Wells Fargo Bank, N.A. v. Hansen
47 N.E.3d 1185
Ill. App. Ct.2016Background
- Neil Hansen and Noelle Kiener executed a $360,000 mortgage (2007) later assigned to Wells Fargo; Hansen defaulted and Wells Fargo filed foreclosure in Dec. 2008.
- After service by publication and failure to answer, a default judgment of foreclosure was entered Sept. 3, 2009; Wells Fargo later sought and obtained a new default judgment April 19, 2013, and vacated the 2009 judgment nunc pro tunc to that date.
- Hansen appeared in July 2012, then moved (Oct.–Dec. 2013) to vacate the April 19, 2013 default judgment under 735 ILCS 5/2-1301(e), alleging Rule noncompliance, standing defects, and HAMP-related issues.
- The trial court denied Hansen’s motion to vacate (Dec. 2013); Wells Fargo proceeded to judicial sale (June 27, 2014) and the court confirmed the sale (Nov. 6, 2014) after Hansen objected, asserting HAMP violations and lender unlicensed issues.
- On appeal Hansen challenged (1) denial of his motion to vacate the default judgment and (2) the court’s confirmation of the sale, arguing HAMP noncompliance (denied modification, failure to exhaust loss mitigation) and other procedural defects.
Issues
| Issue | Plaintiff's Argument (Wells Fargo) | Defendant's Argument (Hansen) | Held |
|---|---|---|---|
| Whether trial court abused discretion in denying Hansen’s 2-1301(e) motion to vacate default judgment | Court properly exercised discretion; record insufficient to show abuse; many alleged defects caused no prejudice | Judgment should be vacated for procedural errors, Rule noncompliance, and lack of standing | Affirmed: abuse-of-discretion review; appellant failed to provide record of hearing and did not show entitlement as a matter of law, so denial stands |
| Whether post-judgment nunc pro tunc order dodged Rule 114 (loss mitigation affidavit) requirements | Nunc pro tunc vacatur related back to April 19, 2013 judgment, which predated Rule 114’s effective date | Nunc pro tunc vacatur was used to avoid Rule 114 and thus judgment is defective | Affirmed: April 19, 2013 judgment predated Rule 114, so Rule 114 did not apply; no reversible error |
| Whether Wells Fargo lacked standing at time of judgment | Standing was not timely challenged before entry of judgment; Barnes doctrine bars vacatur | Wells Fargo lacked standing to foreclose and judgment is void | Held for Wells Fargo: standing claim forfeited by failure to raise before judgment entry |
| Whether judicial sale should be set aside for HAMP violations (denied permanent mod; failure to exhaust loss mitigation) | Hansen failed to prove by preponderance that a HAMP application was pending or that servicer violated HAMP requirements; no evidence of exhausted alternatives or certification failure | Sale violated HAMP because Wells Fargo improperly denied/ revoked a HAMP modification and failed to provide required certifications | Affirmed: Hansen did not prove HAMP violations by preponderance; no basis to set aside sale |
Key Cases Cited
- Wells Fargo Bank, N.A. v. McCluskey, 2013 IL 115469 (discusses factors for evaluating 2-1301 motions)
- Aurora Loan Services, LLC v. Kmiecik, 2013 IL App (1st) 121700 (appellate review of trial court’s discretion on vacating defaults)
- Marren Builders, Inc. v. Lampert, 307 Ill. App. 3d 937 (standard for abuse of discretion)
- Foutch v. O'Bryant, 99 Ill. 2d 389 (need for complete record on appeal; presumption of correct trial court disposition)
- Mortgage Electronic Registration Systems, Inc. v. Barnes, 406 Ill. App. 3d 1 (standing forfeiture by failure to raise before judgment)
- Household Bank, FSB v. Lewis, 229 Ill. 2d 173 (standard of review for confirmation of foreclosure sale)
- Michael v. Precision Alliance Group, LLC, 2014 IL 117376 (preponderance can ‘establish’ facts)