Reverse Mortgage Solutions, Inc. v. Rahman
2017 IL App (1st) 161035
| Ill. App. Ct. | 2017Background
- Harvey and Rosalind Collins bought property in Chicago in 1961 as joint tenants. In 1979 Harvey executed a quitclaim deed purporting to convey his interest to Rosalind; the deed included a truncated legal description but listed Rosalind’s residence at 1486 E. 56th Street.
- Rosalind died in 2003; no will or probate estate was opened, and a special representative later reported no will had been filed. Harvey continued to reside at the property.
- In 2006 Harvey executed a reverse mortgage; the mortgage included a full legal description in the attached note. The mortgage later transferred to Reverse Mortgage Solutions (RMS).
- RMS filed to foreclose after Harvey’s 2011 death and sought reformation of the mortgage (wrong legal description alleged), quiet title, and equitable relief; Rahman (daughter/heir) moved to dismiss, arguing Harvey lacked title because of the 1979 quitclaim deed.
- The trial court found the 1979 deed legally sufficient and dismissed RMS’s claims under section 2-619 for failure to plead facts showing Harvey regained an interest; it denied Rahman’s Rule 137 sanctions motion. RMS appealed dismissal; Rahman cross-appealed denial of sanctions.
Issues
| Issue | Plaintiff's Argument (RMS) | Defendant's Argument (Rahman) | Held |
|---|---|---|---|
| Validity of 1979 quitclaim deed description | Deed description is incomplete/ambiguous and thus void for uncertainty | Deed sufficiently describes property (aided by address and 1961 deed) and is valid | The deed is legally sufficient; not void for uncertainty |
| Whether Harvey had mortgageable interest after Rosalind’s death | Rosalind died intestate; Harvey inherited a portion and could mortgage that share | Harvey conveyed full interest in 1979 and thus lacked title to mortgage; mortgage invalid as to whole property | RMS pleaded facts that Rosalind likely died intestate and that Harvey may have inherited an interest; dismissal was erroneous and remand for discovery required |
| Effect of mortgage purporting to encumber more than mortgagor owned | Mortgage remains valid to extent of mortgagor’s actual interest; cotenant may mortgage own share | Mortgage invalid to the extent it purported to encumber whole property | Court held cotenant-mortgage rules apply; mortgage could encumber Harvey’s inherited share even if not whole estate |
| Rule 137 sanctions against RMS | Not applicable; pleadings were defensible and not frivolous | RMS filed meritless, vexatious pleadings warranting sanctions | Trial court did not abuse discretion in denying sanctions; denial affirmed |
Key Cases Cited
- Brunotte v. DeWitt, 360 Ill. 518 (1935) (description in deed is sufficient if a competent surveyor can identify the property; extrinsic evidence may aid uncertain descriptions)
- Cadle Co. II v. Stauffenberg, 221 Ill. App. 3d 267 (1991) (a cotenant may mortgage his or her interest; mortgage binds only the mortgagor’s actual interest)
- South Side Bank & Trust Co. v. Sherlock Homes, Inc., 6 Ill. App. 2d 138 (1955) (a mortgage purporting to grant a greater estate than mortgagor owned is void only as to the excess)
- Evanston Ins. Co. v. Riseborough, 2014 IL 114271 (2014) (de novo review applies to section 2-619 dismissals)
- Lake Environmental, Inc. v. Arnold, 2015 IL 118110 (2015) (abuse-of-discretion standard for reviewing denial of Rule 137 sanctions; Rule 137 must be strictly construed)