Deutsche Bank National Trust Co. v. Roongseang , 2019 IL App (1st) 180948 ( 2020 )

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Appellate Court Date: 2020.06.16
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Deutsche Bank National Trust Co. v. Roongseang,
2019 IL App (1st) 180948Appellate Court DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee
Caption for the First Franklin Mortgage Loan Trust 2005-FF8, Mortgage Pass-
Through Certificates, Series 2006-FF8, Plaintiff-Appellee, v. CHAI
ROONGSEANG; JINTANA ROONGSEANG, a/k/a Jintana
Supatwanich; UNKNOWN OWNERS and NONRECORD
CLAIMANTS, Defendants (Chai Roongseang and Jintana
Roongseang, Defendants-Appellants).
District & No. First District, First Division
No. 1-18-0948
Filed December 2, 2019
Decision Under Appeal from the Circuit Court of Cook County, No. 12-CH-44450; the
Review Hon. Michael F. Otto, Judge, presiding.
Judgment Reversed and remanded.
Counsel on Rod Radjenovich, of Jeffrey Strange and Associates, of Wilmette, for
Appeal appellants.
Robert J. Deisinger, of Anselmo Lindberg & Associates, LLC, of
Naperville, for appellee.
Panel JUSTICE PIERCE delivered the judgment of the court, with opinion.
Justices Hyman and Walker concurred in the judgment and opinion.
OPINION
¶1 This appeal arises from a mortgage foreclosure action against defendants Chai and Jintana
Roongseang. On June 22, 2005, the Roongseangs took out a mortgage on the property
commonly known as 730 Lacrosse Avenue, Wilmette, Illinois. The mortgage was later
assigned to plaintiff Deutsche Bank National Trust Company, as trustee for the First Franklin
Mortgage Loan Trust 2005-FF8, mortgage pass-through certificates, series 2006-FF8. After
the Roongseangs defaulted on the loan, plaintiff filed a complaint to foreclose the mortgage.
¶2 The Roongseangs filed an answer and affirmative defenses, alleging that plaintiff failed to
provide them with an acceleration notice in accordance with the terms of the mortgage. In its
reply to the affirmative defenses, plaintiff denied failing to send the acceleration notice.
Plaintiff then moved for summary judgment, arguing that the failure to provide notice was an
improper affirmative defense and, in the alternative, that plaintiff had complied with the notice
requirement by mailing the acceleration notice to the Roongseangs via certified mail. Plaintiff
also moved for a judgment of foreclosure. On March 8, 2017, the circuit court entered summary
judgment and a judgment of foreclosure in favor of plaintiff. In its judgment orders, the circuit
court made no finding as to whether the contractually required acceleration notice had been
given to the Roongseangs. On April 6, 2018, the circuit court entered an order approving the
report of sale for the property.
¶3 On appeal, the Roongseangs argue that the circuit court erred by entering summary
judgment and an order approving the report of sale in favor of plaintiff because plaintiff failed
to provide proof of actual delivery of the acceleration notice. Essentially, the Roongseangs
argue that the mortgage does not presume delivery of an acceleration notice sent via certified
mail. Therefore, they contend that plaintiff was required to provide proof of actual delivery,
not proof of mailing, in order to establish compliance with the notice condition precedent. For
the following reasons, we agree. We therefore reverse the circuit court’s entry of summary
judgment and order approving judicial sale in favor of plaintiff and remand for further
proceedings.
¶4 I. BACKGROUND
¶5 On June 22, 2005, the Roongseangs took out a mortgage on the Wilmette property from
First Franklin, a division of National City Bank of Indiana. The mortgage was later assigned
to plaintiff and thereafter serviced by plaintiff’s mortgage loan servicer, Specialized Loan
Servicing LLC. The Roongseangs defaulted on the loan in August of 2009. On December 17,
2012, plaintiff filed a complaint to foreclose on the mortgage.
¶6 Plaintiff attached a copy of the mortgage to its complaint. Section 22 of the mortgage
requires the lender to provide the Roongseangs a notice of acceleration prior to invoking
acceleration or initiating foreclosure. Section 20 of the mortgage provides that “notice and
opportunity to take corrective action” must be given before the lender commences any judicial
action in connection with the mortgage and that notices issued in accordance with section 15
satisfy the notice requirements of section 20. Section 15 of the mortgage provides:
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“All notices given by borrower or Lender in connection with this Security Instrument
must be in writing. Any notice to Borrower in connection with this Security Instrument
shall be deemed to have been given to Borrower when mailed by first class mail or
when actually delivered to Borrower’s notice address if sent by other means.”
¶7 Plaintiff’s complaint also asserted “deemed and construed” allegations pursuant to section
15-1504 of the Illinois Mortgage Foreclosure Law. 735 ILCS 5/15-1504(c) (West 2012).
Paragraph 9 of the complaint alleged “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.” In answer to paragraph 9, the Roongseangs stated, “deny as to the action at
bar.”
¶8 The Roongseangs’ second affirmative defense was titled, “lack of subject matter
jurisdiction.” The allegations in support of this affirmative defense read as follows:
“2. Deutsche Bank has failed to give any 30 day notice to cure any default. Deutsche
Bank has failed to give Borrower any Notice of Acceleration pursuant to paragraph 22.
***
8. Lender has not given defendant any notice of acceleration pursuant to section 20
of the Mortgage.”
¶9 In its reply to the second affirmative defense, plaintiff denied failing to send the
acceleration notice. Plaintiff also denied that failure to send a required notice could be properly
raised as an affirmative defense.
¶ 10 On October 18, 2016, plaintiff filed its motion for summary judgment and its motion for
judgment of foreclosure. In its motion for summary judgment, plaintiff argued that the
Roongseangs’ affirmative defenses were improper and, in the alternative, that plaintiff had
provided the required notice by mailing the acceleration notice to the Roongseangs via certified
mail. In support of this claim, plaintiff attached an affidavit of mailing from Ami McKernan,
second assistant vice president of Specialized Loan Servicing. In relevant part, the affidavit
stated that:
“Notice of Default dated July 12, 2012 was sent by certified mail under the
exclusive care and custody of the United States Postal Service addressed to the
following persons at the last known address set forth below:
Chai Roongseang
Jintana Roongseang
730 Lacrosse Ave
Wilmette, IL 60091-2012”
¶ 11 A copy of the July 12, 2012, notice was attached to the affidavit as Exhibit A, titled “Notice
of Intent to Accelerate.” In response, the Roongseangs denied receiving the notice, and argued
that there is no presumption of delivery for certified mail. Both Chai and Jintana Roongseang
attached affidavits stating that they did not receive any notice of default and acceleration prior
to the filing of the foreclosure action.
¶ 12 On March 8, 2017, the circuit court entered summary judgment and a judgment of
foreclosure in favor of plaintiff. In its judgment orders, the circuit court made no specific
finding as to whether the required acceleration notice had been given to the Roongseangs. On
April 6, 2018, the circuit court entered an order approving the report of sale for the property
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¶ 13 A timely notice of appeal was filed.
¶ 14 II. ANALYSIS
¶ 15 On appeal, the Roongseangs argue that the circuit court erred by entering summary
judgment and an order approving the report of sale in favor of plaintiff because plaintiff failed
to prove actual delivery of the acceleration notice. The Roongseangs argue that without proof
that plaintiff complied with the acceleration notice requirement in the mortgage, plaintiff could
not maintain a foreclosure action against them. Plaintiff argues (1) this appeal should be
dismissed based on the Roongseangs’ failure to timely file the record, (2) the Roongseangs
failed to plead with specificity how plaintiff failed to perform the condition precedent as
required by Illinois Supreme Court Rule 133(c) (eff. Jan. 1, 1967) and therefore judicially
admitted receipt of the notice, and (3) plaintiff sufficiently established that the acceleration
notice was properly mailed to the Roongseangs in accordance with the terms of the mortgage.
¶ 16 Although the issue of notice was raised below by the Roongseangs in an affirmative
defense titled “lack of subject matter jurisdiction,” on appeal the parties agree that the question
of compliance with the notice requirements in the mortgage is not one of jurisdiction. Rather,
it is a question of compliance with a mandatory condition precedent to plaintiff’s foreclosure
action. See Cathay Bank v. Accetturo, 2016 IL App (1st) 152783, ¶ 37. The parties disagree as
to whether plaintiff’s performance of that condition precedent was properly resolved by the
trial court on summary judgment.
¶ 17 Summary judgment is appropriate where “the pleadings, depositions, and admissions on
file, together with the affidavits, if any, show that there is no genuine issue as to any material
fact and that the moving party is entitled to a judgment as a matter of law.” 735 ILCS 5/2-1005
(West 2012). We review the circuit court’s ruling on summary judgment de novo. Murphy-
Hylton v. Lieberman Management Services, Inc., 2016 IL 120394, ¶ 16. We review a court’s
decision to confirm a judicial sale for abuse of discretion. Household Bank, FSB v. Lewis, 229
Ill. 2d 173, 178 (2008).
¶ 18 As an initial matter, we must address plaintiff’s renewed request to dismiss this appeal
based on the Roongseangs’ violation of Illinois Supreme Court Rule 326 (eff. July 1, 2017).
Plaintiff argues that the Roongseangs’ failure to timely file the record on appeal or timely file
a motion for an extension of time to do so requires this court to dismiss the appeal. The
Roongseangs respond that this court has the authority to grant motions for extensions of time
that are untimely filed as well as motions to file the record instanter. We agree.
¶ 19 Pursuant to Rule 326, “the record on appeal shall be filed in the reviewing court within 63
days after the filing of the notice of appeal, or the last notice of appeal if more than one appeal
is taken, or, if the time for filing a report of proceedings has been extended, within 14 days
after the expiration of the extended time.” Id. “Extensions of time for filing the record may be
granted by the reviewing court or a judge thereof on motion made before the expiration of the
original or extended time or on motion filed within 35 days thereafter supported by a showing
of reasonable excuse for failure to file the motion earlier.” Id. Failure to timely file the record
or a motion for extension of time to do so does not affect the appellate court’s jurisdiction over
an appeal. In re Marriage of Miller, 84 Ill. App. 3d 931, 932 (1980). The appellate court has
the discretion to determine whether an appeal should be dismissed for failure to timely file the
record, even where no extension for filing was requested. See In re Estate of Woodshank, 27
Ill. App. 3d 444, 449 (1975).
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¶ 20 Here, the parties do not dispute that neither the record nor any motion for an extension of
time to file the record was filed during the period provided for in Rule 326. The Roongseangs
filed their notice of appeal on May 10, 2018, but did not file their first verified motion for
extension of time to file the record on appeal until September 19, 2018. Another panel of this
court granted the motion to extend the filing of the appellate record to October 18, 2018. It was
not filed by this date. On November 26, 2018, the Roongseangs moved to file the record on
appeal instanter. The same panel granted the motion, and the record on appeal was filed on
December 5, 2018. The Roongseangs, by counsel, asserted that the delay in filing the record
was due to miscommunications between the clerk’s office and their attorney.
¶ 21 We find that Rule 326 does not mandate dismissal of an appeal for failure to timely file the
record or a motion for extension of time to do so because the filing of the record is not
jurisdictional. Although dismissal under Rule 326 is within our discretion, we find that it is not
warranted. Delay and miscommunication between the circuit court clerk’s office and
appellants is not infrequent and the delay occasioned here has not been materially prejudicial
to the parties. Therefore, we will consider the appeal on its merits.
¶ 22 Next we consider whether the Roongseangs judicially admitted receipt of the notice.
Plaintiff argues that the Roongseangs did not sufficiently plead plaintiff’s failure to send the
notice under Rule 133(c) in their answer and affirmative defenses. We disagree and find that
the Roongseangs’ adequately pled plaintiff’s failure to send the required notices and, therefore,
did not make a judicial admission of receipt of notice.
¶ 23 Rule 133(c) provides,
“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.” Ill. S. Ct. R. 133(c) (eff. Jan. 1, 1967).
“[A] general denial to an allegation of the performance of a condition precedent in a contract
is treated as an admission of that performance.” Bank of New York Mellon v. Wojcik, 2019 IL
App (1st) 180845, ¶ 21. To comply with Rule 133(c), a party must set forth the specific
conditions that the opposing party failed to perform. Cushman & Wakefield of Illinois, Inc. v.
Northbrook 500 Ltd. Partnership, 112 Ill. App. 3d 951, 960 (1983). The specific denial
required by Rule 133(c) may be contained in an affirmative defense. Radkiewicz v. Radkiewicz,
353 Ill. App. 3d 251, 259 (2004).
¶ 24 We find that the Roongseangs’ second affirmative defense complied with Rule 133(c) in
pleading plaintiff’s failure to perform a condition precedent. In their second affirmative
defense, the Roongseangs enumerate the various notices that plaintiff failed to send them. Of
relevance here, the Roongseangs specifically pleaded that plaintiff failed to send them a notice
to cure or a notice of acceleration under paragraphs 20 and 22 of the mortgage. These
statements are adequate to meet the fact pleading requirements of Rule 133(c) because they
specifically describe which conditions precedent are in dispute.
¶ 25 Having determined that the Roongseangs properly put the notice to cure and the
acceleration notice requirement at issue, we consider whether plaintiff established its
compliance with the notice requirements of the mortgage where its proof shows a mailing by
certified mail without proof of actual delivery of the notice. We note that other jurisdictions
have discussed the difference between first class and certified mail, but our research has not
identified any Illinois decisions that have addressed whether mortgagors must provide proof
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of actual delivery to prove receipt of a required notice where the notice is sent via certified
mail. The Roongseangs argue that certified mail is sufficiently different from first class mail
to require proof of actual delivery. The Roongseangs contend that, unlike first class mail, there
can be no presumption of delivery for certified mail because the delivery of certified mail does
not allow the letter to be left without a signature from the addressee. Plaintiff responds that
certified mail is an “extra service” that confirms delivery of first class mail.
¶ 26 Section 15 of the mortgage provides that any notice sent to the borrower will be deemed
given “when mailed by first class mail or when actually delivered to Borrower’s notice address
if sent by other means.” Plaintiff attests that it sent the required notice to the Roongseangs via
certified mail. The Roongseangs deny receipt of the notice. Therefore, the question is whether
certified mail falls under the umbrella of “first class mail,” for which proof of mailing is
sufficient to show compliance with the notice requirement, or whether sending a notice via
certified mail is by “other means,” which requires proof of actual delivery.
¶ 27 Interpretation of a mortgage provision, like interpretation of any contract, is a question of
law which we review de novo. Accetturo, 2016 IL App (1st) 152783, ¶ 26. “The primary
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 popular
meaning, the term should be enforced as written. Id. at 1078-79. Because words derive their
meaning from context, the provisions of a contract must be looked at as a whole. Gallagher,
226 Ill. 2d at 233.
¶ 28 The clear purpose of section 15 of the mortgage, when read together with sections 20 and
22, is to provide the borrower with a notice of default to allow for an opportunity to cure.
Section 15 describes two methods by which the mortgagor can prove that notice has been
given. First, notice is deemed given when mailed to the borrower by first class mail. Second,
if the notice is sent by “other means,” notice is deemed given when actually delivered to the
borrower’s notice address. Because the terms “first class mail” and “other means” are not
defined in the mortgage, we construe the terms in the context of the mortgage document as a
whole.
¶ 29 The United States Postal Service defines its mailing standards in the Domestic Mail Manual
(DMM). See 39 C.F.R. § 111.1 (2005). In the DMM, “certified mail” is described as an “extra
service” that is only available for first class and priority mail. U.S. Postal Serv., Mailing
Standards of the United States Postal Service, Domestic Mail Manual § 503.1.4.1 (Oct. 7,
2019) https://pe.usps.com/cpim/ftp/manuals/dmm300/full/MailingStandards.pdf [https://perma.
cc/PV5G-VT2P]. The DMM does not describe certified mail as a class of mail but as a service
used to provide “the sender with a mailing receipt and, upon request, electronic verification
that an article was delivered or that a delivery attempt was made.” Id. § 503.3.1.1.
¶ 30 Section 15 of the mortgage states that notice shall be deemed given where the notice is sent
via first class mail. This reflects the “mailbox rule,” where properly addressed letters sent via
regular mail carry a presumption of delivery when they are deposited in the mail with postage
prepaid. CitiMortgage, Inc. v. Lewis, 2014 IL App (1st) 131272, ¶ 39. This rule was developed
to prohibit a party from undermining the reliability of giving notice by mail by asserting a mere
denial of receipt. See Bernier v. Schaefer, 11 Ill. 2d 525, 529 (1957).
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¶ 31 Given the restrictions on delivery of certified mail, many courts have declined to extend
the “mailbox” presumption of delivery to certified mail. In In re Marriage of Betts, 159 Ill.
App. 3d 327 (1987), the court examined the service requirements of Illinois Supreme Court
Rule 11 (eff. May 15, 1980). Generally, a party complies with the requirements of Rule 11
when it deposits a properly addressed letter with postage prepaid at a United States post office
or in a post office box. In Betts, the petitioner mailed notice of a hearing via certified mail as
opposed to “regular mail” as required by the rule. Betts, 159 Ill. App. 3d at 332. The Betts court
found that where a party serves notice of a hearing via certified mail, that party could not rely
on the presumption of delivery associated with ordinary mail. Id. By undertaking more than
the rule required in sending the notice via certified mail, the petitioner triggered an obligation
“to follow through on that method by submitting the return receipt as proof of service.” Id.
Thus, proof of service for a document sent via certified mail could not be shown without the
certified mail return receipt.
¶ 32 Similarly, the Seventh Circuit has held that there is no presumption of delivery “as to a
piece of certified mail when no receipt notice is returned.” McPartlin v. Commissioner, 653
F.2d 1185, 1191 (7th Cir. 1981). In McPartlin, the commissioner of the Internal Revenue
Service (Commissioner) sent a notice of deficiency to petitioners’ address via certified mail.
The Commissioner’s file did not contain a return receipt. Id. The court found that the lack of a
return receipt could mean that delivery of the notice was never attempted. Id. The
Commissioner claimed that the notice started the period during which the taxpayer could
petition for a redetermination. The court found that, without the return receipt, the
Commissioner could not establish that the notice of deficiency was received by the petitioner
and thus could not establish that the petition for redetermination was untimely. Id. at 1192.
¶ 33 In a case strikingly similar to the one at bar, though not binding on this court, the Appellate
Court of Connecticut determined that, under the terms of the mortgage, proof of actual delivery
is required for mortgage notices sent via certified mail. Aurora Loan Services, LLC v. Condron,
186 A.3d 708 (Conn. App. Ct. 2018). In Condron, the mortgage provided that notice would be
deemed given “ ‘when mailed by first class mail or when actually delivered to Borrower’s
notice address if sent by other means.’ ” (Emphasis omitted.) Id. at 720. The court found that
the terms of the mortgage notice provision only afforded a presumption of receipt to a notice
sent by first class mail. Id. After discussing the differences between certified mail and regular
mail, the court found that the presumption of receipt could not be extended to notices sent via
certified mail. Because actual delivery may be less likely when a notice is sent by certified
mail, the term “certified mail” falls under the “other means” of sending notice and proof of
actual delivery is required. Id. at 725.
¶ 34 We are not persuaded by plaintiff’s argument that certified mail is an “extra service” that
is added to first class mail, so that certified mail should be considered a form of first class mail
to which the presumption of delivery applies. Various jurisdictions, including the United States
Supreme Court, have found that certified mail and first class mail are not interchangeable terms
because the different delivery services associated with them affect the receipt of notice. See,
e.g., Jones v. Flowers, 547 U.S. 220, 235 (2006) (finding that “use of certified mail might make
actual notice less likely in some cases—the letter cannot be left like regular mail to be
examined at the end of the day, and it can only be retrieved from the post office for a specified
period of time”); Massoud v. Board of Education of Valley View Community District No. 365-
U, 97 Ill. App. 3d 65 (1981) (finding that notice given by first class mail is not a substitute for
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notice sent by certified or registered mail); National City Mortgage Co. v. Richards, 182 Ohio
App. 3d 534, 2009-Ohio-2556, 913 N.E.2d 1007, ¶ 28 (finding that there was no presumption
of delivery for a mortgage default notice that was sent via certified mail and not via “ordinary,
first class mail”).
¶ 35 Given the distinction between the methods of delivery for first class and certified mail, we
find that where plaintiff chose to send the acceleration notice via certified mail, it was sent by
“other means” and proof of actual delivery of the notice is required to establish compliance
with the notice provisions in the mortgage. Because plaintiff sent the notice via certified mail,
there is no presumption of delivery and the plaintiff must provide the return receipt, or present
other competent evidence of actual delivery, in order to prove compliance with the notice
requirements of the mortgage.
¶ 36 We reject plaintiff’s contention that its failure to provide the return receipt can be excused
under the doctrine of substantial compliance or as harmless error. “When a contract contains
an express condition precedent, strict compliance with such a condition is required.” Accetturo,
2016 IL App (1st) 152783, ¶ 32. “[C]ourts will enforce express conditions precedent regardless
of the potential for harsh results for the noncomplying party.” Id. Plaintiff has failed to establish
that it complied with the conditions precedent in the mortgage.
¶ 37 Because sending notice by certified mail is sending notice by “other means,” we find that,
at summary judgment, plaintiff failed to meet its burden to prove it sent notice to the
Roongseangs. There is no dispute that plaintiff did not submit a return receipt. In their
pleadings and affidavits, the Roongseangs denied receiving the notice and created a fact issue
on whether notice was sent. As discussed, proof of actual delivery, in the form of the return
receipt for the certified mail, would have established compliance with the mortgage notice
requirement. Because plaintiff did not produce the return receipt, or otherwise provide proof
of actual delivery, it has not met its evidentiary burden on summary judgment to show that it
complied with the notice condition precedent. Accordingly, we reverse the trial court’s entry
of summary judgment in favor of plaintiff. Similarly, we reverse the trial court’s entry of a
judgment of foreclosure in favor of plaintiff.
¶ 38 Finally, we review an order approving a report of sale and distribution for abuse of
discretion. Id. ¶ 54. Where a question of fact exists as to whether the mortgagee complied with
the notice requirements in the mortgage and satisfied a condition precedent to a foreclosure
action, the circuit court abuses its discretion in confirming a judicial sale. Credit Union 1 v.
Carrasco, 2018 IL App (1st) 172535, ¶ 22. Here, the failure to prove actual delivery of the
notice sent by certified mail leaves a question of fact as to whether plaintiff complied with the
notice requirements found in the mortgage. We reverse the order approving the report of sale.
¶ 39 III. CONCLUSION
¶ 40 For the foregoing reasons, the orders of the circuit court entering summary judgment and
judgment of foreclosure in favor of plaintiff and approving the report of sale are reversed. We
remand to the circuit court for further proceedings.
¶ 41 Reversed and remanded.
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