American Chartered Bank v. USMDS, Inc.
987 N.E.2d 818
Ill. App. Ct.2013Background
- ACB issued mortgage and note to USMDS in Feb 2006; USMDS defaulted Sept 2010; ACB filed foreclosure in Feb 2011 naming USMDS, Stillwater HOA, and unknown/nonrecord claimants; service attempted on USMDS by Chicago address via registered agent; Stillwater properly served; USMDS unable to be personally served; process on Secretary of State and publication pursued; default judgment entered Oct 2011; USMDS moved to vacate (Feb 2012) alleging improper service; trial court denied; sheriff’s sale to ACB; USMDS appealed and argued lack of due inquiry for substitute service; court reversed and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether substitute service required due inquiry. | USMDS argues due inquiry required for substitute service. | ACB failed meaningful due inquiry; service invalid. | Yes; improper without due inquiry. |
| Whether service on Secretary of State was proper. | ACB complied with 5/5.25; notice mailed. | Due diligence lacking; could have served agent/owner. | Not dispositive; due inquiry required for substitute service. |
| Whether evidentiary hearing was required to determine due inquiry. | No hearing needed; affidavits suffice. | Evidence needed to assess diligence. | Evidentiary hearing required; record insufficient. |
| Waiver of jurisdiction objections. | USMDS waived by filing to vacate before challenging jurisdiction. | USMDS preserved challenge to service. | USMDS did not waive; jurisdiction challenge preserved. |
Key Cases Cited
- GMB Financial Group, Inc. v. Marzano, 385 Ill. App. 3d 978 (Ill. App. 2008) (jurisdiction via summons or appearance; void order without jurisdiction)
- Nasolo, Equity Residential Properties Mgmt. Corp. v. Nasolo, 364 Ill. App. 3d 26 (Ill. App. 2006) (strict compliance required for substitute service; due inquiry needed)
- Dutch Farms Meats, Inc. v. Horizon Foods, Inc., 275 Ill. App. 3d 322 (Ill. App. 1995) (distinguishes service on corporate officer vs. required diligence under 5/5.25(b)(2))
- Bank of New York v. Unknown Heirs & Legatees, 369 Ill. App. 3d 472 (Ill. App. 2006) (due inquiry and due diligence required for service by publication)
- National Wrecking Co. v. Midwest Terminal Corp., 234 Ill. App. 3d 750 (Ill. App. 1992) (minimal diligence may reveal appropriate address)
- 3M Co. v. Moroney & Co., 374 Ill. App. 3d 109 (Ill. App. 2007) (distinguishes reasonable inquiry scope for service)
- Cotton, Citimortgage, Inc. v. Cotton, 2012 IL App (1st) 102438 (Ill. App. 2012) (evidentiary hearing when due inquiry contested)