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World Savings v. Amerus Bank

November 16, 2000


Appeal from the Circuit Court of Cook County No. 98 CH 05401 Honorable Aaron Jaffe, Judge Presiding.

The opinion of the court was delivered by: Justice Barth

In this mortgage foreclosure action, defendant, AmerUs Bank, n/k/a Commercial Federal Bank (Commercial), appeals from orders of the circuit court which denied Commercial's motion to strike portions of the affidavit of the third-party purchaser-appellee, Dorota Wasik, and which confirmed the sale of the residence of defendants Min Suek Lee and Cindy Lee to Wasik. We affirm.

On April 24, 1998, plaintiff World Savings and Loan Association filed in the trial court a complaint seeking to foreclose on a mortgage which the Lees executed in the principal amount of $182,500. The complaint named the Lees and a secondary mortgagee, AmerUs Bank, Commercial's predecessor in interest, as defendants. The complaint alleged that the Lees defaulted on their mortgage installment payments and that an outstanding principal balance of $161,865.59 remained. The complaint further identified Commercial as a secondary mortgagee in a mortgage securing notes for $74,300 and $60,000. Commercial submitted proof that, on these notes, unpaid principal balances of $69,520.88, and $56,030.95, respectively, remained due from the Lees.

On September 30, 1998, finding that the Lees had been properly served by publication, the trial court entered a judgment of foreclosure by default in the amount of $182,893.95. The judgment provided in pertinent part:

"[I]f the premises shall not be redeemed according to and within the time provided by law, *** then the real estate hereinabove described *** [shall] be sold at public vendue to the highest bidder by the Sheriff of the County wherein the property in question is located.

*** That said Sheriff upon making such sale, shall *** report the same to the Court for its approval and confirmation, and he shall likewise report the distribution of the proceeds of sale and his acts and doings in connection therewith; that he may accept plaintiff's receipt for its distributive share of the proceeds of sale in lieu of cash; that, in lieu of cash he may accept the receipt of any party to this proceeding found herein to have a lien on the property in question for said party's distributive share of the proceeds of sale for those amounts over and above the amounts due to Plaintiff ***."

The published notice of sale provided that the "[s]ale shall be under the following terms: Cash." The sale took place on March 9, 1999, at 12 p.m. According to the sheriff's report of sale, dated March 10, 1999, Wasik was the high bidder with a bid of $191,918.90. The report further states that the sheriff received payment from Wasik in the amount of the bid.

On April 6, 1999, plaintiff moved for an order confirming the sale to Wasik. Commercial opposed the confirmation of the sale on the grounds that the sale price was inadequate and that the sheriff failed to follow the terms of sale as provided in the judgment of foreclosure and the published notice of sale. Commercial submitted with its response to plaintiff's motion an appraisal dated April 13, 1999, which valued the subject property at $260,000. The appraisal report states that no inspection was made of the interior of the Lees' home.

Commercial also submitted the affidavits of Thomas Brennan, Erick J. Bohlman, and Crystal Zeigler. In his affidavit, Brennan stated that he is an employee of Commercial and that, on March 8, 1999, he wire transferred $26,970 to Superior Bank for deposit into the account of the law firm representing Commercial at the foreclosure sale.

In his affidavit, Bohlman stated that he was the attorney representing Commercial at the foreclosure sale. While attending the sale, he learned that the funds which were the subject of the wire transfer had not yet been deposited into his firm's account. He obtained plaintiff's permission to bid without cash on hand provided that he obtained the cash before 5 p.m that day. At the sale, Bohlman submitted a bid on behalf of Commercial which turned out to be the highest bid. After the bidding, Bohlman advised the deputy sheriff conducting the sale that he did not have cash on hand and of his agreement with plaintiff. The deputy sheriff decided that this was unacceptable and held the sale over.

In her affidavit, Zeigler stated that she was an employee of Superior Bank and that the bank received the wire transfer from Commercial at 4:50 p.m. on March 8, 1999. The bank inadvertently delayed crediting the law firm's account until March 10, 1999.

Commercial also moved to strike portions of an affidavit in which Wasik described how she changed her position in reliance on her status as the high bidder at the sale. In the affidavit, Wasik stated that, in reliance on her successful bid, she contracted to sell her home on April 3, 1999, in anticipation of making the subject property her home. On April 6, 1999, she agreed to change the closing date for the sale of her home from June 4, 1999, to May 21, 1999.

At the April 22, 1999, hearing on the motions, plaintiff, Commercial, and Wasik stipulated that, after the deputy sheriff rejected the sale to Commercial, a second round of bidding took place. Wasik was the high bidder the second time. Immediately after the sale, Wasik put down a 10% deposit and paid the balance of the sale price the following day. The parties also stipulated that three other foreclosure sale notices appearing in the same publication as the notice in this matter stated the terms of sale as 10% cash down. There was an additional stipulation to admit photographs which tended to show the poor condition of the interior of the premises.

Also at the hearing, the deputy sheriff who presided over the sale testified that the formal policy of the sheriff's department is that a party purchasing property at a foreclosure sale must put down 10% of the sale price in the form of cash or a certified cashier's check at the time of the sale and must pay the balance within 24 hours. He further testified that, before every sale, he announces this policy to those present to bid on the property and that he made such an announcement before commencing the bidding on March 9, 1999.

The trial court denied Commercial's motion to strike the disputed portions of Wasik's affidavit because it believed that the facts asserted therein were relevant in addressing the equitable considerations arising as a result of the sale. In issuing its ruling regarding the confirmation of the sale, the trial court stated:

"Number 1, I would find that notice has been given. There has been nothing proven with regard to the sale being fraudulent of anything. No one has really alleged that.

I don't think that it is unconscionable ***.

*** Commercial is not a stranger to the world of mortgages. And I think that counsel for the plaintiff is correct that this is the procedure and it has been used. It has been the custom, as I understand it, for ...

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