CitiMortgage, Inc. v. San Juan
976 N.E.2d 563
Ill. App. Ct.2012Background
- CitiMortgage foreclosed on a cooperative unit at 5000 East End Ave, Unit 6D, Hyde Park; sale confirmed and judgment of foreclosure entered.
- Building Corporation asserted priority under a Proprietary Lease and Recognition Agreement, claiming past-due assessments precluded CitiMortgage distributions.
- Building Corporation’s past-due assessments totaled $18,934.79 as of Oct 15, 2009, per its manager’s affidavit.
- Judgment of foreclosure allowed CitiMortgage to pay taxes and assessments during redemption; sale occurred May 21, 2010 with CitiMortgage the high bidder at $34,126.
- In Sept 2010, the court amended the judgment to give Building Corporation a lien superior to CitiMortgage’s, affecting the earlier sale order.
- CitiMortgage alleged newly discovered evidence—$50,000 in assessments and condominium conversion costs—that it could have avoided by not pursuing foreclosure.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Must a section 2-1401 petition show a meritorious defense? | CitiMortgage argues meritorious defense not required when vacating a judgment in its favor. | Building Corporation contends Smith v. Airoom requires meritorious defense to vacate any judgment. | Meritorious defense required; no exception for judgment in CitiMortgage's favor. |
| Do newly discovered facts about assessments and conversion constitute a meritorious defense? | CitiMortgage asserts $50,000 in arrears and condominium conversion would change outcome. | Building Corporation asserts information was already disclosed and the facts do not negate the judgment. | No meritorious defense; evidence insufficient to vacate. |
| Did amended judgment determining priority invalidate or affect sale order? | CitiMortgage argues amended judgment conflicts with sale-confirmation order. | Building Corporation contends amendment appropriately addressed priority and did not render sale invalid. | Amended judgment valid; did not require vacating sale order. |
Key Cases Cited
- Household Bank, FSB v. Lewis, 229 Ill. 2d 173 (2008) (distinguishes when 2-1401 relief may be sought for vacating judgments)
- Smith v. Airoom, Inc., 114 Ill. 2d 209 (1986) (set forth three elements to obtain 2-1401 relief)
- Blutcher v. EHS Trinity Hospital, 321 Ill. App. 3d 131 (2001) (meritorious defense established by new facts affecting prior judgment)
- Department of Conservation v. Cipriani, 202 Ill. App. 3d 986 (1990) (newly discovered evidence distinguished from post-judgment disclosures)
- Sunderland v. Portes, 324 Ill. App. 3d 105 (2001) (new facts may satisfy 2-1401 where underlying interests protected)
- Physicians Insurance Exchange v. Jennings, 316 Ill. App. 3d 443 (2000) (misunderstandings of procedural steps do not alone justify relief)