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Metrobank, Successor By Merger With Community Bank v. Frank R. Cannatello

January 9, 2012


Appeal from the Chicago Circuit Court of Cook County. Honorable Franklin U. Valderama, Judge Presiding. No. 10 CH 003150

The opinion of the court was delivered by: Justice Rochford

JUSTICE ROCHFORD delivered the judgment of the court, with opinion.

Justices Hall and Karnezis concurred in the judgment and the opinion.


¶ 1 Plaintiff-appellant, Metrobank, successor by merger with Chicago Community Bank, brought this action to foreclose a mortgage and obtain a personal deficiency judgment against defendant-appellee Frank R. Cannatello (defendant).*fn1 Defendant failed to appear in this case after receiving notice via abode service. A default judgment was entered against him and the mortgaged property was sold. After the sale, the trial court denied plaintiff's request for a personal deficiency judgment, having found that defendant was not personally served as required under section 15-1508(e) of the Illinois Mortgage Foreclosure Law (Foreclosure Law). 735 ILCS 5/15-1508(e) (West 2010). It appears that no Illinois case has previously addressed whether a personal deficiency judgment may be entered against a defendant who failed to appear in the foreclosure action after abode service. We reverse.


¶ 3 The mortgage at issue was executed by defendant on May 11, 2004, and was on a multi-unit property located at 520 W. 44th Place in Chicago (property). The mortgage was secured by defendant's promissory note, which was later renewed in a principal amount of $190,318.25. The mortgage provided for various remedies in the event of a default by defendant, including the right to obtain a judgment against defendant for any deficiency owed plaintiff after foreclosure and sale of the property. The mortgage was recorded against the property on July 14, 2004. The mortgage and notes listed defendant's home address as 2947 S. Halsted Street, Chicago. Subsequently, defendant defaulted on his payments.

¶ 4 On January 25, 2010, plaintiff filed its complaint against defendant seeking to foreclose the mortgage on the property pursuant to section 15-1504 of the Foreclosure Law. 735 ILCS 5/15-1504 (West 2010). The unpaid principal balance, at the time of the filing of the complaint, was $189,203.54. Plaintiff also alleged defendant was personally liable for any deficiency. The complaint prayed for a judgment of foreclosure, sale of the property, and a personal judgment for any deficiency balance found due after the sale against defendant.

¶ 5 Pursuant to section 2-203 of Article II of the Illinois Code of Civil Procedure, plaintiff accomplished abode service on defendant. 735 ILCS 5/2-203 (West 2010). The sheriff's affidavit of service averred that, on February 17, 2010, a copy of the complaint and summons was left with Robert Cannatello, age 64, a member of defendant's family or person who lived at 2947 S. Halsted Street in Chicago, defendant's usual place of abode. The affidavit further stated the deputy sheriff explained the contents of the complaint and summons to Robert Cannatello and mailed the summons and complaint in a sealed envelope with postage prepaid to defendant at the same address.

¶ 6 Defendant failed to appear or answer. On July 14, 2010, upon plaintiff's motion, with notice to defendant, and supported by affidavits and exhibits, the circuit court found defendant in default and entered a default judgment in the amount of $214,173.57 in favor of plaintiff and ordered the sale of the property. The order also provided that, after the sale:

"[I]f the remainder of the proceeds shall not be sufficient to pay the above described amounts and interest, the Selling Officer shall then specify the amount of the deficiency in his Report of Sale. The Plaintiff shall be entitled to a judgment in personam/in rem against defendant(s) FRANK R. CANNATELLO, as the named defendant(s) for the amount of such deficiency, with the same lien priority as to the underlying mortgage foreclosed herein." (Emphasis in original.)

Judicial Sales Corporation was appointed selling officer for the public auction of the property.

¶ 7 On October 15, 2010, the property was sold to plaintiff as the highest bidder for a credit bid of $170,000. The report of the sale and distribution indicated a deficiency of $51,956.89. On December 16, 2010, plaintiff filed a motion to confirm the sale and a motion under section 15-1508(e) of the Foreclosure Law seeking a judgment against defendant for the deficiency. Section 15-1508(e) of the Foreclosure Law provides:

"In any order confirming a sale pursuant to the judgment of foreclosure, the court shall also enter a personal judgment for deficiency against any party (i) if otherwise authorized and (ii) to the extent requested in the complaint and proven upon presentation of the report of sale in accordance with Section 15-1508. Except as otherwise provided in this Article, a judgment may be entered for any balance of money that may be found due to plaintiff, over and above the proceeds of the sale or sales, and enforcement may be had for the collection of such balance, the same as when the judgment is solely for the payment of money. Such judgment may be entered, or enforcement had, only in cases where personal service has been had upon the persons personally liable for the mortgage indebtedness, unless they have entered their appearance in the foreclosure action." 735 ILCS 5/15-1508(e) (West 2010).

Defendant was notified of the motions. The circuit court confirmed the sale on January 20, 2011, but it entered an order denying the motion for a personal deficiency judgment "based on the reason that abode ...

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