CitiMortgage, Inc. v. Sharlow
2014 IL App (3d) 130107
| Ill. App. Ct. | 2014Background
- Sherrie Sharlow defaulted on a mortgage; plaintiff (CitiMortgage, assignee) obtained a foreclosure judgment (Feb 25, 2010) listing total indebtedness and a Rule 304(a) finding.
- Redemption period expired; sheriff’s sale occurred Aug 25, 2010; plaintiff/HUD purchased property for $219,624.17; sheriff’s report showed $218,436.69 disbursed to plaintiff and the confirmation order (Oct 21, 2010) stated no surplus or deficiency and contained a Rule 304(a) finding.
- About 22 months after confirmation, Sharlow filed a 735 ILCS 5/2-1401 petition claiming she discovered a >$10,000 surplus (tax notice) and sought modification to receive the surplus.
- Plaintiff opposed, asserting no surplus existed because $9,240.21 was postjudgment interest and $1,006.55 were postjudgment costs/advances to which it was entitled.
- Trial court denied the 2-1401 petition after reviewing sheriff’s files; appellate court affirmed, concluding plaintiff was entitled to postjudgment interest and reimbursement for postjudgment costs/advances.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 735 ILCS 5/15-1509(c) barred Sharlow’s claim after deed recorded | 15-1509(c) bars post-sale challenges once title transferred | Forfeited in trial court; alternately, statute bars title challenges but not contest to proceeds | Forfeiture; and on merits, statute does not bar a claim limited to proceeds, so not applied to bar petition |
| Whether due diligence was required / satisfied for 2-1401 | Sharlow failed to show due diligence; petition untimely | Petition is in nature of bill of review so due diligence not required; or she acted promptly after tax notice | Court agreed due diligence not required for bill-of-review type petition; even if required, Sharlow met it |
| Whether plaintiff entitled to postjudgment interest from judgment date to sale | Entitled to 9% statutory postjudgment interest under 735 ILCS 5/2-1303 because foreclosure judgment was final & appealable (Rule 304(a)) | Postjudgment interest not allowable until it’s determined whether collateral satisfied debt; sale produced surplus so no unsatisfied judgment | Held plaintiff entitled to postjudgment interest: Rule 304(a) made foreclosure judgment final, so 2-1303 applies and interest accrues from judgment until sale |
| Whether plaintiff could recover postjudgment costs/advances without detailed evidence at confirmation | Entitled to reimbursement for postjudgment fees/costs/advances listed in complaint and approved in sheriff’s report and confirmation order | Recovery improper absent itemized evidence at confirmation; surplus remains unexplained | Held reimbursement proper: Mortgage Foreclosure Law permits approval of postjudgment fees/costs if claimed in proceedings and confirmation approved disbursement |
Key Cases Cited
- People v. Vincent, 226 Ill.2d 1 (standard of review for 2-1401 denials)
- In re Marriage of Verdung, 126 Ill.2d 542 (foreclosure judgment generally not final absent Rule 304(a))
- Standard Bank & Trust Co. v. Callaghan, 215 Ill. App.3d 76 (historical rejection of statutory postjudgment interest under prior mortgage law)
- First Bank & Trust Co. of O’Fallon v. King, 311 Ill. App.3d 1053 (debtor’s interest limited to proceeds; 15-1509(c) does not bar proceeds claim)
- Carson v. Rebhan, 294 Ill. App. 180 (interest treatment in foreclosure context)
- JP Morgan Chase Bank v. Fankhauser, 383 Ill. App.3d 254 (order confirming sale is final and establishes distribution)