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Bayview Loan Servicing, LLC v. 2010 Real Estate Foreclosure, LLC

Court of Appeals of Illinois, First District, Second Division

June 25, 2013

BAYVIEW LOAN SERVICING, LLC, As Servicer for Citimortgage, Inc., Assignee of Mortgage Electronic Systems, Inc., as Nominee for Credit Suisse First Boston Financial Corporation, Plaintiff-Appellee,
v.
2010 REAL ESTATE FORECLOSURE, LLC, Intervenor-Appellant (Mark Laskowski, The Bank of Commerce, Under Mortgage Recorded as Document Number 0703908031, Pacific Realty Group, LLC, Under Memorandum and Affidavit of Equitable Interest, Recorded as Document Number 0834555052, Nonrecord Claimants, Unknown Tenants, and Unknown Owners, Defendants).

Held [*]

The denial of intervenor’s motion to vacate the confirmation of a foreclosure sale following a judgment of foreclosure and an order of sale was not an abuse of discretion, notwithstanding intervenor’s contentions that plaintiff failed to register as a collection agency under the Collection Agency Act, or prove it was exempt, and that plaintiff filed a defective lis pendens, since intervenor failed to establish that plaintiff, the loan servicer, was subject to the Act, and the lis pendens plaintiff filed complied with the Mortgage Foreclosure Law; therefore, intervenor failed to prove that “justice was otherwise not done” pursuant to section 15- 1508(b) of the Foreclosure Law.

Appeal from the Circuit Court of Cook County, No. 09-CH-25261; the Hon. Jesse G. Reyes, Judge, presiding.

Acumen Law Group, LLC, of Chicago (Bardia Fard, of counsel), for Appeal appellant.

Law Offices of Ira T. Nevel, LLC (Ira T. Nevel, of counsel), and Noonan & Lieberman, Ltd. (Ruth B. Sosniak, of counsel), both of Chicago, for appellee.

Panel PRESIDING JUSTICE HARRIS delivered the judgment of the court, with opinion. Justices Connors and Simon concurred in the judgment and opinion.

OPINION

HARRIS PRESIDING JUSTICE

¶ 1 Plaintiff, Bayview Loan Servicing, LLC, as servicer for Citimortgage, Inc., assignee of Mortgage Electronic Registration Systems, Inc., as nominee for Credit Suisse First Boston Financial Corporation (plaintiff), brought this mortgage foreclosure action against defendants, Mark E. Laskowski, the Bank of Commerce, under mortgage recorded as document number 0703908031, Pacific Realty Group, LLC, under memorandum and affidavit of equitable interest, recorded as document number 0834555052, nonrecord claimants, unknown tenants and unknown owners (collectively defendants) on July 23, 2009. Defendants are not parties to this appeal. After a judgment of foreclosure and order of sale was entered by the circuit court, a judicial sale of the subject property occurred. Upon the motion of plaintiff, the circuit court confirmed the judicial sale. Intervenor, 2010 Real Estate Foreclosure, LLC, sought to vacate the confirmation of the sale pursuant to both section 2-1301(e) of the Illinois Code of Civil Procedure (Code) (735 ILCS 5/2-1301(e) (West 2010)) and section 15-1508(b) of the Illinois Mortgage Foreclosure Law (Foreclosure Law) (735 ILCS 5/15-1508(b) (West 2010)). Following a hearing, the circuit court denied intervenor's motion to vacate the confirmation of the sale. At issue here is whether the circuit court abused its discretion in denying intervenor's motion to vacate the confirmation of the sale. Initially, we note that we have only analyzed the component of intervenor's motion to vacate brought pursuant to section 15-1508(b) of the Foreclosure Law. The component of intervenor's motion to vacate brought pursuant to section 2-1301(e) of the Code is not applicable here because plaintiff invoked the mandatory obligations under section 15-1508(b) of the Foreclosure Law when it properly motioned for a confirmation of the sale. Under section 15-1508(b) of the Foreclosure Law, we hold that intervenor failed to carry its burden of proving that sufficient grounds existed to vacate the confirmation of sale in this case. Specifically, intervenor failed to show that "justice was otherwise not done" in the judicial sale in accordance with section 15-1508(b) of the Foreclosure Law. Accordingly, the circuit court did not abuse its discretion in denying intervenor's motion to vacate the confirmation of the sale.

¶ 2 JURISDICTION

¶ 3 On January 17, 2012, the circuit court denied intervenor's motion to vacate the confirmation of the sale. On March 30, 2012, this court allowed intervenor leave to file a late notice of appeal. Intervenor filed its late notice of appeal on April 4, 2012. Accordingly, this court has jurisdiction pursuant to Illinois Supreme Court Rules 301 and 303 governing appeals from final judgments entered below. Ill. S.Ct. R. 301 (eff. Feb. 1, 1994); R. 303 (eff. May 30, 2008).

¶ 4 BACKGROUND

¶ 5 Plaintiff brought its complaint to foreclose a mortgage against defendants on July 23, 2009.[1] On January 23, 2010, the circuit court entered a judgment of foreclosure and order of sale. The circuit court additionally entered the following orders: summary judgment was entered against Laskowski; the unknown owners, unknown tenants, and nonrecord claimants were dismissed; and an order of default was entered against the remaining defendants.

¶ 6 On May 13, 2010, intervenor filed its appearance and an emergency motion to "continue sale." At this time, attorney Stephen Richek represented intervenor. In its motion, intervenor argued that it was the successful bidder at the foreclosure sale conducted by the second mortgagee on the property. Intervenor further asserted that it had "a [m]otion pending to be heard on June 4, 2010 as to whether the sale of the second mortgage will be vacated due to bankruptcy issues" and that "if [it was] successful in vacating the sale of the second mortgage then it needs to deliver the property in the same condition as it was prior to the sale so that the second mortgage can be in a position to decide whether it will pay off the first lien or what it will do." On May 17, the circuit court entered an order allowing intervenor to intervene and stayed the sale.

¶ 7 On July 1, 2010, a similarly named entity, "2010 Real Estate Foreclosure, LLC 1106" (1106), represented by attorney Adam S. Tracey, filed a motion to set aside the sale alleging that the sale of the property violated a bankruptcy stay.

¶ 8 On July 14, 2010, plaintiff filed a "motion for order approving the report of sale and distribution and possession." Plaintiff stated that the judicial sale of the property occurred on June 25, 2010.

¶ 9 On November 23, 2010, 1106 filed a motion to set aside the sale of the property, again alleging the sale violated a bankruptcy stay.

¶ 10 On January 5, 2011, plaintiff filed another motion for an order approving the report of sale and for distribution and possession for the judicial sale that occurred on June 25, 2010.[2]The report of sale indicated a deficiency on the amount owed under the mortgage of $78, 789.23. Also on January 5, 2011, the circuit court entered an order on "defendant's motion to set aside sale." In the caption, defendant was listed as "2010 Real Estate, et al." The order denied defendant's motion without prejudice and stated "the movant not appearing and plaintiff tendering to the court an order annulling the stay entered by the bankruptcy court." The record is not clear whether the defendant on this particular motion was intervenor or the similarly named party, 1106.

¶ 11 Intervenor, now represented by the Acumen Law Group, LLC, [3] filed a response in opposition to plaintiff's motion for an order approving the report of sale and for distribution and possession. In its response, intervenor alleged that there was a second mortgage on the property, also subject to a foreclosure proceeding under case number "09-CH-04354." Intervenor was the successful bidder at the February 2, 2010, judicial sale brought by the second mortgagee on the subject property. Intervenor argued that the circuit court should not confirm the sale of the property in the present action because it would "severely prejudice, and potentially moot, [intervenor's] *** pending motion to vacate confirmation of sale in the [second] mortgage action." Intervenor asked the court to deny plaintiff's motion to confirm the sale "pending a full adjudication"of its motion to vacate the sale in the second mortgage foreclosure action. Intervenor alleged that after it was the successful bidder at the judicial sale of the property for the second mortgage, it learned that "a fraudulent release of the [first] mortgage had been recorded with the Cook County Recorder of Deeds." Intervenor further alleged that plaintiff filed a defective lis pendens. According to intervenor, had it known of the alleged fraudulent release and defective lis pendens, it would not have bid on the property at the judicial sale of the property brought by the second mortgagee.

¶ 12 On September 26, 2011, plaintiff refiled its report of sale and distribution. On that same day, the circuit court entered an order confirming the judicial sale of the property.

¶ 13 On October 24, 2011, intervenor filed a motion, pursuant to section 2-1301(e) of the Code (735 ILCS 5/2-1301(e) (West 2010)), to vacate the confirmation of the foreclosure sale and to intervene. Intervenor argued that it acted diligently, had meritorious claims, would be severely penalized if the confirmation of the sale is not vacated, and that plaintiff would not be prejudiced by a vacation of the confirmation of the sale. Intervenor stated it had unsuccessfully attempted to vacate the confirmation of the judicial sale brought by the second mortgagee. In support of its allegation that it had meritorious claims, intervenor relied on section 15-1508(b)(iv) of the Foreclosure Law (735 ILCS 5/15-1508(b)(iv) (West 2010)), claiming that justice would not otherwise be done if confirmation of the sale was not vacated. To show that justice would not otherwise be done, intervenor realleged that plaintiff filed a defective lis pendens and that a fraudulent release of a mortgage occurred. Accordingly, intervenor claimed that "[a]s a consequence of the fraudulent release of the first mortgage and the defective lis pendens, [it] actually and reasonably believed that it was purchasing the [p]roperty without the first mortgage encumbrance." Intervenor alleged that had it known of the first mortgage, it would not have bid at the foreclosure sale brought by the second mortgagee. Additionally, intervenor alleged that plaintiff was not licensed as a collection agency under the Illinois Collection Agency Act (Collection Act) (225 ILCS 425/1 et seq. (West 2010)). According to intervenor, plaintiff was required under the Collection Act to be licensed. Therefore, intervenor argued that plaintiff's foreclosure action was void.

¶ 14 As exhibit "A" to its motion, intervenor attached a print out from the Cook County recorder of deeds website. Intervenor highlighted the section of the printout where the lis pendens was listed on the website. Under the heading "Grantor/Trust No." plaintiff's name appears, and under the heading "Grantee/Trust No." the name of codefendant Mark Laskowski appears. The following disclaimer appears at the bottom of the print out:

"While the Cook County Recorder of Deeds (CCRD) attempts to keep this website up to date with existing law and policies, the CCRD does not guarantee the accuracy of any of the information contained herein, including, but not limited to, database information and document images. CCRD also does not guarantee the legality of the documents and database information contained herein and accepts no liability for any damages incurred, whether directly, indirectly, incidental, punitive or consequential as a result of any errors, omissions, or discrepancies in any ...

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