US Bank v. Kosterman
39 N.E.3d 245
Ill. App. Ct.2015Background
- In 2006 the Kostermans executed a mortgage and promissory note; payments later defaulted and U.S. Bank, as trustee for BAFC 2007‑2 Trust, filed to foreclose in October 2011.
- Defendants answered and pleaded two affirmative defenses: lack of standing and lack of capacity to sue; the trial court struck those defenses with prejudice.
- Two weeks after the defenses were stricken, plaintiff moved for summary judgment supported by an affidavit from Carolyn Mobley that referenced records but did not attach or certify them as required by Ill. S. Ct. R. 191(a).
- Defendants filed Rule 191(b) affidavits asserting they needed the records to respond and sought to depose Mobley; plaintiff eventually faxed an uncertified 11‑page loan history and refused to produce Mobley for deposition.
- The trial court granted summary judgment, entered foreclosure and possession orders, and later struck defendants’ outstanding discovery requests; the appellate majority reversed and remanded, finding procedural and evidentiary errors.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether lack of standing is an affirmative defense | Standing challenge is a basis for dismissal, not an affirmative defense | Lack of standing is an affirmative defense that must be pleaded and preserved | Court: Lack of standing is an affirmative defense; trial court erred in striking it |
| Whether Mobley’s affidavit met Rule 191(a) and supported summary judgment | Mobley’s attestations and the later‑provided loan history suffice; defendants had opportunity to respond | Affidavit failed to attach/certify records relied on; defendants were prejudiced and denied meaningful discovery | Court: Plaintiff failed to produce/certify the records and refused deposition; defendants deprived of meaningful opportunity to rebut; summary judgment improper |
| Whether striking discovery and quashing Mobley’s deposition after judgment was proper | Postjudgment discovery was unnecessary; defendants had business records and time to respond | Striking discovery prevented defendants from testing plaintiff’s proof and standing | Court: Striking discovery without allowing meaningful probing of standing/evidence was error; defendants entitled to discovery on standing and Mobley’s affidavit |
| Whether the judgment of foreclosure and sale and confirmation of sale should stand | Plaintiff contends evidence supported foreclosure and sale confirmation | Defendants contend they were denied chance to present defenses and rebut evidence | Court: Reverse and remand for further proceedings; trial court abused process by summary judgment by ambush |
Key Cases Cited
- Greer v. Illinois Housing Development Authority, 122 Ill. 2d 462 (Ill. 1988) (holding challenge to standing is an affirmative defense)
- Wells Fargo Bank, N.A. v. McCluskey, 2013 IL 115469 (Ill. 2013) (framework for vacating sale when lender prevented borrower from raising meritorious defenses)
- Bank of America, N.A. v. Ebro Foods, Inc., 409 Ill. App. 3d 704 (Ill. App. 2011) (foreign corporation conducting interstate commerce not required to obtain Illinois certificate of authority)