                            2016 IL App (2d) 150492
                                 No. 2-15-0492
                           Opinion filed June 30, 2016
_____________________________________________________________________________

                                           IN THE

                            APPELLATE COURT OF ILLINOIS

                              SECOND DISTRICT
______________________________________________________________________________

ALSJ, INC.,                           )   Appeal from the Circuit Court
                                      )   of Du Page County.
      Plaintiff and Counterdefendant- )
      Appellant,                      )
                                      )
v.                                    )   No. 11-CH-2344
                                      )
LAURA J. KURTZ,                       )
                                      )   Honorable
      Defendant and Counterplaintiff- )   Robert G. Gibson,
      Appellee.                       )   Judge, Presiding.
______________________________________________________________________________

       JUSTICE JORGENSEN delivered the judgment of the court, with opinion.
       Justices McLaren and Birkett concurred in the judgment and opinion.

                                              OPINION

¶1     Plaintiff, ALSJ, Inc., filed a complaint to foreclose a mortgage against defendant, Laura

J. Kurtz. Kurtz filed, inter alia, an affirmative defense and a counterclaim, each of which

alleged that ALSJ violated the Mortgage Rescue Fraud Act (Act or Mortgage Fraud Act) (765

ILCS 940/1 et seq. (West 2014)). The trial court found that Kurtz defaulted on the loan.

However, it also found that ALSJ violated the Mortgage Fraud Act. The court characterized

ALSJ’s actions as part of an “equity-stripping scheme” against Kurtz, whereby Kurtz, a legally

unsophisticated homeowner, would lose her home for failing to satisfy a “facially outrageous”

one-year balloon mortgage. The court rescinded the mortgage documents and awarded attorney
2016 IL App (2d) 150492


fees to Kurtz. ALSJ appeals, arguing that: (1) the Mortgage Fraud Act does not apply, because

ALSJ is not a “distressed property consultant”; 1 (2) even if the Mortgage Fraud Act applies and

ALSJ violated it, Kurtz is not entitled to relief, because she is not a “consumer”; (3) even if

Kurtz is entitled to relief, the court abused its discretion by rescinding the mortgage documents,

because the rescission resulted in a windfall to Kurtz; and (4) even if Kurtz is entitled to relief,

the court abused its discretion in awarding attorney fees. ALSJ also argues that the court erred in

denying its motion to reconsider. Kurtz did not file an appellate brief. We reject each of ALSJ’s

arguments, and we affirm the court’s judgment.

¶2                                      I. BACKGROUND

¶3     The mortgage documents between Kurtz and ALSJ include: (1) an installment note in the

amount of $66,000; (2) a trust deed in favor of ALSJ; (3) an escrow agreement; (4) a warranty

deed; and (5) a business-purpose affidavit (wherein Kurtz averred that the loan was for

commercial purposes).      The mortgage documents pertained to a single-family residence in

Lombard (the subject property). The closing on the loan took place in March 2010. Kurtz made

less than six months of payments on the loan. In May 2011, ALSJ filed its complaint for

foreclosure.

¶4     Kurtz filed an affirmative defense and a counterclaim, alleging that ALSJ violated the

Mortgage Fraud Act. ALSJ does not seem to dispute that the terms of the mortgage documents

violate the Mortgage Fraud Act as applied to distressed-property consultants, distressed

properties, and distressed-property owners.      The documents set forth a one-year balloon



       1
           ALSJ appears to concede that, if it is a “distressed property consultant,” the Mortgage

Fraud Act applies and it violated the Mortgage Fraud Act.

                                               -2-
2016 IL App (2d) 150492


mortgage that would ultimately bear a 36% interest rate with a late fee of $693. However, again,

ALSJ contends that it is not a distressed-property consultant.

¶5                                    A. First Day of Trial

¶6     The trial court held a two-day trial on the parties’ filings. Kurtz’s attorney did not appear

the first day, but he appeared the second day. On the first day, the parties primarily addressed

the issue of whether Kurtz defaulted on the loan. The court found that she did. ALSJ’s

witnesses began testimony regarding Kurtz’s affirmative defense and counterclaim, as follows.

¶7                                        1. Andrew Lee

¶8     Andrew Lee testified that he is the president and founder of ALSJ. ALSJ lends money to

real-estate developers. ALSJ lends money only for commercial purposes, not for individual

homeowners. Lee believed that Kurtz wanted the loan for commercial purposes, because Kurtz

provided him with an affidavit that stated:

               “To induce ALSJ Incorporated to loan me the aforementioned sum, I hereby

       represent that said sum is being used solely for business purposes and not for personal,

       family, or household purposes.”

Lee requires a similar statement from each entity or person to whom he issues a loan. Kurtz

never told Lee that she was residing in the subject property or that she might lose the property if

she did not obtain a loan to pay the taxes. A broker, Zoran Bozovic, referred Kurtz to Lee. Lee

talked to Kurtz by phone; he never met her.

¶9                                        2. Robert Hall

¶ 10   Robert Hall testified that he is an attorney and that he represented Kurtz in her

transactions with ALSJ. Hall informed Kurtz that the loan was to be used for commercial

purposes. Hall believed that the loan would be used for commercial purposes, because Kurtz


                                               -3-
2016 IL App (2d) 150492


signed an affidavit that so stated. Hall believed that Kurtz lived in an apartment in Lisle, because

Kurtz showed him documentation with that address.             During Hall’s testimony, the court

interjected to ask how Kurtz came to be Hall’s client. (Again, Kurtz’s attorney was not present.)

Hall could not recall whether Kurtz was referred to him. He believed that Kurtz called him to

initiate the relationship.

¶ 11                                       3. Jeffery Asner

¶ 12    Jeffery Asner testified that he works for ALSJ. ALSJ seeks real estate to buy, repair, and

then sell for profit. Sometimes ALSJ issues loans to businesses that do the same. Bozovic

informed ALSJ that Kurtz was looking to rehab a property and then sell or rent it. Bozovic

further told ALSJ that, if Kurtz rented the property, she would seek to refinance with a

conventional mortgage. Kurtz provided ALSJ with a pay stub that listed a Lisle apartment as her

address. To decide whether to issue the loan, Asner walked through the subject property. In his

view, although the necessary repairs were mostly cosmetic, he did not think that the house was

livable. He did not think that it looked as though anyone was living there, because there was no

furniture.

¶ 13                                  B. Second Day of Trial

¶ 14                                           1. Lee

¶ 15    Lee testified again. He stated that he would voluntarily seek a lower amount than the

amount due, effectively reducing the interest rate from 36% to 9%. He would also cancel the

late fees. Lee reiterated that, when he issued the loan, he thought that it was for commercial

purposes. Lee testified that he had served in the military, was 78 years old, and had suffered

from a heart attack and cancer.




                                               -4-
2016 IL App (2d) 150492


¶ 16   On cross-examination, Lee testified that Bozovic approached ALSJ. ALSJ did not have

an agency relationship with Bozovic. Bozovic told ALSJ that Kurtz was his cousin. 2 When

asked whether he had ever worked with Bozovic or Hall in the past, Lee answered: “We get

many leads from people,” and “No. Unless he was the attorney from yesterday.”

¶ 17                                        2. Kurtz

¶ 18   Kurtz testified that, in 2008, her mother passed away and bequeathed the subject property

to her and her sister. For the first few months, Kurtz, who had never owned a home before, lived

in her Lisle apartment. Her sister and her sister’s husband lived in the subject property. They

began basic renovations, like paint and kitchen tile backsplash. Then, the family decided that

Kurtz would be the sole owner of the home. In May 2009, her sister transferred title in the home

to her. Kurtz and her son (age not specified) moved into the home. Kurtz then learned that the

home carried approximately $8,000 in delinquent taxes. Kurtz, who worked in a jewelry store,

did not have good credit to obtain a loan to pay the delinquent taxes and finish the renovations.

¶ 19   A customer at the jewelry store, Corey Hughes, told Kurtz that his company, New

Frontier Financial, could help her. Hughes referred her within the company to Bozovic and

Bozovic’s partner, Greg Davis. Bozovic told Kurtz that he could help her obtain a loan, even

though she had bad credit. Kurtz paid Bozovic a $5,700 consulting fee to help her secure a loan.

The transaction took place at a local restaurant. Bozovic told Kurtz that his “friend,” Lee, might

be able to provide her with a loan. Bozovic also referred Kurtz to Hall. Bozovic told Kurtz that

Hall often represented Bozovic’s clients and that Hall would not charge a high fee. Kurtz met

Hall at his office. Hall provided her with a “copious amount of papers.” Hall tabbed the papers

       2
           This allegation was never explored. However, it is not supported by Kurtz’s testimony.

See infra ¶ 19.

                                               -5-
2016 IL App (2d) 150492


for Kurtz’s signature, but he did “not really” explain them to her. He did not explain the separate

meaning of each document. Rather, he told her generally that her signatures were necessary to

procure the loan.

¶ 20    Further, Hall told her that she would no longer need to pay the taxes on the subject

property. ALSJ would pay the taxes. Kurtz believed Hall, because she never got a “bill” in the

mail to tell her that the taxes were not being paid. (Later, in 2013, ALSJ paid $28,000 to Du

Page County for the delinquent taxes in order to meet the redemption period for the tax sale of

the property.)

¶ 21    When the loan was issued, Kurtz did not understand that the loan was to be used for

commercial purposes. She thought she had obtained an ordinary “mortgage-type” loan against a

house that she owned “free and clear.” Hall never corrected her impression. When Bozovic

stopped returning her calls, Kurtz began to think she had been deceived. Kurtz tried to contact

Bozovic, rather than ALSJ, because she thought Bozovic was her “go-to guy.” Less than six

months after the loan had been issued, Kurtz became convinced that the loan was improper and

she stopped making payments. As to her state of mind, Kurtz submitted an e-mail that she wrote

to her accountant shortly after she realized the nature of the documents she had signed. The e-

mail stated in part:

        “In an effort to clear up some old debt and do some repairs on my parents’ house, I

        worked with a company to get a small loan to do this thinking it was a mortgage-type

        loan against the house I fully owned. Long story short, I was scammed into a loan that

        over the course of six months I paid about $12,000 in interest. In essence, it was a[n]

        [il]legal loan shark paperwork and all up to and including a $10,000 pay day for the

        mortgage broker.


                                               -6-
2016 IL App (2d) 150492


                It is now in the hands of my attorneys. Is there any tax relief on this?”

¶ 22    ALSJ’s attorney asked Kurtz how she possibly could have believed that the loan was an

ordinary home mortgage against her property, given the terms of the loan itself. Kurtz answered

that she had no experience with home mortgages. She had always lived in an apartment.

¶ 23    Kurtz did not recognize the alleged 2009 pay stub, referenced by Asner, that listed the

Lisle apartment as her address. Rather, to substantiate her claim that she resided in the subject

property, Kurtz submitted: (1) pay stubs from 2009 forward that listed the subject property as her

address; (2) February 2010 homeowner’s insurance on the subject property (“[A]s soon as I

moved in, I had to change it from no people living in the house to people living in the house

because it’s way different expense-wise.”); (3) copies of loan payments to ALSJ issued on

personal checks that listed the subject property as her address; (4) copies of her personal income

tax forms from 2009 to 2012 that listed the subject property as her address; (5) utility bills from

2009 forward that listed the subject property address; and (6) an appraisal listing Davis as the

lender/client, performed before ALSJ issued the loan, containing pictures of a fully furnished

interior. Kurtz testified specifically to pictures of her furnished bedroom, her son’s furnished

bedroom, and the furnished dining room.

¶ 24                                    3. John Michael Kurtz

¶ 25    Kurtz’s son, John Michael Kurtz, testified that he has been living in the subject property

with his mother since 2009. He was present in 2009 when several men walked through the home

to conduct an appraisal. One of the men was Lee’s son, Josh Lee. The house was fully furnished

at that time.

¶ 26    After John Michael testified, Kurtz sought to admit a number of exhibits. One exhibit

was the Davis appraisal. ALSJ objected to its admission. Kurtz stated that, based on the pictures


                                                -7-
2016 IL App (2d) 150492


of furniture in the house, the document was probative of whether Kurtz was living in the subject

property during the time in question and the document had impeachment value against ALSJ

witnesses who had testified that, at the time of the appraisal, the home had no furniture. The

court initially stated that it would reserve judgment on the appraisal’s admission. However,

apparently the court admitted it, because, after listing the remainder of the exhibits, the court

asked Kurtz’s attorney if he would like to question Lee about the appraisal. Kurtz’s attorney

took the opportunity. (We do not see the Davis appraisal in the record.)

¶ 27                                         4. Lee

¶ 28   Lee attempted to distance himself from the Davis appraisal, stating that ALSJ had

conducted a separate appraisal. Lee stated that ALSJ does its own appraisals. Lee’s sons

usually perform the appraisals. Lee came along on the ALSJ appraisal; John Michael let the

ALSJ group into the home. ALSJ’s appraisal was not part of the court record. There was not a

copy of it, because ALSJ’s appraisals were informal. At the time of ALSJ’s appraisal, there was

no furniture in the home.

¶ 29   Kurtz never gave Lee a reason to believe that she lived in the subject property. Lee never

noticed that Kurtz’s personal checks to ALSJ listed the subject property as her address. If he

examined each check that carefully, he “would never get through a day.”

¶ 30   Finally, as to ALSJ’s connection to Davis and Bozovic, Lee acknowledged that he had

previously taken referrals from Davis and Bozovic. However, Davis and Bozovic were not

employed by ALSJ in any capacity. ALSJ had nothing to do with the consulting fee Kurtz paid

to Bozovic.

¶ 31                                  C. Written Order




                                              -8-
2016 IL App (2d) 150492


¶ 32   In its written order, the trial court stated that Kurtz had defaulted on her loan. However,

it also stated that Kurtz proved her affirmative defense and counterclaim pursuant to the

Mortgage Fraud Act.

¶ 33   The court determined that the Act applied to the subject property and to the parties. The

evidence at trial “conclusively” demonstrated that the subject property qualified as a “distressed

property” under the Act, as it was a “residential real property consisting of one to [six] family

dwelling units that is in foreclosure or at risk of loss due to nonpayment of taxes, or whose

owner is more than 30 days delinquent on any loan that is secured by the property.” 765 ILCS

940/5 (West 2014). Additionally, ALSJ qualified as a “distressed property consultant” under the

Act, as it was “any person who, directly or indirectly, for compensation from the owner, makes

any solicitation, representation, or offer to perform or who, for compensation from the owner,

performs any service that the person represents will in any manner do any of the following: ***

(8) save the owner’s residence from foreclosure or save the owner from loss of home due to

nonpayment of taxes.” Id. The court rejected ALSJ’s argument that Kurtz was ineligible for the

protections of the Act because she did not occupy the subject property. The court stated that the

Act did not specify owner occupancy as a requirement. Further, even if owner occupancy were a

requirement, Kurtz established owner occupancy.

¶ 34   Next, the court determined that ALSJ violated the Act; it “utterly failed to comply with

the statutory provisions.” ALSJ induced Kurtz to enter into a mortgage for her distressed

property in order to secure a one-year note ultimately bearing a 36% interest rate with a late fee

of $693. The loan was “facially outrageous.” In little over four years, Kurtz had accrued

approximately $153,000 in interest and fees on the $66,000 loan, increasing the total owed to

over $200,000. The court believed that ALSJ knew that its loan was “outrageous,” and, in


                                              -9-
2016 IL App (2d) 150492


“recognition of its patent illegality,” it voluntarily lowered the interest rate from 36% to 9% and

cancelled the late fees.      The court also believed that ALSJ attempted to avoid criminal

prosecution by garnering sympathy for Lee’s advanced age and declining health.

¶ 35    ALSJ also induced Kurtz to enter into a warranty deed, whereby, in the event of a default,

Kurtz would be divested of the subject property. “The violation amounted to an equity stripping

scheme, which the Act seeks to combat.” Finally, ALSJ referred Kurtz to Hall, 3 who “provided

little if any counsel and essentially rubber-stamped the transaction by having Kurtz execute the

documents.”

¶ 36    In issuing a remedy, the court cited section 55 of the Mortgage Fraud Act (765 ILCS

940/55(a) (West 2014)), which states that any consumer suffering loss under the Mortgage Fraud

Act may be granted a remedy under the Consumer Fraud and Deceptive Business Practices Act

(Consumer Fraud Act) (815 ILCS 505/1 et seq. (West 2014)). The court determined that the

appropriate remedy would be to rescind the mortgage documents. The court would hear the

issue of attorney fees at a later date.

¶ 37                                      D. Motion to Reconsider

¶ 38    ALSJ moved to reconsider. It argued that the Act did not apply, because: (1) the subject

property was not a “distressed property”; (2) ALSJ was not a “distressed property consultant,”

because it did not make any offer to Kurtz with regard to her delinquent taxes; (3) the loan was

for commercial purposes; and, relatedly, (4) Kurtz did not reside in the subject property, and her

testimony to the contrary was not credible. As to its third and fourth arguments, ALSJ noted that

        3
            This is a misstatement. Even under Kurtz’s theory of the case, Bozovic, not ALSJ,

referred Kurtz to Hall. We make the correction for accuracy; it does not affect our overall

impression of the trial court’s ruling.

                                                 - 10 -
2016 IL App (2d) 150492


the loan would not be considered “facially outrageous” if it had been issued to a business person

who intended to sell the property within one year.

¶ 39   The trial court denied the motion to reconsider. It stated that the subject property was a

“distressed property,” because it was at risk of being lost due to late taxes. It summarily stated

that ALSJ was a “distressed property consultant.” As to ALSJ’s third and fourth arguments, the

court explained:

       “Having a homeowner sign a paper saying it’s a commercial loan doesn’t make it a

       commercial loan. The testimony of Miss Kurtz and her son were more credible than

       [ALSJ’s] witnesses. The documentary evidence supported [Kurtz’s] position that the

       subject property was her owner-occupied personal residence.”

The court concluded that, at trial, it had resolved the commercial-versus-residential issue in favor

of Kurtz and that there was no basis for it to reconsider that determination.

¶ 40                                     E. Attorney Fees

¶ 41   In considering whether to award attorney fees to Kurtz, the court noted that, even though

ALSJ clearly violated the statute, ALSJ did issue a $66,000 loan, approximately $42,000 of

which Kurtz was able to retain, even accounting for the portions of the loan that Kurtz repaid and

the fees paid to those involved in the loan process. Thus, the court, seemingly sua sponte,

considered whether awarding attorney fees would result in a windfall to Kurtz.

¶ 42   The trial court asked the parties if they would like to “settle” the matter right then. The

court suggested that Kurtz forgo an award of attorney fees in exchange for ALSJ’s promise that

it would not pursue an unjust-enrichment claim against her. The court weighed aloud the

positives and negatives of such an arrangement. It offered that Kurtz’s enrichment was not

necessarily “unjust,” because ALSJ violated the statute. Still, the “settlement” would “at least


                                               - 11 -
2016 IL App (2d) 150492


bring an end to the situation.” The court asked the parties if “any of that” had “crossed [their]

minds.”

¶ 43   ALSJ refused the court’s suggestion, stating that it would not speak to whether it would

be pursuing “additional remedies.” However, it asked the court to include Rule 304(a) language

in its order. The court stated, “Well, if there’s an order today granting attorney fees, there’s

nothing left in the case, is there?” Kurtz responded, “I would think not.” ALSJ responded, “But

just to make the matter clear, [Y]our Honor.” The court again stated that it did not believe that

any claims remained pending, but it included the Rule 304(a) language in its order granting

Kurtz $9,740 in attorney fees.

¶ 44                                        II. ANALYSIS

¶ 45   On appeal, ALSJ argues that: (1) the Mortgage Fraud Act does not apply, because ALSJ

is not a “distressed property consultant;” (2) even if the Mortgage Fraud Act applies and ALSJ

violated it, Kurtz is not entitled to relief, because she is not a “consumer”; (3) even if Kurtz is

entitled to relief, the court abused its discretion by rescinding the mortgage documents, because

the rescission resulted in a windfall to Kurtz; and (4) even if Kurtz is entitled to relief, the court

abused its discretion in awarding attorney fees. ALSJ also argues that the court erred in denying

its motion to reconsider.

¶ 46   Kurtz did not file a response brief. If the record is simple and the claimed errors are such

that the court can easily decide the appeal without the aid of an appellee’s brief, the court should

decide the merits of the appeal. First Capitol Mortgage Corp. v. Talandis Construction Corp.,

63 Ill. 2d 128, 133 (1976). If the appellant’s brief demonstrates prima facie reversible error and

the contentions of the brief find support in the record, we may reverse the trial court’s judgment.




                                                - 12 -
2016 IL App (2d) 150492


Id. Here, however, ALSJ’s claimed errors do not find support in the record. Thus, we decide the

appeal against ALSJ.

¶ 47                        A. ALSJ is a “Distressed Property Consultant”

¶ 48   ALSJ first argues that the Mortgage Fraud Act does not apply, because it is not a

distressed-property consultant.      The Mortgage Fraud Act defines a “distressed property

consultant” as:

                  “ ‘Distressed property consultant’ means any person who, directly or indirectly,

       for compensation from the owner, makes any solicitation, representation, or offer to

       perform or who, for compensation from the owner, performs any service that the person

       represents will in any manner do any of the following:

                         (1) stop or postpone the foreclosure sale or *** the loss of the home due to

                  nonpayment of taxes;

                                                 ***

                         (6) assist the owner in foreclosure, loan default, or post-tax sale

                  redemption period to obtain a loan or advance of funds;

                          ***

                         (8) save the owner’s residence from foreclosure or *** loss of home due

                  to nonpayment of taxes.” 765 ILCS 940/5 (West 2014).

¶ 49   ALSJ does not challenge the trial court’s interpretation of the Mortgage Fraud Act.

Rather, it challenges the trial court’s credibility determinations and its implicit factual

determination that ALSJ worked in conjunction with Bozovic. We may not assess the credibility

of witnesses, and we will reverse the court’s factual determinations only if they are clearly




                                                - 13 -
2016 IL App (2d) 150492


against the manifest weight of the evidence. Graham v. Mimms, 111 Ill. App. 3d 751, 767

(1982).

¶ 50      At trial and in the motion to reconsider, ALSJ raised only the general question of its

affiliation with Bozovic and complicity in a scheme to strip Kurtz of the equity in her property.

However, on appeal, ALSJ raises a much more technical argument concerning the absence of a

business agency relationship. See, e.g., Raclaw v. Fay, Commy & Co., 282 Ill. App. 3d 764, 768

(1996). This technical argument is forfeited. Poilevey v. Spivack, 368 Ill. App. 3d 412, 417

(2006). In any case, it is unclear to us why Kurtz must prove an agency relationship as opposed

to simple complicity in a scheme. Thus, we focus on the trial court’s general determination that

ALSJ was complicit in the scheme to defraud Kurtz and that ALSJ knew that Kurtz was the

owner of a distressed property, which she sought to save by obtaining a loan.

¶ 51      ALSJ essentially argues that it did not realize that it issued the loan for the preservation

of a distressed home. It believed that it issued the loan for commercial purposes to a person who

intended to repair and resell the home before interest on the loan grew unconscionably steep.

Further, it implies that Kurtz deceived it by signing a document averring that the loan was for

commercial purposes and that she resided not in the subject property but in an apartment in Lisle.

Alternatively, it implies that, if Kurtz was a victim, then the same third parties who deceived

Kurtz, i.e., Bozovic, Davis, and Hall, deceived ALSJ as well. 4 Kurtz, not ALSJ, signed a

consulting agreement with Bozovic. Kurtz, not ALSJ, paid Bozovic a $5,700 consulting fee.

Bozovic referred Kurtz to ALSJ, not the other way around. ALSJ portrays the third parties as

independent actors who secured fees for themselves while referring Kurtz to ALSJ.



          4
              ALSJ did not seek to join the third parties in the case.

                                                    - 14 -
2016 IL App (2d) 150492


¶ 52   The trial court reasonably rejected ALSJ’s theory of the case. Lee wanted the court to

believe that Bozovic acted independently of ALSJ, but, when asked straightforward questions

about his history with Bozovic and Hall, Lee provided nonanswers or ambiguous answers.

When asked if he had prior dealings with Bozovic, Lee answered: “We get many leads from

people.” When asked if he had prior dealings with Hall, Lee answered: “No. Unless he was the

attorney from yesterday,” which, of course, he was. When recalled to the stand, Lee finally

acknowledged that he had previously taken referrals from Bozovic and Davis.

¶ 53   Lee further testified that he did not participate in the Davis appraisal. Lee’s participation

in the Davis appraisal would have established a link between Davis and Lee and, thus, between

Bozovic and Lee. The court reasonably rejected Lee’s assertion that he did not participate in the

Davis appraisal, particularly given how the testimony unfolded. First, John Michael testified that

Josh was involved in the appraisal of the subject property. John Michael did not imply that more

than one appraisal had been performed in conjunction with the loan. The appraisal listed Davis

as the lender/client, thus establishing a link between Davis and Lee.         After John Michael

testified, Lee testified that he did not participate in the Davis appraisal. ALSJ did perform an

appraisal, but it was not “official” and, thus, there was no paperwork documenting the appraisal.

Lee implied that, when John Michael testified that he saw Josh during the appraisal, John

Michael must have been referring to ALSJ’s unofficial appraisal, not Davis’s appraisal. The

court could have found it odd that: (1) Lee failed to mention the “unofficial” nature of ALSJ’s

appraisal the first two times he testified and mentioned it only after Kurtz showed that the

documented appraisal was linked to Davis; (2) ALSJ conducted “unofficial” appraisals as a

business practice; and/or (3) Davis partook in an appraisal that he did not intend to share with the

company issuing the loan, ALSJ.        The court could have been further troubled by ALSJ’s


                                               - 15 -
2016 IL App (2d) 150492


witnesses’ testimony that there was no furniture in the subject property during its alleged

appraisal, when the Davis appraisal contained pictures of a fully furnished home. For any of

these reasons, the court could have reasonably rejected Lee’s attempt to explain away his link to

the Davis appraisal.

¶ 54   Finally, the trial court reasonably afforded little weight to Kurtz’s affidavit averring that

the loan was for commercial purposes. Lee testified that he makes each loan recipient sign a

similar document. In this way, Lee’s own testimony corroborates Kurtz’s testimony that she was

presented with a series of forms to sign and that she did not draft them. Further, Lee testified

that he spoke with Kurtz by phone. Thus, in order to believe ALSJ’s theory of the case, the court

would have had to believe that Lee, a professional lender, did not diligently inquire as to the

purposes of the loan, or that, if he did, Kurtz lied and told him that the loan was for commercial

purposes. The court also would have had to believe that ALSJ did not notice that Kurtz’s

personal checks to ALSJ listed the subject property as her address. The court resolved these

credibility issues in favor of Kurtz.

¶ 55   As to credibility, the trial court stated: “The testimony of Miss Kurtz and her son were

more credible than [ALSJ’s] witnesses.” The court did not believe that Lee was an innocent

participant; rather, it believed that Lee’s actions bordered on criminal: “Perhaps also in

recognition of the patent illegality of the transaction and the potential criminal penalties pursuant

to the Act, ALSJ’s principal, Andrew Lee, testified to his advanced age and declining health.”

We will not upset the trial court’s credibility determinations. Mimms, 111 Ill. App. 3d at 767.

¶ 56                               B. Kurtz is Entitled to Relief

¶ 57   ALSJ next builds upon its argument at trial that Kurtz is not the sort of owner whom the

Mortgage Fraud Act is intended to protect, because she did not occupy the subject property.


                                                - 16 -
2016 IL App (2d) 150492


ALSJ now concedes, without explanation, that whether Kurtz resided in the subject property is

irrelevant under the Mortgage Fraud Act. (Rather, ALSJ’s alleged belief that Kurtz did not

reside in the subject property is relevant to its argument that it was an innocent participant and

did not intend to strip Kurtz of her equity. As discussed above, we reject that argument.) ALSJ,

nevertheless, attempts to save its argument.

¶ 58   ALSJ’s new argument is difficult to follow, but ALSJ seems to argue that, although the

trial court found that ALSJ violated the Mortgage Fraud Act, the court erroneously afforded

relief under the Consumer Fraud Act. The court stated that, under the Mortgage Fraud Act, an

injured party may obtain relief under the Consumer Fraud Act, which allows for any relief the

court deems proper. 765 ILCS 940/55 (West 2014); 815 ILCS 505/10a (West 2014). The

Consumer Fraud Act protects “consumers.” Steinburg v. Chicago Medical School, 69 Ill. 2d

320, 328 (1977). A “consumer” contracts for, or purchases, merchandise not for resale or in the

ordinary course of his trade or business, but for the use of his “household.” Brown v. Veile, 198

Ill. App. 3d 513, 519 (1990). ALSJ now argues that Kurtz is not a “consumer.” In arguing that

Kurtz is not a “consumer,” ALSJ again challenges Kurtz’s credibility as to whether she resided

in the subject property so as to use the loan for her “household.”

¶ 59   This argument has at least two weaknesses. First, ALSJ does not explain why Kurtz must

establish her status as a consumer. ALSJ now accepts that Kurtz is an “owner” under the

Mortgage Fraud Act and that, as a victim under the Mortgage Fraud Act, Kurtz has standing to

seek a remedy under the Consumer Fraud Act. 765 ILCS 940/55 (West 2014). Thus, ALSJ does

not convince us that Kurtz needs the additional status of “consumer” in order to obtain relief

under the Consumer Fraud Act.




                                               - 17 -
2016 IL App (2d) 150492


¶ 60   Second, ALSJ’s argument that Kurtz is not a consumer relies upon the challenges to

Kurtz’s credibility and documentary evidence that the trial court rejected. We have already

discussed the court’s credibility determinations (supra ¶ 55).

¶ 61   As to documentary evidence, Kurtz presented: (1) pay stubs from 2009 forward; (2)

February 2010 homeowner’s insurance; (3) copies of personal checks to ALSJ; (4) copies of her

personal income tax forms from 2009 to 2012; (5) utility bills from 2009 forward; and (6) the

Davis appraisal. Much of Kurtz’s documentary evidence—tax forms, pay stubs, and bills—was

unrelated to this case. To compete with this evidence, ALSJ presented Kurtz’s affidavit averring

that the loan was for commercial purposes and listing the Lisle apartment as her address.

However, Kurtz alleged that this very document was one of the fraudulently procured

documents, part of a flurry of paperwork she was told to sign. To take this document at face

value would be to beg the question of fraud. Particularly in combination with its credibility

determinations, the court reasonably favored Kurtz’s documentary evidence over ALSJ’s.

Therefore, we reject ALSJ’s argument that Kurtz is not entitled to relief.

¶ 62                          C. Remedy Not Abuse of Discretion

¶ 63   ALSJ argues that the trial court’s remedy was an abuse of discretion, because, by

rescinding the mortgage documents, it awarded Kurtz a windfall. ALSJ states that it paid

$30,000 in delinquent property taxes and issued a $66,000 loan. 5 Kurtz defaulted on her loan

       5
           The alleged $96,000 windfall ($66,000 loan + $30,000 delinquent taxes) cited by ALSJ

on appeal is different from the $42,000 windfall the trial court estimated at the attorney-fee

hearing ($66,000 loan - $8,000 delinquent taxes and additional fees associated with the

transaction). It appears that ALSJ chose the $30,000 figure because, in November 2013, it paid

$28,000 to Du Page County to meet the deadline for the redemption period on a tax sale of the

                                               - 18 -
2016 IL App (2d) 150492


and ALSJ paid taxes on the subject property, but Kurtz kept the subject property. ALSJ argues

that, rather than put the parties in the same position that they were in before the contract, the

court’s rescission put ALSJ in a worse position and Kurtz in a better position. See Puskar v.

Hughes, 179 Ill. App. 3d 522, 528 (1989) (a court may rescind a contract so as to return the

parties to their precontract status). Rescission is an equitable remedy, and we will not disturb the

trial court’s decision to rescind an agreement unless it abused its discretion.        Klucznik v.

Nikitopoulos, 152 Ill. App. 3d 323, 327 (1987).

¶ 64   ALSJ hinted at, but did not develop, the windfall argument in its motion to reconsider,

and, therefore, the argument is forfeited. Haudrich v. Howmedica, Inc., 169 Ill. 2d 525, 536

(1996). Rather, after the trial court denied the motion to reconsider, the court raised the issue of

Kurtz’s potential windfall when deciding whether it should negate her attorney-fee award. The

court suggested that it would cancel the award in light of the potential windfall, if the parties

would “settle” the case and “bring an end to the situation.” ALSJ rejected this suggestion. The

court then noted that ALSJ was the wrongdoer in this case and that, therefore, regardless of the

potential windfall, it would award Kurtz’s attorney fees. Indeed, from Kurtz’s perspective, that

she unwittingly accepted now-illiquid funds, following various tax payments and home repairs,

does not mean that she has cash on hand to pay attorney fees to defend against a six-figure

judgment. These circumstances do not alert us to an injustice that would compel us to excuse




property. ALSJ made this payment almost two years after Kurtz filed her counterclaim for fraud.

ALSJ presumably made this payment so that it would ultimately be able to acquire the property.

Continuing to pay expenses, in furtherance of what the court later determined to be an equity-

stripping scheme, was at ALSJ’s own peril.

                                               - 19 -
2016 IL App (2d) 150492


ALSJ’s forfeiture. And, even if the issue were not forfeited, the court did not abuse its discretion

under these circumstances by consciously declining to account for the potential windfall.

¶ 65                                     D. Attorney Fees

¶ 66   ALSJ argues that the trial court was precluded from awarding Kurtz attorney fees,

because, although Kurtz requested attorney fees, she did not cite section 10a(c) of the Consumer

Fraud Act. 815 ILCS 505/10a(c) (West 2014). Section 10a(c) of the Consumer Fraud Act

allows for the award of attorney fees at the discretion of the trial court. Id. ALSJ cites no case

law to explain why the failure to cite section 10a(c) should preclude Kurtz from receiving fees.

As we have already discussed, victims under the Mortgage Fraud Act may receive relief under

the Consumer Fraud Act. Kurtz cited the Mortgage Fraud Act, and the court found her to be a

victim. Attorney fees are a form of relief under the Consumer Fraud Act. Thus, the court was

not precluded from awarding Kurtz attorney fees.

¶ 67   ALSJ next argues that, even if the trial court was permitted to award attorney fees, it

abused its discretion in so doing. See Krautsack v. Anderson, 223 Ill. 2d 541, 554 (2006). ALSJ

contends that it should not have to pay Kurtz’s fees, because it lacked “culpability and bad faith.”

It also argues that “the Trial Court’s already-existing decision to rescind the Note and Trust deed

‘militate against an award of fees’ ” (citing Krautsack, 223 Ill. 2d at 558 (circumstances might

militate against the award of fees to the prevailing party)).

¶ 68   We reject ALSJ’s abuse-of-discretion argument. We reject ALSJ’s first point, because

the trial court found that ALSJ did act with bad faith. We reject ALSJ’s second point, because it

is an attempt to resurrect its windfall argument. Again, the trial court suggested forgoing the

attorney-fee award in light of the potential windfall, but ALSJ rejected the suggestion in order to

take its chance at pursuing further gain. See, e.g., McMath v. Katholi, 191 Ill. 2d 251, 255


                                                - 20 -
2016 IL App (2d) 150492


(2000) (a party cannot complain on appeal about an action to which it consented). Under these

circumstances, the court did not abuse its discretion in awarding attorney fees.

¶ 69                     E. Denial of Motion to Reconsider was Proper

¶ 70   Finally, ALSJ argues that the trial court erred in denying its motion to reconsider. When,

as here, a motion to reconsider is based on the trial court’s application of existing law, as

opposed to based on new facts or legal theories not presented in the prior proceedings, our

review is de novo. People v. $280,020 U.S. Currency, 372 Ill. App. 3d 785, 791 (2007).

¶ 71   ALSJ argues that the trial court misapplied existing law when it determined that ALSJ

was a “distressed property consultant,” Kurtz was entitled to relief, and Kurtz was credible.

ALSJ already raised these points in other portions of the appeal, and we rejected them. The trial

court did not err in denying the motion to reconsider.

¶ 72                                   III. CONCLUSION

¶ 73   For the aforementioned reasons, we affirm the trial court’s judgment.

¶ 74   Affirmed.




                                               - 21 -
