Court Opinion

ID: 9712056
Source: CourtListenerOpinion
Date Created: 2023-08-26 04:45:39.282787+00
Date Added: 2024-06-11T18:23:09.565359
License: Public Domain

JUSTICE REINHARD, dissenting: I respectfully dissent from the majority’s conclusion that, by accepting prepayment of the balance defendants claimed was due on the note, defendants waived any rights under the terms of the note. No pertinent authority is cited by the majority, except cases generally expressing the waiver principle, to support this holding. In fact, it is clear from the actions of both parties that defendants, rather than intentionally waiving the right to collect all the interest they claimed was due, demanded the full 120 days’ interest which they asserted was due upon prepayment. Plaintiff paid what was demanded, albeit “under protest.” No cases are cited by the majority for the proposition that paying a debt “under protest” causes the person accepting the payment to lose any rights. Waiver principles are inapplicable to the instant case as the doctrine is properly invoked in defense against the enforcement of the contractual right claimed to be waived. Whalen v. K mart Corp. (1988), 166 Ill. App. 3d 339, 519 N.E.2d 991, cited by the majority, states that “[if a party] has intentionally relinquished a known right, either expressly or by conduct inconsistent with an intent to enforce that right, he has waived it and may not thereafter seek judicial enforcement.” (Emphasis added.) (166 Ill. App. 3d at 843, 519 N.E.2d at 994.) The underlying rationale is that “[a] party to a contract may not lull another into a false assurance that strict compliance with a contractual duty will not be required and then sue for noncompliance.” (166 Ill. App. 3d at 343, 519 N.E.2d at 994.) In the instant case, defendant has not sought enforcement of the notice provision, and I find no authority that would allow a party to offensively assert waiver to recover amounts already paid under the contract, as plaintiff seeks to do here. As I view the transaction, it appears that plaintiff expressed its desire to prepay the note and defendants, seeking to accommodate plaintiff without sacrificing the 30 days’ interest they would receive if they enforced the 30-day notice provision, offered plaintiff the option of discharging the debt immediately by including the 30 days’ interest. Therefore, defendants sent a payoff letter to plaintiff stating that an immediate prepayment would result in a total of 120 days’ interest. Plaintiff notified defendants that it objected to inclusion of the 30-day interest calculation, but, thereafter, paid the total amount demanded by defendants as a full payoff, apparently wishing to sell the property immediately. I believe the parties, in effect, modified the contract by their conduct. An existing contract may be modified with the assent of both parties (see MAJS Investment, Inc. v. Albany Bank & Trust Co. (1988), 175 Ill. App. 3d 478, 480, 529 N.E.2d 1035; 17 Am. Jur. 2d Contracts §465 (1964)), and such a modification by subsequent agreement is subject to the rules governing all contracts. (Scutt v. La Salle County Board (1981), 97 Ill. App. 3d 181, 185, 423 N.E.2d 213.) Here, defendants offered plaintiff the option of an immediate prepayment payoff which included the 30-day period of interest which defendant would have been entitled to if notice had been given as provided under the contract. Even though plaintiff objected to that amount, it paid it in full, in effect accepting defendant’s offer, in order to sell the property at that time. The modification was supported by consideration on both sides in that defendants were not required under the original contract to accept the prepayment without notice, and plaintiff was under no obligation to prepay. Thus, rather than finding a waiver against defendants, I would conclude that defendants properly received the 30 days’ interest pursuant to the contract as modified, and plaintiff has established no basis for the return of this amount. For the foregoing reasons, I would affirm the judgment of the circuit court.