BMO Harris Bank, N.A. v. Porter

• Decision Date: 01 June 2018
• Docket Number: No. 1–17–1308,1–17–1308
• Citation: 2018 IL App (1st) 171308,106 N.E.3d 411
• Parties: BMO HARRIS BANK, N.A., f/k/a Harris Trust and Savings Bank, Plaintiff and Counterdefendant–Appellee, v. Arleta A. PORTER, Brian R. Porter, Urban Partnership Bank, Unknown Owners, and Non–Record Claimants, Defendants (Arleta A. Porter and Brian R. Porter, Defendants and Counterplaintiffs–Appellants).
• Court: United States Appellate Court of Illinois

2018 IL App (1st) 171308

106 N.E.3d 411

BMO HARRIS BANK, N.A., f/k/a Harris Trust and Savings Bank, Plaintiff and Counterdefendant–Appellee,

v. Arleta A. PORTER, Brian R. Porter, Urban Partnership Bank, Unknown Owners, and Non–Record Claimants, Defendants(Arleta A. Porter and Brian R. Porter, Defendants and Counterplaintiffs–Appellants).

No. 1–17–1308

Appellate Court of Illinois, First District, Fifth Division.

Filed June 1, 2018

Brian R. Porter, of Chicago, for appellants.

Margaret A. Manetti, of Codilis & Associates, P.C., of Burr Ridge, for appellee.

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

¶ 1 Defendants, Arleta A. and Brian R. Porter, appeal an order of the circuit court of Cook County that granted plaintiff BMO Harris Bank, N.A.'s¹ (BMO Harris) motion to strike and dismiss defendants' third amended counterclaim with prejudice in a mortgage foreclosure action. For the reasons that follow, we affirm.

¶ 2 BACKGROUND

¶ 3 A. History

¶ 4 Defendants executed a mortgage and equity line of credit agreement with Harris Trust and Savings Bank on October 29, 2001. The initial credit limit was $100,000, although the mortgage indicated that the maximum lien amount for the line of credit was $125,000. According to its terms, the mortgage secured not only the amount then presently advanced under the credit agreement but also "any future amount which Lender may advance to grantor under the Credit Agreement within twenty (20) years from the date of [the] Mortgage. The revolving line of credit obligates Lender to make advances to Grantor so long as Grantor complies with all the terms of the Credit Agreement and Related Documents."

¶ 5 The credit agreement indicated that the term of the credit line began as of the date of the Agreement and continued until October 29, 2011 (maturity date), and that all indebtedness would be due and payable upon maturity. The agreement further stated that the lender may renew or extend the period during which defendants could obtain credit advances or make payments as well as renew or extend the credit line account itself. Additionally, the credit agreement indicated, within the "Change in Terms" section, that "[w]e may make changes to the terms of this Agreement if you agree to the change in writing at that time, if the change will unequivocally benefit you throughout the remainder of your Credit Line Account, or if the change is insignificant (such as changes relating to our data processing systems)."

¶ 6 The mortgage was in turn secured by real property located at 4505 South Oakenwald in Chicago, Illinois.

¶ 7 Plaintiff filed a foreclosure complaint against defendants in the circuit court on July 1, 2014, based on defendants' failure to pay the loan in full on October 29, 2011. Defendants filed their answer to the complaint on October 1, 2014, in which they only specifically denied paragraphs 3(J) and 4 of the complaint, which state:

"3(J). Statement as to defaults: Mortgagors have not paid the monthly installments of Principal, taxes, Interest and insurance for 10/29/2011, through the present; the Principal balance due on the Note and the Mortgage is $80,803.11, plus Interest, costs, advances and fees. Interest accrues pursuant to the note, and the current per diem is $6.09.

* * *

4. Plaintiff avers that in addition to persons designated by name herein and the Unknown defendants herein before referred to, there are other persons, and/or non-record claimants who are interested in this action and who have or claim to have some right, title, interest or line in, to or upon the real estate, or some part thereof, in this Complaint described including but not limited to the following:

Unknown owners and NonRecord Claimants, if any."

¶ 8 Defendants also filed affirmative defenses, alleging laches and lack of default due to the creation of a contract implied in law. Plaintiff filed a motion to dismiss the affirmative defenses, and in response, defendants amended their affirmative defenses and filed a counterclaim.

¶ 9 Defendants' counterclaim, filed on February 13, 2015, alleged breach of an implied-in-fact contract and breach of an implied-in-law contract. Plaintiff moved to dismiss the amended affirmative defenses and the counterclaim. The trial court set a briefing schedule, and after briefing by the parties, the trial court struck the count alleging breach of an implied-in-fact contract claim with leave to replead and struck the count alleging breach of an implied-in-law contract claim with prejudice.

¶ 10 Defendants subsequently filed an amended counterclaim alleging breach of an implied-in-fact contract, which plaintiff moved to dismiss. Following briefing by the parties, the trial court struck the amended counterclaim with leave to replead.

¶ 11 Defendants filed a second amended counterclaim on their breach of an implied-in-fact contract claim, and plaintiff again moved to dismiss. Following briefing by the parties, including supplemental briefs, the trial court struck the second amended counterclaim with leave to replead.

¶ 12 B. Third Amended Counterclaim

¶ 13 On June 16, 2016, defendants filed their third amended counterclaim, which is the subject of this appeal. The third amended counterclaim alleged breach of the extension of their credit agreement and breach of an implied-in-fact contract.

¶ 14 Paragraphs 1 through 35 of defendants' third amended counterclaim relate to defendants' count I, titled "Breach of Extension of Credit Agreement."

¶ 15 In paragraph 3, defendants alleged "[t]hat on October 29, 2011, [defendants] and [plaintiff] executed a 12–page Mortgage which secured a revolving line of credit of up to $125,000 with [defendants] as the grantor, and [plaintiff] as the lender."

¶ 16 In paragraph 4, defendants' alleged

"[t]he only reference to the time period covered by said Mortgage in paragraph 3, is the statement 'this Mortgage...shall secure not only the amount which Lender has presently advanced to Grantor under the Credit Agreement, but also any future amounts which Lender may advance to Grantor under the Credit Agreement within twenty (20) years from the date of this Mortgage to the same extent as if such future advance were made as of the date of the execution of this Mortgage, or until October 29, 2021 ." (Emphasis added.)

¶ 17 In paragraph 5, defendants alleged "[t]hat the above-referenced Credit Agreement, secured by the Mortgage at issue, was also executed on October 29, 2001, with a maximum credit amount of $100,000 payable upon maturity on October 29, 2011."

¶ 18 In paragraph 6, defendants alleged "[t]hat the time period of the Mortgage at issue is unequivocally for a 20 year term or until October 29, 2021." (Emphasis added.)

¶ 19 In paragraph 7, defendants alleged

"[t]hat page 1 of said Credit Agreement further provided in the ‘Term’ paragraph: ‘You (PORTER) agree that we (Harris Trust and Savings Bank) may renew or extend the period during which you may obtain credit advances or make payments. You further agree that we may renew or extend your Credit Line Account.’ Said ‘Term’ paragraph in the Credit Agreement does not require that a renewal or extension of time of the Credit Agreement be in writing." (Emphasis in original.)

¶ 20 In paragraph 8, defendants alleged

"[t]hat page 3 of said Credit Agreement provides in the ‘Change in Terms’ paragraph that ‘We (Harris Trust and Savings Bank) may make changes to the terms of this Agreement if you (PORTER) agree to the change in writing at that time, if the change will unequivocally benefit you (PORTER) throughout the remainder of your Credit Line Account, or if the change is insignificant (such as changes related to our data processing systems).’ Thus, a simple reading of the ‘Change in Terms’ paragraph make it plain that the sentence structure is an ‘either or ’ basis, rather than an ‘either and ’ basis. Put another way, the Bank could only make changes to the Credit Agreement if PORTER agreed in writing or if the change unequivocally benefitted Porter or if the change would be insignificant; rather than ‘if PORTER agreed in writing and if the change benefitted PORTER and if the change was insignificant.’ This language is key, as it clearly establishes that the only changes to the Credit Agreement which are required to be in writing are those which will not unequivocally benefit Counter–Plaintiff PORTER."

¶ 21 In paragraph 10, defendants alleged that they physically went into a BMO Harris branch and

"expressly asked the female BMO HARRIS agent-employee whom provided service, that in light of the 20–year period of the actual Mortgage (through October 2021), what steps should be taken by Counter–Plaintiffs to have Counter–Defendant extend the period during which to make payments on the outstanding balance of the Credit Agreement through October 2021, as was contractually provided as an option in the ‘Term’ section of said Credit Agreement (paragraph 6 above). Said BMO–Harris agent-employee provided [defendant] with a customer service number * * *."

¶ 22 In paragraph 11, defendants alleged that they again made payment and contacted plaintiff via the customer service number previously provided and again

"expressly asked, that in light of the 20–year period of the actual Mortgage (through October 2021), what steps should be taken by [defendants] to have [plaintiff] extend the period during which to make payments on the outstanding balance of the Credit Agreement through October 2021, as was contractually provided as an option in the ‘Term’ section of said Credit Agreement (paragraphs 6 through 8 above). That in direct response to these inquiries [plaintiff] directed [defendants] to continue to remit regular monthly payments on the outstanding Credit Agreement balance in order to effectuate an extension of time through October 2021 in which to pay the outstanding balance."

¶ 23 Paragraphs 12 and 13 made similar allegations as in paragraph 10 related to payments made by defendants from November 2011 through January 2012.

¶ 24...