United States District Court, C.D. Illinois, Springfield Division
MYERSCOUGH UNITED STATES DISTRICT JUDGE
cause is before the Court on Plaintiff Regions Bank's
Motion for Summary Judgment (d/e 10) and Plaintiff's and
the County Treasurer of Logan County, Illinois' Joint
Consent to Judgment of Foreclosure (d/e 11). Because the
inclusion of Unknown Owners and Non-Record Claimants destroys
complete diversity, this cause is dismissed without prejudice
for lack of jurisdiction.
October 2018, Plaintiff filed a Verified Complaint for
Foreclosure (d/e 1) naming as Defendants MMIL Entertainment,
LLC (MMIL), the record title holder of the properties in
question, as well as other defendants who may have an
interest in the property, including the County Treasurer of
Logan County, Illinois (County) and Unknown Owners and
Non-Record Claimants. Plaintiff invoked federal jurisdiction
under 28 U.S.C. § 1332 predicated on the assertions that
the amount in controversy exceeded $75, 000 and that the
parties were diverse.
Plaintiff alleged that Plaintiff is an Alabama state banking
corporation with its principal place of business in Alabama.
Plaintiff alleged that MMIL is an Illinois limited liability
company whose members are citizens of the State of Illinois.
See Thomas v. Guardsmark, LLC, 487 F.3d 531, 534
(7th Cir. 2007) (“For diversity jurisdiction purposes,
the citizenship of an LLC is the citizenship of each of its
members.”). Plaintiff's counsel also filed, at the
Court's request, an Affidavit identifying the members of
MMIL. Plaintiff's counsel states that the MMIL Operating
Agreement indicates the members of MMIL are David G.
Lanterman and John L. Rooney, both of whom are residents of
Illinois. However, “residence and citizenship are not
synonyms and it is the latter that matters for purposes of
the diversity jurisdiction.” Meyerson v.
Harrah's E. Chicago Casino, 299 F.3d 616, 617 (7th
Cir. 2002). Therefore, if the Court were not dismissing for
lack of jurisdiction due to the inclusion of Unknown Owners
and Non-Record Claimants, the Court would require further
information on the citizenship of MMIL.
filed an Affidavit of Service by Publication as to Unknown
Owners and Non-Record Claimants (d/e 7) pursuant to Illinois
law. See 735 ILCS 5/2-206 (providing for service by
publication); 735 ILCS 5/15-1502(c)(2) (requiring, for
termination of the rights of non-record claimants, an
affidavit and notice to non-record claimants); see
also 735 ILCS 5/2-413 (providing for service of unknown
parties by affidavit and publication). Plaintiff thereafter
served the Unknown Owners and Non-Record Claimants by
publication (d/e 9). The other defendants have also been
served. See d/e 4 (waiver of service executed by
MMIL); d/e 5 (affidavit of service on the County).
April 19, 2019, Plaintiff filed a Motion for Summary Judgment
(d/e 10). On May 10, 2019, Plaintiff and the County filed a
Joint Consent to Judgment of Foreclosure (d/e 11). MMIL has
not filed an answer to the Complaint or responded to the
Motion for Summary Judgment. Plaintiff has not sought a
default judgment against MMIL.
14, 2019, this Court directed Plaintiff to address whether
the inclusion of Unknown Owners and Non-Record Claimants
destroys complete diversity. Plaintiff filed a Memorandum
(d/e 13) asserting that Unknown Owners and Non-Record
Claimants are nominal parties whose inclusion does not
destroy diversity. In the alternative, Plaintiff asks that
the Court dismiss the Unknown Owners and Non-Record Claimants
if the Court finds that they are not nominal parties.
Court has an obligation to raise sua sponte whether the Court
has subject matter jurisdiction. See Craig v. Ontario
Corp., 543 F.3d 872, 875 (7th Cir. 2008). Courts have
original jurisdiction of civil actions if there is complete
diversity between the parties and the amount in controversy
exceeds $75, 000, exclusive of interest and costs. 28 U.S.C.
jurisdiction cannot be established without knowing the
citizenship of every defendant. For this reason, “John
Doe” defendants are generally not permitted in
diversity suits. Pain Ctr. of SE Indiana LLC v. Origin
Healthcare Solutions LLC, 893 F.3d 454, 458 (7th Cir.
2018) (“Because the prerequisites for diversity
jurisdiction must be proved and not presumed, John Doe
defendants are ordinarily forbidden in federal diversity
suits.”). An exception exists when “John Does are
nominal parties-nothing more than placeholders” in the
event that discovery identifies additional defendants the
plaintiff wishes to sue. Id. In such cases, the
court can ignore John Does for purposes of diversity
cites John Hancock Realty Dev. Corp. v. Harte, 568
F.Supp. 515 (N.D. Ill. 1983) in support of the assertion that
the Unknown Owners and Non-Record Claimants are nominal
parties who can be ignored for purposes of diversity
jurisdiction. In Harte, the district court held that
the existence of any unknown owners or non-record claimants
in a mortgage foreclosure action was merely speculative and
that any interest such persons might have “cannot be
held to be real and substantial until such individual is
known to exist and comes forward to make a claim.”
Id. at 516. The Harte court concluded that
the unknown owners and non-record claimants were
“nominal parties with no substantial interest in the
Harte decision, however, is the minority view of the
district courts in the Seventh Circuit that have considered
the issue. The majority of district courts in the Seventh
Circuit who have addressed the issue conclude that unknown
owners and non-record claimants are not nominal parties.
See First Bank v. Tamarack Woods, LLC, No.
13-cv-00058, 2013 WL 5436373, at *2 (S.D. Ill. Sept. 30,
2013) (where the plaintiff sought to terminate the interests
of the unknown owners and non-record claimants in the
mortgaged real estate); Home Sav. of Am. F.A. v. Am.
Nat'l Bank & Trust Co. of Chicago, 762 F.Supp.
240, 242 (N.D. Ill. 1991) (where the plaintiff sought a
binding adjudication against the unknown owners and
non-record claimants in foreclosure action); John Hancock
Mut. Life Ins. Co. v. Cent. Nat'l Bank in Chicago,
555 F.Supp. 1026 (N.D. Ill. 1983).
example, in Home Savings of America, the court
reasoned that Illinois law permits the joinder of unknown
owners and non-record claimants and, where such parties are
joined, the court has the power to make a binding decision as
to their rights. In such instances, unknown owners and
non-record claimants are not nominal parties. Home Sav.
of Am., 762 F.Supp. at 242; see also Tamarack
Woods, 2013 WL 5436373, at *2. The Home Savings of
America court also noted that the existence of unknown
owners and non-record claimants is not speculative, pointing
in particular to the right of some claimants, such as the
judgment creditor of a mortgagor, to redeem the property
after a foreclosure sale. Home Sav. of Am., 762
F.Supp. at 243; 735 ILCS 5/12-132 (providing a judgment
creditor of a mortgagor the right to redeem the mortgaged
property after the expiration of three months and within six
months after the sale); see also Gen. Elec. Credit Corp.
v. Am. Nat'l Bank & Trust Co. of Chicago, ...