Wells Fargo Bank, N.A. v. McCluskey
2013 IL 115469
Ill.2013Background
- Katie McCluskey executed a $330,186 promissory note secured by a mortgage on her home, Wells Fargo held the mortgage, and default occurred prompting foreclosure under the Foreclosure Law.
- McCluskey was served in 2010, did not answer, and a default judgment of foreclosure was entered with a redemption period ending February 20, 2011.
- On February 24, 2011, McCluskey moved to stay the sale and vacate the default judgment; the parties settled a postponement for 75 days to pursue loan modification.
- Wells Fargo was the successful bidder at the judicial sale on May 12, 2011 for $235,985.69; McCluskey later moved to vacate the default judgment and set aside the sale under Section 2-1301(e).
- McCluskey alleged meritorious defenses (Rule 191-compliant affidavit and standing/possession issues) in her 2-1301(e) motion filed May 26, 2011, two weeks after the sale.
- Circuit court denied the motion, found waiver because of prior withdrawal of the motion and agreement to postpone sale; it also confirmed the sale.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 2-1301(e) or Foreclosure Law governs post-sale relief | McCluskey argues 2-1301(e) applies even after sale to vacate the default and the sale's underlying judgment. | Wells Fargo contends 15-1508(b) Foreclosure Law controls after a motion to confirm the sale is filed. | Foreclosure Law governs after a motion to confirm the sale is filed. |
| Whether a borrower mayvacate a default after sale under 2-1301(e) prior to confirmation | McCluskey seeks relief under 2-1301(e) before sale confirmation, asserting due process and meritorious defenses. | Wells Fargo relies on precedence that 2-1301(e) is inconsistent with sale-confirmation procedures. | Prior to confirmation, 2-1301(e) may apply; after confirmation, not. |
| Effect of post-sale timing on vacating judgment and sale | Even after sale, if not yet confirmed, vacating under 2-1301(e) remains possible. | Once confirmation processes begin under 15-1508(b), relief is limited to specified grounds and justice-not-done standards. | After a motion to confirm is filed, relief is limited to 15-1508(b) grounds; 2-1301(e) relief cannot undermine sale. |
Key Cases Cited
- Mortgage Elec. Registration Sys., Inc. v. Barnes, 406 Ill. App. 3d 1 (2010) (Foreclosure Law controls when inconsistent with Code after sale motion)
- Merchants Bank v. Roberts, 292 Ill. App. 3d 925 (1997) (Foreclosure Law interplay with 2-1301(e) posture)
- Household Bank, FSB v. Lewis, 229 Ill. 2d 173 (2008) (stability in judicial sales; discretion under 15-1508(b))
- Fleet Mortgage Corp. v. Deale, 287 Ill. App. 3d 385 (1997) (equitable relief where lender's error affected redemption rights)
- Commercial Credit Loans, Inc. v. Espinoza, 293 Ill. App. 3d 923 (1997) (equitable relief where lender's conduct impeded redemption)
- Bayview Loan Servicing, LLC v. 2010 Real Estate Foreclosure, LLC, 2013 IL App (1st) 120711 (2013) (intervenor did not show justice not done where error stemmed from own negligence)
- Nationwide Advantage Mortgage Co. v. Ortiz, 2012 IL App (1st) 112755 (2012) (standing/pleading defenses timing post-sale motion)
- Deutsche Bank Nat’l Tr. Co. v. Snick, 2011 IL App (3d) 100436 (2011) (standing and timeliness in post-sale defenses)