Firm Wins Victory in Appellate Court for Condominium Association

The Illinois Appellate Court recently issued an opinion affirming a dismissal which Pretzel & Stouffer partners John H. Scheid and Matthew J. Egan won in the Circuit Court of Cook County in favor of the firm’s client, a condominium association. The case involved a large Chicago bank, which foreclosed on a mortgage it held on a condominium and was the successful bidder for this unit at a foreclosure sale. A dispute arose between the bank and the condominium association about the bank’s responsibility to pay pre-foreclosure assessments on the unit under the Illinois Condominium Property Act. The bank paid these assessments under protest and then sued the firm’s client, alleging a claim for a declaratory judgment that it was not liable for unpaid pre-foreclosure assessments, as well as claims for damages under theories of fraud and civil conspiracy.

John and Matt responded to the bank’s complaint by filing a motion to dismiss. The Circuit Court granted this motion and dismissed all of the bank’s claims with prejudice. The court agreed with John and Matt’s argument that under the Illinois Condominium Property Act, the bank had failed to extinguish the condominium association’s pre-foreclosure assessment lien because the bank’s first payment of post-foreclosure assessments on the unit came months late. The court ruled that the only way for a foreclosure sale buyer can extinguish a pre-foreclosure assessment lien under the Condominium Property Act is to make the post-foreclosure assessment payment when due.

The Appellate Court affirmed the dismissal of each of the bank’s claims on additional grounds which John and Matt had argued. The Appellate Court held that the bank’s complaint did not state a valid claim for declaratory judgment, as it sought backward-looking relief, the bank’s allegations did not state a claim for fraud, and the bank lacked standing to pursue a claim for civil conspiracy. The case is BMO Harris Bank N.A. vs. Jackson Towers Condominium Association, Inc., et al., 2018 IL App (1st) 170781.