U.S. Bank, National Ass'n v. Reinish

2020 IL App (2d) 190175

• Court: Appellate Court of Illinois
• Decided: June 24, 2020
• Docket: 2-19-0175
• Status: Published

Opinion

2020 IL App (2d) 190175 No. 2-19-0175 Opinion filed April 21, 2020

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT

U.S. BANK, NATIONAL ASSOCIATION, ) Appeal from the Circuit Court as Legal Title Trustee for Truman 2016 ) of Lake County. SC Title Trust, ) ) Plaintiff-Appellee, ) ) v. ) No. 17-CH-1336 ) SUSAN M. REINISH, ) Honorable ) Luis A. Berrones, Defendant-Appellant. ) Judge, Presiding.

JUSTICE BRENNAN delivered the judgment of the court, with opinion. Presiding Justice Birkett and Justice Zenoff concurred in the judgment and opinion.

OPINION

¶ 1 Defendant, Susan M. Reinish, appeals from the trial court’s order granting summary judgment

for plaintiff, U.S. Bank, National Association as Legal Title Trustee for Truman 2016 SC Title

Trust (U.S. Bank). For the following reasons, we affirm.

¶2 I. BACKGROUND

¶ 3 On May 19, 2006, Reinish executed a promissory note payable to World Savings Bank, FSB,

in the amount of $658,000. The note was secured by a mortgage on Reinish’s property at 105

Sequoia Lane, Deerfield. Reinish defaulted on her obligation to make monthly payments,

beginning on May 1, 2017, and for each month thereafter. On October 2, 2017, Wells Fargo Bank, 2020 IL App (2d) 190175

N.A., as successor by merger to Wachovia Mortgage, FSB, formerly known as World Savings

Bank, filed a complaint to foreclose on Reinish’s mortgage. U.S. Bank was substituted as plaintiff

on February 9, 2019; we will refer to the bank mortgagees collectively as “U.S. Bank.” In her

answer, filed on March 21, 2018, Reinish generally denied the complaint’s written allegations.

¶ 4 On May 3, 2018, U.S. Bank moved for summary judgment, and on August 22, 2018, Reinish

filed a memorandum in opposition. Reinish argued for the first time that U.S. Bank had not sent

her a notice of acceleration. She claimed that sending such notice was a condition precedent to

U.S. Bank filing a complaint for foreclosure and that, since it did not send her the required notice,

it had no enforceable right to foreclose. Reinish filed an affidavit stating that she had never

received any notice of acceleration.

¶ 5 On September 13, 2018, U.S. Bank filed a reply in support of its motion for summary judgment,

asserting that the mortgage contract did not require a notice of acceleration, because Reinish

defaulted on her obligation to make monthly mortgage payments. It further asserted that Reinish’s

argument had been otherwise forfeited because she failed to address the issue in her answer to the

complaint. U.S. Bank argued that a mere denial that a notice of acceleration had been received was

insufficient to create a genuine issue of material fact.

¶ 6 The mortgage provisions underlying the notice-of-acceleration claims are contained in

paragraphs 26 and 27 of the mortgage, and they read as follows:

“26. AGREEMENTS ABOUT LENDER’S RIGHTS IF THE PROPERTY IS

SOLD OR TRANSFERRED:

Acceleration of Payment of Sums Secured. Lender may, at its option, require

immediate payment in full of all Sums Secured by the Security Instrument if all or any part

of the Property, or if any right in the Property, is sold or transferred without Lender’s prior

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written permission. Lender also may, at its option, require immediate payment in full if

Borrower is not a natural Person and a beneficial interest in Borrower is sold or transferred

without Lender’s prior written permission. However, Lender shall not require immediate

payment in full if this is prohibited by Federal Law in effect on the date of the Security

Instrument.

If Lender exercises the option to require immediate payment in full, Lender will

give me notice of acceleration. If I fail to pay all Sums Secured by this Security Instrument

immediately, Lender may then or thereafter invoke any remedies permitted by this Security

Instrument without further notice to or demand on me.

27. RIGHTS OF THE LENDER IF THERE IS A BREACH OF DUTY

It will be called a ‘Breach of Duty’ if (i) I do not pay the full amount of each payment on

the date it is due; or (ii) I fail to perform any of the promises or agreements under the Note

or this Security Instrument; or (iii) any statement made in my application for this loan was

materially false and misleading or if any statement in my application for this loan was

materially false or misleading by reason of my omission of certain facts; or (iv) I have

made any other statement to Lender in connection with this loan that is materially false or

misleading. If there is a Breach of Duty by me, Lender may demand an immediate payment

of all sums secured.” (Emphases added.)

¶ 7 On September 26, 2018, the trial court heard argument on the motion for summary judgment

and ultimately granted the motion. The property was sold at a judicial foreclosure sale on January

8, 2018, and the sale was confirmed without objection. Reinish timely appealed.

¶8 II. ANALYSIS

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¶ 9 On appeal, Reinish’s sole argument is that the trial court erred in granting U.S. Bank’s motion

for summary judgment, because there existed a genuine issue of material fact as to whether

U.S. Bank complied with the mortgage contract’s condition precedent that it provide a notice of

acceleration. In response, U.S. Bank argues that Reinish forfeited this issue, because she failed to

deny the deemed allegation that proper notice was given, which operated to judicially admit notice

of acceleration, pursuant to section 15-1504(c) of the Illinois Mortgage Foreclosure Law

(Foreclosure Law) (735 ILCS 5/15-1504(c) (West 2018)) and Illinois Supreme Court Rule 133(c)

(eff. July 1, 1982). In the alternative, U.S. Bank contends that the mortgage did not require a notice

of acceleration because, as here, the borrower defaults by reason of nonpayment. Reinish disagrees

with this interpretation of the mortgage.

¶ 10 Summary judgment is properly granted where the pleadings, depositions, and admissions on

file, together with any affidavits, indicate that there is no genuine issue of material fact and the

moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1005(c) (West 2018). The

purpose of summary judgment is not to answer a question of fact, but to determine whether one

exists. Ballog v. City of Chicago, 2012 IL App (1st) 112429, ¶ 18. Although a drastic means of

disposing of litigation, summary judgment is, nonetheless, an appropriate measure to efficiently

dispose of a suit when the moving party’s right to the judgment is clear and free from doubt.

Gaston v. City of Danville, 393 Ill. App. 3d 591, 601 (2009). When reviewing a ruling on a motion

for summary judgment, we conduct de novo review. Coleman v. East Joliet Fire Protection

District, 2016 IL 117952, ¶ 20.

¶ 11 Our review of U.S. Bank’s foreclosure complaint discloses that it scrupulously followed the

format prescribed in section 15-1504(a) of the Foreclosure Law. 735 ILCS 5/15-1504(a) (West

2018). Where, as here, the complaint follows the prescribed format, it is statutorily “deemed and

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construed to include” certain allegations, even where not specifically set forth in the complaint.

Id; see also Parkway Bank & Trust Co. v. Korzen, 2013 IL App (1st) 130380, ¶ 43. Among these

deemed allegations, set forth in section 15-1504(c) is:

“(9) that any and all notices of default or election to declare the indebtedness due

and payable or other notices required to be given have been duly and properly given[.]”

735 ILCS 5/15-1504(c)(9) (West 2018).

¶ 12 Simply put, because U.S. Bank’s foreclosure complaint conformed to the format prescribed

in section 15-1504(a), it is deemed to allege that U.S. Bank provided Reinish a notice of

acceleration. Id. Assuming then, as Reinish contends, that a notice of acceleration was a condition

precedent to U.S. Bank moving forward with foreclosure, and having found that U.S. Bank

properly pled that it provided said notice pursuant to section 15-1504(c)(9)’s deemed- inclusion

provision, we next turn to the interplay between Reinish’s answer to U.S. Bank’s complaint and

Rule 133(c) and section 2-610(b) of the Code of Civil Procedure. 735 ILCS 5/2-610(b) (West

2018).

¶ 13 Illinois Supreme Court Rule 133(c) (eff. July 1, 1982) provides:

“Condition Precedent. In pleading the performance of a condition precedent in a contract,

it is sufficient to allege generally that the party performed all the conditions on his part; if

the allegation be denied, the facts must be alleged in connection with the denial showing

wherein there was a failure to perform.”

¶ 14 When interpreting Rule 133(c), Illinois courts have repeatedly held that, where a complaint

for breach of contract alleges the performance of a condition precedent, the failure to deny the

same with specific facts in a party’s responsive pleading results in a forfeiture of the issue of

whether the condition precedent was performed. See Bank of New York Mellon v. Wojcik, 2019

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IL App (1st) 180845, ¶ 21. Indeed, under such circumstances, the nonspecific denial is deemed a

judicial admission that cannot later be disputed to defeat a motion for summary judgment. Id. ¶

23.

¶ 15 Our review of Reinish’s answer to U.S. Bank’s complaint discloses that she neither denied

receiving notice of acceleration, nor - filed an affirmative defense claiming lack of notice.

Accordingly, under Rule 133(c), Reinish is deemed to have judicially admitted U.S. Bank’s

allegation that proper notice was provided.

¶ 16 Moreover, we reach a similar determination by applying section 2-610(b) of the Code of Civil

Procedure, which provides:

“Every allegation, except allegations of damages, not explicitly denied is admitted,

unless the party states in his or her pleading that he or she has no knowledge thereof

sufficient to form a belief, and attaches an affidavit of the truth of the statement of want

of knowledge, or unless the party has had no opportunity to deny.” 735 ILCS 5/2-610(b)

(West 2018).

¶ 17 Thus, by not denying this allegation deemed in the complaint, Reinish judicially admitted that

she received a notice of acceleration, and she could not properly assert a contrary position in

opposition to U.S. Bank’s motion for summary judgment.

¶ 18 To escape the above analysis, Reinish urges reliance on the decision in Cathay Bank v.

Accetturo, 2016 IL App (1st) 152783, where the court reversed a summary judgment in a mortgage

foreclosure case. We find this reliance to be misplaced. In Accetturo, summary judgment was

reversed not because the trial court relied upon the mortgagor’s failure to deny notice in answering

the foreclosure complaint, but because the court improperly struck the timely filed and properly

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pled affirmative defenses claiming that the provided acceleration notices were insufficient under

the mortgage contract. Id. ¶ 47. Accordingly, the holding in Accetturo is of no avail to Reinish.

¶ 19 Given that failure to provide a notice of acceleration is Reinish’s sole basis for asserting that

there was a genuine issue of material fact precluding entry of summary judgment, and further given

this court’s conclusion that Reinish has forfeited this argument, the trial court correctly granted

summary judgment in U.S. Bank’s favor.

¶ 20 Forfeiture aside, we also find that that the clear language of Reinish’s mortgage demonstrates

that a notice of acceleration was not required, because the breach underlying the foreclosure is

Reinish’s failure to make payments.

¶ 21 A mortgage is a contract between the immediate parties. Resolution Trust Corp. v. Holtzman,

248 Ill. App. 3d 105, 111 (1993). The main objective in construing a contract is to give effect to

the intent of the parties. Gallagher v. Lenart, 226 Ill. 2d 208, 232 (2007). Thus, when construing

the language of a contract, we give terms their plain and ordinary meaning. Hunt

v. Farmers Insurance Exchange, 357 Ill. App. 3d 1076, 1078 (2005). If a term that is undefined

by the contract has a plain and ordinary meaning, the term should be enforced as written. Id. at

1078-79. Since words derive their meaning from context, the provisions of a contract must be

looked at as a whole. Gallagher, 226 Ill. 2d at 233.

¶ 22 A reading of the mortgage makes clear that paragraphs 26 and 27 address Reinish’s different

rights depending on her action or inaction. Paragraph 26 is titled “Agreements About Lender’s

Rights if the Property is Sold or Transferred,” and it obligates the lender to provide a notice of

acceleration as a condition precedent for foreclosure under this circumstance. Of course, this

situation did not occur here.

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¶ 23 Paragraph 27 is titled “Rights of the Lender if There is a Breach of Duty.” One breach of duty

specifically delineated in Paragraph 27 is the failure to make a mortgage payment in full on the

day it is due―the breach Reinish committed. The notice-of-acceleration condition found in

Paragraph 26 does not apply to such a breach. Reinish asks us to disregard the headings for

paragraphs 26 and 27 and construe the paragraphs together to find an obligation to provide a notice

of acceleration under all the circumstances listed in both paragraphs. Doing so, however, would

ignore the plain and ordinary meaning of the terms in the contract and create an obligation that

clearly was not intended. For these reasons, were Reinish’s notice claim not otherwise forfeited,

we would nevertheless find that the trial court properly granted summary judgment for U.S. Bank.

¶ 24 III. CONCLUSION

¶ 25 In sum, when Reinish failed, in her answer, to deny the deemed allegation that the Bank had

sent her all proper notices, she forfeited the issue of whether U.S. Bank failed to comply with a

condition precedent in the mortgage contract. Forfeiture aside, a plain reading of the mortgage

makes clear that a notice of acceleration was not required, because Reinish breached her duty to

make timely mortgage payments. For those reasons, the trial court’s order granting U.S. Bank

summary judgment is affirmed.

¶ 26 The judgment of the circuit court of Lake County is affirmed.

¶ 27 Affirmed.

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