PNC Bank, National Association v. Chicago Title Land Trust Company et al

Filing 59

WRITTEN Opinion entered by the Honorable Harry D. Leinenweber on 7/12/2012:For the reasons stated below, summary judgment as to the remaining amount due on the loan is denied. Status hearing set for 8/22/2012 at 09:00 AM. Mailed notice(wp, )

Order Form (01/2005)

United States District Court, Northern District of Illinois
Name of Assigned Judge
or Magistrate Judge

Harry D. Leinenweber

CASE NUMBER

11 C 5393

CASE
TITLE

Sitting Judge if Other
than Assigned Judge

DATE

7/12/2012

PNC Bank, N.A. vs. Sledz et al.

DOCKET ENTRY TEXT

For the reasons stated below, summary judgment as to the remaining amount due on the loan is denied. Status
hearing set for 8/22/2012 at 9:00 a.m.

O[ For further details see text below.]

Docketing to mail notices.

STATEMENT
Before the Court is Plaintiff’s motion for summary judgment in this mortgage foreclosure action. For
the following reasons, the motion is denied.
I. INTRODUCTION
Daniel Sledz signed a promissory note for a $1,680,555.49 loan from National City Bank (“National
City”) on September 1, 2008. This note and the subsequent repayment schedule was a continuation of a preexisting balloon payment loan that had come due. Instead of making that balloon payment, Sledz arranged to
restructure the debt payments under a new loan. Under the new loan, principle and interest payments were
due on the first of every month, beginning October 1, 2008, until a new balloon payment came due on
September 1, 2009. As security for the loan, Sledz pledged his home in Aurora, Illinois. (The pledge was
technically made by Defendant Chicago Title Land Trust Company (“Chicago Title”), which succeeded Cole
Taylor Bank as trustee of the land trust holding the property. Sledz is the beneficiary of this trust.) Sledz was
unable to make the balloon payment when it came due and the bank, rather than foreclose, accepted interestonly payments. Eventually, Sledz stopped making even these payments and the bank filed for foreclosure.
The Court ruled on liability on May 11, 2012, granting summary judgment for Plaintiff PNC Bank,
N.A. (“PNC”), the successor to National City. The Court continued the issue of how much remains due on
the Note (“Note”) until Defendants had an opportunity to file a sur-reply to a supplemental affidavit Plaintiff
filed in its reply.
II. LEGAL STANDARD
Summary judgment shall be granted “if the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The burden of
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STATEMENT
showing the needlessness of trial is on the movant, but the Court must consider all reasonable inference in the
light most favorable to the nonmoving party. Pouls v. Vill. Of Pleasant Prairie, 10-C-394, 2012 U.S. Dist.
LEXIS 37412, at *3 (E.D. Wis. Mar. 20, 2012) (citing Matsushita Elec. Indus. Co., Ltd. V. Zenith Radio
Corp., Ltd., 475 U.S. 574, 587 (1986). However, where the nonmovant is the party with the ultimate burden
of proof at trial, that party retains its burden of producing evidence that would support a reasonable jury
verdict. Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986).
III. ANALYSIS
In their response to summary judgment, the Defendants take issue with the Plaintiff’s calculation of
the amount due remaining under the Note. The Plaintiff contends that the amounts due and owing on the
Note, as of July 15, 2011, are as follows: $1,568,518.45 (principal), $71,073.49 (interest), and $88,592.79
(late charges), for a total owed of $1,728,184.73.
The Defendants disagree with Plaintiff’s calculation of the amount due on the promissory note,
arguing that in September 2009 a series of payments were incorrectly applied to the debt at issue in this Note.
Specifically, the Defendanst contend that on September 25, 2008 three payments were entered on the Note of
$15,661.85 (“First Payment”), $14,004.63 (“Second Payment”), and $30,671.48 (“Third Payment”), and that
they were misapplied to the debt owed on the Note.
According to Plaintiff, the Third Payment was completely and wholly a loan disbursement fee in
consideration for Plaintiff issuing the new loan. No portion of the $30,671.48 was intended to be applied to
principle or interest of the loan. Defendants submitted a document entitled “Loan Settlement Statement” that
is signed by both Sledz and National City Bank. It reads:
In connection with the above referenced transaction, NATIONAL CITY BANK has incurred
or will incur the following expenses:
$1,000 AFS Closing Fee
$5.00 Flood Determination
$21,707.18: Payment due 10/1/08
$7,959.30 Interest due thru 9/1/08
TOTAL: $30,671.48
Defs.’ Resp., Ex. B. Defendants say the plain language of “payment due 10/1/08” indicates that at
least some of this $30,671.48 was supposed to be applied to the principle of the loan. Plaintiff is equally
adamant that the language of “following expenses” makes it plain the entire $30,671.48 was strictly a fee
given in exchange for granting the loan, and no portion of it was intended to be applied to principle or
interest.
The issue is key, because if the application of this payment was faulty, all the resulting calculations of
principle and interest are incorrect.
The Court believes this document is ambiguous. While the reference to “expenses” does suggest what
follows will be a fee for granting the loan, the itemization of elements as “interest due thru 9/1/08” and
“payment due 10/1/08” suggest that portions of that amount were intended to be applied as an interest
payment and/or a principle payment. The ambiguity of this document creates an issue of material fact
preventing summary judgment on the issue of the amount due on the loan.
Even if the issue regarding the application of the $30,671.48 were clear, the Court would still be
forced to deny summary judgment. Plaintiff submitted a loan payment spreadsheet that indicated, in some
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STATEMENT
instances, overpayments made by Sledz were carried over to be credited against interest payments that would
subsequently become due. As Defendants point out, this is contrary to the loan agreement, which states that
“payments will be applied first to any accrued unpaid interest; then to principal.” Defs.’ Ex. A, at 1. The
loan agreement also explicitly provides for early payments. “[E]arly payments will reduce the principal
balance due and may result in Borrower’s making fewer payments.” Id. Defendants argue this
misapplication of payments also affects the amount due and owing on the Note and creates an issue of
material fact. The Court agrees.
Absent determinative information from either party regarding the correct amount due on the Note, the
Court is unable to summarily decide upon an appropriate number and grant summary judgment.
IV. Conclusion
For the above reasons, the motion for summary judgment is denied as to the Plaintiff’s calculation of
the amount due and owing by the Defendants on the Note.

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