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Illinois App. Court (3rd Dist) Holds Third Refiled Foreclosure Not Barred

The Appellate Court of Illinois, Third District, recently rejected a mortgagor’s argument that the Illinois single refiling rule barred a third attempt at foreclosure where the intervening foreclosure complaint was premised upon an alleged default under a loan modification agreement.

A copy of the opinion in Wells Fargo Bank, N.A. v. Norris is available at:  Link to Opinion.

The convoluted procedural and factual history for the mortgage loan at issue in this matter can be boiled down to the following:

The defendant mortgagor (who was not a signatory to the promissory note) and his ex-spouse defaulted under the terms of the subject loan for failing to make payments in 2008.

Following their default, the mortgagee filed its first foreclosure action premised upon the 2008 default, but later voluntarily dismissed the first foreclosure based upon the belief that a loan modification agreement had been reached.  Subsequently, the mortgagee filed its second foreclosure action which alleged a 2009 default of the subject loan as modified by the loan modification agreement.

The mortgagee later voluntarily dismissed the second foreclosure action – although not clear in the opinion – presumptively because the loan modification agreement was unenforceable.

Finally, the mortgagee filed its third foreclosure action alleging the same 2008 default as the first foreclosure action and no loan modification.

In the third foreclosure action, the mortgagor filed an answer and affirmative defenses in which he argued that the action was barred by the doctrines of res judicata and/or collateral estoppel due to the prior two dismissals.  Later, the mortgagor modified his defense to that the Illinois single refiling rule (735 ILCS 5/13-217) precluded the third foreclosure action.

Following briefing and oral arguments, the trial court granted summary judgment and judgment of foreclosure in the mortgagee’s favor.  The mortgagor filed his appeal, arguing in pertinent part that the single refiling rule bars the third foreclosure action.

As you may recall, Section 5/13-217 of the Illinois Code of Civil Procedure, also known as the single refiling rule, is a saving provision that grants a plaintiff the absolute right to refile his complaint within one year after a voluntary dismissal – and other non-dispositive events, e.g. dismissal for want of prosecution – or within the remaining period of limitations, whichever is greater. 735 ICLS 5/13-217; see also, Timberlake v. Illini Hospital, 175 Ill. 2d 159, 163 (Ill. 1997).

The purpose of Section 13-217 is to facilitate the hearing of cases on their merits, but has been held by the Illinois Supreme Court to be limited to only one refiling of a claim regardless of whether or not the statute of limitations has expired.  See Richter v. Prairie Farms Dairy, Inc., 2016 IL 119518, P 44.

According to the Appellate Court, the determination as to whether a case is a refiling of a prior complaint is determined based upon the principles of res judicata.  Illinois courts apply the transaction test for res judicata purposes in which separate claims will be considered to be the same cause of action if both claims arise from a single group of operative facts, regardless of whether they assert different theories of relief.  River Park, Inc. v. City of Highland Park, 184 Ill. 2d 290, 310-11 (Ill. 1998).

Applying the transactional test to the first, second and third foreclosure complaints, the Appellate Court determined that the third foreclosure was a refiling of the first foreclosure, and that the second foreclosure was not a re-filing of the first foreclosure.

In distinguishing the first and second foreclosures, the Appellate Court specifically noted that the first foreclosure was based upon a violation of the original mortgage and a 2008 default, but the second foreclosure was based upon a breach of the original mortgage and loan modification agreement with a 2009 default.

The Appellate Court also noted that the first and second foreclosures alleged different principal loan balances.  The Court concluded that it was clear the second foreclosure did not involve the same cause of action as the first foreclosure for purposes of the refiling rule, and therefore, the third foreclosure complaint was the first and only refiling of the same cause of action as the first foreclosure complaint.

Accordingly, the Appellate Court affirmed the lower court’s summary judgment and judgment of foreclosure in favor of the lender.

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Cole Braun is based in Maurice Wutscher's Chicago office, where he practices in the firm's Commercial Litigation, Consumer Litigation, and Insurance Recovery and Advisory groups. He has significant litigation experience in a number of state and federal jurisdictions in a variety of different types of litigation. Cole graduated magna cum laude from Florida State University College of Law, and earned the distinction to be elected to the Order of the Coif. He was awarded his Bachelor of the Arts degree from the University of Tennessee. For more information, see

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