U.S. Bank Trust National Association v. Lopez
2017 IL App (2d) 160967
| Ill. App. Ct. | 2017Background
- U.S. Bank Trust, as owner trustee for Queen’s Park Oval Asset Holding Trust, filed a mortgage foreclosure complaint on March 11, 2014, attaching the promissory note and mortgage.
- The note attached to the original complaint bore two indorsements: from the original lender to Countrywide Bank, FSB, and from Countrywide to the Secretary of Housing and Urban Development (HUD); it did not show an indorsement to plaintiff.
- Defendants pleaded as an affirmative defense that plaintiff lacked standing because the note was indorsed to HUD, not to plaintiff, and also alleged violations of Illinois Supreme Court Rule 113 and 24 C.F.R. § 203.604.
- Plaintiff later filed an amended complaint that added an undated allonge purporting to indorse the note from HUD to the trust for which plaintiff was trustee and alleged it was a nonholder in possession with the rights of a holder.
- The trial court struck defendants’ affirmative defenses under section 2-619.1, granted plaintiff summary judgment, entered a judgment of foreclosure and sale, and confirmed the sale; defendants appealed.
- The appellate court reversed, holding plaintiff lacked standing at the time the original complaint was filed because the original note was indorsed to HUD and the assignment/indorsement to plaintiff occurred after filing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to bring foreclosure | Plaintiff was a nonholder in possession with rights of a holder and the assignment of the mortgage established capacity to sue | Plaintiff lacked standing when suit was filed because the note was indorsed to HUD, not plaintiff; the allonge/assignment came after filing | Plaintiff lacked standing at filing; dismissal affirmed on that ground |
| Effect of mortgage assignment without note transfer | Assignment of mortgage (Jan 16, 2014) gave plaintiff rights as holder | An assignment of the mortgage alone, without assignment/indorsement of the debt/note, confers no holder rights | Assignment of mortgage alone did not cure lack of standing without assignment/indorsement of the note |
| Sufficiency of plaintiff’s affidavit/evidence of possession | Firm attorney affidavit and imaged note show plaintiff possessed original note before filing | Affidavit and imaged records insufficient to rebut documentary evidence showing indorsement occurred after filing | Court found such attestations did not overcome prima facie showing defendant made that plaintiff lacked standing |
| Rule 113/24 C.F.R. § 203.604 defenses | Plaintiff implicitly argued procedural defects were not jurisdictional or fatal | Defendants argued Rule 113 and HUD servicing rules required dismissal | Court did not reach or resolve these issues because lack of standing disposed of the case |
Key Cases Cited
- King v. First Capital Financial Services Corp., 215 Ill. 2d 1 (Illinois Supreme Court) (standard for 2-615 motion)
- Wexler v. Wirtz Corp., 211 Ill. 2d 18 (Illinois Supreme Court) (standing requires real interest at filing)
- Illinois Graphics Co. v. Nickum, 159 Ill. 2d 469 (Illinois Supreme Court) (standard for summary judgment review and 2-619 matters)
- Lebron v. Gottlieb Memorial Hospital, 237 Ill. 2d 217 (Illinois Supreme Court) (burden on party asserting lack of standing)
- Elvin v. Wuchetich, 326 Ill. 285 (Illinois Supreme Court) (assignment of mortgage without note does not transfer debt)
- Bristol v. Wells Fargo Bank, N.A., 137 So. 3d 1130 (Fla. Dist. Ct. App.) (same principle regarding mortgage assignment without note)