Appeal from the Circuit Court of Du Page County. No. 08-CH-955 Honorable Neal Cerne and Robert G. Gibson, Judges, Presiding.
The opinion of the court was delivered by: Justice Schostok
JUSTICE SCHOSTOK delivered the judgment of the court, with opinion. Justices McLaren and Zenoff concurred in the judgment and opinion.
¶ 1 The plaintiff, Deutsche Bank National Trust Company, filed a foreclosure suit against the defendant, James L. Gilbert. Gilbert raised the affirmative defense that Deutsche Bank lacked standing at the time it filed the suit. Gilbert also filed a counterclaim alleging violations of the federal Truth in Lending Act (TILA) (15 U.S.C. § 1601 (2006)) and seeking damages. The parties filed cross-motions for summary judgment. The trial court initially found in favor of Gilbert on the issue of standing and dismissed the foreclosure. However, following Deutsche Bank's filing of a motion for reconsideration, the trial court reversed itself and granted summary judgment in favor of Deutsche Bank on all claims. Gilbert appeals, arguing that the trial court's initial decision was correct, and that he is also entitled to summary judgment in his favor on the counterclaim. For the following reasons, we reverse the judgment of foreclosure and dismiss the cause, and affirm the dismissal of the counterclaim.
¶ 3 On August 15, 2005, Gilbert entered into a home mortgage loan with WMC Mortgage Corporation. The loan was secured with a mortgage to Mortgage Electronic Registration Systems, Inc. (MERS). The loan had a variable interest rate that would fluctuate within certain parameters, generally being equal to 3.85% plus the London Inter-Bank Offered Rate (LIBOR), rounded to the nearest 0.125%. Gilbert asserts that, at the time of the loan, the LIBOR was 4.0817%,*fn1 and thus the initial interest rate on the loan would have been 8.000%. However, the note specifically provided for an initial interest rate of 6.990% during the first two years of the loan.
¶ 4 At the time of closing, WMC Mortgage provided Gilbert with copies of the note, the mortgage, and a document labeled "Variable Rate Mortgage Program Disclosure." This last document contained the following statement: "This ARM [Adjustable Rate Mortgage] loan may have a discount feature, and your initial interest rate may not be based on the index used to make later adjustments." The next sentence suggested that Gilbert "[a]sk about our current interest rate discount."
¶ 5 On March 10, 2008, Deutsche Bank filed a foreclosure action against Gilbert. In its complaint, it alleged that it was the current holder of the indebtedness. Copies of the note and the mortgage were attached to the complaint as exhibits.
¶ 6 On August 25, 2008, MERS (as nominee for WMC Mortgage) executed a document titled "Assignment of Mortgage" (Assignment). The Assignment stated that MERS, for certain consideration "the receipt of which is hereby acknowledged," "assigned and transferred" to Deutsche Bank, "as Trustee under the Pooling and Servicing Agreement dated as of November 1, 2005, GSAMP Trust 2005-WMC2," all interests in Gilbert's mortgage. On September 12, 2008, Deutsche Bank filed an amended complaint, attaching the Assignment as an exhibit. Gilbert filed an answer, raising the affirmative defense of lack of standing on the ground that the Assignment showed that Deutsche Bank did not own the indebtedness when it originally filed the foreclosure. Gilbert also filed a counterclaim, in which he alleged that WMC Mortgage's disclosures to him at the time of closing violated TILA (15 U.S.C. § 1601 et seq. (2006)) by stating only that the initial interest rate might be discounted, although WMC Mortgage knew for certain that the rate was discounted. Gilbert asserted that Deutsche Bank was liable for these violations as the assignee of the mortgage.
¶ 7 In September 2009, both sides filed motions for summary judgment. Gilbert argued that he was entitled to a dismissal of the foreclosure (on the ground that Deutsche Bank lacked standing to bring the suit at the time the suit was filed) and judgment in his favor on his counterclaim. Deutsche Bank contended that it did have standing at the time it filed suit, because the Assignment simply memorialized an earlier transfer of interest. In support, it submitted an affidavit from William F. Loch, an employee of a company that serviced loans for Deutsche Bank, in which Loch averred that, based on his review of "the documents contained in the Gilbert loan file," MERS assigned its interest to Deutsche Bank on November 1, 2005. Loch did not state how he knew that this was when the assignment occurred, and he did not attach any documentary evidence that the assignment had occurred on this date. Deutsche Bank also argued that the counterclaim was defective on a number of bases, including that it was untimely and that the conditions necessary for Deutsche Bank to have assignee liability had not been met.
¶ 8 On November 23, 2009, after the motions had been fully briefed and orally argued, the trial court issued its initial ruling. As to the standing issue, it granted Gilbert's motion for summary judgment and dismissed the foreclosure, finding that Deutsche Bank was not the holder of the indebtedness at the time it filed the suit. The trial court noted Loch's averment that Deutsche Bank was the holder on the date of filing, but found it "to be a legal conclusion and just because he says it does not make it so." The trial court further noted that there was no document showing when the assignment took place. As to the counterclaim, the trial court denied both parties' motions for summary judgment because it believed that there were issues of fact regarding whether the violations of TILA could be seen on the face of the loan documents and thus whether Deutsche Bank could be liable as an assignee.
¶ 9 Deutsche Bank filed a motion for reconsideration, arguing that the Assignment "clearly stated" that MERS assigned its interest to Deutsche Bank on November 1, 2005. In addition, Deutsche Bank argued, the counterclaim was time-barred, and Deutsche Bank was not subject to assignee liability because the alleged TILA violations were not apparent on the face of the loan documents. The motion was fully briefed, but on the hearing date, only the attorney for the bank showed up. The trial court listened to Deutsche Bank's arguments. It then granted reconsideration and reversed its earlier rulings, granting summary judgment for Deutsche Bank on all claims. Regarding the counterclaim, the trial court found that there was no assignee liability for the alleged TILA violations because the violations were not "really clear" from the face of the documents. In addition, it found that the counterclaim was time-barred.
¶ 10 The court entered a judgment of foreclosure, and the home was sold to Deutsche Bank, resulting in a deficiency of approximately $250,000. (Because the deficiency judgment was in rem, Gilbert was not personally liable for it.) In due course, ...