HSBC Bank USA v. Kirkland Townsend, 793 F.3d 771

Background

In 2005 Townsend borrowed $136,000, mortgaging a Chicago condominium; he defaulted in 2011. HSBC acquired the note and mortgage and sued for foreclosure in federal court (diversity jurisdiction).
The district court granted HSBC summary judgment, entered a judgment of foreclosure and order of judicial sale, quantified the debt at $143,569.65, and declared the judgment "final" under Rule 54(b) while retaining jurisdiction to enforce or vacate the judgment on reinstatement or redemption.
The judgment contemplated a judicial sale under Illinois procedures, post-sale confirmation under 735 ILCS 5/15-1508, and possible entry of a deficiency judgment if sale proceeds were insufficient.
Townsend appealed pro se; the Seventh Circuit sua sponte raised appellate-jurisdiction questions and ordered supplemental briefing (Townsend later received counsel for the supplemental briefing).
The panel considered whether the appeal was proper under (1) 28 U.S.C. §1291 (final-judgment rule), (2) Rule 54(b), (3) 28 U.S.C. §1292(a)(1) (injunction interlocutory appeals), or (4) the Forgay doctrine for orders causing irreparable harm.

Issues

Issue	Plaintiff's Argument (Townsend)	Defendant's Argument (HSBC)	Held
Is the district court's foreclosure judgment "final" under 28 U.S.C. §1291?	The foreclosure decree is final because it settles the merits, fixes the debt, identifies the property, and orders priority — leaving only execution.	The judgment is not final because Illinois law leaves open reinstatement/redemption periods, a required judicial sale and confirmation hearing, and potential adjustment or refusal of deficiency judgment.	Held: Not final under §1291 — foreclosure + sale order leaves substantive post-judgment contingencies under Illinois law that defeat finality.
Was Rule 54(b) certification valid?	Townsend relied on district court's express Rule 54(b) certification.	HSBC relied on the certification as well.	Held: Rule 54(b) inapplicable — no separate claim remained and the record lacked an adequate "no just reason for delay" finding.
Is the order an appealable injunction under 28 U.S.C. §1292(a)(1)?	Townsend argued irreparable harm from foreclosure sale might warrant interlocutory review.	HSBC argued foreclosure decrees are not injunctions for §1292(a)(1) purposes; stays exist to protect possession.	Held: Not an injunction under §1292(a)(1); foreclosure decrees are outside that narrow interlocutory statute.
Does the Forgay doctrine permit immediate appeal because of irreparable harm?	Townsend argued potential irreparable harm from loss of home supports Forgay review.	HSBC pointed to Illinois protections (reinstatement/redemption, certificate of sale, confirmation, statutory possession periods) and availability of stays pending appeal.	Held: Forgay not satisfied — Illinois procedures and stays prevent imminent irreparable harm, so immediate appeal under Forgay is unavailable.

Key Cases Cited

Bullard v. Blue Hills Bank, 135 S. Ct. 1686 (U.S. 2015) (finality principle: typical right to appeal only from final decision)
Gelboim v. Bank of Am. Corp., 135 S. Ct. 897 (U.S. 2015) (finality construed practically; core application terminates action)
Catlin v. United States, 324 U.S. 229 (U.S. 1945) (final decision leaves nothing but execution of judgment)
Budinich v. Becton Dickinson & Co., 486 U.S. 196 (U.S. 1988) (a post-decision question does not defeat finality unless it would alter the order)
Liberty Mut. Ins. Co. v. Wetzel, 424 U.S. 737 (U.S. 1976) (lack of quantified damages can defeat finality)
Forgay v. Conrad, 47 U.S. (6 How.) 201 (U.S. 1848) (order delivering property may be immediately appealable to avoid irreparable harm)
Whiting v. Bank of the United States, 38 U.S. (13 Pet.) 6 (U.S. 1839) (historical rule treating foreclosure decree as final on the merits)
United States v. Hansen, 795 F.2d 35 (7th Cir. 1986) (foreclosure decree is not an injunction under §1292(a)(1))