Rumford v. Countrywide Funding Corp.

No. 2--96--0891
________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT
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DIANA L. RUMFORD, f/k/a Diana ) Appeal from the Circuit Court
L. Leonard, Indiv., and on ) of Lake County.
Behalf of Others Similarly )
Situated, ) No. 95--CH--668
)
Plaintiff-Appellant, )
)
v. )
)
COUNTRYWIDE FUNDING CORPORATION, ) Honorable
) Jack Hoogasian,
Defendant-Appellee. ) Judge, Presiding.
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JUSTICE McLAREN delivered the opinion of the court:
Plaintiff, Diana L. Rumford (f/k/a Diana L. Leonard), filed a
two-count amended complaint against defendant, Countrywide Funding
Corporation, alleging breach of contract and violation of the
Consumer Fraud and Deceptive Business Practices Act (the Act) (815
ILCS 505/1 et seq. (West 1994)). The parties filed cross-motions
for summary judgment. Following a hearing, the court granted
defendant's motion. Plaintiff appeals, and we reverse and remand.
Plaintiff filed her amended complaint as a class action on
behalf of herself and all others similarly situated. She defined
the class as all people who entered into mortgage contracts with
defendant, whereby defendant agreed under the terms of the
contracts to release the mortgage instruments without charge when
the mortgages were paid off, but then imposed an additional charge
at the time the mortgages were released.
In her amended complaint, plaintiff alleged that she entered
into a mortgage contract with defendant. Plaintiff provided
security to defendant for the repayment of a $30,000 note.
Paragraph 21 of the mortgage contract provided "Upon payment of all
sums secured by this Security Instrument, Lender shall release this
Security Instrument without charge to Borrower. Borrower shall pay
any recordation costs." On or about November 22, 1993, defendant
sent a letter, entitled "STATEMENT OF ACCOUNT FOR PAYMENT IN FULL,"
(hereinafter account statement or payoff letter) to plaintiff's
attorney. Plaintiff attached the payoff letter and the contract to
the complaint. In addition to the outstanding principal balance
and interest, the payoff letter included a $50
"reconveyance/statement fee" and a $15 "prepayment penalty/other"
charge. These amounts were included in the balance of $26,786.21
needed to pay the account in full. Plaintiff paid the total amount
due, including the $50 and $15 fees, and obtained a release deed
from the defendant.
Count I of the amended complaint alleged breach of contract.
Plaintiff alleged that she performed all of the terms and
conditions of the mortgage contract, but that defendant breached
the contract by charging fees in violation of the contract's
express terms. Count II alleged a violation of section 2 of the
Act (815 ILCS 505/2 (West 1994)), which declares as unlawful:
"Unfair methods of competition and unfair or deceptive
acts or practices, including but not limited to the use or
employment of any deception, fraud, false pretense, false
promise, misrepresentation or the concealment, suppression or
omission of any material fact, with intent that others rely
upon the concealment, suppression or omission of such material
fact ***." 815 ILCS 505/2 (West 1994).
Defendant moved for summary judgment, relying on the affidavit
of one of its first vice-presidents, Rick Wilson. The gist of the
motion was that only fees for releasing the mortgage were
prohibited, and the fees defendant assessed plaintiff were not for
releasing the mortgage. Wilson stated in his affidavit that he has
worked in defendant's remittance processing division since February
1992 and has been in the mortgage business for 23 years. Wilson
had personal knowledge of defendant's policies with respect to
providing account statements to customers. Wilson stated that
defendant accepts account statement requests from its customers or
its customers' agents. When defendant receives such a request, it
generates an account statement by computer. Defendant also updates
the customer's file and provides the customer with an amended
statement if any changes occur that would affect the amount listed
in the original statement.
Wilson further stated that defendant charges its customers $50
for processing the request for an account statement. The charge is
intended to compensate defendant for providing an amended statement
when necessary. Defendant bills its customers for this service by
including the $50 fee on the account statement. Defendant will
send the statement to the customer by facsimile if the customer so
requests. The fee for doing so is $15. According to Wilson,
defendant informs the individual requesting the statement that
there is an additional charge for receiving the statement by
facsimile and so informed plaintiff's attorney when she requested
the account statement.
Wilson's affidavit further stated that defendant releases a
customer's mortgage when the principal and interest are paid in
full. If a customer pays the principal and interest, but not the
$50 and $15 fees, defendant will still release the mortgage even
though the customer remains liable for the fees. On hundreds of
occasions, defendant has released mortgages when a customer who is
liable for statement and facsimile fees did not pay those fees.
According to Wilson, plaintiff's attorney requested the account
statement. Defendant charged plaintiff $50 for processing the
statement request and $15 to send it by facsimile. Plaintiff never
asked defendant to release her mortgage without payment of the
fees. If she would have paid principal and interest only,
defendant would have released the mortgage, but plaintiff still
would have been liable for the fees.
In response, plaintiff also moved for summary judgment. In
her supporting memorandum, plaintiff reiterated the allegations of
her complaint regarding the language of the contract and the payoff
letter. She attached the payoff letter to her memorandum.
Plaintiff argued that defendant was now trying to rewrite the
payoff letter by stating that a "reconveyance/statement fee" is a
fee for processing a request for an account statement and that a
"prepayment penalty/other" is a facsimile fee. Plaintiff further
argued that the explanation for the charges is irrelevant because
the contract provides that the mortgage is to be released without
charge to the borrower. With respect to Wilson's statement that a
mortgage would be released upon payment of only principal and
interest, plaintiff pointed out that such an assertion was not made
in the payoff letter and that defendant included the charges in the
amount necessary to pay the account in full.
Defendant filed a reply in which it argued that Wilson's
affidavit was uncontroverted and refuted the allegations of the
complaint. Defendant argued that plaintiff was not charged for the
release of her mortgage. Defendant further argued that payment of
plaintiff's note was to be made in California and that California
law allows a mortgagee to charge a fee, not to exceed $60, for an
account statement. In support, defendant filed a supplemental
affidavit of Rick Wilson. In the affidavit, Wilson states that a
customer may find out an account balance by speaking to a customer
service agent, by using defendant's automated balance service, by
referring to the quarterly report that summarizes the account
status, or by requesting an account statement. Defendant only
charges borrowers who request an account statement. Wilson further
stated that plaintiff's note required her to make payments to
defendant's California office.
Following a hearing, the court entered summary judgment for
defendant, and plaintiff timely appealed. On appeal, plaintiff
argues that defendant's evidence was inherently incompetent,
suspect, and/or unbelievable. Plaintiff asks us to reverse the
trial court's decision and enter summary judgment in her favor or,
in the alternative, to reverse and remand the cause for further
proceedings.
Summary judgment is properly granted if "the pleadings,
depositions, and admissions on file, together with the affidavits,
if any, show that there is no genuine issue as to any material fact
and that the moving party is entitled to a judgment as a matter of
law." 735 ILCS 5/2--1005(c) (West 1994). The purpose of summary
judgment is not to try questions of fact, but to determine whether
such questions exist. Gilbert v. Sycamore Municipal Hospital, 156 Ill. 2d 511, 517 (1993). In determining whether a genuine issue of
fact exists, the court must construe the evidence strictly against
the moving party. Guerino v. Depot Place Partnership, 273 Ill.
App. 3d 27, 30 (1995). The nonmovant need not prove his case at
the summary judgment stage (Bickerman v. Wosik, 245 Ill. App. 3d
436, 438 (1993)), but must come forward with evidentiary material
that establishes a genuine issue of material fact (Salinas v.
Chicago Park District, 189 Ill. App. 3d 55, 59 (1989)). Summary
judgment will be granted only when the right of the moving party is
clear and free from doubt. Guerino, 273 Ill. App. 3d at 30.
We review summary judgment orders de novo. Monticello
Insurance Co. v. Wil-Freds Construction, Inc., 277 Ill. App. 3d
697, 701 (1996). Where the parties file cross-motions for summary
judgment, they invite the court to decide the issues presented as
a question of law. Giannetti v. Angiuli, 263 Ill. App. 3d 305, 312
(1994). Nevertheless, where there are factual questions on
material issues, summary judgment is inappropriate. Giannetti, 263
Ill. App. 3d at 312.
Both parties argue on appeal that they were entitled to
summary judgment. However, our review of the record indicates that
there were material issues of fact, and summary judgment should not
have been granted for either side. In Giannetti, we stated the
rules for when summary judgment should be granted in a contract
case:
"Summary judgment is a proper procedure where only the
construction of language and the validity of a contract are at
issue [citation] and there is no dispute as to the language
and formation of the agreement [citation]. However, it is a
question of fact whether a breach of contract has occurred
[citation] or whether the agreement contains an ambiguity
which requires the admission of extrinsic evidence [citation].
Summary judgment is particularly inappropriate where *** the
parties seek to draw inferences on questions of intent."
Giannetti, 263 Ill. App. 3d at 312-13.
Defendant argues that, because plaintiff did not file
counteraffidavits, the trial court properly entered summary
judgment for defendant. We disagree. We explained in Pease v.
International Union of Operating Engineers Local 150, 208 Ill. App.
3d 863, 874 (1991), that, where a movant in a summary judgment
proceeding supplies uncontradicted facts that would entitle the
movant to a judgment as a matter of law, the nonmovant cannot rely
on his complaint or answer alone to raise a genuine issue of
material fact. We also explained that, "even though a party
opposing a motion for summary judgment fails to file
counteraffidavits, the movant is not entitled to summary judgment
unless his motion and supporting affidavits establish his right to
summary judgment as a matter of law." Pease, 208 Ill. App. 3d at
874.
Here, plaintiff was not relying on her complaint alone to
raise a genuine issue of material fact. She was relying on the
contract between the parties and the account statement that was
generated by defendant's own payoff department. Wilson's affidavit
contradicted those documents. Rather than establishing defendant's
right to a judgment as a matter of law, Wilson's affidavit created
the fact questions. Plaintiff relied on a contract that provided
"Upon payment of all sums secured by this Security Instrument,
Lender shall release this Security Instrument without charge to
Borrower" and an account statement supplied by defendant that
included in her account balance a "reconveyance/statement fee" of
$50 and a "prepayment penalty/other" charge of $15. Wilson's
affidavit was an explanatory denial of what the payoff letter
indicates. By stating that a "reconveyance/statement fee" was
really a fee for processing plaintiff's request for a statement of
her account balance and that a "prepayment penalty/other" was a
facsimile fee, Wilson's affidavit did nothing more than create
questions of material fact as to whether defendant breached the
contract. To grant summary judgment for defendant, the trial court
would have had to do what the court is not supposed to do at the
summary judgment stage--weigh the evidence. Further, the trial
court would have had to make a credibility determination that
Wilson was telling the truth in his affidavit, although that
affidavit was contradicted by documents generated by defendant.
We wish to reiterate that, although uncontradicted statements
of fact in an affidavit must be taken as true for purposes of a
summary judgment motion, the moving party is not entitled to
summary judgment merely because the opposing party fails to file a
counteraffidavit. Here, the documents attached to plaintiff's
complaint--the contract and the payoff letter--contradicted
Wilson's affidavit, and plaintiff was entitled to rely on that
evidence to create a genuine issue of material fact.
We find that the contradictions between the payoff letter and
the affidavit created fact questions precluding summary judgment on
both the breach of contract and the consumer fraud counts.
Defendant argued in the trial court that summary judgment was
proper on the consumer fraud claim because the Act has been held
not to apply to simple breach of contract claims. See Golembiewski
v. Hallberg Insurance Agency, Inc., 262 Ill. App. 3d 1082, 1093
(1994). However, we find that plaintiff's consumer fraud claim was
not based on a simple breach of contract but on an allegation that
defendant was engaged in a pattern of misrepresenting to customers
that additional charges would not be assessed at the time their
mortgages were released. For the reasons previously stated, we
find that material issues of fact remained on this issue.
The judgment of the circuit court of Lake County is reversed,
and the cause is remanded for further proceedings consistent with
this opinion.
Reversed and remanded.
BOWMAN and THOMAS, JJ., concur.