Court Opinion

ID: 2652211
Source: CourtListenerOpinion
Date Created: 2014-02-04 21:45:45.016066+00
Date Added: 2024-06-11T12:57:53.294476
License: Public Domain

Illinois Official Reports

                                          Appellate Court

              Pembrook Condominium Ass’n-One v. North Shore Trust & Savings,
                                2013 IL App (2d) 130288

Appellate Court              PEMBROOK CONDOMINIUM ASSOCIATION-ONE, Plaintiff-
Caption                      Appellant, v. NORTH SHORE TRUST AND SAVINGS, Defendant-
                             Appellee (Jeffrey Powell, Betty Jo Powell, and Unknown Occupants,
                             Defendants).

District & No.               Second District
                             Docket No. 2-13-0288

Filed                        December 17, 2013

Held                         The trial court’s judgment the motion of defendant mortgagee to
(Note: This syllabus         dismiss plaintiff condominium association’s complaint in forcible
constitutes no part of the   entry and detainer seeking possession of a condominium unit and
opinion of the court but     overdue condominium association fees incurred by the unit’s owner
has been prepared by the     before the mortgagee foreclosed its first mortgage and purchased the
Reporter of Decisions        unit at a sheriff’s sale was upheld on appeal, notwithstanding the
for the convenience of       association’s contention that the trial court erred in holding that
the reader.)                 plaintiff’s lien was unenforceable, since plaintiff was not entitled to
                             recover any assessments that came due before April 2012, when the
                             deed conveying the unit to defendant mortgagee following
                             confirmation of the foreclosure sale was recorded and conveyed
                             possession to the mortgagee, and pursuant to section 9(g)(3) of the
                             Condominium Property Act, the payments defendant mortgagee made
                             to the association barred recovery of the alleged lien.

Decision Under               Appeal from the Circuit Court of Lake County, No. 12-LM-2638; the
Review                       Hon. Michael B. Betar, Judge, presiding.

Judgment                     Affirmed.
     Counsel on               Steven P. Bloomberg and Adam K. Beattie, both of Chuhak & Tecson,
     Appeal                   P.C., of Chicago, for appellant.

                              Thaddeus M. Bond, Jr., of Law Office of Thaddeus Bond, Jr. &
                              Associates, of Waukegan, for appellee.

     Panel                    PRESIDING JUSTICE BURKE delivered the judgment of the court,
                              with opinion.
                              Justices McLaren and Schostok concurred in the judgment and
                              opinion.

                                              OPINION

¶1         Plaintiff, Pembrook Condominium Association-One, appeals a judgment granting in part
       the motion of defendant North Shore Trust & Savings (North Shore) to dismiss plaintiff’s
       complaint (see 735 ILCS 5/2-619(a)(9) (West 2012)) in forcible entry and detainer (see 735
       ILCS 5/9-101 et seq. (West 2012)). The complaint sought possession of a condominium unit
       and the collection of overdue condominium association charges that the owner had incurred
       before North Shore foreclosed its first mortgage and purchased the unit at a sheriff’s sale.
       Plaintiff argues that the trial court erred in holding that its lien under section 9 of the
       Condominium Property Act (Act) (765 ILCS 605/9 (West 2012)) was unenforceable. We
       affirm.
¶2         Plaintiff’s complaint, filed November 27, 2012, sought possession of a condominium unit
       in Gurnee. North Shore moved to dismiss the complaint, stating that in 2007 North Shore
       obtained a first mortgage against the property by lending to the owner, Aimee Zeit. At that
       time, no other liens had been recorded against the property. On July 26, 2011, North Shore
       filed a complaint to foreclose its mortgage, naming as defendants Zeit and “Unknown Owners
       or Parties Interested in or in Actual Possession of Said Land or Lots” (Other Defendants). On
       July 27, 2011, plaintiff recorded a claim for a lien, against Zeit, based on $1,607.55 in unpaid
       association charges. On August 2, 9, and 16, 2011, a newspaper published a notice of the
       foreclosure action, directed to the Other Defendants.
¶3         North Shore’s motion alleged further that on October 7, 2011, North Shore received a
       judgment of foreclosure finding that Zeit owed North Shore $114,582.19 in principal and
       interest. On April 13, 2012, at the sheriff’s sale, North Shore bought the property for
       $119,751.65, and the trial court confirmed the sale and granted North Shore possession. On
       April 17, 2012, a deed was recorded conveying the property to North Shore. On August 30,
       2012, plaintiff recorded another claim for a lien, for $7,412.22 in association charges, for
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     March 2010 through July 2012, plus any subsequent charges. North Shore sent plaintiff checks
     for the May, June, and July 2012 association charges, but plaintiff refused them. From August
     2012 on, plaintiff accepted North Shore’s payments.
¶4        North Shore argued in part that plaintiff’s complaint was defeated by section 9(g)(3) of the
     Act (765 ILCS 605/9(g)(3) (West 2012)). Because section 9(g)(1) of the Act (765 ILCS
     605/9(g)(1) (West 2012)) is the basis for the lien, we set out the pertinent parts of both sections
     9(g)(1) and 9(g)(3). They read:
                  “(1) If any unit owner shall fail or refuse to make any payment of the common
             expenses or the amount of any unpaid fine when due, the amount thereof together with
             any interest, late charges, reasonable attorney fees incurred enforcing the covenants of
             the condominium instruments *** and costs of collections shall constitute a lien on the
             interest of the unit owner in the property prior to all other liens and encumbrances,
             recorded or unrecorded, except only *** (b) encumbrances on the interest of the unit
             owner recorded prior to the date of such failure or refusal which by law would be a lien
             thereon prior to subsequently recorded encumbrances. Any action brought to
             extinguish the lien of the association shall include the association as a party.
                  ***
                  (3) The purchaser of a condominium unit at a judicial foreclosure sale *** shall
             have the duty to pay the unit’s proportionate share of the common expenses for the unit
             assessed from and after the first day of the month after the date of the judicial
             foreclosure sale ***. Such payment confirms the extinguishment of any lien created
             pursuant to paragraph (1) *** of this subsection (g) by virtue of the failure or refusal of
             a prior unit owner to make payment of common expenses, where the judicial
             foreclosure sale has been confirmed by order of the court ***.” 765 ILCS
             605/9(g)(1)(b), (g)(3) (West 2012).
     According to North Shore, plaintiff’s acceptance of its checks for association charges, after the
     trial court had confirmed the foreclosure sale, confirmed the extinguishment of any lien that
     plaintiff had had before April 13, 2012. North Shore also argued generally that nothing enabled
     plaintiff to obtain from North Shore charges that had been owing before the foreclosure was
     complete–and thus before North Shore had obtained either possession of or title to the
     property.
¶5        Further, North Shore contended, plaintiff’s action was defeated by article 6.10 of the
     condominium declaration. For clarity, we quote both paragraphs 1 and 10 of article 6:
                  “6.01 *** The Developer, for each Unit Ownership hereby covenants, and each
             Owner of a Unit Ownership by acceptance of a deed therefor *** hereby agrees to pay
             to the Residential Association such assessments or other charges or payments as are
             levied pursuant to *** this Declaration. Such assessments, *** together with interest
             thereon and costs of collection, if any, as herein provided, shall be a charge on the Unit
             Ownership and shall be a continuing lien upon the Unit Ownership against which each
             such assessment is made. Each such assessment, *** together with such interests and

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             costs, shall also be the personal obligation of the Owner of such Unit Ownership at the
             time when the assessment *** becomes due.
                                                  ***
                 6.10 *** The lien on each Unit Ownership *** for assessments *** shall be
             subordinate to the lien of any first mortgage on the Unit Ownership recorded prior to
             the date that any such assessments or other charges or payments become due. Except as
             hereinafter provided, the lien provided for in Section 6.01 shall not be affected by any
             transfer of title to the Unit Ownership. Where title to the Unit Ownership is transferred
             pursuant to a decree of foreclosure ***, such transfer of title shall to the extent
             permitted by law extinguish the lien for any assessments or other charges or payments
             under Section 6.01 which became due prior to (i) the date of the transfer of title or (ii)
             the date on which the transferee comes into possession of the Dwelling Unit, whichever
             occurs first.”
     North Shore asserted that section 6.10 barred the recovery from North Shore of association
     charges that became due before North Shore obtained possession on April 13, 2012.
¶6       Defendants Jeffrey and Betty Jo Powell filed an appearance.1 Plaintiff responded to North
     Shore’s motion as follows. Under section 9(g)(1) of the Act, and the declaration, a lien for
     overdue assessments accrued the instant that the assessments became due; the lien need not
     have been recorded separately. Under section 9(g)(1), because North Shore had not named
     plaintiff as a defendant in the foreclosure action, that action could not have eliminated
     plaintiff’s lien. Further, plaintiff’s acceptance of North Shore’s payments of association
     charges from August 2012 on did not extinguish its lien, because North Shore was legally
     obligated to make these payments and plaintiff had the duty to collect them (see 765 ILCS
     605/18.4 (West 2012)). Also, section 6.10 of the declaration did not defeat plaintiff’s lien,
     because it stated that the lien could be extinguished only “to the extent permitted by law,” and
     because plaintiff had not been named in North Shore’s action, the law did not permit the
     judgment there to extinguish plaintiff’s lien.
¶7       In reply, North Shore argued as follows. No authority enables a condominium association
     to enforce, against a foreclosing lender, a lien that arose before the completion of a foreclosure
     and a confirmed sheriff’s sale. (North Shore’s reply appears to have conceded that plaintiff was
     not named as a defendant in North Shore’s foreclosure action.) Further, North Shore argued, it
     recorded its lien in 2007, before plaintiff’s lien arose; plaintiff could bring a separate
     foreclosure action, but its lien did not have priority over North Shore’s lien. Finally, North
     Shore reiterated that plaintiff’s acceptance of North Shore’s payments of association charges
     that had accrued after North Shore’s foreclosure action was complete “confirm[ed] the
     extinguishment of any lien” (765 ILCS 605/9(g)(3) (West 2012)) that plaintiff had had against
     the property.
¶8       The trial court dismissed plaintiff’s claims for assessments that had accrued before North
     Shore obtained either possession of or title to the property. The court did not dismiss the claim
     for “the May-July assessment amount.” The court made the order immediately appealable (see

        1
         The record does not disclose the Powells’ relationship to the property.
                                                   -4-
       Ill. S. Ct. R. 304(a) (eff. Feb. 26, 2010)). Plaintiff timely appealed. Plaintiff argues that the trial
       court erred in holding that it could not enforce its lien for assessments that had accrued before
       North Shore acquired either possession of or title to the property. As this appeal involves
       questions of law raised in a motion to dismiss under section 2-619 of the Code of Civil
       Procedure (735 ILCS 5/2-619 (West 2010)), our review is de novo. See Van Meter v. Darien
       Park District, 207 Ill. 2d 359, 368 (2003).
¶9          We affirm. We hold that (1) under case authority, plaintiff may not recover from North
       Shore any assessments that came due before April 2012; and (2) under section 9(g)(3) of the
       Act, North Shore’s payments of association charges that came due after it obtained title to the
       property barred plaintiff from recovery based on the alleged lien. As we deem either of these
       grounds sufficient to resolve this appeal, we do not address North Shore’s arguments that the
       condominium declaration also bars recovery and that the foreclosure judgment, by itself,
       extinguished plaintiff’s lien.
¶ 10        We note again that the trial court denied plaintiff recovery only as to any lien that was
       created before North Shore obtained title to the property. Thus, this appeal concerns any lien
       that plaintiff had as a result of Zeit’s nonpayment of charges that came due no later than April
       2012.
¶ 11        We turn first to the case law that defeats plaintiff’s appeal. In Newport Condominium Ass’n
       v. Talman Home Federal Savings & Loan Ass’n of Chicago, 188 Ill. App. 3d 1054 (1988), the
       plaintiff (association) obtained a judgment foreclosing its lien on a condominium unit and
       holding that the defendant mortgage lender (Talman) was liable for past-due association
       charges for a period that included between when Talman received a certificate of purchase at a
       sheriff’s sale and when Talman received a deed conveying title to the unit. Id. at 1055-56. On
       appeal, Talman contended that it could not be liable for the charges that became due during this
       interval. The appellate court held that, although the association had had a valid lien on the unit,
       it could not enforce it against Talman for the period in dispute. Id. at 1059-60.
¶ 12        The appellate court first summarized the following pertinent facts. Talman held a first
       mortgage, based on its loan to the unit owner, Thompson. On March 12, 1982, Talman filed an
       action to foreclose the mortgage, naming the association as a party. At that time, the
       association also had a lien against the unit for past-due assessments. Id. at 1056. On November
       9, 1982, the trial court in Talman’s action entered a judgment of foreclosure, holding that
       Talman had a first lien and that the association had a subordinate lien. Id.2 On January 25,
       1983, at the sheriff’s sale, Talman bid successfully for the property and received a certificate of
       purchase. However, owing to complications involving Thompson’s bankruptcy and his
       abandonment of the unit as the property of his estate, it was not until May 29, 1985, that
       Talman received a sheriff’s deed to the unit. Id. On June 25, 1985, the association filed an
       action to foreclose its lien, asserting that Talman was liable for assessments that had come due
       on or after July 25, 1983, which was the expiration of the redemption period. The trial court
       held that Talman was liable for these assessments, including those that had come due between

           2
           Thus, although the opinion does not specify when the mortgage was recorded, we infer that
       Talman did so before Thompson missed any association charges.
                                                      -5-
       when Talman received the certificate of purchase and when it received the sheriff’s deed. The
       trial court reasoned that the certificate of purchase had given Talman “constructive title” and
       thus had made Talman liable for those assessments. Id. at 1057.
¶ 13        On appeal, Talman conceded that the association had a valid subordinate lien on the unit
       and that Talman was liable for all the assessments that came due after it received the sheriff’s
       deed. However, Talman contended that it was not liable for the assessments that had come due
       after it received the certificate of purchase but before it obtained the sheriff’s deed. The
       appellate court agreed. The court held that the certificate of purchase did not convey title in the
       unit to Talman, because, under long-standing Illinois law, title had remained with Thompson
       until the sheriff’s deed conveyed it to Talman. Id. at 1059. For this reason, the association
       could not enforce its lien against Talman insofar as it sought to recover charges that had come
       due before Talman obtained title. “[B]ecause the obligation to pay condominium assessments
       is a covenant that runs with the land and is binding only upon title holders [citation], we
       conclude that Talman is not liable for the assessments which accrued during the period from
       July 25, 1983 (expiration of the redemption period), to May 29, 1985 (date Talman exchanged
       the certificate for the deed).” Id. at 1059-60; see also Board of Directors of Olde Salem
       Homeowners’ Ass’n v. Secretary of Veterans Affairs, 226 Ill. App. 3d 281, 287 (1992) (citing
       Newport, court held that assignee of mortgage lender that had obtained foreclosure judgment
       was not liable to condominium association, which was not named in foreclosure judgment, for
       association charges that had come due before assignee obtained sheriff’s deed conveying title
       to unit).
¶ 14        Although neither party cites Newport, it disposes of this appeal. Even if plaintiff’s lien
       survived the foreclosure judgment in favor of North Shore, it could not be enforced against
       North Shore to the extent that it was based on association charges that came due before North
       Shore obtained title to the property. (Of course, the lien could not be enforced at all against the
       other defendants in this case, as none of them obtained title at all.) Thus, the judgment must be
       affirmed.
¶ 15        We next hold that the judgment must be affirmed for a second reason: as North Shore
       argues, under section 9(g)(3) of the Act, its payment of association charges that came due from
       May 2012 on defeats plaintiff’s attempt to enforce its lien for the period in dispute. As noted
       earlier, under section 9(g)(3), the purchaser of a condominium unit at a judicial foreclosure
       sale must pay the charges that are “assessed from and after the first day of the month after the
       date of the judicial foreclosure sale,” and, if the trial court has confirmed the sale, the payment
       “confirms the extinguishment of any lien” created under section 9(g)(1) by the failure of the
       previous unit owner to pay the assessments that came due earlier. 765 ILCS 605/9(g)(3) (West
       2012).
¶ 16        Here, North Shore paid not only the charges that came due after July 2012 but also those
       that were “assessed from and after the first day of the month after the date of the judicial
       foreclosure sale,” i.e., from and after May 1, 2012. (Plaintiff refused the tender, but North
       Shore did all that it could to pay the charges.) The trial court had previously confirmed the
       judicial foreclosure sale. Plaintiff contends that section 9(g)(3) was not triggered because
       North Shore did not tender its payment of postforeclosure-sale association charges until June
                                                    -6-
       18, 2012. Plaintiff asserts that this fact shows that North Shore did not “pay the unit’s
       proportionate share of the common expenses for the unit assessed from and after the first day
       of the month after the date of the judicial foreclosure sale” (765 ILCS 605/9(g)(3) (West
       2012)), i.e., May 1, 2012. Plaintiff overlooks that, on June 18, 2012, North Shore tendered
       plaintiff a check for $589.64, the amount of the May and June association charges for the
       foreclosed-upon unit. (The check’s “memo” entry so states.) Thus, although the check was
       tendered in June, it covered charges due on May 1, 2012.
¶ 17       We must apply the statute according to its plain meaning. See Wells v. Board of Trustees of
       the Illinois Municipal Retirement Fund, 361 Ill. App. 3d 716, 722 (2005). We agree with North
       Shore that its payment of the postforeclosure-sale assessments extinguished any lien that
       plaintiff had had based on Zeit’s failure to pay the assessments that came due before the
       foreclosure sale. To hold that plaintiff’s lien survived the payments would contradict the plain
       and necessary implication of section 9(g)(3). If the payments extinguished the lien that had
       been created under section 9(g)(1), then plaintiff cannot enforce that lien.
¶ 18       Plaintiff contends that, because it was not named as a defendant in North Shore’s
       foreclosure action, section 9(g)(1) prevents that action from extinguishing its lien. However, as
       North Shore notes, plaintiff was not a necessary party to the foreclosure action, and plaintiff’s
       lien was not of record when North Shore filed the action. Plaintiff’s assertion that section
       9(g)(1) prevented the foreclosure action from extinguishing its lien is beside the point:
       irrespective of section 9(g)(1), the payment of the association charges meant that, under
       section 9(g)(3), the lien was no longer in effect. For us to hold otherwise would read section
       9(g)(3) out of the Act.
¶ 19       For the foregoing reasons, the judgment of the circuit court of Lake County is affirmed.

¶ 20      Affirmed.

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