United States District Court, C.D. Illinois, Rock Island Division
DARROW CHIEF UNITED STATES DISTRICT JUDGE.
the Court are Plaintiff United States of America's Motion
to Approve the Marshal's Report and Confirm Judicial Sale
(“Motion to Confirm Sale”), ECF No. 86,
Defendants Hillcrest Resort, Inc. (“Hillcrest”)
and Terri Kosth's (“Defendants”) Motion to
Vacate Marshal's Sale, ECF No. 96, Magistrate Judge
Jonathan Hawley's Report and Recommendation
(“R&R”), ECF No. 100, which recommends
granting Defendants' motion and denying the United
States' motion, and the United States' objection to
the R&R, ECF No. 101. Also before the Court are the
United States' Motion Requesting an Expedited Ruling, ECF
No. 102, and the United States' Motion for Leave to File
a Reply, ECF No. 105. For the reasons that follow, the
objection is SUSTAINED IN PART and OVERRULED IN PART, and the
R&R is ADOPTED IN PART and REJECTED IN PART. The Motion
Requesting an Expedited Ruling and the Motion for Leave to
File a Reply are GRANTED. The Court defers ruling on the
remaining motions pending an evidentiary hearing.
January 12, 1994, Hillcrest borrowed $151, 000 from the Small
Business Administration (“SBA”), an agency of the
United States Government. See Note, Compl. Ex. A,
ECF No. 1-1 at 1-2. As security, Hillcrest granted the SBA a
mortgage on the property. Mortgage, Compl. Ex. B, ECF No. 1-1
at 3-6. The mortgage was later modified to reflect an
increase in the principal sum on the loan to $190, 600.
See Mod. Mortgage, Compl. Ex. D, ECF No. 1-1 at 8-9.
After Hillcrest defaulted on the loan, the United States
sought foreclosure of the mortgage. See Compl., ECF
No. 1; Am. Compl., ECF No. 43. The Court granted the United
States' motion for summary judgment against Defendants
and entered a judgment of foreclosure. Sept. 28, 2017 Order,
ECF No. 69. The Court ordered that the property be sold by
the United States Marshal for the Central District of
Illinois at the Henry County Courthouse. Id. at
March 9, 2018, the United States filed a notice indicating
that the Marshal's sale would occur on July 10, 2018.
2018 Not. Marshal's Sale, ECF No. 72. The sale did not
occur on that date. On March 13, 2019, the United States
filed a second notice indicating that the Marshal's sale
would occur on May 7, 2019. 2019 Not. Marshal's Sale, ECF
No. 74. Later, the United States filed a certificate of
publication. See Certificate of Publication, ECF No.
75. An agent of the Star Courier Newspaper certified that
notice of the sale was published in that newspaper once a
week from April 2, 2019 through April 23, 2019. Id.
The certificate contained the contents of the notice
published in the newspaper. Id.
sale occurred as planned on May 7, 2019. On July 22, 2019,
the United States filed a certificate of purchase signed by
the Marshal, which indicated that Daniel Roach had purchased
the property for $285, 000 at the sale. Certificate of
Purchase, ECF No. 83. The same day, the United States filed
the Marshal's report of sale, which again indicated the
purchaser and amount for which the property sold. Report of
Sale, ECF No. 84. It also listed “[t]he total amount of
indebtedness secured by the mortgage foreclosed herein and
the Judgment of Foreclosure entered herein.”
Id. ¶ 4. The Marshal reported that notice was
given in accordance with 735 ILCS 5/15-1507(c), that the
terms of the sale were fair, that the sale was conducted
fairly and without fraud, and that justice was done by the
sale. Id. ¶ 5. On July 25, 2019, the United
States filed its Motion to Confirm Sale. Defendants obtained
new counsel in early August and were granted an extension of
time to file a response to the motion. See Aug.
8, 2019 Text Order. On August 30, 2019, Defendants filed both
a response to the motion, Resp. Mot. Confirm Sale, ECF No.
95, and their Motion to Vacate Marshal's Sale. The Court
referred the motions to Judge Hawley for a recommended
disposition. He filed his R&R on October 9, 2019,
recommending granting Defendants' motion and denying the
United States' motion. The United States objects to the
Motion for Leave to File a Reply
reply to [a] response is permitted without leave of
Court.” CDIL-LR 7.1(B)(3). The United States argues
that it seeks leave to file a reply in support of its
objection to address issues raised for the first time in
Defendants' response: whether it can cite to unpublished
state court opinions and whether the case should be remanded
to Judge Hawley for further proceedings. Mot. Leave File
Reply 1. The motion is GRANTED and the Clerk is directed to
file the proposed reply, ECF No. 105-1, on the docket. The
Court agrees with the United States that Illinois Supreme
Court Rule 23, which provides, in part, that non-precedential
orders “may not be cited by any party except to support
contentions of double jeopardy, res judicata,
collateral estoppel or law of the case, ” Ill. Sup. Ct.
R. 23(e)(1), is not binding on federal courts. But the Court
cannot give an unpublished case precedential effect, so where
the Court cites to unpublished Illinois cases, it does so
only for their persuasive value. Cf., e.g.,
Mandelstein v. Rukin, No. 17-cv-9216, 2019 WL
3857886, at *7 n.7 (N.D. Ill. Aug. 16, 2019); Netherlands
Ins. Co. v. Knight, No. 4:10-cv-04043-SLD-JEH, 2014 WL
3376873, at *2 (C.D. Ill. July 10, 2014).
Report and Recommendation
magistrate judge considers a pretrial matter dispositive of a
party's claim or defense, he must enter a recommended
disposition. Fed.R.Civ.P. 72(b)(1). Parties may object within
fourteen days of being served with a copy of the recommended
disposition. Id. 72(b)(2). The district judge
considers de novo the portions of the recommended disposition
that were properly objected to, and may accept, reject, or
modify the recommended disposition, or return it to the
magistrate judge for further proceedings. Id.
72(b)(3). If no objection, or only partial objection, is made
the district judge reviews the unobjected to portions of the
recommendation for clear error only. Johnson v. Zema Sys.
Corp., 170 F.3d 734, 739 (7th Cir. 1999). But the
district judge may “reconsider sua sponte any
matter determined by a magistrate judge” even if no
party objects. Schur v. L.A. Weight Loss Ctrs.,
Inc., 577 F.3d 752, 760 (7th Cir. 2009).
Hawley recommends granting Defendants' Motion to Vacate
the Marshal's Sale on the basis that the United States
did not give proper public notice of the sale. R&R 6-9.
The United States objects to this finding on multiple
grounds. See Objection 2. The Court addresses this
issue de novo.
What Law Applies
United States raises a question as to what law applies,
see Id. at 3, so the Court addresses this issue
first. The United States brought this mortgage foreclosure
action under 28 U.S.C § 1345, which provides district
courts with original jurisdiction over “all civil
actions, suits or proceedings commenced by the United
States.” See Am. Compl. ¶ 1. Section
1345, however, does not dictate what law the court should
law governs questions involving the rights of the United
States arising under nationwide federal programs,' [but]
state law supplies the content of federal law unless Congress
has established distinctively federal rules.”
United States v. Einum, 992 F.2d 761, 761-62 (7th
Cir. 1993) (quoting United States v. Kimbell Foods,
Inc., 440 U.S. 715, 726 (1979)). The Court, therefore,
generally applies the substance of the Illinois Mortgage
Foreclosure Law (“IMFL”), 735 ILCS
5/15-1101-1706. See United States v. Torres, 142
F.3d 962, 966-67 (7th Cir. 1998) (applying the IMFL in a
foreclosure action brought by a government agency),
overruled on other grounds by Hill v. Tangherlini,
724 F.3d 965, 967 n.1 (7th Cir. 2013); United States v.
LaSalle Nat'l Tr., 807 F.Supp. 1371, 1371 (N.D. Ill.
1992) (same). Even if federal law applied, federal law
requires that a court-ordered sale of ...