DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR GSAA HOME EQUITY TRUST 2006-18, ASSET-BACKED CERTIFICATES, SERIES 2006-18, Plaintiff,
TRACY CORNISH, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., AS NOMINEE FOR FIRST NATIONAL BANK OF ARIZONA, Defendants.
MEMORANDUM OPINION AND ORDER
VIRGINIA M. KENDALL, District Judge.
Plaintiff Deutsche Bank National Trust Company, as Trustee for GSAA Home Equity Trust 2006-18, Asset-Backed Certificates, Series 2006-18 (the "Bank") brings this mortgage foreclosure action against Defendants Tracy Cornish and Mortgage Electronic Registration Systems, as nominee for the First National Bank of Arizona. For the following reasons, the Court grants Defendants' motion to dismiss.
Cornish obtained a $731, 250.000 mortgage for a home in Flossmoor, Illinois on May 22, 2006. The lender listed on the mortgage is National Banking Association. Cornish signed the accompanying Note on the same date, with First National Bank of Arizona listed as the lender. The Cook County Recorder of Deeds recorded the mortgage on May 24, 2006. The heading on the Note indicates that it is an "InterestFirst NOTE, " and among its terms is a provision that her first 120 monthly payments would be "interest only, " and that the monthly payment would rise by $1, 241.47 after that period. The allonge to the Note assigns it to the First National Bank of Nevada, who in turn assigns it to itself via a "blank indorsement." 810 ILCS § 5/3-205. The allonge is undated, written on First National Bank of Nevada letterhead, contains no notarization, and is signed by Amy Hawkins, who is allegedly the Assistant Vice President of both the First National Bank of Arizona and the First National Bank of Nevada.
The mortgage was assigned to Avelo Mortgage on April 26, 2007 by Mortgage Electronic Registration Systems, acting as nominee for the First National Bank of Arizona and "its successors or assigns." The Cook County Recorder of Deeds recorded the assignment on May 18, 2007. The assignment includes a provision stating, "Together with all rights and interest in the same and the premises therein described and the note or obligation thereby secured." (emphasis in original). On April 27, 2007, one day after it was assigned the mortgage, Avelo filed a foreclosure proceeding with the Cook County Circuit Court's Chancery Division (the "State Action"). According to the docket in that case, 2007-CH-11589, a judgment of foreclosure was entered and a selling officer was appointed on July 23, 2007. On August 19, 2008, there was a voluntary dismissal of the foreclosure by agreement among the parties. Foreclosure proceedings resumed on October 9, 2008, and another judgment of foreclosure was entered on March 3, 2009 with the notation "(CASE IS PENDING)." The foreclosure was subsequently dismissed on September 28, 2010 for want of prosecution. Less than a year later, the following filings were made:
Activity Date: EXHIBITS FILED 4/4/2011 Participant: AVELO MORTGAGE Attorney: HEAVNER SCOTT & BEYERS Activity Date: PROOF OF SERVICE FILED 4/4/2011 Participant: AVELO MORTGAGE Attorney: HEAVNER SCOTT & BEYERS Activity Date: SUBSTITUTION OF 4/4/2011 Participant: AVELO ATTORNEY FILED MORTGAGE Attorney: PIERCE & ASSOCIATES
The docket contains no additional activity.
Avelo then assigned the mortgage to Deutsche Bank National Trust Company, as Trustee for GSAA Home Equity Trust 2006-18, Asset-Backed Certificates, Series 2006-18 on January 10, 2013. The assignment was recorded with the Cook County Recorder of Deeds on February 24, 2013 and contains a provision linking it to the Note, "Together with the note or notes therein described or referred to, the money due and to become due thereon, with interest, and all rights accrued or to accrue under said Mortgage." The Bank filed the present foreclosure action with this Court on April 8, 2013.
Cornish moves to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) because, she alleges, there is still an active case pending at the state level. The Bank argues that the case was dismissed for want of prosecution on September 28, 2010, and that there is no pending case as a result. It therefore urges that this Court has jurisdiction based on diversity of citizenship pursuant to 28 U.S.C. § 1332. However, the Court need not reach the merits of the parties' jurisdictional arguments as stated.
In Illinois, if a plaintiff's case is dismissed for want of prosecution, she may "refile the action within one year or within the remainder of the statute of limitations, whichever is greater, " pursuant to 735 ILCS § 5/13-217. BankFinancial, FSB v. Tandon, 989 N.E.2d 205, 210 (Ill.App. Ct. 2013) (cited approvingly by Adebowale v. Griffith, 2013 WL 5366849, 6, ___ F.App'x ____ (7th Cir. Sept. 26, 2013)). Section 5/13-217, known as the "savings clause, " is intended to "facilitate the disposition of litigation upon the merits and to avoid its frustration upon grounds that are unrelated to the merits" while at the same time "serve as an aid to the diligent, not a refuge of the negligent." Gendek v. Jehangir, 518 N.E.2d 1051, 1053 (Ill. 1988). If a plaintiff fails to refile her action within that one year period, "the litigation is effectively terminated" and the dismissal for want of prosecution "constitutes a final judgment because, at this juncture, the order effectively ascertains and fixes absolutely and finally the rights of the parties in the lawsuit.'" S.C. Vaughan Oil Co. v. Caldwell, Troutt & Alexander, 693 N.E.2d 338, 344 (Ill. 1998) (quoting Flores v. Dugan, 435 N.E.2d 480, 482 (Ill. 1982)). This final judgment is considered a final judgment on the merits pursuant to Illinois Supreme Court Rule 273: "Unless the order of dismissal or a statute of this State otherwise specifies, an involuntary dismissal of an action, other than a dismissal for lack of jurisdiction, for improper venue, or for failure to join an indispensable party, operates as an adjudication upon the merits." See also Jones v. Syntex Labs., Inc., 1 F.App'x 539, 541 (7th Cir. 2001) ("[A] state court judgment has precisely the same preclusive effect in federal court as it would in the issuing state, and under Illinois law dismissals for want of prosecution are not considered final judgments on the merits until the statute of limitations and a one-year refiling period have expired...." (citation omitted)).
The facts here are straightforward. The State Action was filed against Cornish on April 27, 2007 and dismissed for want of prosecution on September 28, 2010. The only actions taken in the case after that date were the filings of exhibits, proof of service, and a substitution of attorneys on April 4, 2011. Because the Bank's predecessor did not file another complaint within one year of September 28, 2010, the Court finds that State Action has reached final judgment on the merits. Hudson v. City of Chi., 889 N.E.2d 210, 222 (Ill. 2008) ("[The Illinois Supreme Court] has referred to section 13-217 as providing a plaintiff with an absolute' right to refile a complaint within one year or within the remaining limitations period" (emphasis added)). Even if a filing other than a motion or complaint could be considered "refilling a complaint, " the Bank's predecessor took no additional action between April 4, 2011 and April 8, 2013, when the Bank filed its complaint with this Court more than two years later. Cornish's argument that the case is still pending at the state level is therefore incorrect.
The doctrine of res judicata bars subsequent actions between the same parties or their privies on the same cause of action if a court of competent jurisdiction renders a final judgment on the merits. Rein v. David A. Noyes & Co., 665 N.E.2d 1199, 1204 (Ill. 1996). This applies not only to what was actually decided in the original action, but also to what could have been decided in that action. Id. Under the Rules of Decision Act, 28 U.S.C. § 1738, federal courts are "bound to give [a] prior Illinois judgment the same res judicata effect as would be provided by Illinois courts." Harl v. City of La Salle, 679 F.2d 123, 125 (7th Cir. 1982). Three requirements must be met for the doctrine of res judicata to apply: "(1) there was a final judgment on the merits rendered by a court of competent jurisdiction; (2) there was an identity of cause of action; and (3) there was an identity of parties or their privies." Rein, 665 N.E.2d at 1204; Downing v. Chi. Transit Auth., 642 N.E.2d 456, 458 (Ill. 1994). ...