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Wells Fargo Bank, N.A v. Katie Mccluskey

November 2, 2012


Appeal from the Circuit Court of Du Page County. No. 10-CH-3920 Honorable (Richard J. Gettemy and Wells Fargo Bank, ) Robert G. Gibson, N.A., Defendants. Judge, Presiding.

The opinion of the court was delivered by: Justice Schostok

JUSTICE SCHOSTOK delivered the judgment of the court, with opinion. Justices Zenoff and Hudson concurred in the judgment and opinion.


¶ 1 In this mortgage foreclosure action, the defendant, Katie McCluskey, appeals the trial court's denial of her petition to vacate the foreclosure judgment. We reverse and remand for additional proceedings.

¶ 2 On September 28, 2009, the defendant executed and delivered a note to the plaintiff, Wells Fargo Bank, N.A., evidencing a loan of $330,186. To secure payment, the defendant and her husband, Richard Gettemy, conveyed a mortgage on their home at 1333 Cortland Drive in Naperville to the plaintiff. The note required the defendant to pay principal and interest to the plaintiff on the first day of each month, starting November 1, 2009. The note provided that the defendant would be in default if she did not make her payments when due. The defendant failed to make her monthly payment on April 1, 2010, or any payment due thereafter.

¶ 3 On July 14, 2010, the plaintiff filed an action against the defendant to foreclose the mortgage. The defendant was personally served with summons. On October 18, 2010, the plaintiff filed a motion to default the defendant for her failure to appear and plead to the complaint. The motion was supported by the affidavit of China Brown, the plaintiff's vice president of loan documentation. Following a hearing, the trial court found the defendant in default and entered a judgment of foreclosure. The trial court ordered that the property be sold at a sheriff's sale by open verbal bid.

¶ 4 On February 24, 2011, the day the property was set for sale, the defendant, by her attorney, filed a motion for an emergency stay pursuant to section 2-1301(e) of the Code of Civil Procedure (the Code) (735 ILCS 5/2-1301(e) (West 2010)), requesting the court to permit the attorney to appear, vacate the default order, and halt the sheriff's sale. In the motion, the defendant acknowledged that (1) she had been served with process seven months earlier; (2) she was in default on the mortgage; (3) the plaintiff had denied her request for a loan modification; and (4) she had hired an attorney to "forestall the mortgage foreclosure process while continuing to attempt to obtain loan modification relief."

¶ 5 At the hearing on the defendant's motion for an emergency stay, the parties negotiated an agreed order whereby the defendant withdrew the stay motion (including the motion to vacate the default order) and the plaintiff postponed the sale date for "approximately 75 days." The plaintiff informed the trial court that it had made no guarantee to the defendant that it would accept her loan modification proposal. Counsel for the parties signed the agreed order and the trial court entered it. The judicial sale was subsequently reset to May 12, 2011.

¶ 6 On May 12, 2011, the property was sold. The plaintiff was the successful bidder and filed a motion pursuant to section 15-1508 of the Illinois Mortgage Foreclosure Law (the Foreclosure Law) (735 ILCS 5/15-1508 (West 2010)) to confirm the sale. On June 7, 2011, the defendant, through a new lawyer, filed a second section 2-1301(e) motion to vacate the default judgment. The plaintiff alleged that Brown's affidavit did not comply with Illinois Supreme Court Rule 191 (eff. July 1, 2002) because Brown (1) had not attached the note and mortgage to her affidavit and (2) did not have personal knowledge about the facts of the case. The defendant also alleged that the plaintiff did not have standing to bring the suit.

¶ 7 On August 30, 2011, following a hearing, the trial court denied the defendant's motion to vacate. The trial court found that the defendant had voluntarily withdrawn her stay motion in return for the postponement of the sheriff's sale. As the defendant had gotten the benefit of her bargain, she could not now seek to rescind it. The trial court thereafter entered an order confirming the sheriff's sale and granting the plaintiff an order of possession. The defendant appeals the order denying her motion to vacate but not the confirmation order.

¶ 8 On appeal, the defendant argues that the trial court abused its discretion in denying her second section 2-1301(e) motion to vacate the default judgment. Specifically, she argues that her motion was timely because it was filed before the trial court entered its final order. She maintains that her allegations were sufficient to compel the plaintiff to go to trial in order to ensure that substantial justice was done between the parties. She further contends that the trial court abused its discretion in concluding that she had waived her right to file a section 2-1301(e) motion when she withdrew her earlier section 2-1301(e) motion in exchange for the 75-day stay of the judicial sale.

¶ 9 Section 2-1301(e) of the Code provides: "The court may in its discretion, before final order or judgment, set aside any default, and may on motion filed within 30 days after entry thereof set aside any final order or judgment upon any terms and conditions that shall be reasonable." 735 ILCS 5/2-1301(e) (West 2010). The moving party has the burden of establishing sufficient grounds to vacate a default judgment. In re Marriage of Ward, 282 Ill. App. 3d 423, 432 (1996).

¶ 10 In response, the plaintiff argues that the defendant's section 2-1301(e) motion was untimely because it was not brought until after the sheriff's sale had occurred. Relying on Mortgage Electronic Registration Systems, Inc. v. Barnes, 406 Ill. App. 3d 1, 4-5 (2010), the plaintiff contends that a section 2-1301(e) motion after a sheriff's sale is improper because it is inconsistent with section 15-1508(b) of the Foreclosure Law, which regulates orders confirming foreclosure sales. In Barnes, the Illinois Appellate Court, First District, stated:

"The Foreclosure Law governs the mode of procedure for mortgage foreclosures in Illinois (Plaza Bank v. Kappel, 334 Ill. App. 3d 847 (2002)), and 'any inconsistent statutory provisions shall not be applicable' (735 ILCS 5/15-1107(a) (West 2008)). Section 15-1508(b) of the Foreclosure Law provides that, after the foreclosure judgment and judicial sale, the circuit court shall confirm the sale unless the court finds that (i) a required notice was not given, (ii) the terms of the sale were unconscionable, (iii) the sale was conducted fraudulently, or (iv) justice was otherwise not done. 735 ILCS 5/15-1508(b) (West 2008). Because section 15-1508(b) limits the court's discretion to refuse confirmation of the sale to those four specified grounds, it is more restrictive than and, thus, inconsistent with section 2-1301(e) of the Code. If section 15-1508(b) of the Foreclosure Law did not prevail over section 2-1301(e) of the Code, then the latter would eviscerate the former because parties could thwart section 15-1508(b) by filing petitions to vacate non-final judgments even after foreclosure sales have been held. Such a practice would undermine the sale ...

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