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First Bank of Highland Park v. Sklarov

Court of Appeals of Illinois, Second District

September 18, 2019

FIRST BANK OF HIGHLAND PARK, Plaintiff-Appellee,
v.
VLADIMIR SKLAROV, a/k/a Val Sklarov; CHICAGO TITLE LAND TRUST COMPANY, as Trustee Under Trust Agreements, a/k/a Trust No. 1107654, February 15, 2001, a/k/a Trust No. 9810, and a/k/a Trust No. 1108013; SHARON SKLAROV; BMO HARRIS BANK, N.A.; DEBORAH S. KIMELMAN; and UNKNOWN OWNERS AND NONRECORD CLAIMANTS, Defendants Vladimir Sklarov, Defendant-Appellant.

          Appeal from the Circuit Court of Lake County. No. 16-CH-1548 Honorable Luis A. Berrones, Judge, Presiding.

          Attorneys for Appellant: Michael T. McCracken, of Chicago, for appellant.

          Attorneys for Appellee: Thomas J. Dillon, Wendy Kaleta Gattone, Nicholas S. Maragos, and Kyle T. Dillon, of McFadden & Dillon, P.C., of Chicago, for appellee.

          JUSTICE SCHOSTOK delivered the judgment of the court, with opinion. Justices Hutchinson and Hudson concurred in the judgment and opinion.

          OPINION

          SCHOSTOK, JUSTICE.

         ¶ 1 In this mortgage foreclosure case, the plaintiff, First Bank of Highland Park (Bank), moved to be appointed the mortgagee in possession pursuant to section 15-1701(b)(2) of the Illinois Mortgage Foreclosure Law (Foreclosure Law) (735 ILCS 5/15-1701(b)(2) (West 2016)). The defendant, Vladimir Sklarov, opposed the appointment on the basis that (among other things) the property was residential real estate and thus the statute favored maintaining him in possession. The trial court found that the property was not residential and thus the presumption in favor of Sklarov did not apply, and it granted the Bank's motion. Sklarov appeals (Ill. S.Ct. R. 307(a)(4) (eff. Nov. 1, 2017)), and we affirm.

         ¶ 2 I. BACKGROUND

         ¶ 3 In 2011, a land trust, of which Sklarov was the beneficiary, obtained a mortgage on the property located at 460 Hunter Lane in Lake Forest (Property). Sklarov signed the promissory note secured by the mortgage. He also signed later promissory notes associated with the refinancing of the debt. Sklarov ceased making payments on the debt, and on October 17, 2016, the Bank filed this foreclosure action.

         ¶ 4 Sklarov traveled extensively for work, and the last date on which he resided at the property is not contained in the record. An affidavit by Bank employee Anne O'Connor1 stated that, before the foreclosure action was filed, Sklarov informed the Bank that he was residing in Sklarov argued that the O'Connor affidavit should be stricken because O'Connor was disclosed as an expert witness past the date for such disclosures. (O'Connor succeeded a different Bank employee, Joseph K. Kreisel, who originally handled the file on the Property and submitted an earlier affidavit.) The record does not reflect any explicit ruling on this argument, but the order appointing the Bank as mortgagee in possession recites that the trial court reviewed and considered both the O'Connor and Kreisel affidavits. On appeal, although Sklarov states that he "objects" to any consideration of the O'Connor affidavit, he has not asserted that the trial court's consideration of the affidavit was error, nor has he advanced any argument supported by legal authority to show such error. Europe. It is undisputed that Sklarov has not resided in Illinois or at the Property since before the foreclosure action was filed and that a tenant named Ryan Eagle was residing at the Property when the action was filed. (Eagle was initially named as a defendant in the foreclosure action. He was dismissed from the case after he moved out.) At some point between 2014 and the filing of the foreclosure action, Sklarov and his wife, Sharon, were divorced. Pursuant to an order entered in the dissolution case, Sharon was to receive any rents generated by the Property.

         ¶ 5 On October 31, 2018, the Bank filed a motion pursuant to section 15-1701(b)(1) of the Foreclosure Law (735 ILCS 5/15-1701(b)(1) (West 2016)) to be appointed mortgagee in possession of the Property. Section 15-1701(b) sets out two different presumptions depending on whether the property at issue is "residential real estate":

"(b) Pre-Judgment. Prior to the entry of a judgment of foreclosure:
(1) In the case of residential real estate, the mortgagor shall be entitled to possession of the real estate except if (i) the mortgagee shall object and show good cause, (ii) the mortgagee is so authorized by the terms of the mortgage or other written instrument, and (iii) the court is satisfied that there is a reasonable probability that the mortgagee will prevail on a final hearing of the cause, the court shall upon request place the mortgagee in possession. ***
(2) In all other cases, if (i) the mortgagee is so authorized by the terms of the mortgage or other written instrument, and (ii) the court is satisfied that there is a reasonable probability that the mortgagee will prevail on a final hearing of the cause, the mortgagee shall upon request be placed in possession of the real estate, except that if the mortgagor shall object and show good cause, the court shall allow the mortgagor to remain in possession." Id. § 15-1701(b).

         Thus, if the property is residential, under subsection (b)(1) the mortgagor (borrower) is entitled to remain in possession unless the mortgagee (lender) meets its burden of showing good cause to be placed in possession. Nonresidential real estate is governed by subsection (b)(2). Under that provision, the lender is entitled to be placed in possession upon its request unless the borrower shows good cause why it should not be.

         ¶ 6 Although the Bank's motion for appointment was brought under subsection (b)(1) (which pertains to residential real estate), the body of the motion argued that the Property was not residential, because Sklarov was not living there and the Property was rented to someone else when the foreclosure action was filed. The Bank cited ...


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