not always maintain the unit as their principal residence since they purchased a property in 2006 and was [sic] required to maintain the property as their principal residence for at least 1 year to satisfy an occupancy requirement of the mortgage. However,

as of March 2017, the board member considered the unit to be their principal residence.”

¶ 11 Attached to the audit report was a list of “Auditee Comments” prepared by Lakeview East in response to the auditors’ findings, which noted: “we disagree with the OIG’s audit report that a member did not maintain their unit as their primary residence.” Lakeview East said in those comments that the auditors had “incorrectly misinterpret[ed] a statement regarding the member’s primary residence.”

¶ 12 The OIG’s responses to these comments, also appended to the report, included the following additional details regarding the purported exchange:

“The president of the board stated that the Cooperative disagreed that a member associated with a unit did not maintain their unit at the project as their principal residence and stated that we misinterpreted a statement regarding the member’s principal residence.

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