V&T Investment Corp. v. West Columbia Condominium Ass'n
105 N.E.3d 889
Ill. App. Ct.2018Background
- V&T purchased a condominium unit at a judicial foreclosure sale (sale Oct 2013; sale confirmed Dec 16, 2013; deed issued Dec 31, 2013) and began paying assessments in Feb 2014.
- After requesting a paid-assessment letter in June 2014, V&T was billed $7,803.97, which it paid under protest and then sued to recover.
- West Columbia relied on 765 ILCS 605/9(g)(1), (3), and (4): asserting a preexisting lien, that post-foreclosure assessments were due from the month after the sale (Nov 2013), and that purchaser must pay up to six months of prior unpaid assessments preceding a collection action.
- Trial court ruled for West Columbia without written findings; appellate record contained stipulations, ledgers, and testimony that the association had possession and rented the unit after obtaining judgment against the prior owner. The association collected substantial rent while in possession.
- The appellate court considered (1) whether V&T’s Feb 6, 2014 payment extinguished the §9(g)(1) lien; (2) whether §9(g)(4) required V&T to pay six months of prior assessments; (3) whether attorney fees could be charged to V&T; and (4) breach of fiduciary duty claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether purchaser’s payment extinguished the §9(g)(1) lien | Payment on Feb 6, 2014 was timely because assessments are due the month after confirmation/deed (Jan 2014) | Assessments became due the month after the judicial foreclosure sale (Nov 2013); V&T’s payment was late | Payment was "prompt under the circumstances" (made shortly after confirmation) and extinguished the §9(g)(1) lien, but purchaser nonetheless owed assessments for Nov–Dec 2013 |
| Whether purchaser must pay six months of prior unpaid assessments under §9(g)(4) | V&T argued outstanding assessments were paid during prior collection action (via rents) so §9(g)(4) obligation was erased | West Columbia contended unpaid assessments for the six months preceding the 2009 action remained unpaid and collectible from purchaser | §9(g)(4) applies; but factual dispute whether outstanding assessments were paid must be resolved — appellate court found the record showed rents exceeded the prior judgment, so purchaser was not liable for those six months |
| Whether attorney fees from the prior owner’s enforcement action are collectible from the purchaser | V&T: prior §9(g)(1) lien was extinguished by its prompt payment; §9(g)(4) does not authorize recovery of prior attorney fees from purchaser | West Columbia: notice of sale allows collection of assessments and legal fees per §9(g)(5) | Attorney fees tied to enforcement against the prior owner are not recoverable from the purchaser once the §9(g)(1) lien was extinguished; purchaser reimbursable for fees charged in the demand letter |
| Breach of fiduciary duty claim | V&T alleged West Columbia improperly demanded/collected amounts it knew were not owed | West Columbia argued charges were lawful under the Act; evidence insufficient to show a breach | Breach claim not proven: plaintiff produced only conclusory assertions and lacked evidentiary support; no fiduciary breach found |
Key Cases Cited
- 1010 Lake Shore Ass’n v. Deutsche Bank Nat’l Trust Co., 2015 IL 118372 (interpreting §9(g)(3) and effect of purchaser payments in extinguishing association lien)
- Household Bank, FSB v. Lewis, 229 Ill. 2d 173 (2008) (general rule on purchaser liability for post-foreclosure assessments)
- Newport Condominium Ass’n v. Talman Home Fed. Sav. & Loan Ass’n of Chicago, 188 Ill. App. 3d 1054 (1989) (assessments and liability during redemption/sheriff’s deed contexts)
- Board of Directors of 175 E. Delaware Place Homeowners Ass’n v. Hinojosa, 287 Ill. App. 3d 886 (1997) (statutory nature of condominium authority/actions)
- Eychaner v. Gross, 202 Ill. 2d 228 (2002) (standard of review for factual findings)