DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee for Long Beach Mortgage Loan Trust 2005-WL1, Plaintiff-Appellee,
DANIEL J. HART, ELLEN C. HART, and FIRST UNITED BANK, as Trustee Under the Provisions of a Trust Dated March 16, 1994, and Known as Trust No. 1671, and JVS FINANCIAL SERVICES, INC., Defendants Daniel J. Hart and Ellen C. Hart, Defendants-Appellants.
from the Circuit Court of the 12th Judicial Circuit, Will
County, Illinois, Circuit No. 07-CH-4201 Honorable Daniel
Rippy, Judge, Presiding.
JUSTICE McDADE delivered the judgment of the court, with
opinion. Justice Schmidt concurred in the judgment and
opinion. Justice Carter specially concurred, with opinion.
1 Defendants appeal from the trial court's order
confirming the sale of foreclosed property. Defendants argue
that the agreed order of foreclosure has no legal effect
because the mortgage itself was void. We reject
defendants' argument on a number of grounds and initiate
sanctions proceedings against defendants and their counsel.
3 On December 21, 2007, plaintiff, Deutsche Bank National
Trust Company, filed a complaint for foreclosure against
defendants, Daniel and Ellen Hart. The foreclosure was sought
upon a mortgage signed by defendants on April 1, 2005,
securing a loan of $716, 000. Paragraph I of the complaint
contained the legal description of the mortgaged real estate
as well as the common address of 26828 S. Will Center Road,
Monee, Illinois. The complaint alleged that defendants failed
to pay the monthly installment due on August 1, 2007, and all
payments thereafter, resulting in a total amount owed of
4 Plaintiff attached a copy of the mortgage in question as an
exhibit to the complaint. On the first page of the mortgage,
"1 of 16" has been handwritten at the bottom of the
page. Typewritten on the bottom of each subsequent page is
the page number, as well as the number of pages-for example,
the bottom of the second pages reads "Page 2 of
15." On each page, however, the typewritten pagination
has been crossed out, with a number handwritten underneath.
The presumable cause of this repagination is the third page
of the attached mortgage, which contains the legal
description of the property. The legal description is the
same as that provided in the complaint. This page, unlike the
others, does not bear defendants' initials. In turn, the
next page has a typewritten "Page 3 of 15" crossed
out, with the numeral 4 written underneath. This fourth page
also contains a large blank space, above which it reads
"Legal Description Attached Hereto and Made a Part
Hereof." Beneath the blank space appears the property
address: 26828 S. Will Center Road, Monee, Illinois.
5 Defendants were served with a summons on December 28, 2007.
On February 4, 2008, Gary Davidson filed an appearance on
behalf of defendants. On March 24, 2008, the trial court
entered a default judgment for foreclosure and sale, as
defendants had yet to file an answer to the complaint.
Davidson subsequently filed a motion to vacate the default
judgment, which the trial court granted. Attorney Brett
Geiger-of the same firm as Davidson-filed an answer on behalf
of defendants soon thereafter. In their answer, defendants
admitted to, inter alia, paragraph I of the
complaint, which contained the legal description.
6 Plaintiff moved for summary judgment on July 30, 2008,
noting that defendants had not denied any of the relevant
allegations made in the complaint. On October 3, 2008,
defendants moved to amend their answer. In that motion,
defendants claimed for the first time that the legal
description contained in the complaint "was not the
property Plaintiff or Defendant intended to secure with the
7 As an exhibit to their motion for leave to amend the
answer, defendants attached a copy of the mortgage that had
not been repaginated. See supra ¶ 4. They also
attached a copy of a quitclaim deed from November 2004. The
quitclaim deed evidenced that defendants had conveyed to
themselves as tenants in the entirety a tract of less than
five acres. In the motion, defendants argued that it was only
that smaller tract of land that they had intended to
8 The trial court granted defendants' motion for leave to
amend their answer. The amended answer, filed on October 8,
2008, denied the allegations in paragraph I of the complaint.
Plaintiff subsequently withdrew its motion for summary
9 The parties spent most of the next three years engaging in
discovery. At a court appearance on May 2, 2011, both parties
indicated that they had "entered into substantive
discussions intended to settle the outstanding issues between
the parties." The trial was set for October 3, 2011.
10 On September 27, 2011, plaintiff filed a motion to bar the
defense of mistake. In support, plaintiff argued that mistake
is an affirmative defense and that an affirmative defense not
pled is waived. On the day of trial, before the trial court
could rule upon plaintiff's motion, the parties met in
the chambers of trial judge Barbara N. Petrungaro to discuss
settlement terms. Negotiations continued that afternoon
outside of chambers. The parties eventually agreed on terms,
and an agreed judgment of foreclosure and sale was filed by
the trial court on October 3, 2011.
11 The agreed judgment declared defendants to owe $988,
585.60 on the note and mortgage and provided a four-month
redemption period, expiring on February 3, 2012. The agreed
judgment contained the full legal description as provided in
the original complaint. The agreed judgment also provided
that defendants would maintain possession of the property for
60 days after the date of any future order confirming sale.
The agreed judgment was signed by both defendants, as well as
their attorney, David Smith, of the same firm as Davidson and
Geiger. A separate agreed order filed the same day declared
that plaintiff would pay a sum of $10, 000 to defendants.
12 The February 3, 2012, deadline passed without defendants
making a redemption. On March 14, 2012, Daniel Hart filed a
pro se motion "to cease and desist any further
action [and] pending sheriff's sale of property."
The motion also sought to strike the agreed judgment of
October 3, 2011, "re-open [the] case, " and proceed
to trial. Daniel also requested the trial court "to
release plaintiffs from mortgage and note and return property
as free and clear." In support of the motion, Daniel
wrote as follows:
"Former defendants *** Daniel and Ellen Hart were
blatantly and willfully lied to by opposing counsel-were
coerced into signing all rights to property and to agree to
the contents of former plaintiff's decrees as true and
correct by telling Daniel and Ellen Hart that if we
didn't sign off that they would take procession
[sic] of our property and throw us out the following
day-October 4th, 2011."
further contended that plaintiff had "inserted
fictitious paperwork, " in reference to the legal
description, and that defendants would not have signed such a
mortgage. David Smith subsequently sought and was granted
leave to withdraw as attorney for defendants.
13 Plaintiff filed a motion to strike defendants' motion.
On June 12, 2012, Thomas Burdelik filed an appearance on
behalf of defendants, as well as a motion to vacate agreed
orders. In that motion, Burdelik expounded upon
defendants' claims that plaintiff's counsel, Craig
Cronquist, had threatened that defendants could be removed
from their home within 48 hours if plaintiff prevailed at
trial. The motion also alleged that defendants' previous
counsel (Smith) did not have sufficient experience in
mortgage litigation and that his recommendation that they
settle on the day of trial was "a complete about
face" from his prior confidence in the case. The motion
concluded: "Upon later reflection [defendants]
recognized that their interests had not been well
represented, which lead [sic] to the present
motion." The motion to vacate agreed orders also
elaborated on defendants' claim that they had not
intended to mortgage the entirety of their property.
14 In a response filed on July 2, 2012, plaintiff argued that
the parties were bound by the settlement agreement and that
the settlement was neither grossly unfair nor unconscionable.
Further, plaintiff reasserted that defendants were barred by
waiver from raising error as an affirmative defense.
Plaintiff attached as an exhibit to its response a copy of a
check for $10, 000 dated October 20, 2011, and made payable
to defendants and their attorneys. In an affidavit also
attached to plaintiff's response, Cronquist denied having
made any threats to defendants.
15 The matter proceeded to an evidentiary hearing held on
August 15, 2012. Though the record on appeal does not include
a report of proceedings for this hearing, the trial
court's subsequent order-dated September 24,
2012-provides a detailed summary of the testimony
presented. It is from this summary that we detail the
16 Daniel testified that the property at 26828 S. Will Center
Road encompasses 40.3 acres of land. He and Ellen contacted
mortgage broker Joanne Rogers with the intent of mortgaging
40 acres of their land. Rogers told them that 40 acres would
be a nonconforming loan, and that they would have to decrease
the acreage. At Rogers' behest, defendants asked attorney
Raymond Feeley to prepare a quitclaim deed. Daniel believed
that the quitclaim deed was for seven acres. He felt that the
legal description in the quitclaim deed was the legal
description that should have been later attached to the
17 Defendants were represented by Smith as they engaged in
settlement discussions on October 3, 2011. Defendants
rejected all settlement offers before breaking for lunch.
After lunch, Smith talked with Cronquist in the hall. Daniel
Hart (one of the defendants) testified that when defendants
joined the attorneys in the hall, Cronquist conceded that
defendants might win on the mortgage issue. However,
Cronquist assured defendants that plaintiff would still be
able to collect on the note, and that defendants could be
evicted from their home the next day. Daniel testified that
Smith agreed with Cronquist's statements. As part of the
settlement, plaintiff agreed to pay $10, 000 and to give
defendants extra time on the property. On the way home from
the courthouse on October 3, 2011, Daniel learned from
multiple sources that Cronquist's threat was false, that
defendants could not be evicted in such a short time frame.
Daniel later received and cashed the check. At that time,
defendants owed Smith's law firm over $9, 000.
18 The testimony of Ellen Hart was substantially similar to
that of her husband. She agreed that they did not intend to
mortgage the entire 40 acres and described the legal
description in the quitclaim deed as encompassing 15 acres.
Ellen testified that Smith had expressed confidence in their
case but his demeanor changed on the day of trial. When
Cronquist told defendants they could be removed from their
property within 24 hours, Smith told them the statement was
correct. Ellen testified that if she had known the statement
to be false, she would not have agreed to settle.
19 Cronquist testified that on October 3, 2011, the trial
court met with the attorneys in chambers in an effort to
settle the case. Thereafter, Cronquist met with Smith to
discuss settlement parameters. It became apparent that the
settlement would involve payment to defendants to ease the
costs associated with moving, as well as providing them
additional time to move out. Cronquist testified that he
never predicted plaintiff would lose on the mortgage issue
but win on the note. He did not make any sort of predictions
regarding cases to the opposition. Additionally, his motion
in limine regarding the defense of mistake was still
pending at that time. Cronquist denied making any sort of
threats regarding eviction to Smith or to defendants. He knew
that eviction in such a short time frame would be an
20 Cronquist testified that the settlement had three main
parts. First, plaintiff would pay defendants a sum of $10,
000. Second, the redemption period, which is normally three
months, would be extended to four months. Third, defendants
would be given 60 days in possession ...