                                Illinois Official Reports

                                        Appellate Court



                   CitiMortgage, Inc. v. Bukowski, 2015 IL App (1st) 140780



Appellate Court           CITIMORTGAGE, INC., Plaintiff-Appellee, v. ANNA BUKOWSKI
Caption                   and KATHERINE D. BUKOWSKI, Defendants-Appellants.



District & No.            First District, Third Division
                          Docket No. 1-14-0780



Filed                     January 21, 2015



Held                       The appellate court affirmed the entry of summary judgment for
(Note: This syllabus plaintiff mortgagee in a mortgage foreclosure action, notwithstanding
constitutes no part of the defendants’ contentions that the trial court erred in striking certain of
opinion of the court but defendants’ affirmative defenses, including the claim that they did not
has been prepared by the receive notice of acceleration of their loan and that plaintiff did not
Reporter of Decisions comply with the federal Truth in Lending Act.
for the convenience of
the reader.)




Decision Under            Appeal from the Circuit Court of Cook County, No. 12-CH-7426; the
Review                    Hon. Robert E. Senechalle, Judge, presiding.




Judgment                  Affirmed.
     Counsel on               Charles Aaron Silverman, PC, of Chicago (Charles Silverman, of
     Appeal                   counsel), for appellants.

                              Codilis & Associates, PC, of Chicago (Louis J. Manetti, Jr., of
                              counsel), for appellee.



     Panel                    JUSTICE MASON delivered the judgment of the court, with opinion.
                              Presiding Justice Pucinski and Justice Lavin concurred in the
                              judgment and opinion.


                                               OPINION

¶1         In this mortgage foreclosure action relating to property located at 1503 North Larch
       Drive in Mount Prospect, Illinois, the trial court granted summary judgment to
       plaintiff-appellee CitiMortgage, Inc., against defendants-appellants, Anna and Katherine
       Bukowski. Following a judicial sale of the property, the trial court confirmed the sale in an
       order dated February 20, 2014. On appeal, defendants contend that the trial court erred in
       striking certain affirmative defenses, specifically, that they did not receive a notice of
       acceleration of the loan and that CitiMortgage failed to comply with the federal Truth in
       Lending Act (TILA) (15 U.S.C. § 1601 et seq. (2006)) in connection with the modification of
       the loan. Finding no merit in either issue, we affirm.

¶2                                          BACKGROUND
¶3         CitiMortgage filed its complaint to foreclose the mortgage on February 9, 2012.
       CitiMortgage alleged a default in payment of monthly installments on the loan beginning in
       October 2011. Attached to the complaint were the mortgage and note dated November 21,
       2007, and a loan modification agreement executed on June 24, 2010. The loan modification
       adjusted the interest rate on the loan and changed the maturity date. Only Anna signed the
       note and loan modification agreement. Both Katherine and Anna signed the original
       mortgage.
¶4         On March 16, 2012, Anna filed a pro se answer. Anna claimed that she possessed
       insufficient information to allow her to admit or deny the existence of a default in payment of
       amounts due under the loan. She did not raise any affirmative defenses.
¶5         Counsel later appeared for both Anna and Katherine. Counsel filed a motion to withdraw
       Anna’s pro se answer, which was denied, but the court granted Anna leave to file an
       amended answer. Katherine filed an answer on August 23, 2012, raising two matters
       denominated as “affirmative defenses.” In her first defense, labeled “Failure of Condition
       Precedent,” Katherine claimed that she did not receive an acceleration notice from
       CitiMortgage. Katherine’s second defense alleged that when the loan was modified and Anna
       was required to establish an escrow account for the payment of real estate taxes,
       CitiMortgage failed to provide Anna with notice of the requirements of the Illinois Mortgage

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       Escrow Account Act (765 ILCS 910/11 (West 2012)), thus violating TILA. Anna’s amended
       answer filed the same day raised identical defenses.1
¶6         CitiMortgage filed a motion pursuant to section 2-619.1 of the Illinois Code of Civil
       Procedure (735 ILCS 5/2-619.1 (West 2012)) to dismiss defendants’ affirmative defenses.
       CitiMortgage argued that the first defense was not a proper affirmative defense because it
       was premised on the claim that a condition precedent to the foreclosure action had not been
       met. Further, CitiMortgage contended that defendants failed to allege that they had
       performed as required under the mortgage, note and loan modification agreement.
       CitiMortgage attached a copy of the notice addressed to Anna dated November 7, 2011, and
       provided the affidavit of Erin Theobald, a business operations analyst, attesting to the
       mailing of the notice on that date. As to the claimed TILA violation, CitiMortgage argued
       that TILA does not apply to loan modifications and that, in any event, a TILA violation in
       connection with the loan modification would not invalidate the loan.
¶7         After briefing, CitiMortgage’s motion was granted on January 15, 2013. The trial court
       dismissed the first defense based on the claimed nonreceipt of the acceleration notice with
       leave to amend. The second defense based on the alleged TILA violation was dismissed with
       prejudice. Katherine later filed a pleading labeled “amended” affirmative defenses, which
       added no additional facts. No second amended affirmative defenses were filed by Anna.
¶8         Six months later, CitiMortgage moved for summary judgment. Defendants’ response
       recited the standards for affidavits under Illinois Supreme Court Rule 191 (eff. Jan. 4, 2013),
       but made no substantive argument that the affidavits filed by CitiMortgage did not meet
       those standards. Defendants also failed to supply any affidavit to support their claimed
       nonreceipt of the acceleration notice. After considering the briefs and arguments of counsel,
       the trial court granted CitiMortgage’s motion and entered a judgment of foreclosure and sale.
       Pursuant to the judgment, a judicial sale was conducted on November 26, 2013, and the sale
       was confirmed on February 20, 2014.
¶9         Defendants filed their notice of appeal on March 18, 2014. Defendants’ notice of appeal
       specified that they were appealing from the February 20, 2014, order confirming the judicial
       sale and that the relief sought on appeal was to overturn the order approving the sale.
¶ 10       CitiMortgage filed a motion to dismiss the appeal on the ground that no relief from the
       only order specified in the notice of appeal–the order confirming the judicial sale–was
       warranted because that order was entered on presentment and without objection from
       defendants. CitiMortgage further argued that the order granting the motion to dismiss the two
       defenses was not subject to review because it was not listed in the notice of appeal. On May
       27, 2014, this court denied CitiMortgage’s motion to dismiss without prejudice to its ability
       to raise the issue in briefing.

¶ 11                                       ANALYSIS
¶ 12      CitiMortgage first argues that we should dismiss this appeal because the only order
       specified in defendants’ notice of appeal was the order confirming the judicial sale.

           1
            Although the amended answer states that it is being filed on behalf of Katherine, the notice
       attached to the answer states that it is being filed on behalf of Anna. Because the amended answer is
       identical to Katherine’s answer filed the same day, we assume Anna’s attorney simply neglected to
       change the name of his client in Anna’s amended answer.

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       CitiMortgage notes that defendants did not object to the entry of that order. By failing to
       indicate that they were appealing the trial court’s dismissal of their defenses or the order
       granting summary judgment to CitiMortgage, CitiMortgage argues that defendants have
       waived review of any error in connection with those orders. We disagree.
¶ 13        It is well settled that an appeal from a final judgment in a case entails review not only of
       the final judgment order, but of any interlocutory orders constituting “ ‘ “a step in the
       procedural progression leading” ’ ” to that judgment. Fitch v. McDermott, Will & Emery,
       LLP, 401 Ill. App. 3d 1006, 1014 (2010) (quoting Neiman v. Economy Preferred Insurance
       Co., 357 Ill. App. 3d 786, 790 (2005), quoting In re D.R., 354 Ill. App. 3d 468, 472 (2004));
       see also Perry v. Minor, 319 Ill. App. 3d 703, 708-09 (2001). Here, the only contested
       matters in the trial court related to defendants’ assertion of defenses to CitiMortgage’s
       foreclosure complaint. “The purpose of the notice of appeal is to inform the prevailing party
       in the trial court that his opponent seeks review by a higher court. [Citation.] The notice
       should be considered as a whole and will be deemed sufficient to confer jurisdiction on an
       appellate court when it fairly and adequately sets out the judgment complained of and the
       relief sought, advising the successful litigant of the nature of the appeal. [Citation.]” Fitch,
       401 Ill. App. 3d at 1014. When defendants filed their notice of appeal, CitiMortgage was
       undoubtedly aware that the only basis for challenging the final judgment in this case was the
       trial court’s dismissal of the defenses raised to CitiMortgage’s foreclosure complaint. The
       dismissal of defendants’ affirmative defenses was a “step in the procedural progression” of
       the foreclosure action that ultimately led to confirmation of the sale. Thus, defendants’
       appeal from the final order entered in the case encompasses review of the trial court’s orders
       dismissing the affirmative defenses and entering summary judgment for CitiMortgage.
¶ 14        Furthermore, even if, from a “technical” standpoint (Rosestone Investments, LLC v.
       Garner, 2013 IL App (1st) 123422, ¶ 20) defendants’ notice of appeal was deemed deficient,
       we would not be inclined to find waiver as it is a limitation on the parties and not the court’s
       jurisdiction. Cambridge Engineering, Inc. v. Mercury Partners 90 BI, Inc., 378 Ill. App. 3d
       437, 453 (2007). We therefore find we have jurisdiction to decide the issues raised by
       defendants on appeal.
¶ 15        With respect to the merits of defendants’ appeal, they first contend the trial court erred in
       dismissing their “defense” based on the contention that they did not receive the acceleration
       notice from CitiMortgage. Defendants alleged that they regularly checked their mail, that
       they had received other communications from CitiMortgage, but that they never received an
       acceleration letter. We review the dismissal of defendants’ affirmative defenses de novo.
       Hartmann Realtors v. Biffar, 2014 IL App (5th) 130543, ¶ 20.
¶ 16        As CitiMortgage correctly notes, defendants’ claim is not a proper affirmative defense as
       it does not “give color” to CitiMortgage’s complaint but, rather, is an assertion that
       CitiMortgage has not satisfied a condition precedent to its right to bring suit. The loan
       documents require the lender to “give notice to Borrower prior to acceleration following
       Borrower’s breach of any covenant or agreement in this Security Instrument.” The notice
       must specify: (a) the default; (b) the action required to cure the default; (c) a date, not less
       than 30 days from the date the notice is given to borrower, by which the default must be
       cured; and (d) that failure to cure the default on or before the date specified in the notice may
       result in acceleration of the sums due, foreclosure by judicial proceeding and sale of the
       property. If CitiMortgage had not sent an acceleration notice, it would not be entitled to

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       foreclose. Thus, defendants’ assertion that CitiMortgage failed to send the notice attacks
       CitiMortgage’s ability to maintain the action and does not raise new matter that defeats the
       claim. See id. ¶ 25 (“ ‘[A]n “affirmative defense” is one in which the defendant gives color to
       his opponent’s claim but asserts new matter which defeats an apparent right in the
       plaintiff.’ ” (quoting Raprager v. Allstate Insurance Co., 183 Ill. App. 3d 847, 854 (1989)));
       Zook v. Norfolk & Western Ry. Co., 268 Ill. App. 3d 157, 169 (1994) (affirmative defense
       that would not defeat cause of action even if true but merely rebut a portion of plaintiff’s
       evidence was properly stricken); Zieger v. Manhattan Coffee Co., 112 Ill. App. 3d 518, 533
       (1983) (defendant’s affirmative defenses “neither admitted any part of plaintiff’s case nor
       introduced any new matter which would have defeated plaintiff’s contentions”).
¶ 17       Further, defendants’ denial that they received the acceleration notice is insufficient to
       create a genuine issue of material fact, which would defeat CitiMortgage’s entitlement to
       summary judgment. Summary judgment is appropriate when the pleadings, depositions, and
       admissions on file, together with any affidavits, show that there is no genuine issue as to any
       material fact and the moving party is entitled to judgment as a matter of law. 735 ILCS
       5/2-1005(c) (West 2012); Williams v. Manchester, 228 Ill. 2d 404, 417 (2008). A trial court’s
       ruling on summary judgment presents an issue of law, which we review de novo. Williams,
       228 Ill. 2d at 417.
¶ 18       As a threshold matter, we note that this case has a procedural anomaly. Although Anna
       and Katherine both signed the original mortgage, only Anna signed the note and loan
       modification agreement. Anna, who filed the original answer pro se, was granted leave to file
       an amended answer. Anna then filed an amended answer the same day Katherine filed her
       answer, and the affirmative defense related to TILA was stricken with prejudice from both
       answers while the affirmative defense related to notice was stricken with leave to amend. But
       only Katherine filed an “amended” affirmative defense following the court’s ruling;
       therefore, only Katherine preserved the issue for appeal.
¶ 19       However, the result is the same because although Katherine filed a pleading purporting to
       assert “amended” affirmative defenses, the allegations of the amended pleading were
       identical to the original and no counteraffidavits were filed in response to CitiMortgage’s
       motion for summary judgment. By failing to plead any additional facts in support of her
       claimed nonreceipt of the acceleration notice, we are left to evaluate the sufficiency of
       Katherine’s unsupported allegations against the sworn evidence provided by CitiMortgage
       that there was a default in the payment of amounts due and that the notice of default,
       including CitiMortgage’s right to accelerate the amounts due, was in fact mailed to Anna on
       November 7, 2011. A party defending against summary judgment is not entitled to rely on
       the allegations of her pleading to raise a genuine issue of material fact, but must affirmatively
       controvert evidence adduced by the moving party. Purtill v. Hess, 111 Ill. 2d 229, 240-41
       (1986). Under the terms of the mortgage, any notice to the borrower is deemed to have been
       given when mailed by first class mail. In light of the copy of the notice to Anna in the record
       and the Theobald affidavit attesting to the date that notice was mailed, as well as other
       evidence demonstrating the existence of the default and the amounts due, Katherine’s
       unsupported claim that she did not receive the notice was insufficient to create a genuine
       issue of material fact. It follows that the identical unsupported claim raised by defendants on
       appeal must fail as well.



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¶ 20       Defendants’ second affirmative defense claimed that as a result of CitiMortgage’s alleged
       failure to provide Anna with notice of the requirements of the Illinois Mortgage Escrow
       Account Act (765 ILCS 910/11 (West 2012)), CitiMortgage violated TILA. TILA and its
       implementing Regulation Z (12 C.F.R. § 226 et seq. (2006)) generally require that certain
       material disclosures be made to a consumer seeking an extension of credit secured by the
       consumer’s residence. Such disclosures include the creditor, the amount financed, the finance
       charge, the annual percentage rate and the payment schedule. 12 C.F.R. § 1026.18 (2006).
       CitiMortgage raises several arguments regarding the sufficiency of this claimed defense
       (including Katherine’s ability to raise it given that she did not sign the loan modification), but
       in the interest of brevity we address only the legal issue of TILA’s application to the
       circumstances presented here because it is dispositive. Defendants acknowledge that TILA
       applies only in connection with the original extension of credit to a consumer and that later
       events do not require new disclosures unless the original obligation is replaced with another,
       as in the case of a refinancing. Specifically, courts have found that TILA does not apply in
       the context of loan modifications. See Drake v. Ocwen Financial Corp., No. 09-C-6114,
       2010 WL 1910337, at *7-9 (N.D. Ill. May 6, 2010).
¶ 21       Katherine cites no contrary authority, but asks us “as a matter of public policy” to extend
       TILA to loan modifications. Katherine offers no persuasive reason why we should depart
       from TILA’s plain language and the authorities that have construed it. Because TILA does
       not apply to loan modifications, CitiMortgage’s claimed failure to provide Anna with notice
       of the requirements of the Illinois Mortgage Escrow Account Act (765 ILCS 910/11 (West
       2012)) gives rise to no claim under TILA.
¶ 22       The trial court properly dismissed defendants’ affirmative defenses and because
       defendants failed to raise any genuine issue of material fact calling into question
       CitiMortgage’s entitlement to summary judgment, the trial court correctly granted that
       motion as well. There being no other issues raised, the order confirming the sale is affirmed.

¶ 23      Affirmed.




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