In January 2003, Michael Henderson, the defendant, wanted to rehabilitate real estate he owned. He submitted a loan application to the plaintiff, National Lending Services Inc. National Lending approved Henderson’s loan. The loan provided for an adjustable rate interest in which the interest only was paid until the loan matured on June 1, 2004.
Henderson signed a trust agreement providing that National Lending would distribute the loan funds as necessary to Chicago Title & Trust, which would then pay the construction companies that were doing the rehab work on the property.
Every month, Henderson would pay $185.83 as the interest payment required on the note. When the note matured in June 2004, rather than paying the remainder of the $322,983.41 that was due, he continued to make monthly interest payments. Finally, on Dec. 2, 2010, National Lending filed a lawsuit against Henderson for the unpaid balance of the note, plus per diem additional charges. Henderson appeared pro se in the case.
Henderson accused National Lending of not proving what was paid toward the loan, what was due or what had to be paid. National Lending filed a motion for summary judgment against Henderson, including affidavits from its deputy director, an affidavit from MB Financial and another from Chicago Title.
The affidavit of National Lending’s deputy director stated the essentials of what it claimed Henderson owed. The affidavit also included copies of several notes, two of which were neither sworn nor certified in any way. Henderson responded by challenging how the individuals whose affidavits were taken had personal knowledge of the situation and noted that National Lending had failed to submit “statements, ledgers, annual escrow analysis, mortgage interest statements and the original note.”
Henderson filed motions to strike each of the affidavits. He also filed counter-affidavits and a sur response. On the hearing date, Oct. 14, 2011, although there was no record of the court proceedings, the court entered summary judgment against Henderson and arranged for the foreclosure and sale of his property. Henderson appealed.
The appellate court was forced to take Henderson’s unusual pro se appeal. It was handwritten, missing many of the required segments for an appellate court brief.
The appellate court resolved two important arguments in Henderson’s handwritten brief: First: that National Lending had no standing since Henderson’s first contact was with National Housing Services; second, that National Lending’s affidavits were insufficient to support summary judgment. The appellate court ruled on those issues.
Henderson did begin dealing with National Housing Services and was transferred to National Lending. The note he had was clearly with National Lending and thus it had standing in this court.
However, the second argument carried great weight. The affidavits submitted by National Lending were not in compliance with Illinois Supreme Court Rule 191(a), which required that they be made on personal knowledge and include sworn or certified copies of all papers on which they replied.
In the affidavit submitted by National Lending, while the witnesses claimed they had “personal knowledge” of the situation, they do not explain how they came by their knowledge. They do not detail the duties or circumstances of testifying individuals, but instead recite summaries of Henderson’s situation.
Further, the court pointed out that several of the affidavits were incomplete in that there were missing documents relied upon or including documents neither sworn to nor certified. The Illinois Appellate Court found that it could not uphold summary judgment based on affidavits with these major defects.
Accordingly, the appellate court reversed the decision of trial judge who granted summary judgment and vacated the order of foreclosure and sale of Henderson’s home. The appellate court’s order also sent the case back to the trial judge for further disposition.
Neighborhood Lending Services, Inc. v. Michael Henderson, 2013 IL App. (1st) 121374-U.
Kreisman Law Offices has been handling real estate disputes, business litigation matters and corporate litigation for individuals and businesses for more than 37 years, in and around Chicago, Cook County and its surrounding areas, including Northbrook, Wilmette, Chicago (Edison Park), Berwyn, Brookfield, Chicago (Chinatown), Oakbrook Terrace, Palos Park, Palatine, Lemont, Blue Island, Calumet City, Chicago (Beverly), Chicago (Washington Heights), Bedford Park and Cicero, Ill.
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