Parkway Bank and Trust Company v. Korzen
2 N.E.3d 1052
Ill. App. Ct.2014Background
- Defendants Korzen and Zanzola owned the vacant Thomas Street lot; Parkway Bank foreclosed on the loan secured by a 2007 mortgage and assignment of rents.
- The mortgage contained a due-on-sale clause and required defendants to pay Parkway’s attorney fees and costs on trial and on appeal; defendants waived redemption rights under certain conditions.
- Foreclosure case filed August 26, 2010; defendants were served (Korzen in Chicago, Zanzola in Prairie Grove) and appeared pro se.
- Parkway moved for summary judgment; defendants failed to timely respond to requests to admit facts and disputed production of the original note.
- Circuit court granted summary judgment February 9, 2012 and foreclosure sale; sale was later confirmed with a deficiency judgment and post-foreclosure attorney fees.
- Defendants appealed pro se, raising a broad array of procedural and “land patent” defenses; the appellate court imposed sanctions under Rule 375 due to frivolous, abusive tactics.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether service of process was proper | Korzen was validly served; both defendants named and appeared; service complied with law. | Service to Zanzola but not to Korzen violated process rules; Korzen owned the property and was improperly served. | Service was sufficient; no basis to disturb judgments. |
| Whether Parkway had standing to foreclose | Copy of note attached to complaint provides prima facie ownership; plaintiff need not produce original note. | Production of original note or title is necessary to prove ownership and standing. | Production of original note not required; standing established by attested documents; error in discovery about original note not fatal. |
| Whether failure to submit Rule 191(b) affidavit and authenticity defenses precluded summary judgment | Defendants admitted allegations by not denying; Rule 191(b) affidavit not required to defeat summary judgment. | Lack of Rule 191(b) affidavit and denial of authenticity create triable issues. | Defendants admitted authenticity; Rule 191(b) not required to defeat summary judgment; issues not triable. |
| Whether discovery and postjudgment conduct warranted sanctions | Defendants engaged in frivolous, vexatious tactics, including land patent filings and subpoenas to harass. | Defendants dispute procedural rulings; discovery requests were relevant to defenses. | Sanctions imposed; appellate court awarded $5,000 fine and approved fee petition. |
| Whether the sale should be confirmed and deficiency awarded | Sale price was valid, proper notice given; deficiency judgment appropriate. | Foreclosure process tainted by discovery issues and land patent arguments; sale should not stand. | Sale confirmed; deficiency judgment upheld; postjudgment fees awarded to plaintiff. |
Key Cases Cited
- First Federal Savings & Loan Ass’n v. Chicago Title & Trust Co., 155 Ill. App. 3d 664 (Ill. App. 1987) (production of original note not required to prove indebtedness)
- Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90 (Ill. 1992) (summary judgment standards and de novo review)
- Hickey v. Illinois Central R.R. Co., 35 Ill. 2d 427 (Ill. 1966) (original title concept in property context)
- NAB Bank v. LaSalle Bank, N.A., 2013 IL App (1st) 121147 (Ill. App. 2013) (standards for judicial sale and sufficiency of proof on appeal)
- Pathway Financial v. Beach, 162 Ill. App. 3d 1036 (Ill. App. 1987) (land patent arguments in foreclosure frivolous)