Credit Union 1 v. Carrasco

2018 IL App (1st) 172535
No. 1-17-2535
Fourth Division
June 28, 2018
______________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
FIRST DISTRICT
______________________________________________________________________________
)
CREDIT UNION 1, )
)
Plaintiff-Appellee, )
)
v. )
)
YOLANDA CARRASCO a/k/a Yolanda C. Carrasco ) Appeal from the Circuit Court
a/k/a Yolanda Martinez; ALEJANDRO MARTINEZ ) of Cook County.
a/k/a Alejandro C. Martinez; CITIBANK (SOUTH )
DAKOTA) N.A.; UNKNOWN HEIRS AND ) No. 14 CH 3405
LEGATEES OF YOLANDA CARRASCO a/k/a )
YOLANDA C. CARRASCO a/k/a YOLANDA ) The Honorable
MARTINEZ, IF ANY; and UNKNOWN OWNERS ) John J. Curry, Jr.,
AND NON-RECORD CLAIMANTS; ) Judge Presiding.
)
Defendants )
)
(Yolanda Carrasco, )
Defendant-Appellant). )
)
______________________________________________________________________________
JUSTICE GORDON delivered the judgment of the court, with opinion.
Presiding Justice Burke and Justice McBride concurred in the judgment and opinion.
OPINION
¶1 The instant appeal arises from a foreclosure action filed by plaintiff Credit Union 1
against defendant Yolanda Carrasco with respect to a single family home in Calumet City.
The trial court granted summary judgment in plaintiff’s favor and, after the property was
No. 1-17-2535
sold, entered an order approving the report of sale and distribution. Defendant appeals,
arguing that plaintiff never established that it sent an acceleration notice as required under the
terms of the mortgage, meaning that plaintiff did not have the right to initiate the foreclosure
action. For the reasons that follow, we reverse.
¶2 BACKGROUND
¶3 On February 26, 2014, plaintiff filed a complaint for foreclosure of a single family home
in Calumet City, alleging that defendant had failed to make payments due under the
mortgage and note beginning in February 2011, leaving a current unpaid principal balance of
$132,961.37. Attached to the complaint was a copy of the mortgage. As relevant to the
instant appeal, section 15 of the mortgage was entitled “Notices” and provided, in relevant
part:
“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.”
¶4 Additionally, section 22 was entitled “Acceleration; Remedies” and provided:
“Lender shall give notice to Borrower prior to acceleration following Borrower’s
breach of any covenant or agreement in this Security Instrument ***. The notice shall
specify: (a) the default; (b) the action required to cure the default; (c) a date, not less
than 30 days from the date the notice is given to Borrower, by which the default must
be cured; and (d) that failure to cure the default on or before the date specified in the
notice may result in acceleration of the sums secured by this Security Instrument,
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foreclosure by judicial proceeding and sale of the Property. The notice shall further
inform Borrower of the right to reinstate after acceleration and the right to assert in
the foreclosure proceeding the non-existence of a default or any other defense of
Borrower to acceleration and foreclosure. If the default is not cured on or before the
date specified in the notice, Lender at its option may require immediate payment in
full of all sums secured by this Security Instrument without further demand and may
foreclose this Security Instrument by judicial proceeding. Lender shall be entitled to
collect all expenses incurred in pursuing the remedies provided in this Section 22,
including, but not limited to, reasonable attorneys’ fees and costs of title evidence.”
¶5 On February 23, 2015, defendant filed an appearance through counsel and, on August 28,
2015, filed an answer and affirmative defenses; none of defendant’s defenses concerned the
notice of acceleration. On October 16, 2015, plaintiff filed a motion to strike defendant’s
affirmative defenses, which was denied on February 26, 2016, without prejudice. On March
31, 2016, plaintiff filed another motion to strike defendant’s affirmative defenses and for
partial summary judgment on the affirmative defenses. On April 25, 2016, the trial court
granted plaintiff’s motion and dismissed defendant’s affirmative defenses without prejudice
and granted defendant 21 days to file amended affirmative defenses; defendant did not do so.
¶6 On November 23, 2016, plaintiff filed a motion for default judgment against all other
defendants, since no other defendants had filed an appearance, 1 and also filed a motion for
summary judgment against defendant. The motion for summary judgment claimed that
defendant’s answer did not present any facts to refute the allegations contained in plaintiff’s
complaint and contained merely general denials of the allegations. An affidavit of proveup
1
The motion for default judgment against the other defendants was granted on March 7, 2017.
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attached to the motion for summary judgment indicated that the total amount due from
defendant was $239,923.13.
¶7 On February 3, 2017, defendant filed a response to the motion for summary judgment. As
relevant to the instant appeal, the response claimed that defendant denied receiving an
acceleration notice pursuant to section 22 of the mortgage. Attached to defendant’s response
was a certification sworn by defendant pursuant to section 1-109 of the Code of Civil
Procedure (Code) (735 ILCS 5/1-109 (West 2016)), which provided, in relevant part:
“I am the only person responsible for retrieving the mail at [the property address
in Calumet City].
I retrieve my mail on a daily basis from the mailbox.
I have never had any problems receiving mail from the United States Post Office.
I have never received a letter of acceleration that was required to be sent to me in
Paragraph 22 of my mortgage.
On information and belief, the Plaintiff never sent a letter of acceleration that was
required to be sent to me pursuant to Paragraph 22 of the mortgage.”
¶8 On February 16, 2017, plaintiff filed a reply in support of its motion for summary
judgment. With respect to the issue of notice, plaintiff argued that defendant claimed not to
have received the acceleration notice but acknowledged receipt of plaintiff’s grace period
notice, which had been sent to the same address. Additionally, plaintiff argued that the
mortgage provided that notice was deemed given when plaintiff mailed the acceleration
notice, not when defendant received it, making defendant’s claim that she never received it
“completely irrelevant.” Plaintiff argued that “[t]he only relevant inquiry is whether the
Acceleration Notice was mailed, which it was.”
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¶9 Attached to the reply were three documents, all under the heading “Exhibit A.” The first
was a letter dated October 4, 2013, from defendant to plaintiff’s counsel, which provided, in
relevant part:
“I received a grace period notice dated September 20, 2013 on September 26th,
2013.”
The second document was a letter dated September 18, 2013, from plaintiff’s counsel to
defendant, which was entitled “NOTICE OF INTENT TO ACCELERATE.” Above the
address block of the letter were the words: “Via Certified U.S. Mail and via regular 1st class
U.S. mail.” The third document was a letter dated September 20, 2013, from plaintiff’s
counsel to defendant at the same address listed on the prior letter’s address block. The letter
was entitled “GRACE PERIOD NOTICE” and above the address block were the words: “Via
regular 1st class U.S. mail.”
¶ 10 On March 7, 2017, the trial court entered an order granting plaintiff’s motion for
summary judgment, and also entered a judgment of foreclosure and sale. 2 The property was
sold at a judicial sale on June 8, 2017, and on June 23, 2017, plaintiff filed a motion for an
order approving the report of sale and distribution, for an in personam deficiency judgment,
and for possession. On September 8, 2017, the trial court entered an order approving the
report of sale, entered an in personam deficiency judgment against defendant in the amount
of $174,656.91, and entered an order of possession.
¶ 11 Defendant filed a timely notice of appeal, and this appeal follows.
2
We note that only a portion of the judgment of foreclosure and sale is contained in the record on
appeal.
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¶ 12 ANALYSIS
¶ 13 On appeal, defendant argues that summary judgment should not have been granted in
plaintiff’s favor, and the sale should not have been approved, because plaintiff never
established that it sent the acceleration notice required by the mortgage. A trial court is
permitted to grant summary judgment only “if 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(c) (West 2016). The trial court must view these documents and exhibits in the light
most favorable to the nonmoving party. Home Insurance Co. v. Cincinnati Insurance Co.,
213 Ill. 2d 307, 315 (2004). We review a trial court’s decision to grant a motion for summary
judgment de novo. Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90,
102 (1992). De novo consideration means we perform the same analysis that a trial judge
would perform. Khan v. BDO Seidman, LLP, 408 Ill. App. 3d 564, 578 (2011).
¶ 14 “Summary judgment is a drastic measure and should only be granted if the movant’s right
to judgment is clear and free from doubt.” Outboard Marine Corp., 154 Ill. 2d at 102.
However, “[m]ere speculation, conjecture, or guess is insufficient to withstand summary
judgment.” Sorce v. Naperville Jeep Eagle, Inc., 309 Ill. App. 3d 313, 328 (1999). The party
moving for summary judgment bears the initial burden of proof. Nedzvekas v. Fung, 374 Ill.
App. 3d 618, 624 (2007). The movant may meet his burden of proof either by affirmatively
showing that some element of the case must be resolved in his favor or by establishing “ ‘that
there is an absence of evidence to support the nonmoving party’s case.’ ” Nedzvekas, 374 Ill.
App. 3d at 624 (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)). “ ‘The purpose
of summary judgment is not to try an issue of fact but *** to determine whether a triable
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issue of fact exists.’ ” Schrager v. North Community Bank, 328 Ill. App. 3d 696, 708 (2002)
(quoting Luu v. Kim, 323 Ill. App. 3d 946, 952 (2001)). We may affirm on any basis
appearing in the record, whether or not the trial court relied on that basis or its reasoning was
correct. Ray Dancer, Inc. v. DMC Corp., 230 Ill. App. 3d 40, 50 (1992).
¶ 15 In the case at bar, defendant claims that plaintiff was not entitled to summary judgment
because there was a question of fact as to whether plaintiff had provided the acceleration
notice required by the mortgage. We agree. The mortgage at issue required that “Lender shall
give notice to Borrower prior to acceleration following Borrower’s breach of any covenant or
agreement in this Security Instrument,” and further imposed requirements as to the contents
of that notice. 3 This type of acceleration notice has been held to be a condition precedent to
the lender’s right to bring suit, meaning that “[i]f [the lender] had not sent an acceleration
notice, it would not be entitled to foreclose.” CitiMortgage, Inc. v. Bukowski, 2015 IL App
(1st) 140780, ¶ 16; Cathay Bank v. Accetturo, 2016 IL App (1st) 152783, ¶ 33 (“A notice of
acceleration is a condition precedent to foreclosure under Illinois Mortgage Foreclosure
Law.”). “A ‘condition precedent’ is an act that must be performed or an event that must occur
before a contract becomes effective or before one party to an existing contract is obligated to
perform.” Accetturo, 2016 IL App (1st) 152783, ¶ 32. “When a contract contains an express
condition precedent, strict compliance with such a condition is required [citation], and the
contract does not become enforceable or effective until the contract is performed or the
contingency occurs. [Citation.]” Accetturo, 2016 IL App (1st) 152783, ¶ 32. Thus, as the
Accetturo court found when considering an identical acceleration clause, “[b]ecause the
mortgage contained an acceleration clause that provided ‘[plaintiff] shall give notice to
3
Defendant does not argue on appeal that the substance of the purported notice was deficient, but
only argues that proper notice was not given.
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[defendant] prior to acceleration,’ we find that paragraph [22] is a contractual condition
precedent and that [plaintiff] had a mandatory duty to send a notice of acceleration to
[defendant] prior to accelerating the mortgage.” Accetturo, 2016 IL App (1st) 152783, ¶ 37.
Plaintiff does not dispute on appeal that the sending of the notice of acceleration was a
condition precedent to its right to maintain a foreclosure action. 4
¶ 16 In the case at bar, then, we must determine whether the record establishes that the notice
was properly sent or whether there is a question of fact concerning this issue. Defendant
points to the certification she attached to her response to the motion for summary judgment,
in which she certified that she had not received a notice of acceleration. However, all that this
certification establishes is that defendant did not receive the notice. As plaintiff notes, under
the terms of the mortgage, “[a]ny 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.” Thus, if the
facts established that plaintiff mailed the notice, summary judgment would be appropriate.
¶ 17 Plaintiff relies on a presumption of receipt, as set forth in Tabor & Co. v. Gorenz, 43 Ill.
App. 3d 124 (1976). In that case, the court found: “A letter properly addressed, stamped and
mailed is presumed to have been duly received based upon the probability of delivery and the
difficulty of proving receipt in any other way.” Tabor & Co., 43 Ill. App. 3d at 129.
However, plaintiff does not address the sentences that immediately follow: “To be entitled to
the benefit of the presumption there must be proof that the item was contained in the properly
addressed envelope with adequate postage affixed and that it was deposited in the mail.”
Tabor & Co., 43 Ill. App. 3d at 129. Additionally, “[t]he presumption *** is a rebuttable one;
4
Indeed, we must note that plaintiff’s brief on appeal is certainly “brief,” spanning fewer than
two pages and with no citations to authority or to the record on appeal.
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and if rebutted, receipt becomes a question to be resolved by the trier of fact.” Tabor & Co.,
43 Ill. App. 3d at 129.
¶ 18 In the case at bar, defendant claimed in her response to the motion for summary judgment
that she never received the acceleration notice, and attached a certification in support. In
response, plaintiff submitted three documents: (1) a letter from defendant acknowledging
receipt of the grace period notice; (2) a letter purporting to be the acceleration notice; and (3)
a letter purporting to be the grace period notice. There was no affidavit attached to any of
these documents, nor was there a copy of an envelope or receipt of mailing. In short,
nowhere was there “proof that the item was contained in the properly addressed envelope
with adequate postage affixed and that it was deposited in the mail.” Tabor & Co., 43 Ill.
App. 3d at 129. Thus, we fail to see how plaintiff can argue that it is entitled to a presumption
that the notice was properly mailed when plaintiff has wholly failed to comply with the
requirements for such a presumption. We note that there is evidence in the record that
plaintiff was well able to provide such proof with respect to other mailings—for instance, in
support of its claims that it had served the defendants, plaintiff attached certified mail
receipts and “Certificate[s] of Mailing” from the postal service bearing the amount of postage
paid. However, this type of proof is completely absent with respect to the notice of
acceleration.
¶ 19 We also fail to see the significance of defendant’s acknowledgement that she received the
grace period notice. At most, that demonstrates that her mailing address was accurate.
However, there is no claim that the two documents were sent at the same time and, in fact,
the two documents bear different dates, suggesting that they were sent separately.
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Consequently, the fact that defendant received one notice has absolutely no bearing on the
question of whether she received the other notice.
¶ 20 We are similarly unpersuaded by plaintiff’s attempt to suggest that defendant had failed
in some way because she “made no effort to depose the affiant or the author of the letter.”
However, as noted, there was no affidavit concerning the matter of the acceleration notice.
The only affidavits contained in the record on appeal concern other matters, such as
defendant’s payment history, service, and loss mitigation. Furthermore, there was no
requirement that defendant depose “the author of the letter,” as the letter itself was produced
for the first time in the reply in support of the motion for summary judgment.
¶ 21 In summary, the parties do not dispute that an acceleration notice was required.
Defendant has produced a certification stating that she did not receive such a notice. Plaintiff
did not submit a counteraffidavit but submitted only a copy of the purported acceleration
notice, without any proof that the notice had been mailed. Accordingly, there is a question of
fact as to whether this notice was, in fact, provided to defendant as required by the terms of
the mortgage. This question of fact means that summary judgment should not have been
granted, and we must reverse the trial court’s order granting summary judgment.
¶ 22 Additionally, the order approving the report of sale and distribution must likewise be
reversed. “The provisions of section 15-1508 [of the Mortgage Foreclosure Law (735 ILCS
5/15-1508(b) (West 2016))] have been construed as conferring on circuit courts broad
discretion in approving or disapproving judicial sales.” Household Bank, FSB v. Lewis, 229
Ill. 2d 173, 178 (2008). Accordingly, “[a] court’s decision to confirm or reject a judicial sale
under the statute will not be disturbed absent an abuse of that discretion.” Lewis, 229 Ill. 2d
at 178. “When a bank fails to comply with its servicing requirements and does not give
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notice to the borrower mandated by a provision in its mortgage, and the circuit court ignores
the banks’ failure to comply with the mortgage’s servicing requirements, the circuit court
abuses its discretion.” Accetturo, 2016 IL App (1st) 152783, ¶ 54. In the case at bar, there is a
question of fact as to whether notice was properly provided. Until that question of fact is
resolved, the trial court cannot properly approve a judicial sale of the property in question.
¶ 23 CONCLUSION
¶ 24 Since plaintiff failed to provide any evidence that would entitle it to a presumption that it
had mailed an acceleration notice to defendant, there is a question of fact as to whether
plaintiff properly provided notice as required under the mortgage. Consequently, neither
summary judgment nor the order approving sale, which was based on the summary judgment
order, should have been granted.
¶ 25 Reversed.
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