Country Club Estates Condominium Association v. Bayview Loan Servicing, LLC
2017 IL App (1st) 162459
| Ill. App. Ct. | 2017Background
- Bayview purchased a condominium at a judicial foreclosure and received a sheriff’s deed on November 21, 2014; the unit had nearly $14,000 in pre-sale unpaid assessments.
- Under 765 ILCS 605/9(g)(3), a foreclosure purchaser must pay common expense assessments beginning the first day of the month after the foreclosure sale; payment "confirms the extinguishment" of any lien for prior unpaid assessments.
- The Association demanded payment in March 2015 and sued April 27, 2015, seeking possession and roughly $18,659 in unpaid assessments (pre- and post-sale).
- On June 22, 2015 (about seven months after Bayview’s acquisition), Bayview tendered $4,771.85 representing only postsale assessments; the Association refused the partial tender.
- Bayview moved for partial summary judgment, arguing that its tender of postsale assessments extinguished the lien for presale assessments under section 9(g)(3); the trial court granted partial summary judgment for Bayview.
- The appellate court reversed, holding that extinguishment requires "prompt" payment of postsale assessments and remanded because a factual question exists whether Bayview’s seven-month delay was prompt.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether payment of postsale assessments extinguishes an association’s lien for presale assessments only if paid promptly | 1010 Lake Shore requires prompt payment; Bayview’s seven-month delay was not prompt | Section 9(g)(3)’s plain text contains no timing limit; any later tender extinguishes the lien | Payment must be "prompt" under the circumstances to extinguish the lien; material factual issue whether seven-month delay was prompt; summary judgment reversed |
| Whether 1010 Lake Shore’s promptness discussion is binding | 1010 Lake Shore’s statement is controlling and implies a timeliness requirement | The promptness discussion was dictum and should not bind or apply retroactively | Appellate court treats the 1010 Lake Shore discussion as binding and applies the promptness requirement (not retroactivity issue here) |
| Whether the statutory phrase "first day of the month after the date of the judicial foreclosure sale" sets a rigid deadline for extinguishment | Payment is expected in the month after sale and that timing supports a promptness standard | That phrase denotes when liability begins, not a strict deadline for extinguishment | Phrase signals when obligation begins but not a strict deadline; promptness assessed case-by-case |
| Whether Bayview’s tender could be excused by reasons like delayed sale confirmation or the Association’s refusal of partial payment | Association’s refusal of partial tender would excuse delay; sale-confirmation delay can justify payment shortly after confirmation | Bayview points to potential procedural timing issues and policies discouraging unfair results | Equitable defenses may excuse delay, but no such excusing facts appear in the record here; remand to resolve factual issues |
Key Cases Cited
- 1010 Lake Shore Association v. Deutsche Bank National Trust Co., 2015 IL 118372 (Ill. 2015) (section 9(g)(3) incentivizes prompt payment and payment "confirms the extinguishment" of prior liens)
- Exelon Corp. v. Department of Revenue, 234 Ill. 2d 266 (Ill. 2009) (even supreme court dictum may be binding absent a contrary decision)
- Taddeo v. Board of Trustees of the Illinois Municipal Retirement Fund, 216 Ill. 2d 590 (Ill. 2005) (statutory interpretation is reviewed de novo)
- Allegis Realty Investors v. Novak, 223 Ill. 2d 318 (Ill. 2006) (summary judgment review is de novo)
- Federal National Mortgage Ass’n v. Bryant, 62 Ill. App. 3d 25 (Ill. App. Ct.) (foreclosure is an equitable proceeding)