Olive Portfolio Alpha, LLC v. 116 West Hubbard Street, LLC
2017 IL App (1st) 1160357
| Ill. App. Ct. | 2017Background
- Olive Portfolio Alpha, LLC (plaintiff), assignee of the mortgage note, filed foreclosure against 116 West Hubbard Street, LLC (defendant). Plaintiff acquired the 2012 amended note via two recorded allonges.
- Defendant defaulted; plaintiff sought summary judgment, obtained a foreclosure judgment, conducted a judicial sale (credit bid $6,000,000), and moved to confirm the sale and seek a deficiency.
- Defendant raised affirmative defenses including (1) plaintiff lacked standing as an unregistered foreign LLC transacting business in Illinois and (2) plaintiff was not a valid holder because the second allonge was not “affixed” to the note. Defendant also sought Rule 191(b) discovery about plaintiff’s servicer (Sabal) and the chain of custody of loan documents.
- The trial court granted plaintiff’s summary judgment, denied defendant’s Rule 191(b) discovery motion and extension, confirmed the sale, and allowed defendant’s counsel to withdraw (giving the defendant 21 days to obtain new counsel).
- On appeal defendant argued the court abused its discretion by denying discovery and an extension to respond to summary judgment, erred on the allonge/holder question, and improperly granted withdrawal and sale confirmation without protecting the 21-day transition period.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Rule 191(b) discovery | Discovery unnecessary; issues were legal and documents were before the court | Needed targeted discovery about servicer relationship and chain-of-custody to oppose summary judgment | Denied — affidavits failed Rule 191(b) specifics; trial court didn’t abuse discretion |
| 2. Standing (foreign LLC transacting business) | Plaintiff not required to show standing; defendant bears burden to prove lack of standing | Plaintiff transacts business via servicer (Sabal) and thus must be registered to sue | Denied — defendant forfeited authority and failed to meet burden to show lack of standing |
| 3. Holder/allonge affixation (UCC 3-204) | Allonge was affixed (paper-clipped); physical originals were presented to court | Allonge not properly affixed; paper clip insufficient so plaintiff not holder | Held for plaintiff — “affixed” includes nonpermanent attachment such as paper clip; no further discovery required |
| 4. Counsel withdrawal and sale confirmation (Rule 13) | Motion to confirm sale filed before withdrawal motion; court complied with Rule 13 and Foreclosure Law | Court should have delayed confirmation to give 21-day transition and avoid prejudice | Denied — even if sequencing erred, defendant showed no prejudice and §15-1508(b) provides limited bases to vacate sale, none alleged |
Key Cases Cited
- Ragan v. Columbia Mutual Insurance Co., 183 Ill. 2d 342 (summary judgment standard and de novo review)
- Dawdy v. Union Pacific R.R. Co., 207 Ill. 2d 167 (abuse of discretion standard for discovery rulings)
- Alvarez v. Pappas, 229 Ill. 2d 217 (statutory construction; plain meaning rule)
- Brucker v. Mercola, 227 Ill. 2d 502 (statutory interpretation rules)
- Wells Fargo Bank, N.A. v. McCluskey, 2013 IL 115469 (court’s limited grounds to vacate/decline confirmation of foreclosure sale)
- First Federal Savings & Loan Ass’n of Chicago v. Chicago Title & Trust Co., 155 Ill. App. 3d 664 (foreclosure plaintiff need not produce original note beyond attaching copy)
- Giannoble v. P&M Heating & Air Conditioning, Inc., 233 Ill. App. 3d 1051 (Rule 191(b) compliance requirements)
- Crichton v. Golden Rule Insurance Co., 358 Ill. App. 3d 1137 (deficiencies in affidavits under Rule 191(b) )
- In re Marriage of Miller, 273 Ill. App. 3d 64 (Rule 13 transition period principles)