EMC Mortgage Corp. v. KempEMC Mortgage Corp. v. Kemp
Case Information
*1 I LLINOIS O FFICIAL R EPORTS Supreme Court
EMC Mortgage Corp. v. Kemp
,
Docket No.
Filed December 28, 2012
Held There is no appellate jurisdiction to consider challenges to nonfinal orders issued during the pendency of a foreclosure action, prior to entry of an ( Note: This syllabus order approving sale and distribution; and no supreme court rule permits constitutes no part of the appeal of such orders. the opinion of the court
but has been prepared
by the Reporter of
Decisions for the
convenience of the
reader . )
Decision Under Appeal from the Appellate Court for the Second District; heard in that court on appeal from the Circuit Court of Du Page County, the Hon. Review
Robert G. Gibson, Judge, presiding.
Judgment Appellate court judgment affirmed.
Appeal dismissed. *2 Counsel on David G. Wentz, of Brooks, Tarulis & Tibble, LLC, of Naperville, for appellant. Appeal
Edward J. Lesniak and Susan M. Horner, of Burke, Warren, MacKay & Serritella, P.C., of Chicago, for appellee.
Justices JUSTICE FREEMAN delivered the judgment of the court, with opinion.
Chief Justice Kilbride and Justices Thomas, Garman, Burke, and Theis concurred in the judgment and opinion.
Justice Karmeier dissented, with opinion.
OPINION
The issue in this case is whether appellate jurisdiction exists to consider a challenge to an order issued during the pendency of a mortgage foreclosure action. Because appellate jurisdiction does not exist, we dismiss the appeal. Background In 2005, defendant Barbara Kemp mortgaged property at 1240 Hamilton Lane in
Naperville to Maribella Mortgage, LLC, to secure payment of a note from Maribella. Maribella sold the loan to plaintiff, EMC Mortgage Corporation, in early 2006. The loan eventually fell into default, and EMC Mortgage filed, in the circuit court of Du Page County, a complaint to foreclose in July of that year. Over the course of the next two years, Kemp filed a series of counterclaims, all of which were dismissed. EMC Mortgage filed a motion for summary judgment, which was granted in April 2009. The circuit court entered a judgment of foreclosure on June 2, 2009, and EMC Mortgage scheduled a judicial sale in October. Several weeks later, Kemp unsuccessfully moved for reconsideration of the April
summary judgment order and to stay the judicial sale. The sale was later stayed by Kemp’s bankruptcy filing. The bankruptcy stay was subsequently lifted, and the sale was rescheduled to October 5, 2010. On the date the property was set for sale, Kemp filed an emergency motion to vacate judgment, erroneously invoking section 2-1401 of the Code of Civil Procedure. In this motion, Kemp argued that vacatur of the June 2009 judgment of foreclosure was proper and that once the judgment was vacated, EMC’s complaint should be dismissed pursuant to section 2-619 of the Code. Kemp also requested a stay of the sale. A hearing was held on the emergency motion on October 5, at the conclusion of which the circuit court entered one of the orders that is the subject of this appeal. In the court’s order, the court, noting that EMC Mortgage did not object to a stay, granted a 45-day stay of *3 sale. However, the court denied Kemp’s motion to vacate the June 2009 judgment of foreclosure, along with Kemp’s motion to dismiss, adding Rule 304(a) language to the order.
¶ 6 Kemp next filed a second motion to reconsider on November 4, 2012. The court denied
this motion, again adding Rule 304(a) language to its order, on November 16, 2010. ¶ 7 Kemp appealed. In her notice of appeal, Kemp sought review of the circuit court’s
October 5 order, which denied her motion to vacate, as well as the court’s November 16
order, denying her reconsideration. The appellate court dismissed the appeal for lack of
appellate jurisdiction.
all final judgments entered in the circuit court. See Ill. Const. 1970, art. VI, § 6 (providing
that appeals “from final judgments of a Circuit Court are a matter of right to the Appellate
Court”). The Constitution also grants to this court the right to “provide by rule for appeals
to the Appellate Court from other than final judgments.”
Id.
Accordingly, absent a supreme
court rule, the appellate court is without jurisdiction to review judgments, orders or decrees
which are not final.
Flores v. Dugan
,
subsequent motion to reconsider that denial. The first problem with Kemp’s appeal is that
the relief she sought under section 2-1401 is not even available to her, there being no final
and appealable order entered in this case yet. See
appealable until the trial court enters an order approving the sale and directing the
distribution.
In re Marriage of Verdung
,
foreclosure is a final order, without Rule 304(a) language added to it, the judgment is not
appealable.
Verdung
,
¶ 13 Yet another problem with Kemp’s appeal is that the orders Kemp seeks review of—the
denial of a motion to vacate based upon an inapplicable section of the Code of Civil
Procedure and the denial of its reconsideration—are neither final nor appealable. Had the
motion to vacate been properly brought under
¶ 14 Kemp concedes all of the above, but contends that the trial judge’s inclusion of Rule
304(a) language to its orders of October 5 and November 16 bestows appellate jurisdiction
on those orders. This contention is meritless. It is well settled that “the inclusion of the
special finding in the trial court’s order cannot confer appellate jurisdiction if the order is in
fact not final.”
Crane Paper Stock Co. v. Chicago & Northwestern Ry. Co.
,
¶ 15 Kemp’s final argument is that she is attempting to attack a void order and that a petition
to vacate a void order may be made at any time, in any court, regardless of finality. This contention is also meritless. Generally, a void order can be attacked at any time by a person affected by it. People v. Flowers , 208 Ill. 2d 291, 308 (2003). This legal proposition, however, by itself, does not act to confer appellate jurisdiction on a reviewing court if such jurisdiction is otherwise absent. Id. Rather, the rule allows a party the ability to always raise the issue of whether an order is void in an appeal where appellate jurisdiction exists and the case is properly before the court of review. Id. As we have pointed out, there is no supreme court rule that permits the appeal of the nonfinal orders that Kemp has appealed in this case.
¶ 16 Conclusion The appellate court correctly concluded that appellate jurisdiction is lacking in this case.
The judgment of the appellate court is therefore affirmed, and the appeal is dismissed. Appellate court judgment affirmed. Appeal dismissed. JUSTICE KARMEIER, dissenting: The issue in this case is whether the appellate court had jurisdiction to consider a Rule 304(a) appeal challenging a judgment of foreclosure and sale in residential mortgage foreclosure action. After the case was fully briefed, the appellate court concluded that jurisdiction was lacking and dismissed the homeowner’s appeal in an unpublished order pursuant to Supreme Court Rule 23 (Ill. S. Ct. R. 23 (eff. July 1, 2011)). For the following reasons, I would reverse the appellate court’s judgment and remand the cause to the appellate court for consideration of the appeal on the merits. I therefore respectfully dissent.
¶ 22 BACKGROUND Barbara Kemp purchased a home in Naperville in 2005. To finance the purchase, Kemp
took out a mortgage on the property in the amount of $863,200. A company known as Maribella Mortgage, LLC, was named as the lender. Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for Maribella, was designated as the mortgagee. The mortgage documents indicated that mortgage was given to secure repayment of an adjustable rate promissory note given by Kemp to Maribella. Correspondingly, the adjustable rate promissory note listed Maribella as the lender. When Kemp failed to make her scheduled mortgage payments, a company known as
EMC Mortgage Corporation (EMC) initiated mortgage foreclosure proceedings in the circuit court of Du Page County. The complaint was filed on July 7, 2006, and included copies of both the mortgage (designated as Exhibit A) and promissory note (designated as Exhibit B). Although the complaint alleged that EMC was the “legal holder, agent or nominee of the legal holder, of the indebtedness,” nothing in the mortgage, the promissory note, or the complaint itself explained that company’s relationship, if any, to Maribella or MERS, the entities named in the actual mortgage and loan documents. Kemp initially responded to the complaint by moving to dismiss for lack of in personam
jurisdiction. That motion was subsequently stricken, and the court granted EMC leave “to issue an alias summons nunc pro tunc .” After being granted additional time to plead, Kemp filed a pro se answer in which she expressly denied EMC’s allegation that it was the “legal holder, agent or nominee of the legal holder, of the indebtedness.” Kemp also initiated discovery. Kemp subsequently filed a pro se counterclaim challenging the inclusion of Kemp’s
husband in the mortgage documents. EMC moved to dismiss, arguing that Kemp’s counterclaim failed to set forth any facts or legal theories under which EMC could be held responsible for the wrongful conduct and damages alleged by Kemp. EMC’s motion was granted, and the court dismissed the counterclaim with leave to amend. When Kemp elected to file an amended counterclaim, EMC moved to dismiss and for
imposition of sanctions. In support of its motion, EMC submitted an affidavit from one of its assistant vice presidents, Ashley Stephenson, attesting that EMC had no involvement in the origination or funding of Kemp’s loan and that, in fact, Maribella had not assigned the subject loan to EMC until December 29, 2006, more than five months after EMC filed this foreclosure action. A copy of the written assignment was appended. Although it was not executed until January 12, 2007, the document confirmed that December 29, 2006, was when EMC, described by Stephenson as “a mortgage banking company that specializes in the acquisition, securitization, servicing and disposition of residential loans,” had first acquired Kemp’s loan from Maribella. [1]
Kemp, through her attorneys, responded to EMC’s motion to dismiss the amended counterclaim. In that response, Kemp asserted that EMC could not avoid responsibility for the wrongful acts alleged in the counterclaim on the grounds that it had no role in the loan transaction. The reason for that, Kemp contended, was that while Maribella rather than EMC extended the loan to Kemp, Maribella was acting as EMC’s agent in its dealings with Kemp and her husband. EMC replied to Kemp’s response. After taking issue with the legal sufficiency of some
of the allegations in Kemp’s amended counterclaim, EMC returned to the question of its involvement in the loan transaction. It reiterated that EMC had nothing to do with negotiating the terms of the agreement, preparing the relevant documents, or securing their execution. Because of that, it asserted, it had no culpability, in any capacity, for any of the improprieties alleged by Kemp. The circuit court granted EMC’s motion to dismiss, but once again granted Kemp leave
to replead, which she did. EMC, in turn, continued to challenge the sufficiency of Kemp’s allegations and the validity of her assertion that it should be held liable for Maribella’s actions based on principles of agency. The circuit court once again found EMC’s contentions meritorious and dismissed Kemp’s second amended counterclaim. With the counterclaim thus dispatched, EMC moved for summary judgment on its
complaint for foreclosure pursuant to section 2-1005 of the Code of Civil Procedure (
to reconsider she filed after the court entered its written order in June of 2009, challenged the
judgment for foreclosure and sale. Kemp’s attack was two-pronged. First, invoking
EMC lacked standing. Second, relying on section 2-619(a)(9) of the Code of Civil Procedure
(
motion was held on October 5, 2010. Counsel for EMC was present. EMC’s attorney protested the motion on the grounds that Kemp should have pressed her arguments regarding standing earlier in the proceeding. He did not, however, raise any technical objections to the form of the motion, and it is clear that the parties and the court understood that the purpose of the motion was to persuade the court to revisit and set aside its judgment of foreclosure and sale. At the conclusion of the hearing, the court agreed to stay the sale for an additional 45 days, but refused to vacate the judgment of foreclosure and sale and to dismiss. In so doing, the circuit court made an express written finding pursuant to Supreme Court Rule 304(a) (Ill. S. Ct. R. 304(a) (eff. Feb. 26, 2010)) that there was no just reason for delaying either enforcement or appeal. Kemp asked the circuit court to reconsider denial of the foregoing motion. As grounds
for relief, Kemp again raised the argument, echoing an assertion she had initially made in her answer to the complaint for foreclosure and sale, that the proceedings were fatally defective because EMC did not yet have any legally cognizable interest in the mortgage at the time the complaint was filed. A hearing on the motion to reconsider was held November 16, 2010. At that hearing, the
circuit court acknowledged that Kemp’s motion was “well done” and implicated problems with the foreclosure process which had been raised and were pending elsewhere in the United States, but noted that the only case law cited by Kemp for her position were from out of state. “In the absence of an Illinois authority,” the court ruled, “the motion [for reconsideration] is denied.” As it had in its order, the court then made an express written finding pursuant to Supreme Court Rule 304(a) that there was no just reason for delaying either enforcement or appeal. Kemp filed a timely notice of appeal. The appellate court entered an order staying sale
of Kemp’s home pending resolution of the appeal. While the appeal was pending, EMC [2] moved to dismiss for lack of jurisdiction. Kemp filed an objection and the motion was denied. After the case was fully briefed and taken under advisement, the appellate court
reconsidered its position. It determined that it did lack jurisdiction and dismissed the appeal
on that basis in an unpublished order entered pursuant to Supreme Court Rule 23 (Ill. S. Ct.
R. 23 (eff. July 1, 2011)).
ANALYSIS
Whether the appellate court has jurisdiction to consider an appeal presents a question of
law which we review
de novo
.
Gardner v. Mullins
,
foreclosure and sale, and its subsequent refusal to set that judgment aside. In order to
understand how and when such judgments may be challenged on appeal, it is important to
first understand how the foreclosure process works. Under Illinois law, a judgment of
foreclosure does not end a mortgage foreclosure case. Upon entry of such a judgment, the
Illinois Mortgage Foreclosure Law (
(Emphasis added.) See,
e.g.
,
and appealable until the sale has occurred and the court has entered orders approving the sale and directing the distribution. In re Marriage of Verdung , 126 Ill. 2d 542, 555 (1989); Deutsche Bank National Trust Co. v. Hall-Pilate , 2011 IL App (1st) 102632, ¶ 20. Correspondingly, it is the order confirming the sale, not the judgment of foreclosure, that is *9 the final and appealable order in a foreclosure case. Marion Metal & Roofing Co. v. Mark Twain Marine Industries, Inc. , 114 Ill. App. 3d 33, 35 (1983). Again, the judgment of foreclosure is merely interlocutory. Under article VI, section 6, of the 1970 Illinois Constitution (Ill. Const. 1970, art. VI,
§ 6), litigants are not entitled to appeal from interlocutory orders of the circuit court as a
matter of right. Rather, article VI, section 6, vests this court with the authority to provide for
such appeals, by rule, as it sees fit. Ill. Const. 1970, art. VI, § 6. Except as specifically
provided by those rules, the appellate court is without jurisdiction to review judgments,
orders or decrees which are not final.
Almgren v. Rush-Presbyterian-St. Luke’s Medical
Center
,
is well established that an aggrieved property owner may nevertheless bring an immediate
appeal from a foreclosure judgment where the circuit court has made a written finding under
Supreme Court Rule 304(a) (Ill. S. Ct. R. 304(a) (eff. Feb. 26, 2010)) that there is no just
reason for delaying either enforcement or appeal or both.
In re Marriage of Verdung
, 126 Ill.
2d at 555-56;
JP Morgan Chase Bank v. Fankhauser
,
Rule 304(a) finding was not made when the court first entered its judgment of foreclosure, the court did make the requisite finding when Kemper moved unsuccessfully to vacate and dismiss the judgment ordering foreclosure and then again when she sought reconsideration after her motion to dismiss and vacate was denied. In the appellate court’s view, the finding made upon denial of Kemp’s motion to vacate
and dismiss was ineffective because that motion invoked
character of the pleading should be determined from its content, not its label. Accordingly,
when analyzing a party’s request for relief, courts should look to what the pleading contains,
not what it is called.
In re Haley D.
,
judgment.
Towns v. Yellow Cab Co.
,
Supreme Court Rule 304(a) not only when it denied Kemp’s motion to vacate and dismiss
on October 5, but also when it rejected her subsequent motion to reconsider that denial on
November 16. Our appellate court has repeatedly held that an appeal from an order disposing
of a motion to reconsider which contains a Rule 304(a) finding should be treated as having
been intended to cover the original judgment (
Relander v. Phoenix Mutual Life Insurance
Co.
,
Because the requisite Rule 304(a) findings were made by the circuit court following entry of both its October 5 and November 16 orders, because those orders rejected what were tantamount to requests for reconsideration of the underlying judgment of foreclosure, and because Rule 304(a) findings with respect to denial of motions to reconsider are sufficient to render the underlying judgment immediately appealable where, as here, the underlying *11 judgment is itself of the type which can be immediately appealed under Rule 304(a), I would therefore hold that the appellate court erred when it held that it lacked jurisdiction to consider the merits of this case. In reaching this result, I do not mean to suggest that recharacterization of parties’ motions
should be done as a matter of routine. Whether and to what extent recharacterization is
appropriate depends on the particular circumstances before us. We must always keep in
mind, however, that pleadings are to be liberally construed with a view to doing substantial
justice between the parties. See
Kemp’s appeal to proceed immediately without first remanding to the circuit court may somehow do violence to long-standing rules of appellate jurisdiction. I believe that the foregoing discussion amply demonstrates that such concern is unfounded. Allowing the appeal to proceed on the merits is, in truth, entirely consistent with well-established principles of judicial review. But even if one is unpersuaded by my analysis, there is another alternative that would avoid the need for any discussion of the law at all. In the exercise of our supervisory authority, we could simply vacate the appellate court’s unpublished Rule 23 order and order it to consider Kemp’s appeal on the merits. Surely that is a better outcome than requiring the parties and the circuit and appellate courts to proceed through additional formalities which are costly, time-consuming and may, in the end, be utterly meaningless. CONCLUSION For the foregoing reasons, I would reverse the appellate court’s judgment and remand the cause to the appellate court with directions to consider Kemp’s appeal on the merits. I therefore respectfully dissent.
Notes
[1] The original promissory note executed by Kemp was endorsed in blank by Maribella’s treasurer. The endorsement, which is undated, was presumably added in anticipation of a sale and transfer of the mortgage by Maribella to some other party. As just indicated, however, Stephenson’s sworn statement established that EMC did not acquire Kemp’s loan from Maribella until December
[2] The appellate court’s stay remains in effect.
[3] A mortgagor has the right to reinstate the mortgage by curing all defaults and paying the
mortgagee’s costs and expenses within 90 days of the date all mortgagors submitted to the
jurisdiction of the court.
[4] Invocation of section 2-1401was technically premature, as the majority notes, because there
was not yet a final judgment. The problem with reliance on