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Neighborhood Lending Services, Inc. v. Callahan

Court of Appeals of Illinois, First District, Fifth Division

September 1, 2017

BARBARA CALLAHAN; UNKNOWN HEIRS and LEGATEES of Lillie M. Callahan; UNKNOWN OWNERS and NONRECORD CLAIMANTS; and RICHARD KUHN, as Special Representative for Lillie M. Callahan, a/k/a Lillian M. Callahan (Deceased), Defendants (Philip Sanders, Intervenor-Appellant).

         Appeal from the Circuit Court of Cook County. No. 15 CH 07374 Honorable Michael Mullen, Judge Presiding.

          ROCHFORD JUSTICE delivered the judgment of the court, with opinion. Presiding Justice Hoffman and Justice Delort concurred in the judgment and opinion.



         ¶ 1 Plaintiff-appellee, Neighborhood Lending Services, Inc. (NLS), brought this mortgage foreclosure suit against defendants Barbara Callahan, unknown heirs and legatees of Lillie M. Callahan, unknown owners and nonrecord claimants, and Richard Kuhn, as special representative for Lillie M. Callahan, a/k/a Lillian M. Callahan (deceased). After the property subject to the suit was foreclosed upon and sold, and after a motion to confirm the sale was filed, a petition to intervene was filed by intervenor-appellant, Phillip Sanders. While the circuit court granted the motion to intervene, it denied any objections to the sale raised by Sanders and granted the motion to confirm the sale. The circuit court thereafter denied Sanders's motion to reconsider. For the following reasons, we affirm both the confirmation of the sale and the denial of the motion to reconsider.

         ¶ 2 I. BACKGROUND

         ¶ 3 The subject of this foreclosure case is a residential property located at 6103 South Sangamon Street, Chicago, Illinois (the property). The record reflects that a quitclaim deed was executed and recorded in 1984, transferring the property from Robert and Lillie Mae Callahan, as husband and wife, to Robert, Lillie, and their daughter, Barbara Ann Callahan. The property was held in joint tenancy.

         ¶ 4 In 1991, Lillie and Barbara granted a mortgage on the property to NLS. That mortgage was released in 2005. In 2006, Lillie alone granted NLS a second mortgage on the property, the mortgage that is at issue in this case. That mortgage secured an original indebtedness of $16, 692.

         ¶ 5 Lillie died on March 14, 2012. On May 5, 2015, NLS filed this mortgage foreclosure action, pursuant to the Illinois Mortgage Foreclosure Law (Foreclosure Law) (735 ILCS 5/15-1101 et seq. (West 2014)). NLS recorded a lis pendens and notice of foreclosure on May 13, 2015.

         ¶ 6 On June 17, 2015, having been granted leave of court, NLS filed the operative amended complaint, adding Mr. Kuhn as a defendant solely to act as a special, court-appointed personal representative for Lillie. Therein, NLS alleged that the mortgage had not been paid since January 2013 and was, therefore, in default. Lillie and Barbara were identified as owners of the property, with Barbara additionally identified as having a possible interest in the property as Lillie's heir. Again, the mortgage and note attached as exhibits to the complaint reflect that they were executed in 2006, solely by Lillie.

         ¶ 7 All of the named defendants (excluding Mr. Kuhn) were served by publication. None filed an appearance or answer to the complaint. On November 23, 2015, the circuit court entered the following orders: (1) an order of default against Barbara, unknown heirs and legatees of Lillie M. Callahan, and unknown owners and nonrecord claimants; (2) summary judgment against Richard Kuhn, as special representative for Lillie; and (3) a judgment for foreclosure and sale in favor of NLS against all defendants. A notice of sale was issued on January 14, 2016. On February 25, 2016, a sale was held and the property was sold to NLS for $15, 500, leaving a $16, 704.29 deficiency with respect to the total amount of $31, 854.29-which included interest and fees-owed to NLS. A motion seeking confirmation of the sale was filed by NLS on March 25, 2016.

         ¶ 8 On April 11, 2016, Sanders filed a petition to intervene in this case, pursuant to section 15-1501(e)(3) of the Foreclosure Law. 735 ILCS 5/15-1501(e)(3) (West 2014). According to Phillip's petition to intervene, Robert died in 1990.[1] Thus, according to the petition, when Lillie died in 2012, Barbara was left as the sole surviving joint tenant of the property. The petition further contended that Barbara thereafter executed a quitclaim deed transferring the property to Sanders on December 9, 2013, before NLS filed this suit or recorded its lis pendens. A copy of that deed was attached to the petition. Sanders purportedly took immediate possession of the property and placed signs on the property indicating the change in ownership and providing his contact information.

         ¶ 9 Contending that he first learned of this foreclosure action when Barbara provided him a notice of sale on February 20, 2016, Sanders investigated the issue. He located the deed transferring the property to him on March 13, 2016, discovering for the first time that it had never been recorded.[2] He then contacted an attorney and filed the motion to intervene.

         ¶ 10 Based upon these factual allegations, Sanders contended that, while he would be bound by any order entered in this case, his interests were not otherwise properly represented. His petition, therefore, asked the circuit court to allow him to intervene "to be given an opportunity to redeem or otherwise obtain the benefit of his bargain, " and be granted "such other and further relief as this Court deems just and appropriate under the circumstances."

         ¶ 11 On April 21, 2016, the circuit court entered an order granting Sanders's petition to intervene. Additionally, "construing Sanders' petition as an objection to [p]laintiff's motion confirming sale, " the order denied any such objection. In a separate order entered ...

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