2018 IL App (2d) 170082
Ill. App. Ct.2018Background
- Kathleen Gorman (decedent) held an undivided half interest in real property; her husband John executed a $750,000 mortgage apparently purporting to encumber the whole property.
- Amcore (later BMO) foreclosed on John’s loan; foreclosure complaint named both John and Kathleen, but the mortgage covered only John’s undivided half interest.
- A judicial sale occurred; disputes followed about whether only an undivided half interest or the entire property was sold. The sale was vacated and reformed to reflect sale of an undivided half interest; BMO ultimately acquired an undivided half interest.
- Meghan Gorman-Dahm (administrator of Kathleen’s estate) sued BMO and counsel alleging slander of title (based on recording a sheriff’s deed transferring entire title), abuse of process (use of foreclosure to obtain title), punitive damages, and partition.
- Defendants moved to dismiss under 735 ILCS 5/2-615 and 2-619; the trial court dismissed counts for slander of title and abuse of process (absolute litigation privilege) and dismissed the partition claim as duplicative of the pending foreclosure case. Plaintiff appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether recording a sheriff’s deed in foreclosure is protected by the absolute litigation privilege | The sheriff’s deed is not "in a legal proceeding" and privilege is inapplicable; privilege should be qualified | Recording a sheriff’s deed is part of the foreclosure litigation process (analogous to lis pendens) and is absolutely privileged | Court held the absolute litigation privilege extends to recording a sheriff’s deed in foreclosure and bars slander/abuse claims |
| Whether slander of title claim was sufficiently pleaded | Pleaded false filings and malicious conduct in seeking entire property | Even if privileged were qualified, plaintiff failed to plead malice and required elements | Court held plaintiff did not plead falsity and malice required to overcome privilege/qualified privilege rules; claim fails |
| Whether abuse of process claim was adequately pleaded | Foreclosure process was used for ulterior purpose to obtain entire title; alleged improper acts in prosecution of suit | All alleged acts were regular steps in foreclosure; underlying debt validity irrelevant to abuse claim | Court held allegations concerned authorized litigation acts and failed to plead requisite ulterior purpose/abuse elements |
| Whether partition claim must be dismissed because same cause was pending in foreclosure | Partition here is separate; BMO lacked standing in foreclosure to assert partition so dismissal improper | Same cause and parties had a pending partition claim in foreclosure; dismissal avoids duplicative litigation | Court affirmed dismissal under section 2-619(a)(3): trial court did not abuse discretion because same cause was pending in foreclosure; res judicata did not apply (prior dismissal was without prejudice) |
Key Cases Cited
- Ringier America, Inc. v. Enviro-Technics, Ltd., 284 Ill. App. 3d 1102 (1996) (extends absolute privilege to lis pendens and communications tied to litigation affecting property ownership)
- Applegate Apartments Ltd. Partnership v. Commercial Coin Laundry Systems, 276 Ill. App. 3d 433 (1995) (recording documents in foreclosure provide notice that property is involved in litigation)
- Kurczaba v. Pollock, 318 Ill. App. 3d 686 (2000) (limits litigation privilege where pleadings are not part of court record or communications go beyond litigation scope)
- Thompson v. Frank, 313 Ill. App. 3d 661 (2000) (refuses to extend litigation privilege to out-of-court communications not authorized by statute)
- Whildin v. Kovacs, 82 Ill. App. 3d 1015 (1980) (elements of slander of title require false and malicious publication causing special damages)
- McGrew v. Heinold Commodities, Inc., 147 Ill. App. 3d 104 (1986) (elements of abuse of process require ulterior purpose and improper use of process)
- Starnes v. International Harvester Co., 184 Ill. App. 3d 199 (1989) (discusses narrow class of cases where absolute privilege applies despite malice)
- Albertson v. Raboff, 295 P.2d 405 (Cal. 1956) (reasoning that communications necessary to bring an action should be privileged)