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                                    Appellate Court                         Date: 2016.02.23 08:35:56
                                                                            -06'00'




        Northbrook Bank & Trust Co. v. 2120 Division LLC, 2015 IL App (1st) 133426



Appellate Court        NORTHBROOK BANK AND TRUST COMPANY, Plaintiff-
Caption                Appellee, v. 2120 DIVISION LLC, an Illinois Limited Liability
                       Company, 1353 SEDGWICK LLC, an Illinois Limited Liability
                       Company, OLDTOWN MANAGEMENT LLC, an Illinois Limited
                       Liability Company, and ALEX BOLTIN, Defendants-Appellants.



District & No.         First District, Fourth Division
                       Docket No. 1-13-3426



Filed                  December 3, 2015



Decision Under         Appeal from the Circuit Court of Cook County, No. 10-CH-49709; the
Review                 Hon. John H. Ehrlich, Judge, presiding.



Judgment               Affirmed.



Counsel on             Daniel J. Voelker and Olga S. Dmytriyeva, both of Chicago, for
Appeal                 appellants.

                       Michael M. Tannen and Ted D. Hartman, both of Tannen Law Group,
                       P.C., of Chicago, for appellee.
     Panel                     PRESIDING JUSTICE McBRIDE delivered the judgment of the
                               court, with opinion.
                               Justices Howse and Ellis concurred in the judgment and opinion.




                                                 OPINION

¶1         This is an appeal from the foreclosure of separate mortgage loans taken in 2007 and 2008
       by three limited liability companies and personally guaranteed by Alex Boltin. After judicial
       sales netted less than the mortgage debts, the trial judge confirmed the sales and entered joint
       and several deficiency judgments against the companies and Boltin for $359,193, $262,702,
       and $2,279,954, or a total of nearly $3 million. We will refer to these appellants collectively as
       the borrowers or the Boltin defendants. The party we refer to as the lender is Northbrook Bank
       & Trust Company, or Northbrook Bank, which was not the original lender. The original lender
       was Ravenswood Bank, a Chicago entity that failed in 2010 and was taken over by the Federal
       Deposit Insurance Corporation. The FDIC sold the Boltin mortgage notes and other assets to
       Northbrook Bank. The Boltin defendants contend the trial judge erred by striking their
       affirmative defenses as factually deficient and barred by a principle of banking law that when
       the FDIC or its assignees attempt to collect on a failed bank’s promissory note, the borrower or
       guarantor is estopped from relying on an unrecorded agreement with the failed bank. See
       D’Oench, Duhme & Co. v. Federal Deposit Insurance Corp., 315 U.S. 447 (1942). The second
       claim on appeal is that granting the lender’s motion for summary judgment was in error
       because the decision was based on an affidavit from a Northbrook Bank vice president who,
       according to the borrowers, had no personal knowledge of loan records created and maintained
       by Ravenswood Bank. Northbrook Bank timely filed a response brief, but the borrowers have
       not filed a reply brief.
¶2         We first consider the lender’s contentions that some of the appellate arguments are moot or
       have been forfeited or waived. The lender argues that any portion of the appeal which would
       affect the rights, titles, or interests of third-party purchasers of the subject real estate should be
       dismissed as moot because the Boltin defendants failed to obtain a Rule 305(k) order staying
       execution of the judgment before filing their notice of appeal. Ill. S. Ct. R. 305(k) (eff. July 1,
       2004). This rule provides:
                    “(k) Failure to Obtain Stay; Effect on Interests in Property. If a stay is not perfected
               within the time for filing the notice of appeal, or within any extension of time granted
               ***, the reversal or modification of the judgment does not affect the right, title, or
               interest of any person who is not a party to the action in or to any real or personal
               property that is acquired after the judgment becomes final and before the judgment is
               stayed; nor shall the reversal or modification affect any right of any person who is not a
               party to the action under or by virtue of any certificate of sale issued pursuant to a sale
               based on the judgment and before the judgment is stayed.” Ill. S. Ct. R. 305(k) (eff. July
               1, 2004).
¶3         Thus, Rule 305(k) protects a third-party buyer from the reversal or modification of a
       judgment regarding that property. Furthermore, it is well established that without a stay, an


                                                     -2-
     appeal seeking possession or ownership of specific property that has already been conveyed to
     a third party is moot. Town of Libertyville v. Moran, 179 Ill. App. 3d 880, 886, 535 N.E.2d 82,
     86 (1989).
¶4        The subject properties are in Chicago and include a ground commercial unit and first floor
     residential condominium unit in a four-unit building at 2120 West Division Street, a
     commercial unit located in a four-unit building at 1353 North Sedgwick Street, and a very
     large single-family residence situated at 331-333 West Schiller Street. At the court-ordered
     sheriff’s sale, Northbrook Bank credit bid on the four properties, meaning that it bid the
     amount it was owed for the loans, interest, and the expenses of foreclosing. See 2 Michael T.
     Madison, Jeffrey R. Dwyer & Steven W. Bender, Law of Real Estate Financing § 12:84
     (updated July 2015). It was outbid on only the Schiller property. The trial judge confirmed the
     four sales on September 23, 2013, and the Boltin defendants filed their notice of appeal within
     30 days. Because there was no stay on the enforcement of the judgment orders, the lender sold
     the Division Street residential unit to a third party on December 5, 2013; the Division Street
     commercial unit to a third party on April 8, 2014; and the Sedgwick property on December 10,
     2014.
¶5        The lender is not asking us to disregard any of the borrowers’ appellate arguments, but to
     instead curtail the effect of our ruling in accordance with Rule 305 so that we do not diminish
     the rights of the third-party purchasers. However, we need not analyze this request until it
     becomes apparent whether the appeal is successful in undoing the judgment order. We will
     return to this argument below.
¶6        The lender next contends we should limit the scope of our consideration to the only order
     listed in the borrowers’ notice of appeal, which is the order confirming the judicial sales. The
     lender argues that by failing to list the orders striking the affirmative defenses and granting
     summary judgment, the borrowers forfeited or waived review of any error in those rulings. We
     are not persuaded by this argument.
¶7        Illinois Supreme Court Rule 303(b)(2) requires a notice of appeal to “specify the judgment
     or part thereof *** appealed from and the relief sought from the reviewing court.” Ill. S. Ct. R.
     303(b)(2) (eff. Jan. 1, 2015). However, the briefs, not the notice of appeal itself, specify the
     precise points to be relied on for reversal. In re Estate of Sewart, 274 Ill. App. 3d 298, 300 n.1,
     652 N.E.2d 1154 n.1 (1995). “The notice of appeal, which is to be liberally construed, serves
     the purpose of informing the prevailing party in the trial court that the unsuccessful litigant
     seeks a review by a higher court.” Sewart, 274 Ill. App. 3d at 300 n.1, 652 N.E.2d at 1154 n.1.
     Where the notice adequately sets forth the judgment complained of and the relief sought, the
     notice is effective and the appellate court has jurisdiction to consider the issues. CitiMortgage,
     Inc. v. Bukowski, 2015 IL App (1st) 140780, ¶ 13, 26 N.E.3d 495; Taylor v. Peoples Gas Light
     & Coke Co., 275 Ill. App. 3d 655, 659, 656 N.E.2d 134, 138 (1995).
¶8        It is not necessary that the notice of appeal identify a particular order to confer jurisdiction,
     as long as the order that is identified in the notice of appeal directly relates back to the order or
     judgment sought to be reviewed. Taylor, 275 Ill. App. 3d at 659, 656 N.E.2d at 138. Stated
     another way, an appeal from a final judgment order entails review of not only the final
     judgment order, but also any interlocutory orders that were a “step in the procedural
     progression” leading to the judgment. (Internal quotation marks omitted.) Bukowski, 2015 IL
     App (1st) 140780, ¶ 13, 26 N.E.2d 495. This well-established principle is illustrated by Burtell
     v. First Charter Service Corp., 76 Ill. 2d 427, 431-36, 394 N.E.2d 380, 381-84 (1979), in

                                                   -3-
       which the court held that a notice of appeal referring only to a final judgment order was
       sufficient to confer jurisdiction to review a prior order for an accounting, because the final
       judgment was based on the accounting. In Perry v. Minor, 319 Ill. App. 3d 703, 708-09, 745
       N.E.2d 113, 118 (2001), orders barring the presentation of testimony or evidence at trial were
       directly related to the final judgment order and, thus, were reviewable based on a notice of
       appeal referencing only the final judgment order. However, in Illinois Central Gulf R.R. Co. v.
       Sankey Brothers, Inc., 78 Ill. 2d 56, 61, 398 N.E.2d 3, 5 (1979), where the notice of appeal
       listed only a summary judgment order and not an earlier order dismissing a counterclaim, the
       court had no jurisdiction to review the propriety of the dismissal. And, in Long v. Soderquist,
       126 Ill. App. 3d 1059, 1062, 467 N.E.2d 1153, 1155 (1984), a notice of appeal from a summary
       judgment order as to certain counts against certain defendants, that did not refer to an earlier
       order dismissing other counts against other defendants, did not permit the reviewing court to
       consider the dismissal.
¶9          While the instant appeal was pending, a mortgage lender’s contention that its borrower’s
       notice of appeal was defective was rejected by another panel of this First District in Bukowski,
       2015 IL App (1st) 140780, ¶ 13, 26 N.E.3d 495. The only order referenced in the notice of
       appeal in that case was an order confirming the judicial sale, and, like here, the lender
       contended that the appellate court should not review the dismissal of affirmative defenses or
       the entry of summary judgment. Bukowski, 2015 IL App (1st) 140780, ¶ 12, 26 N.E.2d 495.
       The court denied the lender’s request, because the orders dismissing the defendant’s
       affirmative defenses and entering summary judgment for the plaintiff were steps in the
       procedural progression of the foreclosure action that ultimately led to the confirmation of the
       sale. Bukowski, 2015 IL App (1st) 140780, ¶ 13, 26 N.E.2d 495. The court also noted that when
       the notice of appeal was issued (whose essential purpose is to advise the prevailing party of the
       nature of the appeal), the lender was “undoubtedly aware” that the only basis for appeal would
       be the arguments that had been presented in the trial court. Bukowski, 2015 IL App (1st)
       140780, ¶ 13, 26 N.E.2d 495.
¶ 10        We find that the precedent, and in particular, Bukowski, indicates that the orders dismissing
       the Boltin defendants’ affirmative defenses and granting summary judgment for the lender
       were steps in the procedural progression leading to the order confirming the judicial sales, and
       that by listing only the confirmation of sale order in their notice of appeal, the Boltin
       defendants encompassed review of those earlier orders. Furthermore, the lender has remarked
       on the considerable attention and time that the lender, borrowers, and trial judge spent with the
       affirmative defenses, such as the “docket for this case is 73 pages long,” motion practice on
       defects in the borrowers’ answer and three amended answers “lasted more than 600 days,” and
       that when the court eventually denied the borrowers leave to refile, the court was allowing the
       lender “at long last to move for summary judgment.” Surely then, this lender, like the lender in
       Bukowski, was aware when it received the notice of appeal that the appellants would be
       revisiting the affirmative defenses they presented in the trial court. In fact, the lender criticizes
       the opening brief on appeal as a “cut-and-paste brief, which, but for the citation of two cases, is
       word-for-word identical to motions filed in and rejected by the trial court.” The lender argues
       that although Bukowski specifically addressed the procedural progression of a mortgage
       foreclosure action, we should disregard the opinion, because the court was not asked to
       consider the current arguments about the bifurcated nature of foreclosure proceedings or to
       consider that a borrower’s grounds for setting aside a default judgment of foreclosure are


                                                     -4-
       limited by statute once the lender has filed a motion to confirm sale (see Wells Fargo Bank,
       N.A. v. McCluskey, 2013 IL 115469, ¶ 27, 999 N.E.2d 321 (indicating that prior to the filing of
       the motion to confirm sale, the borrower may seek to vacate the default judgment of
       foreclosure under the standards set forth in section 2-1301(e) of the Code of Civil Procedure
       (735 ILCS 5/2-1301(e) (West 2010)), but after the motion to confirm has been filed, the
       borrower’s arguments are limited by section 15-1508(b) of the Illinois Mortgage Foreclosure
       Law (735 ILCS 5/1508(b) (West 2010))). However, regardless of whether we describe this
       legal action as a single case, a bifurcated process, or in multiple stages, an order entered at any
       point in the proceedings could be characterized as a procedural step that culminated in the final
       judgment order. Thus, the question is not whether we can categorize the suit into distinct
       phases or when the order was entered but whether the order directly relates to the final order
       specified in the notice of appeal. In this case, the affirmative defense and summary judgment
       orders directly relate to the final judgment order specified in the notice of appeal. Therefore, it
       is appropriate for us to review the orders discussed in the appellants’ opening brief and we
       deny the lender’s motion to limit our review on the basis of the contents of the notice of appeal.
¶ 11        The lender also argues that the Boltin defendants forfeited review of the dismissal of their
       affirmative defenses, because the defenses appear in their original answer but not in their first,
       second, or third amended answers. The lender is relying on the principle that when a party files
       an amended pleading that does not restate prior allegations or incorporate by reference a prior
       pleading, then the earlier allegations are considered “abandoned and withdrawn” and the party
       has waived any objection to the trial court’s ruling on the former pleading. (Internal quotation
       marks omitted.) Foxcroft Townhome Owners Ass’n v. Hoffman Rosner Corp., 96 Ill. 2d 150,
       154, 449 N.E.2d 125, 126 (1983) (filing an amended complaint waives review of trial judge’s
       rulings on the original complaint). Repleading ensures that the opposing party and the courts
       will be aware of the points at issue. Foxcroft, 96 Ill. 2d at 154, 449 N.E.2d at 126. It is not
       considered unduly burdensome for a party to incorporate into its final pleading all the
       allegations that it wants to preserve for appellate review. Foxcroft, 96 Ill. 2d at 154, 449 N.E.2d
       at 127. In fact, the effort to replead can be quite minimal, and a simple paragraph or footnote in
       an amended pleading expressing a desire to preserve dismissed claims would be sufficient to
       preserve those issues for appellate review. Bonhomme v. St. James, 2012 IL 112393, ¶ 26 n.1,
       970 N.E.2d 1 n.1; Saunders v. Michigan Avenue National Bank, 278 Ill. App. 3d 307, 312, 662
       N.E.2d 602, 607 (1996) (finding that a footnote stating prior complaints were attached to
       preserve dismissed claims for appeal was effective).
¶ 12        We have considered the lender’s argument and the content of the borrowers’ four answers
       and find it apparent that although the amended versions do not properly separate the
       borrowers’ denials from their affirmative defenses, each amendment was an attempt to
       improve and elaborate on the prior allegations in order to factually state affirmative defenses.
       Illinois authority indicates that the failure to properly designate an affirmative defense as an
       affirmative defense is merely a technical defect which may be overlooked if the allegations set
       out the necessary elements of the defense. Capital Development Board ex rel. P.J. Gallas
       Electrical Contractors, Inc. v. G.A. Rafel & Co., 143 Ill. App. 3d 553, 557-58, 493 N.E.2d 348,
       351 (1986); 735 ILCS 5/2-603(b) (West 2010) (“each count, counterclaim, defense or reply,
       shall be separately pleaded, designated and numbered”); 735 ILCS 5/2-603(c) (West 2010)
       (“[p]leadings shall be liberally construed with a view to doing substantial justice between the
       parties”); American National Bank & Trust Co. v. Mar-K-Z Motors & Leasing Co., 11 Ill. App.


                                                    -5-
       3d 1046, 298 N.E.2d 209 (1973) (in light of principle that substantial justice between the
       parties may require the liberal construction of pleadings, part of an answer which contained the
       necessary elements of a counterclaim, other than designation as such, was treated as a
       counterclaim).
¶ 13        Accordingly, we will consider the appellants’ arguments, the first of which is whether the
       trial judge erred in striking their affirmative defenses as factually deficient and barred by the
       D’Oench doctrine. D’Oench, 315 U.S 447.
¶ 14        An affirmative defense assumes that the defendant would otherwise be liable, if the facts
       alleged by the plaintiff are true, but asserts new matter by which the plaintiff’s apparent right to
       recovery is overcome. Vroegh v. J&M Forklift, 165 Ill. 2d 523, 530, 651 N.E.2d 121, 125-26
       (1995). An affirmative defense is comprised of allegations that do not negate the essential
       elements of the plaintiff’s cause of action, but rather admit the legal sufficiency of the cause of
       action, and assert new matter by which the plaintiff’s apparent right of recovery is defeated.
       Vroegh, 165 Ill. 2d at 530, 651 N.E.2d at 125-26.
¶ 15        The facts establishing an affirmative defense must be stated in the defendant’s answer with
       the same degree of specificity that is required of a plaintiff stating a cause of action.
       International Insurance Co v. Sargent & Lundy, 242 Ill. App. 3d 614, 630, 609 N.E.2d 842,
       854 (1993). A motion to dismiss an affirmative defense pursuant to section 2-615 of the Code
       of Civil Procedure, as with all section 2-615 motions, admits all well-pled facts constituting the
       defense and attacks only the legal sufficiency of those facts. Sargent & Lundy, 242 Ill. App. 3d
       at 630, 609 N.E.2d at 854; 735 ILCS 5/2-615 (West 2010).Where the well-pled facts of an
       affirmative defense raise the possibility that the defendant will prevail, the defense should not
       be dismissed and a court of review will vacate a dismissal that was entered in error. Farmer
       City State Bank v. Guingrich, 139 Ill. App. 3d 416, 422, 487 N.E.2d 758, 762 (1985). In
       reviewing the sufficiency of an affirmative defense, we are to disregard any conclusions of fact
       or law not supported by allegations of specific fact. Hartmann Realtors v. Biffar, 2014 IL App
       (5th) 130543, ¶ 20, 13 N.E.3d 350. We review de novo an order striking an affirmative defense
       on the basis of sufficiency. Hartmann Realtors, 2014 IL App (5th) 130543, ¶ 20, 13 N.E.3d
       350.
¶ 16        In its amended verified complaint, Northbrook Bank described the creation of the
       mortgage and construction loans in 2007 and 2008 and the modifications in 2008, 2009 and
       2010 by its predecessor-in-interest, Ravenswood Bank, and the Boltin defendants, and that the
       borrowers failed to repay their debts. Northbrook Bank included supporting exhibits and
       specified how it calculated the amounts it was seeking in its lawsuit.
¶ 17        For example, with respect to the commercial unit and residential unit on Division Street,
       some of the allegations and responses were as follows:
                    “13. On or about October 30, 2007, Ravenswood Bank extended a construction
                loan to Division LLC in the original principal amount of $1,106,000.00 evidenced by a
                Mortgage Note; Modified by an Amendment to Mortgage Note and Construction Loan
                Agreement on or about October 25, 2008; and yet again modified on or about June 30,
                2009 by an Amended and Restated Mortgage Note, which increased the principal to
                $1,253,000.00 and extended the maturity date to October 25, 2010. The Mortgage
                Note; Amendment to Mortgage Note and Construction Loan Agreement; and Amended
                and Restated Mortgage Note may be collectively referred to herein as the ‘Division
                Note,’ and true and accurate copies of same are attached hereto as Exhibit A.

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                  ANSWER: Defendants deny that all of the dates are accurate, but admit the truth of
              the remaining allegations contained in Paragraph 13 of the Second Amended
              Complaint.
                  14. The Division Note, as amended, expressly provides that it is secured by, inter
              alia, the Division Mortgage, the Sedgwick Mortgage, and the Oldtown Mortgage, all as
              defined and further described below. (Exhibit A, Amended and Restated Mortgage
              Note, at pp. 2-3 ¶¶ A, I & J.
                  ANSWER: Defendants admit the truth of the allegations contained in Paragraph 14
              of the Second Amended Complaint.”
¶ 18       Next, the lender alleged that the lender fully performed its obligations under the Division
       Street contracts; however, the Boltin defendants denied the allegation and set out their
       affirmative defense:
                  “22. Northbrook Bank, by and through its predecessor-in-interest Ravenswood
              Bank, fully performed all of its obligations under the Division Loan Documents,
              including but not limited to disbursing substantial loan funds to Division LLC in
              accordance with the terms and conditions set forth in the Division Loan Documents.
                  ANSWER: Defendants deny the allegations in Paragraph 22 of the Amended
              Complaint. More specifically, Ravenswood Bank failed to perform its obligations
              under the written loan agreement by failing to timely fund the construction loan and by
              acting in a dual role as both lender and general contractor of the construction project,
              and as a result, caused the default on the loan agreements. More specifically, on several
              occasions when Defendants were not in default under the Loan, Defendants fully
              satisfied the ‘Conditions Precedent to Disbursement’ of the Construction Loan
              Agreement, dated October 30, 2007 (Construction Loan Agreement at ¶ 4, ‘Conditions
              Precedent to Disbursement,’ Exhibit “C” to Plaintiff’s Verified First Amended
              Complaint to Foreclose Mortgage and for Other Relief), but, nevertheless, Plaintiff
              failed and refused, without just reason, to fund said loan. On each of these several
              occasions, Defendants also satisfied all conditions contained in Paragraph 6,
              ‘Disbursement of the Loan’ of the same Construction Loan Agreement. These delays in
              funding caused interest to accrue on the Notes unnecessarily and resulted in
              Defendants not having sufficient loan proceeds available to complete the project and
              pay off the Loans to the banks.
                  23. As described in further detail herein, Division LLC defaulted on its obligations
              to Northbrook Bank under the Division Mortgage and Division Note when it failed to
              make a required monthly interest payment on May 25, 2010 and continuing thereafter.
                  ANSWER: [Defendants repeated their response to paragraph 22.]
                  24. As described in further detail herein, Division LLC defaulted on its obligations
              to Northbrook Bank under the Division Loan Documents when the Division Note
              matured on October 25, 2010, and Division LLC failed to pay to Northbrook Bank the
              entire outstanding principal and accrued interest.
                  ANSWER: [Defendants again repeated their response to paragraph 22.]”
¶ 19       This format of allegation and answer/repetition of paragraph 22 continued with respect to
       the other properties. According to Northbrook Bank, the Boltin defendants repeated the
       statement in paragraph 22 a total of 44 times in their third amended answer. Northbrook Bank

                                                  -7-
       moved to strike the third amended answer as deficient on facts, and after briefing and oral
       arguments, the trial judge granted the motion and did not grant further leave to amend the
       answer.
¶ 20        Now, in apparent reliance on paragraph 22 and its numerous reiterations in the third
       amended answer, the Boltin defendants contend they alleged “sufficient facts to support their
       defenses” and that if there was a need to interpret the facts or draw any inference from them,
       those interpretations and inferences should have been drawn in their favor. Although they
       listed nine affirmative defenses in their original answer (breach of duty of good faith and fair
       dealing; fraud; breach of duty to mitigate; breach of fiduciary duty; coventurer or partnership;
       statute of limitations; and waiver, estoppel, and laches), on appeal they address only the first
       defense and have, therefore, waived our review of the others. Roiser v. Cascade Mountain,
       Inc., 367 Ill. App. 3d 559, 568, 855 N.E.2d 243, 252 (2006) (appellant’s failure to provide
       reasoned argument results in waiver of appellate consideration); Ill. S. Ct. R. 341(h)(7) (eff.
       Feb. 6, 2013) (“Points not argued [in the appellant’s brief] are waived and shall not be raised in
       the reply brief, in oral argument, or on petition for rehearing.”).
¶ 21        The duties of good faith and fair dealing in performing the terms of a contract are duties
       that are implied in every contractual relationship. Bank One, Springfield v. Roscetti, 309 Ill.
       App. 3d 1048, 1059-60, 723 N.E.2d 755, 763 (1999); Prudential Insurance Co. of America v.
       McCurry, 143 Ill. App. 3d 222, 225, 492 N.E.2d 1026, 1028 (1986) (a covenant of good faith
       and fair dealing in performance is implied in every contract as a matter of law, absent an
       express disavowal). The duties of good faith and fair dealing are an implied agreement to
       refrain from doing anything which will destroy or injure the other party’s right to receive the
       fruits of the contract. Prudential Insurance Co. of America v. Van Matre, 158 Ill. App. 3d 298,
       308, 511 N.E.2d 740, 746 (1987) (citing 17A C.J.S. Contracts § 328, at 286 (1963)).
¶ 22        There are, however, no factual statements or exhibits which substantiate the conclusory
       statements that Ravenswood Bank “failed to perform its obligations,” “failed and refused ***
       to fund such loan,” and acted “in a dual role as both lender and general contractor of the
       construction project, and as a result, caused the default on the loan agreements.” Focusing on
       the first statement, there are no facts, such as the dates and dollar amounts, supporting the
       conclusion that the bank “failed to perform its obligations.” And the subsequent allegation,
       “More specifically, on several occasions *** Plaintiff failed and refused *** to fund such
       loan” does not actually provide any specifics. Even when we read paragraph 22 as a whole, it is
       unclear what the lender specifically did or failed to do in breach of its duties of good faith and
       fair dealing in the performance of its contracts with the borrowers. There is also no factual
       basis for the statement that Ravenswood Bank had “a dual role as both lender and general
       contractor of the construction project.”
¶ 23        Furthermore, the Boltin defendants cite the principle that in a section 2-615 proceeding, all
       inferences and interpretations of the facts are to be construed in favor of the non-moving party,
       but there are no facts alleged from which we might draw inferences or make interpretations.
       Because Illinois is a fact pleading jurisdiction, we must disregard conclusions of fact or law
       that are unsupported by specific factual allegations. Kilburg v. Mohiuddin, 2013 IL App (1st)
       113408, ¶ 20, 990 N.E.2d 202. Conclusions of fact or law are insufficient to state a cause of
       action regardless of whether they generally inform the defendant of the nature of the claim
       against him. Coghlan v. Beck, 2013 IL App (1st) 120891, ¶ 22, 984 N.E.2d 132.


                                                   -8-
¶ 24        The Boltin defendants also argue they “clearly spelled out” their affirmative defenses, but
       they support this argument by citing portions of their original answer to the second amended
       complaint, which is a version of their answer that they abandoned and withdrew by amending
       it (three times). Foxcroft, 96 Ill. 2d at 154, 449 N.E.2d at 126. None of the prior versions of the
       answer are at issue and none can be used to show that the trial judge erred when he dismissed
       the final version. We consider the Boltin defendants’ reliance on the abandoned version to be
       an implicit concession that the latest version lacks sufficient factual allegations to state an
       affirmative defense.
¶ 25        Furthermore, even that prior pleading lacks sufficient facts. According to that pleading,
       Boltin’s intention for the Schiller Street property was to construct a building with eight
       two-bedroom condominium units and an underground parking lot, and he went so far as to get
       approved for a $2.5 million construction loan, obtain building permits, and begin to prepare the
       building’s foundation. However, he realized he would need more land to actually complete the
       condominium project and that he would have to borrow an additional $100,000 to purchase it.
       He spoke with Eric Hubbard, who was Ravenswood Bank’s president, chief lending officer,
       and a member of its board of directors and also the owner of his own real estate management
       company. Hubbard refused to increase Boltin’s loan and said “ ‘everything would be all
       right’ ” if Boltin instead built a 6,800 square foot single-family home and retained Metro
       Home Chicago as the project’s general contractor. The Boltin defendants “could have sold or
       rented” the condominiums and were opposed to constructing a single-family home in a
       neighborhood where there were only multi-unit buildings and horse stables. The general
       contractor that Hubbard told Boltin to use, Metro Home Chicago, was owned by Roger Luri,
       who was also a real estate broker and the bank’s chief executive officer and a member of its
       board of directors. At the time, Boltin was unaware that Luri had roles at the bank and thus had
       a conflict of interest. (The pleading does not elaborate on the conflict of interest.) Luri “and
       Ravenswood Bank promised and convinced Defendants that they already had a buyer for the
       single-family home, who would immediately purchase it when construction was completed, or
       even before the completion of it, at a substantial profit to the Defendants.” However, “[d]uring
       the project, Luri, Hubbard, and Ravenswood Bank engaged in three unjustified work
       stoppages, which totaled approximately ten (10) month[s], and charged Defendants a
       commercially unreasonable fee of fifteen percent (15%) for Luri’s and Ravenswood Bank’s
       role in the project. “ Because of the accumulating interest, Ravenswood Bank was able to force
       the Boltin defendants to cross-collaterize the Schiller loan with other assets. And, then,
       “[u]pon information and belief, that conduct, and possibly other conduct, caused a breach of
       loan agreements between Ravenswood Bank and Defendants which was completely, or
       substantially, responsible for the delinquency of the loan.”
¶ 26        Although the allegations are somewhat unclear, the gist is that (1) Hubbard, in his capacity
       at Ravenswood Bank, made promises and misrepresentations which induced the Schiller
       corporation and Boltin to borrow money to build a single-family home; (2) Luri’s brokerage
       and general contracting companies overcharged for their work; and (3) Luri engaged in work
       stoppages on the Schiller construction; which entitled Ravenswood Bank to delay loan
       disbursements to Luri’s company, increase the interest debt, connect the various loans, and
       then, in some unstated way, cause the Boltin defendants to become delinquent on the loans.
       The Boltin defendants argue these allegations “clearly spelled out” that “once Boltin hired Luri
       and [his company] Metro Home Chicago (at Ravenswood’s insistence), [the bank] had


                                                    -9-
       complete control of the construction and the use of the loan proceeds for the construction.” We
       fail to see how it would be advantageous to the general contractor or lender to delay the pace of
       construction without cause and impair a borrower’s ability to make timely installment
       payments to its contractor and lender, but in any event, the specific allegations are that Luri’s
       company, not the bank, caused work stoppages which disrupted the repayments and caused the
       defaults. The pleading lacks any factual allegations indicating that the conduct of the general
       contractor should be attributed to the bank and entitle the borrowers to avoid their repayment
       obligations to the bank. Furthermore, the pleading lacks specific allegations indicating the
       borrowers satisfied the conditions precedent for loan disbursements, showing that Luri’s work
       stoppages were unjustified, and explaining how delaying the Schiller construction impaired
       not only the repayment of the Schiller loan but also the Division and Sedgwick loans. Again,
       the principle that all possible inferences and interpretations of the facts are to be drawn in favor
       of the Boltin defendants is not triggered by conclusory and incomplete allegations. Kilburg,
       2013 IL App (1st) 113408, ¶ 20, 990 N.E.2d 202. When we disregard all the conclusions of
       fact or law not supported by allegations of specific fact (Hartmann Realtors, 2014 IL App (5th)
       130543, ¶ 20, 13 N.E.3d 350), we can only conclude that this abandoned version of the answer
       does not state an affirmative defense to the bank’s allegations for foreclosure.
¶ 27        The Boltin defendants also argue that a clause in one of the 2008 loan modification
       contracts is ineffective and does not prevent them from relying on the affirmative defense of
       breach of the duties of good faith and fair dealing. That clause states, “11. Each Obligor hereby
       ratifies and confirms his or its respective obligations and liabilities *** and acknowledge that
       he or it have no defenses *** against the enforcement by Lender of their respective obligations
       and liabilities under the amended Note, the Guaranty and other Loan documents, as so
       amended.” The Boltin defendants contend that when they executed this contract, they were
       unaware of the potential for an affirmative defense to this foreclosure suit and, thus, could not
       have effectively released this defense. Given our conclusion that the Boltin defendants failed
       to factually plead an affirmative defense, this clause has no bearing on the appeal and we need
       not analyze the argument.
¶ 28        Another major obstacle facing the Boltin defendants is that even if they had set out
       sufficient facts, their affirmative defense is barred by the D’Oench doctrine. The premise of the
       affirmative defense is that, but for Hubbard’s promises (he said “ ‘everything would be all
       right’ ” if the building plans changed from an eight-flat to a single-family home and Luri’s
       company became the general contractor) and lack of disclosure (Luri was not only a general
       contractor but was also involved in the bank’s leadership), the Boltin defendants would not
       have changed the construction plans, taken the Schiller loan, and hired Luri’s company, which
       were decisions that led to the Schiller loan delinquency, cross-collateralization, and all three
       defaults. Hubbard’s alleged representations or conditions are unrecorded terms between the
       lender and the borrowers which D’Oench bars as a defense to a foreclosure action by the FDIC
       or the FDIC’s assignee.
¶ 29        The D’Oench doctrine is both a common law and statutory principle that applies to the
       FDIC and its assigns when dealing with the loans of a failed lender. Community Bank of the
       Ozarks v. Federal Deposit Insurance Corp., 984 F.2d 254 (8th Cir. 1993). According to
       Northbrook Bank, it was required to obtain the FDIC’s permission to invoke the special
       powers of the D’Oench doctrine in these proceedings and the FDIC gave its approval.



                                                    - 10 -
¶ 30       The doctrine arose from a 1942 Supreme Court decision in which the FDIC, as the receiver
       for a failed bank, brought an action against the maker of a $5,000 demand note, and the court
       held that the maker could not rely on an affirmative defense that was not apparent from the face
       of the agreement (lack of consideration). D’Oench, 315 U.S. at 456. The bank’s president and
       the maker executed the note with the understanding that it was not genuine and the bank would
       enforce only the interest terms. D’Oench, 315 U.S. at 456. The bank president wanted to have
       the $5,000 demand note in the bank’s portfolio in order to falsely inflate the bank’s assets and
       conceal its true health from bank examiners. D’Oench, 315 U.S. at 456. The court ruled that
       the FDIC was entitled to rely on the bank’s official records of its rights and obligations and to
       disregard the additional terms between the bank president and note maker. D’Oench, 315 U.S.
       447. The doctrine has expanded into a rule that protects the FIDC, as receiver of a failed bank
       or as a purchaser of its assets, from a borrower who has “ ‘lent himself to a scheme or
       arrangement’ whereby banking authorities are likely to be misled.” Beighley v. Federal
       Deposit Insurance Corp., 868 F.2d 776, 784 (5th Cir. 1989) (quoting D’Oench, 315 U.S. at
       460). The doctrine applies even when the borrower does not intend to deceive banking
       authorities. Beighley, 868 F.2d at 784.
¶ 31       Eight years after D’Oench was decided, Congress codified the doctrine in the Federal
       Deposit Insurance Act. See 12 U.S.C. § 1823(e)(1) (2012). The public policy that underlies the
       precedent and statute is “to allow federal and state examiners to rely on a bank’s records in
       evaluating the worth of the bank’s assets, to encourage prudent consideration in lending, and to
       assure proper [contemporaneous] recordation of banking acts to guard against collusive or
       erroneous reconstruction of terms.” Community Bank of the Ozarks, 984 F.2d at 256-57 (citing
       Langley v. Federal Deposit Insurance Corp., 484 U.S. 86, 91-93 (1987)).
¶ 32       Thus, defenses based on representations that are not recorded in the financial institution’s
       official documents are barred, including fraud in the inducement, misrepresentations, and oral
       modifications. Community Bank of the Ozarks, 984 F.2d at 257; Bowen v. Federal Deposit
       Insurance Corp., 915 F.2d 1013, 1016 (5th Cir. 1990) (“transactions not reflected on the
       bank’s books do not appear on the judicial radar screen either”). In Langley, for instance,
       borrowers contended their notes were procured by the bank’s misrepresentations that certain
       Louisiana property was larger than it was, included 400 mineral acres when it contained only
       75 acres, and that there were no mineral leases encumbering it, when in fact there were mineral
       leases. Langley, 484 U.S. at 89. “[T]he essence of [the borrowers’] defense against the note is
       that the bank made certain warranties regarding the land, the truthfulness of which was a
       condition to performance of their obligation to repay the loan.” Langley, 484 U.S. at 90-91.
       There was no record of these representations in the notes and personal guarantees that the
       parties executed, nor did they appear in the bank’s records or in the minutes of its board of
       directors or loan committee. Langley, 484 U.S. at 89. Accordingly, once the FDIC was
       appointed as receiver and substituted for the bank, the borrowers were not permitted to rely on
       these terms as conditions or defenses to payment of the notes. Langley, 484 U.S. at 89.
¶ 33       Similarly, here, the borrowers are arguing that certain statements were made and the
       truthfulness of those assurances is a condition to the performance of their obligation to repay
       the loans. Also, here, however, there is no indication in any bank record or other document
       cited by the borrowers that Ravenswood Bank conditioned the Schiller loan on the borrowers
       replacing the condominium project they intended with plans to construct a single-family home,
       required the borrowers to use Luri’s company as the project’s general contractor, or assured the


                                                  - 11 -
       borrowers that if they took these steps, there would be a buyer waiting to purchase the home at
       a price that was profitable to the borrowers. Although the borrowers contend these conditions
       or promises are what led to Luri’s company being in the position to cause 10 months of work
       stoppages, increased interest, amendments to the loan agreements, and ultimately the
       borrowers’ default, the borrowers may not rely on these oral statements as an affirmative
       defense to the bank’s allegations. Langley, 484 U.S. at 89.
¶ 34       The borrowers contend the D’Oench doctrine applies only to “secret” or “unwritten, oral
       misrepresentations” and does not apply here because the FDIC and Northbrook Bank should
       have been put on notice by the written loan records that there was an improper relationship
       between Ravenswood Bank and Luri’s contracting company, Metro Home Chicago, because
       “Metro Home Chicago” clearly appears in the loan documents. Therefore, although Boltin
       contends Ravenswood Bank’s loan records did not make him aware of Luri’s various roles,
       these same records should have made the FDIC and Northbrook Bank aware of this
       impropriety. This is unpersuasive in part because D’Oench means that the FDIC examiners
       were not expected to second guess the “facially unencumbered notes,” could rely on the
       analysis of their “[s]preadsheet experts” rather than seek the opinions of “historians” and
       “soothsayers,” and did not have a “duty to compile oral histories of the bank’s customers and
       loan officers.” Bowen, 915 F.2d at 1016. When the FDIC is deciding whether to liquidate a
       failed bank or take another course of action, time is of the essence. The FDIC’s evaluation
       “must be made ‘with great speed, usually overnight, in order to preserve the going concern
       value of the failed bank and avoid an interruption in banking services.’ ” Langley, 484 U.S. at
       91 (quoting Gunter v. Hutcheson, 674 F.2d 862, 865 (11th Cir. 1982)). The FDIC would not be
       able to make a reliable and timely evaluation if it was held to the investigative standard that the
       Boltin defendants now propose. The FDIC is entitled to act under the assumption that bank
       records containing seemingly unqualified notes are not in fact subject to undisclosed
       conditions. Langley, 484 U.S. at 91. Furthermore, even if the FDIC examiners had realized in
       this instance that Luri had multiple roles in the financing and construction of the financed
       project, the examiners would have no apparent basis for concluding that the arrangement was a
       condition of the loan. There are no bank records indicating the financial institution or any
       individual required Boltin to hire Luri’s company, forced him to replace the condominium
       plans with the large single-family home that could not be rented or sold like the individual
       condominium units, or promised Boltin that a ready buyer was awaiting the completion of a
       single-family home. Therefore, regardless of whether “Metro Home Chicago” or Luri’s name
       appears somewhere in the loan file, D’Oench bars the affirmative defense.
¶ 35       The Boltin defendants cite Community Bank of the Ozarks but do not discuss the case or
       argue that it supports their position on appeal. To the contrary, in Community Bank of the
       Ozarks, the court affirmed the trial judge’s determination that D’Oench and 12 U.S.C. § 1823
       barred a defense based on terms that were not recorded in the bank’s files. Community Bank of
       the Ozarks, 984 F.2d 254; 12 U.S.C. § 1823 (2012). Similar to the Boltin defendants, the
       defendants took loans to acquire and develop three lots in Sunrise Beach, Missouri, but they
       had difficulty finding buyers. Community Bank of the Ozarks, 984 F.2d at 256. Despite being
       given additional time to repay their debt, they defaulted, and the lending bank also failed.
       Community Bank of the Ozarks, 984 F.2d at 256. After the FDIC stepped in, the properties
       were sold by a successor bank, but the sale left a large deficiency owing, and in response to a
       claim for a deficiency judgment, the borrowers contended the lending bank made certain


                                                   - 12 -
       promises in connection with the loan. Community Bank of the Ozarks, 984 F.2d at 256. These
       statements included promising to defer repayment for a reasonable time after construction
       while the developers found buyers, increasing the loan to fund additional stages of
       construction, and making reasonable efforts to finance buyers. Community Bank of the Ozarks,
       984 F.2d at 256. The borrowers’ only documentation of these assurances was a letter they sent
       stating their “ ‘understanding of the agreement,’ ” but this letter was not in the bank’s files and
       thus met none of the statute’s requirements, which were for the terms to be in writing,
       contemporaneously executed with the note by both parties, approved by the bank’s loan
       committee, and an official part of the bank’s records since their execution. Community Bank of
       the Ozarks, 984 F.2d at 257; 12 U.S.C. § 1823(e) (2012). In an attempt to get around D’Oench,
       those borrowers also contended that because some of the employees of the failed bank had
       gone to work for the successor bank, the new bank could not claim ignorance of the special
       terms. Community Bank of the Ozarks, 984 F.2d at 257. Unfortunately for those borrowers,
       however, it is a well-settled proposition that the FDIC’s knowledge of an unrecorded
       agreement or representation does not affect the application of the statute. Community Bank of
       the Ozarks, 984 F.2d at 257. This case does not support the current borrowers’ appeal.
¶ 36       The Boltin defendants also cite but do not attempt to apply Howell, which is a case in
       which the court rejected the FDIC’s reliance on D’Oench. Howell v. Continental Credit Corp.,
       655 F.2d 743 (7th Cir. 1981). As Northbrook Bank argues, the court’s reasons for determining
       D’Oench was not controlling there do not exist here. The equipment lease that the FDIC was
       attempting to enforce had bilateral obligations which the original lender had breached. Howell,
       655 F.2d 743. Thus, the lease itself was the basis for the defense. Here, like in D’Oench, there
       are facially valid notes which impose unilateral obligations on the borrowers to repay the bank.
¶ 37       For these reasons, we find that D’Oench barred the Boltin defendants’ affirmative defense,
       regardless of whether it was pled in sufficient detail, and that the trial judge was correct in
       rejecting it.
¶ 38       The next issue is whether the trial judge erred in granting summary judgment on the
       lender’s complaint for foreclosure. The Boltin defendants opposed the motion on grounds that
       it was supported by inadequate affidavits. Summary judgment is appropriate where the
       pleadings, depositions, admissions and affidavits on file, viewed in the light most favorable to
       the nonmoving party, reveal that there is no genuine issue as to any material fact and that the
       moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1005(c) (West 2010);
       Kajima Construction Services, Inc. v. St. Paul Fire & Marine Insurance Co., 227 Ill. 2d 102,
       106, 879 N.E.2d 305, 308 (2007). “Summary judgment is a drastic remedy and should be
       allowed only when the right of the moving party is clear and free from doubt.” Jones v.
       Chicago HMO Ltd. of Illinois, 191 Ill. 2d 278, 291, 730 N.E.2d 1119, 1127 (2000). An order
       granting summary judgment is reviewed de novo. Kajima Construction, 227 Ill. 2d at 106, 879
       N.E.2d at 308. In addition, we review de novo a trial court’s ruling regarding the sufficiency of
       an affidavit which supports a motion for summary judgment. Jackson v. Graham, 323 Ill. App.
       3d 766, 773, 753 N.E.2d 525, 531 (2001) (reviewing de novo a motion to strike an affidavit
       attached to a motion for summary judgment).
¶ 39       The record indicates that the Boltin defendants filed an unverified third amended answer to
       Northbrook Bank’s verified third amended complaint. Once a verified pleading is filed by one
       party, all subsequent pleadings must be verified, unless excused. 735 ILCS 5/2-605(a) (West
       2010) (“If any pleading is so verified, every subsequent pleading must also be verified, unless

                                                   - 13 -
       verification is excused by the court.”). There is no indication that the trial court excused the
       Boltin defendants from verification, thus, their unverified answer is treated as a nullity and the
       well-pled facts in the verified complaint are deemed admitted. Marren Builders, Inc. v.
       Lampert, 307 Ill. App. 3d 937, 942, 719 N.E.2d 117, 122 (1999) (“the court must regard the
       unverified pleading as if it was never filed”); Pinnacle Corp. v. Village of Lake in the Hills, 258
       Ill. App. 3d 205, 209, 630 N.E.2d 502, 506 (1994) (“When a subsequent pleading is not
       verified, it is as if the unverified pleading was never filed; it must be disregarded.”); Florsheim
       v. Travelers Indemnity Co. of Illinois, 75 Ill. App. 3d 298, 309, 393 N.E.2d 1223, 1232 (1979)
       (the failure to file a verified answer where one is required constitutes a failure to plead and
       results in all well-pled facts being deemed admitted).
¶ 40        The factual allegations of nonpayment and default under the Division, Sedgwick, and
       Oldtown loan agreements, and the unconditional repayment guaranty by Boltin personally,
       were admitted and uncontroverted allegations. It was, therefore, appropriate for the court to
       proceed on the basis of Northbrook Bank’s affidavits to enter judgments of foreclosure. First
       Federal Savings & Loan Ass’n of Ottawa v. Chapman, 116 Ill. App. 3d 950, 954-55, 452
       N.E.2d 600, 604 (1983) (if the factual allegations of foreclosure are not controverted by an
       answer, then an affidavit attesting to the facts of the complaint is sufficient evidence on which
       to enter a foreclosure decree); 735 ILCS 5/15-1506(a)(2) (West 2010) (section of the mortgage
       foreclosure statute stating, “where all the allegations of fact in the complaint have been proved
       by verification of the complaint or affidavit, the court upon motion supported by an affidavit
       stating the amount which is due the mortgagee, shall enter a judgment of foreclosure as
       requested in the complaint”).
¶ 41        In the trial court, and now on appeal, the Boltin defendants contend, however, that
       Northbrook Bank’s affidavit and supplemental affidavit of proof regarding the amounts due
       and owing were defective because the affiant, Northbrook Bank vice president Kimberly
       Okoye, based her statements in part on data that was compiled by personnel of the now defunct
       Ravenswood Bank. They cite Illinois Supreme Court Rule 191(a) for the proposition that an
       affidavit in support of a motion for summary judgment must be based on personal knowledge.
       Ill. S. Ct. R. 191(a) (eff. Jan. 4, 2013). That rule states in relevant part:
                “Affidavits in support of and in opposition to a motion for summary judgment under
                section 2-1005 of the Code of Civil Procedure *** shall be made on the personal
                knowledge of the affiants; shall set forth with particularity the facts upon which the
                claim, counterclaim, or defense is based; shall have attached thereto sworn or certified
                copies of all documents upon which the affiant relies; shall not consist of conclusions
                but of facts admissible in evidence; and shall affirmatively show that the affiant, if
                sworn as a witness, can testify competently thereto. If all of the facts to be shown are
                not within the personal knowledge of one person, two or more affidavits shall be used.”
                Ill. S. Ct. R. 191(a) (eff. Jan. 4, 2013).
¶ 42        The Boltin defendants contend that because Okoye had no personal knowledge of the
       accounting procedures used at Ravenswood Bank, she was not competent to testify in person
       or swear in the affidavits to the validity of the accounting data used in her damage calculations.
       They suggest that Northbrook Bank should have found a former employee of Ravenswood
       Bank to lay a proper foundation for admitting the historical information, and that, without this
       witness, it was improper for the trial court to enter summary judgment.


                                                   - 14 -
¶ 43       Northbrook Bank responds that Okoye’s affidavits were comprehensive and addressed not
       only the history of the loans and defaults, but also Okoye’s ability to authenticate the
       Ravenswood Bank records used in her calculations. Northbrook Bank points out that the
       borrowers did not try to depose Okoye or conduct other discovery in an effort to prepare a
       counteraffidavit or present other evidence in opposition to her factual affidavits which
       included her reasons for relying on the accuracy of her employer’s records. The bank also
       argues that without a counteraffidavit or other evidentiary material, the facts in the affidavits
       stood uncontradicted. See F.H. Paschen/S.N. Nielsen, Inc. v. Burnham Station, L.L.C., 372 Ill.
       App. 3d 89, 92-93, 865 N.E.2d 228, 232 (2007) (“courts must accept an affidavit as true if it is
       uncontradicted by counteraffidavits or other evidentiary materials”); Kugler v. Southmark
       Realty Partners III, 309 Ill. App. 3d 790, 795, 795, 723 N.E.2d 710, 714 (1999) (same). They
       also point out that the Boltin defendants fail to cite a single case involving the business records
       of a bank or indicating that an employee of a successor bank cannot rely on and authenticate
       the records of its predecessor and that there is case law to the contrary.
¶ 44       We agree with Northbrook Bank. The motion and supporting affidavits for summary
       judgment and the order of foreclosure and sale were so detailed that they span more than two
       full volumes of the appellate record. Okoye’s first affidavit was factually detailed and was
       accompanied by documents which she relied on, such as the loan agreements and amendments,
       property tax payment records, and numerous printouts from the “loan accounting system” of
       Ravenswood Bank which detailed payment, interest, and late charge transactions that were
       posted to the borrowers’ accounts. Her second affidavit, which is the one the Boltin defendants
       focus upon, addressed her personal knowledge about the loan file and why the accounting
       records were reliably accurate. Okoye swore:
                   “1. This affidavit acts as a supplement to my affidavit of proof and is tendered for
               the purpose of addressing the new requirements of Illinois Supreme Court Rule 113.
               The Supreme Court order for this new Rule 113 was entered on February 28, 2013,
               after I executed my original affidavit of proof on January 23, 2013, and after
               [Northbrook Bank] filed its motion for summary judgment on February 15, 2013. The
               new Rule 113 goes into effect May 1, 2013, before the hearing on our motion for
               summary judgment on May 9, 2013.
                   2. As part of my job duties, first as a commercial loan officer at Northbrook Bank in
               2010 and then as an assistant vice president in 2012, I have administered and overseen
               commercial loans in litigation. This generally includes loans which originally were
               made by Northbrook Bank’s predecessor in interest, Ravenswood Bank, and
               specifically including the loans in foreclosure in this case.
                   3. In conjunction with my affidavit of proof, as an employee and agent of Plaintiff,
               I reviewed the loan file, all of the loan documents relating to the three loans and
               properties at issue in this case and referred to in my affidavit, and filed with the court
               along with the summary judgment motion. I also reviewed payment history records
               relating to the three loans and properties at issue in this case.
                   4. As part of my job duties, first as a commercial loan officer at Northbrook Bank in
               2010 and then as an assistant vice president in 2012, I became familiar with
               Ravenswood Bank’s then-regular business practices and procedures, including those
               related to bookkeeping and the associated accounting and computer systems that
               maintain borrowers’ accounts and loan information, as described herein. As a

                                                   - 15 -
               commercial loan officer and assistant vice president, I have also become familiar with
               RAVENSWOOD BANK’s accounting software by reviewing it regularly in
               foreclosure cases involving loans made by RAVENSWOOD BANK and by
               communicating with former RAVENSWOOD BANK employees, including those in
               operations whom Northbrook Bank retained after it acquired RAVENSWOOD
               BANK’s assets from the FDIC.
                   5. RAVENSWOOD BANK utilized an accounting software program called Fiserv.
               Fiserv is a type of accounting software commonly used by banks. It is commercially
               available and is recognized as a standard accounting program in the banking industry.
               The Fiserv accounting software records loan payments and maintains the loan payment
               histories for RAVENSWOOD BANK’s loans, including the loans for 2120 Division
               LLC, 1353 Sedgwick LLC, and Oldtown Management LLC. Those Fiserv loan
               payment histories are attached to my affidavit of proof as Exhibits 1, 3, and 5.
                   6. The Fiserv software and loan accounting systems was used by RAVENSWOOD
               BANK in the regular course of business activity, and the records in the Fiserv system
               have not been altered by Northbrook Bank.
                   7. The information regarding the loan terms for 2120 Division LLC, 1353
               Sedgwick LLC, and Oldtown Management LLC as set forth in each respective note and
               amendment thereto was entered into Ravenswood Bank’s Fiserv system, at or near the
               time the loans were made and as part of its regular course of business activity, and
               those Fiserv records and payment histories are now kept and maintained in Northbrook
               Bank’s regular course of business.
                   8. It was part of RAVENSWOOD BANK’s regular business practice for its
               employees in the loan operations department to input into the Fiserv system the loan
               payment histories’ information regarding payments, credit, or advances, at or near the
               time payments were made or credits applied.
                   9. To the best of my knowledge, this practice was followed by maintaining the
               loans and inputting payment data in the Fiserv system with 2120 Division LLC, 1353
               Sedgwick LLC, and Oldtown Management LLC. I have printed a true and accurate
               copy of each separate loan payment history from the Fiserv system. Each printed
               payment history is attached as Exhibits 1, 3, and 5 to the Affidavit of Proof.
                   10. The loan payment histories are summations of documents and payment data
               relating to the loan, its payments, and associated charges, and loan payment histories
               were kept and maintained in the regular course of business activity for
               RAVENSWOOD BANK. Northbrook Bank now keeps and maintains the Fiserv
               records in the regular course of its business activity.”
¶ 45       The Boltin defendants contend that Okoye has referenced her conversations with former
       employees of Ravenswood Bank, which is inadmissible hearsay, and that Okoye’s lack of
       personal knowledge is most clearly demonstrated in paragraph 9 of her affidavit, by the
       statement that “[t]o the best of my knowledge, [Ravenswood Bank followed the stated record
       keeping procedures when dealing with the Boltin loans].” This contention is unpersuasive.
¶ 46       Okoye does not repeat her conversations or offer them for the truth of their contents, but
       rather is explaining the background or basis for her belief that the Ravenswood Bank records
       were made in the regular course of its business activities. Thus, her statement was not hearsay


                                                 - 16 -
       and it properly helped lay the foundation for the admissibility of the bank’s
       computer-generated payment histories. Hearsay is a statement which (1) the declarant does not
       make while testifying at the current trial or hearing and (2) a party offers in evidence to prove
       the truth of the matter asserted in the statement. Fed. R. Evid. 801(c). The hearsay rule bans
       in-court repetition of extrajudicial utterances only when they are offered to prove the truth or
       falsity of their contents and does not apply to statements offered merely to show that they were
       made. United States v. Thurman, 915 F. Supp. 2d 836, 862 (W.D. Ky. 2013). Furthermore, it
       would have been permissible for Okoye to repeat specific conversations instead of just
       indicating that she had those conversations. If an out-of-court statement is offered only to
       establish the recipient’s belief or state of mind as a result of the utterance, then the extrajudicial
       statement is not hearsay. Thurman, 915 F. Supp. 2d at 862 (citing the federal counterpart to our
       state rule). Also, rather than reading paragraph 9 in isolation or just the sentence clause “[t]o
       the best of my knowledge,” as the Boltin defendants have done, we take the document as a
       whole (F.H. Paschen/S.N. Nielsen, 372 Ill. App. 3d at 92, 865 N.E.2d at 32) and conclude that
       the affidavit describes Okoye’s ability to competently testify about its contents. In the
       affidavit, Okoye indicates that the Fiserv software is a standard accounting software in the
       banking industry and that she became familiar with it as she began regularly reviewing
       accounting records in conjunction with foreclosure actions on Ravenswood Bank notes and
       communicating with her coworkers who were former employees of Ravenswood Bank. Okoye
       further explains that she learned it was a regular business practice of the loan operations
       personnel of Ravenswood Bank to contemporaneously update its Fiserv records with
       payments, credits, or advances. With this background in place, Okoye then states, “To the best
       of my knowledge, this [record keeping] practice was followed in maintaining the loans and
       inputting payment data in the Fiserv system [with the loans at issue].” We find that the
       affidavit satisfies Rule 191, because, as a whole, the affidavit indicates personal knowledge
       and allows the reader to reasonably infer that Okoye could competently testify to its contents at
       trial. F.H. Paschen/S.N. Nielsen, 372 Ill. App. 3d at 92, 865 N.E.2d at 32; Kugler v. Southmark
       Realty Partners III, 309 Ill. App. 3d 790, 795, 723 N.E.2d 710, 714 (1999). Furthermore,
       because the affidavit was unopposed, we take it as true. F.H. Paschen/S.N. Nielsen, 372 Ill.
       App. 3d at 92-93, 865 N.E.2d at 869; Kugler, 309 Ill. App. 3d at 795, 723 N.E.2d at 714.
¶ 47        This conclusion is bolstered by two cases cited by Northbrook Bank which reject the
       proposition that affidavits such as Okoye’s were inadmissible proof in this foreclosure case.
       The first foreclosure case is Land, in which the trial judge granted a bank’s motion for
       summary judgment which was supported by an affidavit completed by the bank’s assistant vice
       president. Bank of America, N.A. v. Land, 2013 IL App (5th) 120283, ¶ 5, 992 N.E.2d 1266.
       The affidavit included a record of all payments and stated a total amount in default. Land, 2013
       IL App (5th) 120283, ¶ 5, 992 N.E.2d 1266. The borrowers argued that the assistant vice
       president could not competently testify to records kept by another company which preceded
       the bank’s acquisition of the loan. Land, 2013 IL App (5th) 120283, ¶ 11, 992 N.E.2d 1266.
       They also argued the records did not take into account a series of $490 payments which had
       been made pursuant to a loan modification agreement. Land, 2013 IL App (5th) 120283, ¶ 15,
       992 N.E.2d 1266. They did not, however, support this argument with a counteraffidavit
       disputing the balance owed. Land, 2013 IL App (5th) 120283, ¶ 17, 992 N.E.2d 1266. The
       court relied on authority indicating it made no difference if the business records were those of
       the bank or a third party, so long as the person authenticating the records was their custodian or


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       other person familiar with the business and its mode of operations. Land, 2013 IL App (5th)
       120283, ¶ 13, 992 N.E.2d 1266. The court found that the assistant vice president’s affidavit
       sufficiently laid a foundation for the admission of the bank’s accounting records (Land, 2013
       IL App (5th) 120283, ¶ 13, 992 N.E.2d 1266) and that the trial court rightfully relied on the
       bank’s unopposed calculations (Land, 2013 IL App (5th) 120283, ¶ 14, 992 N.E.2d 1266).
¶ 48       The second case we find helpful is Avdic, where the borrower failed to supply a
       counteraffidavit (US Bank, National Ass’n v. Avdic, 2014 IL App (1st) 121759, ¶ 7, 10 N.E.3d
       339) but challenged the sufficiency of a bank employee’s affidavit. The bank employee had,
       however, factually described her review of the business records and loan file and attached the
       mortgage, note, and computerized payment records which were the basis for her sworn
       conclusion of the total amount in default (Avdic, 2014 IL App (1st) 121759, ¶ 30, 10 N.E.3d
       399). The court found that the statement factually attesting to the bank employee’s personal
       knowledge of the bank’s contract, record-keeping practices, and computer-generated records,
       established a foundation for admission of the bank’s records, which included specific figures
       for principal, interest, late charges, and other expenses such as taxes and insurance. Avdic,
       2014 IL App (1st) 121759, ¶¶ 26-29, 10 N.E.3d 399. The court rejected the borrowers’
       contention that the bank employee needed to have personally made the entries in the
       record-keeping software or been familiar with the file before the dispute arose. Avdic, 2014 IL
       App (1st) 121759, ¶ 29, 10 N.E.3d 399.
¶ 49       For these reasons, we are unpersuaded by the Boltin defendants’ contention that Okoye’s
       affidavit in support of Northbrook Bank’s motion for summary judgment was insufficient
       because it was not prepared by an employee of the predecessor bank. Accordingly, we affirm
       the trial court order granting summary judgment.
¶ 50       Finally, we return to the lender’s request to dismiss as moot any part of the borrowers’
       appeal which would affect the rights of the third party bona fide purchasers of the properties.
       Given that the appeal has been unsuccessful and does not disturb any of the trial court’s
       rulings, the lender’s request is moot and is stricken as such.
¶ 51       Summarizing, the lender’s motion to limit the scope of the appeal is denied, the lender’s
       motion to dismiss the appeal in part as moot is stricken, and the trial court’s judgment order in
       favor of the lender and against the borrowers is affirmed.

¶ 52      Affirmed.




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