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Gorman-Dahm v. BMO Harris Bank, N.A.

Court of Appeals of Illinois, Second District

January 17, 2018

MEGHAN GORMAN-DAHM, as Administrator of the Estate of Kathleen Gorman, Deceased, Plaintiff-Appellant,
v.
BMO HARRIS BANK, N.A.; STEPHAN G. DADAY; and KLEIN, DADAY, ARETOS and O'DONOHGHUE, LLC, Defendants-Appellees.

          Appeal from the Circuit Court of Kane County, No. 16-CH-293; the Hon. David R. Akemann, Judge, presiding.

          Gary D. McGuane, of Aurora, for appellant.

          Stephen G. Daday and Julie A. Repple, of Klein, Daday, Aretos & O'Donoghue, LLC, of Rolling Meadows, for appellee BMO Harris Bank, N.A.

          David A. Sorensen, of Law Offices of Edward J. Kozel, of Chicago, for other appellees.

          Panel BURKE JUSTICE delivered the judgment of the court, with opinion. Justices McLaren and Schostok concurred in the judgment and opinion.

          OPINION

          BURKE JUSTICE.

         ¶ 1 Plaintiff, Meghan Gorman-Dahm, as administrator of the estate of Kathleen Gorman, deceased, filed a complaint against defendants, BMO Harris Bank, N.A. (BMO); Stephan G. Daday; and Klein, Daday, Aretos and O'Donoghue, LLC, consisting of five counts: count I for slander of title, counts II and IV for punitive damages, count III for abuse of process, and count V for partition. The trial court granted defendants' motion to dismiss all counts, finding that (1) the absolute litigation privilege barred counts I and III, (2) there was no separate cause of action for punitive damages (counts II and IV), and (3) the partition claim in count V was at issue in another case, the underlying foreclosure complaint pending in the same circuit. Plaintiff contends that the trial court erred in dismissing counts I, III, and V of her complaint.[1]We affirm.

         ¶ 2 I. FACTS

         ¶ 3 A. Underlying Foreclosure Complaint

         ¶ 4 The underlying foreclosure complaint arose from a mortgage loan made by Amcore Bank, N.A. (Amcore), BMO's predecessor in interest, to Kathleen's husband, John P. Gorman (deceased), on November 30, 2007, in the amount of $750, 000, which was secured by property commonly known as 760 Church Street, Batavia, Illinois. The property had been owned by John and Kathleen, as tenants in common, prior to her death on July 3, 2006.

         ¶ 5 John defaulted on the loan, and Amcore filed the foreclosure complaint on January 20, 2010 (No. 10-CH-266), in Kane County, naming both John and Kathleen as defendants.

         ¶ 6 The mortgage attached to the complaint showed that only John had granted a security interest in the property.

         ¶ 7 A judgment of foreclosure and sale on the property was entered on June 11, 2012. The judicial sale occurred on August 14, 2014. Later, the parties to the foreclosure action, BMO, John, and plaintiff (who was granted leave to intervene on October 14, 2014), agreed that the notice of sale indicated that the property to be sold was an "undivided half interest" in the property. It was also undisputed by the parties that an undivided half interest was the only interest that could be sold at the judicial sale. BMO was the successful bidder, in the amount of $112, 399. The report of sale and distribution did not indicate that only an undivided half interest was sold.

         ¶ 8 On April 2, 2015, the trial court vacated the judicial sale of August 14, 2014. On April 28, 2015, the trial court granted BMO's motion to amend the complaint to conform to the proofs and its motion to amend the judgment of foreclosure and sale nunc pro tunc to reflect that the mortgaged real estate consisted of an undivided half interest in the property. The trial court also expunged the deed, which had not described the property as an undivided half interest. Another judicial sale took place, and a deed was issued to BMO for an undivided half interest in the property. A motion to confirm the sale was granted on January 4, 2017.

         ¶ 9 B. Plaintiff's Complaint

         ¶ 10 On August 11, 2016, while the foreclosure case was still pending, plaintiff filed her complaint in the present proceedings, alleging the following.

         ¶ 11 John executed the loan and the mortgage in his individual capacity only. When he borrowed the money for the mortgage, he did not know that he owned only an undivided half interest in the property and that Kathleen's estate owned the other half interest. John proceeded under the assumption that he held title to the property in joint tenancy with Kathleen and, therefore, had mortgaged the entire property. The complaint in the foreclosure case sought the entire property, not just an undivided half interest. And, at least as of the date of being served with John's answer, defendants knew that the loan was secured by only an undivided half interest in the property. Despite that knowledge, defendants sought foreclosure on the entire property.

         ¶ 12 Defendants proceeded to obtain a judgment of foreclosure against the entire property. Upon entry of the judgment, defendants caused to be published a notice of sale that provided for the sale of only an undivided half interest in the property. At the judicial sale, however, defendants caused the sheriff to sell the entire property. BMO was the successful bidder at the sale, having bid a price of $125, 000. After the sale, defendants filed a motion for approval of the sale and distribution, reflecting the sale of ...


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