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Yelena Shchekina v. Washington Mutual Bank

August 7, 2012

YELENA SHCHEKINA, PLAINTIFF,
v.
WASHINGTON MUTUAL BANK, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Matthew F. Kennelly, District Judge:

MEMORANDUM OPINION AND ORDER

Yelena Shchekina has sued Washington Mutual Bank (WaMu), JPMorgan Chase Bank (Chase), First Magnus Financial Corp., and Dmitry Ryaguzov to quiet title in real estate located in Long Grove and for a declaratory judgment that, among other things, none of the defendants has an interest in the real estate. The Court has jurisdiction based on diversity of citizenship.

Shchekina contends, among other things, that her signature on loan and mortgage documents executed in favor of First Magnus was forged. Chase is the current holder of the First Magnus note and mortgage, having acquired them from WaMu, which acquired them from First Magnus. Ryaguzov is alleged to be a current tenant of the real estate.

Chase has counterclaimed, seeking a determination that if the First Magnus loan and mortgage documents are found to have forged signatures, it should be found to be subrogated to a previous note and mortgage in favor of HLB Mortgage, which the First Magnus loan paid off. Alternatively, Chase asks to be subrogated to the last mortgage in the chain that is determined to be valid. Chase also seeks an equitable lien in an amount equal to its own loan or the loan accompanying the mortgage to which it is found to be subrogated.

The case was reassigned to the undersigned judge after the unfortunate passing of its respected colleague, Judge William J. Hibbler. Chase has moved for partial summary judgment on its counterclaim. For the reasons stated below, the Court grants Chase's motion in part.

Background

In 2003, Shchekina and her husband purchased residential property located at 6517 Saddle Ridge Court, in Long Grove, Illinois. To purchase the property, they borrowed $472,000 from WaMu and executed a purchase money mortgage in WaMu's favor to secure repayment of the loan. Shchekina and her husband later refinanced the WaMu loan with Guaranty Residential Lending and executed a mortgage in Guaranty Residential's favor to secure the loan, also in the amount of $472,000. Shchekina admits that she signed the documentation relating to both the WaMu note and mortgage and the Guaranty Residential note and mortgage. Shchekina has testified that she was aware that the Guaranty Residential loan was used to pay off the WaMu loan.

In 2005-2006, there were three subsequent notes and mortgages relating to the Long Grove property. The first transaction involved a mortgage in favor of Guaranty Bank, which secured a loan in the amount of $592,000, at least part of which was used to pay off the balance of the Guaranty Residential loan. The next transaction was with HLB Mortgage and involved a loan of $650,000, which was used to pay off the Guaranty Bank loan, and a mortgage in HLB's favor to secure repayment. The last transaction was a loan from First Magnus Mortgage in the amount of $650,000, which was used to pay off HLB, and a mortgage to secure repayment to First Magnus. At each juncture, when the new lender's mortgage was recorded, the prior lender's mortgage was released.

As indicated earlier, First Magnus later assigned its note and mortgage to WaMu. Chase acquired the note and mortgage via an FDIC receivership after WaMu failed.

Shchekina disputes the validity of Guaranty Bank, HLB, and First Magnus mortgages. Specifically, she claims that her signatures on the mortgages and loan documents were forged. Shchekina also denies knowing that these loans were taken out to pay off the balances of the prior loans.

Shchekina has also offered the testimony of James Hayes, a handwriting expert. Hayes reviewed only the First Magnus documents. He has testified that the signature on the First Magnus documents does not appear to be Shchekina's signature. Shcheckina has also provided affidavits from two friends and colleagues who state that they are familiar with her signature and that her purported signatures on the First Magnus, HLB, and Guaranty Bank mortgages are not actually her signatures.

Discussion

Chase has moved for summary judgment on its counterclaim, in which it seeks equitable subrogation and imposition of an equitable lien. Chase concedes for purposes of the present motion that Shchekina's signature on the First Magnus documents was forged. Chase argues, however, that it should be allowed to assert the rights of the mortgagee whose loan First Magnus paid off -- in other words, that it should be equitably subrogated to the HLB note and mortgage. In this regard, Chase contends that Shchekina has not offered evidence sufficient to give rise to a genuine factual dispute regarding the validity of the HLB mortgage. In the alternative, Chase asks the Court to find that Chase is subrogated to the position of the mortgagee on the last mortgage in the chain that the Court finds to be valid. Chase also requests imposition of an equitable lien in its favor.

On a motion for summary judgment, the Court "view[s] the record in the light most favorable to the non-moving party and draw[s] all reasonable inferences in that party's favor." Trinity Homes LLC v. Ohio Cas. Ins. Co., 629 F.3d 653, 656 (7th Cir. 2010). Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A genuine issue of triable fact exists only if "the evidence is ...


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