NEIGHBORHOOD LENDING SERVICES, INC., Plaintiff-Appellee, v. BARBARA CALLAHAN; UNKNOWN HEIRS and LEGATEES of Lillie M. Callahan; UNKNOWN OWNERS and NONRECORD CLAIMANTS; and RICHARD KUHN, as Special Representative for Lillie M. Callahan, a/k/a Lillian M. Callahan Deceased, Defendants (Philip Sanders, Intervenor-Appellant).
Docket No. 1-16-2585
Appellate Court of Illinois, First District, Fifth Division
September 1, 2017
Rehearing denied September 27, 2017
2017 IL App (1st) 162585
Appeal from the Circuit Court of Cook County, No. 15-CH-07374, the Hon. Michael Mullen, Judge, presiding. Judgment Affirmed.
Counsel on Appeal: Margaret A. Lundahl, of Chicago, for appellant. Codilis & Associates, P.C., of Burr Ridge (Louis J. Manetti, Jr., and Margaret Manetti, of counsel), for appellee.
OPINION
¶ 1 Plaintiff-appellee, Neighborhood Lending Services, Inc. (NLS), brought this mortgage foreclosure suit against defendants Barbara Callahan, unknown heirs and legatees of Lillie M. Callahan, unknown owners and nonrecord claimants, and Richard Kuhn, as special representative for Lillie M. Callahan, a/k/a Lillian M. Callahan (deceased). After the property subject to the suit was foreclosed upon and sold, and after a motion to confirm the sale was filed, a petition to intervene was filed by intervenor-appellant, Phillip Sanders. While the circuit court granted the motion to intervene, it deniеd any objections to the sale raised by Sanders and granted the motion to confirm the sale. The circuit court thereafter denied Sanders‘s motion to reconsider. For the following reasons, we affirm both the confirmation of the sale and the denial of the motion to reconsider.
¶ 2 I. BACKGROUND
¶ 3 The subject of this foreclosure case is a residential property located at 6103 South Sangamоn Street, Chicago, Illinois (the property). The record reflects that a quitclaim deed was executed and recorded in 1984, transferring the property from Robert and Lillie Mae Callahan, as husband and wife, to Robert, Lillie, and their daughter, Barbara Ann Callahan. The property was held in joint tenancy.
¶ 5 Lillie died on March 14, 2012. On May 5, 2015, NLS filed this mortgage foreclosure action, pursuant to the
¶ 6 On June 17, 2015, having been granted leave of court, NLS filed the operative amended complaint, adding Mr. Kuhn as a defendant solely to act as a special, court-appointed personal representative for Lillie. Therein, NLS alleged that the mortgage had not been paid since January 2013 and was, therefore, in default. Lillie and Barbara were identified as owners of the property, with Barbara additionally identified as having a possible interest in the property as Lillie‘s heir. Again, the mortgage and note attached as exhibits to the complaint reflect that they were executed in 2006, solely by Lillie.
¶ 7 All of the named defendants (excluding Mr. Kuhn) were served by publication. None filed an appearance or answer to the complaint. On November 23, 2015, the circuit court еntered the following orders: (1) an order of default against Barbara, unknown heirs and legatees of Lillie M. Callahan, and unknown owners and nonrecord claimants; (2) summary judgment against Richard Kuhn, as special representative for Lillie; and (3) a judgment for foreclosure and sale in favor of NLS against all defendants. A notice of sale was issued on January 14, 2016. On February 25, 2016, a sale was held and the property was sold to NLS for $15,500, leaving a $16,704.29 deficiency with respect to the total amount of $31,854.29—which included interest and fees—owed to NLS. A motion seeking confirmation of the sale was filed by NLS on March 25, 2016.
¶ 8 On April 11, 2016, Sanders filed a petition to intervene in this case, pursuant to section
¶ 9 Contending that he first learned of this foreclosure action when Barbara provided him a notice of sale on February 20, 2016, Sanders investigated the issue. He located the deed transferring the property to him on March 13, 2016, discovering for the first time that it had never bеen recorded.2 He then contacted an attorney and filed the motion to intervene.
¶ 10 Based upon these factual allegations, Sanders contended that, while he would be bound by any order entered in this case, his interests were not otherwise
¶ 11 On April 21, 2016, the circuit court entered an order granting Sanders‘s petition to intervene. Additionally, “construing Sanders’ petition as an objection to [p]laintiff‘s motion confirming sale,” the order denied any such objection. In a separate order entered the same day, the circuit court confirmed the sale of the property.
¶ 12 On May 2, 2016, Sanders filed a motion to reconsider. He specifically contended therein that, pursuant to our supreme court‘s decision in Harms v. Sprague, 105 Ill. 2d 215 (1984), Lillie‘s interest in the property and the lien on the property created by the mortgage she gave to NLS in 2006 were immediately extinguished upon Lillie‘s deаth. Therefore, Sanders asserted that “[b]ecause Plaintiff‘s lien was extinguished by operation of law upon the death of Lillie Mae, Plaintiff could not foreclose on the property.” Sanders, therefore, asked the circuit court to “reconsider the decision to approve the sale of the subject property, vacate that order and dismiss the complaint, or for such оther relief as the Court finds fair and equitable.”
¶ 13 NLS filed a written response to the motion to reconsider, and Sanders filed a written reply. In his reply, Sanders specifically argued for the first time that, in light of Lillie‘s death and the decision in Harms, the circuit court lacked subject matter jurisdiction over this matter
and its orders were void. Asserting that void orders can be attacked at any time, Sanders, therefore, asked the circuit court to “reconsider the decision to approve the sale of the subject property, vacate that order and all others, dismiss the complaint, and for such other relief as the Court finds fair and equitable.”
¶ 14 The circuit court denied the motion to reconsider on August 24, 2016, and Sanders timely appealed from that order and from the order confirming the sale.
¶ 15 II. ANALYSIS
¶ 16 On appeal, Sanders contends that the circuit court improperly confirmed the sale of the property and improperly denied his motion to reconsider that decision, in part because it lacked subject matter jurisdiction over this matter. For a number of reasons, we reject Sanders‘s arguments and affirm the judgment of the circuit court.
¶ 17 We first consider Sanders‘s challenge to the circuit court‘s subject matter jurisdiction, as that is his primary argument and it is an issue that “cannot be waived, stipulated to, or consented to by the parties.” Bradley v. City of Marion, 2015 IL App (5th) 140267, ¶ 13. We review de novo the issue of a circuit court‘s subject-matter jurisdiction. In re Estate of Ahern, 359 Ill. App. 3d 805, 809 (2005).
¶ 18 Our supreme court has recognized that subject matter jurisdiction:
“[R]efers to the power of a court to hear and determine cases of the general class to which the proceeding in question belongs. [Citations.] With the exception of the circuit court‘s power to review administrative action, which is conferred by statute, a circuit court‘s subject matter jurisdiction is conferred entirely by our state constitution. [Citations.] Under section 9 of article VI, that jurisdiction extends to all ‘justiciable matters.’ [Citation.] Thus, in order to invoke the subject matter jurisdiction of the circuit
court, a plaintiff‘s case, as framed by the complaint or petition, must presеnt a justiciable matter.” Belleville Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc., 199 Ill. 2d 325, 334-35 (2002).
¶ 19 A justiciable matter is “a controversy appropriate for review by the court, in that it is definite and concrete, as opposed to hypothetical or moot, touching upon the legal relations of parties having adverse legal interests.” Id. at 335.
¶ 20 Here, NLS brought this suit to foreclose a mortgage on the property, pursuant to the Foreclosure Law. As a numbеr of prior decisions have recognized, such a suit is one within the general class of cases the circuit court has the inherent power to hear and determine. Nationstar Mortgage, LLC v. Canale, 2014 IL App (2d) 130676, ¶ 14 (“There is no doubt that courts have the inherent power to hear and determine foreclosure cases.“); Beal Bank v. Barrie, 2015 IL App (1st) 133898, ¶ 21 (same). Thus, any general attack on the circuit court‘s subject matter jurisdiction would appear to be fundamentally unfounded.
¶ 21 More specifically, however, Sanders contends that the record reflects that Robert died in 1990 and that, when Lillie died in 2012, Barbara became the sole surviving joint tenant of the property. Sanders contends that Barbara, therefore, held sole ownership in the property, unencumbered by the mortgage Lillie alone granted to NLS, when Barbara executed a quitclaim deed to him in 2013. Therefore, NLS purportedly has no interest in the property upon which to premise the circuit court‘s subject matter jurisdiction over this foreclosure suit. Sanders supported his argument by citation to the decision in Harms, in which our supreme court recognized that (1) a mortgage given by one joint tenant in a property does not sever the joint tenancy, (2) the property right of the mortgaging jоint tenant is extinguished at the moment of his death, (3) such a mortgage by one joint tenant does not survive as a lien on the property following the mortgaging joint tenant‘s death, and (4) therefore, the surviving joint tenant takes the property unencumbered by any mortgage granted solely by a deceased joint tenant. Harms, 105 Ill. 2d at 224-26.
¶ 22 Even accepting all of Sanders‘s other factual and legal assertions, we would not agree with his conclusion that the circuit court, therefore, lacked subject matter jurisdiction over this suit. It is well recognized that “even a defectively stated claim is sufficient to invoke the court‘s subject-matter jurisdiction, as ‘[s]ubject matter jurisdiction does not depend upon the legal sufficiency of the pleadings.’ [Citation.] In other words, the only consideration is whether the alleged claim falls within the general class of cases that the court has the inherent power to hear and determine.” (Emphasis in original.) In re Luis R., 239 Ill. 2d 295, 301 (2010). As Sanders‘s specific contentions are—at best—an attack on the merits of the foreclosure suit brought by NLS, they do nothing to alter our conclusion that the circuit court had subject matter jurisdiction over the issues framed by the complaint filed by NLS. Similar conclusions have been reached under similar circumstances in the past. Canale, 2014 IL App (2d) 130676, ¶ 14; Barrie, 2015 IL App (1st) 133898, ¶ 21.
¶ 23 Indeed, Sanders‘s arguments in this regard are more properly viewed as contentions that, because it purportedly no longer had any interest in the property, NLS lacked standing to bring
¶ 24 We also reject Sanders‘s reliance upon the decision in ABN AMRO Mortgage Group, Inc. v. McGahan, 237 Ill. 2d 526 (2010), in support of his argument that “[w]hile the court would have subject matter jurisdiction ordinarily over this kind of suit, there was no existing lien on the property to give the court jurisdiction over the property.” In McGahan, our supreme court recognized that (1) mortgage foreclosure actions are quasi in rem, (2) “the mortgagor, the person whose interest in the real estate is the subject of the mortgage, is a necessary party defendant to the foreclosure proceedings,” (3) “it is necessarily true that there must be personal service on the mortgagor,” and (4) therefore, “a mortgagee must name a personal representative for a deceased mortgagor in a mortgage fоreclosure proceeding in order for the circuit court to acquire subject matter jurisdiction.” Id. at 528, 535-36. Here, NLS complied with this requirement by naming Mr. Kuhn as a defendant to represent Lillie‘s interest in the property—whatever that interest might or might not be. Thus, McGahan does nothing to support Sanders‘s jurisdictional argument in this matter.
¶ 25 Having concluded that the circuit court had subject matter jurisdiction over this matter, we now address Sanders‘s remaining contentions that the circuit court improperly confirmed the sale of the property and improperly denied his motion to reconsider that decision.
¶ 26 Section
¶ 27 With respect to the order confirming the sale and the motion to reconsider that order, Sanders contends on appeal, based upon all the above discussed arguments, that (1) he owned the property “free and clear of the mortgage lien,” such that the foreclosure complaint should have been dismissed; (2) the circuit court had no pоwer to order the sale of the entire property, where Lillie could only ever mortgage her partial interest in the property; and (3) at the very least, the circuit court should have recognized Sanders‘s interest in the property and his right to a lien on any proceeds from the sale. We find that none of these arguments leads us to a conclusion that the circuit court abused its discretion or misapplied existing law in confirming the sale of the property or in denying the motion to reconsider that decision.
¶ 28 Sanders intervened in this matter only after the property had been sold and a motion to confirm that sale had been filed. At that point in the proceedings, the court‘s discretion to vacate the sale was governed by the mandatory provisions of section
¶ 29 As our supreme court has recognized:
“[O]nce a motion to confirm the sale under section 15-1508(b) has been filed, the court has discretion to see that justice has been done, but the balance of interests has shifted between the parties. At this stage of the proceedings, objections to the confirmation under section 15-1508(b)(iv) cannot be based simply on a meritorious pleading defense to the underlying foreclosure complaint. *** Rather, the justice provision under section 15-1508 (b)(iv) acts as a safety valve to allow the court to vacate the judiсial sale and, in rare cases, the underlying judgment, based on traditional equitable principles. ***
To vacate both the sale and the underlying default judgment of foreclosure, the borrower must not only have a meritorious defense to the underlying judgment, but
must establish under section 15-1508(b)(iv) that justice was not otherwise done because either the lender, through fraud or misrepresentation, prevented the borrower from raising his meritorious defenses to the complaint at an earlier time in the proceedings, or the borrower has equitable defenses that reveal he was otherwise prevented from protecting his property interests. *** This interpretation is consistent with the legislative policy of balancing the competing objectives of efficiency and stability in the sale process аnd fairness in protecting the borrower‘s equity in the property and preserving the integrity of the sale.” Wells Fargo Bank, N.A. v. McCluskey, 2013 IL 115469, ¶¶ 25-26.
Thus, “in the absence of fraud or irregularity, courts [will] not refuse to confirm a judicial sale merely to protect an interested party ‘against the result of his own negligence.’ ” Id. ¶ 19 (quoting Shultz v. Milburn, 366 Ill. 400, 405 (1937)).
¶ 30 Here, the record reflects that NLS (1) properly served nonrecord claimants such as Sanders by publication; (2) proрerly recorded a lis pendens and notice
¶ 31 On this record, we fail to see how Sanders has shown that justice was not otherwisе done because either the lender, through fraud or misrepresentation, prevented him from raising his meritorious defenses to the complaint at an earlier time in the proceedings, or because he has equitable defenses prevented him from protecting his property interests. McCluskey, 2013 IL 115469, ¶ 26. Because any possible “injustice,” with respect to Sanders‘s purported interest in the property, results from Sanders‘s own negligence, we affirm the circuit court‘s orders confirming the sale and denying the motion to reconsider that order.
¶ 32 III. CONCLUSION
¶ 33 For the foregoing reasons, we affirm the judgment of the circuit court.
¶ 34 Affirmed.
JUSTICE ROCHFORD
APPELLATE COURT JUSTICE