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Illinois App. Court (1st Dist) Holds Mortgagee’s Affidavit for Alternative Service Fatally Deficient

The Appellate Court of Illinois, First District, recently vacated a default foreclosure judgment in favor of a mortgagee and against a borrower because the mortgagee’s affidavit in support of its motion for alternative service did not establish the required due diligence demonstrating the investigation made to determine the borrower’s whereabouts, and the trial court therefore lacked personal jurisdiction over the borrower.

A copy of the opinion in Urban Partnership Bank v. Ragdale is available at:  Link to Opinion.

A mortgagee initiated a foreclosure action against a borrower based upon a mortgage loan between the parties.  The mortgagee was not able to personally serve the borrower.  After several unsuccessful attempts, the mortgagee filed a motion for alternative service.

In support of its motion for alternative service, the mortgagee submitted two affidavits of process servers documenting their unsuccessful attempts to serve the borrower’s husband at the subject property along with a due diligence affidavit.  The mortgagee’s due diligence affidavit documented unsuccessful attempts to serve the borrower at the vacant subject property and noted that the mortgagee knew “of no other address, location, or avenue of discovery to pursue at this time to successfully execute service upon” the borrower.

The trial court granted the mortgagee’s motion for alternative service. The mortgagee then carried out the alternative service, and the trial court entered judgment in favor of the mortgagee in July 2014. The subject property was sold at judicial sale in November 2014. The trial confirmed the sale in February 2015.

Subsequently, the borrower filed a timely petition under section 2-1401 of the Illinois Code of Civil Procedure to quash service and to vacate the judgment.

As you may recall, Section 2-1401 allows for relief from final orders and judgments more than 30 days but less than two years after their entry. 735 ILCS 5/2-1401.

The borrower’s petition alleged that the borrower and her husband moved to a new address in January 2012 and that if the mortgagee had conducted due diligence, then it could have found her at the new address.

The trial court denied the borrower’s 2-1401 petition.  This appeal followed.

The Appellate Court began by examining the requirements for service.  Section 2-203 of the Illinois Code of Civil Procedure allows for service of process by leaving a copy of the summons with the defendant personally, or by leaving a copy at the defendant’s usual place of abode with a family member or a person residing there age 13 or older, along with mailing the summons to that address. 735 ILCS 5/2-203.

If personal or abode service is impractical, then a plaintiff may request leave to use alternative service.  735 ILCS 5/2-203.1.  A section 2-203.1 motion for alternative service must include an affidavit, stating the investigation made to determine the defendant’s whereabouts and why service is impractical under section 2-203, “including a specific statement showing that a diligent inquiry as to the location of the individual defendant was made and reasonable efforts to make service have been unsuccessful.” Id.

The First District analyzed the mortgagee’s affidavits in support of alternative service and determined that the mortgagee “failed to conduct any type of inquiry into where defendant may be living after finding the Subject Property vacant.”

Specifically, the Appellate Court found that the mortgagee’s due diligence affidavit did not fulfill section 2-203.1’s requirements because it did “not identify any type of investigation into [the borrower’s] current location, let alone an honest and well-directed one as permitted by the circumstances.”

Moreover, the First District noted that the mortgagee’s due diligence affidavit ignored that on Dec. 2, 2012, the mortgagee served the borrower’s husband at the borrower’s new address that the mortgagee purportedly could not find.  Despite this, the mortgagee made no attempt to serve the borrower at this address.  The Appellate Court found that this oversight supported its conclusion that the mortgagee did not conduct the required due diligence.

Thus, the Appellate Court held, while section 2-203.1 contains no required “magic words” to demonstrate due diligence, the affidavit must at least “set forth facts that demonstrate a diligent inquiry as to the location of the defendant.”  Here, the Court noted, the affidavit failed to identify any “effort to obtain an alternate address for [the borrower] and is therefore fatally defective.”

The First District ruled that the trial court erred in denying the section 2-1401 petition because the affidavit attached to the motion for alternative service did not establish the required due diligence.

Thus, the Appellate Court ruled, the mortgagee did not properly serve the borrower, the trial court did not have personal jurisdiction over the borrower, and the judgment was void.  U.S. Bank National Ass’n v. Johnston, 2016 IL App (2d) 150128 (“[A] failure to effect service as required by law deprives a court of jurisdiction over the person, and any default judgment based on defective service is void.”)

Accordingly, the First District reversed the trial court’s judgment in favor of the mortgagee and remanded the case for further proceedings consistent with its decision.

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Ernest Wagner practices in Maurice Wutscher's Commercial Litigation and Consumer Litigation groups, and leads the firm’s Insurance Recovery and Advisory group. Based in Chicago, he also supports the firm’s litigation matters in its Miami office. Ernest has substantial experience in various types of commercial and insurance recovery litigation. He has conducted more than 35 jury trials, and more than 150 arbitrations for plaintiffs and defendants. He has also successfully represented clients in numerous appeals, in various jurisdictions. Ernest earned his Juris Doctor from Emory University School of Law in Atlanta, Georgia, and his Bachelor of the Arts from the University of Iowa.

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