First Midwest Bank v. Cobo
124 N.E.3d 926
Ill.2019Background
- In 2006 Cobo and Rule executed a promissory note secured by a mortgage; they defaulted on July 1, 2011.
- Waukegan Savings & Loan filed a foreclosure complaint in 2011 seeking foreclosure and expressly requesting a personal deficiency judgment based on the note; First Midwest later acquired the loan.
- First Midwest voluntarily dismissed the 2011 foreclosure (April 2, 2013), then filed a breach-of-note suit April 16, 2013 (voluntarily dismissed April 3, 2015).
- First Midwest filed a new breach-of-note action July 30, 2015 seeking recovery on the same default and principal balance; defendants moved to dismiss under Illinois’s single-refiling rule.
- The circuit court granted summary judgment for First Midwest; the appellate court reversed and dismissed. The Illinois Supreme Court affirmed the appellate court and dismissed the suit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a foreclosure complaint that requests a deficiency judgment and a later breach-of-note action are the same cause of action for the single-refiling rule | First Midwest: foreclosure (quasi in rem) is different from breach of note (in personam); therefore breach suit was a different cause of action | Cobo/Rule: foreclosure complaint sought a deficiency under the same note and default, so later breach actions are refilings barred by the single-refiling rule | Where foreclosure complaint specifically sought a deficiency judgment on the same note and default, a later breach-of-note suit asserts the same cause of action and is barred |
| Proper test to determine identity of causes of action for single-refiling rule | First Midwest: labels/title matter; foreclosure form required certain facts, so those facts shouldn’t convert foreclosure into note claim | Defendants: use transactional (res judicata) test to assess identity of cause of action regardless of labels | Court adopts the transactional test (River Park) to determine identity of cause of action for the single-refiling rule |
| Effect of using Foreclosure Law form language ("personal judgment for deficiency, if sought") | First Midwest: form compels pleading of note-related facts; using those form statements shouldn’t bar later note suits or be treated as seeking a deficiency | Defendants: inclusion of the deficiency request (even form language) put note-based relief at issue | Court: reproducing the form language that requests a personal deficiency judgment constitutes seeking that remedy; defendants were alerted to a potential note claim and cannot later refile twice more |
| Whether single-refiling rule requires prior final adjudication on the merits | First Midwest: Coleman distinguishable because that case involved a final adjudication (res judicata) | Defendants: single-refiling rule applies to voluntary dismissals and does not require final adjudication | Court: single-refiling rule is distinct from res judicata and does not require prior final adjudication; prior voluntary dismissals can trigger the rule |
Key Cases Cited
- Flesner v. Youngs Dev. Co., 145 Ill.2d 252 (Ill. 1991) (interpreting §13‑217 to allow only one refiling)
- River Park, Inc. v. City of Highland Park, 184 Ill.2d 290 (Ill. 1998) (adopting transactional test for identity of cause of action)
- ABN AMRO Mortg. Group, Inc. v. McGahan, 237 Ill.2d 526 (Ill. 2010) (distinguishing in rem foreclosure and in personam note actions)
- LP XXVI, LLC v. Goldstein, 349 Ill. App.3d 237 (Ill. App. 2004) (res judicata analysis where separate instruments were treated as distinct transactions)
- Farmer City State Bank v. Champaign Nat’l Bank, 138 Ill. App.3d 847 (Ill. App. 1985) (lender may pursue mortgage and note remedies consecutively or concurrently)