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Davis v. G.N. Mortgage Corp.

    Brief Fact Summary.

    The Davise's (Plaintiff) sued G.N. (defendant), and others, for breach of contract claiming that Patricia (defendant), from the title insurance company gave them documents at the closing containing 2-yearpre-payment penalty. Later, G.N. sold the Davises’ mortgage to Countrywide (defendant), which informed that pre-payment penalty is 5 years. The district court granted defendants’ motion for summary judgment. Plaintiff appealed.

    Synopsis of Rule of Law.

    In Illinois, a party to a reasonable, unambiguous, and fully-integrated signed contract charging fraud must show by clear and convincing evidence the presence of (1) a false explanation of a material fact; (2) the litigant's knowledge that the statement was false; (3) that the respondent put forth the statement to induce offended party to act; and (4) the offended party depended on respondent's false statement.

    Facts.

    Illinois residents Thomas and Cathy Davis (plaintiff) documented suit in federal court against G.N. Home loan Corporation (G.N.) (defendant), and others, for breach of agreement identified with a mortgage contract the Davises had gone into with G.N. at the loan closing, the Davises asserted Patricia Bogdanovich (defendant), an agent of the title insurance agency, furnished them with two piles of documents accepted to be indistinguishable and containing a two-year prepayment penalty. The Davises signed one set of documents and held an unsigned set for their records. From that point, G.N. sold the Davises' mortgage to Countrywide Home Loans, Inc. (Countrywide) (defendant), which educated the Davises that a five-year prepayment penalty period applied to their mortgage, not a two-year time frame. The district court granted defendants' motion for summary judgment. The Davises appealed.

    Issue.

    In Illinois, should a party to a reasonable, unambiguous, and fully-integrated signed contract charging fraud must show by clear and convincing evidence the presence of (1) a false explanation of a material fact; (2) the litigant's knowledge that the statement was false; (3) that the respondent put forth the statement to induce offended party to act; and (4) the offended party depended on respondent's false statement?

    Held.

    Yes. In Illinois, a party to a reasonable, unambiguous, and fully-integrated signed contract charging fraud must show by clear and convincing evidence the presence of (1) a false explanation of a material fact; (2) the litigant's knowledge that the statement was false; (3) that the respondent put forth the statement to induce offended party to act; and (4) the offended party depended on respondent's false statement.

    Dissent.

    N/A

    Concurrence.

    N/A

    Discussion.

    In Illinois, a reasonable and unambiguous signed contract is presumed to contain the majority of the material things and terms the parties planned and may not be adjusted by parol evidence. See Air Safety, Inc. v. Educators Realty Corp., 706 N.E.2d 882 (Ill.1999). Here, the mortgage agreement is fully-integrated in nature and makes a lawful commitment between the Davises and G.N. also, from that point, Countrywide. Besides, the Davises unmistakably signed the addendum accommodating the five-year prepayment penalty period. All things considered, the Davises guarantee that Bogdanovich committed fraud by expressing that there was a two-year prepayment penalty period rather than a five-year time span. In Illinois, a party to a reasonable, unambiguous, and fully-integrated signed contract charging fraud must show by clear and convincing evidence the presence of (1) a false explanation of a material fact; (2) the litigant's knowledge that the statement was false; (3) that the respondent put forth the statement to induce offended party to act; and (4) the offended party depended on respondent's false statement. Capiccioni v. Brennan Naperville, Inc., 791 N.E.2d 553, 558 (Ill.App.Ct.2003). Unlike Davis' breach of agreement claim, an assertion of common law fraud in Illinois might be demonstrated using parol evidence. Nonetheless, the Davises just can't adequately demonstrate that they depended on G. N’s. purported representations that a two-year prepayment penalty applied particularly when the Davises had a conspicuous chance to read the documents before they signed them. The judgment of the district court is affirmed.


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