1010 Lake Shore Association v. Deutsche Bank National Trust Company
2015 IL 118372
| Ill. | 2016Background
- Deutsche Bank purchased a condominium unit at a judicial foreclosure sale on June 17, 2010. The condominium association (1010 Lake Shore Association) demanded unpaid common-expense assessments on March 27, 2012 and sued on May 17, 2012 for possession and unpaid assessments.
- Association claimed a lien under 765 ILCS 605/9(g)(1) for a prior owner’s unpaid assessments and moved for summary judgment, attaching an affidavit showing no payments after July 1, 2010 and an accrued balance.
- Deutsche Bank argued any pre-foreclosure lien was extinguished in the foreclosure and that, under §9(g)(3), a foreclosure-sale purchaser need only pay assessments accruing after the sale to avoid liability.
- The trial court granted summary judgment for the association for about $70,000 and possession; the appellate court affirmed, holding that §9(g)(3) requires a purchaser to pay post-sale assessments and that such payment “confirms the extinguishment” of the preexisting association lien.
- The Illinois Supreme Court granted leave, rejected Deutsche Bank’s statutory-construction and remedy arguments (remedy challenge forfeited), and affirmed: §9(g)(3) imposes an additional step—payment of post-sale assessments—to confirm extinguishment of an association lien, and Deutsche Bank failed to make those payments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Construction of 765 ILCS 605/9(g)(3): what confirms extinguishment of an association lien after foreclosure | §9(g)(3) requires a purchaser to pay assessments from the first day of the month after the sale; making those payments "confirms" extinguishment of the prior-owner lien | §9(g)(3) provides an alternative method to extinguish the lien (by paying post-sale assessments) and cannot revive a lien already extinguished in a foreclosure where the association was joined | Court held §9(g)(3) assumes the lien is extinguished in the foreclosure process and requires payment of post-sale assessments as an additional step to "confirm" that extinguishment; Deutsche Bank did not pay and therefore failed to confirm extinguishment |
| Interaction between Condominium Property Act §9(g)(3) and Foreclosure Law §15-1509(c) | Association: statutes can be harmonized; §9(g)(3) confirms extinguishment after foreclosure | Deutsche Bank: §15-1509(c) already extinguishes junior liens of parties joined in foreclosure; §9(g)(3) cannot revive extinguished liens | Court harmonized statutes: §15-1509(c) extinguishes liens of parties joined in foreclosure; §9(g)(3) assumes extinguishment and requires post-sale payments to confirm it; both can be read consistently |
| Liability for prior-owner unpaid assessments vs. post-sale assessments | Association: purchaser who fails to pay post-sale assessments may remain liable for the prior-owner lien | Deutsche Bank: statute sections (9(g)(4)/(5)) show legislature did not intend mortgagees to be liable for all pre-sale unpaid assessments | Court: §§9(g)(4)/(5) are consistent—the six-month rule applies to nonmortgagee purchasers; §9(g)(3) applies to all purchasers and requires payment of post-sale assessments to confirm extinguishment, so mortgagees avoid liability for pre-sale assessments only if they pay post-sale assessments |
| Appropriate remedy (forcible entry and detainer / personal judgment vs. lien foreclosure) | Association pursued possession and money judgment via forcible entry and detainer; association’s remedy upheld | Deutsche Bank: remedy was improper; association should have pursued lien foreclosure | Court found Deutsche Bank forfeited this remedy argument by not raising it below and did not rule on the merits; affirmed summary judgment for the association |
Key Cases Cited
- Lake County Grading Co. v. Village of Antioch, 2014 IL 115805 (statutory interpretation appropriate for summary judgment)
- Nationwide Financial, LP v. Pobuda, 2014 IL 116717 (de novo review of summary judgment)
- Skaperdas v. Country Casualty Insurance Co., 2015 IL 117021 (statutory-construction standard)
- Bettis v. Marsaglia, 2014 IL 117050 (legislative intent and plain-meaning analysis)
- Knolls Condominium Ass’n v. Harms, 202 Ill. 2d 450 (harmonizing related statutes)
- Brunton v. Kruger, 2015 IL 117663 (preservation-of-issues principle for appellate review)