Amos Financial LLC v. Szydlowski

2022 IL App (1st) 210046

SECOND DIVISION
August 2, 2022

IN THE
APPELLATE COURT OF ILLINOIS
FIRST DISTRICT

No. 1-21-0046

)
AMOS FINANCIAL, LLC, ) Appeal from the
) Circuit Court of
Plaintiff-Appellee, ) Cook County,
) Law Division.
)
v. ) No. 2018 L 011035
)
STAN SZYDLOWSKI, ) Honorable
) Jerry A. Esrig
Defendants-Appellant. ) Judge Presiding.
)

PRESIDING JUSTICE FITZGERALD SMITH delivered the judgment of the court, with
opinion.
Justices Lavin and Cobbs concurred in the judgment and opinion.

OPINION

¶1 This appeal stems from a breach of guaranty contract cause of action filed by the plaintiff,

Amos Financial LLC (Amos), against, inter alia, the defendant, Stan Szydlowski (Szydlowski).

The defendant appeals from the circuit court’s order granting summary judgment in favor of the

plaintiff. On appeal, the defendant asserts that summary judgment was improper because the

plaintiff never acquired the defendant’s guaranty. In the alternative, the defendant contends that

even if the plaintiff was the owner of the guaranty, there remained genuine issues of material fact

as to the scope of the defendant’s liability under the guaranty. For the following reasons, we affirm.
No. 1-21-0046

¶2 I. BACKGROUND

¶3 At the outset, we note that the record before us is incomplete, as it fails to include any of

the documents ostensibly issued during discovery. More importantly, the record does not contain

any report of the proceedings below, nor any acceptable substitute—such as a bystanders’ report

or an agreed statement of facts—as authorized under Illinois Supreme Court Rule 323 (eff. Dec.

13, 2005). From the bare common law record that is before us, we have been able to glean the

following pertinent facts and procedural history.

¶4 On October 11, 2018, the plaintiff, Amos, filed a complaint against, inter alia, the

defendant, Szydlowski, 1 alleging a breach of guaranty. According to the complaint, the plaintiff is

the holder and owner of a promissory note (note) executed on October 1, 2010, by the original

borrower Klaucens and Associates, Inc. (Klaucens) and its lender First Midwest Bank (FMB).

Under the note, Klaucens promised to pay FMB $200,000. The note, which is attached to the

complaint, further provides that the loan was to mature on December 17, 2011.

¶5 The complaint further alleged that the note was assigned twice. First, on January 16, 2013,

FMB negotiated and executed a document, titled “Endorsement and Allonge to Promissory Note”

(the first allonge), agreeing to assign the note to M-III Chicago, L.L.C. (M-III Chicago). Then, on

June 15, 2018, M-III Chicago executed a document, titled “Allonge” (the second allonge), agreeing

to assign the note to the plaintiff.

¶6 The complaint also alleged that on May 1, 2008, together with three other individuals, the

1
In addition to Szydlowski, the complaint initially named three more defendants: Elizabeth Ursin,
Erika Bolger, and Joseph C. Brucek. For various reasons, however, all three were either defaulted or
dismissed from the case with prejudice. Accordingly, because this appeal concerns only Szydlowski, we
will set forth only those facts and procedural history relevant to the summary judgment order entered against
him.

-2-
No. 1-21-0046

defendant executed a “continuing” commercial guaranty (guaranty) in favor of FMB as a security

on Klaucens’ note. According to the complaint, the plaintiff is the assignee and successor to FMB

and therefore also the holder and bona fide owner of the guaranty.

¶7 The guaranty, which is attached to the complaint, states, in pertinent part, that

“for good and valuable consideration,” the defendant “absolutely and unconditionally guarantees

full and punctual payment of [his] share of the indebtedness” owed to FMB by Klaucens and the

“performance and discharge of all” of Klaucens’ “obligations” under the note and the “[r]elated

documents.” The guaranty defines the defendant’s “share of the indebtedness” as $50,000, plus

interest, collection costs, expenses, and attorneys’ fees. In addition, the guaranty defines “note”

as:

“[T]he promissory note dated May 1, 2008, in the original principal amount of $200,000

from [Klaucens] to [FMB], together with all renewals of, extensions of, modifications of,

refinancings of, consolidations of, and substitutions for the promissory note in the

agreement.”

¶8 The guaranty also contains a subsection in bold capital letters entitled “Continuing

Guaranty,” which provides in full:

“THIS IS A ‘CONTINUING GUARANTY’ UNDER WHICH GURANATOR AGREES

TO GUARANTEE THE FULL AND PUNCUTAL PAYMENT, PERFORMANCE AND

SATISFACTION OF THE GURANATOR’S SHARE OF THE INDEBTEDNESS OF

BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR

ACQUIRED, ON A CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS

MADE ON THE IDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH

GUARANTOR’S OBLIGATIONS AND LIABILITY UNDER THE GUARANTY FOR

-3-
No. 1-21-0046

ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR

PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE

FROM TIME TO TIME.”

¶9 In addition, under the subsection “Duration of Guaranty,” the guaranty provides that the

guaranty will “continue in full force until all the [i]ndebtedness incurred or contracted before

receipt by [FMB] of any notice of revocation shall have been fully and finally paid and satisfied

and all of [the defendant’s] other obligations under this [g]uaranty shall have been fully

performed.”

¶ 10 Moreover, the guaranty states that the defendant authorizes FMB “without notice or

demand, and without lessening [the defendant’s] liability under the [g]uaranty, from time to time

*** to make one or more additional secured or unsecured loans to [Klaucens]” and to “assign or

transfer” the guaranty “in whole or in part.” In addition, the guaranty provides that “on transfer of

[the defendant’s] interest,” the guaranty “shall be binding upon and inure to the benefit of the

parties, their successors, and assigns.”

¶ 11 According to the plaintiff’s complaint, because Klaucens defaulted on the October 1, 2010,

note, the defendant owed the plaintiff money under the guaranty. The complaint therefore sought

a judgment against the defendant in the sum of $50,000, plus accruing interest, attorneys’ fees,

costs, and any other amounts due under the note.

¶ 12 On June 7, 2019, the defendant filed his answer to the complaint, admitting that on October

1, 2010, Klaucens and FMB executed a promissory note for the amount of $200,000 and that on

May 1, 2008, he signed the guaranty in the amount of $50,000 for a certain promissory note

executed on May 1, 2008, by Klaucens and payable to FMB. The defendant, however, stated that

he had insufficient knowledge as to whether (1) the October 1, 2010, note was in default, (2) the

-4-
No. 1-21-0046

plaintiff had performed all of its obligations under that note and the guaranty, (3) the guaranty was

in default, (4) the guaranty required him to pay the plaintiff’s fees and costs to enforce the

guaranty, and (5) the exact amounts that were due and owing to the plaintiff under the guaranty.

In addition, the defendant neither admitted nor denied the plaintiff’s allegation that the guaranty

was a “continuing” guaranty, but rather asserted that the “document spoke for itself.”

¶ 13 On June 19, 2019, the circuit court entered a case management order requiring that written

discovery be issued by July 3, 2019. While the record reveals that in response to this order, on July

3, 2019, the defendant served written discovery requests on the plaintiff, those requests are not

part of the record on appeal.

¶ 14 On August 27, 2019, the plaintiff filed the instant motion for summary judgment, asserting

that it was entitled to judgment as a matter of law because the defendant failed to deny or

adequately refute the material allegations in the complaint. Specifically, the plaintiff asserted that

it was undisputed that it was the holder and bona fide owner of both the note and the guaranty. In

addition, the plaintiff pointed out that the defendant failed to refute that the note was in default and

that by his failure to pay the amounts due and owing under the note, he was in default on the

guaranty.

¶ 15 In support of its motion for summary judgment, the plaintiff attached, inter alia, an

affidavit from its Chief Financial Officer (CFO) and general counsel Brian Donegan, who attested

to having personal knowledge of the plaintiff’s policies and procedures with respect to “loan

payment processing, disbursements, and the keeping, integration, and maintenance of loan records,

including transaction histories.”

¶ 16 According to Donegan’s affidavit, the relevant loan and note were executed by Klaucens

and FMB on October 1, 2010. That note was then negotiated by FMB to M-III Chicago by way of

-5-
No. 1-21-0046

the first allonge and then by M-III Chicago to the plaintiff by way of the second allonge. Donegan

further attested that the note was secured by the defendant’s May 1, 2008, guaranty, which was

originally held by FMB. Donegan opined that when the plaintiff acquired the loan and the note

from M-III Chicago, on June 15, 2018, the guaranty was automatically transferred it.

¶ 17 According to Donegan’s affidavit, upon acquiring the loan, the plaintiff also acquired the

business records maintained by FMB and its successor M-III Chicago, including the loan’s

transaction history. That transaction history, which was attached to Donegan’s affidavit,

establishes that no payments were made on the loan since it was acquired by the plaintiff.

According to Donegan, as of April 3, 2019, Klaucens owed the plaintiff $139,535.41 on the note

and the defendant owed it $62,579.22 under the guaranty.

¶ 18 On October 29, 2019, the defendant filed a response arguing that the plaintiff did not

acquire the guaranty pursuant to the two allonges and that even if it did, there remained genuine

issues of material fact as to what he had guaranteed that precluded summary judgment.

Specifically, the defendant pointed out that neither the October 1, 2010, note, nor either of the

allonges, refer to his previously executed May 1, 2008, guaranty. Rather, the plain language of that

guaranty makes clear that the “note” that he guaranteed was the May 1, 2008, promissory note,

and not the October 1, 2010, note, upon which the plaintiff’s complaint relies.

¶ 19 On October 30, 2019, the plaintiff filed its reply asserting, inter alia, that it was expressly

assigned the May 1, 2008, guaranty. In support, the plaintiff attached two documents: (1) a January

16, 2013, “General Assignment” between FMB and M-III Chicago and (2) an August 2, 2019,

“Omnibus Assignment of Loan Documents” between M-III Chicago and itself with an effective

date of June 15, 2018.

¶ 20 After the motion for summary judgment was fully briefed, the matter was set for a clerk’s

-6-
No. 1-21-0046

status hearing on November 19, 2019. Because the record before us does not contain a transcript

of any of the proceedings below, we do not know exactly what transpired at that hearing or why

the circuit court chose to forego a hearing on the summary judgment motion. From the bare

common law record before us, we can only discern that on November 19, 2019, the motion was

taken under advisement.

¶ 21 On January 30, 2020, the circuit court entered an eight-page written order granting

summary judgment in favor of the plaintiff in the amount of $64,665.92. The court found that by

signing the May 1, 2008, guaranty, the defendant had guaranteed the October 1, 2010, note. In

doing so, the court first rejected the plaintiff’s position that it had been expressly assigned the

guaranty. In this respect, the court noted that it could not rely on Donegan’s statement that the

guaranty was transferred to the plaintiff on June 15, 2018, because his affidavit did not attach the

“General Assignment” or the “Omnibus Assignment of Loan Documents,” and neither document

attached to the plaintiff’s reply brief had been authenticated.

¶ 22 Nonetheless, the circuit court found that the defendant was bound by the May 1, 2008,

guaranty because the plain language of that contract reflected that it was a “continuing” guaranty,

pursuant to which the defendant had agreed to guarantee all future obligations of Klaucens, arising

from the originally guaranteed loan. The court found that the October 1, 2010, loan was such a

future obligation and that therefore the defendant was liable for it.

¶ 23 On March 3, 2020, the defendant filed a motion to reconsider and vacate the grant of

summary judgment in favor of the plaintiff, asserting that the circuit court had erred in finding that

the guaranty was a “continuing” guaranty. The defendant argued that the conflict between the

“continuing guaranty” language and the language limiting his obligation to the “note” dated May

1, 2008, had to be read in favor of him as the guarantor. In addition, the defendant argued that it

-7-
No. 1-21-0046

was error for the circuit court to rely on section 13 of the Restatement (Third) of Suretyship and

Guaranty (1996) (Restatement (Third) of Suretyship and Guaranty § 13 (1996)) to conclude that it

did not matter that the plaintiff was not expressly assigned the guaranty. The defendant argued

that, contrary to the court’s position, the guaranty could be assigned only if the allonges on the

promissory note were accompanied by express assignments of the loan itself.

¶ 24 After the plaintiff filed its response on October 16, 2020, the circuit court heard arguments

via Zoom on December 18, 2020. The circuit court denied the defendant’s motion to reconsider

for the reasons stated in open court. Because the appellate record is devoid of any transcript of the

proceedings below, we have no way of discerning what transpired at that hearing, whether

additional evidence was presented to the circuit court, and what the court’s reasoning may have

been.

¶ 25 The defendant now appeals both the order granting summary judgment in the plaintiff’s

favor and the order denying his motion for reconsideration.

¶ 26 II. ANALYSIS

¶ 27 Before addressing the merits of the defendant’s appeal, we note that it is the burden of the

defendant, as the appellant, to provide a sufficiently complete record of the proceedings in the trial

court to allow for meaningful appellate review. Foutch v. O’Bryant, 99 Ill. 2d 389, 392 (1984);

Lewandowski v. Jelenski, 401 Ill. App. 3d 893, 902 (2010). It is axiomatic that in the absence of a

complete record, a reviewing court will resolve all insufficiencies apparent therein against the

appellant and will presume that the order entered by the circuit court was in conformity with the

law and had a sufficient legal and factual basis. Foutch, 99 Ill. 2d at 392. Because the record here

is incomplete, as it contains no transcript from the proceedings below—including, glaringly, the

hearing on the defendant’s motion to reconsider the grant of summary judgment in favor of the

-8-
No. 1-21-0046

plaintiff—in reviewing the merits of the defendant’s claims, we will resolve all insufficiencies in

the record against him.

¶ 28 With these principles in mind, we turn to the merits of the summary judgment order.

Summary judgment is proper where “the pleadings, depositions, and admissions on file, together

with the affidavits, if any, show that there is no genuine issue as to any material fact and that the

moving party is entitled to a judgment as a matter of law.” 735 ILCS 5/2-1005 (West 2020); Bruns

v. City of Centralia, 2014 IL 116998, ¶ 12. In determining whether the plaintiff is entitled to

summary judgment, we must construe the pleadings and evidentiary material in the record in the

light most favorable to the defendant and strictly against the plaintiff. Schade v. Clausius, 2016 IL

App (1st) 143162, ¶ 17; Happel v. Wal-Mart Stores, Inc., 199 Ill. 2d 179, 186 (2002).

¶ 29 A genuine issue of material fact exists where the facts are in dispute or where reasonable

minds could draw different inferences from the undisputed facts. Morrissey v. Arlington Park

Racecourse, LLC, 404 Ill. App. 3d 711, 724 (2010); Espinoza v. Elgin, Joliet & Eastern Ry. Co.,

165 Ill. 2d 107, 114 (1995). However, “[m]ere speculation, conjecture, or guess is insufficient to

withstand summary judgment.” Sorce v. Naperville Jeep Eagle, Inc., 309 Ill. App. 3d 313, 328

(1999).

¶ 30 The plaintiff bears the initial burden of proof and may meet it either “by affirmatively

showing that some element of the case must be resolved in [its] favor or by establishing that there

is an absence of evidence to support the [defendant’s] case.” (Internal quotation marks omitted.)

Epple v. LQ Management, LLC, 2019 IL App (1st) 180853, ¶ 15. To survive its motion, however,

the plaintiff need not prove its case, but must present a factual basis that would arguably entitle it

to a judgment. Bruns, 2014 IL 116998, ¶ 12. Where the plaintiff introduces such facts, if not

contradicted, the defendant may not rely on his pleadings alone to raise issues of material fact.

-9-
No. 1-21-0046

Klitzka v. Hellios, 348 Ill. App. 3d 594, 597 (2004) (citing Hermes v. Fischer, 226 Ill. App. 3d

820, 824 (1992)).

¶ 31 Our review of the circuit court’s entry of summary judgment is de novo, and we may affirm

on any basis appearing in the record, whether or not the circuit court relied on that basis, or its

reasoning was correct. See Village of Palatine v. Palatine Associates, LLC, 2012 IL App (1st)

102707, ¶ 43; see also Ragan v. Columbia Mutual Insurance Co., 183 Ill. 2d 342, 349 (1998);

Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 102 (1992). However, a

circuit court’s decision on a motion to reconsider an order will not be disturbed absent an abuse of

discretion. Woolums v. Huss, 323 Ill. App. 3d 628, 639 (2001).

¶ 32 Because a guaranty is a contractual obligation, a breach of guaranty claim is governed by

the same principles as a breach of contract claim. See Riley Acquisitions, Inc. v. Drexler, 408 Ill.

App. 3d 397, 402-03 (2011). To recover for a breach of contract, the plaintiff must establish (1) the

existence of a valid and enforceable contract, (2) performance by the plaintiff, (3) breach of

contract by the defendant, and (4) resultant injury to the plaintiff. Zirp-Burnham, LLC v. E. Terrell

Associates, Inc., 356 Ill. App. 3d 590, 600 (2005).

¶ 33 In the present case, on appeal, the defendant contends that summary judgment was

improper because the plaintiff failed to establish that it was the holder of the guaranty, i.e., that

there was a valid and enforceable contract between itself and the defendant. In addition, the

defendant argues that even if the plaintiff is the holder of the guaranty, there remain genuine issues

of material fact as to the scope of the defendant’s liability under that contract.

¶ 34 In this respect, the defendant first points out, just as he did below, that it is undisputed that

neither the October 1, 2010, note, nor the two allonges reference, let alone expressly assign, the

May 1, 2008, guaranty to the plaintiff, so as to establish that the plaintiff is the owner of the

- 10 -
No. 1-21-0046

guaranty. Moreover, even if the plaintiff could somehow show that it is the holder of the guaranty,

that contract nowhere guarantees the October 1, 2010, note. Rather, as the defendant points out,

the guaranty defines the guaranteed “note,” as

“the promissory note dated May 1, 2008, in the original principal amount of $200,000.00

from [Klaucens] to [FMB], together with all renewals of, extensions of, modifications of,

refinancings of, consolidations of, and substitutions for the promissory note of agreement.”

Because the October 1, 2010, note, upon which the plaintiff’s entire complaint relies, does not

provide that it is a renewal, extension, modification, refinancing, consolidation, or substitution for

the May 1, 2008, note, the defendant contends that his guaranty is limited solely to the May 1,

2008, note. In the alternative, he asserts that, at the very least, viewing this evidence in the light

most favorable to him, we must find that there remains a genuine issue of material fact as to the

scope of his liability under the guaranty.

¶ 35 The plaintiff, on the other hand, responds that the defendant’s arguments are irrelevant

because the circuit court properly found that the plain language of the guaranty establishes that

this is a “continuing” guaranty, which obligates the defendant to all future debts arising from the

original May 1, 2008, note. In support, the plaintiff cites to the subsection of the guaranty that

provides:

“THIS IS A ‘CONTINUING GUARANTY’ UNDER WHICH THE GUARANTOR

AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT,

PERFORMANCE AND SATISFACTION OF THE GUARANTOR’S SHARE OF THE

INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER

ARISING OR ACQUIRED, ON A CONTINUING BASIS. ACCORDINGLY, ANY

PAYMENTS MADE ON THE IDEBTEDNESS WILL NOT DISCHARGE OR

- 11 -
No. 1-21-0046

DIMINISH GUARANTOR’S OBLIGATIONS AND LIABILITY UNDER THE

GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS ***.”

The plaintiff contends that this language clearly imposes upon the defendant the obligation for his

“share of” Klaucens’ “indebtedness,” both presently existing and “hereinafter arising or acquired,

on a continuing basis.” The plaintiff argues that because the defendant admitted to having executed

the May 1, 2018, guaranty and did not deny that the October 1, 2010, note arose from the May 1,

2018, note, the plaintiff was entitled to summary judgment.

¶ 36 For the following reasons, we agree with the plaintiff and find that because the dispositive

issue in this appeal is whether the guaranty is a “continuing” one, the circuit court properly held

that summary judgment was proper in favor of the plaintiff.

¶ 37 A “ ‘continuing guaranty is a contract pursuant to which a person agrees to be a secondary

obligor for all future obligations of the principal obligor to the obligee.’ ” TH Davidson & Co.,

Inc. v. Eidola Concrete, LLC, 2012 IL App (3d) 110641, ¶ 11 (quoting Restatement (Third) of

Suretyship and Guaranty § 16 (1996)). Continuing guaranties of future obligations are valid,

binding, and have a long history in Illinois. See Mamerow v. National Lead Co., 206 Ill. 626

(1903).

¶ 38 Because guaranties, like all other contracts, are construed according to general contract

principles, “[w]hether a guaranty is a continuing one will depend on the language of the contract,

interpreted according to the intention of the parties as manifested by their writings.” 20 Ill. L. and

Prac. Guaranty § 15 (2022 Update); see McLean County Bank v. Brokaw, 119 Ill. 2d 405, 412

(1988); Blackhawk Hotel Associates v. Kaufman, 85 Ill. 2d 59, 64 (1981) (citing Restatement of

Security § 88 (1941)); Restatement (Third) of Suretyship and Guaranty § 14 (1996) (“[t]he

standards that apply to interpretation of contracts in general apply to interpretation of contracts

- 12 -
No. 1-21-0046

creating secondary obligations”). Where a guaranty’s language is unequivocal in its terms, it must

be interpreted as written. Bank of Naperville v. Holz, 86 Ill. App. 3d 533, 537 (1980). “Where by

the terms of the written guaranty it appears that the parties look to a future course of dealing or a

succession of credits it is generally considered a continuing guaranty.” Scovill Manufacturing Co.

v. Cassidy, 275 Ill. 462, 467 (1916); Weger v. Robinson Nash Motor Co., 340 Ill. 81, 92 (1930);

see CCP Ltd. Partnership v. First Source Financial, Inc., 368 Ill. App. 3d 476, 483 (2006).

¶ 39 In the present case, a review of the guaranty contract unequivocally establishes that the

parties contemplated a future course of dealing. As the plaintiff correctly points out, the guaranty,

in all capital letters, contains a section under the heading “CONTINUING GUARANTY,” which

explicitly provides that the defendant (as the guarantor) will remain responsible for his share of

Klaucens’ indebtedness “now existing or hereinafter arising or acquired, on a continuing basis.”

(Emphasis added.) In addition, this provision states that any payments made on the indebtedness

shall not discharge or diminish the defendant’s obligations for any “remaining and succeeding

indebtedness.” (Emphasis added.)

¶ 40 What is more, the guaranty contract provides no limitation on the duration of the guaranty.

Specifically, the contract states that unless the defendant provides FMB with a written notice of

revocation, there is no limitation on the duration of the guaranty until all the indebtedness “incurred

or contracted” has been paid off in full. Moreover, under the heading “Guarantor’s Authorization

to Lender,” the defendant expressly authorizes FMB, “without notice or demand” and “without

lessening” the defendant’s liability under the guaranty, inter alia, from time to time to “make one

or more additional secured or unsecured loans *** or otherwise to extend additional credit” to

Klaucens.

¶ 41 Under this language, there can be no doubt that the parties contemplated a future course of

- 13 -
No. 1-21-0046

dealings and that the May 1, 2008, contract was for a continuing guaranty. See e.g., Harris Bank

Argo v. Midpack Corp., 151 Ill. App. 3d 293, 295-296 (1986) (holding that a guarantor was liable

on a promissory note, notwithstanding his claim that the guaranty applied to a previous note,

because the guaranty stated that it was a continuing one which covered past, present, and future

debts).

¶ 42 Accordingly, contrary to the defendant’s position, the fact that the plaintiff failed to attach

the May 1, 2008, promissory note to its complaint is irrelevant. The October 1, 2010, note is proof

of Klaucens’ indebtedness and an obligation “hereinafter arising” under the guaranty. The October

1, 2010, note is a future obligation between the original parties referenced in the guaranty, for

which, under the continuing guaranty, the defendant is liable.

¶ 43 The defendant nonetheless asserts that the plaintiff should be prohibited from enforcing the

guaranty because it was not a party to the guaranty contract but, rather, claims to be the holder of

the guaranty by way of assignment. In this respect, the defendant again points out that there was

no assignment of the guaranty because neither allonge mentions, let alone expressly assigns the

guaranty to the plaintiff. For the following reasons, we disagree.

¶ 44 The defendant’s argument is essentially one of standing, i.e., that because the plaintiff does

not own the guaranty, it lacks standing to enforce it. However, lack of standing is an affirmative

defense that must be pleaded and proven by the defendant, rather than the plaintiff. U.S. Bank

National Ass’n v. Sauer, 392 Ill. App. 3d 942, 946 (2009); Wexler v. Wirtz Corp., 211 Ill. 2d 18,

22 (2004). The defendant here fails to meet his burden of pleading and proving this affirmative

defense, as he fails to offer any evidence to show that the plaintiff is not the holder of the guaranty.

¶ 45 Nor could he. It is axiomatic that a debtor lacks standing to contest the transfer of the debt

pursuant to an endorsement or assignment, unless the debtor himself is a party to the transfer

- 14 -
No. 1-21-0046

document. Bank of America National Ass’n v. Bassman FBT, L.L.C., 2012 IL App (2d) 110729,

¶ 15. The defendant here was not a party to the transfer document and therefore has no standing to

challenge the transfer of the guaranty to the plaintiff. Moreover, a review of the guaranty contract

language reveals that the guaranty itself explicitly prohibits any defense to the guaranty’s

enforcement. Under the subsection “Guarantor’s Waivers,” the guaranty specifically provides,

among other things, that the defendant waives “any and all rights or defenses *** including ***

any defenses given to guarantors at law or in equity other than actual payment and performance of

the indebtedness.”

¶ 46 Moreover, contrary to the defendant’s position, no explicit assignment of the guaranty was

necessary for the plaintiff to enforce the October 1, 2010, note. Instead, as the circuit court properly

found, it was sufficient for the plaintiff to show that it was the holder of the note. In coming to this

decision, and absent any precedent to the contrary, we find section 13 of the Restatement (Third)

of Suretyship and Guaranty, to be instructive. Comment f to section 13 provides in pertinent part:

“Secondary obligation follows underlying obligation. A secondary obligation, like a

security interest, has value only as an adjunct to an underlying obligation. It can usually be

assumed that a person assigning an underlying obligation intends to assign along with it

any secondary obligation supporting it. Thus, unless there is agreement to the contrary or

assignment is prohibited *** assignment of the underlying obligation also assigns the

secondary obligation.” (Emphasis added.) Restatement (Third) of Suretyship and Guaranty

§ 13, cmt. f (1996).

¶ 47 Here, the guaranty contract provides no agreement prohibiting assignment. Rather, under

the contract, the defendant explicitly authorizes FMB from time to time to “assign or transfer” the

guaranty. In addition, the contract clearly states that the guaranty “shall be binding upon and inure

- 15 -
No. 1-21-0046

to the benefit of the parties, their successors and assigns.” Under this record, we are compelled to

conclude that when the October 1, 2010, note (i.e., the underlying obligation) was assigned to the

plaintiff, the guaranty (i.e., the secondary obligation) was assigned as well. As such, we hold that

summary judgment in favor of the plaintiff was proper.

¶ 48 For these same reasons, we reject the defendant’s invitation to reverse the circuit court’s

order denying his motion to reconsider the grant of summary judgment in favor of the plaintiff. In

doing so, we note that without a transcript of the proceedings from the hearing on this motion, we

cannot know what arguments, aside from those in the pleadings, were made by the parties or what

new evidence, if any, was brought to the attention of the circuit court. We also cannot know the

reasons why the circuit court decided to deny the plaintiff’s motion to reconsider. As such, we

must presume that the court’s decision was in in conformity with the law and had a sufficient legal

and factual basis. Foutch, 99 Ill. 2d at 392.

¶ 49 III. CONCLUSION

¶ 50 For the aforementioned reasons, we affirm the judgment of the circuit court.

¶ 51 Affirmed.

- 16 -
No. 1-21-0046

Amos Financial, LLC v. Szydlowski, 2022 IL App (1st) 210046

Decision Under Review: Appeal from the Circuit Court of Cook County, No. 2018-L-
011035; the Hon. Jerry A. Esrig, Judge, presiding.

Attorneys Kevin S. Besetzny, of Besetzny Law P.C., of Chicago, for
for appellant.
Appellant:

Attorneys Noah Weininger, of Weininger Law Firm LLC, of Chicago, for
for appellee.
Appellee:

- 17 -