STATE OF ILLINOIS, ex rel. STEPHEN T. SAPORTA, Relator-Appellant,
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., a Subsidiary of MERSCORP, INC., a Delawar corporation; DOE DEFENDANTS A-ZZZ, et al., an Illinois municipal corporation, et al. Defendants, and STATE OF ILLINOIS, Appellee.
from the Circuit Court of the 12th Judicial Circuit, Will
County, Illinois. Circuit No. 11-L-447 The Honorable John
Anderson, Judge, presiding.
Justices Carter and Wright concurred in the judgment and
1 The plaintiff, the State ex rel. attorney Stephen
T. Saporta (Relator), filed a qui tam
action against Mortgage Electronic Registration
Systems, Inc. (MERS) and unnamed defendants, including
entities that originated and/or serviced certain home loans,
alleging that the defendants knowingly made false statements
in certain mortgage documents in order to avoid paying
millions of dollars in mortgage assignment fees to the
State's counties. The State elected not to take over the
Relator's action, but later filed a motion to dismiss the
action, which the circuit court granted. On appeal, the
Relator argues that the circuit court erred when it (1)
granted the Attorney General's motion to dismiss; (2)
ruled that the Attorney General's motions to reconsider
and for a protective order were moot; and (3) denied his
motion to disqualify the Attorney General due to a conflict
of interest. We affirm.
3 The Relator filed this qui tam action on June 3,
2011, claiming, inter alia, that the
"Defendants filed with the County Recorder of Deeds
Offices of this state purported 'Mortgage' documents
with what purported to be self-executing language of
assignment in order to avoid payment in full of all recording
fees reflecting the establishment and/or transfer of secured
interests in real property in the State." The complaint
alleged that the mortgage documents contained language that
designated MERS as the legal nominee of the lenders, their
successors, and their assigns. The complaint also alleged
that the Relator requested information from the State's
county recorders in April 2011, 18 counties either objected
to the request or failed to respond, 76 counties reported not
collecting separate recording fees from these mortgage
documents, and only 8 counties reported that they collected
separate recording fees from these mortgage documents.
Further, the complaint alleged that the defendants'
knowing failure to pay these recording fees violated section
3(a)(1)(G) of the Illinois False Claims Act (Act) (740 ILCS
175/3(a)(1)(G) (West 2010)).
4 The Attorney General notified the circuit court by motion
on January 13, 2014, that the State was declining to take
over the case from the Relator. Citing to the Act, the
Attorney General also requested, inter alia, that
all of the pleadings, orders, and notices of appeal filed in
the case be served upon it. Two days later, the circuit court
granted the Attorney General's motion and granted the
various requests aimed at protecting the State's interest
in the case.
5 On June 25, 2014, the circuit court entered an order at the
Relator's request that required the State to turn over
its investigative file related to MERS' business
practices for an in camera inspection.
6 Within three weeks of receiving that order, the Attorney
General filed a motion to dismiss the Relator's case. The
Attorney General also filed a motion for entry of a
protective order and reconsideration of the court's June
25, 2014, order.
7 On March 25, 2015, the Relator filed a motion to disqualify
the Attorney General. The motion alleged that some potential
defendants, including banks, sponsored an awards dinner on
March 24, 2011, that honored the Attorney General. The
Relator claimed that this created a conflict of interest such
that the Attorney General should be precluded from
intervening in the case. A press release from the
Neighborhood Housing Services of Chicago, Inc., was appended
to the motion and stated, in relevant part, that the Attorney
General "was honored with the NHS Community Advocacy
Award for her work on initiating and drafting key legislation
aimed at protecting homeowners from predatory lending and
mortgage fraud." The dinner had taken place over two
months prior to the filing of the qui tam complaint
and four years prior to the filing of the Relator's
motion to disqualify.
8 The circuit court denied the Relator's motion on March
31, 2015. The court ruled that the motion to disqualify was
untimely because the Relator stated he had known of the
alleged conflict for years. The court stated that the Relator
therefore had waived the issue, and that even without the
waiver, the motion was without merit.
9 On the same day, the circuit court granted the Attorney
General's motion to dismiss and ruled that the Attorney
General's motions for entry of a protective order and
reconsideration were accordingly moot.
10 The ...