REAL ESTATE LAW PRACTICE KEY POINTS

(August 2001)

 

By Steven B. Bashaw

Steven B.  Bashaw, P.C. 

Suite 1012

1301West 22nd Street

Oak Brook, Illinois  60523

Tel.: (630) 974-0104

Fax.: (630) 974-0107

Email:  sbashaw@bashawlaw.com

(Copyright 2001 - All Rights Reserved)

 

 

(Editor’s Note: In addition to encouragement from the Illinois Institute of Continuing Legal Education and the Illinois State Bar Association’s Real Estate Section Council,  it should be noted that Chicago Title Insurance Company helps underwrite the monthly production of these real estate law “Keypoints”. Chicago Title is committed to the role of attorneys in real estate transactions and their continuing education in this area.  Its staff attorneys are pleased to offer their view points on various developments in the law as set forth below.

 

There was no publication of these “Keypoints” or the corresponding “Flashpoints” by the IICLE in July 2001.  I will make certain that any important or significant cases that were published by the courts last month are not “missed”, but included in the coming months.  Thank you to all of you who inquired about the “Keypoints” and my “baseball injury”.  I am happy to report that all ten digits are working again and that the stress of “falling behind” is easing-- following a week’s vacation.  {The week was spent in Las Vegas where the motorcycle drill team of which I am a member, (the “Mighty” Medinah Motor Corps), won the Grand Champion’s Trophy in the Imperial Session Competition among all Shrine Motor Corps from around the country, followed by a wonderful ride back through the most beautiful scenery imaginable through the desert of Nevada, painted Utah, the Colorado Rockies, Nebraska and Iowa with my wife, Laura.}  We are searching hard for our “work ethic” after so much hard work and accomplishment, and we appreciate your patience!}

 

 

1. MORTGAGE FORECLOSURE: VACATING DEFAULT JUDGMENTS:

 

In Bank and Trust Company v. Line Pilot Bungee, Inc. , (5th Dist., July 13, 2001), the Court provides an important and often overlooked distinction between vacating a default judgment within thirty days of the entry (735 ICLS 5/2-1301), and after thirty days of entry, (735 ILCS 5/2-1401), applied to a mortgage foreclosure case.

 

The facts were simply that two of seven defendants sought to vacate a judgment of foreclosure entered by default by filing a motion to vacate the judgment ten days after the date of entry of the judgment.  (An order of default was entered more than thirty days prior to entry of the judgment and the filing of the motion to vacate, but the defendant’s motion appears to have specifically sought to vacate the judgment rather than the order of default, and this is the focus of the decision on appeal.)  Defendants seeking to vacate default judgments will like the language of the opinion:  “A default judgment has been recognized as a drastic action, and it should be used only as a last resort….  Illinois courts have a history of being liberal with respect to vacating default judgments under Section 2-1301.”  At the same time, Plaintiff’s attorney’s will appreciate the Court’s words: “However, we conclude that the application of the correct standard satisfactorily considers plaintiff’s rights by including the evaluation of the hardship imposed on plaintiff by proceeding to a trial on the merits.  In addition, we note that section 2-1301(e) allows the trial court to establish whatever provisions it deems reasonable in setting aside the default judgment.  This includes the imposition on defendants of plaintiff’s costs and attorney fees incurred in obtaining the default judgment.”

 

This case has a good overview and great language for both sides of the motion to vacate, and should be worth the read.

 

 

2. EASEMENTS BY NECESSITY; PROOF REQUIRED, EXPANSION OF IMPLIED USE:

 

In Weaver v. Cummins, (4th Dist., June 28, 2001), it seems pretty clear that the Plaintiff sought to change theories of easement in mid-stream, and that it worked well…. for the most part.

 

The Plaintiff’s original complaint sought enforcement of an express easement created in 1995 by their predecessor in title for a roadway to the plaintiff’s property. The trial court dismissed the complaint finding that the predecessor had no right to grant an easement, so the Plaintiff amended their complaint to allege an easement by necessity.  This theory worked much better, and the trial court found the elements of unity of title in a common grantor and necessity existed in ruling for the Plaintiff. The necessity finding was based largely on testimony that while an alternative roadway could be constructed, the high cost together with the current use supported the implied easement. The Appellate Court’s analysis of easement by necessity is good background for anyone working on a case in this area.  Easements by necessity and easements implied by a preexisting use are both drawn from an inference of the intentions of the parties to a conveyance of the land. Necessity is a required element, but “evidence of prior use may lower the necessity requirement…The preexisting use, therefore, reduces the extent of necessity required to be proved”.

 

The scope of the easement is, likewise, based upon the implied intention of the parties as determined by the Court.  Here, the Plaintiff sought to use the roadway to move their antique car collection by semi-trailer trucks to auto shows over the roadway.  In order to accommodate the semi-trailers, the Plaintiff sought to widen the roadway by three feet so the trucks could turn onto and from the roadway.  While the trial court fashioned a remedy allowing the Plaintiff to make 12 annual roundtrips with semi-trailers, the decision on appeal found that this was against the manifest weight of the evidence.  The record was “devoid of any evidence that the parties to the original conveyance contemplated the type of use plaintiffs proposed.”, and “the intent of the parties is evidence by the dimensions of the roadway at the time of separation of title.”  The trial court was affirmed in its finding of necessity, but reversed in the allowing Plaintiff to use semi-trailer trucks on the roadway.

 

 

3. THE TITLE COMPANY’S PERSPECTIVE ON EASEMENTS AND OVERBURDENING:

 

FROM THE TITLE INSURANCE COMPANY PERSPECTIVE:

 

The law of easements is one of my favorite topics.  In the last few months and years we have had several interesting cases concerning prescriptive easements, easements by implication, and easements by necessity.  For example, see Independence Tube Corp. v. Radke, 704 N.E.2d 72; Emanuel v. Hernandez, 728 N.E.2d 1249, and Canali v. Satre, 688 N.E.2d 351.  And now we have another one, Weaver v. Cummins, No. 4-00-0982. The facts of the case are mundane and undistinguishable.  The court held that the plaintiffs were entitled to an easement by necessity.  But the plaintiffs also wanted the court to find that they were entitled to move their collection of antique trucks via semi-truck across the easement property.  The court refused to make this finding, stating that "the implied easement allows plaintiffs reasonable ingress and egress to their property, but the record is devoid of evidence that the parties to the original conveyance contemplated the type of use plaintiffs proposed."  This made me think of that oft-misunderstood topic, the overburdening of easements.

 

Example: Lot two is a very large lot.  The owner of adjoining lot one gives an access easement to the owner of lot two.  The easement is over the south ten feet of lot one. After the easement is created, the owner of lot two subdivides this lot into six smaller lots and then sells them all.  Before the subdivision was created, one person--the one owner of lot two--had the right to go over the south ten feet of lot one.  But now, would the six owners of what was then lot two still have the right to use this easement? 

 

Some people might say that the six lot owners would not have the right to use the easement, that it is now overburdened.  But this probably is not the case.  Illinois case law makes it clear that a properly created easement benefits not only the dominant tract as a whole, but also benefits each and every part thereof.  The easement is not extinguished by a division of the dominant estate.  Instead, the easement inures to the benefit of the owners of these several smaller parts of the dominant estate.  See Beloit Foundry Co. V. Ryan, 28 Ill.2d 379 (1963).

 

Therefore, a court would probably rule that the six owners of lot two would continue to have the right to use the easement.  (Naturally, they would have to establish interior easements over lot two in order to get to the easement over lot one.)

 

So what is overburdening an easement?  Case law indicates that if an easement is limited in scope or purpose, the owner of the property subject to the easement is entitled to prevent the burden of the easement from being increased.  See Marlatt v. Peoria Water Works Co., 114 Ill.App.2d 11 (1969).

 

For example: A sanitary sewer easement affects the north line of a lot. Commonwealth Edison would not have the right to put utility poles and wires within this easement area on the basis that it is a "public utility easement."

 

Thus, overburdening of an easement occurs when the use of the easement goes beyond the scope of the contemplated purpose of the easement.

 

Example: Several years ago I was asked to insure an easement, but I declined on the basis that I felt that the easement would be overburdened.  The original easement was for the moving of farm equipment into a farmer's field.  The easement traversed across a railroad right-of-way.

 

A developer bought the field and intended to build a large residential development.  He wanted me to insure that all these individual homeowners could use what was originally a farmer's easement.  The easement originally allowed the farmer to move his farm equipment into the field in order for him to till the field and harvest his crops.  Now I was being asked to insure that the easement could be used as an access road by the dozens of individual homeowners in their dozens of mini-vans and SUVs.

 

This, I think, is a classic example of the overburdening of the easement. Clearly the proposed use of this easement goes beyond the scope of the original easement.

 

For an old, but still good, article on easements, see "Private Ways: Title and Title Evidence,"by John F. Denissen, that appeared in the June 1957 issue of the ILLINOIS BAR JOURNAL.

 

Dick Bales

Chicago Title Insurance Company

 

 

4.  RESPA; OVERCHARGING FOR RECORDING EXPENSES:

 

Eschevarria v. Chicago Title & Trust Company, (7th Cir., July 5, 2001, case no. 00-4087), deals with the issue of “overcharging” for recording charges and whether this is a violation of RESPA.  Plaintiffs were homebuyers who sued Chicago Title claiming that it violated RESPA’s prohibition on fee-splitting when it charged them more to record their deeds and mortgages than the actual costs of the recording.  Chicago Title charged Eschevarria $25.00 for recording their deed and $45.00 for recording the mortgage.  The actual charges were $25.00 and $31.00 respectively. Chicago Title did not refund, but kept the $14.00 overcharge. (The Court’s decision written by Judge Bauer and concurred by Judges Coffey and Poser, the Judge responsible for the Court’s well known decisions based upon economic theories, described the action thusly: “Chicago Title pocketed the $14.00 overcharge.”)

 

Affirming the District Court’s dismissal of the suit for failure to state a cause of action under the Federal Rules of Civil Procedure, the Court essentially found that “pocketing” is not the equivalent to “fee-splitting”.  RESPA prohibits accepting any portion, split or percentage of any charge made for rendering a real estate settlement service.  Chicago Title successfully argued, (as had Intercounty Title Company in Durr v. Intercounty Title Company, (7th Cir., 1993), 14 F.3D 1183, cert. denied 513 U.S. 811), that because it received the extra money from the plaintiffs and kept the overcharges itself, rather than sharing them with a third party, there was no fee-splitting required to support a  finding of a RESPA violation.   Noting that it had earlier held that “Intercounty merely receive a ‘windfall’ and did not violate RESPA”, the Court syllogistically determined that there were no facts plead showing that Chicago Title had illegally shared fees with the Recorder, the Recorder received no more than it’s regularly recording fees, and the Recorder did not arrange for Chicago Title to receive any unearned fee; ergo, no wrongdoing under RESPA. “This result makes sense considering not only RESPA’s plain language, but its intended purpose.  We state in Durr:  At its core, RESPA is an anti-kickback statute…If we subjected to RESPA liability a title company that kept an overcharge without requiring allegations that it shared an unearned fee with a third party, we would radically, and wrongly expand the class of cases to which RESPA Sec. 8(b) applies.” 

 

(Does anyone else have the image of the ‘one-legged-man-in-a-butt-kicking-contest’ going through their mind??  Theoretically and procedurally, I understand this case, but perhaps one of our title company friends can help us see the justice in this decision next month? I’m just bothered by the fact that there seems to be a case, no two cases, that tackle the circumstances where a title service provider “pockets” a fee and allows this to occur with impunity)

 

 

5.  RESPA; “DECEPTIVE PRACTICES” EXCLUSION UNDER INSURANCE POLICY

 

Beyer v. Heritage Realty, Inc. (7th Cir., June 8, 2001, case 00-2016) is a case from the Eastern District of Wisconsin that considers whether violation of RESPA’s disclosure requirements is a “deceptive practice” as defined in a errors and omissions insurance policy exclusion provision.  The circumstances giving rise to the issue are a little convoluted, but essentially, Beyer sued Heritage Realty for failure to disclose its affiliation with a title insurance company in transactions that it initiated, and for which the title company provided settlement services.  The case was a class action, and Heritage’s carrier under a “Real Estate Agents and Brokers Program Professional Liability” policy, St. Paul Fire and Marine Insurance Company, intervened seeking a declaration that its policy did not cover liability for non-compliance with RESPA disclosure mandates.  Its argument was based upon a policy exclusion for coverage for any violation of “antitrust, price fixing, restraint of trade or deceptive trade practice law”.  Agreeing that the lack of disclosure that was at the center of the case was a deceptive trade practice, the magistrate judge entered a judgment holding that St. Paul need not defend nor indemnify Heritage Realty.

 

The Seventh Circuit reversed.  Keying on whether it was the intention of the parties to exclude violations of RESPA within the policy exclusion under the penumbra of “deceptive trade practice”, it noted that the policy specifically mentions and explicitly excludes coverage for violations of antitrust laws, securities laws, and ERISA, but specifically does not mention the principal federal statute regulating to activities of real estate brokers relating to disclosure, RESPA.  The Court then ponders: “Would it not be weird—would it not be deceptive?—to exclude all coverage of RESPA in such a policy without mentioning RESPA by name or direct reference?”, and reverses.

 

 

6. ZONING; ADMINISTRATIVE PRECEDENT AND ESTOPPEL:

 

Allan Monat brought an action seeking a mandamus against Cook County and the Department of Building and Zoning requiring them to issue a building permit that would allow him to construct a horse stable on property he purchased in unincorporated Cook County.  Monat v. County of Cook, (1st Dist., may 14, 2001).  There were a number of nearby homeowners who kept horses on their properties, and the subdivision in which he purchased land was surrounded by a Forest Preserve and bridle paths for horses.   Twenty years earlier, the Cook County Board of Commissioners granted a special use ordinance for property in the subdivision allowing private boarding of horses based upon a report from the Zoning Board of Appeals.  Monat was advised of this during his negotiations for the purchase of the property.  Nonetheless, in order to build a stable on the small lot he intended to purchase, Monat required a variance from the setback requirements, and applied for the variance to permit construction of the stable.  Owners of several nearby homes opposed Monat’s request for a variance, but the Zoning Board of Appeals granted the variation as requested.  Monat thereafter signed an offer to purchase the lot and applied for the building permit.   After closing and moving in, Monat modified the plans to change the stable’s roof and applied to modify his building permit as well.  The Department of Building then issued a “stop work” order.  Monat then brought this action for mandamus seeking the permit and arguing that the special use permit granted him the right to a building permit and the that Department of Building was equitably estopped to deny him and issue a stop work order.

 

Turning first to the issue of whether the prior decision of granting the special use permit was res judicata upon the Department, the Court held:  “A prior determination by an administrative body is not res judicata in subsequent proceedings before it.  [Citations]  An administrative body has the power to deal freely with each situation as it comes before it, regardless of how it may have dealt with similar or even the same situation in  a previous proceeding.”  Finding that the twenty year old ordinance was ambiguous because it did not clearly state whether it applied only to stables that existed at the time or to any stables to be built in the future in this subdivision, the Court examined the genesis and facts surrounding the special use ordinance and found that its purpose was to allow the continued housing of horses in stables existing at the time, but no evidence of any intent to expand the special use to all lots in the subdivision.  Monat’s lot did not have a stable or horses when the county granted the special use twenty years ago, and therefore had no basis for a claim of right to a permit to build a stable now.

 

Monat was more successful with his argument that the Department was equitably estopped to deny him the permit.  An affirmative act which serves as the basis for a claim that a municipality is equitably estopped must not be merely the unauthorized acts of a ministerial officer, but be an affirmative act of the municipality such as legislation, and result in extraordinary or compelling circumstances.  Finding that the holding of a hearing, at which owners of neighboring property expressed their opinions, construing the prior special use ordinance, and then issuing a building permit for the stable, together constituted an “affirmative act” of the County that supported estoppel.   The issue of whether Monat changed his position substantially enough to give rise to extraordinary or compelling circumstances necessary for estoppel is a question of fact, and therefore the trial court should not have granted summary judgment in favor of the County.

 

The case was affirmed in part, reversed in part, and remanded for findings of fact and application of law.

 

 

7.  LAND TRUSTS:  FORGERY AND WARRANTY BY THE TRUSTEE:

 

The title to real estate in Northbrook, Illinois was held in a land trust at First National Bank of Northbrook in In Re Marriage of Lily Gross, (1st Dist., June 8, 2001).  (Webmaster’s note:  The original court opinion referenced by the author was withdrawn on August 16, 2001, and is no longer available on the 1st District’s Appellate Court Opinions web site; see new opinion filed August 24, 2001).  The beneficiary and holder of the power of direction in the land trust was Lily Gross.  Letters of Direction, however, were forged by Lily’s husband, Jeffrey Gross, directing First National Bank to execute a mortgage in the sum of $210,000 and a line of credit in the sum of $125,000, both in favor of Success National Bank.  When Success obtained judgment of foreclosure due to a default on the debt, Lily filed a complaint against First National Bank for breach of its fiduciary duty as trustee and negligence in the execution of the mortgage documents based on the forged Letter of Direction.   First National filed a counterclaim against Jeffrey, of course, but also filed against Success National Bank, claiming that Success delivered the mortgage documents and forged Direction to them, and that First National “relied upon Success’ somehow warranting that the letter of direction was signed by the appropriate party.”

 

In a decision deals extensively with issues relating to admissions in a deposition by a First National Bank employee relating to whether the Letter of Direction came from Success Bank, (which may be helpful to some litigators in its finding that “no” means “no” and there is no “wiggle room in the word ‘no’” in interpreting testimony), the Court affirmed the trial court’s summary judgment in favor of Success.  Holding that First National Bank had no basis to look to Success to warrant that the signature of its own beneficiary on the Letter of Direction was authentic, the decision notes that the security documents contained an express warranty by First National Bank that it had authority to act as trustee, (given by its beneficiary pursuant to a power of direction), in executing the security instruments.  Accordingly, summary judgment in favor of Success National Bank and against First National Bank was affirmed. This is a short and concise decision which may be helpful in land trust issues.

 

 

8. BANKRUPTCY STAY MODIFICATION; DOCKETING ORDERS:

 

The law in NDB Highland Park Bank, N.A. v. Wien, (2nd Dist., 1993), 251 Ill.App.3d 512, appeared to be quite clear in its holding that an Order in federal bankruptcy court does not become final until docketed.  The First District, however, has ruled differently, and applied a “common sense” standard in Standard Federal Bank for Savings v. Hanno, (1st Dist., June 22, 2001).

 

In Hanno, the mortgagor filed a series of six bankruptcy petitions. The fourth and fifth petitions were found to have been filed in bad faith intended to stay the confirmation of the pending foreclosure sale.  When Hanno filed his sixth bankruptcy petition, the bank and debtor entered into a stipulated order that provided Hanno was to have until December 1, 1999 to sell the property, and that if the property was not sold by that date, the Bankruptcy Court would dismiss the case.  Hanno was unable to sell and the Bankruptcy Case was dismissed by an Order entered at a hearing on December 2, 1999, with Hanno present.  However, the Clerk did not docket the order until December 7, 1999.  On December 6, 1999, the Bank filed motions to reinstate the state foreclosure case and confirm the previously held sale. On December 9, 1999, the foreclosure case was reinstated and the sale confirmed.  Hanno’s argument that the filing of the motions prior to the docketing of the order modifying the sale rendered those motions void was rejected.  While noting the Wien case held that bankruptcy orders do not become final until they are docketed, and, since the bankruptcy court retained jurisdiction until the order that lifted the stay was docketed, the sale conduction prior to the docketing of the order was void for lack of jurisdiction, Justice Reid held Hanno’s reliance on Wien misplaced, and pointed to the decision in Noli v. Commissioner of Internal Revenue, (9th Cir. 1988) 860 F.2d 1521, and In re Saunders, as instructive.  Nolti held the bankruptcy court’s order lifting the stay was effective and binding upon the parties. …They were present when the oral order was issued and clearly had notice of its existence and content.”   In re Saunders, (S.D. Fla., 1999), 240 B.R. 636, held that “Rather, common sense dictates that a court’s order is effective when a court enters such an order….  To hold otherwise would permit the clerk’s office to misplace an order order and prevent a judgment’s order from becoming effective. Parties should be able to reasonably rely on a written order, signed by a Judge, that the party has actually received, even if this Order does not get docketed.”  Noting that Hanno was present at the hearing on December 9, 1999, when the foreclosure case was reinstated and confirmed, and distinguishing Wien further on the basis of the fact that the sale was conducted prior to the docketing of the dismissal order whereas Hanno’s sale took place before the filing of the sixth bankruptcy petition, the confirmation of the sale was affirmed based on a finding that the trial court had jurisdiction.  (Actually, only the filing of the motions, not any hearings thereon, took place during the post-hearing-pre-docketing period according to the statement facts.)  The highly technical ruling in Wien appears to be somewhat tempered by the facts.

 

 

9. RESTRICTIVE COVENANTS; PRIVITY OF ESTATE AND PRIOR VIOLATIONS:

 

Save the Prairie Society brought an action to enforce a restrictive covenant relating to use of property in a 200 acre area once owned entirely by Bartlett & Co. in Save the Prairie Society v. Greene Development Group, Inc., (1st Dist., June 18, 2001).

 

The use was limited to residential use and garden farming, and prohibited hog, goat or mushroom farming, as stated in deeds between 1942 and 1947.  These specific restrictions were stated as a covenant running with the land in a deed to defendant’s predecessors from Bartlett, but the plaintiff’s were unable to prove privity of estate due to an intervening deed from Bartlett & Co. to Frederick Barlett, as trustee, which did not set forth the same restrictions; although later deeds from the trust stated similar covenants forbidding any principal buildings other than a residence and hog or mushroom farming.

 

In denying Plaintiff’s petition for a preliminary injunction, the trial court ruled that the plaintiff lacked standing to enforce the restrictive covenant due to the absence of privity of estate. The court also found that multi-unit residential and commercial uses in the northern part of the 200-acre tract changed the character of the tract and rendered the restrictive covenants unenforceable.  In its decision reversing, the First District noted that a plaintiff does not have to prove privity of estate in order to equitably enforce a restrictive covenant. If the restriction or covenant is part of general scheme or plan for the mutual benefit of the owners of all lots in the particular tract, the courts will enforce the restriction regardless of direct privity.  The Courts will consider whether (1) the restrictions are included in all deeds to the subdivisions, (2) the restrictions have been previously violated, (3) the burdens imposed are generally equal and for the mutual benefit and advantage of all lot owners, and (4) notice of the restriction is given the recorded plat of subdivision.  There were numerous previous violations of the restrictions, but “a general plan may be found to exist even though there are violations….”, and violations of building restriction are not material when they occur on other streets or areas than the one directly involved.  Here, the extensive violations of the restrictions on other parts of the 200-acre area had not impacted the character of the land use in the immediate vicinity of the property in question, and that property had retained its residential nature.  The trial court “failed to apply recognized legal principals” relating to these issues, and there was no adequate remedy at law because if allowed to proceed the “Defendant’s development would have irrevocably changed the character of the neighborhood.  The courts must balance the harms from granting or denying the preliminary injunction, and here the plaintiff’s interest were in greater need of protection than the defendant’s delay in realizing profits sought from developing the property.”  While there were clearly some hurdles for the Plaintiff to surmount in proving a likelihood of success on the merits necessary for the imposition of an injunction, “If the subject of the injunction is property which may be destroyed, or if, as here, the plaintiff seeks only to maintain the status quo until the ultimate issue is decided, the injunction is property allowed or maintained even where there may be serious doubt as to the ultimate success of the complaint.”

 

 

10. REAL ESTATE TAX SALE REDEMPTION; TIMING AND ACCRUAL OF PENALTIES AND INTEREST:

 

“Timing is the secret to the universe”, and nowhere more so than in the redemption of real property from foreclosures and tax sales.  In The Matter of The Application of the County Treasurer, Petition of Phoenix Bond & Indemnity, (1st Dist., June 28, 2001), Phoenix Bond sought to expunge the redemption from a tax sale that occurred on Monday, January 31, 2000.  Phoenix argued that the owner’s redemption, (submitted on a Monday, 24 months and 1 day after the sale), was insufficient in sum because the redemption statute provides that any redemption made more than 18 months and less than 24 months is to include sale penalties calculated by multiplying the penalty period times four and dividing that percentage into the certificate amount paid by the purchaser at sale, whereas an additional penalty of 18% is to be added when redemption is more than 24 months after the sale.

 

The official estimate of redemption prepared by the Clerk quoted $40,452.35, and noted that an additional sum of $1,875.82 would be added after January 30, 2000; which fell on a Sunday.  The office was closed, of course, on Sunday, so the owners appeared on Monday with $40,452.35 in hand to redeem.  The Clerk accepted the redemption, and Phoenix objected.  Filing a motion to expunge the redemption, Phoenix challenged the amount paid and contended that because it was made more than 24 months after the sale of sale, it should have included an additional $1,875.82.  The Statute on Statutes, (5 ILCS 70/1.11), provides that the owner was entitled to redeem on the following Monday without any change in the amount required.  Phoenix, however, sought to make a distinction between the “act of redemption” and the “accrual of penalty” dates.  Conceding that while the period for the act of redemption could not legally expire on a Sunday, Phoenix nonetheless argued that there was no such limitation on the accrual of the penalty. The accrual of penalties, like the accrual of interest on a debt or judgment, Phoenix contended, is not subject to abatement on non-business days.  Accordingly, while the owners still had the right to redeem on the Monday following, they should have paid the additional penalty that accrued on that date in order to do so; i.e., their right to redeem did not expire on Monday, but the amount necessary to do so did increase on that date, making their deposit insufficient.

 

Reciting the rule that Illinois law favors redemptions and redemption statutes will be liberally construed, Justice Hartman reasons that “the determination of the redemption date and the calculation of the penalty are interrelated to the extent that the penalty is fixed by the redemption date”, and rejected the theory that the calculation of the date could be separated or bifurcated from the calculation of the amount necessary.  (This case also contains citations to similar decisions employing the Statute on Statutes to allow for the doing of any act provided by the law to be completed on the next, first business day following weekends and holidays pursuant to Section 1.11.)