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Deutsche Bank National Trust Co. v. Estate of Schoenberg

Court of Appeals of Illinois, First District, First Division

March 26, 2018

DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee for Long Beach Mortgage Loan Trust 2006-9, Plaintiff-Appellee,
v.
ESTATE OF VINCENT SCHOENBERG; MIDWEST BANK AND TRUST COMPANY, as Trustee u/t/a Dated January 18, 1979, and Known as Trust No. 79-01-2857; NORTH BANK; UNIVERSITY PARK CONDOMINIUM ASSOCIATION; VINCENT G. SCHOENBERG a/k/a VINCENT G. SCHOENBERG III; EMILY SCHOENBERG; UNKNOWN BENEFICIARIES OF THE MIDWEST BANK AND TRUST COMPANY, as Trustee u/t/a Dated January 18, 1979, and Known as Trust No. 79-01-2857; UNKNOWN HEIRS and LEGATEES OF THE ESTATE OF VINCENT SCHOENBERG; UNKNOWN OWNERS and NON-RECORD CLAIMANTS, Defendants Midwest Bank and Trust Company, Defendant-Appellant.

          Appeal from the Circuit Court of Cook County No. 09 CH 7591 The Honorable Michael T. Mullen, Judge Presiding.

          PRESIDING JUSTICE PIERCE delivered the judgment of the court, with opinion. Justices Harris and Mikva concurred in the judgment and opinion

          OPINION

          PIERCE, PRESIDING JUSTICE.

         ¶ 1 This appeal arises out of a mortgage foreclosure action. Defendant Midwest Bank and Trust Company, as trustee under a trust agreement dated January 18, 1979, and known as trust No. 79-01-2857 (Midwest), appeals from the Cook County circuit court's orders (1) granting summary judgment in favor of plaintiff Deutsche Bank National Trust Company, as trustee for Long Beach Mortgage Loan Trust 2006-9 (Deutsche Bank), (2) entering a judgment of foreclosure and sale, (3) dismissing Midwest's affirmative defenses, and (4) entering an order approving the report of sale and distribution. On appeal, Midwest contends that (1) the circuit court lacked subject-matter jurisdiction and personal jurisdiction, (2) Deutsche Bank was not the proper party plaintiff, (3) Deutsche Bank failed to comply with the circuit court's order for reinstatement after Deutsche Bank voluntarily dismissed its complaint, (4) the circuit court erred in granting Deutsche Bank's motions for summary judgment and to dismiss Midwest's affirmative defenses, and (5) the circuit court erred by granting Deutsche Bank's motion to confirm the report of sale and distribution, approve the judicial sale of the property, and for an order of possession. We find no error and affirm.

         ¶ 2 BACKGROUND

         ¶ 3 In August 2006, Vincent G. Schoenberg executed a promissory note payable to 21st Century Mortgage Bankers (21st Century), secured by a mortgage on two condominium units located at 1451 East 55th Street, Chicago, Illinois (the property). Vincent was the sole borrower and mortgagor identified by the mortgage.[1] The mortgage identified 21st Century as the "Lender" and Mortgage Electronic Registrations Systems, Inc. (MERS), as the mortgagee. The mortgage further provided that MERS was acting "solely as a nominee for Lender and Lender's successors and assigns." In September 2006, Vincent executed a "Warranty Deed in Trust" that conveyed his interest in the property to an Illinois land trust with Midwest acting as trustee. In December 2008, Vincent died.

         ¶ 4 On February 17, 2009, Deutsche Bank filed a mortgage foreclosure complaint against Vincent and Midwest.[2] Attached to the complaint were copies of the mortgage and note executed by Vincent. Also attached to the complaint was an allonge executed by 21st Century specially indorsing the note to Washington Mutual Bank, as well as a separate page bearing a blank indorsement by Washington Mutual Bank. An attorney filed an appearance on behalf of Vincent and Midwest. On August 17, 2009, the circuit court entered an order dismissing Deutsche Bank's complaint pursuant to section 2-1009 of the Code of Civil Procedure (Code) (735 ILCS 5/2-1009 (West 2008)), "with leave to reinstate upon [m]otion supported by [a]ffidavit, filed and presented within one *** year of this dismissal, if [d]efendant(s) default on the loan modification, repayment plan, or other settlement agreement."

         ¶ 5 Deutsche Bank moved to reinstate the foreclosure action on July 28, 2010. The motion stated that defendants were being evaluated for loss mitigation eligibility by the loan servicer in March 2009 but that defendants failed to submit the proper documentation and that Deutsche Bank wished to proceed with the foreclosure. The motion was supported by an affidavit. The attorney who previously filed an appearance on behalf of Vincent and Midwest responded to the motion to reinstate and moved for summary judgment, arguing that Deutsche Bank lacked standing. No mention was made of Vincent's death. The circuit court denied the motion for summary judgment and granted Deutsche Bank's motion to reinstate.

         ¶ 6 On October 31, 2013, Midwest moved to dismiss Deutsche Bank's complaint. Midwest argued that Deutsche Bank lacked standing and that the circuit court lacked jurisdiction because Vincent was deceased. Deutsche Bank filed a response to Midwest's motion to dismiss and filed a motion to appoint a special representative for Vincent. On December 9, 2013, the circuit court denied Midwest's motion to dismiss and appointed Cary Rosenthal as special representative for Vincent. Rosenthal filed a report on April 29, 2014, reflecting that Vincent was deceased and that the special representative gave notice of the action to Vincent's wife Brenda and son Vincent Jr., both of whom were purportedly living in the property.

         ¶ 7 On July 22, 2014, the circuit court granted Deutsche Bank's motion to approve Rosenthal's report and Deutsche Bank's motion for leave to file a first amended complaint naming "The Estate of Vincent Schoenberg" as a defendant, along with Brenda and Vincent Jr. On November 19, 2014, Deutsche Bank was granted leave to file a second amended complaint removing Brenda as a defendant because she was deceased and adding as defendants Emily Schoenberg and unknown beneficiaries of the Midwest trust. Attached to the second amended complaint were the mortgage, note, and allonge, along with an assignment of mortgage recorded by the Cook County Recorder of Deeds on March 9, 2009, reflecting that MERS as nominee for 21st Century assigned the mortgage to Deutsche Bank. The assignment of mortgage stated, "This instrument serves to memorialize the transfer of this loan which has previously taken place."

         ¶ 8 Midwest moved to dismiss the second amended complaint. Midwest argued that 21st Century was dissolved on May 8, 2008, and that any action it took after that date "is of no effect and is void." Midwest argued that Deutsche Bank lacked standing and that the circuit court lacked jurisdiction because Vincent was a necessary party, he was deceased, and there was no appointed special representative. Midwest further argued that Deutsche Bank had not complied with section 13-209(c) of the Code (735 ILCS 5/13-209(c) (West 2014)), because it failed to have a personal representative appointed. The circuit court denied Midwest's motion to dismiss and ordered Midwest to answer the complaint. Midwest's answer denied all of the allegations in Deutsche Bank's complaint and asserted a 74-paragraph affirmative defense restating the substance of Midwest's motion to dismiss.

         ¶ 9 Deutsche Bank moved for summary judgment on its second amended complaint and moved to dismiss Midwest's affirmative defense. On September 3, 2015, the circuit court set a briefing schedule on the motions.[3] The scheduling order reflected that counsel for Midwest was present in court on that date and was granted until October 1, 2015, to respond to Deutsche Bank's motions. A hearing was scheduled for October 28, 2015. On October 26, 2015, Midwest filed a "Notice of Motion" that it would appear on October 28, 2015, "and then and there present and move in accordance with [d]efendant's [a]nswer" to Deutsche Bank's motions. The only filing that accompanied the notice of motion was Midwest's 25-page "answer" to Deutsche Bank's motions.

         ¶ 10 On October 28, 2015, the circuit court (1) granted summary judgment in favor of Deutsche Bank on its second amended complaint, (2) dismissed Midwest's affirmative defense with prejudice, (3) entered a judgment of foreclosure and sale in favor of Deutsche Bank, (4) appointed a selling officer, (5) granted Deutsche Bank's oral motion to dismiss "Estate of Vincent Schoenberg" as a defendant, (6) denied Midwest's "motion/answer" to Deutsche Bank's motions, and (7) denied Midwest's oral motion for a finding pursuant to Illinois Supreme Court Rule 304(a) (eff. Feb. 26, 2010).

         ¶ 11 The property was sold at a judicial sale on January 29, 2016, and Deutsche Bank was the successful bidder at the sale. Deutsche Bank then filed a motion for orders approving the report of sale and distribution, confirming the judicial sale, and for possession. On February 26, 2016, Midwest filed a "Motion in Accordance with 735 ILCS 1508 [sic] and Supreme Court Rule 113(i)." Midwest again asserted the circuit court lacked jurisdiction because Vincent was deceased, that a mortgagor is a necessary party and no special representative had been appointed, and that Deutsche Bank lacked standing. The circuit court set both parties' motions for a hearing. At that hearing, the circuit court made it clear that it was considering Midwest's motion as a response to Deutsche Bank's motion for confirmation of the judicial sale. On March 3, 2016, the ...


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