Bank Financial, FSB v. Brandwein
2015 IL App (1st) 143956
Ill. App. Ct.2015Background
- 5628 N. Broadway, LLC borrowed $275,000 from Bank Financial (mortgage and promissory note signed by LLC and manager Barry Brandwein). Default led to foreclosure and judicial sale; a deficiency remained (~$73–79k later increased by interest).
- Plaintiff foreclosed in chancery, obtained appointment of a receiver, confirmed sale, then transferred the deficiency claim (Count II) to the law division to recover against Brandwein personally.
- Brandwein did not answer Count I (foreclosure) but answered Count II, asserting an affirmative defense and counterclaim for tortious interference: a bank officer allegedly told tenants to pay rent to the bank, which hindered Brandwein’s ability to collect rents and cure the loan.
- Plaintiff moved for summary judgment on Count II under 735 ILCS 5/2-1005(c), arguing it had contractual rights to require tenants to pay rent and that Brandwein produced no evidence tenants actually paid the bank or were damaged.
- At the summary-judgment hearing the court found Brandwein’s evidence ambiguous (his affidavit stated it became "difficult" to collect rent but did not show tenants paid the bank or withheld payment), granted summary judgment for plaintiff, and entered a deficiency judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether defendant raised a genuine issue of material fact on tortious interference | Bank argues there is no evidence tenants paid bank or breached lease; bank had contractual rent-collection rights | Brandwein says bank’s agent told tenants to pay bank, which interfered with landlord-tenant contract and prevented curing the loan | Held for plaintiff: no admissible evidence tenants paid bank or breached; mere difficulty collecting is insufficient |
| Whether a mortgagee may demand rents before judicial possession/receiver appointment | Bank contends mortgage granted right to require tenants pay rent directly to lender | Defendant relies on Comerica precedent that mortgagee must have actual/constructive possession (e.g., receiver) before collecting rents | Court accepts that possession requirement exists but finds defendant failed to show rents were collected or caused damage, so summary judgment still appropriate |
| Sufficiency of defendant’s affidavit/evidence to avoid summary judgment | Bank says defendant’s affidavit is conclusory and lacks proof of breach/damages | Brandwein relies on his affidavit and timeline alleging bank’s agent contacted tenants shortly after complaint filing | Held: affidavit is ambiguous and speculative; nonmoving party must present competent admissible evidence of elements of tortious interference |
| Effect of timing (acceleration/preexisting default) on alleged mitigation/damages | Bank notes the note had been accelerated and the loan balance far exceeded the small amount Brandwein claims could have been cured by rents | Defendant argues interference occurred soon after complaint and precluded curing smaller default amount | Held: opportunity to cure had expired; even if rents had been diverted they would not have cured the accelerated debt, so no bona fide factual issue affecting judgment |
Key Cases Cited
- Comerica Bank–Illinois v. Harris Bank Hinsdale, 284 Ill. App. 3d 1030 (1996) (mortgagee must have actual or constructive possession before collecting rents; assignment-of-rents enforced only with possession/receiver)
- Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90 (1992) (summary judgment standard and that it is a drastic remedy)
- Poulos v. Lutheran Social Services of Illinois, Inc., 312 Ill. App. 3d 731 (2000) (elements required to prove tortious interference with contractual relations)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (movant may meet summary judgment burden by showing absence of evidence to support nonmoving party)