Wells Fargo Bank, N.A. v. Maka
72 N.E.3d 765
| Ill. App. Ct. | 2017Background
- In 2002 Jan Maka executed a $274,000 residential mortgage with Alliance Mortgage Co.; the mortgage later was assigned to Wells Fargo, which sued to foreclose in 2013 for default beginning August 2012.
- The circuit court granted Wells Fargo summary judgment and entered a judgment of foreclosure and sale in February 2015; Maka did not assert a License Act claim until after judgment.
- Maka moved under section 2-1301(e) to vacate the foreclosure, arguing the originating lender (Alliance) was unlicensed under the Residential Mortgage License Act of 1987 (License Act), which, he asserted per Dina, rendered the mortgage void.
- The circuit court denied the motion (treating it as a motion to reconsider), confirmed the sale to the purchaser, and later denied Maka’s motion to reconsider that denial; Maka appealed.
- During the pendency of the case the General Assembly amended section 1-3(e) of the License Act (Public Act 99-113, effective July 23, 2015) to state that mortgages shall not be invalid solely because of a licensing violation and declared the amendment declarative of existing law.
- The appellate court reviewed the legal question de novo and affirmed the circuit court, concluding Dina is no longer good law and that the amendment clarifies the License Act never allowed voiding mortgages as a private remedy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a violation of the License Act renders a mortgage void | Wells Fargo: License Act violations do not void mortgages; remedies lie with regulator | Maka: Under Dina, an unlicensed lender’s mortgage is void and unenforceable | Court: Mortgage is not void for License Act violation; amendment clarifies existing law and Dina is not controlling |
| Whether the 2015 amendment to section 1-3(e) applies | Wells Fargo: Amendment is declarative of existing law and applies to clarify that mortgages remain valid | Maka: Amendment cannot be applied retroactively to divest property rights (due process) | Court: Amendment is clarifying, intended to reflect prior law, and applies; constitutional due-process claim forfeited for failure to raise below |
| Whether the circuit court erred in treating the motion as a motion to reconsider | Wells Fargo: No reversible error; the claim is a legal question properly resolved on appeal | Maka: Court mischaracterized and abused discretion, but substantive claim remains | Court: Procedural label did not alter review; primary issue is legal and reviewed de novo; no reversible error |
| Whether Maka preserved constitutional due-process challenge | Wells Fargo: Argument was not raised below and is forfeited | Maka: Challenges retroactive application as unconstitutional | Court: Forfeited—issue not raised in trial court, so appellate court will not reach merits |
Key Cases Cited
- Chatham Foot Specialists, P.C. v. Health Care Serv. Corp., 216 Ill. 2d 366 (Ill. 2005) (contracts by unlicensed entities unenforceable only where statute enacted to protect public health/safety and indicates voiding was intended)
- K. Miller Constr. Co. v. McGinnis, 238 Ill. 2d 284 (Ill. 2010) (legislative amendment may be considered declarative of prior law; factors for distinguishing clarifying vs. substantive change)
- JP Morgan Chase Bank v. Fankhauser, 383 Ill. App. 3d 254 (Ill. App. Ct. 2008) (legal questions in postjudgment motions reviewed de novo)
- Puss N Boots, Inc. v. Mayor’s License Comm’n, 232 Ill. App. 3d 984 (Ill. App. Ct. 1992) (legislature’s prompt amendment after judicial interpretation negates presumption the amendment changed the law)