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Appellate Court Date: 2018.07.18
16:03:55 -05'00'
U.S. Bank National Ass’n v. Randhurst Crossing LLC, 2018 IL App (1st) 170348
Appellate Court U.S. BANK NATIONAL ASSOCIATION, as Trustee, Successor-
Caption in-Interest to Bank of America, N.A., as Trustee Successor to Wells
Fargo Bank, N.A., as Trustee for the Registered Holders of Wachovia
Bank Commercial Mortgage Trust, Commercial Mortgage
Pass-Through Certificates, Series 2003-C5, By and Through Its
Special Servicer, CWCapital Asset Management, LLC, Plaintiff-
Appellee, v. RANDHURST CROSSING LLC; and UNKNOWN
OWNERS AND NONRECORD CLAIMANTS, Defendants
(Randhurst Crossing LLC, Defendant-Appellant).
District & No. First District, Fourth Division
Docket No. 1-17-0348
Filed March 29, 2018
Decision Under Appeal from the Circuit Court of Cook County, No. 13-CH-14977; the
Review Hon. Anna M. Loftus, Judge, presiding.
Judgment Affirmed.
Counsel on Adam C. Toosley, of Freeborn & Peters LLP, of Chicago, for
Appeal appellant.
Kori M. Bazanos, of Bazanos Law P.C., of Chicago, and Gregory A.
Cross and Brent W. Procida, of Venable LLP, of Baltimore, Maryland,
for appellee.
Panel JUSTICE GORDON delivered the judgment of the court, with
opinion.
Presiding Justice Burke and Justice McBride concurred in the
judgment and opinion.
OPINION
¶1 The instant appeal arises from the foreclosure of defendant Randhurst Crossing LLC’s
mortgage on commercial property. During the course of the foreclosure proceedings, prior to
the appointment of a receiver, defendant filed for Chapter 11 bankruptcy in federal court,
which stayed the foreclosure proceedings. After the automatic stay was lifted in the bankruptcy
action, a receiver was appointed in the foreclosure proceedings, and the trial court ordered all
rents paid during the bankruptcy to be turned over to the receiver. The trial court ultimately
granted summary judgment in plaintiff’s favor concerning the foreclosure action. In the
judgment of foreclosure and sale, the trial court also awarded plaintiff its attorney fees, as
provided in the loan documents. On appeal, defendant challenges (1) the order requiring
turnover of the prereceivership rents, (2) the trial court’s award of attorney fees, and (3) the
trial court’s denial of defendant’s request that the property manager that managed the property
during the bankruptcy proceedings be paid. For the reasons that follow, we affirm the trial
court’s judgment.
¶2 BACKGROUND
¶3 The parties have engaged in years of extensive litigation, in both state court and in
bankruptcy court. The instant appeal concerns three narrow issues: whether the trial court
properly awarded plaintiff prereceivership rents, whether the trial court properly awarded
plaintiff its attorney fees, and whether the trial court properly denied defendant’s request that
the property manager be paid. We focus on the facts relevant to those issues and provide other
facts only as required for context.
¶4 I. Prebankruptcy Proceedings
¶5 In defendant’s own words, defendant “is a single-asset real estate entity that was engaged
in the business of owning and operating a retail shopping center located at the northwest corner
of Rand Road, Route 83, and Kensington Road, in Mt. Prospect, Illinois” (the property).
Defendant was the obligor on a note executed on October 31, 2002, in the amount of $3.9
million, which was secured by a mortgage on the property; the maturity date on the note was
November 11, 2012. The plaintiff trust is the successor in interest to the note and mortgage,
and the current lawsuit is being pursued by its servicer on its behalf; we refer to the trust and
the servicer interchangeably as “plaintiff.”
¶6 On the same day as the execution of the mortgage and note, defendant also executed an
“Assignment of Leases and Rents,” which provided, in relevant part, that defendant
“is hereby permitted, and is hereby granted a revocable license by Assignee, to retain
possession of the Leases and to collect and retain the Rents unless and until there shall
be an Event of Default under this Assignment, the Mortgage or the other Loan
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Documents. In the event of such Event of Default, the aforementioned license granted
to Assignor shall automatically terminate without notice to Assignor, and Assignee
may thereafter, without taking possession of the Property, take possession of the
Leases and collect the Rents.”
This assignment of leases and rents was recorded on November 4, 2002.
¶7 On December 18, 2012, plaintiff sent a letter to defendant, informing defendant that an
event of default had occurred due to defendant’s failure to pay the outstanding indebtedness
due on November 11, 2012, the maturity date, and making a demand for the payment of all
unpaid amounts due and owing. On the same day, plaintiff sent a letter to defendant providing
that, upon execution of the agreement by both parties and the payment of a forbearance fee of
$20,000, the letter would constitute a forbearance agreement by which plaintiff would forbear
exercising its rights and remedies against defendant and the property from November 11, 2012,
through March 18, 2013. This letter was executed by both parties, with defendant executing it
on January 23, 2013, and there is no dispute that defendant paid the $20,000 forbearance fee.
¶8 On April 12, 2013, plaintiff sent a letter to defendant, indicating that plaintiff would agree
to extend the forbearance period to June 16, 2013, upon execution by both parties of the letter
and upon tender by defendant of an additional forbearance fee of $30,000. This letter purports
to have been executed by defendant on March 14, 2013;1 the copy of the letter contained in the
record on appeal does not contain plaintiff’s signature.2
¶9 On June 18, 2013, plaintiff filed a complaint for foreclosure against defendant, alleging
that defendant was in default and, in addition to a judgment of foreclosure and sale, requested
the appointment of a receiver.
¶ 10 On June 20, 2013, plaintiff filed a separate motion for appointment of a receiver, as
authorized by the mortgage. The motion claimed that upon its appointment, the receiver would
1
The date on the letter, as noted, is April 12, 2013, but the signature of Stephen Ballis, defendant’s
manager, contains a handwritten date of March 18. Presumably, the letter was executed after the date of
its sending. However, it is not clear which date—the date of the letter or the date of the signature—is
erroneous.
2
The validity of this second forbearance agreement was a point of contention between the parties
throughout the litigation. Plaintiff initially appears to have conceded the validity of this
agreement—this letter, which constitutes the second forbearance agreement, was attached to plaintiff’s
motion for summary judgment, which also included the affidavit of Gregory Akins, a senior vice
president with plaintiff servicer. In this affidavit, Akins averred that this letter constituted “[a] true and
correct copy of the second forbearance agreement between the Trust and Randhurst which, among
other things, extended the Maturity Date to June 16, 2013 for the payment of a fee.” Akins further
averred that “[a]fter entering into two forbearance agreements that, among other things, extended the
Maturity Date to June 16, 2013 (the ‘Forbearance Period’)[,] Randhurst remained in default under the
Note and Mortgage by failing to pay the full amount of principal and interest owing after the
Forbearance Period lapsed.” However, at some point after the motion for summary judgment was filed,
plaintiff apparently changed its position concerning the validity of the second forbearance agreement,
despite Akins’s sworn statement that the parties “enter[ed] into” two forbearance agreements. During
the hearing on plaintiff’s amended motion for summary judgment, plaintiff’s counsel argued that this
statement by Akins in his affidavit was a “mistake.” Nevertheless, the validity of the second
forbearance agreement does not change the analysis of the issues present on appeal and, in fact, plaintiff
did not file its foreclosure suit until after the expiration of the second forbearance period.
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also provide property management services. On September 23, 2013, the motion was entered
and continued to November 14, 2013.
¶ 11 On March 17, 2014, the day that the motion for appointment of receiver was to be heard,
the trial court entered an order staying the case due to defendant’s March 14, 2014, filing of
Chapter 11 bankruptcy.
¶ 12 II. Bankruptcy Proceedings
¶ 13 As relevant to the instant appeal, on May 14, 2014, plaintiff filed a motion in bankruptcy
court, in which plaintiff requested that the rents collected from the property’s tenants be
considered “cash collateral” pursuant to the Bankruptcy Code (11 U.S.C. § 363(a) (2012)) and
that defendant be prohibited from using such cash collateral. The motion claimed that plaintiff
had sent defendant a letter stating that the rents were considered cash collateral under the
Bankruptcy Code and “the Debtor did not have permission to use cash collateral.” However,
the motion claimed that “[t]he Debtor’s first Small Business Monthly Operating Report ***
raises significant questions about whether the Debtor is engaging in the unauthorized use of
Cash Collateral and properly segregating and accounting for these funds.” Accordingly,
plaintiff sought a court order “prohibiting the Debtor from further use of [plaintiff’s] Cash
Collateral and compelling the Debtor to account for and segregate all Cash Collateral, together
with such other relief as may be just and proper.”
¶ 14 On May 20, 2014, the bankruptcy court entered an order that “[u]pon the Motion of
[plaintiff] to Prohibit Use of Cash Collateral and Compel Segregation and Accounting; the
Court being duly advised in the Premises; it is hereby: ORDERED, the Debtor is prohibited
from using any proceeds of the real property *** without permission from the Trust or Court
authorization” and further ordering defendant to segregate all proceeds of the property. We
refer to this as the “cash collateral order.”3
¶ 15 On July 15, 2014, the bankruptcy court held a hearing on a “Motion to Hold the Debtor in
Contempt” filed by plaintiff due to defendant’s lack of compliance with the cash collateral
order, and on March 30, 2015, the bankruptcy court entered an order holding defendant in
contempt. The transcript of the hearing and the order reflect that defendant had made
postpetition payments from a bank account containing rents collected from tenants without
first seeking the bankruptcy court’s permission, and the order required defendant to return the
payments to the account.
¶ 16 On April 28, 2015, the bankruptcy court continued defendant’s motion to dismiss the
bankruptcy action4 but indicated that it would be inclined to lift the automatic stay, noting:
3
We note that, during oral argument in the instant appeal, defendant’s counsel suggested that this
order was a standard order that had been prepared by defendant and “was brought on a motion by the
debtor.” However, as noted, the order itself makes clear that it was entered “[u]pon the Motion of
[plaintiff]” and the order indicates that it was prepared by plaintiff’s counsel. As explained further
below, we recognize that the Bankruptcy Code places certain restrictions on all debtors-in-possession
with respect to the use of cash collateral. However, this does not change the fact that this was a separate
order entered based on a motion filed by plaintiff, contrary to defendant’s counsel’s representations at
oral argument.
4
This motion does not appear in the record on appeal, but in its motion for appointment of a
receiver, plaintiff claimed that the motion was filed by defendant on March 16, 2015.
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“I had said at the last hearing that what I was thinking about doing was vacating the
automatic stay upon appropriate motion to permit the parties to go back to the state
court or the state court to appoint the receiver. Upon reflection—and then the receiver
could come back, and we could proceed with the dismissal and let things proceed.
On reflection, it occurs to me that I think that would be putting my thumb on the
scale too much for one side or the other. It seems to me the state court has the option to
let the debtor have the money and the property, to appoint a receiver to do it, to let the
trust have the money. I have no idea what the state court would want to do.
But it strikes me that we have what is—what at this point both parties admit is a
two-party dispute and that the appropriate place for that to be determined is not in this
court, but in state court.
My main concern just to simplify everything and what I’m trying to
accomplish—and I don’t really care how we accomplish it—but this is what I want to
see done, is to ensure that in the process of transferring the litigation and the dispute
from this court to the state court, that neither side is advantaged or disadvantaged by the
fact that the bankruptcy was filed in the first place or how the bankruptcy is dismissed.”
An order granting the motion to lift the automatic stay does not appear in the record on appeal,
but according to plaintiff’s motion for appointment of a receiver, the bankruptcy court entered
such an order on May 12, 2015.
¶ 17 III. Postbankruptcy Proceedings
¶ 18 On May 22, 2015, plaintiff filed a new motion for the appointment of a receiver. Paragraph
9 of the motion provided:
“On April 14, 2015, the Bankruptcy Court granted the Defendant/Debtor’s Motion
to Dismiss but deferred dismissal of the Bankruptcy Case so that the status quo could
be maintained, until Plaintiff obtained an order from this Court on either a motion for
appointment of a Receiver or for other relief in order to secure the real estate and funds
held by the Defendant/Debtor, during the pendency of the foreclosure case.”
¶ 19 On June 8, 2015, the trial court granted plaintiff’s motion. With respect to the issue of
rents, the order provided that
“[t]he receiver is authorized to collect all rents relating to the Property, and the tenants
of the Property are directed to pay rent to the receiver from the effective date of this
order, until further notice. The receiver shall allocate all receipts from the operation of
the real estate and other property subject to the mortgage in accordance with 735 ILCS
5/15-1704(d) [(West 2014)]. Within 21 days, the receiver shall provide notice to any
and all occupants of the property as required by 735 ILCS 5/1704(f) [(West 2014)]. The
receiver shall also have the right to collect past due rents from the tenants of the
Property.”
The trial court’s order became effective on June 17, 2015, upon the court’s approval of the
receiver’s bond.
¶ 20 On the same day as the trial court granted plaintiff’s motion for appointment of a receiver,
it also entered a scheduling order on “[t]he motion of plaintiff *** to obtain pre-receivership
rents (¶ 9 of motion),” setting a briefing schedule on the issue and setting it for hearing on July
20, 2015.
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¶ 21 On June 26, 2015, defendant filed a response to plaintiff’s request to receive
prereceivership rents, arguing that plaintiff had no actual or constructive possession of the
property until the effective date of the receiver’s appointment and there was no legal support
for its claim to prereceivership rents. In reply, plaintiff argued that the receiver would have
been appointed in March 2014 had defendant not filed for bankruptcy protection and further
argued that the cash collateral order entered by the bankruptcy court that restricted the use of
the rents was “in every way the functional equivalent of a receiver.” Thus, plaintiff argued that
defendant should be ordered to turn over at least the rents collected after the entry of the
bankruptcy court’s order, which was entered on May 20, 2014. Plaintiff further claimed that it
had been paying the real estate taxes owed on the property during the pendency of the
bankruptcy.
¶ 22 Defendant filed a surreply to the motion, disputing plaintiff’s contention that the cash
collateral order was in any way analogous to the appointment of a receiver. Defendant argued
that obtaining injunctive relief in bankruptcy court was a more extensive process and that the
cash collateral order “is nothing more than a regurgitation of the language in the Bankruptcy
Code related to the use of cash collateral.” Defendant further argued that plaintiff had cited no
case in which such a cash collateral order was considered to be the functional equivalent of the
appointment of a receiver. Defendant also claimed that plaintiff voluntarily paid the real estate
taxes owed on the property and that defendant “was willing and able to pay the real property
taxes from the rents it received, but could never do so because Lender always beat it to the
punch.”
¶ 23 On July 20, 2015, the parties appeared before the trial court for a hearing on the motion
concerning prereceivership rents and, on August 18, 2015, the trial court entered an eight-page
order granting plaintiff’s motion. The court found that “[u]nder the applicable Illinois Law,
Bankruptcy Law, public policy, and equitable principles, [plaintiff’s] interest in the proceeds
of the subject real estate vested—as that term was used by the Second District in De Kalb Bank
[v. Purdy, 166 Ill. App. 3d 709, 719 (1988)]—on May 20, 2014. [Citation.] As such, [plaintiff]
is entitled to have those proceeds turned over to the court-appointed receiver, for use in
preserving the subject property, whenever the funds are released from [defendant’s] DIP
[(debtor-in-possession)] account.” The court found that “[u]nder Illinois law, asserting control
over rents and profits through proper procedure[ ] is sufficient to vest the plaintiff’s interest in
those rents and profits. [Citation.] The Bankruptcy Court, on [plaintiff’s] motion, asserted that
type of control over the tenants’ rents and other payments when it issued the May 20, 2014[,]
order pursuant to 11 U.S.C. Section 363(e).” The court further found that “[t]he Bankruptcy
Court’s order of May 20, 2014, *** accomplished everything that appointing a receiver would
have accomplished: it placed the rents in the court’s control—its constructive
possession—pending a determination of the parties’ relative rights.”
¶ 24 The court also found that equitable considerations supported the turnover of rents to the
receiver:
“On the last business day prior to the scheduled hearing on [plaintiff’s] motion to
appoint receiver—to which [defendant] had filed no objection within the time allowed,
waiving its right to argue in opposition to that motion—[defendant] filed a petition for
reorganization under Chapter 11. [Plaintiff] consistently asserted its interest in the
property’s proceeds during the bankruptcy case, and obtained a court order in relation
thereto. To allow [defendant] to collect rents from well after March 17, 2014—when
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this court would have appointed a receiver but for [defendant’s] unsuccessful
bankruptcy petition—seems abundantly unfair. Such a holding could encourage other
debtors to file borderline-frivolous bankruptcy petitions to delay adverse foreclosure
orders, wasting the judicial resources of both the Bankruptcy Court as well as this
court.”
¶ 25 On September 29, 2015, plaintiff filed an amended motion for summary judgment. 5 The
merits of the amended motion for summary judgment are not at issue on appeal. However, as
part of the amended motion for summary judgment, plaintiff requested $572,355.44 in attorney
fees, as provided in the loan documents. Attached to the motion for summary judgment was a
“schedule” of the invoices supporting plaintiff’s request for attorney fees, redacted copies of
which plaintiff claimed it had produced to defendant. The schedule listed 57 invoices dating
from December 31, 2012, through September 9, 2015, 43 of which stated that they had been
produced, and the schedule indicated that the invoices had a total value of $578,974.71, with
$549,400.58 in fees and $29,574.13 in costs.
¶ 26 Also attached to the amended motion for summary judgment was the affidavit of Gregory
Akins, a senior vice president at plaintiff servicer.6 With respect to the issue of attorney fees,
Akins averred that “[a]s of the date of this Affidavit, the Loan remains outstanding and the
total amount due and owing under the Loan Document is $5,009,794.05, which consists of:
*** (vi) legal expenses total[ling] $572,355.44 as of September 1, 2015.” Akins further
averred: “The fees and expenses detailed in Exhibits 4 and 5[7] were all incurred in connection
with the Trust’s efforts to enforce the Loan Documents and have been paid or are in the process
of being paid.”
¶ 27 Finally, attached to the amended motion for summary judgment was an affidavit of Brent
Procida, a New York attorney who was a partner in the law firm retained by plaintiff servicer in
connection with the foreclosure action; Procida averred that he had been allowed, pursuant to
Illinois Supreme Court Rule 707 (eff. July 1, 2007), to represent plaintiff in the instant
litigation and pro hac vice in the bankruptcy court and that, over time, he became the primary
attorney working on the instant litigation. Procida averred that he was personally involved with
the legal services rendered to plaintiff in connection with (1) the instant cause, (2) the
bankruptcy case, (3) an adversary proceeding in bankruptcy court, and (4) a pending action in
the circuit court of Cook County concerning a purported guaranty executed by defendant’s
principals. With respect to the issue of attorney fees, Procida averred:
“9. The attorneys’ fees charged by [the firm] are based upon the amount of time
spent on a particular client matter. We keep track of our time by filling out time sheets
on a daily basis. The information from those time sheets is then made into an itemized
invoice by using our computer billing program. I occasionally review the invoices to
5
Plaintiff had previously filed a motion for summary judgment on November 4, 2013, prior to the
bankruptcy action. However, that motion does not appear to have been heard.
6
Akins previously provided an affidavit that was attached to plaintiff’s initial motion for summary
judgment. The affidavit attached to the amended motion for summary judgment is slightly different and
was dated September 21, 2015.
7
Exhibit 4 was the schedule of attorney fees previously discussed. Exhibit 5 was a “Loan Expense
Report” that appears to set forth a list of loan-related expenses, such as appraisals and title insurance.
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assure the accuracy and reliability of this system of generating invoices, and I have
found it to be reliable and accurate.
10. My billing rate during the life span of this case has ranged from $550 to $600
per hour. A detailed listing of the attorneys’ fees incurred by the Trust with regard to
the above-captioned cause is attached to the Motion as Exhibit 4 and redacted invoices
of all legal fees and expenses incurred through August 31, 2015 have been produced to
[defendant].
11. I defer to the Court for the determination of the customary hourly rate for a
Chicago attorney of similar experience. However, I note that [defendant’s] lead
counsel for the majority of this case *** has an hourly billing rate of $530.”
¶ 28 In its response to plaintiff’s amended motion for summary judgment, with respect to the
issue of attorney fees, defendant first argued that some of the amounts claimed by plaintiff
were double-counted because they were incurred during the forbearance period, for which
defendant had already paid a $30,000 forbearance fee “which was to be applied, in part,
towards attorneys’ fees incurred by Lender during the forbearance period(s).” Additionally,
defendant argued that plaintiff had failed to provide documentation to substantiate the fees,
providing only redacted invoices to defendant’s counsel. Defendant further argued that the
mortgage only provided for limited attorney fees that were “incident” to the mortgage
foreclosure or were incurred in efforts “to enforce any terms of this Mortgage” and questioned
how it was to determine whether such claimed fees were recoverable if plaintiff refused to
provide unredacted copies of the invoices. Defendant argued that “[t]his is especially critical in
this situation wherein the Lender has separately filed a cause of action against the guarantors of
the Note and Loan. Any fees and expenses related to that claim is not recoverable under the
Note and Mortgage. And, in that separate action, the Lender has lost multiple motions, and
there is no way that they could ever recover fees related to claims or motions that the Lender
was unsuccessful in. Each separate line item in the entries needs to be scrutinized (even if the
Court finds that the Lender is entitled to recover the fees sought).”8
¶ 29 In its reply, with respect to the issue of attorney fees, plaintiff argued that defendant was
citing the incorrect language in the mortgage and that the mortgage permitted recovery of any
fees “incurred in any action related to the recovery of the Debt.” (Emphasis omitted.) Plaintiff
further argued that “[c]oncerning evidence of the fees, the Defendant has been provided with
redacted timesheets for every invoice included in the total amount due and multiple affidavits.
Discovery is long since closed and the Defendant has never (i) asked the Plaintiff to reconsider
its redactions; (ii) sought to compel production of additional information; or (iii) conducted
any depositions or other discovery concerning the legal fees.”
¶ 30 In a surresponse to the amended motion for summary judgment, defendant claimed that it
had repeatedly requested unredacted copies of the invoices but such requests had not been
granted. Defendant also claimed that the invoices redacted the explanations for the fees and left
only the numbers unredacted and pointed to the fact that the invoices had never been attached
to plaintiff’s motion or its reply, leaving a court unable to review them.
¶ 31 In its surreply to the amended motion for summary judgment, plaintiff claimed that on
March 18, 2016, it provided defendant’s counsel with additional copies of all timesheets
accounting for fees and expenses, attached to a supplemental affidavit from Akins. Plaintiff
8
Plaintiff ultimately withdrew its request for attorney fees concerning this matter.
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further claimed that it “has provided the Court with a wholly unreacted [sic] set of timesheets
for in camera review.” Attached to the surresponse was the “second supplemental affidavit” of
Akins. With respect to the issue of attorney fees, Akins averred:
“8. Attached to the Surreply as Exhibits S3 and S4 are true and correct summaries
showing the monthly legal fees and [plaintiff servicer’s] record of expenses incurred
from the start of this case through March 1, 2016. Exhibits S3 and S4 update Exhibits 4
and 5 to the Amended Motion to reflect the fees and expenses incurred since September
1, 2015.
***
10. The total legal fees and expenses incurred in this case from inception through
March 1, 2016 are $670,008.28.
11. These fees and expenses were all incurred in connection with the Plaintiff’s
efforts to enforce the Loan Documents and recover the Debt.
12. Nevertheless, in the exercise of its billing discretion, the Plaintiff has identified
and removed from this petition 197.5 hours resulting in $92,283.00 of fees incurred in
connection with litigation to enforce the guaranty. These fees are itemized in the
attached Exhibit S7.
13. Detailed timesheet records for the legal fees and expenses incurred by [plaintiff
servicer] from the inception of this case through March 1, 2016 are attached to the
Surreply as Exhibit S8 and are separately attached to this affidavit. These time sheets
have been redacted by counsel and true and correct copies of an unredacted set are
being delivered to Judge Loftus for in camera review.
14. The fees and expenses sought in this case were incurred at the usual and
customary rates paid by [plaintiff servicer] for national and local counsel in similar
cases. These fees and expenses have all actually been paid, or in the case of the most
recent invoices, are in the process of being paid.
15. Attorney fees and expenses continue to accrue as the Defendant continues to
resist even the most routine action in this case.”
Also attached to the surreply were approximately 126 pages of lightly redacted timesheets
detailing the legal work that plaintiff’s counsel had performed during the course of the
litigation.
¶ 32 During the pendency of the briefing on the amended motion for summary judgment, on
November 17, 2015, plaintiff filed a motion for disbursement of surplus funds, stating that the
receiver had approximately $479,000 in its operating account for the property and that the
receiver was comfortable releasing $400,000 in surplus funds from the operating account.
Accordingly, plaintiff sought the disbursement of $400,000 to plaintiff in accordance with the
terms of the loan documents.
¶ 33 In response to the motion for disbursement, defendant argued, in part, that a portion of the
“Surplus Funds” identified by the receiver included the $278,341.10 in prereceivership rents
that defendant had turned over to the receiver after the trial court’s August 18, 2015, order.
Defendant argued that permitting these funds to be turned over to plaintiff would render any
appeal of this order moot, as the appellate court would be unable to grant effectual relief if the
funds had already been disbursed.
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¶ 34 Also during the pendency of the briefing on the amended motion for summary judgment,
on March 17, 2016, defendant filed an objection to the receiver’s second report, arguing, in
relevant part, that there was no mention in the report of paying Milestone, LLC (Milestone),
the property manager. The objection noted that Milestone had agreed to perform management
services without pay while the property maintained a negative cash flow, accruing its fees until
the property returned to positive cash flow. However, Milestone had not been paid for the
services it had provided prior to the appointment of the receiver, and defendant argued that
such payments should come from the prereceivership rents that the receiver had received from
defendant.
¶ 35 In response to defendant’s objection to the receiver’s second report, plaintiff argued that
plaintiff had a perfected security interest in the funds held by the receiver while Milestone and
other creditors did not, so plaintiff’s interest in the rents was superior to all other unpaid
invoices. Plaintiff further argued that Milestone’s invoices were contractually subordinated to
the loan, pointing to language in an agreement executed by Milestone that provided that “the
rights of the Undersigned under the Contract to receive any compensation, reimbursement of
costs and expenses or other payments in consideration for its management services for the
Premises shall be and remain subordinate in all respects to the Lender’s rights under Loan
Documents.”
¶ 36 On March 25, 2016, the parties appeared before the trial court for hearings on the amended
motion for summary judgment, the objection to the receiver’s second report, and the request
for disbursement of surplus funds. At the beginning of the hearing, defendant’s counsel
expressed concern about the fact that defendant had only received the updated, less-redacted
versions of the attorney fees invoices a few days prior to the hearing, and the trial court
suggested that “let’s just table that. Okay? There’s a lot going on here and because of this issue
we will address it at another time.” Plaintiff’s counsel, after arguing the merits of the motion
for summary judgment, also made several arguments about the attorney fees and suggested
that a second hearing would not have any additional benefit because “you’re never going to
have more information or better information in front of you than this to make a judgment on
this.” The court responded:
“Well, and here’s the issue though. As counsel apparently did not get the lightly
redacted copies of the bills until recently. A lot of the arguments you’ve raised
regarding the fees are moreover arching [sic] than the specific fees that he’s going to be
reviewing. But I want to continue the discussion on the attorney’s fees for a second
hearing and any argument raised today will be incorporated into that hearing.
So anything that you’ve already argued is going to be incorporated into that but
counsel should have time to look at the documents that he received and make the
arguments based upon those documents. I’m not going to have any further briefing. It’s
just going to be arguments. So we’ll limit fees charged.
And I don’t know if co-counsel can argue the remaining part of that at another time.
So that you wouldn’t have to be present. If you want to be present by phone and her be
present as argument. There’s ways we can limit the amount of fees but this is not—I’m
not going to rule on the fee issue today, just in fairness to counsel.”
¶ 37 At the beginning of defendant’s argument, defense counsel and the court confirmed that
the attorney fees issue would be decided at a later hearing:
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“DEFENSE COUNSEL: *** I just want to make sure we’re clear for the record. It
sounds like based on what we have talked about, I’ll only give you the overview on the
attorney’s fees without trying my best to give you what I had the associate do
yesterday. So we can continue that part.
THE COURT: And just so we can confirm, I’m not going to be ruling on that today.
So any arguments today would be incorporated into the arguments on another date.”
Defense counsel then proceeded to argue the merits of the motion for summary judgment,
arguing the attorney fees issue to challenge whether plaintiff’s affidavits were adequately
supported but noting that “[t]he reasonableness of fees, I’ll save that until next time.”
¶ 38 At the end of the hearing, the trial court found:
“With respect to the motion for summary judgment, I am going to enter judgment of
liability today. As with respect to the amounts due and owing in part because I want to
review the arguments made today and review the briefs but also due to the fact we have
[the] outstanding attorney fee issue, I’m going to reserve ruling on the amounts due and
owing.”
On that date, the trial court also entered a written order granting the amended motion for
summary judgment as to liability and setting the issue of attorney fees for oral argument on
April 22, 2016; the April 22 hearing date was later continued to May 20. In the same order, the
trial court ordered disbursement of $200,000 in surplus funds from the receiver to plaintiff.
¶ 39 There is no transcript of a May 20, 2016, hearing on the issue of attorney fees. However, on
that date, the trial court entered an order granting summary judgment in plaintiff’s favor “for
the amount due & owing as set forth in the record.” On July 22, 2016, the trial court entered a
judgment of foreclosure and sale. The judgment order stated that “[b]y virtue of the Note and
Mortgage, there is due to the Plaintiff” $5,027,581.43, which included $663,389.01 in “Legal
Expenses (12/12-2/16)” and $30,190.21 in “Servicer Expenses.”
¶ 40 The property was sold at a public auction, and plaintiff was the successful bidder with a
credit bid of $4 million.
¶ 41 On October 6, 2016, plaintiff filed a motion to terminate the receivership and approve the
disbursement of the receivership funds to plaintiff.
¶ 42 On October 21, 2016, the trial court entered an order for defendant to file a separate brief
with regard to the Milestone invoices, which defendant did. Defendant claimed that
Milestone’s fees, which it had agreed to accrue until the property returned to positive cash
flow, and other unpaid expenses amounted to $692,366.16 as of June 22, 2015; Milestone’s
accrued management fees alone totaled nearly $100,000. In response, plaintiff claimed that
Milestone’s management fees were $32,500 and were contractually subordinated to plaintiff’s
interest in the property.
¶ 43 On January 6, 2017, the parties appeared before the trial court for hearing on plaintiff’s
motion to confirm the sale, on plaintiff’s motion to terminate the receivership and approve
disbursement of the funds, and on the issue concerning payment of the Milestone invoices.
During the hearing, defendant’s counsel clarified that it was seeking only $32,500 for
Milestone’s fees. After hearing the arguments of the parties, the court found, with respect to
Milestone:
“I think that the—my ruling is, is that the consent and agreement of manager
document, specifically Section 5 of the third full paragraph, the subordination
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agreement controls here; and regardless of whether the work done by Milestone was
ratified or objected to, there had been an alleged default, a complaint filed prior to the
months that Milestone allegedly managed the property and accrued these invoices. So I
think that’s where the analysis stops.
It would have—I’m, as well, not a bankruptcy aficionado, but I think in this case
since we do have a subordination agreement that it controls and regardless of whether
my August 18th, 2015 order provided for the ability to bring these issues to my
attention, that does not mean that I was going to automatically agree to it, especially
given at the time I wrote the August 18th, 2015 order I was not aware of any consent
agreement and certainly of any language or subordination agreement. So that is my
order.”
The trial court also entered an order in which it found, inter alia, that Milestone should not be
paid out of the receiver funds. On the same day, the court entered an order confirming the sale
of the property and awarding possession to plaintiff. In the order, the trial court found that there
remained an in rem deficiency judgment of $1,276,008.47. On January 13, 2017, the trial court
entered an order approving the receiver’s final report, discharging the receiver, and ordering
turnover to plaintiff of the remaining funds after payment of expenses. In the order, the trial
court ordered that “[t]he Receiver shall transmit all property and any remaining funds on hand
in the amount of $594,782.80 to the Plaintiff *** for application to the deficiency judgment.”
¶ 44 On February 3, 2017, defendant filed a notice of appeal, requesting a finding that defendant
was entitled to the prereceivership rents and that the invoices submitted by Milestone to the
receiver should have been paid out of receivership funds.
¶ 45 ANALYSIS
¶ 46 On appeal, defendant makes three arguments: (1) that the trial court erred in requiring
defendant to turn over prereceivership rents, (2) that the trial court erred in denying payment to
Milestone, and (3) that the trial court erred in awarding plaintiff attorney fees. We consider
each issue in turn.
¶ 47 I. Turnover of Prereceivership Rents
¶ 48 The first issue raised by defendant is whether the trial court erred in ordering defendant to
turn over prereceivership rents to the receiver, an issue that presents a case of first impression
for this court. The question of whether rents belong to the mortgagor or to the mortgagee has
been considered by our courts several times, and the general law surrounding the issue is not
disputed by the parties. “Generally in Illinois, ‘a mortgagor[/debtor], as the party in possession
and owner of [a] statutory right of redemption, is entitled to any rents generated from the
property as long as [the mortgagor] retains possession, without having to account for them to
the mortgagee[/lender].’ ” BMO Harris Bank N.A. v. Joe Contarino, Inc., 2017 IL App (2d)
160371, ¶ 34 (quoting In re Wheaton Oaks Office Partners Ltd. Partnership, 27 F.3d 1234,
1241 (7th Cir. 1994)). However, “ ‘Illinois allows mortgagees to include in their mortgages
assignment[-]of[-]rents clauses, giving them[, preforeclosure,] a sufficient interest in the rents
to authorize the appointment of a receiver through whom the mortgagee can begin collecting
rents.’ ” Joe Contarino, Inc., 2017 IL App (2d) 160371, ¶ 34 (quoting Wheaton Oaks, 27 F.3d
at 1242).
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¶ 49 “[A] clause in a real estate mortgage pledging rents and profits creates an equitable lien
upon such rents and profits of the land, which may be enforced by the mortgagee upon default
by taking possession of the mortgaged property.” Anna National Bank v. Prater, 154 Ill. App.
3d 6, 17 (1987). “At common law, it was strictly held that the mortgagee must take actual
possession before he was entitled to rents.” Comerica Bank-Illinois v. Harris Bank Hinsdale,
284 Ill. App. 3d 1030, 1033 (1996). “The possession requirement reflects the public policy in
Illinois that seeks to prevent mortgagees from stripping the rents from the property and leaving
the mortgagor and the tenants without resources for maintenance or repair.” Comerica Bank,
284 Ill. App. 3d at 1033.
¶ 50 However, in Comerica Bank, the court recognized that “there is a modern trend in this area
of the law which permits a mortgagee to collect rents once it has taken constructive, as opposed
to actual, possession of the property. [Citation.] Courts have recently allowed mortgagees to
collect rents after taking some affirmative action to gain possession of the property [citation],
such as obtaining judicial intervention by way of injunctive relief. [Citation.] Similarly, courts
have ruled that mortgagees may be entitled to rents once a receiver has been appointed.
[Citation.]” Comerica Bank, 284 Ill. App. 3d at 1034. Even under the theory of constructive
possession, however, “a mortgagee still needs to obtain a court’s authorization before he may
collect rents without taking possession. Such a requirement ensures that all of the parties’
interests will be before the court and will not be subject to the unilateral acts of the mortgagee.”
Comerica Bank, 284 Ill. App. 3d at 1034. Furthermore, the mere filing of a request does not
constitute sufficient action on the mortgagee’s part; “it is not the mere filing of certain
pleadings but, rather the trial court’s affirmative ruling on such filings that entitles the
mortgagee to the rents.” Comerica Bank, 284 Ill. App. 3d at 1035.
¶ 51 In the case at bar, plaintiff argues that the cash collateral order entered by the bankruptcy
court is sufficient to establish constructive possession so as to entitle it to the prereceivership
rents. We note that defendant repeatedly points to the absence of any case interpreting such an
order in this way, implying that plaintiff’s position is unreasonable. While it is technically true
that there is no case providing such an interpretation, there does not appear to be any case law
concerning this issue at all—it appears to be an issue of first impression in this state. Thus, we
must determine whether the order entered by the bankruptcy court constituted “court
authorization” so as to entitle plaintiff to the prereceivership rents.
¶ 52 In our analysis, it is helpful to consider what actions other courts have considered to be
sufficient—or insufficient—to entitle a mortgagee to prejudgment rents. We begin with
Comerica Bank, which is the leading authority on the issue. See Joe Contarino, Inc., 2017 IL
App (2d) 160371, ¶ 38 (“The Comerica court was the first to hold that constructive possession
to enforce an assignment-of-rents provision must include court authorization.”). In that case,
there were two separate mortgagees seeking prejudgment rents. First, upon the mortgagor’s
default, the first mortgagee “chose to exercise its rights under the assignment of rents. [The
mortgagee] began collecting rents from the property without foreclosing, seeking the
appointment of a receiver, or obtaining authorization from a court. This option permitted [the
mortgagee] to reduce the debt without assuming responsibility for the property or the large tax
obligation.” Comerica Bank, 284 Ill. App. 3d at 1032. On appeal, the court found that the
mortgagee was not entitled to the rents because, “even under the more progressive ‘affirmative
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action’ cases, a mortgagee still needs to obtain a court’s authorization before he may collect
rents without taking possession.”9 Comerica Bank, 284 Ill. App. 3d at 1034.
¶ 53 Additionally, a second mortgagee foreclosed its mortgage and sought an accounting, the
appointment of a receiver, and a return of the rents from the first mortgagee. Comerica Bank,
284 Ill. App. 3d at 1032. The second mortgagee “claim[ed] that filing a foreclosure action and
seeking the appointment of a receiver constitute[d] the necessary affirmative action which
entitled it to the rents.” Comerica Bank, 284 Ill. App. 3d at 1034. The appellate court
disagreed, finding that “the mere filing of the foreclosure action or request for a receiver is not
sufficient to trigger the mortgagee’s right to collect rents.” Comerica Bank, 284 Ill. App. 3d at
1034. The court found that “it is not the mere filing of certain pleadings but, rather the trial
court’s affirmative ruling on such filings that entitles the mortgagee to the rents.” Comerica
Bank, 284 Ill. App. 3d at 1035. Since the rents were collected during the time that the
mortgagor was in possession of the property but before the receiver was appointed, the court
found that the rents collected belonged to the mortgagor. Comerica Bank, 284 Ill. App. 3d at
1035.
¶ 54 One of the cases relied on by Comerica Bank in its analysis was De Kalb Bank v. Purdy,
166 Ill. App. 3d 709 (1988). There, instead of seeking appointment of a receiver, the plaintiff
sought and received an injunction, which prohibited the defendants from disposing of any rents
that had already been received and ordering all future rents to be turned over to the clerk of the
court pending a final hearing on the merits. Purdy, 166 Ill. App. 3d at 715. On appeal, the
defendants argued that “the actions of plaintiff in obtaining an order of injunction sequestering
the rents was not equivalent to the entering and taking possession required, and, therefore, [the
defendants], as a mortgagor in possession, [were] entitled to rents deposited with the court.”
Purdy, 166 Ill. App. 3d at 714-15. The appellate court affirmed the trial court’s judgment,
noting that the trial court could have appointed a receiver but was not required to do so. Purdy,
166 Ill. App. 3d at 717. The court noted that “[a] receivership is like a preliminary injunction in
that both are forms of equitable relief, and, in the instant case, the injunctive relief merely
served to accomplish the objectives of receivership. [Citation.] The October 26, 1984, order of
the court placed the disputed rents in the possession of the court pending a final determination
of the rights of the parties to the rents. The appointment of a receiver would have accomplished
nothing more.” Purdy, 166 Ill. App. 3d at 716. The court further noted that “[a] receivership is
not the only method by which a contract, such as a mortgage whereby rents and profits are
conveyed with real estate as security for a debt, may be enforced, but the court may, in its
discretion, use whatever method seems best as the necessities and exigencies of the situation
may require.” Purdy, 166 Ill. App. 3d at 717.
¶ 55 Similarly, in State Bank & Trust Co. v. Massion, 279 Ill. App. 234 (1935),10 the court
found sufficient evidence of possession in the absence of a receiver. There, the plaintiff had
9
We note that the holding concerning the first mortgagee’s entitlement to the rents occurred in the
context of the second mortgagee’s appeal, as the first mortgagee’s appeal was found to be moot because
the first mortgagee settled with the mortgagor, which included an assignment of the mortgagor’s right
to the rents to the first mortgagee. Comerica Bank, 284 Ill. App. 3d at 1033.
10
We note that “[a]ppellate court decisions issued prior to 1935 had no binding authority.” Bryson
v. News America Publications, Inc., 174 Ill. 2d 77, 95 (1996); see also Chicago Title & Trust Co. v.
Vance, 175 Ill. App. 3d 600, 606 (1988) (explaining that appellate decisions were not binding authority
until the amendment of the Courts Act in 1935 (citing Ill. Rev. Stat. 1935, ch. 37, ¶ 41)). As Massion
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requested the appointment of a receiver during its foreclosure of a trust deed, but no receiver
was ever appointed. Instead, the court entered an order “ordering defendant to turn over the
moneys in her hands to the clerk of the court to await the further orders of the court, and also
ordering that [the rental agents who had been collecting rents] forthwith deliver to the
defendant, or the clerk of the court, all the moneys received from the tenants of the building”;
the defendant was also ordered to pay certain expenses and subsequently requested, and
received, authorization to pay other building expenses from time to time. Massion, 279 Ill.
App. at 236-37. On appeal, the court found that the plaintiff was entitled to the rents, finding
that, “[w]hile it is true that the owner of the equity of redemption is entitled to the rents of the
mortgaged premises until the mortgagee takes actual possession or until a receiver is appointed
and takes possession, yet, viewing the proceedings heretofore noted, the conclusion is manifest
that the order of the court that defendant should remain in possession of the premises, collect
the rents, deposit them with the court, pay expenses of operation under orders of the court, was
in practical effect the appointment of a receiver by the court.” Massion, 279 Ill. App. at 239.
¶ 56 More recently, in Joe Contarino, Inc., the Second District discussed situations in which no
court authorization at all was required for a mortgagee to enforce an assignment-of-rents
clause. There, two parties sought rents collected by the defendants’ property manager from a
number of the defendants’ properties—the plaintiff, a mortgagee who had obtained a
foreclosure judgment against the defendants and was attempting to collect on the judgment,
and a set of three adverse claimants, who were mortgagees on different mortgages and who had
entered into forbearance agreements with the defendants through which the property manager
directly transmitted the rents on their properties to the mortgagees. Joe Contarino, Inc., 2017
IL App (2d) 160371, ¶¶ 4-11. The trial court found that the adverse claimants held a superior
lien on the rents, and the plaintiff appealed. Joe Contarino, Inc., 2017 IL App (2d) 160371,
¶ 27. While much of the court’s discussion is not applicable to the issue before this court, the
court did note that in enforcing an assignment-of-rents clause, “[t]here is some authority for the
proposition that a lockbox arrangement or other direct-payment system constitutes sufficient
enforcement of an assignment of rents; thus, under this view, court authorization is not the only
enforcement mechanism.” Joe Contarino, Inc., 2017 IL App (2d) 160371, ¶ 46 (citing West
Bend Mutual Insurance Co. v. Belmont State Corp., 712 F.3d 1030, 1035 (7th Cir. 2013)). The
court found that the defendants “contracted away in the forbearance agreements [their] right to
receive the rents, which, after deduction of property expenses, [the property manager] directly
forwarded to Adverse Claimants,” which showed that the parties chose a method of enforcing
the assignment of rents that did not require court authorization. Joe Contarino, Inc., 2017 IL
App (2d) 160371, ¶ 59.
¶ 57 Finally, in the bankruptcy case of In re J.D. Monarch Development Co., 153 B.R. 829
(Bankr. S.D. Ill. 1993), the bankruptcy court made clear that at least some affirmative action by
the mortgagee was required before constructive possession would be found. There, the
defendant had filed for Chapter 11 bankruptcy and, during the course of the bankruptcy,
defaulted on its mortgage. J.D. Monarch, 153 B.R. at 831. The mortgagee sought and obtained
was decided in 1935, it technically “had *** binding authority” when it was issued. Bryson, 174 Ill. 2d
at 95. However, even if it did not, it would remain instructive as persuasive authority (see, e.g., North
Shore Community Bank & Trust Co. v. Kollar, 304 Ill. App. 3d 838, 844 (1999) (relying on pre-1935
cases as persuasive authority)), and we discuss it because it is relied on by defendant in the case at bar
and has also been discussed in many of the cases we include in our analysis.
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relief from the bankruptcy stay in order to commence foreclosure proceedings in state court;
during the course of the foreclosure proceeding, the bankruptcy was converted to a Chapter 7
bankruptcy proceeding, and the rents from the debtor-in-possession account were turned over
to the bankruptcy trustee. J.D. Monarch, 153 B.R. at 831. After the property was sold at a
judicial sale, the mortgagee filed an action in bankruptcy court to recover the rents held by the
trustee to be applied to the deficiency remaining on its mortgages. J.D. Monarch, 153 B.R. at
831-32. The mortgagee argued that “it was not required to obtain possession of the real estate
to be entitled to these rents because the rents were being collected during bankruptcy by the
debtor-in-possession and the apartment management firm under authority of the court and
subject to court control. The [mortgagee] contend[ed] that any action on its part to seek
possession of the property or appointment of a receiver during bankruptcy would have been
superfluous and that [its] failure to obtain possession did not affect its perfected lien on the
rents.” J.D. Monarch, 153 B.R. at 832. The bankruptcy court disagreed, finding that, “[w]hile
the debtor’s bankruptcy filing created an estate to be administered by the debtor-in-possession
and the trustee under authority of the Court, it did not alter the relationship between the
[mortgagee] and the debtor regarding possession of the mortgaged property. Rather, absent
action by the [mortgagee] to enforce its assignment of rents, the debtor was entitled to receive
rents from the property until being divested of possession by sale of the property upon
foreclosure.” J.D. Monarch, 153 B.R. at 834. The court found that the mortgagee “did nothing
*** to obtain a court order equivalent to a state court receivership but, instead, allowed the
trustee and debtor-in-possession to collect rents for the bankruptcy estate as successors to the
debtor’s interest. It cannot be said, therefore, that this collection of rents enforced the
[mortgagee’s] lien on the rents, and the Court, accordingly, rejects such contention by the
[mortgagee].” J.D. Monarch, 153 B.R. at 835.
¶ 58 In the case at bar, in the bankruptcy case, on May 14, 2014, plaintiff filed a motion in which
plaintiff requested that the rents collected from the property’s tenants be considered “cash
collateral” pursuant to the Bankruptcy Code (11 U.S.C. § 363(a) (2012)) and that defendant be
prohibited from using such cash collateral. On May 20, 2014, the bankruptcy court entered an
order that “the Debtor is prohibited from using any proceeds of the real property *** without
permission from the Trust or Court authorization” and further ordering defendant to segregate
all proceeds of the property. We agree with the trial court that this order is sufficient to show
that plaintiff obtained constructive possession over the rents as of that date.
¶ 59 While the simplest way to show constructive possession would be the appointment of a
receiver, our courts have made it clear that “[a] receivership is not the only method by which a
contract, such as a mortgage whereby rents and profits are conveyed with real estate as security
for a debt, may be enforced, but the court may, in its discretion, use whatever method seems
best as the necessities and exigencies of the situation may require.” Purdy, 166 Ill. App. 3d at
717. Thus, we consider whether plaintiff has taken “some affirmative action to gain possession
of the property.” Comerica Bank, 284 Ill. App. 3d at 1034. Here, plaintiff filed a motion
specifically requesting that the rents be considered to be cash collateral and that defendant be
prohibited from using the rents without court authorization, and this motion was granted by the
bankruptcy court. Thus, after entry of the order, defendant was unable to use the rents without
court approval and, indeed, was found in contempt when it impermissibly used those funds and
was ordered to return them.
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¶ 60 We find the reasoning in Purdy and Massion to be instructive to the instant case. In both
cases, there was no receiver appointed, yet the appellate court found that the actions taken by
the mortgagee were sufficient to establish possession over the property. In Purdy, where the
mortgagee had received an injunction prohibiting the use of the rents and ordering them turned
over to the clerk of the court, the court noted that “[a] receivership is like a preliminary
injunction in that both are forms of equitable relief, and, in the instant case, the injunctive relief
merely served to accomplish the objectives of receivership. [Citation.] The October 26, 1984,
order of the court placed the disputed rents in the possession of the court pending a final
determination of the rights of the parties to the rents. The appointment of a receiver would have
accomplished nothing more.” Purdy, 166 Ill. App. 3d at 716. The court further noted that “[a]
receivership is not the only method by which a contract, such as a mortgage whereby rents and
profits are conveyed with real estate as security for a debt, may be enforced, but the court may,
in its discretion, use whatever method seems best as the necessities and exigencies of the
situation may require.” Purdy, 166 Ill. App. 3d at 717. Likewise, in Massion, where the
defendant was ordered to collect the rents and deposit them with the clerk of the court, the
court noted that, “[w]hile it is true that the owner of the equity of redemption is entitled to the
rents of the mortgaged premises until the mortgagee takes actual possession or until a receiver
is appointed and takes possession, yet, viewing the proceedings heretofore noted, the
conclusion is manifest that the order of the court that defendant should remain in possession of
the premises, collect the rents, deposit them with the court, pay expenses of operation under
orders of the court, was in practical effect the appointment of a receiver by the court.” Massion,
279 Ill. App. at 239.
¶ 61 Similarly, here, the cash collateral order entered by the bankruptcy court placed the
disputed rents in the control of the court because, although they physically remained in
defendant’s account, they could not be used without court authorization. We note that, as
defendant points out, the language in the cash collateral order entered by the bankruptcy court
is similar to the language of 11 U.S.C. § 363(c)(2), which provides that a debtor may not use,
sell, or lease cash collateral without court authorization or the consent of each entity that has an
interest in such cash collateral. However, the dispositive fact in the instant case is that plaintiff
affirmatively sought and received a court order that (1) the particular rents at issue were cash
collateral and (2) defendant was required to segregate the rents and was prohibited from using
them without plaintiff’s consent or court authorization. We make no findings concerning
whether, in the absence of such affirmative action on plaintiff’s part, a mortgagee would be
entitled to rents collected during a bankruptcy. See J.D. Monarch, 153 B.R. at 835 (finding that
a mortgagee was not entitled to rents held by the bankruptcy trustee where the mortgagee did
not take any action to enforce its interest in the rents).11
¶ 62 We further note that defendant’s possession of the rents occurred in the context of the
bankruptcy proceeding, meaning that defendant’s status changed from a defendant to a debtor.
11
We note that J.D. Monarch is further distinguishable because the mortgagor in that case was
involved in bankruptcy proceedings prior to the default, and the mortgagee was able to obtain relief
from the bankruptcy stay in order to commence foreclosure proceedings, making its failure to seek any
relief, such as the appointment of a receiver, particularly troublesome. See J.D. Monarch, 153 B.R. at
831. In the case at bar, by contrast, plaintiff sought a receiver in the foreclosure action prior to the
bankruptcy and, once the stay was lifted, immediately renewed its request for a receiver, which was
then appointed.
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“ ‘[A] Chapter 11 debtor is a fiduciary of his creditors and the estate. [Citation.] A
debtor-in-possession holds its powers in trust for the benefit of the creditors and has the duty to
protect and conserve property in his possession for their benefit. [Citations.]’ ” In re Weiss,
376 B.R. 867, 880 (Bankr. N.D. Ill. 2007) (quoting In re Schipper, 109 B.R. 832, 835 (Bankr.
N.D. Ill. 1989)). Thus, while the disputed rents remained in defendant’s account until the
receiver was appointed, defendant’s hands were effectively tied with respect to the use of these
funds without court permission.
¶ 63 Defendant argues that Purdy should not be interpreted broadly, pointing to Fidelity Mutual
Life Insurance Co. v. American National Bank & Trust Co. of Chicago, No. 93 C 6436, 1994
WL 67852 (N.D. Ill. Feb. 24, 1994). First, we note that this cited case is an unpublished federal
district court case. “Unreported decisions have no precedential value, and this is even more
true for decisions from foreign jurisdictions.” American Family Mutual Insurance Co. v.
Plunkett, 2014 IL App (1st) 131631, ¶ 38; Burnette v. Stroger, 389 Ill. App. 3d 321, 329
(2009); West American Insurance Co. v. J.R. Construction Co., 334 Ill. App. 3d 75, 82 (2002)
(a “foreign, unreported decision” is of no precedential value”). Specifically, with respect
to unpublished federal cases, this court has found that they do not carry any authority before an
Illinois court. Lyons v. Ryan, 324 Ill. App. 3d 1094, 1107 n.11 (2001) (“unreported federal
court orders” are not “any kind of authority before an Illinois court”); Sompolski v. Miller, 239
Ill. App. 3d 1087, 1093 (1992) (“we decline” to follow “an unreported Federal district court
decision”). While bankruptcy court cases may be instructive in the present case, as we are
considering the interplay between bankruptcy law and Illinois law (see Comerica Bank, 284
Ill. App. 3d at 1033), Fidelity Mutual is not a bankruptcy court case and is simply a federal
district court interpreting Illinois law in an unpublished decision with no precedential value.
Furthermore, Fidelity Mutual is not factually analogous to the instant case at all. There, the
mortgagee directed the current tenant to pay its rent to the mortgagee without any court
authorization or involvement whatsoever. Fidelity Mutual, 1994 WL 67852, at *4. The district
court found that impermissible, noting that “[the mortgagee] wants the right to control the rents
without the protection afforded [the mortgagor] by a receiver or court order. [The mortgagee]
is not entitled to such a result under Illinois law ***.” Fidelity Mutual, 1994 WL 67852, at *5.
In the case at bar, by contrast, plaintiff sought court authorization through the entry of a court
order restricting the use of the rents.
¶ 64 We are similarly unpersuaded by defendant’s reliance on In re Markos Gurnee
Partnership, 252 B.R. 712 (Bankr. N.D. Ill. 1997), in which the bankruptcy court found that a
creditor was not entitled to surplus funds that had been withheld from the creditor’s adequate
protection payments because the funds were not needed to protect the creditor’s claim. That
case did not involve the issue present in the case at bar, namely, whether the mortgagee’s
actions were sufficient to assert constructive possession over the rents collected during the
bankruptcy. Thus, we find defendant’s reliance on this case was not persuasive in analyzing
the situation present before this court.
¶ 65 Additionally, although not cited by either party, we have discovered at least one
bankruptcy court case, In re Southern Gardens, Inc., 39 B.R. 671, 673 (Bankr. S.D. Ill. 1982),
in which the court has found that a request to segregate rents was sufficient “affirmative
action” to constitute constructive possession under Illinois law. In that case, the bankruptcy
court found that the bankruptcy trustee, as the party in possession, was entitled to the rents until
such time as some affirmative action was taken by the mortgagee. The court determined that
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“[t]he question that faces the Court at this time is what form that affirmative action must take.”
In re Southern Gardens, 39 B.R. at 673. The court found: “In this case, [the mortgagee] did not
formally petition the Bankruptcy Court for an order of sequestration, but it did demand that the
Trustee set apart the rents or that the Trustee turn the rents over to the Trustee. This is enough
of an affirmative action, under Illinois law, to entitle [the mortgagee] to the rent proceeds from
the date of the demand.” In re Southern Gardens, 39 B.R. at 673. This case provides further
support for our conclusion that the trial court did not err in ordering the turnover of
prereceivership rents.
¶ 66 As a final matter, we note that defendant repeatedly claims that “the only perfected interest
[plaintiff] had as of the date of the bankruptcy case was its mortgage on [defendant’s]
property.” Thus, defendant claims that plaintiff “received a windfall” because it was awarded
prereceivership rents in addition to the adequate protection payments it received during the
bankruptcy and “the full value of its collateral” received through foreclosure. However, this is
not accurate. Under the Conveyances Act, “[i]f an instrument assigning the interest of the
assignor in rents arising from the real property described in the instrument is recorded,
pursuant to this Act, in the county in which the real property is situated, then the interest of the
assignee in those rents is perfected upon that recordation without the assignee taking any other
affirmative action.” 765 ILCS 5/31.5(b) (West 2014). Thus, since the assignment of rents was
recorded, plaintiff had a perfected interest in the rents prior to the date of the bankruptcy case.
While it remains the case that plaintiff would not have been entitled to collect the rents until it
took steps to enforce its interest (765 ILCS 5/31.5(d) (West 2014)), it is a misstatement for
defendant to repeatedly claim that plaintiff’s interest in the rents had not been perfected at the
time of the bankruptcy filing. Accordingly, its argument in its reply brief that “Cash Collateral
Orders Preserve the Status Quo as of the Time of a Bankruptcy Filing and Does [sic] Not
Perfect a Previously Unperfected Security Interest” is both inaccurate and irrelevant to the
issue in the case at bar, namely, whether plaintiff took an “affirmative action” to assert control
over the rents by requesting and obtaining a separate “cash collateral” order with respect to the
rents.12 Furthermore, the fact that cash collateral may be used with court authorization so long
as the creditor’s interest is adequately protected is not a persuasive distinction in the case at
bar—as the trial court noted, “that contention is not supported by the record in this case.
[Defendant] appears to be a single-purpose entity in the business exclusively of running the
subject property. This is not a situation where a cash collateral order encumbers the proceeds in
one of many accounts owned by a more diverse business. Without more, this court sees no
basis for concluding that the scope of [the] Bankruptcy Court’s order differed from that of an
ordinary receivership.”
¶ 67 We also must highlight that, in the order ordering the turnover of the prereceivership rents
to the receiver, the court specifically found that “[t]he property’s maintenance has been, and
will continue to be, the duty of the representative collecting rents. During the pendency of the
Bankruptcy case, [defendant] acted as that representative, as debtor in possession. *** Now,
and for the remainder of the foreclosure, the receiver has the duty to collect rents and maintain
12
Defendant’s argument also does not acknowledge that the $240,000 in adequate protection
payments received by plaintiff was deducted from the amount of the foreclosure judgment, making it
difficult to see how plaintiff “received more than it was entitled to in the bankruptcy case, and certainly
not less, by its receipt of the adequate protection payments, plus the full value of its collateral through
foreclosure of its mortgage.”
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the subject property. *** Allowing the receiver to take over custody and control of the funds,
in this case, does not strip the property of its benefits while leaving its burdens unclaimed;
rather, keeping the receiver from obtaining those funds would separate the benefits from the
burdens of the subject property.” Furthermore, “[o]ut of an abundance of caution,” the court
specifically ordered that “this court will use its inherent equitable power to ensure that any
property expenses, properly collectable and attributable to those proceeds collected after May
20, 2014, are payable by the receiver unless otherwise ordered by the court.” Thus, the rents
turned over to the receiver would have been used for the same types of expenditures for which
defendant would have been authorized to use cash collateral.
¶ 68 Given our conclusion that the trial court properly ordered defendant to turn over the
prereceivership rents to the receiver, we also can find no error in the trial court’s ultimate order
to turn over these funds to plaintiff, an alternate argument raised by defendant. In its August
18, 2015, order, the trial court ordered that “[u]pon dismissal of the bankruptcy case,
[defendant] is directed to turn over all rents and any other receipts from the
property—including, without limitation, CAM payments—collected after May 20, 2014,
presently held in the DIP account, to the court-appointed receiver *** in his representative
capacity, to be held by him for the preservation and maintenance of the subject property.” This
language used by the trial court simply rephrases a receiver’s duties under the Illinois
Mortgage Foreclosure Law (Foreclosure Law), which provides, inter alia, that the receiver
“shall use reasonable efforts to maintain the real estate *** in at least as good condition as
existed at the time the receiver took possession” (735 ILCS 5/15-1704(c)(2) (West 2014)) and
that the receiver “may take other such actions as may be reasonably necessary to conserve the
mortgaged real estate and other property subject to the mortgage, or as otherwise authorized by
the court” (735 ILCS 5/15-1704(c)(9) (West 2014)). Indeed, it is well established that “[a]
receiver *** is ‘an officer of the court’ appointed to ‘secure and preserve property for the
benefit of all concerned.’ ” United States Fidelity & Guaranty Co. v. Old Orchard Plaza Ltd.
Partnership, 284 Ill. App. 3d 765, 774 (1996) (quoting Heritage Pullman Bank v. American
National Bank & Trust Co. of Chicago, 164 Ill. App. 3d 680, 687 (1987)).
¶ 69 The Foreclosure Law also details and prioritizes the allocation of receipts collected from
operation of the real property, including that, after payment of the enumerated expenses, “the
balance, if any, shall be held or disbursed as ordered by the court.” 735 ILCS 5/15-1704(d)(8)
(West 2014). In the case at bar, the trial court ordered that, after the payment of expenses,
“[t]he Receiver shall transmit all property and any remaining funds on hand in the amount of
$594,782.80 to the Plaintiff *** for application to the deficiency judgment,” which the trial
court had previously found amounted to $1,276,008.47. We can find no error in the trial court’s
ordering the funds remaining in the receiver’s account to be applied to the outstanding
deficiency judgment. Defendant provides no support for its argument that that it was entitled to
the $278,341.10 in prereceivership rents because “these pre-receivership funds were not
necessary, and not used, to ‘preserve or maintain’ the Property,” and we do not find this
argument persuasive.
¶ 70 II. Payment to Milestone
¶ 71 Defendant next argues that the trial court erred in denying defendant’s request that
Milestone be paid for the property management services that it provided during the pendency
of the bankruptcy action. Defendant provides no legal support for its argument, which consists
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of a single paragraph of its brief on appeal.13 Nevertheless, we can find no error in the trial
court’s conclusion.
¶ 72 As plaintiff points out, Milestone entered into a “Consent and Agreement of Manager”
agreement on October 31, 2002, which provided, in relevant part:
“[T]he rights of the Undersigned under the Contract to receive any compensation
reimbursement of costs and expenses or other payments in consideration for its
management services for the Premises shall be and remain subordinate in all respects to
the Lender’s rights under Loan Documents.”
Thus, Milestone expressly agreed that its right to receive payment for its services would be
subordinate to plaintiff’s rights under the loan documents, and the trial court therefore properly
found that Milestone was not entitled to be paid from the prereceivership rents where there
remained a deficiency judgment in plaintiff’s favor to which those rents were applied.
¶ 73 Defendant’s response to plaintiff’s argument is that this agreement “was not before the trial
court and should not have been a basis for the decision to deny the request” because Milestone
was not named as a party. However, we note that defendant, not plaintiff, is the one that
brought Milestone into this action by seeking payment for Milestone’s management fees, so its
attempt to place fault on plaintiff for not naming Milestone as a party is unpersuasive. We
further note that the document that defendant claims “was not properly before the trial court”
was provided by defendant itself, as an exhibit to its brief concerning the Milestone invoices.
Defendant cannot submit a document to the court and then later claim that the document “was
not properly before the trial court.” Accordingly, we are not persuaded by defendant’s
arguments and find that the trial court properly concluded that the contract executed by
Milestone was dispositive as to its ability to receive payment.
¶ 74 III. Attorney Fees
¶ 75 Finally, defendant contends that the trial court erred in awarding plaintiff attorney fees. In
the judgment of foreclosure and sale, the trial court found that plaintiff was entitled to
$663,389.01 in legal expenses, as well as $30,190.31 in servicer expenses. Defendant claims
that the trial court erred in awarding attorney fees because plaintiff did not properly support its
request for the fees and the awarded fees were excessive.
¶ 76 Under the Foreclosure Law, “[a]ttorneys’ fees and other costs incurred in connection with
the preparation, filing or prosecution of the foreclosure suit shall be recoverable in a
foreclosure only to the extent specifically set forth in the mortgage or other written agreement
between the mortgagor and the mortgagee.” 735 ILCS 5/15-1510(b) (West 2014). In the case
at bar, in its request for attorney fees, defendant listed three locations in the loan documents
that provide for the recovery of attorney fees: section 2.5 of the note and sections 3.1(e) and 3.7
of the mortgage.
¶ 77 Section 2.5 of the note provides that “[i]n the event that this Note, or any part hereof, is
collected by or through an attorney-at-law, Maker agrees to pay all costs of collection,
including, but not limited to, reasonable attorneys’ fees.” Section 3.1(e) of the mortgage
provides, in relevant part, that “[i]n the event foreclosure proceedings are instituted by
Mortgagee, all expenses incident to such proceedings, including, but not limited to, reasonable
13
Its reply to plaintiff’s response brief consists of two paragraphs with one case citation.
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attorneys’ fees and costs, shall be paid by Mortgagor and secured by this Mortgage and by all
of the other Loan Documents securing all of any part of the Debt.” Section 3.7 of the mortgage
provides, in relevant part:
“Mortgagor shall pay on demand all of Mortgagee’s expenses incurred in any efforts to
enforce any terms of this Mortgage, whether or not any lawsuit is filed and whether or
not foreclosure is commenced but not completed, including, but not limited to,
reasonable legal fees and disbursements, foreclosure costs and title charges ***.
In addition and without limitation of any amounts expended by Mortgagee pursuant
to Section 3.3 hereof, in any suit to foreclose the lien hereof or in any other action to
enforce any other remedy of Mortgagee under this Mortgage or with respect to any of
the Debt, there shall be allowed and included as additional indebtedness in the decree
for sale, judgment of foreclosure or other judgment or decree all reasonable
expenditures or expenses which may be paid or incurred by or on behalf of Mortgagee
for attorneys, appraisers, consultants and contractors ***. All expenditures and
expenses of the nature in this Section mentioned and such expenses and fees as may be
incurred in the protection of the Premises and the maintenance of the lien of this
Mortgage, including but not limited to the reasonable fees of any attorney employed by
Mortgagee in any litigation or proceedings affecting this Mortgage, the Debt or the
Premises, including, without limitation, bankruptcy proceedings, or in the preparation
for the commencement or defense of any proceeding or threatened suit or proceeding,
shall be immediately due and payable by Mortgagor, with interest thereon from the
date incurred at the Default Rate and shall be secured by this Mortgage.”
¶ 78 In the case at bar, defendant first argues that plaintiff’s request for attorney fees was not
properly supported, so defendant was unable to challenge the reasonableness of the fees. “Only
those fees which are reasonable will be allowed, and the party requesting fees bears the burden
of presenting sufficient evidence from which the trial court can render a decision as to their
reasonableness.” Chicago Title & Trust Co. v. Chicago Title & Trust Co., 248 Ill. App. 3d
1065, 1072 (1993); Aliano v. Sears, Roebuck & Co., 2015 IL App (1st) 143367, ¶ 19. “A
petition for fees must present the court with detailed records containing facts and computations
upon which the charges are predicated and specifying the services provided, by whom they
were performed, the time expended and the hourly rate charged.” Chicago Title & Trust, 248
Ill. App. 3d at 1072; Aliano, 2015 IL App (1st) 143367, ¶ 19. In assessing the reasonableness
of fees, “[a] court may consider a multitude of factors, including the nature of the case, its
difficulty level, the skill and standing of the attorney, the degree of responsibility required, the
usual and customary charges for similar work, and the connection between the litigation and
the fees charged.” 3432 West Henderson Building, LLC v. Gizynski, 2017 IL App (1st) 160588,
¶ 40. A trial court has broad discretion in awarding attorney fees, and its decision will not be
reversed unless the court abused its discretion. 3432 West Henderson, 2017 IL App (1st)
160588, ¶ 40. Additionally, “[t]he trial court’s determination as to an appropriate award of
attorney fees must be considered in light of the principle that the trial judge is permitted to use
his own knowledge and experience to assess the time required to complete particular activities,
and a court of review may not reverse an award of attorney fees merely because it may have
reached a different conclusion.” Chicago Title & Trust, 248 Ill. App. 3d at 1074.
¶ 79 In the case at bar, we cannot find that the trial court abused its discretion in its award of
attorney fees. Attached to the motion for summary judgment, in which plaintiff made its
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request for attorney fees, was a “schedule” of the invoices supporting plaintiff’s request for
attorney fees, redacted copies of which plaintiff claimed it had produced to defendant. The
schedule listed 57 invoices dating from December 31, 2012, through September 9, 2015, 43 of
which stated that they had been produced, and the schedule indicated that the invoices had a
total value of $578,974.71, with $549,400.58 in fees and $29,574.13 in costs. Also attached to
the amended motion for summary judgment was the affidavit of Gregory Akins, a senior vice
president at plaintiff servicer, in which Akins averred that “[a]s of the date of this Affidavit, the
Loan remains outstanding and the total amount due and owing under the Loan Document is
$5,009,794.05, which consists of: *** (vi) legal expenses total[ling] $572,355.44 as of
September 1, 2015.” Akins further averred: “The fees and expenses detailed in Exhibits 4 and 5
were all incurred in connection with the Trust’s efforts to enforce the Loan Documents and
have been paid or are in the process of being paid.” Finally, attached to the amended motion for
summary judgment was an affidavit of Procida, a New York attorney who was a partner in the
law firm retained by plaintiff servicer in connection with the foreclosure action; Procida
averred that he had been allowed, pursuant to Illinois Supreme Court Rule 707 (eff. July 1,
2007), to represent plaintiff in the instant litigation and pro hac vice in the bankruptcy court
and that, over time, he became the primary attorney working on the instant litigation. Procida
averred that he was personally involved with the legal services rendered to plaintiff in
connection with (1) the instant cause, (2) the bankruptcy case, (3) an adversary proceeding in
bankruptcy court, and (4) a pending action in the circuit court of Cook County concerning a
purported guaranty executed by defendant’s principals. With respect to the issue of attorney
fees, Procida averred:
“9. The attorneys’ fees charged by [the firm] are based upon the amount of time
spent on a particular client matter. We keep track of our time by filling out time sheets
on a daily basis. The information from those time sheets is then made into an itemized
invoice by using our computer billing program. I occasionally review the invoices to
assure the accuracy and reliability of this system of generating invoices, and I have
found it to be reliable and accurate.
10. My billing rate during the life span of this case has ranged from $550 to $600
per hour. A detailed listing of the attorneys’ fees incurred by the Trust with regard to
the above-captioned cause is attached to the Motion as Exhibit 4 and redacted invoices
of all legal fees and expenses incurred through August 31, 2015 have been produced to
[defendant].
11. I defer to the Court for the determination of the customary hourly rate for a
Chicago attorney of similar experience. However, I note that [defendant’s] lead
counsel for the majority of this case *** has an hourly billing rate of $530.”
¶ 80 In addition, after defendant argued that the motion lacked sufficient documentation to
support the request for attorney fees, plaintiff supplemented the motion with additional copies
of the timesheets that were less redacted, in addition to providing a fully unredacted copy of
the timesheets to the trial court for in camera review. We cannot find that the request for
attorney fees was thus unsupported and, to the extent that the exhibits attached to the motion
for summary judgment were not sufficient, any deficiencies were cured by plaintiff’s later
supplements. See Lake County Trust Co. v. Two Bar B, Inc., 238 Ill. App. 3d 589, 600 (1992)
(finding that, to the extent original affidavit was insufficient, a supplemental affidavit
remedied the alleged deficiencies).
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¶ 81 Furthermore, we cannot find that the trial court abused its discretion in finding the fees
sought by plaintiff to be reasonable. The trial court conducted a hearing on the issue of attorney
fees on May 20, 2016, but no transcript of this hearing appears in the record on appeal. We note
that, during oral argument, defendant’s counsel suggested that there was no such hearing.
However, the record on appeal makes clear that the trial court heard additional arguments
concerning attorney fees at a hearing separate from the March 25, 2016, hearing that is
included in the record. The record further makes clear that it was at this subsequent hearing that
defendant made its arguments concerning specific fees—defense counsel specifically noted
during the March 25, 2016, hearing that “[t]he reasonableness of fees, I’ll save that until next
time.”
¶ 82 As noted, “[t]he trial court’s determination as to an appropriate award of attorney fees must
be considered in light of the principle that the trial judge is permitted to use his own knowledge
and experience to assess the time required to complete particular activities, and a court of
review may not reverse an award of attorney fees merely because it may have reached a
different conclusion.” Chicago Title & Trust, 248 Ill. App. 3d at 1074. Since we have no way
of knowing what occurred at the hearing, we have no basis for disagreeing with the trial court’s
determination that these fees were reasonable. See Foutch v. O’Bryant, 99 Ill. 2d 389, 391-92
(1984) (an appellant has the burden of presenting a sufficiently complete record of the
proceedings at trial 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 the law and
had a sufficient factual basis). Accordingly, we affirm the trial court’s award of plaintiff’s
attorney fees.
¶ 83 Finally, we note that defendant did not request an evidentiary hearing on the issue of the
reasonableness of plaintiff’s attorney fees. “The reasonableness of fees is a matter of proof,
and a party ordered to pay attorney fees has the right to conduct meaningful cross-examination
on the issue.” Bank of America National Trust & Savings Ass’n v. Schulson, 305 Ill. App. 3d
941, 952 (1999). “When a party who must pay attorney fees asks for an evidentiary hearing, he
is entitled to one.” Schulson, 305 Ill. App. 3d at 952. In the case at bar, if defendant had
requested an evidentiary hearing, counsel would have had the opportunity to test the
reasonableness of plaintiff’s requested fees through cross-examination as to the basis of the
fees and would have been able to present evidence challenging those fees. “The purpose of an
evidentiary hearing is to provide sufficient information to allow the court to assess intelligently
the reasonableness of the fees charged [citation] ***.” Bank of America v. WS Management,
Inc., 2015 IL App (1st) 132551, ¶ 127. “Generally, in protracted litigation involving multiple
complex issues, an evidentiary hearing should be conducted on the request of the losing party,
especially if the prevailing party was represented by multiple attorneys, which may have
resulted in duplicative charges, and where the prevailing party was entitled to fees and costs
with respect to some claims, but not others.” WS Management, 2015 IL App (1st) 132551,
¶ 127 (citing Trossman v. Philipsborn, 373 Ill. App. 3d 1020, 1058 (2007)). In the absence of
such a hearing, the basis for the trial court’s determination would have been the evidence
presented by plaintiff in support of its fee request, including its affidavits and invoices, and the
arguments of the parties. As noted, given the fact that we are unable to know what occurred at
the May 20, 2016, hearing, we cannot find that the trial court abused its discretion in
determining that plaintiff’s requested fees were reasonable.
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¶ 84 CONCLUSION
¶ 85 For the reasons set forth above, we find that the trial court properly ordered defendant to
turn over the prereceivership rents to the receiver and did not err in ordering those rents to be
later disbursed to plaintiff. We further find that the trial court properly denied defendant’s
request that the Milestone invoices be paid from the prereceivership rents. Finally, we find that
the trial court did not abuse its discretion in awarding plaintiff attorney fees as provided by the
loan documents.
¶ 86 Affirmed.
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