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Urban Partnership Bank v. State

Court of Appeals of Illinois, First District, First Division

March 20, 2017

URBAN PARTNERSHIP BANK, as assignee of the Federal Deposit Insurance Corporation, as Receiver for ShoreBank, Plaintiff-Appellee,
v.
FREDERICK RAGDALE a/k/a FREDERICK RAGSDALE, JR., NICKOLE RAGSDALE a/k/a NIKOLE J. RAGSDALE, FREESTAR BANK N.A., FOOD & PAPER SUPPLY CO., 1974 DEVELOPMENT, INC., AUTOMOTIVE FINANCE CORPORATION d/b/a AFC AUTOMOTIVE FINANCE CORPORATION d/b/a AFC, EDWARD HINES LUMBER CO., CAPITAL ONE BANK (USA) N.A., UNITED STATES OF AMERICA, THE CITY OF CHICAGO, THE STATE OF ILLINOIS, UNKNOWN OWNERS and NON-RECORD CLAIMANTS, Defendants, Nickole Ragsdale, Defendant-appellant.

         Appeal from the Circuit Court of Cook County. No. 12 CH 19887 Honorable Bridget A. Mitchell, Judge Presiding.

          Attorney for Appellant - Stephen D. Richek, (Stephen D. Richek, of counsel), Defendant-Appellant.

          Attorney Appellee for Chuhak & Tecson, P.C., (Kara Allen, of counsel), - Plaintiff-Appellee.

          JUSTICE HARRIS delivered the judgment of the court, with opinion., Presiding Justice Connors and Justice Simon concurred in the judgment and opinion.

          Justice: Honorable Sheldon A. Harris, J. Honorable Maureen E. Connors, P.J., and Honorable John B. Simon, J., Concur

          OPINION

          HARRIS, JUSTICE

         ¶ 1 This is an appeal from a mortgage foreclosure action involving residential property owned by defendant-appellant, Nickole Ragsdale (hereinafter "the defendant"). Urban Partnership Bank (hereinafter "the plaintiff), as successor of ShoreBank, provided defendant with a loan, which was secured by a residential mortgage on 4601 S. Vincennes (hereinafter "the Subject Property") in Chicago. Defendant defaulted on the loan. Plaintiff then filed this foreclosure action to recover the Subject Property. The plaintiff failed to personally serve the defendant with a copy of the foreclosure action. After several unsuccessful attempts, the plaintiff filed a motion for alternative service, which the circuit court granted. The plaintiff then carried out the alternative service, and the circuit court entered judgment in favor of plaintiff in July 2014. The Subject Property was sold at judicial sale in November 2014, which the circuit court confirmed in February 2015.

         ¶ 2 In June 2015, the defendant filed a petition under section 2-1401 of the Code of Civil Procedure (735 ILCS 5/2-1401 (West 2014)), seeking to quash service. After a protracted briefing schedule, the circuit court denied the petition in March 2016. Defendant now appeals from the circuit court order denying her 2-1401 petition.

         ¶ 3 Upon review, we find the circuit court did err in denying the section 2-1401 petition. As set forth below, the due diligence affidavit attached to the motion for alternative service failed to comply with the requirements set forth in the applicable section. Accordingly, we hold the defendant was not properly served and the circuit court did not have personal jurisdiction over her.

         ¶ 4 JURISDICTION

         ¶ 5 On March 9, 2016, the circuit court denied defendant's section 2-1401 petition. On March 22, 2016, defendant filed her notice of appeal. Accordingly, this court has jurisdiction over this matter pursuant to article VI, section 6 of the Illinois Constitution, and Illinois Supreme Court Rules 301 and 304(b)(3). Ill. Const. 1970, art. VI, § 6; Ill. S.Ct. R. 301 (eff. Feb. 1, 1994); Ill. S.Ct. R. 304(b)(3) (eff. Feb. 26, 2010).

         ¶ 6 BACKGROUND

         ¶ 7 Plaintiff loaned defendant $1, 000, 000 (the "Loan") on April 17, 2007. Defendant executed a note in favor of plaintiff as security for the Loan and a residential mortgage on the Subject Property. Defendant defaulted on the Loan when she stopped making payments in October 2009. As a result of defendant's default, plaintiff filed a complaint to foreclose mortgage and for other relief on May 30, 2012. At the same time, a summons for defendant was issued with the Subject Property listed as her service address.

         ¶ 8 Plaintiff hired ATG LegalServe, Inc. (hereinafter "ATG") to help effectuate service on defendant. Paul Marik (hereinafter "Marik") of ATG first attempted to serve defendant at the Subject Property on June 20, 2012. Even though he observed movement inside the building of the Subject Property and knocked, nobody answered the door. Since no one responded, he left his contact card. Marik attempted to serve the defendant again at the Subject Property on June 26, 2012. He reported that someone inside the garage opened it slightly, but that person would not acknowledge his presence or respond ...


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