2015 IL App (1st) 133017
Ill. App. Ct.2015Background
- Emma L. Harris mortgaged a 12-unit apartment property in 2006 for $350,000; she defaulted and the bank foreclosed. A default judgment was entered in Dec. 2009 and the property sold at sheriff’s sale in Feb. 2011. A deficiency judgment and confirmation order were entered Sept. 12, 2011.
- Emma, represented successively by multiple attorneys, repeatedly alleged she was not personally served, and later claimed the loan was predatory and obtained by bank employee misrepresentations on her loan application (inflated occupancy and rents).
- Emma sought to vacate the default judgment in Sept. 2010 (denied for lack of diligence), filed two bankruptcies that were dismissed, and ultimately filed a 2-1401 petition in Dec. 2012 seeking relief from the Sept. 2011 sale-confirmation order and leave to file defenses and counterclaims.
- The purchaser for value (EDC Fund 2, LLC) acquired the property in June 2012 and substituted as plaintiff. The trial court dismissed Emma’s amended 2-1401 petition in June 2013 for lack of diligence; a rehearing motion was denied and Emma timely appealed.
- The appellate court affirmed, holding the petition was barred by foreclosure statutes and 2-1401(e) (protecting bona fide purchasers) and, alternatively, that Emma failed to show the required diligence for fact-dependent 2-1401 relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2-1401 petition could vacate the foreclosure-sale confirmation after deed and sale | Emma argued the sale confirmation could be attacked via 2-1401 because of alleged fraud/predatory lending | EDC argued foreclosure law bars post-confirmation attacks and a bona fide purchaser’s interest cannot be disturbed | Court held section 15-1509(c) and §2-1401(e) bar such relief against a purchaser for value; petition cannot undo confirmed foreclosure sale |
| Whether Emma’s 2-1401 petition was exempt from due-diligence requirements as an error-of-law (Collins-type) petition | Emma contended her petition raised errors of law apparent on the record and so need not show diligence | EDC argued the petition was fact-dependent (fraud/predatory lending) and therefore Airoom/Warren County diligence rules apply | Court held petition was fact-dependent, not a purely legal (void-judgment) claim, so Airoom/Warren County diligence requirements apply |
| Whether Emma satisfied due diligence in presenting defenses and filing the 2-1401 petition | Emma claimed she was unaware prior counsel failed to file defenses and that counsel non-cooperation excused delay | EDC argued Emma (and prior counsel) knew of defenses earlier, and Emma waited over a year after confirmation to file 2-1401 | Court held Emma failed to show due diligence in presenting defenses or in filing the petition; the court reasonably declined to relax diligence despite alleged attorney non-cooperation |
| Whether the trial court abused discretion in denying rehearing under §2-1203 | Emma argued the motion raised newly discovered evidence (receiver’s rent roll) and attorney non-cooperation | EDC argued nothing new was presented beyond prior allegations and the equities did not require relief | Court found no abuse of discretion: no new evidence or law sufficient to alter the dismissal and alternative statutory bars remained dispositive |
Key Cases Cited
- Smith v. Airoom, Inc., 114 Ill. 2d 209 (1986) (establishes fact-dependent 2-1401 requirements: meritorious defense and dual diligence showings)
- Warren County Soil & Water Conservation District v. Walters, 2015 IL 117783 (clarifies that fact-dependent 2-1401 petitions require Airoom diligence; purely legal/void-judgment petitions do not)
- People v. Vincent, 226 Ill. 2d 1 (2007) (example of a purely legal/void-judgment 2-1401 petition reviewed de novo)
- Collins v. Collins, 14 Ill. 2d 178 (1958) (describes bill-of-review-type relief for errors apparent on the record)
- Dempster Plaza State Bank v. American National Bank & Trust Co. of Chicago, 83 Ill. App. 3d 870 (1980) (earlier appellate discussion on tolling appeal time via motions to reconsider in pre-2-1401 context)
- Burnicka v. Marquette National Bank, 88 Ill. 2d 527 (1982) (motion to reconsider can toll appeal period in actions akin to section 2-1401 contexts)
- Elg v. Whittington, 119 Ill. 2d 344 (1987) (supreme court holding that Rule 303(a)(1) tolling applies to Rule 304(b)(3) appeals from 2-1401-type judgments)