BMO Harris Bank N.A. v. Scialabba

2024 IL App (3d) 230144-U
CourtAppellate Court of Illinois
DecidedApril 5, 2024
Docket3-23-0144
StatusUnpublished

This text of 2024 IL App (3d) 230144-U (BMO Harris Bank N.A. v. Scialabba) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
BMO Harris Bank N.A. v. Scialabba, 2024 IL App (3d) 230144-U (Ill. Ct. App. 2024).

Opinion

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).

2024 IL App (3d) 230144-U

Order filed April 5, 2024 ____________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

THIRD DISTRICT

BMO HARRIS BANK N.A. f/k/a HARRIS ) Appeal from the Circuit Court BANK N.A. Successor by Merger to ) of the 12th Judicial Circuit, NLSB Bank, ) Will County, Illinois, ) Plaintiff, ) Appeal No. 3-23-0144 ) Circuit Nos. 16-CH-576, 17-CH-998 v. ) (cons.) ) JAMES V. SCIALABBA a/k/a JAMES V. ) Honorable SCIALABBA, SR.; DEBRA L. SCIALABBA; ) Theodore J. Jarz, KAREN SPRINGS II HOMEOWNERS ) Judge, Presiding. ASSOCIATION; UNKNOWN OWNERS AND ) NON-RECORD CLAIMANTS, ) ) Defendants. ) ) _______________________________________ ) ) U.S. BANK NATIONAL ASSOCIATION, ) ) Plaintiff, ) ) v. ) ) ) DEBRA L. SCIALABBA; JAMES V. ) SCIALABBA; BMO HARRIS BANK N.A. ) f/k/a HARRIS BANK N.A. Successor by ) Merger to NLSB BANK; KAREN SPRINGS II ) HOMEOWNERS ASSOCIATION; JAMAL ) BARGHOUTHI; UNKNOWN OWNERS AND ) NON-RECORD CLAIMANTS ) ) ) Defendants ) ) (BMO Harris Bank N.A., Appellant, v. ) U.S. Bank National Association and Jamal ) Barghouthi, Appellees). ) ) ____________________________________________________________________________

JUSTICE ALBRECHT delivered the judgment of the court. Justices Brennan and Davenport concurred in the judgment. ____________________________________________________________________________

ORDER

¶1 Held: The circuit court erred in voiding a summary judgment order, judgment of foreclosure and sale, and subsequent order confirming purchase for lack of jurisdiction.

¶2 Defendant, BMO Harris Bank N.A. (BMO Harris), appeals the circuit court's order

voiding its prior order granting summary judgment in BMO Harris’s favor in its foreclosure

action (case No. 16-CH-576), the contemporaneous judgment of foreclosure and sale of the

mortgaged property, and the subsequent order confirming the sale. The court previously

dismissed U.S. Bank National Association’s (U.S. Bank) concurrent foreclosure action (case No.

17-CH-998) over the same property, asserting lack of jurisdiction based on BMO Harris’s

summary judgment award entering judgment against U.S. Bank. Our mandate reversed and

remanded the cause to reinstate U.S. Bank’s case and to hold further proceedings consistent with

our order. U.S. Bank National Association v. Scialabba, 2021 IL App (3d) 200269-U, ¶ 34. We

hold that the court’s decision to void orders in case No. 16-CH-576 exceeded our mandate, and

therefore, reverse and remand.

¶3 I. BACKGROUND

2 ¶4 This court previously issued a Rule 23 order reversing two circuit court orders that

dismissed U.S. Bank’s motion for leave to file an amended complaint in Will County case No.

17-CH-998 on jurisdictional grounds and denied its motion to reconsider. Id.; Ill. S. Ct. R. 23

(eff. Jan. 1, 2021). Our prior order recounts the pre-appellate history of this matter more

thoroughly, but we provide here the necessary facts as needed to resolve the parties’ present

appellate dispute. See Scialabba, 2021 IL App (3d) 200269-U, ¶¶ 6-21.

¶5 Two financial institutions entered into mortgage agreements with the then-

homeowners/borrowers of the residential property subject to this litigation. The record indicates

that the mortgage interest BMO Harris eventually came to possess was recorded on August 25,

2005. A separate mortgage interest that U.S. Bank later assumed was recorded on October 19,

2012.

¶6 In November 2012, the Will County Recorder’s office recorded a subordination

agreement between BMO Harris and the entity previously holding U.S. Bank’s mortgage interest

wherein BMO Harris subordinated its interest.

¶7 In 2016, BMO Harris commenced a foreclosure action in case No. 16-CH-576 under the

Illinois Mortgage Foreclosure Law (735 ILCS5/15-1101 et seq. (West 2014)) to enforce its

mortgage lien against the residential property. BMO Harris did not name U.S. Bank as a party in

its complaint to foreclose the mortgage interest and made no reference to the 2012 subordination

agreement therein. In 2017, U.S. Bank commenced its own foreclosure action on the property

pursuant to statute in case No. 17-CH-998. BMO Harris was named as one of the party

defendants in U.S. Bank’s complaint and later filed its answer thereto. On August 2, 2017, the

circuit court granted the borrowers’ motion to consolidate the banks’ foreclosure actions

3 pursuant to section 2-1006 of the Code of Civil Procedure (Code). 735 ILCS 5/2-1006 (West

2016).

¶8 Later in August 2017, BMO Harris filed a motion for summary judgment against the

borrowers. The case caption to the motion listed one of the borrowers “James V. Scialabba” and

“et al.” as the defendants. Meanwhile, BMO Harris filed an unsuccessful motion to sever the

actions, claiming its right to a judicial decree of foreclosure was impaired through the

consolidation. When BMO Harris eventually filed its reply in support of the motion for summary

judgment on November 19, 2018, it identified U.S. Bank among other named party defendants.

U.S. Bank was not on the service list for the initial motion but was later included on the notice of

filing for BMO Harris’s reply.

¶9 On November 28, 2018, after hearing argument, the circuit court granted BMO Harris’s

motion for summary judgment and judgment of foreclosure and sale. Per the court’s order, it

reviewed “Defendant(s)[’] *** Answer and determin[ed] that said Answer, as pleaded without

sufficient supporting documentation” failed to raise a genuine issue of material fact to preclude

summary judgment. As the parties have recognized, based on a clerical error by BMO Harris’s

counsel, the order awarding summary judgment identified U.S. Bank as one of the defendants

against which summary judgment was entered. Distinctly, the judgment of foreclosure and sale

did not reference U.S. Bank, its concurrent foreclosure action in case No. 17-CH-998, or its 2012

mortgage lien. The judgment provided that “the Mortgage which [wa]s the subject matter of the[

] proceedings [wa]s extinguished and merged into Judgment” and clarified that “[a]ny purchaser

at the Judicial Sale [will] take[ ] subject to any and all liens, encumbrances and any existing

defects in title.” The record does not indicate whether U.S. Bank was present for the hearing on

BMO Harris’s motion for summary judgment.

4 ¶ 10 Subsequently, on March 7, 2019, Mountolive, LLC, through its member Jamal

Barghouthi, successfully bid on the property for the price of $100,000 through BMO Harris’s

foreclosure sale. Five days later, Barghouthi filed a motion to vacate the sale alleging in part that

BMO Harris’s false advertisement indicated there was no second mortgage against the property,

and, even so, he attached the docket entry wherein the court entered summary judgment

suggesting BMO Harris was the “prevailing party *** against” U.S. Bank. On May 15, 2019, the

circuit court confirmed the sale, granting Mountolive, LLC possession of the property. Prior to

entering its order, the court orally addressed Barghouthi’s purported surprise of the second

mortgage, stating “I think the burden falls on a prospective purchaser to check the public records

to see what, if any, liens might be attached against the property.”

¶ 11 On August 27, 2019, U.S.

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U.S. Bank National Ass'n v. Scialabba
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2024 IL App (3d) 230144-U, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bmo-harris-bank-na-v-scialabba-illappct-2024.