City of Chicago v. Federal National Mortgage Association
110 N.E.3d 1059
| Ill. App. Ct. | 2017Background
- City of Chicago filed suit under the Unsafe Property Act (65 ILCS 5/11-31-1) and local nuisance ordinance seeking demolition authority and recovery of demolition costs for 535 W. 60th St.
- JPMorgan obtained foreclosure, purchased the property, and Fannie Mae later became certificate holder after confirmation of sale; Fannie Mae owned the property June 13, 2012–April 11, 2013 and then sold it to Branton.
- The circuit court entered a demolition order on April 9, 2013 (effective May 9, 2013) against Fannie Mae; City did not demolish until Sept. 17, 2015 and recorded its demolition lien Feb. 24, 2016.
- City moved (Mar. 29, 2016) in the demolition case to “ascertain demolition and other costs” and sought a personal money judgment of $27,042 against Fannie Mae by motion; notice of the motion was sent only to Fannie Mae.
- Fannie Mae objected, arguing (i) it was not owner when demolition or lien perfection occurred, (ii) the Act does not permit personal liability by motion, and (iii) the Act requires either foreclosure of the municipal lien or a separate civil action to obtain a money judgment.
- Trial court entered a personal money judgment against Fannie Mae; appellate court reverses, holding the Act does not authorize obtaining a money judgment by motion in the in rem demolition case and that due process requires foreclosure or a separate action.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a municipality may obtain a personal money judgment for demolition costs by motion in the in rem demolition case | City: Act permits enforcement against the “owner or owners” and trial-court retention of jurisdiction allows entry of judgment by motion | Fannie Mae: Act requires either foreclosure of the demolition lien or a separate civil action; judgment by motion denies procedural protections | Reversed: Act does not authorize money judgment by motion; must foreclose lien or bring separate action |
| Whether a prior or transient owner can be held personally liable after sale without additional process | City: Owner at time of demolition order may remain liable despite later sale | Fannie Mae: Liability after sale (when not owner at demolition or lien perfection) raises due-process concerns; City dismissed other responsible parties | Court declined to decide broadly; emphasized due-process concerns and allowed challenge in foreclosure or separate suit |
| Whether the court’s Rule 304(a) finding affects appellate jurisdiction | City: relied on Rule 304(a) to support appealability | Fannie Mae: argued appeal from final judgment under Rule 301 | Court: Appealable as final judgment under Rule 301; cautioned against routine 304(a) findings when judgment is final |
| Whether municipal code provisions cited by City independently authorize money judgment without foreclosure or separate action | City: Chicago Municipal Code provisions permit entry of money judgment | Fannie Mae: Code provisions do not supply enforcement mechanism beyond Act; argument was not raised below | Court: Rejected new argument as inconsistent with Act and not raised below |
Key Cases Cited
- Nelson v. Artley, 2015 IL 118058 (standard of review for questions of law)
- Village of Lake Villa v. Stokovich, 211 Ill. 2d 106 (describes the Act as an expedited in rem proceeding requiring only limited findings)
- City of Aurora v. Meyer, 38 Ill. 2d 131 (scope of demolition proceedings)
- City of Peru v. Bernardi, 84 Ill. App. 3d 235 (reasonableness of demolition costs reserved for later enforcement proceedings)
- Passalino v. City of Zion, 237 Ill. 2d 118 (due process requires meaningful opportunity to be heard)
- People v. Edwards, 2012 IL 111711 (statutory interpretation presumes intentional inclusion/exclusion of language)
- Standard Mutual Insurance Co. v. Lay, 2013 IL 114617 (avoid rendering statutory language surplusage)