CitiMortgage, Inc. v. Sconyers
2014 IL App (1st) 130023
Ill. App. Ct.2014Background
- CitiMortgage sought to foreclose on a mortgage after defendants defaulted on a loan secured by Illinois home.
- CitiMortgage attached the original note showing a stamp Pay to the order of CitiMortgage, Inc. and an assignment of the mortgage from MERS to CitiMortgage reciting the note was assigned with the mortgage.
- Defendants challenged the validity of CitiMortgage's assignment, claiming an alteration of the payee on the note.
- CitiMortgage produced the original note in court and argued it was the holder; defendants did not depose CitiMortgage witnesses or present competing evidence.
- The trial court granted summary judgment, finding CitiMortgage had standing due to the mortgage assignment; on appeal the issue was whether an altered endorsement defeated CitiMortgage’s standing.
- The appellate court affirmed, holding CitiMortgage’s possession of the note and mortgage prima facie established standing; dissent argued genuine issue of material fact existed regarding alteration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CitiMortgage has standing to foreclose without a valid note endorsement | CitiMortgage is the holder of the note and assignee of the mortgage. | Defendants contend the endorsement is altered, undermining CitiMortgage's holding. | Yes; CitiMortgage has standing and is entitled to foreclose despite an alleged alteration. |
| Whether an altered endorsement raises a genuine issue of material fact | The original note in CitiMortgage's possession proves holder status. | The blurred stamp shows an alteration that could affect rights to enforce. | No; no genuine issue based on the record; CitiMortgage's possession and mortgage assignment control. |
| Whether circuit court erred by not holding an evidentiary hearing on alteration | Summaries show holder and mortgage assignment; no need for hearing. | A hearing was necessary to resolve alteration questions. | affirmed; no evidentiary hearing required given evidence produced. |
| What governs the burden of proof regarding alterations when the instrument shows facial alteration | Under Carpenter and related authorities, CitiMortgage's status as holder suffices. | Ruwaldt requires proof that alteration occurred under lawful circumstances; that burden shifts. | No; majority found no genuine issue; dissent disagrees and would require proof of lawful alteration. |
Key Cases Cited
- Carpenter v. Longan, 83 U.S. 271 (1872) (notes and mortgage inseparability; assignment of note carries mortgage; assignment of mortgage alone is void)
- Outboard Marine Corp. v. Liberty Mutual Ins. Co., 154 Ill. 2d 90 (1992) (summary judgment standards and evidentiary burden interplay)
- Purtill v. Hess, 111 Ill. 2d 229 (1986) (affidavits on summary judgment must present admissible facts)
- Ruwaldt v. W.C. McBride, Inc., 388 Ill. 285 (1944) (where facial alteration is evident, burden shifts to holder to prove lawful alteration)
- Wanous v. Balaco, 412 Ill. 545 (1952) (affidavits must support conclusions with admissible facts)
- Murphy v. Urso, 88 Ill.2d 444 (1981) (summary judgment evidentiary standards)