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                                    Appellate Court                         Date: 2017.10.30
                                                                            11:07:56 -05'00'




           Country Club Estates Condominium Ass’n v. Bayview Loan Servicing LLC,
                                  2017 IL App (1st) 162459



Appellate Court         COUNTRY CLUB ESTATES CONDOMINIUM ASSOCIATION,
Caption                 Plaintiff-Appellant, v. BAYVIEW LOAN SERVICING LLC and
                        ALL UNKNOWN OCCUPANTS, Defendants (Bayview Loan
                        Servicing LLC, Defendant-Appellee).



District & No.          First District, Second Division
                        Docket No. 1-16-2459



Filed                   August 8, 2017



Decision Under          Appeal from the Circuit Court of Cook County, No. 15-M6-3500; the
Review                  Hon. Camille E. Willis, Judge, presiding.



Judgment                Reversed and remanded.


Counsel on              Fullett Rosenlund Anderson PC, of Lake Zurich (Stuart A. Fullett,
Appeal                  Jeffrey D. Swanson, and Antonio C. Capozzi, of counsel), for
                        appellant.

                        Noonan & Lieberman, Ltd., of Chicago (James V. Noonan and Robert
                        Reynolds, of counsel), for appellee.
     Panel                    JUSTICE MASON delivered the judgment of the court, with opinion.
                              Presiding Justice Hyman and Justice Pierce concurred in the judgment
                              and opinion.


                                               OPINION

¶1         Defendant, Bayview Loan Servicing LLC (Bayview), purchased a condominium unit
       through a foreclosure sale confirmed in November 2014. At the time of the sale, the unit had
       accrued nearly $14,000 in unpaid monthly assessments to plaintiff, Country Club Estates
       Condominium Association (Association). But seven months after its purchase, despite a
       demand from the Association, Bayview refused to pay any assessments, past or present.
       Thus, in April 2015, the Association filed the present lawsuit against Bayview pursuant to the
       Forcible Entry and Detainer Act (735 ILCS 5/9-101 et seq. (West 2014)), seeking possession
       of the unit and $18,659.26 in unpaid assessments.
¶2         Nearly two months after the lawsuit was filed, and seven months after Bayview acquired
       the unit, Bayview tendered to the Association a payment of $4771.85, which represented
       only the assessments that accrued after the foreclosure sale. Bayview then moved for
       summary judgment, arguing that under section 9(g)(3) of the Condominium Property Act
       (Act) (765 ILCS 605/9(g)(3) (West 2014)), its tender of assessments accruing after the
       foreclosure sale extinguished the Association’s lien for assessments that accrued before the
       foreclosure sale. The trial court agreed and granted partial summary judgment to Bayview as
       to the presale assessments.
¶3         We reverse and hold that, in order to extinguish presale assessments under section
       9(g)(3), a foreclosure buyer must make prompt payment of assessments after acquiring the
       property. Summary judgment for Bayview was improper because a material question of fact
       exists as to whether Bayview’s tender, seven months after acquiring the unit, can be
       considered prompt. We therefore remand for further proceedings.

¶4                                             BACKGROUND
¶5         The following facts are undisputed. On November 21, 2014, Bayview acquired title via
       sheriff’s deed to a condominium unit located at 4002 West 193rd Street in Country Club
       Hills, Illinois. That unit is part of the Association, and pursuant to the Act, the unit owner is
       required to pay monthly assessments to the Association. The previous owner had unpaid
       assessments dating back to January 2011.
¶6         After it purchased the property at the foreclosure sale, Bayview failed to pay any
       assessments. On March 13, 2015, the Association sent Bayview a letter demanding payment
       of $18,379.26 in past-due assessments that accrued both before and after Bayview acquired
       the unit. When Bayview still refused to pay, the Association filed this lawsuit on April 27,
       2015, seeking (i) possession of the unit and (ii) a judgment against Bayview for $18,659.26,
       plus late charges, interest, fines, chargebacks, and any assessments accruing after the filing of
       the action.
¶7         On June 22, 2015, Bayview tendered a payment of $4771.85 to the Association,
       representing only the assessments that accrued after it purchased the unit. The Association

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       refused the tender, as it was not the Association’s policy to accept partial payments. Bayview
       then moved for partial summary judgment. In its motion, Bayview admitted that it owed
       $4771.85 in assessments that accrued since it purchased the unit, but it argued that under
       section 9(g)(3) of the Act, its tender of the postsale assessments extinguished the
       Association’s lien for the presale assessments.
¶8         In response, the Association argued that, under our supreme court’s interpretation of
       section 9(g)(3) in 1010 Lake Shore Ass’n v. Deutsche Bank National Trust Co., 2015 IL
       118372, ¶ 24, a foreclosure buyer is required to make “prompt” payment of postsale
       assessments in order to extinguish an association’s lien for previous unpaid assessments.
       Although the Association did not file a cross-motion for summary judgment, it further argued
       that Bayview’s tender was not prompt as a matter of law. As stated by the Association’s
       counsel in oral argument: “I don’t see a universe where seven months is prompt.”
¶9         The trial court granted Bayview’s motion for partial summary judgment and denied the
       Association’s motion for reconsideration. Following a prove-up, the court granted $5249.92
       in postsale assessments to the Association. The court also entered a finding under Illinois
       Supreme Court Rule 304(a) (eff. Mar. 8, 2016) that there was no just cause to delay the
       enforcement or appeal of its ruling, and it stayed the issue of the Association’s request for
       attorney fees pending the result of the appeal.

¶ 10                                           ANALYSIS
¶ 11       The Association argues, as it did before the trial court, that under 1010 Lake Shore, a
       foreclosure buyer must make prompt payment of current assessments in order to extinguish
       an association’s lien for any presale amounts due and owing. It further argues that Bayview’s
       delay of seven months in tendering payment of postsale assessments was not prompt as a
       matter of law, or, alternatively, that the reasonableness of Bayview’s payment presents a
       material issue of fact precluding summary judgment.
¶ 12       Bayview argues that, under the plain language of section 9(g)(3), there is no promptness
       requirement; a foreclosure buyer may withhold assessments for as long as it pleases,
       regardless of the reasonableness of such action, and still extinguish the association’s lien
       whenever it chooses to pay the postsale assessments. In the alternative, Bayview argues that
       if 1010 Lake Shore imposes a promptness requirement, it should not be applied retroactively
       since 1010 Lake Shore was not decided until more than five months after Bayview’s partial
       tender.
¶ 13       The interpretation of a statute is a question of law that we review de novo (Taddeo v.
       Board of Trustees of the Illinois Municipal Retirement Fund, 216 Ill. 2d 590, 595 (2005)), as
       is the propriety of the trial court’s grant of summary judgment (Allegis Realty Investors v.
       Novak, 223 Ill. 2d 318, 330 (2006)). In interpreting a statute, our main goal is to ascertain and
       effectuate the intent of the legislature. 1010 Lake Shore, 2015 IL 118372, ¶ 21. The best
       indicator of that intent is the language of the statute itself, given its plain and ordinary
       meaning. Id. If the language is unambiguous, we apply it as written, but where the language
       is unclear, we may determine the legislature’s intent from other sources, such as legislative
       history. Krohe v. City of Bloomington, 204 Ill. 2d 392, 395 (2003).
¶ 14       Section 9(g) of the Act provides, in relevant part:



                                                   -3-
                    “(1) If any unit owner shall fail or refuse to make any payment of the common
                expenses or the amount of any unpaid fine when due, the amount thereof *** shall
                constitute a lien on the interest of the unit owner in the property ***.
                                                      ***
                    (3) The purchaser of a condominium unit at a judicial foreclosure sale *** shall
                have the duty to pay the unit’s proportionate share of the common expenses for the
                unit assessed from and after the first day of the month after the date of the judicial
                foreclosure sale ***. Such payment confirms the extinguishment of any lien created
                pursuant to paragraph (1) or (2) of this subsection (g) by virtue of the failure or
                refusal of a prior unit owner to make payment of common expenses ***.” 765 ILCS
                605/9(g)(1), (3) (West 2014).
       Under the plain language of this section, it is clear that a foreclosure buyer’s duty to pay
       monthly assessments begins on “the first day of the month after the date of the judicial
       foreclosure sale.” 765 ILCS 605/9(g)(3) (West 2014). But on the face of the statute, section
       9(g)(3) does not contain any time limit for confirming the extinguishment of an association’s
       lien. Thus, we must look beyond the statute’s language in order to resolve this issue.
¶ 15        In determining the legislature’s intent, we consult the legislative history of section 9(g).
       See Krohe, 204 Ill. 2d at 398 (“legislative history and debates are ‘[v]aluable construction
       aids in interpreting an ambiguous statute’ ” (quoting Advincula v. United Blood Services, 176
       Ill. 2d 1, 19 (1996))). Unfortunately, there is no legislative debate pertaining specifically to
       the extinguishment clause; the current version of section 9(g)(3), which became effective in
       1992, passed unanimously without substantive discussion. Pub. Act 87-692, § 1 (eff. Jan. 1,
       1992) (amending Ill. Rev. Stat. 1991, ch. 30, ¶ 309); see 87th Ill. Gen. Assem., House
       Proceedings, May 3, 1991, at 38-39, 41; 87th Ill. Gen. Assem., Senate Proceedings, June 20,
       1991, at 109-10; 87th Ill. Gen. Assem., House Proceedings, June 27, 1991, at 74-75. But on
       other occasions, our legislature has expressed concern about the difficulties faced by
       condominium associations when a unit owner fails to pay his or her share of common
       expenses and the unit then goes into foreclosure. For instance, in 2006, the legislature
       adopted an amendment to section 9(g) that would give greater protection to condominium
       associations (Pub. Act 94-1049, § 5 (eff. Jan. 1, 2007) (adding 765 ILCS 605/9(g)(4), (5))).
       In support of that amendment, Representative Hamos stated:
                “[T]he issue here is that within a condo building there are other condominium
                owners. They were not responsible for the delinquency, they didn’t cause the
                foreclosure, but they as an association are responsible for paying the operating
                expenses and maintenance costs associated with that building. It’s not their fault that
                there’s a foreclosure, but they’re going to have to eat the costs ***. *** There are
                costs to operating that building and the rest of the unit owners are going to end up
                paying the cost for the delinquency.” 94th Ill. Gen. Assem., House Proceedings, Apr.
                11, 2006, at 36-37 (statements of Representative Hamos).
       See also 94th Ill. Gen. Assem., House Proceedings, Apr. 10, 2006, at 22 (statements of
       Representative Nekritz) (expressing concern that “associations are losing thousands and
       thousands of dollars every year for back assessments that do not get paid”). Representative
       Hamos additionally noted that delinquencies are particularly problematic for small
       condominium associations, where there are fewer unit owners to absorb the costs incurred by


                                                   -4-
       an owner who fails to pay the unit’s fair share of common expenses. 94th Ill. Gen. Assem.,
       House Proceedings, Apr. 11, 2006, at 36-37 (statements of Representative Hamos).
¶ 16       Even though the legislators were discussing the 2006 amendment to the Act, their
       concerns about the difficulties faced by condominium associations are still pertinent to the
       interpretation of section 9(g)(3). The current situation provides a useful case in point: since
       2011, the unit’s former owner was delinquent on assessments, thus exposing the
       Association’s other unit owners to the obligation to pay more than their share of common
       expenses to cover the shortfall. Eventually, in 2014, the unit was foreclosed upon. This
       would ordinarily be a mixed blessing for the other unit owners: it means that they
       permanently lose most of the unpaid back assessments,1 but it should also mean that the new
       owner would begin paying assessments going forward, as required by section 9(g)(3).
       Unfortunately, Bayview withheld assessments for seven months, ultimately forcing the
       Association to sue before Bayview tendered the amount it undeniably owed.
¶ 17       Now, Bayview concedes that it owes the assessments that accrued since it purchased the
       unit—and it could not reasonably do otherwise, given the clear language of section
       9(g)(3)—but it asserts that its tender of those assessments, regardless of its timeliness (or
       lack thereof), should automatically serve to extinguish the Association’s ability to pursue
       payment of presale delinquent assessments. We disagree.
¶ 18       In this regard, our supreme court’s discussion of section 9(g)(3) in 1010 Lake Shore,
       2015 IL 118372, is instructive:
                    “The first sentence of section 9(g)(3) plainly requires a foreclosure sale purchaser
               to pay common expense assessments beginning in the month following the
               foreclosure sale. The second sentence provides an incentive for prompt payment of
               those postforeclosure sale assessments ***. Accordingly, under the plain language of
               section 9(g)(3), the payment of postforeclosure sale assessments formally approves
               and makes certain the cancellation of the condominium association’s lien.” (Emphasis
               added.) Id. ¶ 24.
       Thus, 1010 Lake Shore acknowledges that a time requirement is implicit in section 9(g)(3),
       insofar as that section gives foreclosure buyers an “incentive for prompt payment.” If, as
       Bayview argues, a foreclosure sale buyer could withhold payment of postforeclosure sale
       assessments indefinitely and still obtain the benefit of section 9(g)(3), the statute would not
       provide any such incentive.
¶ 19       Bayview asserts that even without any time limit on extinguishment of an association’s
       lien, the statute still incentivizes prompt payment of assessments as they become due because
       foreclosure buyers typically wish to unencumber and sell their acquisitions as soon as
       possible. But Bayview’s own actions in this case belie such an argument. Bayview was in no
       apparent hurry to pay the assessments it now admits that it owes—not when Bayview
       acquired title to the unit, not four months later when the Association sent a letter demanding
       payment, and not when the Association was finally forced to file suit. Rather, Bayview
       waited two months after the commencement of the action to tender any payment.


           1
           Under section 9(g)(4) (765 ILCS 605/9(g)(4) (West 2014)), the Association can recover six
       months of past-due expenses if Bayview later sells the unit to a third party, but this still leaves the
       majority of the past-due expenses unpaid.

                                                      -5-
¶ 20       Bayview additionally argues that 1010 Lake Shore is distinguishable because the
       foreclosure buyer in that case did not make any payments, prompt or otherwise; thus, the
       court’s discussion of “prompt payment” is merely dictum. But we are not free to ignore the
       dicta of our supreme court. As our supreme court has repeatedly stated, “ ‘Even
       obiter dictum of a court of last resort can be tantamount to a decision and therefore binding in
       the absence of a contrary decision of that court.’ ” Exelon Corp. v. Department of Revenue,
       234 Ill. 2d 266, 282 (2009) (quoting Cates v. Cates, 156 Ill. 2d 76, 80 (1993)); see also
       People v. Williams, 204 Ill. 2d 191, 207 (2003) (regardless of whether Illinois Supreme
       Court’s statement was best classified as judicial or obiter dictum, appellate court erred by not
       following it).2
¶ 21       Therefore, based on 1010 Lake Shore and the statements of our legislature concerning the
       policies animating section 9(g), we hold that in order to extinguish an association’s lien for
       preforeclosure sale assessments, a foreclosure buyer must make “prompt” payment of current
       assessments. In keeping with the well-established principle that a mortgage foreclosure
       proceeding is a proceeding in equity (PNC Bank, National Ass’n v. Wilson, 2017 IL App (2d)
       151189, ¶ 25 (citing Federal National Mortgage Ass’n v. Bryant, 62 Ill. App. 3d 25, 27
       (1978))), the question of whether a particular payment is “prompt” is fact-based, taking the
       particular circumstances and the equities of the situation into account.
¶ 22       We note that, in denying the Association’s motion for reconsideration, the trial court
       stated that it was unsure what “prompt” payment would mean in this context and requested
       guidance on that matter if, in fact, we held that prompt payment was required. For that, we
       look to the language of the statute itself, which provides that foreclosure buyers become
       responsible for paying assessments “from and after the first day of the month after the date of
       the judicial foreclosure sale” (765 ILCS 605/9(g)(3) (West 2014)). Although, as we discuss
       later, this is not necessarily a rigid deadline for the commencement of payment, the wording
       shows that the legislature contemplated that monthly payments would ideally be made “from
       and after the first day of the month” following the foreclosure sale. Id. In some cases, there
       may be extenuating circumstances that would excuse a failure to tender the required
       assessments commencing the month after purchase, but no such circumstances excusing
       Bayview’s delay in payment are before us. In the absence of any extenuating circumstances,
       we would expect assessments to be tendered in the month after purchase. To hold otherwise
       and permit indefinite delay on the part of foreclosure buyers would impose unacceptable
       hardship upon the buyer’s fellow unit owners, who in many instances are already losing
       thousands of dollars in unpaid assessments as a result of the unit’s foreclosure.
¶ 23       Bayview argues that such a rule is unfair to foreclosure buyers for two reasons: first,
       according to Bayview, it gives condominium associations an incentive to wrongfully refuse a
       buyer’s tender of postsale assessments in an effort to recover all past-due assessments and,
       second, given the delay in some cases between the sale and the order confirming the sale, it
       would be unreasonable to expect foreclosure buyers to pay condominium assessments before
       ownership of the property has been confirmed by the court.

           2
            Judicial dictum is a deliberate expression of opinion addressing a point briefed and argued by
       counsel, while obiter dictum is an expression of opinion made as an aside. Exelon Corp., 234 Ill. 2d at
       277. In this case, the 1010 Lake Shore court’s discussion of prompt payment would likely be classified
       as obiter dictum; nevertheless, as noted, we are bound by it. Williams, 204 Ill. 2d at 207.

                                                      -6-
¶ 24        Courts can and should take such circumstances into account when determining whether a
       buyer’s payment of assessments is “prompt.” Thus, for instance, if a buyer’s prompt tender
       of all postsale assessments is unreasonably refused by a condominium association, any
       further delay in payment would clearly be the fault of the association rather than the buyer.
       See State Bank of Geneva v. Sorenson, 167 Ill. App. 3d 674, 680 (1988) (a party seeking
       equitable relief cannot take advantage of its own wrongdoing). Similarly, if it takes months
       for a judicial sale to be confirmed by the court, but the buyer pays its assessments shortly
       after the confirmation order (dating back to the month following the sale), the buyer’s
       payment could be deemed prompt under the circumstances. But no such mitigating facts are
       evident here. The record does not state when the foreclosure sale occurred, but we know that
       Bayview acquired title to the unit on November 21, 2014, and yet did not tender any
       payments until June 22, 2015. The record does not disclose any facts that would explain or
       mitigate this seven-month delay in payment.
¶ 25        Bayview additionally argues that this case is analogous to Pembrook Condominium
       Ass’n-One v. North Shore Trust & Savings, 2013 IL App (2d) 130288, and 5510 Sheridan
       Road Condominium Ass’n v. U.S. Bank, 2017 IL App (1st) 160279, in which a foreclosure
       buyer’s tender of postsale assessments extinguished the condominium association’s lien for
       presale assessments. For the reasons that follow, we find both cases distinguishable.
¶ 26        The Pembrook defendant purchased a condominium unit at a foreclosure sale on April
       13, thus becoming responsible for monthly assessments from May 1 onwards. On June 18,
       defendant tendered a check to the condominium association for its May and June
       assessments. The Pembrook court held that, under section 9(g)(3) of the Act, defendant’s
       tender extinguished the association’s lien for assessments that came due before the
       foreclosure sale. Pembrook, 2013 IL App (2d) 130288, ¶ 17.
¶ 27        But Pembrook does not hold that a foreclosure buyer may delay payment indefinitely and
       still claim the benefit of section 9(g)(3). The court held only that defendant’s payment, which
       it made about a month and a half after its first payment became due, was sufficient under the
       circumstances. There is, in our view, a material distinction between a seven-week delay and a
       seven-month delay in payment. And the Association here did not jump the gun in filing suit
       in an effort to obtain payment of presale assessments. Rather, Bayview’s inaction and its
       steadfast refusal to pay forced the Association to file suit and incur additional expense.
       Finally, to the extent that Pembrook might be read as carte blanche to foreclosure buyers
       wishing to delay payment of assessments indefinitely, the case is inconsistent with our
       supreme court’s later decision in 1010 Lake Shore, which is the controlling authority.
¶ 28        In Sheridan Road, a decision from a different division of this court, the plaintiff
       condominium association argued that section 9(g)(3) required a foreclosure buyer to pay
       postsale assessments by “the first day of the month after the date of the judicial foreclosure
       sale” (765 ILCS 605/9(g)(3) (West 2014)) in order to avail itself of the statute’s
       extinguishment provision. Sheridan Road, 2017 IL App (1st) 160279, ¶ 19. The Sheridan
       Road court disagreed, holding that the phrase “the first day of the month after the date of the
       judicial foreclosure sale” was not a deadline for payment but, rather, the time at which the
       obligation to pay postsale assessments begins. Id. ¶ 20.
¶ 29        We do not disagree with this conclusion; like the Sheridan Road court, we do not read
       that statutory phrase as an explicit deadline for payment. Rather, for the reasons stated above,
       we hold that payment must be prompt under the circumstances (though not necessarily

                                                  -7-
       strictly by the first of the month after the sale) to extinguish an association’s lien. Indeed, the
       Sheridan Road court acknowledged that ensuring prompt payment was one of the
       legislature’s key concerns in enacting the present version of section 9(g)(3):
                “[T]he General Assembly was aware of and concerned with the possibility that
                purchasers who became liable for postsale expenses would not pay in a timely
                manner. To address that problem, the legislature designed section 9(g)(3) to
                encourage prompt payment of postsale expenses by setting their payment as a
                precondition to the extinguishment of association liens for presale expenses.”
                (Emphases in original.) Id. ¶ 24.
       Additionally, as with Pembrook, to the extent that Sheridan Road may be read as imposing
       no timing deadline whatsoever on foreclosure buyers, we find that conclusion to be
       inconsistent with 1010 Lake Shore.
¶ 30       Finally, Bayview argues that even if 1010 Lake Shore imposes a requirement of prompt
       payment, that requirement should not be applied retroactively in this case. But 1010 Lake
       Shore did not create a requirement of promptness; it merely articulated the requirement that
       was already implicit in the purpose underlying section 9(g)(3). See id. (noting that “the
       legislature designed section 9(g)(3) to encourage prompt payment of postsale expenses”
       (emphasis in original)) Accordingly, we do not find that Bayview’s pre-1010 Lake Shore
       tender is exempt from the timeliness requirement of section 9(g)(3).
¶ 31       Thus, we turn to consider whether summary judgment for Bayview as to the presale
       expenses was proper. We cannot discern from the record what reasons, if any, existed for
       Bayview’s delay in payment. And the Association did not file a cross-motion for summary
       judgment, so we are not in a position to say that Bayview’s tender was not prompt as a matter
       of law. Because we have determined that the trial court erred in entering summary judgment
       in favor of Bayview, we remand for further proceedings to resolve whether Bayview’s tender
       of postsale assessments was timely under section 9(g)(3).

¶ 32                                        CONCLUSION
¶ 33       We hold that, in order to obtain extinguishment of a condominium association’s lien for
       presale assessments under section 9(g)(3) of the Act, a foreclosure buyer must make prompt
       payment of postsale assessments. We therefore reverse the trial court’s grant of partial
       summary judgment for Bayview since a material issue of fact exists as to whether Bayview’s
       tender, seven months after acquiring title to the property, was prompt.

¶ 34      Reversed and remanded.




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