1010 Lake Shore Association v. Deutsche Bank (IL)

Summary: Under Section 9(g)(3) of the Condominium Property Act, an association's lien for unpaid assessments from before the judicial sale is not fully extinguished following a judicial foreclosure and sale until the foreclosure sale purchaser makes a payment for assessments due after the sale.


1010 Lake Shore Ass'n v. Deutsche Bank Nat. Trust Co., 2014 IL App (1st) 130962.

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See also the Supreme Court Casenote.

Facts: Deutsche Bank National Trust Co. (‘Deutsche’) purchased a condominium unit at a judicial sale on June 17, 2010. On May 17, 2012, 1010 Lake Shore Association (‘1010 Lake Shore’) filed a complaint alleging Deutsche unlawfully withheld possession of the unit because it owed $62,530.81 in assessments. 1010 Lake Shore requested possession of the property, an award for all unpaid assessments incurred as of the date of trial, attorney fees, and costs. Next, 1010 Lake Shore filed a motion for summary judgment, asserting there were no questions of material fact regarding Deutsche’s failure to pay assessments from the date it obtained title or the amount owed. Additionally, because Deutsche failed to make payments following the foreclosure and sale, the prior unpaid assessment lien against the previous condominium holder still existed and Deutsche was required to pay those assessments as well. 1010 Lake Shore attached the signed affidavit of its property manager, which asserted that Deutsche failed to make payments from July 1, 2010 to August 8, 2012, and included Deutsche’s outstanding balance and how various fees were computed.

In its response, Deutsche asserted that it was not liable for any unpaid assessments incurred prior to purchasing the unit, which accounted for more than $43,000 of the total unpaid assessments. Further, Deutsche argued that a genuine issue of material fact existed concerning the amount of assessments that were incurred after it purchased the unit.

On October 29, 2012, the circuit court entered orders granting summary judgment in favor of 1010 Lake Shore, awarding the prior assessment balance and granting 1010 Lake Shore possession of the property. Subsequently, 1010 Lake Shore filed a fee petition requesting attorney’s fees and costs.

On November 28, 2012, Deutsche filed a motion to reconsider the order granting summary judgment, asserting the court misinterpreted section 9(g)(3) of the Condominium Property Act. Deustche also argued the doctrine of res judicata barred 1010 Lake Shore’s claim, as the foreclosure action addressed the issue of the previous owner’s liens. Deutsche also filed a response to 1010 Lake Shore’s fee petition, asserting 1010 Lake Shore was not entitled to attorney fees because (1) the court erred by granting summary judgment, (2) the amount of attorney fees was unreasonable, and (3) plaintiff failed to provide sufficient support for its request of $698.50 for filing costs. On February 19, 2013, the court entered an order denying defendant’s motion to reconsider, awarding plaintiff attorney fees and costs, and finding there was no just reason for delaying an appeal from its order. Deustche appealed.


Holding: Affirmed. On appeal Deutsche argued that the circuit court erred by granting summary judgment in favor of 1010 Lake Shore. More specifically, Deutsche asserted the court’s decision was based on a misinterpretation of section 9(g)(3) of the Condominium Property Act. The appellate court reviewed the issue de novo.

The court first addressed the statutory interpretation of section 9(g)(3), regarding whether a condominium unit purchaser who did not pay its assessments after purchasing the unit could be held responsible for the previous owner’s unpaid assessments, or, if the new owner could never be held responsible for past assessments. The court held section 9(g)(3) provided that the purchaser of a unit at a judicial foreclosure sale had a duty to pay assessments incurred after the sale, with the payment conclusively extinguishing preexisting liens under section 9(g)(1).Thus, the court determined the plain language of the statute indicated unpaid assessments by a previous owner, if not fully extinguished following a judicial foreclosure and sale, persisted until the new owner made a payment for the post-sale assessments (i.e. “[T]hose expenses assessed from the first day of the month after the date of the sale.”). Further, the court found section 9(g)(3) prevailed over section 15-1509(c) of the Illinois Mortgage Foreclosure Law , cited by Deutsche, because a specific statutory provision "must control over the general rule of foreclosure law."

Next, the court addressed whether there was a genuine issue of material fact regarding the amount of assessments Deutsche incurred following its purchase of the unit. Citing the property manager’s affidavit, the court found that the averment concerning the unpaid assessments was true because the statements went unrefuted by a counteraffidavit at the circuit court level. Therefore, Deutsche forfeited any claim regarding issues of material fact as.

Regarding whether the circuit court abused its discretion by denying Deutsche’s motion to reconsider, the court affirmed the circuit court’s ruling. Though Deutsche argued the doctrine of res judicata applied because the issue of assessment liens was argued during the foreclosure action, of which 1010 Lake Shore was a party, the court found the argument unpersuasive. The court determined that a party could not raise a new legal theory in a motion to reconsider. Therefore, Deutsche was not entitled to relief on its res judicata claim. Further, the court found there was no identity of cause of action between 1010 Lake Shore’s claim and the foreclosure action. The issue presented was based on different operative facts than those of the foreclosure action.

In concluding its holding, the court addressed Deutsche’s argument that the circuit court abused its discretion in awarding 1010 Lake Shore attorney fees because the court erred in granting summary judgment. The court found that with the issue of summary judgment resolved, it only needed to consider whether the amount of fees and costs awarded were reasonable. Citing the fee statement from 1010 Lake Shore’s attorney, the court found that 1010 Lake Shore presented the circuit court with sufficient evidence to establish the reasonableness of the fees requested. Therefore, the court held the circuit court did not abuse its discretion by granting 1010 Lake Shore’s request for attorney fees.


In a dissenting opinion, Justice Liu argued that the court erred in its interpretation of section 9(g)(3). Under the doctrine of in pari material, Liu found Section 15–1509(c) of the Mortgage Foreclosure Law should apply when a condominium association was named a party in the foreclosure action, thereby barring any claims post-foreclosure action regarding a prior owner’s liens. Conversely, section 9(g)(3) of the Act should apply in situations where a condominium association with an enforceable lien was not named as a party in the foreclosure suit or provided with notice of foreclosure as a nonrecord claimant. In that instance, the assessments from the prior owner could be added to the assessments the current owner failed to pay.


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By: ATG Underwriting Department | Posted on: Mon, 09/22/2014 - 3:24pm