Press "Enter" to skip to content

Illinois App. Court (2nd Dist) Rejects Post-Sale Challenge to Foreclosure Service of Process

foreclosureThe Appellate Court of Illinois, Second District, recently held that jurisdictional defects in service of process that did not affirmatively appear on the face of the foreclosure court record protected the rights of an innocent third-party foreclosure against the claims of the borrower.

A copy of the opinion in BankUnited National Ass’n v. Giusti is available at:  Link to Opinion.

In July 2010, a mortgagee filed a foreclosure complaint against a borrower in relation to a property located in Roselle, Ill., County of DuPage. The summons issued was on a form provided by DuPage County and the caption listed “the mortgagee v. the borrower, et al.”  The borrower was eventually served via substitute service on his son at an address in Schaumburg, Ill.

In November 2010, the trial court entered a default judgment and in March 2011 a judgment of foreclosure was entered against the borrower. The property was sold at a sheriff’s sale to the mortgagee who shortly thereafter issued a new buyer a special warranty deed in September 2011.

Seven years later in September 2018, the borrower filed a petition to vacate the judgment of foreclosure and sale arguing the court did not acquire personal jurisdiction over him because he was served in Cook County and the foreclosure court did not appoint a special process server to serve process in Cook County as was required by statute. Additionally, the borrower argued, the summons did not identify him as a defendant and was not directed to anyone.

In December 2018, the foreclosure buyer filed a motion to dismiss arguing that the borrower’s petition was barred by the bona fide-purchaser protections of Illinois law and by the doctrine of laches, among other claims.

As you may recall, Illinois law regarding petitions to vacate judgments provides generally, that where the rights of innocent third-party purchasers have attached, a judgment can be collaterally attacked only where an alleged personal jurisdictional defect affirmatively appears in the record.

The trial court granted the foreclosure buyer’s motion to dismiss holding the protections afforded under Illinois law to bona fide purchasers bar the original owner’s petition “because the lack of jurisdiction is not on the face of the record.”

The borrower appealed.

On appeal the borrower argued that the foreclosure court lacked personal jurisdiction over him because (1) the summons issued against him was “facially noncompliant” because the summons did not identify the defendant as “Defendant;” and (2) he was served by an unauthorized person under the Illinois statute of substitute service of process.

The Appellate Court began its analysis by examining the bona fide-purchaser protections under Illinois law, noting that “[i]n determining whether a lack of jurisdiction is apparent from the record, we must look to the whole record, which includes the pleadings, the return on the process, and the judgment of the court,” and that “[a] lack of jurisdiction is apparent from the record if it does not require inquiry beyond the face of the record.” Id. at 314.

The borrower argued that the lack of personal jurisdiction was apparent on the face of the record due to the invalid summons. He contended that the summons issued against him was “facially noncompliant” with Illinois law regarding the contents of summons because the summons did not identify defendant as “Defendant” and it was not directed to him. In addition, the borrower argued, the summons was invalid because the caption did not identify the parties and he was not named following the line “To each Defendant:”. The borrower argued that, because the words “Plaintiff” and “Defendants” did not appear below the names of the parties, the summons did not identify who the parties are in the caption and thus this violated Illinois law.

The Appellate Court acknowledged a summons issued in violation of the statute and the rules is void and results in a lack of personal jurisdiction over the defendant. Arch Bay Holdings, 2015 IL App (2d) 141117, ¶ 14. For example, the Illinois Supreme Court has ruled that “a summons which does not name a person on its face and notify him to appear, is no summons at all, so far as the unnamed person is concerned.” Ohio Millers Mutual Insurance Co. v. Inter-Insurance Exchange of the Illinois Automobile Club, 367 Ill. 44, 56 (1937); see also Arch Bay Holdings, 2015 IL App (2d) 141117, ¶ 14.

In addition, the Appellate Court noted, the purpose of a summons is to “notify a party that an action has been commenced against him.” In re Application of the County Treasurer & ex officio County Collector, 307 Ill. App. 3d 350, 355 (1999). In determining whether a summons was sufficient to provide the opposing party with notice of the action, courts “adhere to the principle that a court should not elevate form over substance, but should construe a summons liberally.” Id. The rule does not require exact compliance with the form provided. Rather, the rule requires a plaintiff to “substantially” adopt the form provided by rule.

The Appellate Court observed there were only two names listed on the summons, that of the mortgagee and the borrower. The borrower would have known if he were the plaintiff, thus it logically followed that he would be the defendant. In addition, page five of the summons names the borrower as a defendant to be served. Thus, the Appellate Court held the alleged defects in the summons did not deprive the trial court of personal jurisdiction over the borrower as the summons “substantially” adopted the form and no defect regarding the summons was apparent from the face of the record.

Next, the borrower contended that a lack of personal jurisdiction is apparent on the face of the record because he was served in Cook County by a special process server who was not appointed by the court, in violation of Illinois rules regarding service by special process server. When the borrower was served, the relevant Illinois law provided that service in a county with a population of one million or more required a court-appointed special process server if service was not provided by a sheriff.

Here, the mortgagee served the borrower via a special process server, but the record contains no order appointing a special process server. The borrower argued that such an order was required because service occurred in Cook County, which had a population of one million or more. Therefore, the borrower argued, personal jurisdiction was never established.

The Appellate Court noted the mortgagee served the borrower in Schaumburg, which has portions in both DuPage and Cook counties. However, the affidavit did not indicate whether the borrower was served in Cook or DuPage County. Therefore, to determine in which county the mortgagee served the borrower, outside materials are required.

Thus, the affidavit did not establish a jurisdictional defect on its face and the alleged defect is beyond the face of the record. See Thill, 113 Ill. 2d at 314 (a lack of jurisdiction apparent from the record may not be established by going beyond the face of the record); see also Rahman, 2016 IL App (2d) 150040, ¶ 39.

The Appellate Court further noted that the borrower’s citation to a map defeated his argument because it led the court beyond the face of the record. See Thill, 113 Ill. 2d at 314; see also Rahman, 2016 IL App (2d) 150040, ¶ 39 (“[I]t was impossible to determine in which county service occurred from the face of the affidavits—outside materials were necessary.”).

Accordingly, the Appellate Court held that because the jurisdictional defect does not affirmatively appear on the face of the record, Illinois law protects the foreclosure buyers’ rights in the property.

Finally, although the Appellate Court did not need to determine if laches applies to this case, it noted that laches can preclude relief in an appropriate case where prejudice is demonstrated.

Accordingly, the judgment of the trial court was affirmed.

Print Friendly, PDF & Email

Ryan Grotz practices in Maurice Wutscher's Commercial Litigation, Consumer Credit Litigation, and Appellate groups. He has substantial experience in all phases of commercial litigation, including motion practice, written discovery, depositions, mediations, and bench and jury trials. Ryan received his Juris Doctor from the Chicago-Kent College of Law, where he was an associate editor on the Access to Justice Student Editorial Board. He was awarded his Bachelor of Business Administration degree from the University of Iowa. Ryan is licensed to practice law in Illinois and the U.S. District Court for the Northern District of Illinois. For more information, see https://mauricewutscher.com/attorneys/ryan-grotz/

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.