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Deutsche Bank National Trust Company, Trustee On Behalf of the v. Paul Steven Brueggemann A/K/A Paul S.

December 18, 2012

DEUTSCHE BANK NATIONAL TRUST COMPANY, TRUSTEE ON BEHALF OF THE CERTIFICATEHOLDERS OF MORGAN STANLEY ABS CAPITAL I INC. TRUST 2004-HE7,MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-HE7, PLAINTIFF,
v.
PAUL STEVEN BRUEGGEMANN A/K/A PAUL S. BRUEGGEMANN; CHRISTINA M. BRUEGGEMANN A/K/A CHRISTINA M. BRUNS; UNITED STATES OF AMERICA; WASHINGTON COUNTY HOSPITAL; PINCKNEYVILLE COMMUNITY HOSPITAL; PERSONAL FINANCE COMPANY, LLC, DEFENDANTS.



The opinion of the court was delivered by: Herndon, Chief Judge

MEMORANDUM AND ORDER

I. INTRODUCTION

This is a mortgage foreclosure action. Pending before the Court is plaintiff Deutsche Bank National Trust Company's (Deutsche Bank) motion for summary judgment pursuant to FEDERAL RULE OF CIVIL PROCEDURE 56 against defendant the United States of America (USA), a party to this action due to its recorded tax lien on the subject property. In support, Deutsche Bank offers an affidavit of Judy Johnson (Johnson), an Assistant Vice President, Senior Operations Manager for Bank of America (BANA), the servicer of the subject loan (Doc. 18). The USA has filed a motion to strike Johnson's affidavit, arguing alternatively that Deutsche Bank did not properly disclose Johnson as a supporting witness and that Johnson's statements do not meet the requirements of Rule 56 (Doc. 20). For the following reasons, the Court GRANTS Deutsche Bank's motion for summary judgment (Doc. 18) and DENIES the USA's motion to strike (Doc. 20).

II. BACKGROUND

On March 26, 2004, defendants Paul Steven Brueggemann a/k/a Paul S. Brueggemann and Christina M. Brueggemann a/k/a Christina M. Bruns (Collectively, the Brueggemanns) executed a mortgage pledging the real property located at 3803 State Route 154, Perry County, Pinckneyville, Illinois, 62274, to secure a note in the principal sum of $100,000.00 (Doc. 18-1, Ex. 1). The mortgage was recorded on August 25, 2004, with the Perry County, Illinois, Recorder of Deeds, as document number 2004-3135 (Doc. 18-1, Ex. 1).

Unfortunately, the Brueggemanns defaulted on the terms of the note and mortgage in January, 2009. Although not the original mortgagee, Deutsche Bank received assignment of all interests under the note and mortgage on July 19, 2011 (Doc. 2-2, Ex. C). Thus, on October 11, 2011, Deutsche Bank filed a mortgage foreclosure action under 735 ILCS 5/15-1101 et seq., in Perry County, Illinois (Doc. 2-2). The USA timely removed to this Court on November 3, 2011 (Doc. 2), citing 28 U.S.C. §§ 1441(c), 1442(a), 1444, and 2410. The complaint alleges the USA's interest in this dispute arises from its tax lien recorded with the Perry County, Illinois, Recorder of Deeds on May 14, 2010, as document number 2010-01244 in the amount of $11,195.41 (Doc. 2-2, p. 3, Para. 3(L)). The USA's answer admits the allegation that it claims a lien in this matter and additionally states that as of December 30, 2011, its lien against the subject property amounted to $17,5006.42 [sic] (Doc. 6, p. 2, Para. 3(L)(1)).

On May 4, 2012, the Clerk entered an entry of default against the Brueggemanns, Personal Finance Company, LLC, Pinckneyville Community Hospital, and Washington County Hospital (Doc. 16). However, the Court has granted Deutsche Bank's request for postponement of its motion for default judgment against the above-named defendants pending resolution of its instant motion for summary judgment against the USA (Doc. 23). Additionally, the Court granted Deutsche Bank's voluntary motion for dismissal of Unknown Owners and Non-record Claimants on May 4, 2012 (Doc. 17).

This brings the Court to Deutsche Bank's motion for summary judgment against the USA (Doc. 18). Deutsche Bank states the following are undisputed: 1. the Brueggemanns executed a note in the amount of $100,000.00 secured by a mortgage against the subject property; 2. the mortgage was recorded on August 25, 2004, with the Perry County Recorder of Deeds, thereby giving notice to third parties; 3. Deutsche Bank is the successor mortgagee and is entitled to enforce the note pursuant to U.C.C. § 3-301; 4. the Brueggemanns defaulted on their monthly payments as of January 1, 2009, and have failed to cure their default; 5. the outstanding unpaid principal balance of the note is $96,378.18; and 6. the Illinois Mortgage Foreclosure Law provides for enforcement of Deutsche Bank's lien against the property. Deutsche Bank instantly moves for summary judgment against the USA, as its mortgage has priority over the USA's later-recorded tax lien. In support of its allegations, Deutsche Bank offers copies of pertinent documents; notably, the mortgage, note, and BANA computer-generated records detailing the Brueggemanns' payment history regarding the subject loan. Deutsche Bank additionally offers Johnson's affidavit, in which she states that as an Assistant Vice President, Senior Operations Manager for BANA, servicer of the subject loan, she has personal knowledge of BANA's computer-generated records and has reviewed and analyzed the business and loan records of the subject loan in the ordinary course of her employment (Doc. 18-1, pp. 1-4).

While Deutsche Bank classifies this litigation as a "routine mortgage foreclosure action," the USA threw a wrinkle in Deutsche Bank's progression to its requested judgment by filing a motion to strike Johnson's affidavit (Doc. 20). While the USA does not offer evidence in contradiction of Deutsche Bank's or Johnson's assertions, it instead argues that Johnson's affidavit must be stricken as: 1. Johnson was not disclosed to it as a supportive witness; thus, the USA was not afforded an adequate opportunity to discover essential information regarding Johnson, and alternatively, 2. Johnson lacks personal knowledge, her testimony includes inadmissible evidence, and she is not competent to testify.

In light of the USA's motion, the Court deferred ruling on Deutsche Bank's motion for summary judgment until the USA deposed Johnson (Doc. 21). The USA deposed Johnson on August 7, 2012, thereafter renewing both its motion to strike and its opposition to Deutsche Bank's motion for summary judgment. The USA renewed its arguments on the basis that Johnson's statements are insufficient under Rule 56. Thus, the USA's argument that the Court should strike Johnson's affidavit because she was not disclosed as a witness is rendered moot. Accordingly, in determining whether to strike Johnson's affidavit, the Court shall solely review whether her statements meet the requirements of Rule 56.

III. LAW

a. Jurisdiction

Deutsche Bank's complaint alleges the USA's tax lien is subordinate to its mortgage. It instantly seeks judgment as a matter of law as to this allegation. An action affecting property on which the United States has a lien may be removed by the United States. See 28 U.S.C. §§ 1444 and 2410; see also City of Joliet, Ill. v. New West, L.P., 562 F.3d 830, 833 (7th Cir. 2009) ("[T]he presence of the national government as a party with a security in the real estate supplies jurisdiction.").*fn1 Further, a civil action ...


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