Reverse Mortgage Funding, LLC v. Catchins
228 N.E.3d 947
Ill. App. Ct.2023Background
- In 2014 Ida M. Christopher signed a reverse mortgage; medical notes from May 29, 2014, diagnosed her with degenerative Alzheimer-type dementia and noted significant recent-memory deficits; the mortgage was executed June 27, 2014.
- Ida died July 24, 2015; Reverse Mortgage Funding filed foreclosure after her death alleging default for non‑occupancy rather than nonpayment.
- Tyrone Christopher (Ida’s son) and Tyrone Logan (administrator of Ida’s estate) pleaded an affirmative defense that Ida lacked mental capacity to execute the mortgage. They attached an affidavit from Tyrone describing encounters with the loan solicitor and his lay observations of Ida’s dementia.
- Reverse Mortgage moved to strike the affirmative defense under section 2‑615, relying on Probate Act §11a‑22 (contracts void only when party adjudicated incompetent). The trial court struck the defense and, shortly thereafter, entered judgment of foreclosure and sale; sale was later confirmed.
- The appellate court reversed the order striking the amended affirmative defense, vacated the summary‑judgment/foreclosure and the sale confirmation, and remanded so defendants may pursue the incapacity defense and, if appropriate, a rescission counterclaim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of amended affirmative defense alleging lack of capacity | Defense is legally insufficient because Probate Act voids contracts only when party was adjudicated incompetent | Pleading alleges a prior medical diagnosis and inability to appreciate the transaction; common‑law incapacity defense is available without formal adjudication | The amended affirmative defense was sufficiently pleaded; trial court erred in striking it |
| Whether defendants created a genuine issue to defeat summary judgment | Affidavit is hearsay or lay opinion lacking necessary evidentiary weight; summary judgment proper | Affidavit and other materials create triable issues; discovery required to develop the defense | Although defendants’ materials didn’t ultimately defeat summary judgment on the record, the court erred by striking the defense before allowing defendants to fully pursue it; summary judgment vacated and remanded for further proceedings |
| Whether denying discovery/amendment and entering summary judgment was proper | Procedural defaults and failure to follow Rule 191(b) support denial and entry of judgment | Section 2‑1005(g) and general pleading rules permit amendment and require a fair opportunity to litigate affirmative defenses | Court abused its obligation to permit pleadings to be amended and to allow defendants a fair chance to pursue their defense; remand required |
| Effect on judicial‑sale confirmation | Sale should be confirmed because foreclosure judgment was valid | Sale confirmation must fall if foreclosure judgment vacated | Because foreclosure and sale are vacated, the sale confirmation is also vacated and case remanded |
Key Cases Cited
- Vroegh v. J. & M. Forklift, 165 Ill. 2d 523 (1995) (describing nature of affirmative defenses)
- Int’l Ins. Co. v. Sargent & Lundy, 242 Ill. App. 3d 614 (1993) (pleading specificity for affirmative defenses)
- Farmer City State Bank v. Guingrich, 139 Ill. App. 3d 416 (1985) (affirmative defense should not be dismissed if facts raise possibility defendant will prevail)
- Outboard Marine Corp. v. Liberty Mut. Ins. Co., 154 Ill. 2d 90 (1992) (summary judgment is drastic and proper only when right is clear)
- Campbell v. Freeman, 296 Ill. 536 (1921) (capacity requirement to set aside deeds/contracts)
- Freiders v. Dayton, 61 Ill. App. 3d 873 (1978) (mental weakness plus factors like undue influence can void transactions)
- People v. Coleman, 168 Ill. 2d 509 (1995) (lay witness opinion may overcome expert testimony in some contexts)
- In re Estate of Roeseler, 287 Ill. App. 3d 1003 (1997) (family member lay observations relevant to capacity)