Law Offices of David Clough P.C.
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Available for matters in Cook, Dupage, and Will Counties
Established in 2001
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June 2015
Did We Make the Correct Ruling? You Be the Judge

One of the cool things I get to do in my profession, when asked by the court, is preside over selected mediations and arbitrations. It does not pay as well as private practice, but the sense of happiness and accomplishment when helping people settle their disputes in a cost-efficient and timely manner makes up for the lack of monetary remuneration. I had one such opportunity a few weeks ago. The facts are as follows:


A bank foreclosed on a homeowner in the Chicago area known as "little village" about two years ago. It was a fairly easy foreclosure from what was relayed to me. The homeowner did not raise any defenses to the foreclosure, and a judicial sale of the property back to the bank concluded the litigation.


Problems for the homeowner began about one year ago. He started receiving violation notices from the City of Chicago stating that the grass and weeds at his former house were unsightly. Since he did not own the house anymore, he forwarded these violation notices and letters to the bank who now owned the property.  


The bank initially ignored his letters. Every month the former homeowner would get another citation about the grass and weeds. He went to City Hall to explain that he no longer owned the property. The clerk looked up his property records, and showed him that the bank never recorded their repossession of the property. The mortgage and deed still showed him as the legal property owner.

The Former Homeowner Fights Back

The former homeowner then went to the Chicago Department of Administrative Hearings and presented his case to the Administrative Law Officer. He showed the ALO the foreclosure notice, the judicial sale, and every other piece of paper one could imagine regarding his foreclosure, and the fact that he has not owned the property for over two years. The ALO didn't buy his story! He even called the bank during the hearing to corroborate the homeowner's story. The bank told the ALO they knew nothing about the property or the violations. Based on the bank statements, the ALO upheld the homeowner's conviction and calculated fines plus penalties and interest to be over $40,000.


A few months ago, the bank, on a routine inspection of this property, saw someone living in the house. Knowing that the house was supposed to be vacant, the bank knocked on the door and demanded to know who was living there and who allowed them entrance. The people living in the house said the ex-homeowner signed a rental lease with them, and showed it to the bank employee. 


Once the bank found out that someone was living in the house, they once again sued the ex-homeowner saying he had no right to rent out a place he didn't own.  


The court by this time was disinclined to hear anything more about this foreclosure proceeding, and requested it be adjudicated by me and my colleagues. The parties agreed, and a hearing was held. All the sordid facts were presented by the parties. The bank asked for punitive damages for the ex-homeowner allowing people to live in the house, and the ex-homeowner asked that the bank be made to indemnify him (to pay) for the fines, penalties and interest related to poor upkeep of the property. 

At the end of their cases, in chief, we asked two simple questions:


1)  How could the agent of the bank not notice the deplorable condition of the front yard yet spot the people living in the house?

2)  Can you show the panel the questionable lease signed by the ex-homeowner, along with his driver's license?


The bank could not make a cogent argument as to how their agent could ignore the condition of the front yard yet notice people living in the house. In fact, the bank specifically stated that they had made monthly, routine checks on that house for the past two years. And the lease? The signature purported to be the ex-homeowner did not match the signature on his driver's license. It was clear that that was a forgery, and the people living in the house were clearly squatters.


Based on the testimony by the bank and the ex-homeowner, we made our recommendation to the judge that any award should go to the ex-homeowner and the bank should pay the City for fines on the property.


What do you think? Did we make the correct ruling?


As always, I hope you find our e-newsletter helpful and interesting. If you or a family member or colleague needs assistance with a legal matter, please call or email me.
Law Offices of David Clough P.C. | 312-849-3000 | [email protected] |
55 West Monroe, Suite 3950, Chicago, IL 60603