VFC Partners 39 LLC v. Huntley Building Development Corporation
1:15-cv-09646
N.D. Ill.May 30, 2017Background
- Borrower (Huntley Building Development Corp. and Peter J. Konopka) executed three commercial loans (L&M, U, V) on Dec. 20, 2010, evidenced by notes and secured by mortgages and assignments recorded in Kane County; maturity was extended to June 15, 2015.
- Loans originated with First National Bank of Omaha, assigned to Summitbridge Credit Investments LLC, and on Feb. 23, 2015 assigned to Plaintiff VFC Partners 39 LLC, which perfected security interests in collateral.
- Borrower admitted in its answer that it defaulted and failed to pay the Loans when due (default as of the complaint date, Oct. 29, 2015).
- Plaintiff moved for judgment on the pleadings; Borrower admitted material allegations and did not oppose the motion.
- The court found no genuine issue of material fact, concluded Plaintiff is entitled to foreclosure and possession/ protection of collateral under Illinois law and the UCC, and granted judgment on the pleadings.
- Court directed Plaintiff to file a supplemental memorandum by June 30, 2017 specifying amounts due for each loan (principal, interest rate, unpaid interest, and expenses) with citations to complaint exhibits; a separate judgment of foreclosure and sale will be entered.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitlement to foreclosure on L&M, U, V mortgages | Plaintiff: notes, mortgages, assignments show Borrower defaulted and Plaintiff is rightful assignee entitled to foreclosure | Defendants: (admitted default; no opposing argument presented) | Court: Granted judgment on the pleadings; foreclosure judgment entered |
| Sufficiency of pleadings for foreclosure under Illinois law | Plaintiff: attached notes and mortgages to complaint as required by 735 ILCS 5/15-1504 | Defendants: no dispute | Court: Exhibits satisfy statutory requirement; no material factual dispute |
| Right to possession / claim and delivery of collateral under UCC | Plaintiff: mortgages constitute UCC security agreements; 810 ILCS 5/9-609(a) permits immediate possession after default | Defendants: no opposition | Court: Ordered protection of collateral and receiver vested with possession until indebtedness satisfied |
| Whether factual disputes preclude judgment on the pleadings | Plaintiff: no genuine issue of material fact; Borrower admitted default | Defendants: none raised | Court: No genuine disputes; Rule 12(c) judgment appropriate |
Key Cases Cited
- Brunt v. Serv. Emps. Intern. Union, 284 F.3d 715 (7th Cir. 2002) (Rule 12(c) standard and timing)
- Alexander v. City of Chicago, 994 F.2d 333 (7th Cir. 1993) (Rule 12(c) treated like summary judgment but limited to pleadings)
- N. Indiana Gun & Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d 449 (7th Cir. 1998) (pleadings include complaint, answer, and written instruments attached as exhibits)
- Scherr v. Marriott Int’l, Inc., 703 F.3d 1069 (7th Cir. 2013) (courts may take judicial notice of public-record documents)
- Union Planters Bank, N.A. v. FT Mortgage Cos., 794 N.E.2d 360 (Ill. App. Ct. 2003) (recorded mortgage lien priority principles)
- Gen. Motors Acceptance Corp. v. Stoval, 872 N.E.2d 91 (Ill. App. Ct. 2007) (UCC remedies for secured parties)