2019 IL App (1st) 170955

Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

Fourth Division

March 21, 2019 

______________________________________________________________________________ 

IN THE

APPELLATE COURT OF ILLINOIS

FIRST DISTRICT

______________________________________________________________________________ 

)

LOBO IV, LLC; THE DAVIS FAMILY TRUST; and ) 

MARC E. DAVIS, ) 

 ) 

 Plaintiffs and Counterdefendants-Appellants and ) 

Cross-Appellees, ) 

 ) 

v. ) 

 ) 

V LAND CHICAGO CANAL, LLC; V LAND ) 

BLOOMINGDALE ARMY TRAIL, LLC; V LAND ) 

MOKENA WOLF, LLC; and V LAND CORPORATION, ) 

 ) 

Defendants-Appellees and Cross-Appellants ) 

 ) 

(Lakeside Bank, ) 

 Intervenor-Defendant and Counterplaintiff- ) 

Appellee and Cross-Appellant). ) 

)

Appeal from the Circuit Court 

of Cook County. 

No. 05 CH 22194 

The Honorable 

Franklin U. Valderrama, 

Judge Presiding. 

_____________________________________________________________________________

 JUSTICE GORDON delivered the judgment of the court, with opinion. 

 Justices Reyes and Burke concurred in the judgment and opinion.

OPINION

¶ 1 The instant consolidated appeals arise from a trial court order granting specific 

performance on two real estate purchase contracts between plaintiff Lobo IV, LLC (Lobo), 

and defendants (collectively, V Land), in which, after a bench trial, the trial court found that 

Lobo was entitled to purchase the properties pursuant to the contracts and was also entitled to 
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monetary damages due to V Land’s failure to convey Lobo the properties under the terms of 

the contracts. However, in subsequent proceedings, the trial court also found that Lakeside 

Bank (Lakeside), an intervenor and counterplaintiff, had issued several mortgages on the 

properties that had priority over the purchase contracts and that Lobo’s monetary judgment 

against V Land could be used to abate only the purchase price of the properties owed to V 

Land and would not abate any of the moneys due on the outstanding mortgages held by 

Lakeside, which the trial court found that Lobo would be required to pay off. All parties 

appealed. 

¶ 2 Specifically, plaintiffs claim that (1) Lakeside’s mortgages did not take priority over the 

purchase contracts, (2) the trial court should have permitted Lobo to abate any amounts owed 

to Lakeside to the extent of the judgment award in Lobo’s favor, (3) the trial court should 

have extended the closing date further, (4) plaintiffs were entitled to additional attorney fees 

and to an updated damages award, and (5) the trial court should have appointed a receiver or 

escrowed the revenues from the properties at issue. Both V Land and Lakeside argue that 

Lobo terminated the purchase contracts by not closing on the date set by the trial court, and 

so plaintiffs’ appeal should fail. Additionally, each raises their own issues on appeal. V Land

claims that the trial court erred in granting specific performance and monetary damages. 

Lakeside claims that it was entitled to equitable subrogation on several loans it issued 

concerning the properties. For the reasons that follow, we affirm in part and reverse in part. 

¶ 3 BACKGROUND

¶ 4 The underlying litigation in the instant case has been lengthy, spanning over 13 years 

since the purchase contracts at issue were first executed. As noted, the instant case proceeded 

to a bench trial; on appeal, none of the parties challenges any of the trial court’s findings of 
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3 

fact. Accordingly, we set forth the relevant factual background of the case as found by the 

trial court in its May 24, 2012, memorandum opinion and order following trial.

¶ 5 Plaintiff Lobo is an Illinois limited liability company (LLC), and plaintiffs the Davis 

Family Trust and Marc Davis are the members of Lobo. Lobo owned several parcels of land 

in Mokena, Illinois, and in June 2005, sold two of the Mokena properties to defendant V 

Land Mokena Wolf, an LLC owned and managed by Steve Panko, a real estate developer; as 

part of the same transaction, V Land agreed to sell to Lobo, at a later date, three other 

properties owned by other V Land entities in Chicago, Bloomingdale, and Streamwood.1 The 

transaction was structured so that Lobo could take advantage of the tax-deferral provisions of 

§ 1031 of the Internal Revenue Code (26 U.S.C. § 1031 (2000)) by utilizing the proceeds of 

the sale of its Mokena properties to purchase V Land’s “exchange” properties. However, 

Lobo’s purchase of V Land’s properties never closed. 

¶ 6 The properties at issue were owned by defendants V Land Chicago Canal, LLC, and V 

Land Bloomingdale Army Trail, LLC, and both properties were under construction at the 

time the parties entered into their agreements: the Chicago store (referred to as the Canal 

property due to its location) was under construction for a Staples office supply store and a 

Chase Bank branch, and the Bloomingdale store was under construction for another Staples 

store. The purchase contracts for both properties were identical in all material respects other 

than their price terms: the purchase price for the Canal property was $9.5 million and the 

purchase price for the Bloomingdale property was $4.2 million. Several provisions of the 

 1

Only the Chicago and Bloomingdale properties are at issue on appeal. The record indicates that 

Lobo and V Land never entered into a contract for the Streamwood property and Lobo did not pursue 

any claims based on that property at trial.
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purchase contracts are central to the issues on appeal, and we quote them where appropriate 

in our recitation of the facts and our analysis.2

¶ 7 First, paragraph 3 of the contracts contained a provision permitting an adjustment in the 

purchase price if an appraisal returned a different valuation for the property; according to the 

trial court’s findings, this provision was included because the parties could not agree on a 

price, and Panko, owner of V Land, believed that the provision would work in his favor 

because he predicted that the appraisals would return higher valuations than the purchase 

prices set forth in the contracts. This provision provided: 

“Purchase Price Adjustment. No later than November 15, 2005, the parties shall 

obtain a duplicate original or certified copy of Permanent Lender’s (as defined below) 

appraisal of the Property (which appraisal may assume completion of the Building, 

the Improvements and take the Leases with the Bank and Staples into consideration 

as fully open, operating and rent paying tenants, even if such assumption is 

considered an ‘extraordinary assumption’ by the appraiser, but shall not take this 

Agreement into consideration when determining appraised value) (the ‘Appraised 

Value’). In the event that the Appraised Value is greater or less than the Purchase 

Price, then Buyer may elect to no later than November 22, 2005 (i) terminate this 

Agreement and have the Earnest Money returned, be reimbursed for its Out-OfPocket Expenses (as defined below) and Buyer shall deliver the Third Party Reports 

(as defined below) to Seller or (ii) have the Purchase Price adjusted to equal the 

Appraised Value of the Property and Close. In the event Buyer fails to timely elect 

option (i) or (ii), Purchaser shall be deemed to have elected option (ii) above.” 

 2

We quote from the Chicago property’s purchase contract; however, as noted, the material 

provisions of both contracts are identical other than the price terms. 
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¶ 8 Paragraph 8 of the contracts defined the term “Permanent Lender,” which was used in 

paragraph 3: 

“Permanent Loan. Buyer’s obligations are contingent upon Buyer, within ninety (90) 

days after the Effective Date, entering into a loan commitment (the ‘Loan 

Commitment’) with a lender (the ‘Permanent Lender’) prepared to provide permanent 

mortgage financing for the Property. The Loan Commitment shall provide for a nonrecourse loan in an amount equal to 80% of the Purchase Price, at a rate of interest 

not to exceed 110-125 basis points over the 10-year treasury bill, with a loan term of 

10 years amortized over 30 years with a loan fee not to exceed one-half of 1% (the 

‘Permanent Loan’).” 

¶ 9 Following execution of the agreements on June 30, 2005, Lobo applied for financing 

from Old Second National Bank (Old Second), which ordered appraisals on the two 

properties. The appraisals returned valuations that were lower than the contract prices: the 

appraised value of the Canal property was $8 million ($1.5 million below the contract price) 

and the appraised value of the Bloomingdale property was $4 million ($200,000 below the 

contract price). Old Second issued a loan commitment for the properties on November 9, 

2005, at terms that were less favorable to Lobo than the terms set forth in the purchase 

agreement; specifically, Old Second’s loan commitments required a personal guarantee from 

Marc Davis, a larger down payment, and a higher interest rate. Davis forwarded the appraisal 

summaries and the loan commitments to V Land on November 14, 2005, and indicated that 

he was confirming a closing for both properties on December 1, 2005, at the adjusted 

purchase prices.
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¶ 10 On November 29, 2005, V Land’s counsel notified Lobo that Lobo was in default under 

the purchase contracts because it had failed to obtain appraisals from a “Permanent Lender” 

as required under the contracts; V Land indicated that the loan commitments from Old 

Second did not comply with the parties’ agreements because the terms differed from those set 

forth in the contracts. Instead of giving Lobo 30 days to cure the alleged default, as provided 

under the contracts, V Land’s counsel informed Lobo that V Land was terminating the 

contracts and directing the release of earnest money held in escrow. In response, Lobo 

claimed that it was in compliance with the terms of the contracts because the financing 

contingency was for Lobo’s benefit and Lobo had waived it by arranging for financing on 

less favorable terms. Therefore, Lobo claimed, Old Second’s appraisals complied with the 

contracts. Lobo requested a closing date of December 15, 2005. When V Land did not close 

on the properties either on the original closing date of December 1, 2005, or the extended 

date of December 15, 2005, Lobo filed a lawsuit for specific performance and damages based 

on the failed closing. Lobo recorded lis pendens notices with respect to each property shortly 

thereafter.

¶ 11 In its answer and affirmative defenses, V Land raised several affirmative defenses to 

Lobo’s complaint, including the allegation that Old Second did not qualify as a “Permanent 

Lender” under the parties’ contracts and Lobo was therefore in default under the contracts. V 

Land alleged that Lobo had no actionable cause of action against V Land; that Lobo’s claims 

were barred because Lobo failed to mitigate its alleged damages and by the doctrines of 

unclean hands, waiver, and estoppel; and that Lobo was not entitled to the relief requested. V 

Land also filed a counterclaim against Lobo, alleging breach of contract. 
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¶ 12 On August 18, 2008, Lobo filed a motion for the appointment of a receiver on the 

properties, claiming that discovery had revealed that there were a number of irregular and 

improper payments from the properties’ operating accounts, including cash withdrawals and 

payment of legal fees. Lobo further claimed that it had discovered that V Land and Panko 

had placed additional debt on the properties through Lakeside after the commencement of the 

instant litigation and after the recordation of notices of lis pendens on the properties. On 

September 23, 2008, V Land filed a response in opposition to Lobo’s motion to appoint a 

receiver, arguing that Lobo was not entitled to a receiver and that equity did not require the 

appointment of a receiver because any damages Lobo experienced were the result of its 

decision not to close on the properties. Attached to its response was the affidavit of Chris

Sotos, the chief financial officer of V Land, in which he averred that, prior to the execution 

of the purchase contracts, V Land had obtained land acquisition and construction loans for 

each property. However, Sotos further averred that, in June 2006, V Land received additional 

financing on each property from Lakeside, which Sotos characterized as “mini-permanent 

loan[s],” that enabled V Land to pay off the prior loans. In its reply in support of the motion, 

Lobo argued that, under the purchase contracts, V Land was not entitled to take out new 

loans on the properties without Lobo’s consent. On November 24, 2008, the trial court 

denied Lobo’s motion to appoint a receiver, expressly finding that “[t]he court takes no 

position on the propriety of transfers.” 

¶ 13 On December 23, 2009, Lakeside filed a petition to intervene, in which it admitted that it 

had issued mortgages on the properties after the recordation of the lis pendens notices. On 

February 19, 2010, the trial court granted Lakeside’s petition to intervene, and Lakeside filed 

an answer and affirmative defenses to Lobo’s complaint, as well as counterclaims for 
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declaratory relief, in which it sought findings that Lakeside’s mortgages on the properties 

were valid mortgage liens and that Lakeside’s interest in the properties was senior to Lobo’s 

interest in the properties. Lakeside alleged that, at the time of execution of the purchase 

contracts, Lobo had actual and constructive notice that there were liens on the property and 

that Lakeside’s subsequent loans were made with the intent of refinancing those prior loans. 

Accordingly, Lakeside claimed that, under the doctrines of conventional and equitable 

subrogation, it was entitled to hold the same lien priority as the prior lenders. 

¶ 14 According to Lakeside’s counterclaim, on March 8, 2005, CF Lender, L.L.C., made a 

loan to V Land in the original principal amount of $6,990,000 for purposes of constructing 

improvements on the Canal property, which was secured by a mortgage giving CF Lender, 

L.L.C., a first priority mortgage lien on the Canal property and all appurtenances to or 

improvements on the property. Later in 2005, the mortgage was assigned to Wrightwood 

Capital, LLC, which succeeded to all rights under the applicable loan documents. 

¶ 15 Also according to Lakeside’s counterclaim, on June 1, 2005, Keybank made a loan to V

Land in the original principal amount of $3.5 million for purposes of constructing 

improvements on the Bloomingdale property, which was secured by a mortgage giving 

Keybank a first priority mortgage lien on the Bloomingdale property and all appurtenances to 

or improvements on the property. 

¶ 16 According to Lakeside, both loans were set to mature in late 2006: the Canal mortgage on 

October 1, 2006, and the Bloomingdale mortgage on December 1, 2006. In order to avoid 

foreclosure on the loans, V Land requested that Lakeside refinance the loans; Lakeside 

agreed, provided that it obtained a first mortgage lien on each property. Lakeside agreed to 

make a first mortgage loan to V Land for $8 million, to be secured by a first mortgage lien 
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and assignment of rents in favor of Lakeside on the Canal property and agreed to make a first 

mortgage loan to V Land for $3.5 million, to be secured by a first mortgage lien and 

assignment of rents in favor of Lakeside on the Bloomingdale property. At the closing of the 

Canal loan on June 29, 2006, Lakeside disbursed $7,932,533.06, of which (1) $7,019,713.29 

was paid directly to Wrightwood Capital to refinance the previous mortgage and

(2) $518,464.06 was held in escrow to be used to pay for amounts already owed, or that 

might become due, for construction work at the property. At the closing of the Bloomingdale 

loan on June 29, 2006, Lakeside disbursed “at least” $3,474,418.76, and all of those funds 

were paid directly to Keybank to refinance the previous mortgage. 

¶ 17 On June 11, 2010, Lobo filed a motion to dismiss Lakeside’s counterclaim pursuant to 

section 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West 2008)), 

claiming that Lakeside’s claims for conventional and equitable subrogation should be 

dismissed because Lakeside’s loans were issued after Lobo had recorded lis pendens notices 

on the properties, meaning that Lakeside would be considered a “subsequent purchaser” 

under the lis pendens statute.

¶ 18 On July 9, 2010, Lakeside filed a motion for summary judgment on its counterclaim, 

claiming, inter alia, that it was expressly contemplated by the purchase contracts that the 

construction loans on the properties would be paid off at the closing in order for Lobo to take 

clear title to the properties, so denying subrogation would grant Lobo the unearned 

enrichment of ownership of the properties free of the existing mortgages. In response, Lobo 

claimed that the purchase contracts provided that V Land, not Lobo, would pay off any 

existing mortgages. Lobo’s argument was based on paragraph 5 of the purchase contracts, 

which concerned title and provided: 
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“Title Evidence. Seller shall cause to be delivered to Buyer within fifteen (15) days 

after the Effective Date (a) a commitment dated on or after the Effective Date (the 

‘Title Commitment’) to issue a 1992 ALTA form owner’s policy of title insurance in 

the amount of the Purchase Price with those endorsements set forth below (the ‘Title 

Policy’) issued by Chicago Title Insurance Company (the ‘Title Company’), and (b) 

complete, legible copies of all documents relating to title exceptions referenced in the 

Title Commitment (the ‘Title Documents’). When issued, the Title Policy shall show 

title to the Property as of the Closing Date in Buyer to be subject only to the 

Permitted Encumbrances ***. 

The proceeds due Seller at Closing shall be used by the Escrowee to satisfy or 

otherwise obtain a release of any existing mortgage including Lender’s construction 

mortgage and any other monetary encumbrances arising from acts of Seller to enable 

the Title Company to delete the encumbrance from the Title Policy.

Buyer shall have ten (10) business days after receipt of the Title Commitment, 

Title Documents and the Existing Survey identified on Exhibit ‘D’ to object in 

writing (an ‘Objections Letter’) to any exceptions reported in the Title Commitment 

or any matters shown on the Existing Survey (such matters, ‘Unpermitted Title and 

Survey Exceptions’) and to request additional endorsements to address matters raised 

by the Title Commitment and Existing Survey. Matters specifically stated in the Title 

Commitment and not objected to by Buyer in the Objections Letter shall become 

permitted (‘Permitted Encumbrance’).

Seller shall have 30 days from the date of the Objections Letter (the ‘Cure 

Period’) to have the Unpermitted Title and Survey Exceptions removed from the Title 
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Commitment, to correct the defects noted on the Existing Survey and to obtain a 

revised Title Commitment. If Seller does not have such exceptions removed, does not 

correct all survey defects and does not provide Buyer with a revised Title 

Commitment with the additional endorsements, if any, during the Cure Period, Buyer 

may elect, by written notice to Seller delivered within five (5) business days after the 

end of the Cure Period, to (i) terminate this Agreement, in which case the Earnest 

Money shall be returned to Buyer by Escrowee, the Out-Of-Pocket Expenses (as 

defined below) shall be reimbursed to Buyer, Buyer shall deliver the Third Party 

Reports (as defined below) to Seller, and the parties shall have no further rights or 

obligations hereunder, except for those rights and obligations which expressly survive 

any such termination, or (ii) waive such objections hereunder and proceed with the 

transaction pursuant to the remaining terms and conditions of this Agreement. Any 

objections to title which Buyer waives pursuant to (ii) above shall be deemed 

Permitted Encumbrances. If Buyer fails to give Seller notice of its election as 

provided above, it shall be deemed to have elected the option contained in subsection 

(ii) above. Notwithstanding anything to the contrary contained herein, if any existing 

mortgage or other monetary encumbrance is an exception to title and Seller fails to 

cure or satisfy such defect, then at Closing Buyer shall have the right to direct 

Escrowee to cause a portion of the Purchase Price to be used to satisfy the same.” 

¶ 19 On May 10, 2011, the trial court entered an order denying Lobo’s motion to dismiss 

Lakeside’s counterclaim and granting partial summary judgment in Lakeside’s favor, finding 

that, based on conventional subrogation, Lakeside’s mortgage on the Bloomingdale property 

was in first priority position and its mortgage on the Canal property was in first priority 
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position to the extent of $7,019,713.25. The court found that the issue of equitable 

subrogation of an additional $518,000 that Lakeside had lent on the Canal property could not 

be decided as a matter of law because there was insufficient evidence that the money was 

used to improve the property. 

¶ 20 The matter proceeded to trial on the issues between Lobo and V Land3 and, on May 24, 

2012, the trial court entered a 20-page memorandum opinion and order. As noted, on appeal, 

the parties do not challenge any of the trial court’s findings of fact and argue only about its 

interpretation of the contracts and the law. The trial court first noted that the parties stipulated 

that the terms of Old Second’s loan commitment did not conform to the loan terms set forth 

in paragraph 8 of the contracts. Thus, the court found that the issues to be resolved were

(1) whether the parties included paragraph 8 in the contracts for the benefit of Lobo or V 

Land, (2) if paragraph 8 served to protect solely the interests of Lobo, whether Lobo had the 

right to waive the loan commitment requirements in that paragraph, and (3) whether Lobo 

was ready, willing, and able to perform pursuant to the terms of the contracts in December 

2005, thereby entitling it to specific performance.

¶ 21 The trial court rejected V Land’s argument that paragraph 8 was included in the contracts 

for its protection, finding that

“Panko is a sophisticated developer. By his own account, he has over his career 

bought and sold properties worth $300-400 million. The notion that in a negotiation 

in which the parties could not agree on price—the single most important term in any 

real estate transaction—he elected to protect V Land’s interests via a provision 

relating to the type of loan the buyer would obtain defies logic. If Panko believed that 

 3

The issues concerning Lakeside were expressly not part of the trial.
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only an appraisal from a lender willing to lend on the terms set forth in paragraph 8 

would trigger the price adjustment provision of paragraph 3, it would have been a 

simple matter for paragraph 3 to so provide: ‘No appraisal from a lender other than 

one issuing a loan commitment on the terms set forth in paragraph 8 will be sufficient 

to trigger a purchase price adjustment pursuant to this paragraph.’ V Land could also 

have protected itself from unacceptably low valuations by negotiating a provision 

allowing the seller to cancel the contract if the Permanent Lender’s appraisals resulted 

in values below specified dollar amounts. The absence of such common sense 

provisions strongly militates against the position V Land now takes and underscores 

the court’s conclusion that V Land’s arguments are nothing more than an after-thefact effort to avoid the consequences of its failure to perform under the unambiguous 

terms of the agreements it entered into.” 

The trial court concluded that the financing contingency set forth in paragraph 8 was 

included solely for Lobo’s benefit and, therefore, Lobo was permitted to waive it by 

accepting financing on less favorable terms. Furthermore, the court concluded that “[i]f Lobo 

was entitled to accept financing from a Permanent Lender on less favorable terms, it follows 

that Lobo was also entitled to use that lender’s appraisals to invoke the price adjustment 

provisions of paragraph 3.” 

¶ 22 The court then considered whether Lobo was entitled to specific performance and found 

that it was. The court found that the evidence established that Lobo was ready, willing, and 

able to close on the properties as late as December 27, 2005, the last date it could close and 

receive the benefits of the § 1031 exchange. The court also found that the equities favored 

the grant of specific performance, finding that there was no wrongdoing by Lobo in its 
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selection of Old Second and the preparation of the appraisals. The court further found that V 

Land’s conduct “precludes a finding that the remedy of specific performance would be 

inequitable under the circumstances presented here.” The court noted that V Land received 

what it contracted for—namely, the Mokena properties—and so was not entitled to 

unreasonably withhold its own performance in conveying the exchange properties. However, 

the court found that V Land sought to pressure Lobo into paying more by commissioning its 

own appraisals, seeking out competing offers, and taking advantage of the fact that there was 

a limited time in which to close in an attempt “to extract prices for the properties not called 

for under any reasonable interpretation of the contracts.” Accordingly, the trial court held

that Lobo was entitled to specific performance of the contract for the Canal property at the 

price of $8 million and of the contract for the Bloomingdale property at the price of $4 

million.

¶ 23 The trial court then considered whether Lobo was entitled to damages in addition to the 

grant of specific performance—specifically, damages stemming from the loss of the benefits 

of the § 1031 exchange and the loss of rental income from the properties during the period of 

time they were in V Land’s possession. The court first looked to paragraph 16(b) of the 

contracts, which provided: 

“Should Seller default under this Agreement and provided that Buyer is not in default 

hereunder, Buyer shall give Seller written notice specifying the nature of the default. 

If Seller fails to cure such default within thirty (30) days after receipt of such notice, 

all Earnest Money shall be returned to Buyer, Buyer shall be entitled to its Out-OfPocket Expenses, provided the Third Party Reports are delivered to Seller and Buyer 

shall have the right to sue for specific performance.”
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The court found that “[t]he plain language of this clause does not provide that its remedies 

are exclusive or foreclose Lobo from seeking damages proximately caused by the delay in V 

[L]and’s conveyance of the properties to Lobo.” Additionally, the court found that limiting 

Lobo’s relief to a grant of specific performance would “clearly” not make Lobo whole for the 

losses it sustained as a result of V Land’s breach. The court found that Lobo’s evidence 

established that it had incurred losses attributable to the failed § 1031 exchange in the 

amount of $2,020,321 and had incurred damages based on the loss of rental income in the 

amount of $3,991,433. Accordingly, the trial court held that Lobo was entitled to recover 

damages in the amount of $6,011,754 as a consequence of V Land’s breach of the 

agreements; this amount was modified nunc pro tunc on August 14, 2012, to reflect an 

updated damages award of $6,367,650. 

¶ 24 On August 10, 2012, Lobo filed a motion for abatement of the purchase price, arguing 

that damages awarded in the context of an award for specific performance are deemed 

equitable in nature and may offset the purchase price owed under the contracts. 

¶ 25 On August 29, 2012, on a pretrial status date concerning the litigation between Lobo and 

Lakeside, it became clear that Lobo also wished to litigate issues concerning equitable 

abatement and Lakeside’s alleged inequitable conduct. The trial court ordered Lobo to “file a 

pleading regarding equitable issues raised post-trial by plaintiff.” On September 12, 2012, 

Lobo filed a complaint for declaratory judgment against Lakeside, alleging that the priority 

of any lien claimed by Lakeside was inferior to Lobo’s rights to purchase the properties. 

Lobo alleged five counts: (1) count I, that Lakeside failed to properly reduce amounts due 

under its loans by continuously refinancing the properties and permitting the use of loan 

proceeds for property-related and other expenses; (2) count II, that any priority lien should be 
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16 

reduced by the amounts not associated with the construction loans; (3) count III, that any 

obligation should first be satisfied by Lakeside and V Land looking to other sources, since 

the Lakeside loans were personally guaranteed by Panko and Lakeside had obtained title 

insurance covering any potential shortage due to amounts awarded to Lobo in the underlying 

litigation; (4) count IV, that Lobo held a superior position by virtue of the doctrine of 

equitable conversion; and (5) count V, that Lakeside had unclean hands due to its conduct.

On October 3, 2012, Lakeside requested the trial court to strike counts II through V of 

Lobo’s complaint as outside the scope of the trial court’s August 29, 2012, order in an 

attempt to relitigate issues that had been previously decided. On November 6, 2012, the trial 

court struck counts III and IV of the complaint and struck most of count II, other than

allegations concerning the $518,000 that was the subject of Lakeside’s equitable subrogation 

claim.

¶ 26 On August 27, 2013, Lobo filed a motion to vacate or modify the trial court’s May 10, 

2011, order granting partial summary judgment in Lakeside’s favor and finding that 

Lakeside’s mortgages had priority over Lobo’s interests in the properties. Lobo argued that 

the prior order was premature and erroneous as a matter of law. On February 3, 2014, the 

trial court denied Lobo’s motion. 

¶ 27 On March 11, 2014, Lakeside filed a motion for summary judgment on the remaining 

issues between Lakeside and Lobo, namely, on (1) count I of Lakeside’s counterclaim, 

concerning $518,464.06 of Lakeside’s loans that were used to pay contractors, and (2) counts 

I and V of Lobo’s complaint, concerning equitable setoff of a portion of any amounts due to 

Lakeside based on Lobo’s damages award in the underlying litigation against V Land. 
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17 

¶ 28 On April 25, 2014, Lobo filed a motion to escrow excess revenues from the properties, 

arguing that the revenues from the properties had been improperly diverted to Panko and his 

related entities. On the same day, Lobo also filed a motion for an updated damages award 

and judgment, seeking damages for the loss of rental income between the date of the May 24, 

2012, order and June 18, 2014, plus postjudgment interest, leading to a new damages award 

of $9,719,832. On April 28, 2014, Lobo also filed a petition for attorney fees and costs, as 

permitted under the purchase contracts. 

¶ 29 On May 1, 2014, Lobo filed a cross-motion for summary judgment on the remaining 

issues between Lobo and Lakeside, arguing that it would be inequitable to permit Lakeside’s 

liens to have priority over Lobo’s interests in the properties because Lakeside issued its 

mortgages knowing that Lobo had filed suit against V Land and because Lakeside permitted 

V Land to divert its cash flow for purposes other than paying down its loans. 

¶ 30 On February 6, 2015, V Land filed a motion to reconsider the award of damages granted 

by the trial court on May 24, 2012, and August 14, 2012, claiming that the trial court erred in 

granting Lobo damages because the contracts limited what damages could be recovered.

¶ 31 On February 25, 2015, the trial court issued a 27-page memorandum opinion and order, 

ruling on a number of outstanding motions and petitions: (1) Lobo’s motion for summary 

judgment, (2) Lobo’s motion to modify the judgment and abate the purchase price, 

(3) Lobo’s petition for attorney fees, (4) Lobo’s motion to update the damages award,

(5) Lobo’s motion to escrow excess revenues from the properties, and (6) Lakeside’s motion 

for summary judgment.

¶ 32 With respect to the cross-motions for summary judgment, the trial court first considered 

whether Lakeside was entitled to equitable subrogation for the amounts that it had paid to the
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

18 

contractors. The trial court found that the contractors and subcontractors who had contracted 

with V Land prior to the purchase contract established mechanics’ liens on the properties at 

the time of contract for services. However, the court further found that all of the contractors 

and subcontractors, with the exception of one, had executed waivers of their rights to 

mechanics’ liens prior to the time that Lakeside paid them. With respect to the one contractor 

that had not released its lien prior to Lakeside’s payment, the trial court found that the 

mechanics’ lien had not been perfected within four months after completion of the work.

Accordingly, the trial court found that Lobo’s interest was superior to Lakeside’s interest 

with respect to the $518,000 that Lakeside had paid to the contractors.

¶ 33 The trial court next considered whether the amount Lobo owed to Lakeside should be 

reduced due to Lobo’s damages award in the underlying litigation against V Land. The court 

noted that it would not be revisiting the prior decisions that Lakeside’s interest in the original 

construction loans was superior to Lobo’s interest in the properties and found that Lakeside’s 

priority interest would only be reduced by the amount that Lakeside damaged Lobo in its 

handling of the loans. The trial court reviewed the reports of Lobo’s and Lakeside’s damages 

experts and determined that there were several questions of fact concerning whether 

Lakeside’s management of the loans was inequitable, making summary judgment in Lobo’s 

favor on the issue inappropriate. 

¶ 34 The trial court next considered Lobo’s motion to update the damages award to take into 

account lost rental income after the May 24, 2012, grant of specific performance. The court 

found that the initial damages award was intended to make Lobo whole in conjunction with 

the grant of specific performance. However, the trial court found that “[a]t this point, Lobo 

has no pending cause of action against V Land under which damages can be awarded” and 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

19 

had not provided any authority for its claim of additional damages. Accordingly, the trial 

court denied Lobo’s motion. 

¶ 35 Next, the trial court considered Lobo’s petition to abate the purchase price. The court first 

found that the petition was premature because the issue of attorney fees was outstanding.

Next, the trial court found that Lobo’s attempt to reargue Lakeside’s priority based on 

conventional subrogation “cannot stand” and that “Lobo’s petition to abate the purchase price 

is denied with prejudice to the extent that Lobo argues that 1) Lakeside is bound by the 

purchase agreements, 2) Lakeside is not entitled to conventional subrogation, 3) abatement is 

required by the lis pendens statute, or 4) that abatement is required against Lakeside because 

of Lobo’s grant of specific performance.” The court further noted that even if Lobo prevailed 

on its claims that Lakeside behaved inequitably in servicing its loans, the purchase price 

would only be reduced by the damages awarded against Lakeside. Finally, the court noted 

that even if the purchase price was abated in the full amount requested by Lobo, Lobo would 

still not receive clear title to the properties because Lakeside’s liens would still need to be 

satisfied. In sum, the trial court denied the petition to abate the purchase price with respect to 

Lakeside’s right to conventional subrogation, and entered and continued the remainder of the 

petition pending a final determination of amounts owed by V Land and resolution of Lobo’s 

complaint against Lakeside.

¶ 36 The trial court next considered Lobo’s petition for attorney fees. With respect to the 

issues on appeal, the trial court denied Lobo’s petition concerning any of the posttrial 

litigation between Lobo and Lakeside. Lobo claimed that it was entitled to such fees under 

paragraph 31 of the contracts, which provided: 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

20 

“In the event of litigation arising out of this Agreement, the prevailing party shall be 

entitled to court costs, out-of-pocket expenses and reasonable attorneys’ fees from the 

unsuccessful party.” 

The court found that Lakeside prevailed on its motion for summary judgment, based on 

conventional subrogation, so Lobo would not be entitled to attorney fees on that issue. With 

respect to the issue of subrogation of the mechanics’ liens, the court found that Lobo had 

prevailed on that issue, but that Lobo had not demonstrated that the litigation “[arose] out of” 

the purchase contracts. Instead, the court found that Lobo’s claim for attorney fees incurred 

while litigating the issue “arises independently of its specific performance claim against V 

Land.” The court reached a similar conclusion with respect to Lakeside’s allegedly 

inequitable conduct in the management of its loans, further finding that there was no 

“prevailing party” because that issue was still pending. 

¶ 37 Finally, the trial court considered Lobo’s motion to escrow the excess income from the 

properties. The court found that there was no pending claim against V Land and that 

“[w]ithout a cause of action, Lobo is not entitled to a judgment; without the possibility of a 

judgment, Lobo is not entitled to an attachment order.” The trial court further found that 

Lobo’s original complaint against V Land did not allege a cause of action for fraud against V 

Land. Accordingly, the trial court denied Lobo’s request to escrow the excess revenue from 

the properties. 

¶ 38 On April 2, 2015, V Land filed a “petition to declare judgment satisfied,” claiming that 

nearly three years had passed since the grant of specific performance, yet Lobo had not yet 

purchased the properties. V Land thus claimed that laches should operate to bar Lobo from 

obtaining specific performance. 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

21 

¶ 39 On May 13, 2015, Lobo filed a motion to set hearing dates to resolve all remaining 

claims and to schedule the closing for the purchase of the properties.

¶ 40 On September 21, 2015, the trial court entered an order in which it, inter alia, (1) denied 

V Land’s petition to declare the judgment satisfied, (2) denied Lobo’s motion to set a hearing 

date or closing date, and (3) dismissed, sua sponte, counts I and V of Lobo’s complaint 

against Lakeside without prejudice and with leave to amend. With respect to counts I and V, 

the trial court found that, having reviewed the pleadings, “neither of these counts asks the 

Court to inform the parties on how to conduct future performance or conduct, but rather talks 

about past conduct and wants this *** Court to make a decree *** regarding nonliability or 

alleged nonliability for past acts. That is not the purpose of a declaratory complaint.” 

¶ 41 On October 27, 2015, Lobo filed an amended complaint against Lakeside, amending only 

the prayers for relief on counts I and V. Also on October 27, 2015, the trial court entered a 

memorandum opinion and order on the issue of attorney fees, in which the trial court 

declined to reconsider its ruling on Lobo’s request for fees in connection with the litigation 

between Lobo and Lakeside.

¶ 42 On December 29, 2015, Lakeside filed a motion for judgment on the pleadings pursuant 

to section 2-615(e) of the Code (735 ILCS 5/2-615(e) (West 2014)), claiming that counts I 

and V of the amended complaint failed to state causes of action. On January 19, 2016, Lobo 

filed a motion to reconsider the September 21, 2015, sua sponte dismissal of counts I and V 

of its complaint against Lakeside. On April 20, 2016, the trial court entered a 23-page 

memorandum opinion and order denying Lobo’s motion to reconsider and granting 

Lakeside’s motion for judgment on the pleadings. After a recitation of the lengthy procedural 

posture of the instant case, the trial court first found that Lobo had waived any objection to 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

22 

the court’s sua sponte dismissal of counts I and V of the complaint by filing an amended 

complaint. However, the court also noted that the sufficiency of counts I and V of the 

amended complaint (which were substantively identical to the original counts I and V) were 

nevertheless at issue through Lakeside’s motion for judgment on the pleadings. 

¶ 43 The court found that counts I and V of Lobo’s amended complaint against Lakeside were 

not proper actions for declaratory judgment because the allegations upon which Lobo’s 

requested relief was based included only past conduct by Lakeside and, thus, the counts “do 

not further the central purpose of an action for declaratory judgment to offer guidance to the 

parties in relation to future conduct in order to avoid or lessen potential liability because the 

acts upon which Counts I and V are predicated have already occurred.” Additionally, the trial 

court found that Lobo was not entitled to any relief because “neither count is properly based 

upon any substantive legal theory recognized by Illinois law.” The court noted that Lobo 

referred to “inequitable conduct” but found that “ ‘inequitable conduct’ is not an independent 

substantive legal theory that is recognized by Illinois law.” Moreover, the court found that 

even if it was a proper basis for a declaratory judgment action, Lobo’s attempt to use the 

doctrine of unclean hands under the present facts contained “several fatal flaws.”

¶ 44 The court first found that the allegations of Lakeside’s inequitable conduct did not pertain 

to the transaction at issue—Lakeside’s loans to V Land—but pertained only to actions 

allegedly taken by Lakeside after it had issued the loans. Additionally, the court found that 

Lobo had cited no authority for the proposition that Lakeside owed a duty to Lobo to require 

V Land to use all income from the properties to pay down the principal balance of Lakeside’s 

loans. Finally, “and on a most fundamental level,” the court found that counts I and V were 

essentially an attempt to relitigate Lakeside’s claims for conventional subrogation.
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

23 

Accordingly, the trial court granted Lakeside’s motion for judgment on the pleadings on 

counts I and V of the amended complaint against Lakeside. 

¶ 45 On May 24, 2016, Lobo filed a petition to determine the priority payoff amounts for 

Lakeside’s mortgages. On September 27, 2016, the trial court entered a 19-page 

memorandum opinion and order concerning Lobo’s petition for abatement and its petition to 

determine the priority payoff amounts. The court found that the amount of Lakeside’s first 

priority mortgage liens on the properties could be no more than the remaining principal 

balance of the loans, with upper limits of $7,019,713.29 on the Canal loan and $3,570,391.71 

on the Bloomingdale loan. To the extent those principal balances had been reduced, the 

amount required to satisfy the priority mortgage lien was likewise reduced. With respect to 

the Bloomingdale lien, the court found the calculation to be straightforward—Lakeside’s first 

priority mortgage lien on the property would be satisfied by the payment of the outstanding 

principal balance of the loan at any given point in time. 

¶ 46 However, the court found that the Canal loan presented a more complex scenario because 

the amounts initially advanced by Lakeside exceeded the amount required to satisfy the prior 

mortgage and Lakeside had a priority interest only on the $7,019,713.29 required to 

discharge that prior mortgage; the remaining $1,079,573.86 was inferior to Lobo’s interest in 

the property. Thus, the court had to determine how to allocate any payments made on the 

Canal loan between the portion that had priority and the portion that was inferior to Lobo’s 

interest. The trial court found that the payments should be applied pro rata to each loan and 

that the amount required to satisfy Lakeside’s first priority lien on the Canal property was 

86.67% of the outstanding balance of the loan. 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

24 

¶ 47 With respect to the issue of abatement, the trial court found that there was no real dispute 

that Lobo was entitled to abate the purchase price, at least to the extent of Lakeside’s first 

priority liens on the properties, and found abatement of the $8 million purchase price for the 

Canal property by $980,286.71 and abatement of the $4 million purchase price for the 

Bloomingdale property by $429,608.29. Under this calculation, the trial court found that the 

purchase price of the properties would equal the amount of Lakeside’s first priority mortgage 

liens on the properties—$7,019,713.29 on the Canal property and $3,570,391.71 on the 

Bloomingdale property—and the award of equitable compensation to Lobo would be reduced 

to $4,957,755. Additionally, further abatement was warranted to the extent that the amounts 

needed to satisfy Lakeside’s first priority mortgage liens on the properties were less than the 

total amount of the liens. The court thus indicated that it would set a closing date for 

performance of the agreements and ordered that, after that date was set, Lakeside was to file 

a memorandum to specify the amounts required to satisfy the first priority liens on the 

properties as of the closing date. Lobo would then need to tender to V Land or Lakeside at 

the closing the amounts required to satisfy Lakeside’s first priority mortgage liens on the 

properties and V Land would tender to Lobo deeds to the properties free and clear of 

Lakeside’s first priority mortgage liens.

¶ 48 On October 11, 2016, Lakeside filed a motion to modify the trial court’s order, claiming 

that it was entitled to equitable subrogation of amounts that Lakeside had advanced to pay 

property taxes and amounts on the Bloomingdale loan that had been used to pay off the Canal 

construction loan. 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

25 

¶ 49 On October 14, 2016, the trial court entered an order, setting a closing date of January 12, 

2017; the closing date was later rescheduled to March 23, 2017. On March 9, 2017, the trial 

court denied Lakeside’s motion to modify the September 27, 2016, order. 

¶ 50 On March 17, 2017, the trial court entered a final modified judgment, in which it ordered

that on March 23, 2017, “in accordance with [the] Purchase and Sale Agreement,” V Land 

was to sell to Lobo the Canal property for the purchase price of $8 million, payable as 

follows: (1) Lobo was to pay Lakeside $6,110,302.49 on the Canal loan; (2) upon Lakeside’s 

receipt of the payment, Lakeside was to deliver to Lobo a release of the first and second 

mortgages, including all modifications, held by Lakeside on the Canal property, a release of 

the assignment of rents on the Canal property, and a UCC termination statement for the 

security agreement, all in recordable form, and V Land was to deliver to Lobo a special 

warranty deed to the Canal property in recordable form; and (3) the balance of the purchase 

price in the amount of $1,889,697.51 was to be abated by application of amounts due from V 

Land to Lobo. 

¶ 51 Additionally, the court ordered that on March 23, 2017, “in accordance with [the] 

Purchase and Sale Agreement,” V Land was to sell to Lobo the Bloomingdale property for 

the purchase price of $4 million, payable as follows: (1) Lobo was to pay Lakeside 

$3,041,467.24 on the Bloomingdale loan; (2) upon Lakeside’s receipt of the payment, 

Lakeside was to deliver to Lobo a release of the first and second mortgages, including all 

modifications, held by Lakeside on the Bloomingdale property, a release of the assignment of 

rents on the Bloomingdale property, and a UCC termination statement for the security 

agreement, all in recordable form, and V Land was to deliver to Lobo a special warranty deed 

to the Bloomingdale property in recordable form; and (3) the balance of the purchase price in 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

26 

the amount of $958,532.76 was to be abated by application of amounts due from V Land to 

Lobo. 

¶ 52 The trial court further ordered that “[s]ubject to the provisions above, the closing of both 

the above purchase and sale transactions shall be conducted according to the terms of the 

respective Canal Contract and Bloomingdale Contract (together the ‘Contracts’), including 

without limitation those provisions of the Contracts requiring execution and/or delivery of 

documents at closing and allocation and/or payment of closing costs, prorations, and credits.” 

¶ 53 The court found that, after application of the abatements set forth earlier in the order, the 

unabated amount due to Lobo from V Land was $7,205,697.43, including statutory interest 

through March 17, 2017, and entered judgment in Lobo’s favor and against V Land in that 

amount. 

¶ 54 On March 23, 2017, Lobo filed an emergency motion to enforce the final modified 

judgment, in which it claimed that V Land was violating the judgment. Lobo claimed that V 

Land was violating paragraph 5 of the contracts, which required V Land to deliver a title 

policy that, when issued, “shall show title to the Property as of the Closing Date in Buyer 

subject only to the Permitted Encumbrances.” Lobo claimed that on March 22, 2017, 

Chicago Title Insurance Company (Chicago Title) delivered pro forma title policies for both 

properties that complied with paragraph 5 of the contracts. However, later in the day, 

Chicago Title informed Lobo that it planned to add new “exceptions” to the title policies, 

excluding coverage for possible claims by Lakeside and V Land. Additionally, at 10:44 a.m. 

on March 23, Chicago Title delivered “revised” pro forma title policies, which added five 

new exceptions to the Canal title policy and four new exceptions to the Bloomingdale title 

policy, none of which were “Permitted Encumbrances” allowed under the contracts. Lobo 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

27 

claimed that the newly added exceptions included exceptions for (1) Lakeside’s mortgages,

(2) Lakeside’s assignments of leases and rents, and (3) the instant “[p]roceeding” as reflected 

in the various orders and judgments entered in the case. Lobo demanded that V Land comply 

with its obligations and the judgment and deliver clean title policies, but V Land failed to do 

so, and Lobo claimed that there was “no indication” that V Land intended to comply with 

Lobo’s requests. Lobo further claimed that V Land had violated paragraph 12(v) of the 

contracts, which required it to deliver all documents that were required to close the 

transaction and issue the title policy. Lobo claimed that both Lobo and its lender had made it 

clear that they required clean title policies at closing, and V Land failed to deliver such 

documents, as well as failing to deliver a number of other documents. Finally, Lobo claimed 

that V Land had violated the portion of the judgment and contracts that required V Land to 

pay its share of the closing costs, which V Land’s counsel informed Lobo that it would not 

do. 

¶ 55 Lobo claimed that it was ready, willing, and able to close on the purchase of both 

properties and requested that the trial court set a new closing date and order V Land to 

immediately deliver conforming title policies, pay the closing costs as required, and deliver 

all other documents required under the contracts. In the alternative, if V Land was unwilling 

to comply with the court’s judgment and the contracts, Lobo requested that the court provide 

additional relief to Lobo, including using its authority to execute judicial deeds to convey the 

properties to Lobo. Lobo requested that, in the alternative, the court should, at a minimum, 

appoint a receiver for the properties with directions to pay all excess rents to Lobo. 

¶ 56 Attached to Lobo’s emergency motion were the pro forma title policies referred to in its 

motion, which included exceptions for the Lakeside mortgages, the assignment of leases and 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

28 

rents, the “[p]roceeding pending in the Circuit Court of Cook County, Illinois, as case 

number 05 CH 22194,” and the “[t]erms and provisions contained in [the] Memorandum 

Opinion and Order entered on May 24, 2012” in the instant case. 

¶ 57 In response, Lakeside and V Land both claimed that the exceptions on the title policies 

were required by Chicago Title in order to protect against any appeals in the instant litigation. 

They further claimed that, under the contracts, Lobo had the choice of either terminating the 

agreement or waiving any unpermitted encumbrances and closing. Thus, since Lobo had not 

closed on March 23, it should be deemed to have terminated the agreements.

¶ 58 On March 27, 2017, the trial court denied Lobo’s emergency motion, agreeing with 

Lakeside and V Land with respect to the arguments set forth in their responses. Lobo, V 

Land, and Lakeside each filed notices of appeal, and the three appeals were consolidated on 

August 2, 2017. 

¶ 59 ANALYSIS

¶ 60 On appeal, the three parties raise a number of arguments, challenging nearly every 

substantive order entered in this case. Specifically, plaintiffs claim that (1) Lakeside’s 

mortgages did not take priority over the purchase contracts, (2) the trial court should have 

permitted Lobo to abate any amounts owed to Lakeside to the extent of the judgment award 

in Lobo’s favor, (3) the trial court should have extended the closing date further, (4) plaintiffs 

were entitled to additional attorney fees and to an updated damages award, and (5) the trial 

court should have appointed a receiver or escrowed the revenues from the properties at issue. 

Both V Land and Lakeside argue that Lobo terminated the purchase contracts by not closing 

on the date set by the trial court, and so plaintiffs’ appeal should fail. Additionally, each 

raises its own issues on appeal. V Land claims that the trial court erred in granting specific 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

29 

performance and in granting Lobo monetary damages in addition to specific performance, 

while Lakeside claims that it should have been entitled to equitable subrogation on several 

other loans it issued concerning the properties. We consider the major issues in the following 

order: (1) whether Lobo was entitled to specific performance, (2) if it was, whether that right 

terminated when Lobo did not close on March 23, 2017, (3) if it did not, whether Lakeside’s 

mortgages had priority over Lobo’s interest in the properties, and (4) if they did, whether 

Lobo was required to pay the full outstanding balance of each mortgage at closing. The other 

issues raised by the parties will be discussed within the context of this framework.

¶ 61 I. Specific Performance

¶ 62 The first issue we consider is whether Lobo was entitled to specific performance on the 

purchase contracts and the related issue of whether Lobo was also entitled to monetary 

damages in addition to the grant of specific performance. These issues were resolved in 

Lobo’s favor on May 24, 2012, after a bench trial. In a bench trial, the trial court has the 

opportunity to weigh the evidence and make findings of fact, and a reviewing court will defer 

to the findings of the trial court unless they are against the manifest weight of the evidence. 

Eychaner v. Gross, 202 Ill. 2d 228, 251 (2002). “A decision is against the manifest weight of 

the evidence only when an opposite conclusion is apparent or when the findings appear to be 

unreasonable, arbitrary, or not based on the evidence.” Eychaner, 202 Ill. 2d at 252. “ ‘The 

court on review must not substitute its judgment for that of the trier of fact.’ ” Eychaner, 202 

Ill. 2d at 252 (quoting Kalata v. Anheuser-Busch Cos., 144 Ill. 2d 425, 434 (1991)).

However, in the case at bar, the trial court also construed and ruled on the legal effect of 

documents. In reviewing these conclusions of law, we apply a de novo standard of review. 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

30 

Eychaner, 202 Ill. 2d at 252. De novo consideration means we perform the same analysis that 

a trial judge would perform. People v. McDonald, 2016 IL 118882, ¶ 32. 

¶ 63 A. Grant of Specific Performance

¶ 64 To state a cause of action for specific performance, a plaintiff must allege (1) the 

existence of a valid, binding, and enforceable contract; (2) compliance by the plaintiff with 

the terms of the contract, or proof that the plaintiff was ready, willing, and able to perform

the terms of the contract; and (3) the failure or refusal of the defendant to perform its part of 

the contract. Schilling v. Stahl, 395 Ill. App. 3d 882, 884 (2009); Hoxha v. La Salle National 

Bank, 365 Ill. App. 3d 80, 85 (2006). “In order for a party to be entitled to specific 

performance, the contract must be so certain and unambiguous in its terms and in all its parts 

that a court can require the specific thing contracted for to be done.” Schilling, 395 Ill. App. 

3d at 884-85 (citing Cefalu v. Breznik, 15 Ill. 2d 168, 170 (1958)). Specific performance is 

generally not available as a matter of right; “the remedy rests in the sound discretion of the 

trial court, based on all of the facts and circumstances in evidence.” Daniels v. Anderson, 162 

Ill. 2d 47, 56 (1994). 

¶ 65 In the case at bar, V Land argues that the trial court erred in finding that Lobo was 

entitled to specific performance because Lobo violated the contracts by reducing the 

purchase price for the properties without obtaining appraisals from a “Permanent Lender.”

This argument requires us to look to the language of the contracts at issue. The principal 

objective in construing a contract is to determine and give effect to the intention of the parties 

at the time they entered into the contract. Fleet Business Credit, LLC v. Enterasys Networks, 

Inc., 352 Ill. App. 3d 456, 469 (2004). “ ‘[A]n agreement, when reduced to writing, must be 

presumed to speak the intention of the parties who signed it. It speaks for itself, and the 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

31 

intention with which it was executed must be determined from the language used. It is not to 

be changed by extrinsic evidence.’ ” Air Safety, Inc. v. Teachers Realty Corp., 185 Ill. 2d 

457, 462 (1999) (quoting Western Illinois Oil Co. v. Thompson, 26 Ill. 2d 287, 291 (1962)). 

A court interpreting a contract begins by examining the language of the contract alone, and 

“[i]f the language of the contract is facially unambiguous, then the contract is interpreted by 

the trial court as a matter of law without the use of parol evidence.” Air Safety, 185 Ill. 2d at 

462 (citing Farm Credit Bank of St. Louis v. Whitlock, 144 Ill. 2d 440, 447 (1991)). 

¶ 66 “In interpreting a contract, it is presumed that all provisions were intended for a purpose, 

and conflicting provisions will be reconciled if possible so as to give effect to all of the 

contract’s provisions.” Shorr Paper Products, Inc. v. Aurora Elevator, Inc., 198 Ill. App. 3d 

9, 13 (1990). “A court will not interpret a contract in a manner that would nullify or render 

provisions meaningless, or in a way that is contrary to the plain and obvious meaning of the 

language used. [Citation.] Further, when parties agree to and insert language into a contract, 

it is presumed that it was done purposefully, so that the language employed is to be given 

effect. [Citation.]” Thompson v. Gordon, 241 Ill. 2d 428, 442 (2011). 

¶ 67 In the case at bar, paragraph 3 of the contracts contained a provision permitting an 

adjustment in the purchase price if an appraisal returned a different valuation for the 

property. It provided: 

“Purchase Price Adjustment. No later than November 15, 2005, the parties shall 

obtain a duplicate original or certified copy of Permanent Lender’s (as defined below) 

appraisal of the Property (which appraisal may assume completion of the Building, 

the Improvements and take the Leases with the Bank and Staples into consideration 

as fully open, operating and rent paying tenants, even if such assumption is 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

32 

considered an ‘extraordinary assumption’ by the appraiser, but shall not take this 

Agreement into consideration when determining appraised value) (the ‘Appraised 

Value’). In the event that the Appraised Value is greater or less than the Purchase 

Price, then Buyer may elect to no later than November 22, 2005 (i) terminate this 

Agreement and have the Earnest Money returned, be reimbursed for its Out-OfPocket Expenses (as defined below) and Buyer shall deliver the Third Party Reports 

(as defined below) to Seller or (ii) have the Purchase Price adjusted to equal the 

Appraised Value of the Property and Close. In the event Buyer fails to timely elect 

option (i) or (ii), Purchaser shall be deemed to have elected option (ii) above.” 

Paragraph 8 of the contracts defined the term “Permanent Lender,” which was used in 

paragraph 3: 

“Permanent Loan. Buyer’s obligations are contingent upon Buyer, within ninety (90) 

days after the Effective Date, entering into a loan commitment (the ‘Loan 

Commitment’) with a lender (the ‘Permanent Lender’) prepared to provide permanent 

mortgage financing for the Property. The Loan Commitment shall provide for a nonrecourse loan in an amount equal to 80% of the Purchase Price, at a rate of interest 

not to exceed 110-125 basis points over the 10-year treasury bill, with a loan term of 

10 years amortized over 30 years with a loan fee not to exceed one-half of 1% (the 

‘Permanent Loan’). ***” 

V Land argues that Old Second, Lobo’s lender, did not qualify as a “Permanent Lender” and, 

therefore, the appraisal it commissioned was not a proper basis for reduction of the purchase 

price. We do not find this argument persuasive. 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

33 

¶ 68 V Land interprets the language of paragraph 8 of the contracts to mean that a “Permanent 

Lender” is defined as a lender that enters into a loan commitment with the buyer under the 

terms as set forth in paragraph 8. However, the language of paragraph 8 does not require such 

a narrow interpretation. Examining the language of the contracts as a whole, the contracts 

define a great number of terms in the same way as in paragraphs 3 and 8, namely, by setting 

forth a description of an item or party, followed by a shorthand term for the item or party 

contained within parentheses and quotation marks. As a basic example of this type of 

shorthand, the first recital in the Canal contract provides: “Seller is the owner of a parcel of 

land containing approximately 1.14 acres located at 1130 South Canal Street in Chicago, 

Illinois (the ‘City’) which is legally described on Exhibit ‘A’ attached hereto and incorporated 

herein (the ‘Land’).” “City” and “Land” are clearly used as shorthand for the places

immediately preceding the defined terms. See Berg v. eHome Credit Corp., 848 F. Supp. 2d 

841, 846 (N.D. Ill. 2012) (interpreting the term “Borrower,” which appeared in quotation 

marks and parentheses after the parties’ names, to be a shorthand for the parties’ names 

elsewhere in the agreement). Where the contracts define terms in other ways, they do so 

expressly. For instance, in defining the term “Out-Of-Pocket Expenses” in paragraph 5, the 

contracts expressly note that “[a]s used herein, the term ‘Out-Of-Pocket Expenses’ includes,” 

followed by the items included in the definition of the term.

¶ 69 Looking to the terms of paragraph 8, it states that the buyer’s obligations are contingent 

upon its entering into a loan commitment “with a lender (the ‘Permanent Lender’) prepared 

to provide permanent mortgage financing for the Property.” Thus, a “Permanent Lender” is 

simply a defined name for “a lender.” At most, the definition could arguably be expanded to 

include one prepared to provide permanent mortgage financing for the property. The 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

34 

requirements that follow specify the terms that are required to be contained in the loan 

commitment, but do not appear to limit whether the lender itself is considered to be a 

“Permanent Lender.” Indeed, the financing terms come immediately prior to the defined term 

“Permanent Loan,” indicating that the terms restrict only what is considered a “Permanent 

Loan.” Thus, we cannot agree with V Land that Old Second did not qualify as a “Permanent 

Lender” under the terms of the contracts merely because its loan commitment contained 

different financing terms.

¶ 70 Furthermore, even if the terms of the mortgage affected whether a lender was a 

“Permanent Lender,” we agree with the trial court that Lobo was entitled to waive such 

restrictions because the condition was solely for its benefit. A mortgage contingency clause is 

considered to be a condition precedent and, where a contract contains a condition precedent, 

the contract is not enforceable or effective until the condition is performed or the contingency 

occurs. Perry v. Estate of Carpenter, 396 Ill. App. 3d 77, 82 (2009). However, “ ‘a party to a 

contract may waive performance of a condition precedent *** where the condition precedent 

is intended for the benefit of the waiving party.’ ” Perry, 396 Ill. App. 3d at 82 (quoting 

Catholic Charities of the Archdiocese of Chicago v. Thorpe, 318 Ill. App. 3d 304, 309 

(2000)). Mortgage contingency clauses have been interpreted to be for the benefit of the 

purchaser. See, e.g., Perry, 396 Ill. App. 3d at 82; Barnes v. Brown, 193 Ill. App. 3d 604, 

607-08 (1990). 

¶ 71 In the case at bar, V Land does not challenge the trial court’s factual finding that the 

financing contingency set forth in paragraph 8 was intended for Lobo’s benefit, which was 

made after hearing a great deal of testimony and considering the evidence. Instead, V Land 

claims that the trial court’s error was in overlooking paragraph 29 of the contracts, which 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

35 

provided that each contract “may be modified or amended only by written instrument signed 

by both parties.” We do not find this argument persuasive. 

¶ 72 First, V Land did not raise this argument before the trial court. It is well established that 

issues not raised in the trial court are forfeited and may not be raised for the first time on 

appeal. Susman v. North Star Trust Co., 2015 IL App (1st) 142789, ¶ 41. Accordingly, V 

Land has forfeited this argument on appeal. Moreover, even on its merits, paragraph 29 did 

not prevent Lobo from unilaterally waiving the financing condition. The waiver of a 

provision by the party for whose benefit the provision was inserted “is held not to be a 

modification or change in the terms of the original agreement.” Welsh v. Jakstas, 401 Ill. 288, 

298-99 (1948). Thus, Lobo’s waiver of the financing contingency did not operate to modify 

or amend the contracts. The case relied on by V Land, Reed v. Getco, LLC, 2016 IL App 

(1st) 151801, ¶¶ 21-22, is entirely inapposite because that case involved a provision that 

expressly prohibited unilateral waivers in addition to modifications, which is not the case 

with paragraph 29. Accordingly, even if it had not been forfeited, we find no merit to V 

Land’s arguments concerning paragraph 29. 

¶ 73 V Land also argues that the trial court’s analysis was flawed because it failed to construe 

both paragraph 3 and 8 in conjunction. We do not find this argument persuasive. The trial 

court expressly considered both paragraphs 3 and 8 in determining whether Lobo was 

entitled to waive the financing contingency. Additionally, despite V Land’s contentions to 

the contrary, it was the interpretation of paragraph 8 that was crucial in determining whether 

Lobo was entitled to an adjustment of the purchase price. Paragraph 3 is simple in its effect: 

the parties were to “obtain a duplicate original or certified copy of Permanent Lender’s *** 

appraisal of the Property ***.” If the appraised value was different than the purchase price, 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

36 

the buyer was entitled to an adjustment in the price or to terminate the contract. The 

operative language that needed to be interpreted was whether the appraisal submitted in the 

instant case was commissioned by a “Permanent Lender.” That is the analysis engaged in by 

the trial court. It concluded that the financing contingency included in paragraph 8 could be 

unilaterally waived by Lobo and further concluded that the purchase price was entitled to 

adjustment on the basis of Old Second’s appraisal. This necessarily meant that the trial court 

found Old Second to be a “Permanent Lender.” As we have explained above, we agree with 

this conclusion. 

¶ 74 V Land attempts to muddy the waters by arguing that the trial court needed to determine 

that paragraph 3 was also intended solely for Lobo’s benefit in order for Lobo to be entitled 

to adjust the purchase price. However, that is not the case. The definition of “Permanent 

Lender” is contained in paragraph 8. The trial court found, and we agree, that Old Second 

satisfied this definition—either by the express terms of the paragraph or because the 

restrictions on the term were properly waived by Lobo. The term “Permanent Lender” is also 

used in paragraph 3, but is not defined in paragraph 3. Upon finding that Old Second satisfied 

the definition of “Permanent Lender,” it follows that its appraisal would be the appraisal of a 

“Permanent Lender.” Such an appraisal would, by the express terms of paragraph 3, permit 

the adjustment of the purchase price. There is no need to determine that the provision was 

included for any particular party’s benefit to reach this conclusion. 

¶ 75 Finally, V Land argues that the trial court erred in permitting adjustment of the purchase 

price because the appraisal itself was flawed and did not appraise the “Property” as defined 

in the contracts because it did not properly take into account the leases on the properties. We 

do not find this argument persuasive. First, as the trial court found, despite errors in the 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

37 

appraisal itself, there is no evidence that the appraiser did not properly appraise the 

“Property,” as the appraiser did take into account the leases. Second, the terms of the 

contracts do not contain any mechanism by which V Land could challenge the validity of the 

appraisal submitted by the “Permanent Lender,” and paragraph 3 does not condition 

adjustment of the purchase price on V Land’s acceptance of the values returned by the 

appraisal. Accordingly, we see no basis for finding that the challenges to the contents of the 

appraisal itself would preclude adjustment of the purchase price. As the trial court found, 

Panko and V Land were sophisticated sellers, and if they had wished to use a different 

mechanism to calculate the value of the properties, they certainly could have done so.

Consequently, we affirm the trial court’s grant of specific performance at the lower purchase 

prices.

¶ 76 B. Grant of Monetary Damages 

¶ 77 Next, V Land challenges the trial court’s award of monetary damages in connection with 

the grant of specific performance. “The decision to award or deny monetary damages in 

addition to specific performance rests within the sound discretion of the trial court.” Mandel 

v. Hernandez, 404 Ill. App. 3d 701, 705 (2010). When a decree of specific performance does 

not provide complete relief, “the injured party is entitled to those damages that will make him 

whole, including monetary damages incidental to and caused by a delay in performance.” 

Mandel, 404 Ill. App. 3d at 706. 

¶ 78 V Land first claims that Lobo was not entitled to monetary damages because it had not 

substantially complied with the material terms of the contracts due to its attempt to lower the 

purchase price. This argument is a mere rehashing of the specific performance claim set forth 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

38 

above, and we have no need to discuss it further as we have determined that the trial court 

properly awarded specific performance based on the lower contract prices.

¶ 79 Next, V Land claims that Lobo was not entitled to damages for lost rental income or the 

loss of the benefit of the § 1031 exchange because such damages were not authorized by the 

contracts. V Land points to paragraph 16(b) of the contracts, which provides: 

“Should Seller default under this Agreement and provided that Buyer is not in default 

hereunder, Buyer shall give Seller written notice specifying the nature of the default. 

If Seller fails to cure such default within thirty (30) days after receipt of such notice, 

all Earnest Money shall be returned to Buyer, Buyer shall be entitled to its Out-OfPocket Expenses, provided the Third Party Reports are delivered to Seller and Buyer 

shall have the right to sue for specific performance.” 

V Land thus argues that, under the terms of the contracts, the parties agreed that Lobo would 

be entitled only to the three remedies set forth in that provision: (1) the return of earnest 

money, (2) Lobo’s out-of-pocket expenses, and (3) a suit for specific performance. The trial 

court found that the language of this provision did not prohibit Lobo from seeking additional 

damages. We agree.

¶ 80 The parties’ rights under a contract are limited by the terms expressed therein. O’Shield v. 

Lakeside Bank, 335 Ill. App. 3d 834, 839 (2002). Parties may contract for an exclusive 

remedy under the contract, and “[o]nce made and agreed upon, this remedy provision is 

binding on the parties and will be recognized and enforced by our courts.” O’Shield, 335 Ill. 

App. 3d at 839. Such a remedy provision will be deemed exclusive “if the contract warrants 

this interpretation,” even if the word “exclusive” does not expressly appear within the 

contract. O’Shield, 335 Ill. App. 3d at 839. “However, the contract must clearly indicate that 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

39 

the parties intend that the stipulated remedy be the sole or exclusive remedy.” Lake County 

Trust Co. v. Two Bar B, Inc., 182 Ill. App. 3d 186, 192 (1989). 

¶ 81 In the case at bar, nothing in the language of paragraph 16(b) indicates that the remedies 

set forth in that paragraph are to be the “sole” or “exclusive” remedies available to Lobo. We 

note that, while those terms do not necessarily need to expressly appear in the contract, such 

language does appear in the immediately preceding paragraph 16(a), which concerns the 

buyer’s default:

“Should Buyer default under this Agreement and provided that Seller is not in default 

hereunder, Seller shall give Buyer written notice specifying the nature of the default. 

If Buyer fails to cure such default within thirty (30) days after receipt of such written 

notice, then Buyer shall be obligated within two (2) business days after the thirty (30) 

day cure period ends to replace the Note in the Escrow with cash and to direct that 

escrowee pay the Earnest Money to Seller. If Buyer fails to replace the Note with 

cash, then the Note shall be delivered to Seller and Seller may bring an action to 

collect the Note. The Earnest Money shall be Seller’s sole and exclusive remedy for 

Buyer’s default.” (Emphasis added.) 

The fact that such a limitation appears in one subparagraph, relating to the buyer’s default, 

but does not appear in the corresponding subparagraph relating to the seller’s default, which 

appears immediately following the first subparagraph, indicates that the parties intended 

different results in the two situations. See Taracorp, Inc. v. NL Industries, Inc., 73 F.3d 738, 

744 (7th Cir. 1996) (“[W]hen parties to the same contract use such different language to 

address parallel issues ***, it is reasonable to infer that they intend this language to mean 

different things.”). “[W]hen parties agree to and insert language into a contract, it is 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

40 

presumed that it was done purposefully, so that the language employed is to be given effect. 

[Citation.]” Thompson, 241 Ill. 2d at 442. 

¶ 82 Additionally, we are not persuaded by V Land’s claim that permitting Lobo to seek 

damages other than those enumerated in the contracts would render paragraph 16(b) 

meaningless. Paragraph 16(b) operates to make clear certain categories of damages and other 

relief that the buyer is automatically entitled to in the event of the seller’s breach. This 

language does not lose its meaning simply because the buyer may also assert other claims for 

damages within the context of a lawsuit.4

¶ 83 Finally, we are unpersuaded by V Land’s use of the Latin-term maxim

expressio unius est exclusio alterius (the expression of one thing is the exclusion of another).

Under that maxim, the expression of one or more things of a class implies the exclusion of all 

those not expressed. West Bend Mutual Insurance Co. v. DJW-Ridgeway Building 

Consultants, Inc., 2015 IL App (2d) 140441, ¶ 38; Suga v. Suga, 35 Ill. App. 2d 355, 359 

(1962). However, as noted, there is nothing in the language of the provision that indicates 

that it is intended to be the type of exclusive list to which this maxim applies and, to the 

contrary, the language of the contracts as a whole leads to the conclusion that it was not

intended to be an exclusive list in light of the absence of language similar to that included in 

the preceding subparagraph. 

¶ 84 V Land also argues that Lobo was not entitled to damages because it could not both seek 

specific performance and seek damages for lost business opportunities. As noted, when a 

 4

We also note that, while not raised by the parties, an argument could be made that the damages 

awarded by the trial court were encompassed by the language of paragraph 16(b), which expressly 

includes the right to file suit for specific performance. As noted, a grant of specific performance may 

include an award of damages where the specific performance alone would not make the plaintiff 

whole. See Mandel, 404 Ill. App. 3d at 706. 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

41 

decree of specific performance does not provide complete relief, “the injured party is entitled 

to those damages that will make him whole, including monetary damages incidental to and 

caused by a delay in performance.” Mandel, 404 Ill. App. 3d at 706. 

“Although such compensation is often referred to by the courts as ‘damages,’ some 

authorities suggest that it should more properly be considered as equitable 

compensation in the nature of an accounting between the parties rather than legal 

damages, inasmuch as the court in awarding specific performance is confirming the 

contract and erasing the breach. [Citation.] Under this view, the compensation 

awarded as incident to a decree for specific performance is not for breach of contract 

and is therefore not legal damages. [Citation.]” Douglas Theater Corp. v. Chicago 

Title & Trust Co., 266 Ill. App. 3d 1037, 1043 (1994). 

Thus, damages at law, such as for lost business opportunities, are generally not recoverable 

in a specific performance action. See Douglas Theater Corp., 266 Ill. App. 3d at 1043. For 

instance, in Douglas Theater, which involved a refusal to convey a portion of a building that 

was to be used as a theater, the appellate court affirmed the denial of incidental damages for 

loss of the opportunity to build the theater, as well as loss of rent and profits resulting from 

the loss of the ability to build the theater, finding that these damages were not appropriate in 

an action for specific performance. Douglas Theater Corp., 266 Ill. App. 3d at 1043-44. 

¶ 85 In the case at bar, the monetary damages awarded by the trial court were not the type of 

damages prohibited in a specific performance action but instead, were intended to make Lobo 

whole. The trial court awarded damages for the loss of the tax benefits of the § 1031 

exchange, as well as for lost rental income, not for the loss of business opportunities that 

Lobo may have had if the closing had occurred as scheduled. Both of these categories of 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

42 

damages were clearly attributable to the delay in closing and were necessary to make Lobo 

whole. The entire purpose of structuring the closings in the way the contract provided was to 

take advantage of the tax benefits of a § 1031 exchange in connection with the sale of the 

Mokena properties. The contracts for the Mokena properties make specific reference to the 

purchase contracts at issue in the case at bar and state that those “Exchange Contracts” were 

“hereby acknowledged by the parties as being interrelated and interdependent with” the 

Mokena contracts. By not closing on the properties in time, Lobo lost the tax benefits to 

which it was entitled. Similarly, by not closing on the original closing date, Lobo was 

deprived of the income stream from the rents paid by Staples and Chase Bank pursuant to 

their leases on the properties. This is not a situation like the one present in Douglas Theater 

Corp., where the plaintiff was planning on building theaters on the premises and lost its 

business opportunities. Instead, this is a case in which there were active leases under which 

rents were being paid to V Land that would have been paid to Lobo had the properties closed

in a timely manner under the contract. Consequently, we find no error in the trial court’s 

award of damages.

¶ 86 II. Failure to Close

¶ 87 Given our conclusion that Lobo was entitled to specific performance at the lower 

purchase price, we next consider V Land’s and Lakeside’s arguments that Lobo lost that right 

and terminated the contracts when it failed to close on the court-set March 23, 2017, closing 

date. On March 17, 2017, the trial court entered a final modified judgment in the instant case, 

in which it ordered that on March 23, 2017, “in accordance with [the] Purchase and Sale 

Agreement,” V Land was to sell to Lobo the Canal property for the purchase price of $8 

million, payable as follows: (1) Lobo was to pay Lakeside $6,110,302.49 on the Canal loan;
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

43 

(2) upon Lakeside’s receipt of the payment, Lakeside was to deliver to Lobo a release of the 

first and second mortgages, including all modifications, held by Lakeside on the Canal 

property, a release of the assignment of rents on the Canal property, and a UCC termination 

statement for the security agreement, all in recordable form, and V Land was to deliver to 

Lobo a special warranty deed to the Canal property in recordable form; and (3) the balance of 

the purchase price in the amount of $1,889,697.51 was to be abated by application of 

amounts due from V Land to Lobo. 

¶ 88 Additionally, the court ordered that on March 23, 2017, “in accordance with [the] 

Purchase and Sale Agreement,” V Land was to sell to Lobo the Bloomingdale property for 

the purchase price of $4 million, payable as follows: (1) Lobo was to pay Lakeside 

$3,041,467.24 on the Bloomingdale loan; (2) upon Lakeside’s receipt of the payment, 

Lakeside was to deliver to Lobo a release of the first and second mortgages, including all 

modifications, held by Lakeside on the Bloomingdale property, a release of the assignment of 

rents on the Bloomingdale property, and a UCC termination statement for the security 

agreement, all in recordable form, and V Land was to deliver to Lobo a special warranty deed 

to the Bloomingdale property in recordable form; and (3) the balance of the purchase price in 

the amount of $958,532.76 was to be abated by application of amounts due from V Land to 

Lobo. 

¶ 89 The trial court further ordered that “[s]ubject to the provisions above, the closing of both 

the above purchase and sale transactions shall be conducted according to the terms of the 

respective Canal Contract and Bloomingdale Contract (together the ‘Contracts’), including 

without limitation those provisions of the Contracts requiring execution and/or delivery of 

documents at closing and allocation and/or payment of closing costs, prorations, and credits.” 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

44 

¶ 90 The closing did not occur on March 23. Instead, on that date, Lobo filed an emergency 

motion to enforce the final modified judgment, in which it claimed that V Land was violating 

the judgment and the terms of the contracts; the trial court denied Lobo’s motion. Both 

Lakeside and V Land claim that, by not closing, Lobo terminated its rights under the 

contract. Lobo’s claims that V Land violated the contracts, and Lakeside and V Land’s 

claims that Lobo terminated the contracts, all stem from paragraph 5 of the contracts, which 

provides: 

“Title Evidence. Seller shall cause to be delivered to Buyer within fifteen (15) days 

after the Effective Date (a) a commitment dated on or after the Effective Date (the 

‘Title Commitment’) to issue a 1992 ALTA form owner’s policy of title insurance in 

the amount of the Purchase Price with those endorsements set forth below (the ‘Title 

Policy’) issued by Chicago Title Insurance Company (the ‘Title Company’), and (b) 

complete, legible copies of all documents relating to title exceptions referenced in the 

Title Commitment (the ‘Title Documents’). When issued, the Title Policy shall show 

title to the Property as of the Closing Date in Buyer to be subject only to the 

Permitted Encumbrances ***. 

The proceeds due Seller at Closing shall be used by the Escrowee to satisfy or 

otherwise obtain a release of any existing mortgage including Lender’s construction 

mortgage and any other monetary encumbrances arising from acts of Seller to enable 

the Title Company to delete the encumbrance from the Title Policy.

Buyer shall have ten (10) business days after receipt of the Title Commitment, 

Title Documents and the Existing Survey identified on Exhibit ‘D’ to object in 

writing (an ‘Objections Letter’) to any exceptions reported in the Title Commitment 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

45 

or any matters shown on the Existing Survey (such matters, ‘Unpermitted Title and 

Survey Exceptions’) and to request additional endorsements to address matters raised 

by the Title Commitment and Existing Survey. Matters specifically stated in the Title 

Commitment and not objected to by Buyer in the Objections Letter shall become 

permitted (‘Permitted Encumbrance’).

Seller shall have 30 days from the date of the Objections Letter (the ‘Cure 

Period’) to have the Unpermitted Title and Survey Exceptions removed from the Title 

Commitment, to correct the defects noted on the Existing Survey and to obtain a 

revised Title Commitment. If Seller does not have such exceptions removed, does not 

correct all survey defects and does not provide Buyer with a revised Title 

Commitment with the additional endorsements, if any, during the Cure Period, Buyer 

may elect, by written notice to Seller delivered within five (5) business days after the 

end of the Cure Period, to (i) terminate this Agreement, in which case the Earnest 

Money shall be returned to Buyer by Escrowee, the Out-Of-Pocket Expenses (as 

defined below) shall be reimbursed to Buyer, Buyer shall deliver the Third Party 

Reports (as defined below) to Seller, and the parties shall have no further rights or 

obligations hereunder, except for those rights and obligations which expressly survive 

any such termination, or (ii) waive such objections hereunder and proceed with the 

transaction pursuant to the remaining terms and conditions of this Agreement. Any 

objections to title which Buyer waives pursuant to (ii) above shall be deemed 

Permitted Encumbrances. If Buyer fails to give Seller notice of its election as 

provided above, it shall be deemed to have elected the option contained in subsection 

(ii) above. Notwithstanding anything to the contrary contained herein, if any existing 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

46 

mortgage or other monetary encumbrance is an exception to title and Seller fails to 

cure or satisfy such defect, then at Closing Buyer shall have the right to direct 

Escrowee to cause a portion of the Purchase Price to be used to satisfy the same.”

¶ 91 In essence, Lobo claims that V Land breached the contracts by not delivering clear title or 

other documents at closing. V Land and Lakeside claim that Lobo’s only options in that case 

were to waive the unpermitted encumbrances and close or to terminate the contract. Since 

Lobo clearly did not choose to close, V Land and Lakeside claim it should be deemed to have 

terminated the contract. 

¶ 92 Paragraph 5 of the contracts expressly provides that, “[w]hen issued, the Title Policy 

shall show title to the Property as of the Closing Date in Buyer to be subject only to the 

Permitted Encumbrances ***.” Lobo claimed in its motion that on March 22, 2017, the day 

before closing, Chicago Title provided Lobo with a pro forma title policy that complied with 

this paragraph. However, on the day of closing, Chicago Title provided Lobo with a 

“revised” pro forma title policy that added a number of exceptions to the policies, including 

exceptions for the Lakeside mortgages, the assignment of leases and rents, the “[p]roceeding 

pending in the Circuit Court of Cook County, Illinois, as [sic] case number 05 CH 22194,” 

and the “[t]erms and provisions contained in [the] Memorandum Opinion and Order entered 

on May 24, 2012” in the instant case. There is no dispute that these exceptions were not 

“Permitted Encumbrances.” Thus, under the terms of the contracts, the title policy provided 

to Lobo did not comply with the requirements of paragraph 5.5

 5

We recognize that Lakeside and V Land provided reasons for the exceptions being included on 

the title policies, namely, Chicago Title’s refusal to issue clean title policies while the parties retained 

appeal rights. However, this is largely irrelevant to the issue of whether the title policy provided by 

Chicago Title satisfied the terms of paragraph 5. 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

47 

¶ 93 However, the contracts themselves contained a mechanism for dealing with unpermitted 

encumbrances on title. Under paragraph 5, the buyer had 10 days after the receipt of the title 

documents to object to any exceptions; if it did not object, the unobjected-to items on title 

would become “Permitted Encumbrances.” The seller then would have 30 days from the date 

of the objections letter to correct the defects and obtain a revised title commitment. If the 

seller failed to correct the issue, “Buyer may elect, by written notice to Seller delivered 

within five (5) business days after the end of the Cure Period, to (i) terminate this Agreement, 

*** or (ii) waive such objections hereunder and proceed with the transaction pursuant to the 

remaining terms and conditions of this Agreement.” 

¶ 94 Lakeside and V Land focus on the last point, arguing that since Lobo did not waive its 

objections and close, it must be deemed to have terminated the agreements. The trial court 

agreed with this position. However, this ruling omits several key steps in the process.

According to Lobo, on the day of the closing, it was presented with a new pro forma title 

policy—different than the policy it had previously been provided—that contained a number 

of new exceptions to which it objected. Under the terms of the contracts, once Chicago Title 

presented Lobo with an objectionable title policy, Lobo was entitled to object and to demand 

that V Land remove the objectionable exceptions from title. Only after V Land refused to 

correct the issue could Lobo be compelled to choose between closing and terminating the 

agreement. It cannot be the case that a seller can, on the day of the closing, provide a 

completely new title policy, and require the buyer to immediately close or terminate the 

agreement. Such a result is not contemplated by the contracts and would be manifestly 

unjust. 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

48 

¶ 95 We recognize that this litigation has been pending for a number of years, and the parties 

wish to resolve it as soon as possible. However, the way to do so is not by skipping over 

important steps in the process. When Lobo received the new title policy, it should have been 

permitted to object to the new exceptions on title, and V Land should have had the 

opportunity to address those objections. Lakeside and V Land claim that the exceptions were 

included due to Chicago Title’s concerns over the parties’ appeal rights. The emails attached 

to their responses to Lobo’s emergency motion appear to bear this out, at least to some 

extent. However, those emails are all dated March 22, 2017—the day before closing—

meaning that all decisions and discussions were conducted quickly. One benefit to following 

the steps set forth in the contracts is that the parties have the time and ability to discuss 

possible resolution of the issues. If not—if the parties remain in the same position concerning 

the exceptions—then Lobo must make a choice: close or terminate. However, Lobo should 

not have been deemed to have made the choice to terminate on March 23, 2017, when it did 

not close. Instead, the trial court should have set a new closing date, as requested by Lobo in 

its emergency order. We accordingly reverse the denial of Lobo’s emergency motion and 

remand to the trial court with orders for it to set a new closing date.6

¶ 96 III. Subrogation 

¶ 97 We next turn to the issue of whether Lakeside’s mortgages have priority over Lobo’s 

interest in the properties and the extent of that priority. On May 10, 2011, the trial court 

granted partial summary judgment in Lakeside’s favor, finding that, based on conventional 

subrogation, Lakeside’s mortgage on the Bloomingdale property was in first priority position 

 6

We note that Lobo claims that Lakeside refused to release its mortgages, leading to their 

presence on title. However, Lakeside attached its releases to its response to the emergency motion, 

and represented that it was prepared to release the mortgages upon receipt of the payoff amounts. 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

49 

and its mortgage on the Canal property was in first priority position to the extent of 

$7,019,713.25. However, on February 25, 2015, the trial court granted summary judgment in 

favor of Lobo on the issue of the remaining $518,000, finding that Lakeside was not entitled 

to equitable subrogation of those funds. We consider each order in turn. 

¶ 98 A. Lakeside’s Payment of Prior Loans 

¶ 99 First, Lobo argues that the trial court erred in granting summary judgment in favor of 

Lakeside and finding that Lakeside’s mortgages were superior to Lobo’s interest to the extent 

that they were used to pay off the prior construction mortgages. The trial court’s decision was 

based on its application of conventional subrogation. “Subrogation is a principle of equity 

jurisprudence where one who involuntarily pays the debt of another succeeds to the rights of 

the original creditor, with respect to the debt paid.” Paliatka v. Bush, 2018 IL App (1st) 

172435, ¶ 16. In Illinois, subrogation is often applied to substitute one party to the lien 

priority of another. Paliatka, 2018 IL App (1st) 172435, ¶ 16. There are two types of 

subrogation recognized under Illinois law: contractual, or conventional, subrogation and 

common law, or equitable, subrogation. Paliatka, 2018 IL App (1st) 172435, ¶ 17. 

Conventional subrogation, which the trial court applied here, arises where there is an express 

agreement between the parties to the effect that the party paying the debts on behalf of the 

third party will be able to assert the rights of the original creditor. Paliatka, 2018 IL App 

(1st) 172435, ¶ 17. “By paying the debt, the subrogee is entitled to the benefit of the security 

he satisfied with an expectation of receiving equal priority in terms of a lien.” Union Planters 

Bank, N.A. v. FT Mortgage Cos., 341 Ill. App. 3d 921, 925 (2003). 

¶ 100 Conventional subrogation may apply in the context of mortgage refinancing up to the 

amount of the original mortgage, provided that the original mortgage remains in effect at the 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

50 

time that the refinancing mortgage lien is recorded; if the original mortgage lien is released 

prior to the recordation of the new mortgage, conventional subrogation does not apply. 

Aames Capital Corp. v. Interstate Bank of Oak Forest, 315 Ill. App. 3d 700, 710 (2000). In 

addition to the requirement of an express agreement, the lender seeking the benefit of a 

conventional subrogation must prove that (1) the loan proceeds were used to refinance the 

mortgage for which the lender seeks to be subrogated, (2) no harm will come to an innocent 

party if priority is granted to the lender, and (3) there has been no gross negligence. Union 

Planters Bank, 341 Ill. App. 3d at 925. 

¶ 101 In the case at bar, Lobo does not claim on appeal that Lakeside’s mortgages were not 

used to pay off the existing construction loans, nor does it dispute that Lakeside did so in 

agreement with V Land that Lakeside would obtain a first priority lien on each property.

Lakeside submitted a number of documents in connection with its motion for summary 

judgment in support of this agreement. First, in his affidavit, Chris Sotos, chief financial 

officer for V Land, averred that he spoke with David Pinkerton of Lakeside concerning the 

mortgages and offered to give Lakeside first priority mortgage liens on both the Canal and 

Bloomingdale properties in exchange for the Lakeside loans, and further averred that

Lakeside issued the loans on those terms and that the funds were in fact used to pay off the 

construction loans. Similarly, in his affidavit, Pinkerton averred that Lakeside approved the 

loans on the condition that Lakeside receive first priority mortgage liens on both properties.

Pinkerton also averred to the accuracy of internal loan proposals and loan committee minutes 

that stated that the loans would be in first priority position; these documents were also 

attached to the motion for summary judgment. 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

51 

¶ 102 Instead, Lobo claims that the doctrine of equitable conversion meant that Lobo was the 

equitable owner of the property at the time of the Lakeside mortgages, and Lakeside was 

fully aware of Lobo’s interest at the time it made its loans. Accordingly, Lobo claims that 

conventional subrogation does not apply and its interests were superior to Lakeside’s. In 

essence, Lobo claims that its rights under equitable conversion trump Lakeside’s rights under 

conventional subrogation. 

¶ 103 Under the doctrine of equitable conversion, “when the owner of land enters into a valid 

and enforceable contract for its sale he continues to hold the legal title, but in trust for the 

buyer; and the buyer becomes the equitable owner and holds the purchase money in trust for 

the seller.” Shay v. Penrose, 25 Ill. 2d 447, 449 (1962). This “conversion” takes place at the 

time of entering into the contract. Shay, 25 Ill. 2d at 449. In the case at bar, Lobo and V Land 

executed their purchase contracts on June 30, 2005, and thus, as of that date, Lobo became 

the equitable owner of the properties, and V Land owned only a personal property interest in 

the purchase money. See United Community Bank v. Prairie State Bank & Trust, 2012 IL 

App (4th) 110973, ¶ 35. 

¶ 104 Furthermore, equitable conversion is effective as to those with notice of the contract 

“[i]nsomuch as the vendor’s heirs, devisees, and grantees have ‘notice’ of the executory 

contract, it binds them, and as far as they are concerned, the vendor no longer has an interest 

in the land but instead has only a personal-property interest in the purchase money.” United 

Community Bank, 2012 IL App (4th) 110973, ¶ 35. Here, there is no dispute that Lakeside 

was aware of Lobo’s purchase contracts at the time it made its loans to V Land; the record 

shows that Lobo filed notices of lis pendens when it filed the instant lawsuit, and Lakeside 

specifically referred to Lobo’s interest in the properties in its internal loan documents.
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

52 

Accordingly, Lakeside would have taken its interest in the properties subject to Lobo’s 

interest.7 See Hinsdale Federal Savings & Loan Ass’n v. Gary-Wheaton Bank, 100 Ill. App. 

3d 746, 749 (1981). 

¶ 105 However, even though it is clear that Lobo’s interest would be superior to Lakeside’s if V 

Land had merely mortgaged the property, the result is less obvious when the existence of the 

prior construction loans comes into play. Lobo executed its purchase contracts with the 

express understanding that the properties were under construction. The purchase contracts 

list, in their recitals, the fact that each property was under construction, and paragraph 7 of 

the contracts concerned completion of the work and Lobo’s options in the case that 

construction was not completed by the time of closing. Moreover, Lobo was aware that there 

were construction mortgages on the properties. The recitals specifically state that V Land had 

obtained a construction loan on the property, and the purchase contracts provide that that the 

construction mortgages would be released at closing. Thus, it is clear that Lobo’s interest in 

the properties was subject to the prior construction mortgages. The question, then, is whether 

conventional subrogation can operate to permit Lakeside’s mortgages to stand in that same 

position with respect to Lobo’s interest. 

¶ 106 Lakeside points to La Salle Bank, N.I. v. First American Bank, 316 Ill. App. 3d 515 

(2000), claiming that equitable conversion is irrelevant to the determination of whether 

conventional subrogation should apply. However, we find this case to be of limited 

usefulness to our analysis because, despite Lakeside’s contention to the contrary, La Salle 

Bank is not “indistinguishable” from the instant case but instead presents a significantly 

different factual scenario. There, the buyer executed a purchase contract with the beneficiary 

 7

Due to our agreement with Lobo on this issue, we have no need to discuss the effect of the filing 

of the lis pendens notices.
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

53 

of a land trust for the purchase of property. La Salle Bank, 316 Ill. App. 3d at 518. After the 

execution of the contract, the beneficiary and trustee of the land trust entered into a 

construction loan for the property that was secured by a mortgage, which the bank later 

sought to foreclose. La Salle Bank, 316 Ill. App. 3d at 518-19. The bank argued that it was 

entitled to first priority over the buyer’s interest in the property because when it issued its 

loan, it had paid off a prior mortgage on the property in return for a first priority lien.

La Salle Bank, 316 Ill. App. 3d at 521. The buyer, in turn, argued that equitable conversion 

meant that its interest was superior to the bank’s. La Salle Bank, 316 Ill. App. 3d at 521. On 

appeal, we first considered the conventional subrogation issue, as that was the basis for the 

trial court’s grant of summary judgment in the bank’s favor, and found that the trial court 

properly concluded that the bank’s loan was entitled to subrogation. La Salle Bank, 316 Ill. 

App. 3d at 523. We then turned to the buyer’s equitable conversion argument and determined 

that the doctrine did not apply because the beneficiary of the land trust, with whom the buyer 

had contracted, “was not at any time the legal or equitable owner of the property and thus had 

no ownership interest to convey.” La Salle Bank, 316 Ill. App. 3d at 524. 

¶ 107 The facts in La Salle Bank are clearly distinguishable from the case at bar, and the case is 

of limited usefulness to our analysis as a result. In that case, as noted, the doctrine of 

equitable conversion was not implicated because the buyer had not contracted with the legal 

or equitable owner of the property. Here, by contrast, V Land was the legal and equitable 

owner of the property and, therefore, when it contracted with Lobo, Lobo took equitable 

ownership through equitable conversion at the time of the contract’s execution. Accordingly, 

we cannot find that the holding in La Salle Bank impacts our decision in any regard. 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

54 

¶ 108 We are left, then, with the question of whether a mortgage8 issued after the execution of a 

purchase contract may, through conventional subrogation, take priority over the purchaser’s 

interests if such a mortgage was used to pay off a prior mortgage that existed prior to the 

execution of the purchase contract. We find that it can, provided that all of the elements of 

conventional subrogation are satisfied. Both conventional subrogation and equitable 

conversion are equitable doctrines. See United Community Bank, 2012 IL App (4th) 110973, 

¶ 35 (describing equitable conversion as “an application of a general principle of equity: 

‘equity regards and treats as done what ought to be done’ ” (quoting 1 John N. Pomeroy, A 

Treatise on Equity Jurisprudence § 368, at 685 (4th ed. 1918))); Dix Mutual Insurance Co. v. 

LaFramboise, 149 Ill. 2d 314, 319 (1992) (“The right of subrogation is an equitable right and 

remedy which rests on the principle that substantial justice should be attained by placing 

ultimate responsibility for the loss upon the one against whom in good conscience it ought to 

fall.”); Home Savings Bank v. Bierstadt, 168 Ill. 618, 624 (1897) (conventional subrogation 

“results from an equitable right springing from an express agreement with the debtor, by 

which one advances money to pay a claim for the security of which there exists a lien, by 

which agreement he is to have an equal lien to that paid off”). Here, then, equity compels the 

result: if Lobo executed its purchase agreements subject to the existence of mortgages on the 

properties, then it is irrelevant whether those mortgages are held by the original lenders or by 

Lakeside, provided that the other elements of conventional subrogation have been satisfied. 

¶ 109 We turn, then to the question of whether the trial court properly concluded that Lakeside 

had established the elements of conventional subrogation. Again, in addition to the 

requirement of an express agreement, the lender seeking the benefit of a conventional 

 8

Despite Lakeside’s argument to the contrary, we do not read Lobo’s argument as arguing that the 

Lakeside mortgages are invalid but simply that they are inferior to Lobo’s interest.
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

55 

subrogation must prove that (1) the loan proceeds were used to refinance the mortgage for 

which the lender seeks to be subrogated, (2) no harm will come to an innocent party if 

priority is granted to the lender, and (3) there has been no gross negligence. Union Planters 

Bank, 341 Ill. App. 3d at 925. We agree with the trial court that all of these elements have 

been satisfied.

¶ 110 As noted, Lobo does not dispute that Lakeside and V Land agreed that Lakeside would 

pay off the prior construction loans on the properties in exchange for a first priority lien on 

the properties and Lakeside provided evidence that such an agreement existed, which we set 

forth above. Lobo’s only argument as to this point is its argument that there was no 

“agreement” because Lobo, not V Land, was the equitable owner of the properties. However, 

we do not find this argument persuasive. The “debtor” at issue was V Land, not Lobo, and it 

was V Land’s debt that was being paid. Thus, an agreement between V Land and Lakeside 

was all that was required. We also find unpersuasive Lobo’s argument that V Land and 

Lakeside could not enter into any agreement due to the purchase contracts’ provisions that 

“Seller shall not cause, agree to or willfully or intentionally permit any encumbrance, 

easement, covenant or restriction of, or otherwise grant any interest in, the Property or any 

part thereof in any form or manner whatsoever” and that “Seller agrees not to further alter or 

encumber in any way [or] change Seller’s title to the Property after the date of this 

Agreement without Buyer’s prior written consent.” In the case at bar, however, Lakeside’s 

mortgages did not further encumber the properties but, in essence, simply exchanged one 

lienholder for another, since Lakeside’s mortgages were executed in conjunction with the 

releases of the prior mortgages.
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

56 

¶ 111 Lobo also argues that it would be harmed by permitting Lakeside priority over Lobo’s 

interests. We find this argument unpersuasive in light of our analysis above. As noted, Lobo 

knew when it executed the purchase agreements that the properties were subject to mortgages 

to finance the construction on the properties. Lobo fully expected that mortgages would need 

to be satisfied at the time of closing. We agree with the trial court that no harm comes to 

Lobo by the holder of those mortgages being Lakeside, rather than the original lenders. 

¶ 112 Finally, we cannot agree with Lobo that Lakeside’s “gross negligence” bars its use of 

conventional subrogation. Lobo argues that Lakeside’s conduct in knowingly issuing the 

mortgages, despite knowing of Lobo’s interest in the properties and the terms of the purchase 

agreements, demonstrates gross negligence. However, Lobo does not provide any authority 

for the proposition that such conduct, even if risky on Lakeside’s part, would rise to the level 

of gross negligence. Accordingly, we cannot find that the trial court erred in granting 

Lakeside’s mortgages first priority to the extent they were used to pay off the original 

construction mortgages. 

¶ 113 Furthermore, even in the absence of conventional subrogation, Lakeside would have been 

entitled to priority under the doctrine of equitable subrogation. “Equitable subrogation is a 

creature of chancery that is utilized to prevent unjust enrichment.” Aames Capital, 315 Ill. 

App. 3d at 706. “The application of the doctrine of equitable subrogation does not depend 

upon any set of circumstances but depends upon the equities of each individual case.” Union 

Planters Bank, 341 Ill. App. 3d at 925. 

¶ 114 In the case at bar, the equities favor granting Lakeside priority over Lobo’s interest in the 

properties such that equitable subrogation would be applicable. Lakeside paid the 

construction mortgages, thereby paying off mortgages that otherwise would have been paid 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

57 

at closing. It did so under the understanding that it would be obtaining a first priority lien on 

the properties. Permitting Lobo to take title to the property without taking into account 

Lakeside’s removal of the prior liens would result in unjust enrichment to Lobo and/or V 

Land. Accordingly, under either theory, Lakeside would be entitled to subrogation. 

¶ 115 B. Lakeside’s Payment of Contractors 

¶ 116 Lakeside argues that, in addition to the amounts it loaned to pay off the construction 

mortgages, it should also have been entitled to subrogation with respect to $518,464.06 that 

was used to pay contractors. Lakeside’s argument is based on the doctrine of equitable 

subrogation. As noted, “[e]quitable subrogation is a creature of chancery that is utilized to 

prevent unjust enrichment.” Aames Capital, 315 Ill. App. 3d at 706. “The application of the 

doctrine of equitable subrogation does not depend upon any set of circumstances but depends 

upon the equities of each individual case.” Union Planters Bank, 341 Ill. App. 3d at 925. 

¶ 117 In the case at bar, the trial court granted summary judgment in Lobo’s favor on this issue, 

finding that Lakeside was not entitled to equitable subrogation with respect to these funds. 

The trial court found that the contractors and subcontractors who had contracted with V Land 

prior to the purchase contract established mechanics’ liens on the properties at the time of 

contract for services. However, the court further found that all of the contractors and 

subcontractors, with the exception of one, had executed waivers of their rights to mechanics’ 

liens prior to the time that Lakeside paid them. With respect to the one contractor that had not 

released its lien prior to Lakeside’s payment, the trial court found that the mechanics’ lien 

had not been perfected within four months after completion of the work. Accordingly, the 

trial court found that Lobo’s interest was superior to Lakeside’s interest with respect to the 

funds that Lakeside had paid for the contractors. We can find no error with this analysis. 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

58 

¶ 118 It is well settled that a subrogee can have no greater right than the subrogor and can 

enforce only such rights as a subrogor could enforce. William Aupperle & Sons, Inc. v. 

American Indemnity Co., 75 Ill. App. 3d 722, 724 (1979). Here, almost all of the contractors 

had waived their rights to mechanics’ liens prior to Lakeside’s payment. Thus, we find no 

basis for finding that Lakeside could assert a lien with respect to these payments that would 

be superior to Lobo’s interest in the properties. See William Aupperle & Sons, 75 Ill. App. 3d 

at 724 (“Since we have previously determined that the subrogor has waived its right to a 

mechanic’s lien, it follows that the subrogee’s rights in that regard are likewise waived.”). 

¶ 119 Similarly, we find no error in the court’s conclusion that, with respect to the mechanics’ 

lien that had not been waived, Lakeside was not entitled to subrogation because the lien was 

not perfected as required by section 7 of the Mechanics Lien Act (770 ILCS 60/7 (West 

2004)). Lakeside claims that this result conflicts with the result in Detroit Steel Products Co. 

v. Hudes, 17 Ill. App. 2d 514 (1958), in which Lakeside claims that the court “granted 

equitable subrogation to the mortgage lender without any showing that the materialmen’s 

liens had been perfected.” However, we do not agree with Lakeside that the lack of a 

discussion over whether the liens were perfected means that the lender was not required to 

establish this fact—it simply means that it was not at issue in the case and we can read 

nothing more into its absence. Indeed, the Detroit Steel court did, when finding that a 

mechanic’s lien had priority over a subsequent mortgage, note that such a lien would need to 

be “properly perfected in accordance with the statute.” Detroit Steel, 17 Ill. App. 2d at 519. 

There is thus no indication that Detroit Steel can be read to stand for the proposition that an 

unperfected mechanic’s lien may be the basis of a subrogation claim. Here, where there was 

no valid mechanic’s lien because it was never perfected, we can find no error in the trial 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

59 

court’s finding that Lakeside was not entitled to equitable subrogation based on its payment 

of this claim.

¶ 120 C. Other Payments by Lakeside 

¶ 121 Finally, Lakeside claims that the trial court erred in denying Lakeside’s motion to modify 

the order to include two additional subrogations with respect to the Canal loan. Specifically,

on October 11, 2016, after the trial court had entered an order setting forth the formula for 

determining the payoff amounts, Lakeside filed a motion to modify the order, claiming that it 

was entitled to equitable subrogation of amounts that Lakeside had advanced to pay property 

taxes and amounts on the Canal loan that had been used to pay off the Bloomingdale

construction loan. The trial court denied Lakeside’s motion, finding that “[t]hese issues have 

already been addressed from this court’s perspective.” When asked if there was any further 

reasoning for its ruling, the court explained that “from my perspective the motion really is 

just getting at issues that already have been, at least from my perspective, addressed and [is] 

not appropriate at this time.” Lakeside argues that the specific amounts listed in the motion

had not been previously addressed and that the trial court should have therefore considered 

the issues and granted its motion. 

¶ 122 “A motion to reconsider based on the submission of new matters, such as new arguments 

or legal theories not presented during the pendency of the original motion for summary 

judgment, is reviewed under an abuse-of-discretion standard.” Daniels v. Corrigan, 382 Ill. 

App. 3d 66, 71 (2008). In the case at bar, we cannot find that the trial court abused its 

discretion in denying Lakeside’s motion. In its motion to modify the order, Lakeside pointed 

to $78,204.08 that was allegedly used to pay property taxes and to $70,391.71 from the Canal 

loan that was used to pay part of the construction mortgage on the Bloomingdale property. 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

60 

Lakeside claimed that the trial court had never made an “express ruling” as to whether these 

amounts were entitled to subrogation. 

¶ 123 However, the amount of Lakeside’s priority had been extensively litigated throughout the 

case, culminating in the trial court’s order setting the calculation for the final payoff amounts, 

which was the order Lakeside sought to modify. While the trial court’s order could have been 

clearer in terms of explaining its reasoning, the trial court did expressly find in that order that 

only $7,019,713.29 of the Canal loan was entitled to subrogation and $1,079,573.86 was not. 

We thus cannot find the trial court abused its discretion in finding that Lakeside’s attempts to 

argue over specific amounts that it contended should be subrogated was merely another 

attempt to relitigate something that had already been decided. To the extent that Lakeside 

argues that it only became aware of the amounts that would be subrogated when the trial 

court entered its order setting forth the formula, we note that the trial court had consistently 

held since its May 10, 2011, order that $7,019,713.29 of the Canal loan was subrogated, so 

Lakeside was fully able to determine what arguments it wished to raise with respect to the 

remainder of the loan at any time.

¶ 124 IV. Abatement

¶ 125 The final major issue we must resolve in the instant case is whether the portions of the 

Canal and Bloomingdale loans that had priority over Lobo’s interests were subject to 

payment by Lobo and, if so, in what amounts. In the case at bar, the trial court found that 

Lobo was entitled to abate9 the purchase price against V Land, offsetting the amount it was 

 9

We note the term “abatement” has been used in various ways in relation to a grant of specific 

performance. One use of the term is in the situation where “specific performance of a contract for the 

sale of real estate will be ordered, at the election of the purchaser, even though the vendor may be 

unable to convey all of the property included in the contract, with an abatement of the purchase price 

for slight defects in quantity and quality of the estate.” Schiro v. W.E. Gould & Co., 18 Ill. 2d 538, 

542 (1960). Another is in the nature of an offset, where the purchase price is decreased because of 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

61 

required to pay by the amount of damages awarded by the trial court as a result of V Land’s 

breach. This approach has been approved by our courts in the past. For instance, in Industrial 

Steel Construction, Inc. v. Mooncotch, 264 Ill. App. 3d 507, 512 (1994), we affirmed the trial 

court’s abatement of the purchase price on an option to purchase certain property by 

deducting the rent that had been paid by the purchaser-tenant after it became the equitable 

owner of the property. We found that “the trial court’s abatement of rents was not meant to 

punish defendants.” Industrial Steel Construction, 264 Ill. App. 3d at 512. Instead, we noted 

that, in an action for specific performance, a court may also award monetary damages that 

will make the plaintiff whole and found that the credit for the rents “was an equitable 

adjustment made by the trial court in light of plaintiff’s equitable ownership, as well as the 

delay by defendants, and not damages.” Industrial Steel Construction, 264 Ill. App. 3d at 

512-13. In the case at bar, on appeal, no party appears to take issue with the proposition that 

the trial court was permitted to abate the amount Lobo was required to pay for the properties 

by at least a portion of the damages awarded to Lobo as a result of V Land’s delay in 

performance.10 However, the question is the extent of that abatement. The trial court found 

that this abatement was only to the extent of Lakeside’s priority mortgages and that Lobo 

was required to fully pay the mortgages at closing, while Lobo argues that it should be 

entitled to subtract the full amount of its damages award from the purchase price. We agree 

with Lobo.

 

amounts owing to the purchaser; in this case, the abatement is “an equitable adjustment made by the 

trial court in light of plaintiff’s equitable ownership, as well as the delay by defendants, and not 

damages.” Industrial Steel Construction, Inc. v. Mooncotch, 264 Ill. App. 3d 507, 512-13 (1994). We 

read Lobo’s argument as requesting abatement in the latter sense (as an offset) and not in the former 

sense (as compensating for a defect in the property). 

10At oral argument, V Land’s counsel suggested that V Land did not agree with abatement, but 

the reasoning was merely a rehashing of V Land’s arguments as to why Lobo was not entitled to any 

damages at all.
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

62 

¶ 126 To be clear, as we have found earlier in our analysis, Lakeside has a first priority lien on 

both properties, meaning that Lakeside must be paid in order for the mortgages to be 

released. See 765 ILCS 905/2 (West 2004) (after having received full satisfaction and 

payment of all sums due, a mortgagee shall release the mortgage upon request of the 

mortgagor). Our analysis on the issue of abatement has no effect on that conclusion. The 

question we must consider is who is responsible for paying Lakeside’s mortgages—Lobo or 

V Land? By finding abatement only to the extent of Lakeside’s priority mortgages, the trial 

court effectively found that Lobo was required to pay Lakeside’s mortgages. However, 

Lakeside has not provided any authority for the proposition that it is Lobo and not V Land 

that must pay the mortgages. 

¶ 127 There is no dispute that the Lakeside mortgages were between Lakeside and V Land, as 

the seller. Both the note and mortgage for each property list V Land as the “[b]orrower” or 

“mortgagor” and were executed by Panko on behalf of V Land. Additionally, as has been 

made abundantly clear during this lengthy litigation, Lobo is not a party to these mortgages 

in any way and, in fact, vehemently objects to their existence, pointing to the provisions in 

the contracts providing that “Seller shall not cause, agree to or willfully or intentionally 

permit any encumbrance, easement, covenant or restriction of, or otherwise grant any interest 

in, the Property or any part thereof in any form or manner whatsoever” and that “Seller 

agrees not to further alter or encumber in any way [or] change Seller’s title to the Property 

after the date of this Agreement without Buyer’s prior written consent.” In short, there can be 

no dispute that these mortgages are V Land’s obligations. This result is not changed by our 

conclusion above that Lakeside’s mortgages have priority over Lobo’s interest in the 

property. Lobo, in executing its purchase contracts, did so subject to the construction 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

63 

mortgages, in whose shoes Lakeside stands in terms of priority. However, executing a 

contract that is subject to an indebtedness does not obligate Lobo to pay that indebtedness 

unless it has agreed to do so. Charter Bank v. Eckert, 223 Ill. App. 3d 918, 928 (1992) 

(“Generally, the law provides that when a person takes property ‘subject to’ an indebtedness, 

he does not have a personal obligation to pay the indebtedness or to indemnify the grantor 

against the payment of the indebtedness unless he has expressly agreed to do so.”); Pollard v. 

Waggoner, 165 Ill. App. 3d 501, 505 (1988) (“even though a person takes land ‘subject to’ an 

indebtedness, he does not have a personal obligation to pay the indebtedness or to indemnify 

his grantor against the payment of the indebtedness unless he has expressly agreed to do so”); 

Pearce v. Desper, 11 Ill. 2d 569, 575 (1957) (“The words ‘subject to’ do not indicate an 

understanding that the mortgage was to be assumed.”). Here, nothing in the language of the 

contracts indicates that Lobo agreed to pay any indebtedness, whether it was the construction 

mortgages or any new indebtedness. 

¶ 128 We note that, with respect to mortgages or other encumbrances, paragraph 5 of the 

contracts provides: 

“The proceeds due Seller at Closing shall be used by the Escrowee to satisfy or 

otherwise obtain a release of any existing mortgage including Lender’s construction 

mortgage and any other monetary encumbrances arising from acts of Seller to enable 

the Title Company to delete the encumbrance from the Title Policy.”

Under this provision, there can be no dispute that whatever payment is made to V Land at the 

closing is required to be used to pay the Lakeside mortgages. 

¶ 129 The problem is that the trial court determined that the “proceeds due Seller at Closing” 

consisted of $6,110,302.49 for the Canal loan and $3,041,467.24 for the Bloomingdale loan, 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

64 

based on the payoff amounts for the Lakeside mortgages. However, we find no support for 

this calculation in the purchase contracts. As noted, the mortgages were V Land’s mortgages, 

not Lobo’s, and V Land bore the responsibility of paying them at closing. Yes, the purchase 

price of the properties would have been used to first pay off those mortgages. However, if the 

purchase price was less than the payoff amounts, V Land would have been required to make 

up the difference. Under the contracts, V Land was obligated to provide “title to the Property 

as of the Closing Date in Buyer subject only to the Permitted Encumbrances.” Additionally, 

at closing, V Land was required to provide the title company with “[p]ayoff letters for all of 

Seller’s mortgages, liens and judgments.” Thus, it was V Land’s obligation to secure the 

releases of its obligations. We see no reason why this basic proposition should change merely 

because the “purchase price” is offset by the amount of damages owed by the seller. 

¶ 130 Lobo was required to pay V Land $8 million for the Canal property and $4 million for the 

Bloomingdale property, for a combined purchase price of $12 million. However, V Land was 

required to pay $6,367,650 in damages to Lobo as a consequence of its delay in performance 

of the contract. Thus, subtracting the damages award from the aggregate purchase price,

Lobo was required to pay $5,632,350 for the two properties. This $5,632,350 would be 

applied to paying the Lakeside mortgages, but the remaining $3,519,419.73 would be V 

Land’s responsibility. There is no reason why Lobo should be required to pay this amount, 

and the trial court erred in finding that it was. Under the law, the mortgages are V Land’s 

responsibility as the debtor, and we find no basis under the law to force Lobo to pay them in 

the way ordered by the trial court. Consequently, at closing, V Land has the obligation to 

demonstrate that these mortgages will be released or Lobo has the option of terminating the 

contracts entirely or taking the properties subject to Lakeside’s mortgages. 
Nos. 1-17-0955, 1-17-0956, 1-17-0957 (cons.) 

65 

¶ 131 We note that our analysis of the abatement issue is narrower than Lobo would like; under 

Lobo’s theory, it would be entitled to abate the entire damages award against the purchase 

price and receive clear title to the property. This we cannot agree with. As noted, we have 

determined that Lakeside’s mortgages have first priority. Accordingly, they must be paid 

before Lobo may receive clear title. We agree that it is V Land who must make the payment, 

not Lobo. But we cannot agree that Lobo should be permitted to receive the benefit of 

abatement while also taking title free of Lakeside’s mortgages.

¶ 132 This result also comports with the equities of the situation. As noted, Lakeside’s priority 

is the result of the application of conventional subrogation, which is an equitable doctrine.

LaFramboise, 149 Ill. 2d at 319 (“The right of subrogation is an equitable right and remedy 

which rests on the principle that substantial justice should be attained by placing ultimate 

responsibility for the loss upon the one against whom in good conscience it ought to fall.”); 

Bierstadt, 168 Ill. at 624 (conventional subrogation “results from an equitable right springing 

from an express agreement with the debtor, by which one advances money to pay a claim for 

the security of which there exists a lien, by which agreement he is to have an equal lien to 

that paid off”). In the case at bar, there is no dispute that Lakeside issued its mortgages on the 

properties in the full knowledge that Lobo had entered into purchase contracts with respect to 

each of the properties and that Lobo was actively litigating the purchase prices of those 

contracts. There can also be no dispute that Lakeside was aware of the possibility that the 

purchase price of each property, combined with damages and attorney fees, could be less 

than the amount of its mortgages; in its loan proposal, which Lakeside attached to its motion 

for summary judgment, Pinkerton expressly noted: 
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“The suit asks for specific performance to sell the properties for $8 and $4 

million, to get attorney’s fees and to get consequential damages relating to the loss of 

starker exchange benefits which they claim are about $1,000,000. *** 

This will probably be fought out in court for a long time. The downside to the 

bank would be that Vland would have to sell the properties for a total of $12,000,000 

in relation to our loan of $11,500,000. So we have some cushion there. They may 

have to pay some legal fees which could be covered by our cushion so the only 

wildcard would be the starker’s perceived losses. Another outcome of the suit could 

be that Steve [Panko] gives them back the Mokena property and the existing property 

remains with us.

One of the conditions of this loan will be that Chicago Title Insurance provide 

Lakeside Bank with a title policy endorsing/insuring over the Lis Pendens suit against 

the two properties. Linda Kent has confirmed that they will be willing to do so. This, 

again, minimizes our down side risk. 

In sum, we have two good properties with credit quality tenants. We have a 

borrower who has been a proven winner in retail real estate and supports the bank 

with huge deposits. While there will be litigation involved in the property, Lakeside 

Bank will have a title policy insuring its interest in the property. I think this is a loan 

we should make.” 

¶ 133 Additionally, in the loan proposal, Pinkerton identified three sources of repayment, only 

one of which was the sale of the properties:

“The primary source of repayment will come from the cash flows of the property 

by way of the rental income. Secondary sources include probable sale of property to 
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contract purchaser. Tertiary sources include outside income from guarantor and sales 

of other assets.”

¶ 134 Thus, it is clear that Lakeside issued its mortgages knowing that there was a risk that the 

sale of the properties would not cover the amount of its mortgages and took steps to consider 

how its lien would nevertheless be paid. By contrast, Lobo had no say in the issuance of the 

mortgages and did not agree to assume them or to repay them in any way; the only 

involvement it had with any indebtedness was the fact that the proceeds of the sale would be 

used to pay off V Land’s prior mortgages. Additionally, Lobo would have no reason to fear 

any later indebtedness on the properties, since the purchase contracts specifically required 

Lobo’s consent in such a situation. While we determined that the equities favored Lakeside 

with respect to Lakeside’s mortgage priority, we must conclude that equitable considerations 

favor Lobo on the question of whether Lobo must be forced to essentially pay off Lakeside’s 

mortgages. As noted, the mortgages were V Land’s responsibility, not Lobo’s. Accordingly, 

there was no reason for the trial court to refuse to set off the entire damages award against the 

purchase price, especially in a situation where Lobo would otherwise be unable to collect its 

judgment against V Land, as it claims is the case. Again, these mortgages must be paid in 

order for them to be released. But it is V Land who must make the payment. If it cannot do 

so, Lobo may terminate the contract or may take the properties subject to those mortgages. 

¶ 135 V. Remaining Issues

¶ 136 Finally, we must address several remaining issues that have not yet been addressed. First, 

Lobo claims that the trial court erred in not awarding Lobo $511,763 of attorney fees and 

costs that arose from the litigation between Lobo and Lakeside. A trial court has broad 

discretion in awarding attorney fees, and its decision will not be reversed unless the court 
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abused its discretion. 3432 West Henderson Building, LLC v. Gizynski, 2017 IL App (1st) 

160588, ¶ 40. Additionally, “[t]he trial court’s determination as to an appropriate award of 

attorney fees must be considered in light of the principle that the trial judge is permitted to 

use his own knowledge and experience to assess the time required to complete particular 

activities, and a court of review may not reverse an award of attorney fees merely because it 

may have reached a different conclusion.” Chicago Title & Trust Co. v. Chicago Title & 

Trust Co., 248 Ill. App. 3d 1065, 1074 (1993). 

¶ 137 Under the purchase contracts, “[i]n the event of litigation arising out of this Agreement, 

the prevailing party shall be entitled to court costs, out-of-pocket expenses and reasonable 

attorneys’ fees from the unsuccessful party.” In the case at bar, we cannot find that the trial 

court abused its discretion in finding that Lobo was not entitled to its attorney fees with 

respect to the litigation over the priority of the Lakeside mortgages. The trial court provided 

two reasons for its decision: that the litigation did not “arise[e] out of” the contracts and that 

Lobo was not the “prevailing party” with respect to these issues. We agree with the trial court 

that Lobo was not the “prevailing party” in the priority determination. 

¶ 138 A “ ‘prevailing party, for purposes of awarding attorney fees, is one that is successful on 

a significant issue and achieves some benefit in bringing suit.’ ” Peleton, Inc. v. McGivern’s, 

Inc., 375 Ill. App. 3d 222, 227 (2007) (quoting J.B. Esker & Sons, Inc. v. Cle-Pa’s 

Partnership, 325 Ill. App. 3d 276, 280 (2001)). Here, the issue was whether Lakeside’s loans 

had priority, and the trial court found that they did. Thus, Lobo was not the prevailing party 

on that issue. Moreover, to the extent that neither party received all the relief it sought, courts 

have found that “ ‘when the dispute involves multiple claims and both parties have won and 

lost on different claims, it may be inappropriate to find that either party is the prevailing 
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party.’ ” Peleton, 375 Ill. App. 3d 227-28 (quoting Powers v. Rockford Stop-N-Go, Inc., 326 

Ill. App. 3d 511, 515 (2001)). Thus, even if Lakeside would not be considered the prevailing 

party, neither would Lobo. Accordingly, we find no error in the trial court’s denial of 

attorney fees as to these matters.

¶ 139 Similarly, we find no error with the trial court’s denial of Lobo’s request to update the 

damages award. As noted, when a decree of specific performance does not provide complete 

relief, “the injured party is entitled to those damages that will make him whole, including 

monetary damages incidental to and caused by a delay in performance.” Mandel, 404 Ill. 

App. 3d at 706. Thus, as we found above, the trial court properly awarded Lobo damages

incurred by V Land’s delay. However, we cannot find that these damages should have 

continued accruing beyond the date in which the trial court entered its order granting specific 

performance. At that point, the issues between V Land and Lobo were resolved, and it was 

not V Land’s delay that was causing Lobo to incur any damages; if anything, it was the delay 

incurred by litigating the Lakeside issues. As we explained in our analysis above, the award 

of damages in a specific performance action is not of the same nature as in a typical breach of 

contract case but is, instead, a method of repairing the breach and placing the parties in the 

same position they would be in had the breach not occurred. The additional damages 

requested by Lobo, however, which were incurred after the issues between Lobo and V Land, 

would be more typical of the damages at law that are generally not recoverable in a specific 

performance action. See Douglas Theater Corp., 266 Ill. App. 3d at 1043. Accordingly, we 

find no error in the trial court’s denial of Lobo’s motion to update the damages award.

¶ 140 Finally, Lobo claims that the trial court erred in denying its motion for a receiver or to 

escrow the proceeds from the properties. Lobo claims that the trial court’s refusal to do so 
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caused the dissipation of millions of dollars. However, even if the income from the property 

was not used in the way that Lobo wished—namely, to pay down the loans on the 

properties—the trial court found that Lobo had not pointed to any authority requiring the 

funds to be used in this way, and we agree with this conclusion. Lobo also claims that the 

trial court could have used its statutory authority to escrow the funds pursuant to statutes 

permitting such action in the face of fraudulent activity. However, again, there has been no 

finding that any behavior by V Land or Lakeside rose to this level. Accordingly, we cannot 

find that the trial court abused its discretion by denying Lobo’s requested relief. 

¶ 141 CONCLUSION

¶ 142 For the reasons set forth above, we find the following. First, Lobo was entitled to specific 

performance of the contracts at the lowered purchase price and was also entitled to damages 

caused by V Land’s delay in performing. Second, Lobo did not terminate this right by failing 

to close on the court-set closing date, where it was presented with an objectionable pro forma

title policy on the day of the closing. Third, despite Lobo’s position as equitable owner of the 

properties, Lakeside’s mortgages had priority over Lobo’s interest based on the doctrine of 

conventional subrogation. Fourth, the extent of Lakeside’s subrogation was limited to the 

amounts of the construction loans. Fifth, the responsibility for paying off the loans lies with 

V Land, not Lobo, and thus, the purchase price should have been abated to the full extent of 

Lobo’s judgment against V Land. Sixth, the trial court did not abuse its discretion in denying 

Lobo’s requests for additional attorney fees, an update of the damages award, or the 

appointment of a receiver. 
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¶ 143 The case is remanded to the trial court for further proceedings consistent with this 

opinion, including the setting of a new closing date. 

¶ 144 Affirmed in part and reversed in part. 

¶ 145 Cause remanded.