U.S. BANK TRUST NATIONAL ASSOCIATION, Not in Its Individual Capacity but Solely as Owner Trustee for Queen's Park Oval Asset Holding Trust, Plaintiff-Appellee,
MARIO A. LOPEZ, a/k/a Mario Augusto Lopez-Franco; MARTHA D. LOPEZ; UNKNOWN OWNERS; and NONRECORD CLAIMANTS, Defendants-Appellants.
from the Circuit Court of Du Page County. No. 14-CH-473
Honorable Robert G. Gibson, Judge, Presiding.
JUSTICE BURKE delivered the judgment of the court, with
opinion. Justices McLaren and Schostok concurred in the
judgment and opinion.
1 Plaintiff, U.S. Bank Trust National Association, as owner
trustee for Queen's Park Oval Asset Holding Trust, filed
a foreclosure suit against defendants, Mario A. Lopez, a/k/a
Mario Augusto Lopez-Franco, and Martha D. Lopez. Defendants
raised the affirmative defense that plaintiff lacked standing
when it filed the suit. Defendants also raised the
affirmative defense that plaintiff violated Illinois Supreme
Court Rule 113 (eff May 1, 2013) and failed to comply with
Title 24, section 203.604 of the Code of Federal Regulations
(Code) (24 C.F.R. § 203.604 (2014)). The trial court
struck defendants' affirmative defenses, granted
plaintiff summary judgment, and entered a judgment for
foreclosure and sale. On appeal, defendants challenge the
trial court's orders striking their affirmative defenses
and granting plaintiff summary judgment. For the following
reasons, we reverse the judgment of foreclosure, vacate the
order approving the sale, and dismiss the foreclosure action.
2 I. BACKGROUND
3 A. Initial Foreclosure Proceedings and Amended Complaint
4 On March 11, 2014, plaintiff filed a complaint to foreclose
the mortgage on property owned by defendants. The complaint
contained a copy of the mortgage and the note. The note bore
two indorsements, one from the original lender to Countrywide
Bank, FSB (Countrywide), and the second from Countrywide to
the Secretary of Housing and Urban Development (HUD), a
nonparty to the case. The note included no indorsements or
assignments to plaintiff. The complaint alleged in paragraph
"n" that plaintiff was the "legal holder of
5 Defendants filed an answer with affirmative defenses on May
12, 2014, claiming that plaintiff lacked standing because the
note attached to the complaint was indorsed to HUD and not to
plaintiff, that plaintiff failed to comply with Rule 113
because the note did not show an indorsement to plaintiff,
and that plaintiff failed to comply with Title 21, section
203.604, of the Code.
6 On November 7, 2014, plaintiff amended its complaint to
resolve any issue regarding the note. The allegations were
substantially similar to those in the original complaint
except that it alleged at paragraph "n" that
"on March 11, 2014[, ] Plaintiff was a non-holder in
possession of the Note with rights of a holder. Plaintiff is
currently the legal holder of the Note." Also, plaintiff
attached to the pleading a copy of the note that bore the
same two indorsements, one from the original lender to
Countrywide and the second from Countrywide to HUD. The
amended complaint included an "allonge to note"
that was not filed with the original complaint. The allonge,
which is undated, contains a special indorsement from HUD to
Queen's Park Oval Asset Holding Trust, the trust for
which plaintiff was the named trustee.
7 B. Defendants' Motion to Dismiss the Amended Complaint
8 On December 24, 2014, defendants filed a motion to dismiss
plaintiff's amended complaint, pursuant to section
2-619.1 of the Code of Civil Procedure (735 ILCS 5/2-619.1
(West 2014)). They repeated the arguments they raised in
their affirmative defenses, that plaintiff lacked standing
and that the foreclosure action was barred under Rule 113.
Defendants claimed that the defect could not be cured by
amendment. Following argument, the court denied
defendants' motion to dismiss, without prejudice.
9 C. Defendants' Affirmative Defenses to the Amended
10 On April 16, 2015, defendants filed an answer to
plaintiff's amended complaint and repeated their previous
affirmative defenses. They argued again that, when the case
was filed, plaintiff lacked standing, as the note attached to
the original complaint was indorsed to HUD and no assignment
to plaintiffs was attached. Defendants maintained that the
allonge attached to plaintiff's amended complaint
contained an indorsement executed after the filing of the
original complaint. Defendants supported their answer with
judicial admissions made by plaintiff throughout the
proceedings that it was not in possession of an indorsed note
at the time of the original filing. Defendants alleged that
plaintiff violated Rule 113 when it amended the complaint to
include the allonge. Defendants also alleged that ...