{
  "id": 252728,
  "name": "CSM INSURANCE BUILDING, LTD., et al, Plaintiffs-Appellants, v. ANS-VAR AMERICA INSURANCE COMPANY, Defendant-Appellee",
  "name_abbreviation": "CSM Insurance Building, Ltd. v. Ans-Var America Insurance",
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    "parties": [
      "CSM INSURANCE BUILDING, LTD., et al, Plaintiffs-Appellants, v. ANS-VAR AMERICA INSURANCE COMPANY, Defendant-Appellee."
    ],
    "opinions": [
      {
        "text": "JUSTICE WOLFSON\ndelivered the opinion of the court:\nThe parties to this appeal have spent three years making motions and cross-motions in the trial court. Now we are asked to decide whether the plaintiff had standing to bring the lawsuit ,in the first place. The trial judge said it did not. We reverse that finding and remand this cause with directions to get on with it.\nBACKGROUND\nLa Salle National Bank (La Salle) was the owner of the legal and equitable title to real estate located at 2775 West Algonquin Road in Rolling Meadows, Illinois. CSM Insurance Building, Ltd. (CSM), an II-linois general partnership, was the sole beneficiary of the land trust and is the plaintiff in this case.\nOn June 21, 1979, La Salle, as lessor, entered into a 10-year lease agreement with the Central Security Mutual Insurance Company, Ansvar\u2019s predecessor in interest.\nAbout one month later, on July 22, the Great-West Life Assurance Company (Great-West) loaned CSM\u2019s trust $1,125,000. The loan was evidenced by a note and secured by a mortgage of the premises, an assignment of rents, and an assignment of leases.\nAt the end of 10 years, on September 1, 1989, the lease expired and Ansvar moved out. In the following month, it became clear that CSM could not meet its mortgage obligation to Great-West. CSM was in default.\nOn February 23, 1990, Great-West filed a complaint for foreclosure of mortgage, specifying defaults of October 10, November 10, and December 10, 1989. The prayer for relief requested either possession of the property or the appointment of a receiver.\nWhile that foreclosure action was pending, CSM filed its complaint against Ansvar on May 8, 1990. At that point, no judgment of foreclosure had been entered, no sheriff\u2019s sale had been conducted, and no deed had been issued to Great-West. Great-West did not ask for or obtain a deficiency judgment against CSM.\nIn its first complaint against Ansvar, CSM alleged that Ansvar failed to maintain the property properly, ultimately leaving the premises in such a deteriorated, unmaintained, and damaged condition that the property could not be relet or sold. That behavior, said CSM, violated the lease.\nPROCEEDINGS IN TRIAL COURT\nTo reflect the flavor of proceedings in the trial court, we summarize the events that followed the filing of CSM\u2019s complaint:\n07/13/90 Ansvar filed a motion to strike or dismiss the complaint pursuant to section 2 \u2014 615 of the Code of Civil Procedure (111. Rev. Stat. 1989, ch. 110, par. 2 \u2014 615) based upon improperly computed damages.\n07/19/90 Judgment of foreclosure entered in the Great-West lawsuit.\n09/12/90 Sheriff\u2019s sale of premises to Great-West. The premises were purchased for $530,000 by Great-West, creating a deficiency of $680,106.40. No deficiency judgment was entered or requested.\n09/13/90 Sheriff\u2019s report of sale and distribution to Great-West approved and confirmed.\n10/29/90 Ansvar\u2019s motion to dismiss complaint in this case was granted.\n12/21/90 CSM filed amended complaint alleging, alternatively, breach of lease (count I), negligence (count II) and intentional mistreatment of property (count III).\n1/18/91 Ansvar filed a section 2 \u2014 619 motion to dismiss count I of the complaint, arguing: as CSM no longer owned premises, it no longer had a basis for recovery on diminution of value; as CSM was not a party to the written lease agreement and there was no allegation that the lease had been assigned to CSM, no privity of contract existed between CSM and defendant. Ansvar filed a section 2 \u2014 615 motion to dismiss counts II and III arguing: Count II\u2014 Only difference between I and II is that rather than allege that defendant breached the lease, plaintiffs state that defendant breach a duty of care and maintenance arising out of the lease. Ansvar argued that pursuant to Moorman Manufacturing Co. v. National Truck Co. (1982), 91 Ill. 2d 69, 435 N.E.2d 443, and Redarowicz v. Ohlendorf (1982), 92 Ill. 2d 171, 441 N.E.2d 324, economic loss is not recoverable in a negligence action. With regard to count III Ansvar argued complaint did not allege facts, merely stated legal conclusions. In addition plaintiffs sought to recover economic loss in a tort action.\n07/03/91 Trial court granted a section 2 \u2014 615 motion to dismiss counts II and III. Section 2 \u2014 619 motion to dismiss count I denied. Plaintiffs given leave to file amended counts II and III.\n07/29/91 CSM filed motion to reconsider alleging that the trial court misapplied the Moorman doctrine.\n08/19/91 Ansvar filed a motion to reconsider denial of motion to dismiss, alleging that although the trial court denied the motion to dismiss with respect to the damage allegation, it did not address the allegation that CSM was not a proper party due to lack of privity.\n08/28/91 Ansvar filed its answer to count I and affirmative defenses.\n09/04/91 CSM moved to strike answer and affirmative defenses.\n03/06/92 Trial court denied motions to reconsider. Plaintiffs motion to strike granted in part and denied in part. Defendant granted 28 days to file an amended answer and affirmative defenses. Count I still alive.\n04/06/92 Ansvar filed amended answer and affirmative defenses.\n04/27/92 CSM filed a motion to strike the amended affirmative defenses.\n10/30/92 Ansvar filed amended affirmative defenses.\n11/10/92 CSM filed a motion to strike the affirmative defenses.\n11/13/92 CSM ordered to pay discovery sanctions.\n01/06/93 Ansvar brought a motion to dismiss pursuant to section 2 \u2014 619(2) (735 ILCS 5/2 \u2014 619(2) (West 1992)). Ansvar argued that the proper party plaintiff was Great-West and that the pending case is legally deficient because plaintiffs are not a party in interest, having made a full and complete assignment of all their rights under the lease with the defendant.\n04/28/93 Trial court granted CSM\u2019s motion to strike defendant\u2019s \u201cSecond Amended Third Affirmative Defense.\u201d\n05/13/93 Trial court granted defendant\u2019s section 2 \u2014 619 motion to dismiss. Trial court denied CSM\u2019s motion to reconsider and vacated the order of November 13, 1992 (imposition of sanctions).\n06/09/93 CSM filed motion to reconsider and vacate the order of dismissal entered May 13, 1993.\n09/27/93 Plaintiffs\u2019 motion to reconsider denied.\nPlaintiff appeals from the trial court\u2019s dismissal of its lawsuit on standing grounds. It also appeals the trial court\u2019s imposition of sanctions for discovery violations.\nDECISION\nTHE TRIAL COURT\u2019S ORDER DISMISSING THE LAWSUIT In the trial court, and here, Ansvar argues that in three separate documents \u2014 the mortgage, the assignment of rents, and the assignment of lease \u2014 CSM assigned its entire right, title, and interest in the leased property. That means, says Ansvar, Great-West, not CSM, was the real party in interest at the time of the lawsuit. Further, says Ansvar, even if CSM was the real party in interest at the time its lawsuit was filed, it was divested of its rights on entry of the decree of foreclosure and conveyance of the. premises to Great-West.\nCSM responds that its standing was determined and fixed as of the time it filed its lawsuit on May 8, 1990. The mortgage and the assignments were collateral assignments. That means, says CSM, there was no intent to transfer any interest after the underlying lease expired. That is, once the lease expired, the collateral assignment expired. That would be September 1, 1989, 10 months before Great-West obtained its foreclosure judgment.\nAn examination of the mortgage and assignment documents supports GSM\u2019s position. The mortgage provides that the assignment of rents and leases is \"to further secure the indebtedness***.\u201d\nThe assignment of lease provides:\n\"This assignment is given as additional security for the payment of the note of the Assignor ***,\u201d\nand:\n\"Although it is the intention of the parties that this instrument shall be a present assignment, it is expressly understood and agreed, anything herein contained to the contrary notwithstanding, that the Assignee shall not exercise the rights or powers herein conferred upon it until a default shall occur under the terms and provisions of this assignment or of the note or mortgage***,\u201d\nand:\n\"This assignment is intended to be supplementary to and not in substitution for or in of any assignment of rents to secure said indebtedness contained in the mortgage or any other document.\u201d This court construed almost identical language in M. Ecker & Co. v. La Salle National Bank (1994), 268 Ill. App. 3d 874, 880, 645 N.E.2d 335.\nThis kind of assignment, said the court, is not absolute. It is a grant of a lien as \"additional security for the mortgage loan.\u201d\nApplying the holding of M. Ecker & Co., we find that the mortgage and assignments in this case did not convey any ownership interest to Great-West. They granted an equitable lien as additional security for the mortgage. That means CSM remained the owner of the rents and profits from the property until Great-West obtained its foreclosure judgment. Since the lease with Ansvar expired before there was any default on the Great-West loan, the collateral assignment of the lease also expired. The default and foreclosure did not deprive CSM of standing to bring its lawsuit.\nThere is another reason why GSM\u2019s default and the judgment of foreclosure had no impact on GSM\u2019s standing to bring this lawsuit. The rights of the parties are determined as of the date the lawsuit is filed. (Bleck v. Cosgrove (1961), 32 Ill. App. 2d 267, 177 N.E.2d 647.) When this lawsuit was filed, there had been no foreclosure judgment, no sheriff\u2019s sale, no deed issued to Great-West. CSM had standing to sue Ansvar on May 8, 1990. Subsequent events could not erase it.\nIf Ansvar thought Great-West was a necessary or desirable party to this case, it could have made a motion for substitution of parties under section 2 \u2014 1008 (735 ILCS 5/2 \u2014 1008 (West 1992)). Certainly, Great-West showed no interest in being part of this lawsuit. In its own case Great-West did not obtain a deficiency judgment against CSM.\nThe trial court erred when it dismissed GSM\u2019s lawsuit for lack of standing. We have not stopped to consider the effect of the section 2 \u2014 619 motion being filed and heard while Ansvar\u2019s answer and affirmative defenses were pending. That does not mean we condone the practice.\nDISCOVERY SANCTIONS\nThe trial court awarded $1,008 in attorney fees and costs as sanctions against plaintiff for discovery delays. The sanctions grew out of CSM\u2019s late production of documents and answers to interrogatories.\nAnsvar had filed its document request and interrogatories on October 10, 1991. Most of the discovery was outstanding on March 18, 1992, when Ansvar filed a motion to compel responses. The trial court granted plaintiffs until April 27 to comply. On May 8, 1992, the trial court ordered CSM to comply by May 29, adding the words: \"Final extension.\u201d On May 29 CSM answered some of the interrogatories, objected to others, and objected to some requests for production of documents. Some documents were delivered on June 10, 1992. Documents were produced in lieu of answers to certain interrogatories, but plaintiff did not specify which documents responded to which interrogatories.\nOn June 22, 1992, the trial court overruled plaintiff\u2019s objections to interrogatories as untimely. Sanctions were awarded on November 13, 1992.\nWe have not set out all the motions and responses engendered by the sparring over discovery production. It is enough to say the plaintiff caused unnecessary delays in the litigation because of its half-hearted responses to discovery requests. The trial judge was especially and justifiably annoyed by the plaintiff\u2019s long delay in raising objections to the defendant\u2019s discovery requests.\nWe do not disturb the trial judge\u2019s finding that she never intended to extend the time for making objections when she gave the plaintiff time to comply with Ansvar\u2019s discovery requests.\nThe trial judge has broad discretion in these matters. (Servbest Foods, Inc. v. Emessee Industries, Inc. (1980), 82 Ill. App. 3d 662, 403 N.E.2d 1.) Requiring the payment of attorney fees caused by a party\u2019s delay is a reasonable discovery sanction. Rush v. Leader Industries, Inc. (1988), 176 Ill. App. 3d 803, 531 N.E.2d 863.\nIn this case, the defendant filed an affidavit that supported the amount of money awarded. The fact that Ansvar\u2019s original motion for sanctions asked for half that amount did not limit the exercise of the trial judge\u2019s discretion.\nWe affirm the award of attorney fees and costs in the amount of $1,008.\nCONCLUSION\nThe dismissal of the plaintiff\u2019s complaint for lack of standing is reversed and the cause is remanded to the trial court for further proceedings. The award of attorney fees and costs to the defendant for plaintiff\u2019s violation of discovery rules is affirmed.\nAffirmed in part; reversed and remanded in part.\nBUCKLEY and BRADEN, JJ\u201e concur.",
        "type": "majority",
        "author": "JUSTICE WOLFSON"
      }
    ],
    "attorneys": [
      "Joe R. Milburn and John A. Clark, both of Kanter & Mattenson, Ltd., of Chicago, for appellants.",
      "William Biederman, of Biederman & O\u2019Keefe, Ltd., of Chicago, for appel-lee."
    ],
    "corrections": "",
    "head_matter": "CSM INSURANCE BUILDING, LTD., et al, Plaintiffs-Appellants, v. ANS-VAR AMERICA INSURANCE COMPANY, Defendant-Appellee.\nFirst District (1st Division)\nNo. 1 \u2014 93\u20143591\nOpinion filed April 24, 1995.\nJoe R. Milburn and John A. Clark, both of Kanter & Mattenson, Ltd., of Chicago, for appellants.\nWilliam Biederman, of Biederman & O\u2019Keefe, Ltd., of Chicago, for appel-lee."
  },
  "file_name": "0319-01",
  "first_page_order": 337,
  "last_page_order": 343
}