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Illinois App. Court (1st Dist) Holds Borrower’s General Denial Insufficient to Avoid Summary Judgment in Foreclosure

The Appellate Court of Illinois, First District, recently held that a borrower’s general denial that the mortgagee performed the conditions precedent of the mortgage contract prior to filing a foreclosure action was insufficient under Illinois Supreme Court Rules and therefore constituted a forfeiture of the issue.

Accordingly, the Appellate Court affirmed the ruling of the trial court granting summary judgment in favor of the mortgagee.

A copy of the opinion in The Bank of New York Mellon v. Wojcik is available at:  Link to Opinion.

After the borrower defaulted on her mortgage loan, the bank sent her a letter titled “Notice of Intent to Accelerate” contending that the borrower was in default due to nonpayment.

The notice sought to comply with requirements of the mortgage agreement that required the bank to provide certain notices to the borrower prior to acceleration of her payment obligations and the initiation of a foreclosure.

The borrower did not cure her default, and the bank filed a foreclosure complaint which followed the form proscribed by the Illinois Mortgage Foreclosure Law (IMFL).

Thus, the complaint was statutorily “deemed and construed to include” the allegations contained in section 15-1504(c) of IMFL, including the specific allegation “that any and all notices of default or election to declare the indebtedness due and payable or other notices required to be given have been duly and properly given.”

In the answer, the borrower responded to the allegation by stating: “Defendants deny the above allegation.”

The parties filed cross-motions for summary judgment wherein the borrower argued that the bank did not comply with the conditions precedent to filing the foreclosure action because the mortgage required the bank to provide notice to the borrower that she had the “right to assert in the foreclosure proceeding the non-existence of a default or any other defense of Borrower to acceleration and foreclosure,” but the notice stated that the borrower “may have the right to bring a court action to assert the non-existence of a default or any other defense you may have to acceleration and foreclosure.”

In response, the bank argued that the borrower waived the argument by failing to allege specific facts in the answer with respect to why the condition precedent had not been performed, in violation of Illinois Supreme Court Rule 133(c), which provides: “In pleading the performance of a condition precedent in a contract, it is sufficient to allege generally that the party performed all the conditions on his part; if the allegations be denied, the facts must be alleged in connection with the denial showing wherein there was a failure to perform.”

The trial court entered summary judgment in favor of the bank and against the borrower, as well as judgment of foreclosure in favor of the bank, and ruled that there was no reason to delay the appeal.

The borrower then appealed.

On appeal, the First District noted that “the parties agree that sending a proper ‘notice of acceleration’ was a condition precedent to [the bank’s] ability to file the instant foreclosure action.”

Thus, the bank’s “complaint and defendants’ answer thereto were required to comply with Illinois Supreme Court Rule 133(c).”

The First District explained that “[i]n light of the requirements of Rule 133(c), courts have repeatedly recognized that mere general denial of the performance of the conditions precedent of a contract in a party’s responsive pleading, without allegations of specific facts, results in forfeiture of the issue of the performance of the conditions precedent of a contract.”

Thus, “a general denial to an allegation of the performance of a condition precedent in a contract is treated as an admission of that performance.”

Because the borrower only generally denied the bank complied with all conditions precedent and because “[n]o specific facts were alleged in defendants’ answer to support this denial,” the borrower “forfeited the issue; indeed, their general denial stands as an admission that [the bank] provided all proper notices.”

Thus, “in light of defendants’ judicial admission . . ., the circuit court properly denied defendants’ cross-motion for summary judgment.”

Accordingly, the First District affirmed the ruling of the trial court.

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Jeffrey Karek practices in Maurice Wutscher's Commercial Litigation, Consumer Credit Litigation, and Appellate groups. He has substantial experience in defending consumer finance lawsuits in both state and federal trial courts, and on appeal. Such litigation includes allegations brought under TILA, HOEPA, RESPA, FDCPA, TCPA, FCRA, and state consumer protection statutes, including in the defense of putative class actions. Jeff received his Juris Doctor from the University of Michigan Law School, and graduated magna cum laude with a Bachelor of Business Administration degree from Western Michigan University.

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