2018 IL App (1st) 181323
Ill. App. Ct.2018Background
- In 2009 Amcore filed to foreclose on a 400‑acre Barrington Hills horse farm owned/operated by the Cannons and related LLCs; defendants pleaded multiple affirmative defenses including economic duress and TILA violations.
- Amcore’s loan interest passed to BMO Harris and then to the Forest Preserve District, which became plaintiff and was the high bidder at the foreclosure sale; a receiver had been appointed in 2010.
- This litigation produced prior appeals: the appellate court reversed an early summary‑judgment foreclosure (finding factual questions on duress and TILA), then vacated an order naming the Forest Preserve mortgagee in possession for lack of an evidentiary hearing.
- On remand the trial court held an evidentiary hearing and concluded the 400‑acre property is agricultural (nonresidential), the mortgage authorizes possession, defendants’ affirmative defenses lack persuasive evidentiary support, and the Forest Preserve has a reasonable probability of prevailing.
- The trial court reinstated the 2010 receivership (appointing a professional receiver) and denied reinstatement of the Forest Preserve’s earlier mortgagee‑in‑possession order; the Cannons appealed the receivership appointment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the property is "residential real estate" under the Foreclosure Law | Forest Preserve: property is agricultural/nonresidential (predominant use breeding, feeding, hay, numerous barns, staff houses) | Cannons: portions used as primary residence; zoning and covenants restrict nonresidential use | Court: property is a single agricultural tract >40 acres and thus nonresidential (finding supported by evidence) |
| Whether a mortgagee/receiver may be appointed during pendency | Forest Preserve: mortgage authorizes possession and evidence shows a reasonable probability of prevailing on merits | Cannons: prior appellate rulings left factual questions about mortgage validity; appointment premature | Court: after evidentiary hearing, mortgage authorizes possession and Forest Preserve has reasonable probability of success; appointment of receiver affirmed |
| Applicability of TILA to defendants’ claims | Forest Preserve: loan borrowers (per loan documents) were corporate entities, so TILA (consumer credit) does not apply | Cannons: borrower’s purpose (residential use) could make loan consumer credit; prior appeal found question of fact | Court: trial court found borrowers were entities and TILA defense fails as matter of law; this basis is not inconsistent with prior appellate guidance |
| Standard of review for appointment after evidentiary hearing | Forest Preserve: de novo on ultimate legal question but defer to trial court factual findings | Cannons: urged de novo review | Held: factual findings reviewed for manifest weight; ultimate decision (appropriateness of receiver) reviewed de novo; trial court’s factual findings sustained |
Key Cases Cited
- Bank of America, N.A. v. 108 N. State Retail LLC, 401 Ill. App. 3d 158 (Ill. App. Ct. 2010) (discusses appointment of receiver and standards where evidentiary hearing occurs)
- Home Ins. Co. v. Cincinnati Ins. Co., 213 Ill. 2d 307 (Ill. 2004) (summary judgment standard and viewing evidence in light most favorable to nonmovant)
- Uptown Fed. Sav. & Loan Ass’n v. Kotsiopoulos, 105 Ill. App. 3d 444 (Ill. App. Ct. 1982) (treatment of factual findings from hearings and standard of review)
- Tuftee v. County of Kane, 76 Ill. App. 3d 128 (Ill. App. Ct. 1979) (horses are livestock; supports characterizing equine operations as agricultural use)