100 Roberts Road Business Condominium Association v. Khalaf

FOURTH DIVISION
September 19, 2013

2013 IL App (1st) 120461

No. 1-12-0461

100 ROBERTS ROAD BUSINESS ) Appeal from the
CONDOMINIUM ASSOCIATION, ) Circuit Court of
) Cook County.
Plaintiff-Appellant, )
)
v. ) No. 10 M3 4333
)
VICTORIA KHALAF and STANLEY HORN )
)
Defendants, )
)
(Judd Azulay, Glenn Seiden, and All)
Unknown Occupants, ) Honorable
) Martin S. Agran
Defendants-Appellees). ) Judge Presiding

PRESIDING JUSTICE HOWSE delivered the judgment of the court,
with opinion.
Justices McBride and Taylor concurred in the judgment and
opinion.

OPINION

¶ 1 On November 24, 2010, plaintiff 100 Roberts Road Business

Condominium Association filed a forcible entry and detainer

lawsuit against defendants Victoria Khalaf, Stanley Horn, Judd

Azulay, Glenn Seiden and all unknown occupants, claiming that

defendants had failed to pay the common assessments due for a

business condominium since 2004.

¶ 2 On July 28, 2011, following a bench trial, the trial court

entered a judgment for the plaintiff for past-due assessments

against defendants Judd Azulay and Glenn Seiden. However, the
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trial court reduced plaintiff's damage award based on its finding

that plaintiff had failed to mitigate its damages.

¶ 3 Plaintiff filed a motion to reconsider, claiming that it was

inappropriate to reduce plaintiff's award based on its alleged

failure to mitigate damages. On plaintiff's motion for rehearing

the trial court granted plaintiff's motion to reconsider, finding

that defendants had waived their right to argue mitigation based

on the declaration of condominium owners. However, the court then

made a finding that plaintiff had brought the forcible entry and

detainer lawsuit for an improper purpose and dismissed the case

against defendants. Plaintiff appealed. For the reasons that

follow, we reverse the judgment of the circuit court and remand

with directions for further proceedings.

¶ 4 Background

¶ 5 The 100 Roberts Road Condominium building consists of a

three-unit building in Palos Heights, Illinois. The first unit,

10001, is owned by a land trust, with the named beneficiary being

John C. Griffin. Unit 10001 is occupied by the law firm Griffin

and Gallagher, LLC. Unit 10003 is owned by Omer Abuzir and is

occupied by the law firm Abuzir & Mitchell, which is associated

with Victoria Khalaf. Unit 10005, the unit at issue in this

lawsuit, is titled to Victoria Khalaf, Stanley Horn, Glenn Seiden

and Judd Azulay, but has been vacant for a number of years. Unit

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10005 is encumbered with a mortgage signed by Victoria Khalaf,

Stanley Horn, Glenn Seiden and Judd Azulay.

¶ 6 The 100 Roberts Road Business Condominium Association,

plaintiff, consists of three members: Victoria Khalaf, Omer

Abuzir and John C. Griffin. Pursuant to the declaration of

condominium ownership, plaintiff has a duty to maintain the

common areas of the building, estimate the costs associated with

maintaining the common areas and collect assessments from the

unit owners to cover the costs of such maintenance.

¶ 7 Defendants, owners of unit 10005, have not paid common

assessments since 2004, with the exception of $2,000, which was

paid by a Daniel Azulay in 2007.

¶ 8 On June 11, 2010, plaintiff filed a claim for a lien with

the Cook County recorder of deeds in the amount of the unpaid

assessments, $12,910, and mailed the lien to defendants on August

25, 2010. The notice of lien indicated that plaintiff had

retained the law firm Fullest Rosenlund Anderson P.C. to file a

lawsuit and collect the amounts owed in assessments, if

necessary.

¶ 9 On September 23, 2010, plaintiff caused a notice and demand

for possession to be served on all defendants. When there was no

response within the statutory period, plaintiff filed a forcible

entry and detainer lawsuit against defendants on November 24,

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2010. In the lawsuit, plaintiff sought possession, unpaid

assessments, and the payment of costs, late charges, interest and

reasonable attorney fees.

¶ 10 On June 15, 2011, default judgments were entered against

Khalah and Horn. The default judgments were never vacated and

they are not parties to this appeal. On July 6, 2011, Azulay and

Seiden appeared and filed an answer with a general denial of all

allegations.

¶ 11 The trial commenced on July 6, 2011, proceeding against

Azulay and Seiden. There was no court reporter at the trial.

However, in its January 12, 2012 memorandum order, the trial

court recited the facts elicited at trial, which we in turn

recite below.

¶ 12 Plaintiff's first witness, Noreen McInerny, an attorney for

Griffin and Gallagher, LLC, testified that her firm acts as the

attorney and property manager for plaintiff and also rents space

from plaintiff. She testified that the property at issue, unit

10005, is vacant. The warranty deed dated September 2003 states

that the owners of unit 10005 are Victoria Khalaf, Stanley Horn,

Judd Azulay and Glenn Seiden. She testified that with respect to

this litigation, she prepared and filed the notice of liens and

sent copies to defendants; she prepared the demand for possession

and sent copies to defendants; and she filed the complaint on

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November 24, 2010.

¶ 13 McInerny further testified that prior to the weeks leading

up to trial, she had never seen Azulay or Seiden, and she had

never received any checks from either of them. She testified

that the current directors of the association are Khalaf, Abuzir

and Griffin and that Abuzir and Khalaf are in a business

relationship. She testified that the sign on the door of

Abuzir's unit states "Horn, Khalaf, Abuzir & Mitchell."

¶ 14 Next, plaintiff called Mary Corr, the bookkeeper at Griffin

and Gallagher, LLC, who testified that the association pays the

insurance, garbage, fire alarm system and landscaping for the

building. She testified that unit 10005 owes $16,282.15 in

assessments and that since May 2004, she had only received three

checks for assessments, totaling $2,000. She further testified

that when she began doing the book work at Griffin and Gallagher,

LLC, in 2006, unit 10005 was vacant and was $5,000 in arrears.

She was aware that unit 10005 had not paid assessments in years,

but she did not do anything about it. At some point, she was

directed to send notices to Daniel Azulay. She sent several late

notices to Daniel Azulay, but did not send him any claims for

possession.

¶ 15 Defendants called defendant Seiden as a witness. He

testified that he had recently learned that he was an owner of

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unit 10005. He stated that he was never told he was a joint

owner, but acknowledged that his signature was on the mortgage.

He testified that he had known Horn for many years. Seiden and

Horn had been in the practice of law together and Seiden had

entered into about a dozen small investments with Horn. In 2005,

arrangements were made to have Horn dissociate from Seiden's

firm. Ultimately, a lawsuit was filed to effectuate the

dissociation. That litigation is still pending.

¶ 16 In 2006 or 2007, Seiden felt that Khalaf was not fully

accounting for the income she was bringing in at the firm, and

Seiden asked her to take some time off. Khalaf never returned to

the firm. Seiden testified that Daniel Azulay was the brother of

Judd Azulay and they formerly had a law practice together. When

Seiden joined their law firm, Daniel Azulay retained an interest

in the firm, but left the firm shortly thereafter. There had

been bad feelings between the Azulay brothers and Seiden

encouraged the separation.

¶ 17 Following the trial, defendants requested an opportunity to

respond to the issue of title. After this issue was briefed, the

trial court ruled in favor of plaintiff and awarded unpaid

assessments, but reduced the award in two manners. First, the

court deducted from the award the amount of assessments already

paid, $2,000. Second, the court only allowed plaintiff to

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recover unpaid assessments from 2010 to the present because the

court found that plaintiff had failed to mitigate its damages.

¶ 18 Plaintiff filed a motion to reconsider, which was fully

briefed. The trial court granted plaintiff's motion to

reconsider finding that articles XV and XVII of the declaration

of condominium ownership effectively waived defendants' right to

argue mitigation as a defense. However, the trial court

ultimately dismissed the case, ruling in favor of defendants,

finding that plaintiff had filed the lawsuit for an improper

purpose. Specifically, the court found:

"There is strong direct and circumstantial

evidence in this case which leads the court

to believe that the motivation for the suit

against Azulay and Seiden was for reasons

other than the collection of past due

assessments. It appears that Azulay and

Seiden were passive investors in a venture

orchestrated by Horn. According to the

evidence, at the time of the filing of this

case, Horn and Seiden were and continued to

be involved in litigation. Per Seiden's

testimony it appears that in 2006 or 2007

Khalaf left his law firm under a cloud. It

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appears by the sign on the door that Abuzir,

Horn and Khalah are associated in the

practice of law. The evidence produced leads

to the conclusion that 10005 Roberts Road was

never occupied. Khalah along with Abuzir

directed the lawyers to file suit against

Khalaf, Horn, Azulay and Seiden. The

attorneys who filed this case were given an

improper address at which to serve Horn

according to the affidavit of the special

process server. Even though Khalaf and Horn

have never appeared, their attorneys waited

four months to have a default judgment

entered against them. Furthermore, at no

time have Khalaf or Horn petitioned the court

to vacate the default judgment against them."

¶ 19 On February 8, 2012, plaintiff appealed the trial court's

July 28, 2011 order and January 12, 2012 order.

¶ 20 On appeal, plaintiff contends this case must be remanded to

the trial court because: (1) "improper motive" is not an

affirmative defense under Illinois condominium law, (2)

mitigation is not an affirmative defense under Illinois

condominium law, and (3) defendants forfeited both affirmative

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defenses, improper motive and mitigation, because they failed to

plead them.

¶ 21 ANALYSIS

¶ 22 Sections 9(g)(1) and 9(h) of the Condominium Property Act

(the Condominium Act) provide that if a unit owner fails to make

timely payments for common expenses, the amount due shall

constitute a lien on the interest of the unit owner in the

property, which may be foreclosed upon by the board of managers

of the condominium association. See 765 ILCS 605/9(g)(1), (h)

(West 2008). Section 9.2 of the Condominium Act allows a board

of managers to bring a lawsuit pursuant to the Forcible Entry and

Detainer Act (735 ILCS 5/art. IX (West 2008)) to collect unpaid

assessments. See 765 ILCS 605/9.2(a) (West 2008). Conversely,

section 9–102(a)(7) of the Forcible Entry and Detainer Act gives

the board of managers of a condominium association the authority

to maintain a forcible entry and detainer action as a means to

obtain unpaid assessments:

“(a) The person entitled to the

possession of lands or tenements may be

restored thereto under any of the following

circumstances:

* * *

(7) When any property is subject to the

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provisions of the Condominium Property Act,

the owner of a unit fails or refuses to pay

when due his or her proportionate share of

the common expenses of such property, or of

any other expenses lawfully agreed upon or

any unpaid fine, the Board of Managers or its

agents have served the demand set forth in

Section 9–104.1 of this Article in the manner

provided for in that Section and the unit

owner has failed to pay the amount claimed

within the time prescribed in the demand

***.” 735 ILCS 5/9–102(a)(7) (West 2008).

Further, the Forcible Entry and Detainer Act states "when the

action is based upon the failure of an owner of a unit therein to

pay when due his or her proportionate share of the common

expenses of the property, or of any other expenses lawfully

agreed upon or the amount of any unpaid fine, and if the court

finds that the expenses or fines are due to the plaintiff, the

plaintiff shall be entitled to the possession of the whole of the

premises claimed, and judgment in favor of the plaintiff shall be

entered for the possession thereof and for the amount found due

by the court including interest and late charges, if any,

together with reasonable attorney's fees, if any, and for the

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plaintiff's costs." 735 ILCS 5/9-111(a) (West 2008).

¶ 23 In this case, there is no dispute that plaintiff properly

brought this action seeking payment for unpaid assessments under

the Forcible Entry and Detainer Act.

¶ 24 At the outset, we note that there was no transcript

memorializing the trial proceedings and no proper bystander

report certified for review on appeal. Ordinarily, the absence

of a record would require us to uphold the trial court's

findings. Foutch v. O'Bryant, 99 Ill. 2d 389, 391-92 (1984)

("appellant has the burden to present a sufficiently complete

record *** to support a claim of error, and in the absence of

such a record on appeal, it will be presumed that the order

entered by the trial court was in conformity with law and had a

sufficient factual basis"). However, in this case, the trial

court included in its January 12, 2012 memorandum order a

detailed statement of facts summarizing the testimony of each

witness who testified at trial. As such, we have a sufficient

basis in the record to consider the merits of this appeal.

¶ 25 Failure to Plead Affirmative Defenses

¶ 26 Plaintiff argues that because defendants did not plead the

affirmative defenses of mitigation and improper purpose,

defendants should have been barred from presenting evidence of

those issues at trial. The decision whether to allow evidence at

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trial lies within the sound discretion of the trial court and

will not be overturned unless there is an abuse of that

discretion. Webber v. Wight & Co., 368 Ill. App. 3d 1007, 1027-

28 (2006). In the trial court's factual findings, it was clear

that evidence regarding improper motive and mitigation was

presented at trial without any noted objection by the parties.

Any doubts which may arise from the incompleteness of the record

will be resolved against the appellant and in favor of the

judgment below. Foutch, 99 Ill. 2d at 392. Based upon the

record before us, we have no evidence that plaintiff objected to

this testimony at trial and, therefore, find plaintiff has waived

the right to raise the issue on appeal. See Gaston v. Founders

Insurance Co., 365 Ill. App. 3d 303, 311 (2006) (generally,

issues raised for the first time on appeal are waived).

¶ 27 Further, Supreme Court Rule 181(b)(2) provides "[i]n actions

for forcible detainer (see Rule 101(b)), the defendant must

appear at the time and place specified in the summons. If the

defendant appears, he or she need not file an answer unless

ordered by the court; and when no answer is ordered, the

allegations of the complaint will be deemed denied, and any

defense may be proved as if it were specifically pleaded." Ill.

S. Ct. R. 181(b)(2) (eff. Feb. 10, 2006). Given there is no

indication in the record that defendants were ordered to file an

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answer, it appears that evidence in support of these defenses was

also properly presented at trial pursuant to Supreme Court Rule

181(b)(2). Finding that it was proper for defendants to present

evidence of improper motive and mitigation at trial, we must now

determine whether these defenses were germane to plaintiff's

forcible entry and detainer action.

¶ 28 Improper Motive Defense

¶ 29 Plaintiff argues that in filing a forcible entry and

detainer lawsuit against defendants for unpaid assessments,

improper motive was not germane to this action pursuant to the

Forcible Entry and Detainer Act and, therefore, could not legally

serve as a defense to the claims made in the lawsuit. Where we

must ascertain the meaning of a statute, our review is de novo.

Knolls Condominium Ass'n v. Harms, 202 Ill. 2d 450, 454 (2002).

¶ 30 An action under the Forcible Entry and Detainer Act "is a

special statutory proceeding, summary in its nature, in

derogation of the common law, and a party seeking this remedy

must comply with the requirements of the statute." (Internal

quotation marks omitted.) Eddy v. Kerr, 96 Ill. App. 3d 680, 681

(1981). A statute in derogation of the common law cannot be

construed as changing the common law beyond what the statutory

language expresses or is necessarily implied from what is

expressed. Williams v. Manchester, 228 Ill. 2d 404, 419 (2008).

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In construing such a statute, a court will not presume that the

legislature intended an innovation of the common law further than

that which the statutory language specifies or clearly implies.

Id. Indeed, " 'statutes in derogation of common law are to be

strictly construed and nothing is to be read into such statutes

by intendment or implication.' " Id. (quoting Summers v.

Summers, 40 Ill. 2d 338, 342 (1968)).

¶ 31 When entertaining forcible entry and detainer actions, the

court "has limited and special jurisdiction without equitable

powers." Newport Condominium Ass'n v. Talman Home Federal

Savings & Loan Ass'n of Chicago, 188 Ill. App. 3d 1054, 1058

(1988). A forcible entry and detainer proceeding is a summary

statutory proceeding to adjudicate possession rights and should

not be burdened by matters unrelated to the issue of possession.

Bismarck Hotel Co. v. Sutherland, 92 Ill. App. 3d 167, 174

(1980).

¶ 32 The forcible entry and detainer statute provides that "no

matters not germane to the distinctive purpose of the proceeding

shall be introduced by joinder, counterclaim or otherwise.

However, a claim for rent may be joined in the complaint, and

judgment may be entered for the amount of rent found due." 735

ILCS 5/9-106 (West 2008). Accordingly, only matters germane to

the distinctive purpose of a forcible entry claim may be

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introduced by the defendant through affirmative defenses,

counterclaims or otherwise. American National Bank v. Powell,

293 Ill. App. 3d 1033, 1044 (1997); Oak Park Trust & Savings Bank

v. Village of Mount Prospect, 181 Ill. App. 3d 10 (1989). Our

supreme court has defined "germane" as "closely allied ***

closely related, closely connected." (Internal quotation marks

omitted.) Rosewood Corp. v. Fisher, 46 Ill. 2d 249, 256 (1970).

¶ 33 Here, the parties have made it clear throughout the record

that possession is not at issue; the only matter at issue in

plaintiff's forcible entry and detainer action is the payment of

unpaid assessments.1

¶ 34 "Where a claim seeks damages and not possession, [damages to

defendant] is not germane to the distinct purposes of the

forcible entry and detainer proceeding." Sawyier v. Young, 198

Ill. App. 3d 1047, 1053 (1990); Great American Federal Savings &

Loan Ass'n v. Grivas, 137 Ill. App. 3d 267 (1985); Bismarck, 92

Ill. App. 3d 167 (1980); Reid v. Arceneaux, 63 Ill. App. 2d 113

1
When possession is at issue, courts have found the
following issues to be germane in forcible entry and detainer
actions: "(1) claims asserting a paramount right of possession;
(2) claims denying the breach of the agreement vesting possession
in the plaintiff; (3) claims challenging the validity or
enforceability of the agreement on which the plaintiff bases the
right to possession; or (4) claims questioning the plaintiff's
motivation for bringing the action." American National, 293 Ill.
App. 3d at 1044. Because possession is not at issue, these do
not apply in this case.

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(1965). Damages sought by the defendant must be tied to the

issue of possession. Spanish Court Two Condominium Ass'n v.

Carlson, 2012 IL App (2d) 110473, ¶ 33 (2012) ("where possession

is not contested, the defendant may not seek damages at all").

Given that possession is not at issue here, we cannot find that

plaintiff's improper motive was germane to the distinctive

purpose of plaintiff's forcible entry and detainer claim.

¶ 35 In Reid, the plaintiffs filed a forcible entry action to

regain possession of a building on the basis that the defendant

was in default under articles of agreement of the warranty deed.

Reid, 63 Ill. App. 2d at 114. Defendant chose not to contest

possession but instead counterclaimed that the plaintiffs had

committed fraud and misrepresentation by inducing the purchase of

the property. Id. at 116. The court in Reid found that since

the defendant's counterclaim did not dispute possession but

rather sought relief other than possession, its defenses of fraud

and misrepresentation were not germane to the distinctive

purpose of the forcible entry and detainer proceedings. Id.

¶ 36 Similarly, in Sawyier, the court found that the issue of

possession was conceded by the defendant and, therefore, was not

a part of the proceeding. Sawyier, 198 Ill. App. at 1053. As

such, the court held that a defense challenging possession was

not germane and could not be presented in the forcible entry and

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detainer action. Id. at 1053-54.

¶ 37 In this case, possession was no longer an issue at trial and

the distinctive issue to be decided in plaintiff's claim is

whether defendants owe plaintiff unpaid assessments. Defendants

have not cited any cases where improper motive has encompassed a

factual scenario like the one before this court. In the cases

cited by defendants where improper motive has been held to be a

valid defense, possession was an issue and the improper motive

has been equated with retaliatory eviction, i.e., cases where

landlords have attempted to evict tenants from their homes due to

complaints the tenants have made regarding the conditions of

their homes and noncompliance with government ordinances or due

to their refusal to pay rent until their complaints concerning

the condition of the premises are addressed. See American

National, 293 Ill. App. 3d 1033; People ex rel. Department of

Transportation v. Walliser, 258 Ill App. 3d 782 (1994); Jack

Spring, Inc. v. Little, 50 Ill. 2d 351 (1972). In such cases,

there is a clear public policy underlying the defense of

retaliatory eviction. Clore v. Fredman, 59 Ill. 2d 20, 26 (1974)

("The public policy of this State as evidenced by its statutory

law forbids a landlord to terminate or refuse to renew a lease

because a tenant complained to a governmental authority of a bona

fide violation of any applicable building code, health ordinance

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or similar regulation.").

¶ 38 Defendants here do not claim plaintiff filed this case in

retaliation because they complained about the condition of the

property. We find no public policy argument applicable in this

case where the improper motive alleged is bad feelings between

the parties. Defendants have not cited any authority finding that

the defense of improper motive in the context of a forcible entry

and detainer action has been expanded beyond retaliatory

eviction. We are not persuaded that the existence of a dispute

between the owners of a condominium is a valid defense to a

forcible entry and detainer action filed to collect past-due

assessments. We decline to expand the defense of improper motive

beyond the public policy considerations in the cited cases to

include the factual allegations made in this case.

¶ 39 Furthermore, the factual basis of any improper motive in

this case has not been fully developed. It is unclear what the

exact improper motive is alleged to be for filing this lawsuit,

and up to now, any improper motive appears to be based upon

speculation.

¶ 40 We appreciate that there is obvious conflict between these

parties and appreciate the trial court's observations in that

respect. However, we simply can find no authority and no

persuasive reason to expand the meaning of improper motive beyond

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retaliatory eviction. As such, we must reverse the trial court's

order and remand the cause for further proceedings consistent

with this opinion.

¶ 41 Mitigation Defense

¶ 42 Initially, we note that the trial court, in its order

granting rehearing and entering judgment in favor of the

defendants, found that mitigation is not a proper defense in this

case. Defendants did not file a cross-appeal to contest this

initial finding. Accordingly, we find we do not have

jurisdiction to consider defendants' claim that mitigation is a

proper defense in this case. Chicago Title & Trust Co. v.

Brooklyn Bagel Boys, Inc., 222 Ill. App. 3d 413, 421 (1991); Ill.

S. Ct. R. 303 (eff. May 30, 2008).

¶ 43 Assuming arguendo this issue had been properly preserved,

defendants' claim that mitigation is a proper defense is without

merit and would fail. Where we must ascertain the meaning of a

statute, our review is de novo. Knolls Condominium Ass'n, 202

Ill. 2d at 454.

¶ 44 As stated earlier, an action raised under the Forcible Entry

and Detainer Act "is a special statutory proceeding, summary in

its nature, in derogation of the common law, and a party seeking

this remedy must comply with the requirements of the statute."

(Internal quotation marks omitted.) Eddy, 96 Ill. App. 3d at 681.

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A statute in derogation of the common law cannot be construed as

changing the common law beyond what the statutory language

expresses or is necessarily implied from what is expressed.

Williams, 228 Ill. 2d at 419. In construing such a statute, a

court will not presume that the legislature intended an

innovation of the common law further than that which the

statutory language specifies or clearly implies. Id. Indeed,

“statutes in derogation of common law are to be strictly

construed and nothing is to be read into such statutes by

intendment or implication.” (Internal quotation marks omitted.)

Id. (quoting Summers, 40 Ill. 2d at 342).

¶ 45 While defendants suggest that because mitigation is required

in landlord-tenant actions pursuant to section 9-213.1 (735 ILCS

5/9-213.1 (West 2008)), it should be required in this case, the

duty of mitigation found in the landlord-tenant statute has never

been extended to cases dealing with condominium associations and

unit owners. See 735 ILCS 5/9-213.1 (West 2008) ("a landlord or

his or her agent shall take reasonable measures to mitigate the

damages recoverable against a defaulting lessee"); St. George

Chicago, Inc. v. George J. Murges & Associates, Ltd., 296 Ill.

App. 3d 285, 290-91 (1998) (stating section 9-213.1 was created

to "require landlords to make reasonable efforts to relet the

premises following a tenant's departure, rather than allowing

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the premises to stand vacant and the landlord to collect rent in

the form of damages").

¶ 46 Rather, contrary to the language in section 9-213.1

pertaining to landlords and tenants, section 9-111.1 of the

Forcible Entry and Detainer Act specifically lays out that a

condominium association has the right, but not the obligation, to

rent out the unit upon an entry of judgment in its favor. 735

ILCS 5/9-111.1 (West 2008) ("the board of managers shall have the

right and authority, incidental to the right of possession of a

unit under the judgment, but not the obligation, to lease the

unit to a bona fide tenant"). As such, we find it evident from

the language of the Forcible Entry and Detainer Act relating to

condominium associations' remedies that plaintiff had no duty to

mitigate damages in this case.

¶ 47 For the above reasons, we reverse the trial court’s order

and remand the cause directing the circuit court to enter

judgment for the plaintiff in the amount of the assessments due

without deduction for the claimed failure to mitigate damages,

and costs and reasonable attorney fees.

¶ 48 Reversed and remanded with directions.

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