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North Community Bank v. 17011 South Park Ave., LLC

Court of Appeals of Illinois, First District, First Division

March 16, 2015

NORTH COMMUNITY BANK, as Successor to Plaza Bank, Plaintiff-Appellee,
17011 SOUTH PARK AVE., LLC; STAVROULA TSEVIS; SOUTH PARK CITGO, INC.; CHICAGO TITLE AND LAND TRUST, as Successor to Gladstone Norwood Trust and Savings Bank, as Trustee Under Trust Agreement Dated January 23, 1987 and Known as Trust Number 1127; UNKNOWN OWNERS and NONRECORD CLAIMANTS, Defendants (Nick Tsevis, Defendant-Appellant)

Page 628

Appeal from the Circuit Court of Cook County. No. 11 CH 19801. Honorable Daniel Patrick Brennan, Judge Presiding.

For APPELLANT: Edwin J. Belz, Chicago, IL.

For APPELLEE: Chuhak & Tecson, P.C., Chicago, IL (Daniel J. Fumagalli, Francisco E. Connell, of counsel).

PRESIDING JUSTICE DELORT delivered the judgment of the court with opinion. Justices Cunningham and Harris concurred in the judgment and opinion.


Page 629


[¶1] This case presents two novel issues regarding mortgage foreclosures. The first concerns what facts must a mortgagor prove to establish he validly reinstated a delinquent mortgage. The second involves what procedural pitfalls lie in the path of an aggressively defensive mortgagor who tries to interlocutorily appeal a foreclosure order.


[¶3] A defendant in this case, 17011 South Park Ave., LLC (17011), borrowed money from plaintiff Plaza Bank to fund construction of a gasoline station in South Holland, Illinois. The loans were memorialized by two notes, both signed by 17011. The notes were executed in 2005 and in 2009 and modified thereafter. They were secured, in part, by mortgages on a different property owned by 17011 located on Peterson Avenue in Chicago. Both mortgages, executed contemporaneously with the notes, were signed by the land trustee which held record title to the property. Defendant South Park Citgo, Inc. (Citgo), and defendant-appellant Nick Tsevis (Tsevis) were the guarantors of the loans. After the loans fell into default, Plaza Bank[1] filed this multicount foreclosure and collection case against 17011, Citgo, Tsevis, Tsevis's wife, and the land trustee.

Page 630

[¶4] Tsevis filed a counterclaim against Plaza Bank which he later amended. The amended counterclaim contained several counts. The only count relevant to this appeal, count II, alleged that Plaza Bank had a fiduciary duty to Tsevis and had breached that duty. On April 1, 2013, the trial court dismissed that count with prejudice pursuant to section 2-615 of the Illinois Code of Civil Procedure (735 ILCS 5/2-615 (West 2010)), apparently following well-established Illinois law holding that lenders do not generally owe fiduciary duties to borrowers. See Teachers Insurance & Annuity Ass'n of America v. La Salle National Bank, 295 Ill.App.3d 61, 691 N.E.2d 881, 229 Ill.Dec. 408 (1998). The counterclaim dismissal order contained no language indicating that it was final or appealable.

[¶5] On July 17, 2013, the trial court granted summary judgment in favor of Plaza Bank and against the various defendants on the main foreclosure and loan claims. Contrary to usual practice, no additional order was entered that day actually foreclosing on the mortgage and authorizing the sale of the property. Before the court could enter such an order, the defendants moved to " vacate" the summary judgment order. The defendants also moved to make the order dismissing their amended counterclaim final and appealable under Illinois Supreme Court Rule 304(a) (Ill. S.Ct. R. 304(a) (eff. Feb. 26, 2010)).

[¶6] On October 23, 2013, the trial court entered three separate and distinct written orders. The court: (1) denied the defendants' motion to vacate the summary judgment order; (2) struck the defendant's motion to make the counterclaim dismissal final and appealable; and (3) entered a formal order of foreclosure and sale.

[¶7] Although an order of foreclosure is final as to the matters it adjudicates, the order determines fewer than all the rights and liabilities in issue because the trial court still must enter orders approving the foreclosure sale and directing the distribution of the sale proceeds. Accordingly, in a foreclosure case, the order confirming the sale, rather than the judgment of foreclosure, is the final and appealable order. EMC Mortgage Corp. v. Kemp, 2012 IL 113419, ¶ 11, 982 N.E.2d 152, 367 Ill.Dec. 474. Here, however, the third October 23 order -- the order of foreclosure and sale -- actually contained additional language indicating that it was final and appealable under Rule 304(a). Including interlocutory appeal language in foreclosure orders is relatively uncommon, but nonetheless allowable. See In re Marriage of Verdung, 126 Ill.2d 542, 555, 535 N.E.2d 818, 129 Ill.Dec. 53 (1989) (order of foreclosure and sale not appealable unless it includes Rule 304(a) language). The other two orders contained no similar language.

[¶8] On November 20, 2013, Tsevis filed a notice of appeal stating that he was requesting the following ...

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