Press "Enter" to skip to content

Illinois App. Court (1st Dist) Rejects Borrowers’ Allegations of ‘Wrongful Foreclosure,’ UDAP Violations, Other Claims

Illinois mortgage lawThe Appellate Court of Illinois, First District, recently affirmed a trial court’s dismissal with prejudice of a complaint from two borrowers alleging claims for among other things “wrongful foreclosure,” wrongful eviction, fraud, consumer fraud, false imprisonment, and a due process violation under 42 U.S.C. § 1983.

A copy of the opinion in Bozek v. Bank of America, N.A. is available at:  Link to Opinion.

In October 2015, a mortgagee obtained summary judgment in a foreclosure lawsuit it had filed against the borrowers. The borrowers’ property was sold at a judicial sale, and an order confirming the sale was entered in November 2016. A lawsuit for forcible entry and detainer followed to evict the borrowers from the property, which no longer belonged to them.

However, while the mortgagee’s motion for summary judgment was awaiting ruling, the borrowers attempted to remove the case to federal court.

The federal judge immediately flagged the notice of removal as untimely and rejected it — that is, the federal court dismissed and terminated the litigation in federal court. But the federal court never formally remanded the matter back to state court.

The mortgagee’s position before the state foreclosure court was that jurisdiction had now re-attached in state court, and the state court judge agreed. The state court thus proceeded to enter summary judgment for the mortgagee, ultimately paving the way for the judicial sale and the later eviction proceeding.

The borrowers appealed the state court’s entry of summary judgment, claiming that the federal court’s lack of a formal remand meant that the state court never re-acquired jurisdiction, and the state court’s resultant orders of summary judgment and confirmation of judicial sale were thus void. The First District agreed with the borrowers and held that the orders of summary judgment and confirmation of judicial sale were void.

By the time the Appellate Court’s ruling was handed down in May 2018, the order of possession in the eviction proceeding had already been entered. The next business day after the decision was filed, the sheriff began to evict the borrowers from their property. The sheriff then aborted just over an hour into the eviction based on the Appellate Court’s ruling.

The borrowers then brought suit, naming essentially every person or entity involved in the underlying foreclosure and eviction cases as a defendant, including the mortgagee that filed the foreclosure case against the borrowers; the separate entity which may or may not have briefly taken possession of the borrowers’ home following the foreclosure sale; the law firm the foreclosing mortgagee hired to prosecute its foreclosure case against the borrowers; the company that conducted the judicial sale of the borrowers’ home; the state court judge who presided over the foreclosure case; the state court judge who oversaw the eviction case; the county sheriff; and 20 John Doe defendants.

Against each of those defendants, the borrowers asserted claims for, among other things, “wrongful foreclosure,” wrongful eviction, fraud, consumer fraud, false imprisonment, and a due process violation under 42 U.S.C. § 1983.

The trial court dismissed the complaint with prejudice on various grounds as to each defendant. This appeal followed.

The First District began its review by noting that the borrowers stated in their opening brief that, though they sued “multiple parties,” “only [the foreclosing mortgagee] and [the judge who presided over the eviction case] are relevant to this appeal.”

Therefore, the Appellate Court held that, by affirmatively disavowing any attempt to overturn the dismissal of any other defendants, the borrowers have abandoned any such claims. See AMCO Insurance Co. v. Erie Insurance Exchange, 2016 IL App (1st) 142660, ¶ 18 n.1; Berggren v. Hill, 401 Ill. App. 3d 475, 479 (2010).  Accordingly, the First District summarily affirmed the judgments of dismissal as to all defendants to the appeal aside from the foreclosing mortgagee and eviction judge.

The First District then went on to consider whether the trial court correctly dismissed the claims against the judge for the eviction case. The borrowers’ claim, in essence, was that the judge should have known that the foreclosure court lacked jurisdiction over that case; he thus should have recognized a fatal defect in the eviction case stemming from that foreclosure; and he should have alerted the sheriff to that defect.

The trial court dismissed the claims against the judge based on absolute judicial immunity. Absolute judicial immunity protects a judge from suit for his “judicial acts,” even if the judge is alleged to have acted “in excess” of his “jurisdiction” and even if the judge is alleged to have acted “‘maliciously or corruptly.’” Moncelle v. McDade, 2017 IL App (3d) 160579, ¶ 18.

There are two recognized exceptions to judicial immunity. The first is that “a judge is not immune from liability for nonjudicial actions, i.e., actions not taken in the judge’s judicial capacity.” Id. at ¶ 19.

The borrowers claimed that this exception applied. They argued that once the Appellate Court in the prior appeal held that the foreclosure court lost jurisdiction based on the removal to federal court, the eviction judge should have immediately notified the sheriff not to proceed with the eviction.

The First District rejected this argument. The Appellate Court reasoned that it was easy enough for the borrowers to say that the act of calling or emailing the sheriff is more of an “administrative” task. However, the Appellate Court held that the only way that any such “communication” would have any legal consequence whatsoever would be if the judge issued the sheriff an order staying or vacating the previous order of possession. And nobody could possibly claim that the issuance of a judicial order falls outside the judicial sphere; it is part and parcel of everyday judicial duties. Thus, the Appellate Court concluded that the first exception to judicial immunity does not apply.

Under the second exception to judicial immunity, “‘a judge is not immune for actions, though judicial in nature, taken in the complete absence of all jurisdiction.’” Moncelle, 2017 IL App (3d) 160579, ¶ 19. The borrowers also claimed that this exception applied because the eviction judge supposedly never truly had jurisdiction over the eviction case.

The First District rejected this argument for two reasons. First, the Appellate Court did not accept the premise that the judge lacked jurisdiction over the forcible entry and detainer action at any time. The Appellate Court conceded that the foreclosure court lost jurisdiction when that action was removed to federal court and that it was a problem that the forcible entry and detainer case was based on a void foreclosure order. However, the Appellate Court concluded that this was not a jurisdictional problem.

Furthermore, the First District held, briefly losing jurisdiction over a case, due to a removal to federal court, is not what is meant by a court acting “in the complete absence of jurisdiction.” Mireles v. Waco, 502 U.S. 9, 12 (1991). That is, in this context, “the term ‘jurisdiction’ refers not to a judge’s authority or power to act, but to the subject-matter jurisdiction of the court upon which the judge sits.” Moncelle, 2017 IL App (3d) 160579, ¶ 19; see Fisher, 80 U.S. (13 Wall.) at 352.

The First District thus rejected the application of either exception to judicial immunity, and held that the trial court properly dismissed the claims against the eviction judge under judicial immunity.

The Appellate Court next considered the borrowers’ argument that the trial court erred by dismissing their claims against the foreclosing mortgagee for failure to state a claim.

Count 1 of the complaint purported to state a claim for “wrongful foreclosure” and was predicated on the allegation that the parties proceeded with the foreclosure case despite knowing that the foreclosure court had lost — and never regained — jurisdiction due to the borrowers’ notice of removal.

The borrowers conceded that Illinois law does not recognize a cause of action for “wrongful foreclosure.” See, e.g., Acevedo v. CitiMortgage, Inc., No. 11-C-4877, 2013 WL 1283807, at *6 (N.D. Ill. Mar. 26, 2013). The borrowers, however, stated that the First District should focus on the substance, not the title, of their claims and consider their “wrongful foreclosure” claim as one for abuse of process or slander of title. See General Casualty Co. of Wisconsin v. Burke Engineering Corp., 2020 IL App (1st) 191648, ¶ 39.

Abuse of process is the misuse of legal process to accomplish some purpose outside the scope of the legal process itself.” Selby v. O’Dea, 2020 IL App (1st) 181951, ¶ 60. To state a claim for abuse of process, the plaintiff must plead “(1) an improper motive and (2) some act in the use of legal process that is improper in the regular prosecution of proceedings.” Id.

To establish that the defendant had an improper motive, “the plaintiff must plead facts showing that the defendant instituted proceedings against the plaintiff for a purpose ‘such as extortion, intimidation, or embarrassment.’” Id. (quoting Kumar v. Bornstein, 354 Ill. App. 3d 159, 165 (2004)). And “[t]he second element requires proof that ‘the process was used to accomplish some result that is beyond the purview of the process.’” Id. (quoting Kumar, 354 Ill. App. 3d at 165).

The First District found that the complaint alleged neither of those elements because there was no allegation that the foreclosing mortgagee filed the foreclosure action for the purpose of intimidation or harassment, as opposed to exercising its contractual right to foreclose on the property for nonpayment. Additionally, the result sought — foreclosure — was not beyond the purview of the process.

For much the same reason, the Appellate Court determined that Count 1 could not be read as a cognizable claim for slander of title. A cause of action for slander of title requires proof that (1) the defendant made a false and malicious publication, (2) the publication disparaged the plaintiff’s title to property, and (3) the publication caused damages to the plaintiff. Chicago Title & Trust Co. v. Levine, 333 Ill. App. 3d 420, 424 (2002). While the complaint freely used the operative words, the Appellate Court held that it provided no coherent factual allegation that anything the bank did was, in fact, false or malicious.

The First District thus concluded that the “wrongful foreclosure” claim was properly dismissed, even if re-styled as a claim for abuse of process or slander of title.

The borrowers also appealed the dismissal of Count 3 and claimed that the mortgagee was liable for “wrongful eviction.” However, the First District held that the borrowers had never adequately explained this cause of action either.

An action for an improper eviction may be brought under the Forcible Entry and Detainer Act (FEDA). See 735 ILCS 5/9-101 et seq. But FEDA only provides a remedy for re-possession and not one for tort damages. Campana Redevelopment, LLC v. Ashland Group, LLC, 2013 IL App (2d) 120988, ¶¶ 12-13; Yale Tavern, Inc. v. Cosmopolitan National Bank, 259 Ill. App. 3d 965, 971 (1994). The First District observed that Count 3 did not seek restoration of possession of the borrowers’ home, thereby preventing it from becoming a FEDA claim.

The Appellate Court also reasoned that if the borrowers were attempting to state a claim for some common-law tort, they were obligated, at a bare minimum — even as pro se plaintiffs — to explain what those elements were, and detail how Count 3 alleged them. The Appellate Court held that the borrowers had done neither.

The borrowers also appealed the dismissal of their claim under the Illinois Consumer Fraud and Deceptive Business Practices Act (“Illinois Consumer Fraud Act”), with the claim predicated on the allegation that the foreclosing mortgagee made misleading statements about the foreclosure court’s jurisdiction following the borrowers’ attempt to remove the matter to federal court.

The First District identified two fatal problems with this claim. The first flaw was that the mortgagee’s argument to the foreclosure court — that the federal judge’s “dismissal” and “termination” of the case in federal court was enough to re-vest the state court with jurisdiction — was a legal position taken in court with respect to a federal statute, not any kind of actionable misrepresentation of fact. See, e.g., Stern v. Norwest Mortgage, Inc., 284 Ill. App. 3d 506, 513 (1996), aff’d, 179 Ill. 2d 160 (1997).

The second fatal defect was that the borrowers did not and could not allege that the misrepresentation proximately caused their injuries. Connick v. Suzuki Motor Co., 174 Ill. 2d 482, 501 (1996). It was ultimately the foreclosure court’s, and only the foreclosure court’s, decision to determine its own jurisdiction or lack thereof.

The First District thus upheld the dismissal of the claim under the Illinois Consumer Fraud Act.

Finally, the Appellate Court also held that the borrowers failed to state a claim for false imprisonment because the eviction was carried out by the sheriff pursuant to a lawful court order, the bank’s role in the process, at most, was several steps removed from that action, and being kicked out of one’s home, but not otherwise restrained or detained, is not false imprisonment.

Accordingly, the First District affirmed the ruling of the trial court in its entirety.

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.