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Ocwen Loan Servicing LLC v. Victoria L. Kroening

October 28, 2011


The opinion of the court was delivered by: Judge Virginia M. Kendall


This is a foreclosure action brought by Ocwen Loan Servicing LLC against Victoria L. Kroening, the mortgagor of certain residential real property. Ocwen Loan Servicing LLC's Motion for Summary Judgment is granted.

I. The Material Undisputed Facts

On December 13, 2007, Taylor Bean & Whitaker Mortgage Corporation ("TBW") lent Victoria L. Kroening ("Kroening") $141,000.00 subject to a Note executed in favor of TBW. (Def. Rule 56.1 Resp. ¶ 1; Pl. Exhibit A). On the same day, TBW executed a Mortgage to secure the Note on Kroening's home, 8701 Burton Rd., Wonder Lake, IL 60097. (Def. Rule 56.1 Resp. ¶¶ 6-8). On December 21, 2007, TBW secured its interest in the Note by recording the Mortgage with the McHenry County Recorder. (Def. Rule 56.1 Resp. ¶ 6). The mortgagee of the Mortgage was the Mortgage Electronic Registrations Systems, Inc. ("MERS"), which acted as a nominee for the lender, TBW. (Id. ¶ 9; Pl. Exhibit B ¶ (C)). Under the terms of the Note, Kroening agreed to pay 6.25 percent in interest at a yearly rate; to pay taxes, insurance, and any other escrow items that might apply; and to make monthly payments on the first day of every month in the amount of $868.16. (Def. Rule 56.1 Resp. ¶¶ 3-6). According to the Note, the monthly payment amount was subject to change. (Id. ¶ 6).

On December 17, 2009, MERS, as TBW's nominee, assigned the rights associated with the Mortgage and the Note to Ocwen Loan Servicing LLC ("Ocwen"). (Id. ¶ 9). The assignment of the Mortgage was signed by Scott W. Anderson, an employee of Ocwen. (Id. ¶ 10). Anderson had authority to assign the Mortgage on behalf of MERS by Corporate Resolution. (Id.; Pl. Exhibit F).According to the terms of the Assignment of Mortgage, Ocwen acquired all of TBW's interests in Kroening's property pursuant to the Mortgage. (Def. Rule 56.1 Resp. ¶ 11).

In July of 2009, Kroening defaulted on her monthly obligations and has not made a payment since that time. (Def. Rule 56.1 Resp. ¶ 15; Pl. Exhibit D). On January 25, 2010, Ocwen, by its servicer, issued a notice of default to Kroening. (Def. Rule 56.1 Resp. ¶ 14; Pl. Exhibit E). On March 25, 2010, Ocwen also sent a Grace Period Notice to Kroening so as to comply with applicable Illinois foreclosure law. (Def. Rule 56.1 Resp. ¶ 17; Pl. Exhibit G). Kroening did not cure her default, and Ocwen brought suit in this Court for a Judgment of Foreclosure and additional damages and remedies. (Def. Rule 56.1 Resp. ¶ 16; Doc. 1). In late October 2009, this Court entered a Default Judgment against Kroening for failure to appear. (Doc. 17). Within thirty days Kroening filed a Motion to Vacate the Default Judgment, which this Court granted. (Doc. 21; Doc. 24). After conducting discovery, Ocwen moved for summary judgment against Kroening. (Doc. 30). Kroening opposed summary judgment, claiming that a number of disputed issues of material fact preclude this case from summary adjudication. For the reasons stated below, the Court grants Ocwen's Motion for Summary Judgment.

Kroening, who is represented by counsel, denies many of these facts and attempts to assert additional facts into evidence. However, Kroening failed to comply with Local Rule 56.1; all of her denials of Ocwen's material facts are devoid of citation to any record evidence. By contrast, Ocwen has complied with Rule 56.1, and supports all of its factual allegations with record evidence. Thus, all of Ocwen's factual allegations are deemed admitted. Kroening also attempts to assert additional facts into evidence.*fn1 None of Kroening's additional facts are supported by citations to valid record evidence as required by Rule 56.1. Her statement that an unknown investor actually owns the Mortgage and the Note is supported only by a screenshot to MERS's website. (Def. 56.1 Additional Facts ¶ 4). Kroening does not authenticate her factual claim with any affidavits or declarations. Furthermore, the screenshot is from the website of a third-party and as such is hearsay. Her statement regarding Anderson and his connection with other pending cases is also unsupported. (Id. ¶ 5). Kroening attaches photocopies of various signatures of Anderson on other mortgage assignment documents as the support for her claim, but these documents are also unverified and hearsay. This evidence is stricken. Finally, Kroening disputes the personal knowledge of Kyle Gardner, who's affidavit of debt Ocwen relies on, as not encompassing the entire history of the loan. (Id. ¶6). She cites to the second page of the notice of default letter as evidence that Ocwen did not obtain servicing rights to the property until December 2009. Kroening does not supply any evidence to rebut the personal knowledge set forth in Gardner's affidavit. It is undisputed that Ocwen did not obtain the rights in the property until December 2009, but this does not demonstrate that Ocwen was unable to obtain information about the loan dating to July of 2009. Kroening's remaining six additional facts are devoid of citation to any record evidence.

II. Choice of Law and the Standard of Review

The parties are before the Court subject to diversity jurisdiction. Federal courts sitting in diversity apply state law to contract disputes and employ the choice-of-law principles used by the forum state. See United States Textiles, Inc. v. Anheuser-Busch Cos., 911 F.2d 1261, 1269 (7th Cir. 1990) (citing Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 496 (1943)). Illinois courts routinely enforce contractual choice-of-law provision in disputes such as this one, where the Mortgage contains a governing law provision. See Belleville Toyota v. Toyota Motor Sales, U.S.A., 770 N.E.2d 177, 194 (Ill. 2002) ("Generally, choice of law provisions will be honored."). The parties do not dispute that the contractual issues involved in this suit are governed by the laws of the jurisdiction in which the property is located, which is Illinois. As the Seventh Circuit has stated, "Courts do not worry about conflicts of laws unless the parties disagree on which state's law applies." Auto-Owners Ins. Co., v. Webslov Computing, Inc., 580 F.3d 543, 547 (7th Cir. 2009).

Summary judgment is proper when "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). In determining whether a genuine issue of material fact exists, the Court must view the evidence and draw all reasonable inferences in favor of the party opposing the motion. See Bennington v. Caterpillar Inc., 275 F.3d 654, 658 (7th Cir. 2001); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). However, on summary judgment the Court will limits its analysis of the facts to that evidence that is supported by the parties' Local Rule 56.1 statements properly before the Court. Bordelon v. Chicago Sch. Reform Bd. of Tr., 233 F.3d 524, 529 (7th Cir. 2000). Where a proposed statement of fact is supported by the record and not adequately rebutted, for purposes of summary judgment the Court will accept that statement as true. An adequate rebuttal requires a citation to specific support in the record; an unsubstantiated denial is not adequate. See Albiero v. City of Kankakee, 246 F.3d 927, 933 (7th Cir. 2001); Drake v. Minnesota Mining & Mfg. Co., 134 F.3d 878, 887 (7th Cir. 1998) ("'Rule 56 demands something more specific than the bald assertion of the general truth of a particular matter[;] rather it requires affidavits that cite specific concrete facts establishing the existence of the truth of the matter asserted.'").

III. Discussion

As Ocwen argues, this case is essentially a contract dispute. See, e.g., U.S. Bank, N.A. v. Melte Willis, No. 10 C 5454, 2011 WL 3704428, *1 (N.D. Ill. August 22, 2011). Under well-established principled of Illinois contract law, courts construe contracts to effectuate the intent of the parties. See Virginia Surety Co., Inc. v. Northern Insurance Company of New York, 866 N.E.2d 149, 153 (Ill. 2007) ("The cardinal rule is to give effect to the parties' intent, which is to be discerned from the contract language"). To determine the intent of the parties a reviewing court must first look to the language of the contract itself. See Id. (citing Central Illinois Light Co. v. Home Insurance Co., 821 N.E.2d 206, 213 (Ill. 2004)). Where the language of a contract is clear and unambiguous, courts will give the terms their ordinary and popular meaning. See Central Illinois Light Co., 821 N.E.2d at 213. When a contract is unambiguous it controls and must be given effect. Contract interpretation is a matter of law that is well-suited to summary adjudication. See Covinsky v. Hannah Maine Corp., 903 N.E.2d 422, 425 (Ill. App. Ct. 2009).

The Mortgage and the Note prescribe, inter alia, how payments are to be made, the rights and obligations of the respective parties under each of the instruments, and the manner of foreclosure in the event of default. The Mortgage states in bold typeface that "MERS is the mortgagee under this Security Instrument." (See Pl. Exhibit B, pg. 1). The Mortgage provides:

This Security Instrument secures to Lender: (i) the repayment of the Loan, and all renewals, extensions and modifications of the Note; and (ii) the performance of Borrower's covenants and agreements under this Security Instrument and the Note. For this purpose, Borrower does hereby mortgage, grant and convey to MERS (solely as nominee for Lender and Lender's successors and assigns) and to the successors and assigns of MERS the ...

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