2020 IL App (1st) 190454
Ill. App. Ct.2020Background
- In 2006 Khatuna Gagua executed a first mortgage (approx. $1,516,000) and a second mortgage on a Northbrook residence; note and mortgage were assigned and plaintiff is U.S. Bank N.A., as trustee for the First Franklin 2007-FF2 trust.
- Gagua defaulted in 2009; U.S. Bank filed foreclosure in 2014. VMO, LLC was identified as current owner; U.S. Bank sought foreclosure and to bar junior interests including mortgages asserted by Joseph Varan and Michael Fiandaca.
- Varan (served 2014) repeatedly argued pro se that the named plaintiff/trust did not exist, that U.S. Bank lacked standing, and raised other defenses; the court struck multiple amended affirmative defenses under section 2-615 and section 2-619(d).
- Varan also pursued discovery (including a Rule 191(b) request to depose plaintiff’s records custodian); the court denied additional discovery as unnecessary or deficient and stayed the deposition pending summary-judgment rulings.
- The court denied Varan’s motion to strike U.S. Bank’s Rule 113 affidavit, granted U.S. Bank summary judgment and a foreclosure judgment, the property was sold and sale confirmed; Varan appealed. Fiandaca appealed nonfinal orders denying leave to file a counterclaim/response.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of Varan’s amended affirmative defenses | U.S. Bank: defenses fail as conclusory, barred by prior 2-619 ruling, and legally insufficient | Varan: plaintiff/trust does not exist; U.S. Bank lacked standing; First Franklin didn’t exist; indebtedness paid; statutes bar suit | Court struck all six amended defenses — they were conclusory, unsupported by specific facts, legally inadequate, and some were barred by prior adjudication |
| Discovery (compel documents; deposit records custodian under Rule 191) | U.S. Bank: discovery already tendered; Rule 191 affidavit deficient; additional discovery unnecessary | Varan: discovery was material to assert/cure defenses and needed before summary judgment | Court denied motions to compel and to depose under Rule 191(b): defenses had been stricken (moot or irrelevant) and Varan’s Rule 191(b) showing was deficient; no manifest abuse of discretion |
| Rule 113 affidavit and summary judgment | U.S. Bank: affidavit substantially complied with Rule 113/191; established amounts due; summary judgment appropriate | Varan: affidavit defective (format, missing specifics, inconsistencies) and should be stricken | Court found the affidavit in substantial compliance with Rule 113/191; motion to strike denied; summary judgment granted because no counteraffidavit contradicted the affidavit |
| Fiandaca’s appealability | N/A (U.S. Bank did not dispute jurisdiction) | Fiandaca appealed orders denying leave to file counterclaim and response to summary-judgment motion | Appeal dismissed for lack of jurisdiction because orders appealed were nonfinal and Fiandaca’s notice did not identify the final, appealable foreclosure-sale confirmation order |
Key Cases Cited
- Mortgage Electronic Registration Systems, Inc. v. Barnes, 406 Ill. App. 3d 1 (Ill. App. 2010) (trustee may maintain foreclosure action; holder of note may foreclose)
- Federal Nat'l Mortgage Ass'n v. Kuipers, 314 Ill. App. 3d 631 (Ill. App. 2000) (assignment of the note carries an equitable assignment of the mortgage)
- Moore v. Lewis, 51 Ill. App. 3d 388 (Ill. App. 1977) (mortgage is accessory to the debt; transfer of debt carries mortgage security)
- In re Estate of Rubloff, 268 Ill. App. 3d 1070 (Ill. App. 1994) (a trustee represents beneficiaries in actions to which trustee is party)
- Jackson v. Graham, 323 Ill. App. 3d 766 (Ill. App. 2001) (standard for reviewing motions to strike affidavits tied to summary judgment)
- Madden v. F.H. Paschen/S.N. Nielson, Inc., 395 Ill. App. 3d 362 (Ill. App. 2009) (affidavit sufficiency under Rule 191 analyzed from the document as a whole)
- General Motors Corp. v. Pappas, 242 Ill. 2d 163 (Ill. 2011) (notice of appeal must specify judgments or orders appealed from; jurisdictional requirement)
- EMC Mortgage Corp. v. Kemp, 2012 IL 113419 (Ill. 2012) (order confirming judicial sale is the final, appealable order in a foreclosure)