2018 IL App (1st) 160871
Ill. App. Ct.2018Background
- 2006: Vincent Schoenberg executed a note and mortgage to 21st Century; MERS was mortgagee nominee. Vincent later conveyed the property into an Illinois land trust with Midwest Bank & Trust as trustee. Vincent died in December 2008.
- 2009: Deutsche Bank filed a foreclosure complaint attaching the mortgage, note, indorsements/allonge and a recorded assignment of mortgage to Deutsche Bank; the complaint was dismissed under §2-1009 with leave to reinstate within one year upon default of loss-mitigation terms.
- 2010–2014: Deutsche Bank moved to reinstate and the court granted reinstatement; the court later appointed a special representative, approved a report, and permitted Deutsche Bank to file amended complaints adding “Estate of Vincent Schoenberg” and other parties; Midwest repeatedly moved to dismiss asserting lack of jurisdiction and standing.
- 2015: Deutsche Bank moved for summary judgment; Midwest filed an answer/affirmative defenses but did not timely respond to the summary-judgment motion; the circuit court granted summary judgment, dismissed Midwest’s affirmative defenses, and entered a foreclosure judgment.
- 2016: Property sold at judicial sale to Deutsche Bank; court confirmed the sale and approved distribution. Midwest appealed, arguing lack of subject-matter and personal jurisdiction, lack of standing by Deutsche Bank, noncompliance with reinstatement order, error in granting summary judgment, and error in confirming the sale.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether court had subject-matter jurisdiction / whether special representative was required for deceased mortgagor | Deutsche Bank: Jurisdiction exists; Vincent had transferred his interest to a land trust before death so no special representative was necessary | Midwest: Mortgagor is a necessary party; failure to appoint a special representative under McGahan and Rule 113(i) deprived the court of jurisdiction | Court: Vincent was a permissive, not necessary, party because he had conveyed his interest to a land trust; statute amended §15-1501(h) retroactively permits no special rep where trust holds title; subject-matter jurisdiction exists |
| Personal jurisdiction / service on deceased mortgagor or special representative | Deutsche Bank: No special rep required; service on trust/other defendants sufficient | Midwest: No personal jurisdiction because neither Vincent nor a special representative were served | Court: Personal jurisdiction over Vincent impossible after death; lack of service on a special representative is immaterial where none was required |
| Standing / Whether Deutsche Bank was proper plaintiff | Deutsche Bank: Attached note, indorsements/allonge, and assignment to show prima facie ownership and right to foreclose | Midwest: 21st Century dissolved precluded transfers; exhibits do not prove Deutsche Bank’s ownership so judgment is void | Court: Prima facie evidence (note with blank indorsement, allonge, assignment) demonstrated Deutsche Bank’s status as holder; Midwest forfeited arguments and produced no contrary evidence; Deutsche Bank had standing |
| Compliance with 2009 reinstatement order | Deutsche Bank: Reinstatement motion and affidavit supported revival of action within court discretion | Midwest: Deutsche Bank’s motion contained false statements and failed to comply with conditions of dismissal with leave to reinstate | Court: Midwest forfeited this argument by not raising it below and failed to show an abuse of discretion in reinstatement; affirmed reinstatement |
| Summary judgment and dismissal of affirmative defenses | Deutsche Bank: No genuine issue of material fact; submitted prima facie proof | Midwest: Raised jurisdictional and standing defenses; sought to oppose summary judgment | Court: Midwest did not timely respond or show factual disputes; summary judgment and dismissal of affirmative defenses affirmed |
| Confirmation of sale | Deutsche Bank: Sale complied with Foreclosure Law; confirmation proper | Midwest: Confirmation improper because of jurisdictional defects or §15-1508(b)(iv) grounds | Court: Having resolved jurisdiction and standing, Midwest identified no statutory basis to deny confirmation; sale confirmed |
Key Cases Cited
- ABN AMRO Mortgage Group, Inc. v. McGahan, 237 Ill. 2d 526 (2010) (mortgagor is a necessary party in foreclosure; court addressed appointment of special representative where deceased mortgagor held interest at death)
- Joslyn v. Joslyn, 386 Ill. 387 (1944) (possession of bearer paper is prima facie evidence of title to a note and supports foreclosure)
- Landgraf v. USI Film Products, 511 U.S. 244 (1994) (framework for assessing retroactivity of statutes)
- Commonwealth Edison Co. v. Will County Collector, 196 Ill. 2d 27 (2001) (state-law application of Landgraf and standards for retroactive application of statutory amendments)