Press "Enter" to skip to content

Illinois App. Court (2nd Dist) Refuses to Undo Foreclosure Based on Alleged Non-Compliance With Sale Notice Rule

mortgage lawThe Appellate Court of Illinois, Second District, recently affirmed a trial court’s rulings (1) granting summary judgment in favor of the mortgagee, (2) approving a judicial sale, and (3) denying the borrower’s motion to reconsider.

Because the mortgagee’s affidavit of amounts due and owing was properly executed, and because the borrower received notice of the foreclosure sale and did not allege any prejudice, the Appellate Court determined that the borrower had not shown good cause to reverse the trial court’s rulings or to undo the foreclosure sale.

A copy of the opinion in Suntrust Mortgage, Inc. v. Ulrich is available at:  Link to Opinion.

A mortgagee filed a foreclosure action alleging that the borrower was in default.  The mortgagee filed a motion for summary judgment and a motion for judgment for foreclosure and sale. In support of its motions, the mortgagee attached an affidavit of amounts due and owing.

The borrower’s response to the mortgagee’s motion for summary judgment consisted of 15 paragraphs of boilerplate language from various legal authorities, ending with a statement that “[t]he current affidavits attached to this motion are not foundationally sound, and the affiant does not have the requisite personal knowledge.”  The borrower did not file a counteraffidavit.

The trial court granted summary judgment in favor of the mortgagee, finding that no issue of material fact existed, entered an order for judgment for foreclosure and sale, and appointed a selling officer.

The mortgagee published notice of the sale as required by law, and the selling officer sent notice of the sale to the borrower’s attorney. At auction, the property was sold to the mortgagee as the highest bidder. The mortgagee then requested an order approving the sale.

The borrower argued that the notice of sale he received was defective, as it was sent by the selling officer rather than an attorney for the mortgagee, as required by Illinois Supreme Court Rule 113(f). Specifically, the borrower noted that the rule mandates that, “[n]ot fewer than 10 business days before the sale, the attorney for the plaintiff shall send notice by electronic service pursuant to Illinois Supreme Court Rule 11(c) to all defendants appearing of record and shall send notice by mail to all defendants not appearing of record.”  Ill. S. Ct. R. 113(f)(1).

The trial court approved the sale, finding that the notice was proper and that the terms of the sale were not unconscionable. The borrower filed a motion to reconsider, which the trial court denied. The borrower timely appealed.

The borrower first argued on appeal that the trial court erred in granting the mortgagee’s motion for summary judgment because the affidavit of amounts due and owing was deficient because it did not provide specific details about: (1) the affiant’s qualifications to testify, (2) how the affiant acquired the documents she relied upon, and (3) the mortgagee’s computer system.

The borrower also requested that the Second District reverse the current standards for evaluating the sufficiency of affidavits of amounts due and owing in mortgage foreclosure proceedings, as the “current framework allows rote, general and conclusory statements to describe an affiant’s training, responsibilities and competence in reviewing potentially complex payment information.”

The mortgagee, in turn, argued that, because the borrower failed to raise before the trial court the argument regarding specific defects in the affidavit, the issue was forfeited. See Hatch v. Szymanski, 325 Ill. App. 3d 736, 741 (2001). Instead, the mortgagee insisted, the borrower did nothing more than provide 15 paragraphs of boilerplate language, followed by a conclusory assertion that “[t]he current affidavits attached to this motion are not foundationally sound, and the affiant does not have the requisite personal knowledge.”

In the alternative, the mortgagee argued that, pursuant to the current standards under Illinois law for evaluating affidavits of amounts due and owing, the affidavit was sufficient. Further, the mortgagee noted that the borrower failed to file a counteraffidavit in opposition to the mortgagee’s motion for summary judgment.

First, the Second District held that even if the borrower failed to raise the argument at the trial level, and therefore forfeited the argument, an appellate court may still choose to address the merits. In re Marriage of Piegari, 2016 IL App (2d) 160594, B6 10. 

The Second District then noted that, in her affidavit, the mortgagee’s agent identified herself as an officer for the mortgagee. She averred that she had personal knowledge of the amounts due and owing by virtue of her access to and review of the records as a function of her employment. She identified the specific records that she relied upon and attached copies of them to her affidavit. She proclaimed that she had knowledge that the records kept with respect to mortgage loans were comprised of entries made at or near the time of the event, by persons trained and authorized to make such entries.

She further certified that the mortgagee, in the regular course of its business, uses “MSP/LPS,” a program that is standard in the industry, to automatically record and track mortgage payments. She detailed the procedure by which entries are made and described the personnel authorized to make such entries. She then declared that she could competently testify to the facts contained in her affidavit.

The Second District determined that the affidavit tracked the requirements of Illinois Supreme Court Rules 191(a) and 236(a). The Court also concluded that the borrower offered no convincing reason to depart from prior case law and that it had no authority to add requirements to the Supreme Court rules.

Therefore, the Appellate Court held that the affidavit attesting to amounts due and owing had been properly executed. The Court also noted that there had been no counteraffidavit or other evidence that tended to contravene the facts in the affidavit. Therefore, there was no genuine issue of material fact precluding summary judgment.

The borrower also argued that the trial court erroneously approved the sale of the property and erroneously denied the borrower’s motion to reconsider the approval order. The borrower’s basis for appealing was that the selling officer, and not an attorney for the mortgagee, sent the notice of sale.

Section 15-1507(c) of the Illinois Mortgage Foreclosure Law provides that “[t]he mortgagee, or such other party designated by the court, … shall give public notice of the sale.”  735 ILCS 5/15-1507(c). The party providing notice “shall also give notice to all parties in the action who have appeared and have not theretofore been found by the court to be in default for failure to plead.” 735 ILCS 5/15-1507(c)(3).

According to section 15-1508(c) of the Foreclosure Law, a court may set aside a sale where a party who was entitled to notice of the sale failed to receive notice. 735 ILCS 5/15-1508(c). However, where there was merely a defect in the notice, the complaining party must demonstrate good cause for invalidating the sale. 735 ILCS 5/15-1508(d). 

The Appellate Court noted that Rule 113(f) supplements sections 15-1507 and 15-1508 of the Foreclosure Law. Ill. S. Ct. R. 113, Committee Comments. As previously noted, the relevant portion of Rule 113(f) provides that, “[n]ot fewer than 10 business days before the sale, the attorney for the plaintiff shall send notice by electronic service pursuant to Illinois Supreme Court Rule 11(c) to all defendants appearing of record and shall send notice by mail to all defendants not appearing of record.” Ill. S. Ct. R. 113(f)(1).

However, the Second District pointed out that the purposes behind Rule 113(f), as explained by the committee comments, are to ensure that defaulted parties receive notice of the foreclosure action and to increase judicial efficiency. Ill. S. Ct. R. 113, Committee Comments.

In this case, the borrower conceded that he received notice. The Second District therefore held that it would not increase judicial efficiency to vacate the sale just so that the borrower might receive another notice from the mortgagee’s attorney as opposed to the mortgagee’s agent.

The Court also concluded that the borrower did not argue that he suffered any resulting prejudice by any technical defect in the notice that he received and that he had not demonstrated good cause for setting aside the sale. See Cragin Federal Bank for Savings v. American National Bank & Trust Co. of Chicago, 262 Ill. App. 3d 115, 120-21 (1994).

Thus, the Second District held that the trial court properly approved the sale and denied the borrower’s motion to reconsider.

Accordingly, the Appellate Court affirmed the trial court’s rulings.

Print Friendly, PDF & Email

Daniel Miller is an associate in the Chicago office of Maurice Wutscher LLP, practicing in the firm’s Consumer Credit Litigation and Commercial Litigation groups. Daniel has substantial experience as a litigation attorney representing clients in both individual and class action cases involving the FDCPA, TCPA, FCRA, TILA, RESPA, Illinois Consumer Fraud Act, and various other federal and state statutes. He also has experience in representing corporate clients in commercial transactions and executive compensation agreements. Daniel earned his Juris Doctor from the University of Illinois College of Law, and his Bachelor of Arts in History from Durham University in the United Kingdom. He is admitted to practice law in Illinois and the U.S. District Courts for the Northern District of Illinois and the Southern District of Illinois.

Leave a Reply

Your email address will not be published.

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