Andersonville South Condominium Association v. Federal National Mortgage Association
2017 IL App (1st) 161875
Ill. App. Ct.2018Background
- Fannie Mae purchased Unit 2 at 1315 W. Winnemac Ave. at a judicial foreclosure sale on July 21, 2015.
- Andersonville South Condominium Ass'n sued Fannie Mae in forcible entry and detainer (Apr 2016) seeking possession and $63,513.33 in damages for unpaid assessments, late fees, and unit repair costs.
- A trial was scheduled for June 1, 2016. Fannie Mae sought continuances after serving discovery (May 23, 2016) but failed to appear to present its written emergency motion and orally renewed the request on the trial date.
- The trial court denied continuances, found Fannie Mae had been dilatory, and proceeded to a bench trial where the association’s treasurer testified and the association admitted ledgers and its declaration/bylaws.
- The court awarded possession to Fannie Mae but entered judgment for the association for $68,231.45 (including $43,832.65 in late charges and $8,973.57 in repair/renovation costs). Fannie Mae appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trial court abused discretion in denying continuance | Association: trial was properly set; defendant was dilatory | Fannie Mae: needed discovery responses served May 23 to prepare; lack of material evidence | Denial affirmed — court found Fannie Mae lacked diligence and failed Rule 231(a)/§2-1007 requirements |
| Whether preforeclosure late charges (4% monthly) are recoverable | Association: late charges are part of statutory lien under §9(g)(3) and recoverable per 1010 Lake Shore | Fannie Mae: cumulative late charges are punitive/unenforceable penalty | Held recoverable — 1010 Lake Shore controls; Fannie Mae failed to extinguish lien by paying post-sale assessments |
| Whether the late-charge rate/compounding made charge an unenforceable penalty | Association: 4% monthly is reasonable and supported by bylaws/ledger | Fannie Mae: charges exceed assessments (over 1.5x) and are punitive/compound unfairly (compared to Hidden Grove) | Held not a penalty — 4% is lower than rates previously deemed acceptable and facts differ from Hidden Grove; award supported by evidence |
| Whether unit repair/renovation costs are recoverable | Association: costs were incurred to mitigate damages by refurbishing to rent; rental income offset delinquent assessments | Fannie Mae: repairs are not "common expenses" and association assumed risk; would have sold or repaired itself | Held recoverable as mitigation — trial evidence showed repairs enabled rental income used to offset delinquencies; award not against manifest weight of evidence |
Key Cases Cited
- 1010 Lake Shore Ass’n v. Deutsche Bank Nat. Trust Co., 2015 IL 118372 (Ill. 2015) (foreclosure purchaser’s failure to pay post-sale assessments leaves association’s presale-assessment lien intact)
- Hidden Grove Condominium Ass’n v. Crooks, 318 Ill. App. 3d 945 (Ill. App. Ct. 2000) (compounded/unreasonable late fees can be an unenforceable penalty)
- Lake Hinsdale Village Condominium Ass’n v. Dep’t of Pub. Aid, 298 Ill. App. 3d 192 (Ill. App. Ct. 1998) (discusses lien priority; inapplicable to mitigation/repair-cost dispute here)