Beynon Building Corp. v. National Guardian Life Insurance Co.
Appellate Court of Illinois
455 N.E.2d 246 (1983)
Beynon (plaintiff) and a mortgage company executed a note requiring 180 monthly payments of $649.60 on an $85,000 loan at 5.5% interest — but that monthly figure was mathematically inconsistent with the loan terms, and the note was later assigned to National Guardian Life Insurance (defendant). In 1965, Beynon received (but never confirmed) an updated schedule from National suggesting 200 payments, not 180, were actually needed at that rate. After Beynon made all 180 payments and sought release from the mortgage in 1979, National said it had just discovered the true correct monthly payment should have been $694.60. Beynon sued for release from the mortgage; National asserted mutual mistake and sought reformation, and Beynon argued National's defense was time-barred because National had effectively known of the error since 1965.
Whether a contract may be reformed to reflect the parties' true understanding where clear and convincing evidence establishes a mutual mistake of fact.