Aurora Bank FSB v. Perry, 30 N.E.3d 1166

Aurora Bank filed a foreclosure complaint against John and Evelyn Perry claiming default on a mortgage for property in Aurora, IL, and alleged it had capacity as mortgagee by assignment; it attached the mortgage, a corporate assignment, and the note (endorsed in blank).
The Perrys denied Aurora’s allegation of capacity in their answer and asserted fraud as an affirmative defense; they later tried to argue lack of standing in opposition to Aurora’s summary judgment motion.
Aurora moved for summary judgment and foreclosure; the Perrys’ new counsel sought leave to supplement their response to assert lack of standing, which the trial court denied as a waived affirmative defense and as prejudicial late supplementation.
The trial court granted summary judgment for Aurora, a foreclosure sale occurred, and later Aurora moved to substitute Nationstar as plaintiff based on an assignment dated November 1, 2012; the court confirmed the sale and allowed substitution.
On appeal the Perrys argued the court erroneously treated capacity as a standing issue, that Aurora failed to prove capacity, that the affidavit/evidence were insufficient, and that substitution/assignment after judgment abated the action.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Aurora had legal capacity to sue as mortgagee	Aurora was mortgagee/assignee and bearer of the note; attached note and affidavit suffice	Perrys said Aurora lacked capacity/standing and waived proof; attached evidence insufficient	Court: Perrys waived standing defense; Aurora proved capacity as bearer of the note and by affidavit; summary judgment affirmed
Whether denial of capacity in answer preserved standing defense	Aurora: plaintiff need not plead capacity; defense must be timely raised	Perrys: denial in answer required Aurora to prove capacity and preserved defense	Court: denial of capacity is not an adequate assertion of the affirmative defense of lack of standing; Perrys waived it by not pleading or moving timely
Sufficiency of Aurora’s affidavit/business records under Rule 191	Affidavit showed affiant’s role, personal knowledge, review of records, and attached documents; met Rule 191	Perrys: affidavit was conclusory, lacked personal knowledge and foundation for records	Court: affidavit met Rule 191 standards; provided prima facie proof that Aurora was bearer and holder of note
Effect of post-complaint assignment/substitution on judgment and sale	Change in interest does not abate action; substitution allowed under 2-1008	Perrys: substitution after judgment/assignment undermines Aurora’s capacity during entire suit	Court: Aurora had capacity when suit began; substitution after judgment did not void judgment or sale

In re Estate of Wellman, 174 Ill.2d 335 (Ill. 1996) (defines standing as real interest in action and outcome)
Glisson v. City of Marion, 188 Ill.2d 211 (Ill. 1999) (lack of standing is an affirmative defense that can be forfeited)
Smith v. Waukegan Park District, 231 Ill.2d 111 (Ill. 2008) (denial in an answer does not automatically constitute an affirmative defense)
Tankersley v. Peabody Coal Co., 31 Ill.2d 496 (Ill. 1964) (generally remand where trial court decided case on misapprehension of law)
Pedrick v. Peoria & Eastern R.R. Co., 37 Ill.2d 494 (Ill. 1967) (standard for summary judgment entitlement)
Brockmeyer v. Duncan, 18 Ill.2d 502 (Ill. 1960) (claims must be adequately alleged and proved for relief)
Mortgage Electronic Registration Systems, Inc. v. Barnes, 406 Ill. App.3d 1 (Ill. App. 2010) (mortgage assignee has standing to bring foreclosure action)
Landeros v. Equity Property & Development, 321 Ill. App.3d 57 (Ill. App. 2001) (affidavit foundations for business records discussed)
Wilson v. Kinney, 14 Ill. 27 (Ill. 1852) (material fact of capacity must be proved whether admitted or denied)