2018 IL App (1st) 172535
Ill. App. Ct.2018Background
- Credit Union 1 filed a foreclosure complaint (Feb 26, 2014) against Yolanda Carrasco for mortgage defaults beginning Feb 2011; mortgage contained Paragraph 22 requiring lender to give a written acceleration notice at least 30 days before acceleration.
- Carrasco answered and asserted affirmative defenses; plaintiff moved to strike and the defenses were dismissed without prejudice; Carrasco later responded to plaintiff’s summary-judgment motion denying receipt of an acceleration notice and submitted a sworn certification to that effect.
- Plaintiff sought summary judgment and submitted, in its reply, copies of a “NOTICE OF INTENT TO ACCELERATE” (Sept. 18, 2013) and a “GRACE PERIOD NOTICE” (Sept. 20, 2013); no affidavit or proof of mailing/envelope/postage for the acceleration notice was submitted.
- The trial court granted plaintiff’s summary-judgment motion, entered a judgment of foreclosure and sale, the property was sold, and the court approved the report of sale and entered a deficiency judgment and possession order.
- On appeal Carrasco argued plaintiff never established mailing of the required acceleration notice (a contractual condition precedent); the appellate court found a genuine issue of material fact because plaintiff failed to present proof entitling it to the presumption of mailing/receipt.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff proved it sent the Paragraph 22 acceleration notice required by the mortgage | The only relevant inquiry is whether the notice was mailed; copies of the notice and a grace-period letter show mailing and address accuracy | Carrasco swore she never received an acceleration notice; without proof of mailing, the presumption of receipt is unrebutted and creates a factual dispute | Reversed: plaintiff failed to present proof (affidavit, envelope, postage, or mailing certificate) to invoke the presumption of mailing/receipt, so a question of fact exists and summary judgment was improper |
| Whether an acceleration notice is a condition precedent to foreclosure | Plaintiff did not dispute on appeal that sending the notice is a condition precedent | Carrasco argued lack of the required condition precedent bars foreclosure | Held that the mortgage’s acceleration clause is a contractual condition precedent; strict compliance required before suing to foreclose |
| Whether receiving a separate grace-period notice establishes mailing of the acceleration notice | Plaintiff argued receipt of the grace-period notice (sent to same address) supports presumption of mailing | Carrasco argued receipt of one notice does not prove mailing of a different notice sent on a different date | Court held the grace-period notice receipt is insufficient to prove mailing of the acceleration notice; dates differed and mailing proof was absent |
| Whether the order approving the sale should stand given the notice dispute | Plaintiff relied on the foreclosure judgment and sale approval | Carrasco argued sale approval was improper while a material fact (mailing of required notice) remained unresolved | Court reversed the sale approval too, reasoning the court cannot confirm a sale where lender may have failed to comply with mortgage notice requirements |
Key Cases Cited
- Home Insurance Co. v. Cincinnati Insurance Co., 213 Ill. 2d 307 (explaining standard for summary judgment review)
- Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90 (summary judgment is a drastic remedy and reviewed de novo)
- Celotex Corp. v. Catrett, 477 U.S. 317 (movant may meet summary-judgment burden by showing absence of evidence for nonmovant)
- Tabor & Co. v. Gorenz, 43 Ill. App. 3d 124 (presumption that properly addressed, stamped, mailed letter was received; presumption requires proof of envelope/postage/deposit and is rebuttable)