N. Spaulding Condo. Ass'n v. Cavanaugh

• Decision Date: 31 March 2017
• Docket Number: No. 1-16-0870,1-16-0870
• Citation: 2017 IL App (1st) 160870,76 N.E.3d 770
• Parties: NORTH SPAULDING CONDOMINIUM ASSOCIATION, an Illinois Not-For-Profit Corporation, Plaintiff and Counterdefendant-Appellee, v. Michael CAVANAUGH and Tiffany Cavanaugh, Defendants and Counterplaintiffs - Appellants, Michael Cavanaugh and Tiffany Cavanaugh, Third-Party Plaintiffs-Appellants, v. Westward Management, Inc., Third-Party Defendant-Appellee.
• Court: United States Appellate Court of Illinois

2017 IL App (1st) 160870

76 N.E.3d 770

NORTH SPAULDING CONDOMINIUM ASSOCIATION, an Illinois Not-For-Profit Corporation, Plaintiff and Counterdefendant-Appellee,

v.Michael CAVANAUGH and Tiffany Cavanaugh, Defendants and Counterplaintiffs - Appellants,Michael Cavanaugh and Tiffany Cavanaugh, Third-Party Plaintiffs-Appellants,

v.Westward Management, Inc., Third-Party Defendant-Appellee.

No. 1-16-0870

Appellate Court of Illinois, First District, SECOND DIVISION.

March 31, 2017

Kory Cotter Heather & Richardson, LLC, of Chicago (Elliot Richardson, Britney Zilz, and Ryan D. Gibson, of counsel), for appellants.

Girard Law Group, P.C., of Chicago (Andrew A. Girard and John G. Powers, of counsel), for appellees.

OPINION

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

¶ 1 Plaintiff North Spaulding Condominium Association (North Spaulding) initiated a forcible entry and detainer action against the defendant unit owners Michael and Tiffany Cavanaugh (collectively, the Cavanaughs) for unpaid assessments, seeking possession of the unit and a money judgment. In North Spaulding Condominium Ass'n v. Cavanaugh , 2017 IL App (1st) 153387-U, 2017 WL 659408 (North Spaulding I ), we affirmed the trial court's dismissal of the Cavanaughs' counterclaim against North Spaulding and the Cavanaughs' third-party complaint against Westward Management, Inc. (Westward). While North Spaulding I was on appeal, the forcible case proceeded to a bench trial. After the close of the condominium association's case in chief, the Cavanaughs moved for judgment in their favor pursuant to section 2-1110 of the Code of Civil Procedure (Code) (735 ILCS 5/2-1110 (West 2014) ). The trial court denied the motion. The Cavanaughs rested without presenting any witnesses or introducing any evidence. The trial court entered judgment in favor of North Spaulding. The Cavanaughs filed a combined motion for a new trial and to reconsider the denial of their motion for judgment in their favor, which the trial court denied. The trial court then granted North Spaulding's petition for attorney fees. The Cavanaughs timely appeal. For the following reasons, we affirm in part, vacate in part, and remand.

¶ 2 BACKGROUND

¶ 3 A more complete procedural history of this case can be found in North Spaulding I . In that order, we affirmed the trial court's dismissal of the Cavanaughs' counterclaim against North Spaulding and the Cavanaughs' third-party complaint against Westward. Those issues were before us on interlocutory appeal based on the trial court's finding pursuant to Illinois Supreme Court Rule 304(a) (eff. Mar. 8, 2016). While North Spaulding I was pending in this court, the matter proceeded to a bench trial on North Spaulding's forcible entry and detainer complaint. Here, we recite only those facts relevant to the issues before us.

¶ 4 On August 1, 2013, North Spaulding filed a verified complaint against the Cavanaughs, alleging that they had "refused and failed" to pay their monthly condominium association assessments since September 1, 2012. North Spaulding alleged that on December 5, 2012, it sent a notice of nonpayment and a demand for possession (hereinafter Notice and Demand) to the Cavanaughs' condominium unit, that the Cavanaughs were delinquent, and asserted that North Spaulding was entitled to possession of the condominium unit and a judgment for unpaid and accrued common expenses along with late fees, interest, and attorney fees.

¶ 5 The Cavanaughs answered, and filed an amended counterclaim against North Spaulding and an amended third-party complaint against Westward. They also asserted three affirmative defenses: waiver, "improper motive," and "insufficient notice." The trial court granted motions to dismiss the amended counterclaim against North Spaulding and amended third-party complaint against Westward, which we affirmed in North Spaulding I .

¶ 6 On December 22, 2015, the matter proceeded to a bench trial. North Spaulding called Daniel O'Connor, a Westward employee and the property manager for the condominium building. He testified that North Spaulding was a not-for-profit condominium association organized under the Illinois Condominium Property Act (765 ILCS 605/1 et seq. (West 2014)) and governed by the condominium association's declaration. The declaration provides that each unit owner is responsible for paying assessments in equal monthly installments. The declaration also provides that North Spaulding is entitled to take possession of a unit in the event of default and that the assessments, interest, costs, and attorney fees will become the unit owner's obligation.

¶ 7 O'Connor testified that he was familiar with collection letters sent by North Spaulding. He testified that they were stored on a server, that the letters could be accessed through a program called SmartSearch, and that he was familiar with the storage and retrieval methods used by Westward. He indentified the December 5, 2012, Notice and Demand as a "record made by a person with knowledge of or made from information transmitted by a person with knowledge of the acts and events appearing on it," that it was made at or near the time of the acts and events appearing on it, that it was the regular practice of Westward as agent for North Spaulding to make such records, that it was a record kept in the course of regularly conducted business, and that the copy provided to him was a true and correct copy of the notice sent by Westward. He described how the records were stored and accessed, and that a Westward employee creates notices from the information gathered from SmartSearch and sends out the notices by certified mail to the unit owner. The Cavanaughs repeatedly objected to O'Connor's foundation testimony, and objected to the Notice and Demand being admitted into evidence because of a lack of foundation, the Notice and Demand was hearsay, and the Notice and Demand "has not been signed by the witness. It was signed by a third party." The trial court overruled the objections and admitted the Notice and Demand into evidence. O'Connor testified that it was the corporate procedure of Westward to send a Notice and Demand for possession to all known addresses for a unit owner. The Notice and Demand sent to the Cavanaughs stated that the unpaid assessments and accrued fees and fines totaled $1074.56.

¶ 8 O'Connor identified Westward's ledger as a "record made by a person with knowledge of or made from information transmitted by a person with knowledge of the [acts] and events appearing on it," that it was made or updated at or near the time of the acts and events appearing on it, that it was the regular practice of Westward as agent for North Spaulding to make such records, and that it was a record kept in the course of regularly conducted business. He testified that Westward stores ledger information in a computer program called Buildium, which allows for records to be accessed in a variety of ways. Over the Cavanaughs' foundational objection, the trial court admitted the ledger into evidence, which reflected a total unpaid balance of $3204.26.

¶ 9 On cross-examination, O'Connor stated that he began working for Westward in October 2013. He admitted that he was not employed by Westward at the time the Notice and Demand was sent. During cross-examination, the Cavanaughs' counsel sought to question O'Connor regarding whether he attended any condominium board meetings, whether he was familiar with any notices of such meetings, various entries on the ledger, and whether unit repairs were charged to the Cavanaughs. North Spaulding objected to each line of questioning without stating a basis for the objection, and the trial court sustained the objections without asking for a basis for the objections.

¶ 10 After North Spaulding rested its case in chief, the Cavanaughs presented a written "Motion to Find for Defendants at the Close of Plaintiff's Evidence" pursuant to section 2-1110 of the Code (735 ILCS 5/2-1110 (West 2014) ). They asserted for the first time that a prima facie case for forcible entry and detainer includes proving that a condominium board properly noticed a meeting open to unit owners and voted on whether to initiate litigation against a unit owner. In support, the Cavanaughs cited section 18(a)(9) of the Condominium Property Act (765 ILCS 605/18(a)(9) (West 2014)), and Palm v. 2800 Lake Shore Drive Condominium Ass'n , 2014 IL App (1st) 111290, 381 Ill.Dec. 222, 10 N.E.3d 307. The Cavanaughs argued that North Spaulding failed to present any evidence that the unit owners were properly notified of a meeting, or that a vote was taken authorizing the forcible entry and detainer case against the Cavanaughs. After argument, the trial court denied the motion.

¶ 11 The Cavanaughs waived their case in chief and rested. After closing arguments the trial court found in favor of North Spaulding, entering a judgment for possession and a money judgment in the amount of $3204.26, plus $926.26 in costs.

¶ 12 North Spaulding then filed a verified petition seeking $22,493.10 in attorney fees. The fee petition was supported by an affidavit and supporting invoices. The Cavanaughs responded that the fees were excessive, that many of the charges were related to defending the Cavanaughs' counterclaim and third-party complaint, that certain fees were unsupported, and that the hourly rates charged were too high. On February 8, 2016, after a hearing, the trial court granted the fee petition, awarding North Spaulding $23,177.50 in attorney fees.

¶ 13 On January 21, 2016, the Cavanaughs filed a combined motion to reconsider the denial of their section 2-1110 motion for judgment and a motion for a new trial. They argued that the trial court misapplied the law because North Spaulding presented no evidence that it gave proper notice of an association board meeting or that the association board voted to initiate the forcible action. In their motion for a new trial, the Cavanaughs argued that the trial court...