                                      2018 IL App (1st) 181323
                                            No. 1-18-1323
                                                                      Fourth Division
                                                                   December 20, 2018
     ______________________________________________________________________________

                                         IN THE

                             APPELLATE COURT OF ILLINOIS

                                     FIRST DISTRICT

     ______________________________________________________________________________

                                                    )

     THE FOREST PRESERVE DISTRICT OF COOK           )

     COUNTY,                                        )

                                                    )   Appeal from the Circuit Court
           Plaintiff-Appellee,                      )   of Cook County.
                                                    )
     v.                                             )   No. 18 L 315
                                                    )
     ROYALTY PROPERTIES, LLC; CANNON                )   The Honorable
     SQUIRES PROPERTIES, LLC; RICHARD KIRK          )   Margaret Ann Brennan,
     CANNON; and MERYL SQUIRES CANNON,              )   Judge Presiding.
                                                    )

           Defendants-Appellants.                   )

                                                    )

     ______________________________________________________________________________

            JUSTICE GORDON delivered the judgment of the court, with opinion. 

            Presiding Justice McBride and Justice Reyes concurred in the judgment and opinion.


                                              OPINION

¶1         The instant appeal arises from the trial court’s entry of an order appointing a receiver

        during the pendency of a foreclosure action. The trial court initially granted summary

        judgment in the foreclosure action in favor of plaintiff Forest Preserve District of Cook

        County (Forest Preserve), but we reversed that judgment on appeal, finding that there were

        questions of fact concerning the validity of defendants’ affirmative defenses. BMO Harris

        Bank, N.A. v. Royalty Properties, LLC, 2016 IL App (1st) 151338-U. On remand, the trial

        court entered an order finding the Forest Preserve mortgagee in possession pursuant to the
     No. 1-18-1323


         Illinois Mortgage Foreclosure Law (Foreclosure Law) (735 ILCS 5/15-1101 et seq. (West

         2008)). On appeal, we again vacated that order, finding that, without an evidentiary hearing,

         the trial court did not have an adequate basis for finding the Forest Preserve as mortgagee in

         possession. Forest Preserve District v. Royalty Properties, LLC, 2017 IL App (1st) 171564­

         U. After remand, the trial court held an evidentiary hearing, after which it granted the

         appointment of a receiver. For the reasons that follow, we affirm.

¶2                                             BACKGROUND 1

¶3           The underlying real estate transaction involved in the instant appeal has been the subject

         of extensive litigation, both before this court and in federal court. 2 In the instant appeal, we

         are asked to consider the limited question of whether the trial court properly found the Forest
             1
                As an initial matter, we must note the serious deficiencies with the record filed in the instant
     appeal. Defendants electronically filed their 1459-page record in the form of 75 separate pdf files, none of
     which contain any numbering to indicate their proper order within the record. Additionally, despite
     defendants’ claim that they included all of the Forest Preserve’s evidentiary hearing exhibits in the record
     on appeal, the record as filed contains only 6 of the 46 exhibits, which required the Forest Preserve to file
     a supporting supplemental record to provide those documents, over defendants’ objection. Most
     problematically, the appendix to the record on appeal is inaccurate, claiming that documents are part of
     the record when they are not—as one example, defendants’ record on appeal states that all 46 of the
     Forest Preserve’s exhibits are included. While this court has reviewed the record as filed, we must note
     that the issues with the record have caused this court to expend substantial time and effort to untangle in
     order to come to an understanding of the relevant facts before us.
              2
                There have been four separate lawsuits before this court concerning the underlying real estate
     transaction, which have resulted in six decisions by this court, with the instant order becoming the
     seventh. First, defendants Richard Cannon and Meryl Squires Cannon were plaintiffs in a taxpayer action
     against the Forest Preserve concerning its authority to acquire title to the property. Baker v. Forest
     Preserve District, 2015 IL App (1st) 141157. Next, defendants litigated the foreclosure of the primary
     mortgage on the property, leading to appeals in (1) BMO Harris Bank, N.A. v. Royalty Properties, LLC,
     2016 IL App (1st) 151338-U, (2) Forest Preserve District v. Royalty Properties, LLC, 2017 IL App (1st)
     171564-U, and (3) the instant appeal. While the foreclosure action was pending, defendant Royalty
     Farms, LLC, filed a separate action against the Forest Preserve, alleging that the Forest Preserve breached
     the duties it assumed as a landlord when it purchased the farm. Royalty Farms, LLC v. Forest Preserve
     District, 2017 IL App (1st) 161409. Finally, defendants have litigated the attempts to collect on the junior
     note on the property, leading to appeals in (1) McGinley Partners, LLC v. Royalty Properties, LLC, 2018
     IL App (1st) 171317, appeal denied, No. 124085 (Ill. Nov. 28, 2018); and, most recently, in (2) McGinley
     Partners, LLC v. Royalty Properties, LLC, 2018 IL App (1st) 172976. There have also been at least three
     federal lawsuits, the most recent of which was considered by the Seventh Circuit in July 2018. See
     Cannon v. Forest Preserve District, No. 13 C 6589, 2014 WL 1758475 (N.D. Ill. May 2, 2014); Squires-
     Cannon v. White, 864 F.3d 515 (7th Cir. 2017); Squires-Cannon v. Forest Preserve District, 897 F.3d 797
     (7th Cir. 2018).
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     No. 1-18-1323


        Preserve as mortgagee in possession during the pendency of foreclosure proceedings and the

        trial court’s appointment of a receiver. Accordingly, we are primarily concerned with the

        litigation directly affecting that question and consider the ancillary lawsuits only where

        necessary to provide context.

¶4          As noted in our prior decisions, on June 8, 2009, Amcore Bank 3 (Amcore) filed a

        complaint for foreclosure against defendants Richard Cannon and Meryl Squires Cannon

        (collectively, the Cannons), Royalty Properties, LLC (Royalty Properties), and Cannon

        Squires Properties, LLC (Cannon Squires Properties), seeking possession of a 400-acre

        property in Barrington Hills that was used as a horse farm. Defendants filed an answer to the

        complaint and several affirmative defenses, including (1) that Amcore had acted in bad faith

        by failing to send the loan documents to defendants until the night before the closing, (2) that

        the loan violated the Truth in Lending Act (TILA) (15 U.S.C. § 1601 et seq. (2012)), (3) that

        Amcore’s unclean hands barred it from foreclosing, (4) that Amcore’s promises estopped it

        from foreclosing, and (5) that Amcore miscalculated the amount due. The trial court

        dismissed the affirmative defenses but gave defendants leave to replead them. On May 18,

        2010, the trial court appointed a receiver for the property.

¶5          In 2010, during the pendency of the lawsuit, the federal Office of the Comptroller of the

        Currency determined that Amcore was engaging in unsafe business practices that were likely

        to cause insolvency and appointed the FDIC as receiver for Amcore’s assets. As receiver, the

        FDIC sold Amcore’s interest in the loan to BMO Harris Bank (BMO Harris), which took

        over the foreclosure action. BMO Harris filed a motion for summary judgment on the

        complaint, but before the trial court heard the motion, BMO Harris sold its interest in the

            3
              As we explain in more detail below, Amcore’s interest in the loan was sold to BMO Harris
     Bank in 2010, which, in turn, sold its interest in the loan to the Forest Preserve in June 2013.
                                                       3

       No. 1-18-1323


          loan to the Forest Preserve, which was granted leave to substitute as plaintiff. After the

          Forest Preserve was substituted as plaintiff, defendants filed a motion requesting leave to file

          amended affirmative defenses, including the previous defenses as well as additional defenses

          specific to the Forest Preserve. In August 2013, the trial court denied defendants’ motion for

          leave to file their amended affirmative defenses, granted summary judgment in favor of the

          Forest Preserve, and granted the foreclosure of the mortgage and sale of the farm. The Forest

          Preserve was the highest bidder at the foreclosure sale, and the trial court entered a $6.2

          million deficiency judgment against defendants.

¶6           Defendants appealed and we reversed, finding that defendants had adequately alleged

          facts that could support judgment in their favor and that there remained questions of material

          fact precluding entry of summary judgment. BMO Harris Bank, 2016 IL App (1st) 151338­

          U, ¶ 71. Specifically, we noted that defendants had alleged (1) that Amcore had only

          presented them with the 500 pages of closing documents the night before the closing, (2) that

          Amcore knew that they needed to close or forfeit their nearly $2 million escrow deposit, and

          (3) that some of the loan documents provided by Amcore contained terms different than

          those previously discussed. BMO Harris, 2016 IL App (1st) 151338-U, ¶¶ 10, 47. We found

          that “[t]he allegation that the Cannon parties would lose their entire deposit of almost $2

          million if they walked away from the deal, when they had an inadequate opportunity to

          review the loan documents or arrange alternate financing, suffices to state a claim for

          economic duress that violated Amcore’s duties of negotiating in good faith and dealing fairly

          with the Cannons.” BMO Harris, 2016 IL App (1st) 151338-U, ¶ 48.

¶ 7	         Additionally, we found that defendants adequately alleged facts to support a violation of

          TILA. BMO Harris, 2016 IL App (1st) 151338-U, ¶ 52. We noted that TILA applies only to


                                                       4

     No. 1-18-1323


        consumer loans, not to loans for commercial purposes, and that the trial court had found that

        the loan documents established that Amcore made a commercial loan. BMO Harris, 2016 IL

        App (1st) 151338-U, ¶ 51. We further noted that defendants had presented evidence that the

        Cannons had intended to use the property as a residence and that there were zoning

        regulations and easements that severely limited the use of the land and largely forbade

        commercial use of the property. BMO Harris, 2016 IL App (1st) 151338-U, ¶ 52. We found

        that “[t]he circuit court improperly focused on Amcore’s purpose in making the loan, when

        applicable case law requires the court to consider primarily ‘the borrower’s purpose in

        obtaining the loan.’ ” BMO Harris, 2016 IL App (1st) 151338-U, ¶ 52 (quoting People’s

        Bank of Arlington Heights v. Atlas, 2015 IL App (1st) 133775, ¶ 28). Accordingly, we found

        that defendants had adequately alleged facts to raise a question of fact as to whether TILA

        applied to the loan transaction. BMO Harris, 2016 IL App (1st) 151338-U, ¶ 52. We reversed

        the trial court’s grant of summary judgment and its decision to strike defendants’ affirmative

        defenses and remanded “for further proceedings in accord with this order.” BMO Harris,

        2016 IL App (1st) 151338-U, ¶ 71.

¶8         After remand, on May 30, 2017, the parties appeared before the trial court to reinstate the

        case, and defendants requested that possession of the property be returned to them. The

        parties discussed the “status quo” that had been in place prior to the entry of summary

        judgment, with defendants arguing that possession remained presumptively with them

        because there was no showing that the property was nonresidential. The trial court found that,

        prior to the entry of summary judgment, there had been an order finding the Forest Preserve

        as mortgagee in possession and appointing a receiver and that the status quo would be

        continuing with the Forest Preserve as mortgagee in possession. The trial court accordingly


                                                    5

No. 1-18-1323


   entered an order providing that “the Plaintiff Forest Preserve District of Cook County is

   mortgagee in possession, pursuant to the October 10, 2013 ORDER, which is now

   reinstated.” Defendants again appealed to this court, and we again vacated the order. Forest

   Preserve District v. Royalty Properties, LLC, 2017 IL App (1st) 171564-U. We noted that, in

   the prior appeal, “[t]he appellate court expressly held that the Cannon parties stated several

   viable affirmative defenses supported by sufficient evidence to withstand the motion for

   summary judgment. The appellate court found that the Cannon parties stated facts which

   could support a finding that fraud in the factum rendered the purported mortgage documents

   void.” Forest Preserve District, 2017 IL App (1st) 171564-U, ¶ 7. We found that the

   questions of fact surrounding the validity of the mortgage precluded the trial court from

   finding the Forest Preserve as mortgagee in possession. Forest Preserve District, 2017 IL

   App (1st) 171564-U. Specifically, we found:

                “The Cannon parties’ allegations in their affirmative defenses, on which the

          circuit court has heard no testimony, would support a finding that no written

          instrument created a ‘consensual lien,’ because Amcore obtained the Cannons’

          signatures on the purported mortgage through fraud or duress. Because the circuit

          court has not yet heard sufficient evidence to determine whether the document [the

          Forest Preserve] presented meets the statutory definition of ‘mortgage,’ and whether

          Amcore and those who derive their rights from Amcore qualify as mortgagees, the

          circuit court did not have an adequate basis for naming [the Forest Preserve District]

          as mortgagee in possession.” Forest Preserve District, 2017 IL App (1st) 171564-U,

          ¶ 15.




                                               6

       No. 1-18-1323


           Accordingly, we found that “the record does not yet permit the circuit court to designate [the

           Forest Preserve] as a mortgagee in possession of the property at issue” and vacated the order,

           remanding “for further proceedings in accord with this order.” Forest Preserve District, 2017

           IL App (1st) 171564-U, ¶ 17.

¶9             On September 7, 2017, the Forest Preserve filed a motion to set an evidentiary hearing on

           its motion to be named mortgagee in possession. On October 23, 2017, the Forest Preserve

           filed a motion to reinstate a receiver, arguing that the original order appointing a receiver had

           never been appealed and that the appellate court decisions did not concern receivership. On

           October 31, 2017, McGinley Partners, LLC (McGinley Partners), holder of the junior note

           and mortgage on the property, also filed a motion to reinstate the receiver or, in the

           alternative, to appoint a receiver, arguing that a receiver should be appointed because

           McGinley Partners had obtained a judgment against defendants for failure to repay the junior

           note. 4

¶ 10           On November 27, 2017, defendants filed a response in opposition to the motions to

           appoint a receiver, arguing that, at the time the original order appointing a receiver was

           entered, defendants had not yet alleged their affirmative defense of duress. Defendants

           claimed that they did not immediately appeal this order because the receiver entered into a

           management agreement with them, which permitted their management and exclusive

           occupancy of the property. Defendants argued that the Forest Preserve had the burden of

           establishing (1) whether the property was residential real estate, (2) whether the Forest

           Preserve had an enforceable mortgage, and (3) whether there was good cause to appoint a



               4
                We affirmed the trial court’s judgment with respect to the junior note in McGinley Partners,
       LLC v. Royalty Properties, LLC, 2018 IL App (1st) 171317, appeal denied, No. 124085 (Ill. Nov. 28,
       2018).
                                                           7

       No. 1-18-1323


          receiver. Defendants further argued that the Forest Preserve had failed to satisfy its burden,

          so appointment of a receiver should be denied.

¶ 11         In reply, the Forest Preserve argued that defendants had affirmatively represented that

          they had leased the property to another business entity, Royalty Farms, LLC, for a

          commercial horse farm operation, demonstrating that the property was not residential. The

          Forest Preserve also claimed that defendants had not demonstrated that they were “good

          stewards” of the property, as they were unable to pay any of the costs associated with owning

          the property, including the payment of real estate property taxes.

¶ 12         On May 8 and 9, 2018, the parties appeared before the trial court for an evidentiary

          hearing, and on May 25, 2018, the trial court entered a nine-page order granting the

          appointment of a receiver. The court first noted that the requirements for naming a mortgagee

          in possession and appointing a receiver depended on the characterization of the property as

          residential or nonresidential property. The court found that, at the evidentiary hearing, the

          Cannons claimed that they intended to make Hunt Ridge, the largest residence on the

          property, their primary residence, and that at least defendant Richard Cannon did so; the trial

          court also found that the Forest Preserve “did not meaningfully dispute the fact that one or

          both of the Cannons resided at Hunt Ridge.” However, the court noted that “simply residing

          on the Property does not make it residential,” as a single tract of agricultural real estate

          consisting of more than 40 acres was not considered residential property under the statute.

¶ 13         The court found that, at the hearing, the Cannons admitted that they at one point had 54

          horses on the property and grew hay in some of the fields, and also admitted to employing at

          least 11 people to maintain the property and horses. The court further found that, according

          to a brochure published by Horizon Farms, the prior owner of the property, “the Property


                                                       8

No. 1-18-1323


    consisted of Hunt Ridge, a guest house, a farm house, a duplex staff house, a bunk house,

    staff apartment building, race track, hunter jumper area, jumper trail, run in shed, dog kennel,

    workshop, at least nine barns, at least six pastures, and at least nineteen paddocks”; the

    property also had breeding equipment and facilities. The court noted that, at the time

    defendants purchased the property, there were approximately 11 people leasing facilities; the

    court found that, by the time the foreclosure commenced, there were only two lessees

    remaining. However, the court noted that defendants had also leased the property to Royalty

    Farms, LLC, the entity the Cannons had created to manage their horses. The court found:

                “All of this taken together demonstrates that the Property was used predominantly

            for the growing and harvesting of hay; and the feeding, breeding, and management of

            horses. As such, the Property was clearly agricultural in nature. Indeed, all of the

            witnesses including the Cannons referred to the Property as either Horizon or Royalty

            Farms. While the Cannons argue that they did not intend to operate a commercial or

            for-profit farm, the statute does not require that agricultural property be operated for

            profit, merely that the predominate [sic] use of the land is agricultural. 735 ILCS

            5/15-1201. Finally, the Property is a single contiguous 400-acre tract of land, well

            over the statutory 40 acres.

                As such, the Court finds that the Property in question was a single tract of

            agricultural real estate larger than 40 acres, and thus does not meet the statutory

            definition of residential property.” 5



        5
          We note that, although the record does not make it entirely clear, it appears that the property
was zoned as residential under the Barrington Hills zoning code. However, “[a]griculture” is specified as
a permitted use in residential districts (Barrington Hills Village Code § 5-5-2 (amended Dec. 7, 2016))
and the zoning code does not contain a separate zoning district for agricultural use (see Barrington Hills
Village Code § 5-4-1 (added Apr. 1, 1963) (defining zoning districts)). Since the trial court did not use the
                                                     9

       No. 1-18-1323


¶ 14           As such, the trial court noted that, in order to name a mortgagee in possession or appoint

           a receiver, (1) it must be authorized by the mortgage and (2) there must be a reasonable

           probability that the mortgagee will prevail on a final hearing on the case, unless (3) the

           mortgagor objects and can show good cause. The court found that the mortgage permitted the

           mortgagee to take possession or obtain appointment of a receiver and proceeded to consider

           whether defendants’ affirmative defenses showed that there was no consensual mortgage. We

           discuss only the court’s analysis of issues that are raised by defendants on appeal.

¶ 15           With respect to the TILA claims, the court found that the statute applied to consumer

           credit transactions and that, “[u]nder the loan documents,” Royalty Properties and Cannon

           Squires Properties were the borrowers, so no credit was extended to any natural persons “and

           this defense fails as a matter of law.”

¶ 16           With respect to defendants’ claims of economic duress, the trial court identified the

           following allegations of wrongful conduct: (1) that Amcore provided “strong verbal tentative

           approval” of the loan prior to the Cannons’ bid on the property, (2) that Amcore failed to

           provide the loan documents until the evening before the closing, (3) that Amcore refused to

           change the documents to conform with prior representations regarding the terms of the loan,

           and (4) that Amcore demanded that the Cannons assign the purchase agreement to Royalty

           Properties.

¶ 17           First, the court found that the only evidence concerning any representations made by

           Amcore prior to the Cannons’ bid on the property was provided by the testimony of

           defendant Meryl Squires Cannon, who testified that she had conversations with an Amcore




       zoning of the property in its analysis, and the parties equally do not argue the zoning of the subject
       property, we also will not consider the zoning in our analysis.
                                                            10
       No. 1-18-1323


          representative in October 2006 both over the telephone and in person at the property. The

          trial court found that this testimony “is self-serving and is corroborated by no one.”

¶ 18         Next, the court found that Scott Gudmunson testified that he began working on the loan

          documents on December 15, 2006, and that the closing date was set for December 21, 2006;

          the court found that all the witnesses agreed that the closing date was set by the seller, not by

          the Cannons or Amcore. The court found that Gudmunson testified that he and the Cannons’

          attorney “worked essentially non-stop” in order to have the documents ready by the closing

          date and that an email from Gudmunson to the Cannons’ attorney showed that revisions were

          being made as late as 2:40 a.m. on December 21. The trial court found that “the loan

          documents did not exist prior to the closing, so it could not have been wrongful for Amcore

          to fail to provide documents it did not have.”

¶ 19         Additionally, the court found that defendant Richard Cannon had testified to several oral

          objections he had made to the terms of the loan at the closing but that Amcore was unwilling

          to negotiate most of the objected terms. The court further found that, after the closing, he

          continued to dispute an interest calculation issue but made no other objections. The court

          found:

                   “Upon consideration the Court finds that the Cannons would be unlikely to convince

                   a jury that this activity was fraudulent or wrongful. Amcore did not impose the

                   December 21, 2006 closing date on the Cannons, nor did it force them to put up

                   nearly $2,000,000 dollars in earnest money. Indeed, it is this Court’s impression that

                   Amcore went to great lengths to provide the Cannons with a $14,500,000 loan before

                   the closing date so that they would not lose their earnest money. Further, Mrs.

                   Cannon testified that the Cannons held a party at Hunt Ridge shortly after the closing


                                                       11 

       No. 1-18-1323


                 to celebrate buying the property and invited the Amcore bankers. Hardly, the

                 behavior of someone brow beaten into a contract against their will. Finally, it is

                 unclear to this Court why it was wrongful to require the Cannons to assign the

                 Purchase Agreement to Royalty Properties.”

¶ 20         Finally, the trial court found that there was no good cause for not naming the Forest

          Preserve as mortgagee in possession or appointing a receiver. The court noted that defendants

          claimed that the Forest Preserve had improperly maintained the property, but found that the

          photographs submitted by defendants did not show that the property was in disrepair. The

          court further found that the photographs could not prove conclusively who was responsible

          for the current state of the property, “as it has changed hands several times over the course of

          this lawsuit.” Finally, the court found that “the Court does not believe that the Cannons

          would be able to maintain the Property any better than the Forest Preserve. The Property is

          400 acres and contains multiple barns and residences, and the Cannons have not

          demonstrated that they are in a position to hire the number of staff required to maintain such

          a complex property.”

¶ 21         The court concluded:

                       “Based upon the initial review and interpretation of the documentary and

                 testimonial evidence and after having weighed the submissions of the parties, the

                 Court concludes that the Forest Preserve is reasonably likely to prevail on a final

                 hearing of this action. The Court does not believe that the Cannons have established a

                 good cause objection to the appointment of either a mortgagee-in-possession or

                 receiver, so that they should be allowed to remain in possession of the Property.

                 Accordingly, the order of May 18, 2010 appointing a receiver (which order the


                                                      12 

       No. 1-18-1323


                 Cannons never moved to appeal) is hereby reinstated with Mary B. Grossman of V &

                 G Property Management as receiver. Accordingly, as the motion to reinstate the

                 appointment of a receiver has been granted, the motion to reinstate the October 10,

                 2013 order appointing the Forest Preserve as mortgagee in possession is denied.”

¶ 22                                           ANALYSIS

¶ 23         On appeal, defendants claim that the trial court erred in appointing a receiver to manage

          the property. As an initial matter, we must determine the appropriate standard of review for

          our analysis, as the parties disagree on the applicable standard of review, with defendants

          arguing for a de novo review and the Forest Preserve arguing for a deferential standard of

          review. Generally, a motion to appoint a receiver pursuant to the Foreclosure Law is

          reviewed de novo, at least where it does not involve an evidentiary hearing. Bank of America,

          N.A. v. 108 N. State Retail LLC, 401 Ill. App. 3d 158, 165 (2010). However, in the case at

          bar, the receiver was appointed after an evidentiary hearing, and the trial court’s order

          required it to make findings of fact concerning, inter alia, the proper characterization of the

          property. Where a trial court hears witness testimony and makes findings of fact based on

          such testimony, a reviewing court generally affords deference to the trial court’s superior

          position. See, e.g., Hites v. Waubonsee Community College, 2018 IL App (2d) 170617, ¶ 51

          (in reviewing a motion to dismiss following an evidentiary hearing, reviewing factual

          findings under manifest weight standard); Lurie v. Wolin, 2017 IL App (1st) 161571, ¶ 32 (in

          reviewing jurisdictional issue after an evidentiary hearing, reviewing factual findings under

          manifest weight standard); Uptown Federal Savings & Loan Ass’n of Chicago v.

          Kotsiopoulos, 105 Ill. App. 3d 444, 451 (1982) (in reviewing petition to vacate judgment,

          reviewing factual findings under manifest weight standard); see also Bank of America, 401


                                                      13 

       No. 1-18-1323


          Ill. App. 3d at 165 (noting that “it is foreseeable that in a case in which a trial court has held a

          full evidentiary hearing on a motion to appoint a receiver, this court could find that an abuse

          of discretion standard or a manifest weight of the evidence standard would be appropriate to

          review the lower court’s judgmental decision”). In the case at bar, accordingly, we review the

          trial court’s factual findings under a manifest weight of the evidence standard of review,

          while reviewing the ultimate question of the propriety of the receiver’s appointment de novo.

          De novo consideration means we perform the same analysis that a trial judge would perform

          (Khan v. BDO Seidman, LLP, 408 Ill. App. 3d 564, 578 (2011)), while a finding is against

          the manifest weight of the evidence “only if the opposite conclusion is clearly evident or the

          finding itself is unreasonable, arbitrary, or not based on the evidence presented” (Hites, 2018

          IL App (2d) 170617, ¶ 51).

¶ 24          Defendants first claim that the trial court erred in finding that the property was not

          residential under the Foreclosure Law. The determination of whether property is residential

          or nonresidential has a direct impact on the appointment of a receiver, as it dictates which

          party bears the burden of proof of establishing “good cause” under the Foreclosure Law.

          Under section 15-1701(b) of the Foreclosure Law, prior to the entry of a judgment of

          foreclosure,

                       “(1) In the case of residential real estate, the mortgagor shall be entitled to

                  possession of the real estate except if (i) the mortgagee shall object and show good

                  cause, (ii) the mortgagee is so authorized by the terms of the mortgage or other

                  written instrument, and (iii) the court is satisfied that there is a reasonable probability

                  that the mortgagee will prevail on a final hearing of the cause, the court shall upon

                  request place the mortgagee in possession. ***


                                                        14 

        No. 1-18-1323


                        (2) In all other cases, if (i) the mortgagee is so authorized by the terms of the

                  mortgage or other written instrument, and (ii) the court is satisfied that there is a

                  reasonable probability that the mortgagee will prevail on a final hearing of the cause,

                  the mortgagee shall upon request be placed in possession of the real estate, except

                  that if the mortgagor shall object and show good cause, the court shall allow the

                  mortgagor to remain in possession.” 735 ILCS 5/15-1701(b) (West 2008).

           In other words, in both cases, the trial court must find authorization in the mortgage and a

           reasonable probability that the mortgagee will prevail, but if the property is residential under

           the Foreclosure Law, the mortgagor presumptively retains possession unless the mortgagee

           shows good cause, while if the property is nonresidential, the mortgagee presumptively has

           the right of possession unless the mortgagor shows good cause.

¶ 25	         “Residential Real Estate” is defined under the Foreclosure Law as

                  “any real estate, except a single tract of agricultural real estate consisting of more

                  than 40 acres, which is improved with a single family residence or residential

                  condominium units or a multiple dwelling structure containing single family dwelling

                  units for six or fewer families living independently of each other, which residence, or

                  at least one of which condominium or dwelling units, is occupied as a principal

                  residence *** (iii) if a mortgagor is a corporation, by persons owning collectively at

                  least 50 percent of the shares of voting stock of such corporation or by a spouse or

                  descendants of such persons. The use of a portion of residential real estate for non­

                  residential purposes shall not affect the characterization of such real estate as

                  residential real estate.” 735 ILCS 5/15-1219 (West 2008).




                                                       15 

       No. 1-18-1323


¶ 26         In the case at bar, the trial court found that the property was not residential real estate

          because it was a single tract of agricultural real estate consisting of more than 40 acres.

          “Agricultural Real Estate” is

                 “real estate which is used primarily (i) for the growing and harvesting of crops, (ii)

                 for the feeding, breeding and management of livestock, (iii) for dairying, or (iv) for

                 any other agricultural or horticultural use or combination thereof, including without

                 limitation, aquaculture, silviculture, and any other activities customarily engaged in

                 by persons engaged in the business of farming.” 735 ILCS 5/15-1201 (West 2008).

          The trial court found that the Cannons kept a number of horses on the property—at one point

          54—and grew hay in some of the fields, and also employed at least 11 people to maintain the

          property and horses. The trial court also found important the extensive grounds and facilities

          on the property, including guest and staff houses, a race track, at least nine barns and six

          pastures, and at least 19 paddocks, in addition to breeding equipment and facilities. The court

          found that “[a]ll of this taken together demonstrates that the Property was used

          predominantly for the growing and harvesting of hay; and the feeding, breeding, and

          management of horses. As such, the Property was clearly agricultural in nature.” We cannot

          find this factual finding to be against the manifest weight of the evidence.

¶ 27         Defendants focus heavily on the fact that the Barrington Hills zoning code permits the

          boarding of horses as a residential use. However, the fact that the village zoning code defines

          the boarding of horses as a “permitted home occupation” does not imply that the keeping of

          horses is necessarily part of a property’s residential character. Indeed, the breeding and

          raising of horses is also included in the village’s definition of agriculture. See Barrington

          Hills Village Code § 5-2-1 (amended Dec. 7, 2016). Moreover, the village’s characterization


                                                       16 

       No. 1-18-1323


          of the activity does not control its categorization under the Foreclosure Law. Agricultural real

          estate is specifically defined to include real estate used primarily for, inter alia, “the feeding,

          breeding and management of livestock.” 735 ILCS 5/15-1201 (West 2008). It is axiomatic

          that “[h]orses are livestock.” Tuftee v. County of Kane, 76 Ill. App. 3d 128, 133 (1979). Thus,

          it was not inappropriate for the court to take this use into consideration in determining the

          nature of the property.

¶ 28         We are similarly unpersuaded by defendants’ claim that the covenants, conditions,

          restrictions, and easements prohibit nonresidential uses of the property. The documents cited

          by defendants clearly reference the property’s long history as a “horse farm.” Indeed, the

          conservation easement incorporated into the covenants, conditions, and restrictions expressly

          provides that

                 “Grantor wishes to preserve the natural, open space, and scenic elements of Horizon

                 Farms and to ensure that it may continue to be used for farming purposes, including

                 the cultivation of the soil, raising and harvesting agricultural commodities, and the

                 raising, shearing, feeding, caring for, training, and management of animals.”

          We see nothing in these documents that would restrict an agricultural use of the property.

¶ 29         Defendants also argue that none of the agricultural uses pointed to by the trial court

          “change the residential character of property.” However, defendants are beginning from the

          wrong end of the analysis—property is considered residential only if it is not agricultural.

          Agricultural uses do not “take away” the residential character of the property. The property

          was never residential in the first place because it was agricultural. In the case at bar, the trial

          court found that the property was properly characterized as “a single tract of agricultural real

          estate consisting of more than 40 acres,” making it, by definition, nonresidential. 735 ILCS


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       No. 1-18-1323


          5/15-1219 (West 2008). We cannot find that this factual finding was against the manifest

          weight of the evidence.

¶ 30          Defendants also accuse the trial court of focusing on whether the loan was a residential or

          commercial loan in finding that the property was nonresidential. However, in the trial court’s

          order, the court did no such thing. As noted, the trial court discussed a number of facts that

          led it to conclude that the property was agricultural, not residential, in character. None of the

          facts included in the trial court’s analysis on this point included anything about the character

          of the loan. Similarly, contrary to defendants’ contentions, the trial court did not overlook the

          Cannons’ testimony about their making the property their primary residence. Instead, the

          court accurately noted that “simply residing on the Property does not make it residential,” as

          a single tract of agricultural real estate consisting of more than 40 acres was not considered

          residential property under the statute. We can find no error in the trial court’s analysis on this

          issue.

¶ 31          Since the property was nonresidential, under the Foreclosure Law, “if (i) the mortgagee is

          so authorized by the terms of the mortgage or other written instrument, and (ii) the court is

          satisfied that there is a reasonable probability that the mortgagee will prevail on a final

          hearing of the cause, the mortgagee shall upon request be placed in possession of the real

          estate, except that if the mortgagor shall object and show good cause, the court shall allow

          the mortgagor to remain in possession.” 735 ILCS 5/15-1701(b)(2) (West 2008). In the case

          at bar, defendants state in their brief that they do not challenge any of the findings of fact

          made by the trial court. Instead, they argue that the trial court erred in not following the

          dictates of our prior appeals and in considering the merits of their affirmative defenses. We

          do not find these arguments persuasive.


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       No. 1-18-1323


¶ 32         In the case at bar, the two elements required for a mortgagee to take possession of the

          property—its authorization under the mortgage and the reasonable probability of success on

          the merits—are interrelated. In our most recent appeal, we found that defendants’ allegations

          concerning the circumstances surrounding the execution of the loan documents presented a

          question of fact as to the validity of the mortgage itself, and that, “[b]ecause the circuit court

          has not yet heard sufficient evidence to determine whether the document [the Forest

          Preserve] presented meets the statutory definition of ‘mortgage,’ and whether Amcore and

          those who derive their rights from Amcore qualify as mortgagees, the circuit court did not

          have an adequate basis for naming [the Forest Preserve] as mortgagee in possession.” Forest

          Preserve District, 2017 IL App (1st) 171564-U, ¶ 15. Thus, in conducting its evidentiary

          hearing, the trial court necessarily needed to consider the merits of defendants’ affirmative

          defenses.

¶ 33         Defendants rely heavily on the fact that, in our prior decisions, we found that they had

          sufficiently alleged facts to withstand the striking of their affirmative defenses and had raised

          questions of material fact sufficient to withstand a motion for summary judgment. However,

          those prior decisions involved entirely different burdens than are present in the case at bar.

          When the legal sufficiency of a pleading is challenged, all well-pleaded facts are taken as

          true and the court must determine whether the allegations, taken in the light most favorable to

          the nonmovant, are sufficient to establish a cause of action. U.S. Bank Trust National Ass’n v.

          Lopez, 2018 IL App (2d) 160967, ¶ 17. Similarly, in deciding a motion for summary

          judgment, the trial court must view the documents and exhibits in the light most favorable to

          the nonmoving party, and summary judgment may only be granted if there is no general issue

          as to any material fact and the moving party is entitled to judgment as a matter of law. Home


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       No. 1-18-1323


           Insurance Co. v. Cincinnati Insurance Co., 213 Ill. 2d 307, 315 (2004). In other words, with

           respect to either a motion to strike an affirmative defense or a motion for summary judgment,

           there is no weighing of the strength of the nonmovant’s allegations, but only a determination

           that there is a question of fact that would entitle the case to move forward.

¶ 34           By contrast, the Foreclosure Law expressly requires the trial court to determine whether

           there is a “reasonable probability that the mortgagee will prevail on a final hearing of the

           cause” (735 ILCS 5/15-1701(b) (West 2008)), which necessarily includes some weighing of

           the merits of the case. Thus, the fact that we previously found that there was a question of

           fact as to defendants’ affirmative defenses is not incompatible with the trial court’s

           conclusion that, upon hearing further evidence, the Forest Preserve has a reasonable

           probability of prevailing below. 6

¶ 35           In their brief, defendants address only the trial court’s finding as to their TILA defense,

           so we focus on its analysis on that issue. Defendants alleged in their affirmative defenses that

           Amcore failed to make necessary disclosures under TILA, and we previously found that they

           had raised a question of fact as to whether TILA applied to the loan transaction. BMO Harris,

           2016 IL App (1st) 151338-U, ¶ 52. After the evidentiary hearing, in its order, the trial court

           found that the statute applied to consumer credit transactions and that, “[u]nder the loan

           documents,” Royalty Properties and Cannon Squires Properties were the borrowers, so no

           credit was extended to any natural persons “and this defense fails as a matter of law.”

           Defendants argue that this finding was contrary to our holding in the prior appeal, where we

           found that the trial court should not have focused on the label placed on the loan documents



               6
                  We note that the trial court’s finding does not, in fact, mean that the Forest Preserve will prevail
       after a full trial. All the trial court was required to do was find that there was a reasonable probability of it
       prevailing.
                                                              20 

       No. 1-18-1323


          alone. See BMO Harris, 2016 IL App (1st) 151338-U, ¶ 51. We do not find this argument

          persuasive.

¶ 36         In our prior appeal, the issue that we considered was the Forest Preserve’s focus on the

          loan as commercial, not consumer, based on the loan documents, which labeled the loan

          “commercial.” BMO Harris, 2016 IL App (1st) 151338-U, ¶ 52. We found that, in focusing

          on the label placed on the documents, the trial court improperly focused on Amcore’s

          purpose in making the loan, instead of looking to “ ‘the borrower’s purpose in obtaining the

          loan.’ ” BMO Harris, 2016 IL App (1st) 151338-U, ¶ 52 (quoting People’s Bank, 2015 IL

          App (1st) 133775, ¶ 28). In its order after the evidentiary hearing, however, this was not the

          basis of the trial court’s finding. Instead, the trial court found that TILA did not apply as a

          matter of law because the “borrowers” under the loan were not natural persons. This was an

          argument apparently made by the Forest Preserve only in a petition for rehearing in our prior

          appeal and so we expressly declined to consider it in that appeal. See BMO Harris, 2016 IL

          App (1st) 151338-U, ¶ 53. Thus, the trial court’s finding that there was a separate reason that

          the TILA defense failed is not inconsistent with our holding in the prior appeal.

¶ 37         Since defendants do not challenge any of the trial court’s findings of fact concerning the

          merits of their affirmative defenses (other than those arguments addressed above), we

          proceed to consider whether defendants showed good cause for remaining in possession of

          the property. As noted, the mortgagee is presumptively entitled to possession of

          nonresidential property “except that if the mortgagor shall object and show good cause, the

          court shall allow the mortgagor to remain in possession.” 735 ILCS 5/15-1701(b)(2) (West

          2008). In the case at bar, defendants’ arguments for “good cause” essentially boil down to the

          argument that they took good care of the property when it was under their management and


                                                      21 

       No. 1-18-1323


          that the Forest Preserve has allowed the property to deteriorate. However, we have rejected

          such arguments in the past, finding that the argument that the mortgagor is in the best

          position to preserve the property is “an insufficient basis to find that there is good cause to

          permit the mortgagor to retain possession of the subject property.” Bank of America, 401 Ill.

          App. 3d at 176. Furthermore, as defendants themselves note, the Forest Preserve will not be

          the entity in charge of maintaining the property (the receiver will be), so its prior stewardship

          of the property is irrelevant to the issue of whether good cause exists. Accordingly, we

          cannot find that the trial court erred in finding no good cause preventing the appointment of a

          receiver.

¶ 38         As a final matter, defendants accuse the trial court of truncating the hearing, which they

          claim unfairly prejudiced them. However, defendants did not raise any issues with the length

          of the hearing during the two-day hearing itself and did not claim before the trial court that

          they were not permitted to present certain evidence. Issues not raised in the trial court are

          forfeited on appeal. Thompson v. N.J., 2016 IL App (1st) 142918, ¶ 21. The purpose of such

          forfeiture rules “is to encourage parties to raise issues in the trial court, thus ensuring both

          that the trial court is given an opportunity to correct any errors prior to appeal and that a party

          does not obtain a reversal through his or her own inaction.” 1010 Lake Shore Ass’n v.

          Deutsche Bank National Trust Co., 2015 IL 118372, ¶ 14. In the case at bar, had defendants

          objected below, the trial court would have had the opportunity to address defendants’

          concerns. Reading the record, prior to breaking after the morning of the second day of the

          hearing, the trial court asked defense counsel how long he would need that day, and counsel

          responded that “I want to finish the whole hearing today.” The trial court informed the parties

          that they would have until 3 p.m. because the court had another obligation, and defense


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       No. 1-18-1323


          counsel’s only response was “[t]hank you.” Defense counsel did not indicate that this would

          not be enough time. Similarly, after defendants had presented the testimony of their

          witnesses, defense counsel did not in any way indicate that there was any additional evidence

          that remained to be presented and proceeded to present defendants’ closing argument.

          Consequently, we cannot find any basis for reversing the trial court’s order based on the

          length of the hearing.

¶ 39                                        CONCLUSION

¶ 40         For the reasons set forth above, we cannot find that the trial court erred in appointing a

          receiver for the property.

¶ 41         Affirmed.




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