Deutsche Bank National Trust Co. v. Laz

2021 IL App (2d) 200341-U

• Court: Appellate Court of Illinois
• Decided: June 22, 2021
• Docket: 2-20-0341
• Status: Unpublished

Opinion

2021 IL App (2d) 200341-U No. 2-20-0341 Order filed June 22, 2021

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

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT ______________________________________________________________________________

DEUTSCHE BANK NATIONAL TRUST ) Appeal from the Circuit Court COMPANY, as Trustee for Morgan Stanley ) of Du Page County. Ixis Real Estate Capital Trust 2006-2 ) Mortgage Pass Through Certificates, ) Series 2006-2, ) ) Plaintiff-Appellee, ) ) v. ) No. 15-CH-1001 ) DAVID M. LAZ, PAMELA J. LAZ, GREEN ) TRAILS IMPROVEMENT ASSOCIATION, ) VILLAGE OF LISLE, DU PAGE COUNTY ) PUBLIC WORKS, ATTORNEY ) REGISTRATION AND DISCIPLINARY ) COMMISSION, UNKNOWN OWNERS and ) NONRECORD CLAIMANTS, ) ) Defendants ) Honorable ) Bonnie M. Wheaton, (David M. Laz, Defendant-Appellant). ) Judge, Presiding. ______________________________________________________________________________

JUSTICE SCHOSTOK delivered the judgment of the court. Justices Jorgensen and Hudson concurred in the judgment.

ORDER

¶1 Held: Repeal of statute did not deprive the trial court of jurisdiction over motion to reconsider the dismissal of the foreclosure case. The plaintiff had standing to bring 2021 IL App (2d) 200341-U

this foreclosure action. The trial court did not err in confirming the sale of the foreclosed property.

¶2 The plaintiff, Deutsche Bank National Trust Company, filed a foreclosure suit against the

defendant, David M. Laz. Laz raised the affirmative defense that Deutsche Bank lacked standing

at the time it filed the suit. The trial court found that Deutsche Bank had standing and granted

summary judgment in its favor on the affirmative defense. The parties then filed cross-motions

for summary judgment on the foreclosure complaint. The trial court granted summary judgment

in favor of Deutsche Bank on the complaint. Laz appeals pro se from these orders. We affirm.

¶3 I. BACKGROUND

¶4 In 2006, Laz entered into a home mortgage loan with Accredited Home Lenders, Inc. The

loan was secured with a mortgage to Mortgage Electronic Registration Systems, Inc. (MERS), as

nominee for Accredited Home Lenders, Inc. The mortgage encumbered the property known as

2110 Babst Court in Lisle. In 2008, Laz defaulted under the terms of the note and mortgage. In

July 2010, Laz filed for relief under chapter 7 of the U.S. Bankruptcy Code (11 U.S.C. § 727

(1990)). In August 2010, Laz was dismissed from the bankruptcy proceeding, and the case

terminated in September 2010. Laz’s debt was not discharged.

¶5 On May 28, 2015, Deutsche Bank filed a foreclosure action against Laz. In its complaint,

Deutsche Bank alleged that it was the current legal holder of the indebtedness and that Laz had

been in default since September 2008. Copies of the note and the mortgage were attached to the

complaint as exhibits. The note bore an in-blank endorsement, designated as an allonge to the

note, signed by Nancy Montoya as assistant secretary of Accredited Home Lenders. An amended

complaint was later filed to clarify that Laz was personally liable for any deficiency judgment.

The record shows that an assignment of mortgage to Deutsche Bank from MERS, as nominee for

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Accredited Home Lenders, was recorded in November 2008, and a corrected assignment of

mortgage was recorded in March 2014.

¶6 Laz filed an answer and affirmative defenses. He later filed amended affirmative defenses.

His first affirmative defense, which is the only one relevant to this appeal, was that Deutsche Bank

lacked standing because the endorsement of the note was an invalid forgery. Laz noted that the

endorsement was putatively signed by Montoya, as assistant secretary for Accredited Home

Lenders. He attached an affidavit from Montoya in which she asserted that, while she was

employed by Accredited Home Lenders at the time of the endorsement, she was not an assistant

secretary and she did not execute the endorsement on the note.

¶7 On December 2, 2015, the trial court entered an order addressing various issues not related

to this appeal. That order also indicated that Deutsche Bank had produced the original note in

court on that date.

¶8 Thereafter, Laz filed a motion to dismiss the complaint, pursuant to section 2-619 of the

Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West 2014)), arguing that the complaint

should be dismissed because he was never sent a grace period notice as required by section 15-

1502.5 of the Illinois Mortgage Foreclosure Law (Foreclosure Law) (735 ILCS 5/15-1502.5 (West

2014)). Section 15-1502.5, which is commonly known as the Homeowner Protection Act (Act)

(735 ILCS 5/15-1502.5 (West 2014)), became effective on April 6, 2009 (Pub. Act 95-1047, § 35

(eff. Apr. 6, 2009) (adding 735 ILCS 5/15-1502.5)). Under the Act, lenders were required to

provide owners of single-family, owner-occupied properties with a grace period notice prior to

filing a complaint in foreclosure. 735 ILCS 5/15-1502.5(c) (West 2014). The grace period notice

informed the borrower of various resources for counseling and possible loan modification. Id.

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¶9 Deutsche Bank filed a response arguing that Laz was not entitled to a grace period notice

because he had filed a bankruptcy petition. Section 15-1502(b) provided that a grace period notice

was not required if a mortgagor had filed a petition for relief under the United States Bankruptcy

Code. 735 ILCS 5/15-1502.5(b) (West 2014). On June 6, 2016, the trial court entered an order

dismissing the case without prejudice, finding that Laz’s filing of a bankruptcy petition, which was

dismissed without discharge five years prior to the filing of the present foreclosure complaint, did

not relieve Deutsche Bank’s requirement to send a grace period notice.

¶ 10 On July 1, 2016, Deutsche Bank filed a motion to reconsider, arguing that the trial court

misapplied the law when it found that Deutsche Bank was required to send a grace period notice.

Deutsche Bank argued that Laz filed for bankruptcy and that section 15-1502.5 of the Foreclosure

Law clearly stated that a grace period notice was not required when a mortgagor has filed for

bankruptcy, even if the filing was years prior to the foreclosure action.

¶ 11 Also on July 1, 2016, section 15-1502.5 was repealed removing both the grace period

notice requirement and the exception for homeowners who had filed in bankruptcy. The repeal

was effective that same date. See 735 ILCS 5/15-1502.5(k) (West 2014).

¶ 12 On August 12, 2016, the trial court granted Deutsche Bank’s motion to reconsider, vacated

the order dismissing the complaint, and denied Laz’s motion to dismiss the complaint. The trial

court’s reasoning is not known as the record does not include any report of proceedings.

¶ 13 In December 2016, Deutsche Bank moved for summary judgment on Laz’s affirmative

defenses. Deutsche Bank argued that it was entitled to judgment as a matter of law on the issue of

standing because it possessed the original endorsed note. The parties also filed cross-motions for

summary judgment on the amended complaint to foreclose.

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¶ 14 On February 24, 2017, the trial court granted summary judgment in favor of Deutsche Bank

on Laz’s affirmative defense regarding standing. On March 9, 2018, the trial court denied Laz’s

motion for summary judgment and granted Deutsche Bank’s motion for summary judgment on the

foreclosure complaint. On that same date, the trial court entered a judgment for foreclosure and

sale.

¶ 15 Deutsche Bank was the highest bidder at the foreclosure sale. Deutsche Bank filed a

motion to confirm the sale. Laz filed a motion to vacate the judgment of foreclosure, arguing that

it was void given that the grace period notice statute was repealed as of July 1, 2016. On March

9, 2020, the trial court confirmed the foreclosure sale and denied Laz’s motion to vacate.

¶ 16 On April 8, 2020, Laz filed a motion to reconsider the confirmation of sale. In relevant

part, Laz argued that section 15-1503 of the Code was unconstitutional because it offered a remedy

to foreclosure defendants in Chicago which was not offered to foreclosure defendants in other

municipalities. The trial court denied the motion to reconsider, and Laz filed a timely notice of

appeal.

¶ 17 II. ANALYSIS

¶ 18 Laz’s first contention on appeal is that the trial court erred in vacating its June 6, 2016,

dismissal order and conducting further proceedings after that date. Laz argues that once section

15-1502.5 of the Foreclosure Law was repealed on June 30, 2016, the trial court was deprived of

jurisdiction to modify the June 2016 dismissal order. The issue of whether the trial court had

subject matter jurisdiction over the proceedings is reviewed de novo. In re Marriage of Chrobak,

349 Ill. App. 3d 894, 897 (2004). In addition, to the extent the argument on appeal concerns

statutory interpretation, that, too, is a question of law to be reviewed de novo. See, e.g., Carter v.

SSC Odin Operating Co., 237 Ill. 2d 30, 39 (2010).

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¶ 19 Laz’s challenge to the trial court’s jurisdiction is without merit. Our supreme court has

unequivocally held that “[w]ith the exception of the circuit court’s power to review administrative

action, which is conferred by statute, a circuit court’s subject matter jurisdiction is conferred

entirely by our state constitution.” Belleville Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc., 199

Ill. 2d 325, 334 (2002). Under Belleville Toyota, the repeal of section 15-1502.5 did not deprive

the trial court of subject matter jurisdiction over Laz’s case. Here, Deutsche Bank filed a motion

to reconsider the trial court’s June 2016 order and the trial court thus had continuing jurisdiction

over the matter. Dus v. Provena St. Mary’s Hospital, 2012 IL App (3d) 091064, ¶ 14 n.2 (as a

general matter, a trial court retains jurisdiction to reconsider judgments and orders within 30 days

of their entry).

¶ 20 In arguing that the trial court did not have jurisdiction to reconsider the June 2016 dismissal

order, Laz relies on U.S. Bank, N.A. v. Coe, 2017 IL App (1st) 161910. In that case, the foreclosure

action was filed in 2012 and the order confirming the sale was entered in June 2016. The

mortgagors filed an appeal on July 7, 2016, challenging the trial court’s order approving the

foreclosure sale of their property on the basis that they did not receive a grace period notice. The

reviewing court affirmed the trial court’s order confirming the sale.

¶ 21 In affirming the confirmation order, the reviewing court addressed the repeal of section 15-

1502.5 as follows:

“[T]he plain language of the statute expressly repeals the Act, which was itself a

special statutory remedy intended to provide homeowners with some protection prior to a

suit in foreclosure being initiated against them. *** Moreover, we observe that the Act

does not contain a special saving clause. *** Thus it follows that, ‘[t]he unconditional

repeal of a special remedial statute without a saving clause stops all pending actions where

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the repeal finds them. If final relief has not been granted before the repeal goes into effect

it cannot be granted afterwards, even if a judgment has been entered and the cause is

pending on appeal.’ ” Id. ¶ 13 (quoting People ex rel. Eitel v. Lindheimer, 371 Ill. 367,

373 (1939).

The reviewing court held that the mortgagors had no vested right to receive a grace period notice

pursuant to the Act and that when a statute has been repealed, a reviewing court must dispose of

the case based on the law in effect at the time of its decision. Id. ¶¶ 9, 18. Accordingly, the

reviewing court held that when the mortgagors filed their appeal on July 7, 2016, they no longer

had any recourse under the Act because the Act had been repealed. Id. ¶ 19.

¶ 22 Laz’s reliance on Coe is misplaced as that case actually supports the trial court’s decision.

Under Coe, where a statute is expressly repealed and does not contain a savings clause, that statute

has no effect on any cases that remain pending following the date of repeal. Id. at ¶ 9. Any ruling

based on the ineffective statute only stands as to cases that are past and closed. Id. Here, Laz’s

case was not past and closed. The trial court had continuing jurisdiction to rule on the case when

the plaintiff filed a timely motion to reconsider the trial court’s June 2016 order. When the trial

court ruled on the motion to reconsider, it was required to apply the law at the time of its decision.

Id. ¶ 9; see also Hogan v. Bleeker, 29 Ill. 2d 181, 184-85 (1963) (“Where a statute giving a special

remedy is amended without a savings clause in favor of pending actions, all actions affected must

be decided in conformity to the law then existing, both in the trial and [a]ppellate [c]ourts, without

regard to whether the actions accrued before or after such change, or whether action had been

previously instituted.”). At the time the trial court ruled on the motion to reconsider, a grace period

notice was no longer required as the Act had been repealed. Accordingly, under Coe, the trial

court properly granted the motion to reconsider and vacated the dismissal order.

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¶ 23 Laz’s second contention on appeal is that the trial court erred in denying his motion to

reconsider the confirmation of the judicial sale on the basis that section 15-1503 of the Foreclosure

Law was unconstitutional. In his motion to reconsider, Laz argued that the statute contained

certain notice requirements for municipalities with populations exceeding 2,000,000 and provided

certain remedies for failing to meet the specified notice requirements. He noted that the statute

did not provide the same remedy to those in municipalities where the population was less than

2,000,000. Laz raised this argument challenging the constitutionality of section 15-1503 for the

first time in his motion to reconsider.

¶ 24 The purpose of a motion to reconsider “is to bring to the trial court’s attention newly

discovered evidence not available at the time of the first hearing, changes in the law, or errors in

the previous application of existing law to the facts at hand.” River Village I, LLC v. Central

Insurance Cos., 396 Ill. App. 3d 480, 492 (2009). An argument raised for the first time in a motion

to reconsider is deemed forfeited. See, e.g., Evanston Ins. Co. v. Riseborough, 2014 IL 114271, ¶

36 (finding the defendant forfeited argument raised for the first time in a motion to reconsider);

American Chartered Bank v. USMDS, Inc., 2013 IL App (3d) 120397, ¶ 13 (“Issues cannot be

raised for the first time in the trial court in a motion to reconsider and issues raised for the first

time in a motion to reconsider cannot be raised on appeal.”); see also Sewickley, LLC v. Chicago

Title Land Trust Co., 2012 IL App (1st) 112977, ¶¶ 35-37. Because Laz raised this argument for

the first time in his motion to reconsider, it is forfeited and cannot be raised on appeal. Id.

¶ 25 Even absent forfeiture, Laz’s argument would still fail. A trial court’s disposition of a

motion to reconsider that is based on new evidence, facts, or legal theories not presented in prior

proceedings is reviewed for an abuse of discretion. Horlacher v. Cohen, 2017 IL App (1st)

162712, ¶ 80. An abuse of discretion occurs only when the court acts so arbitrarily that no

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reasonable person would take the court’s position. Payne v. Hall, 2013 IL App (1st) 113519, ¶ 12.

Here, there is no transcript of proceedings included in the record on appeal. It was Laz’s burden,

as appellant, to provide a complete record on appeal. Rock Island County v. Boalbey, 242 Ill. App.

3d 461, 462 (1993). In the absence of such a record, we presume that any order entered by the

trial court was in conformity with the law and had a sufficient factual basis. Foutch v. O’Bryant,

99 Ill. 2d 389, 392 (1984). Any doubts which may arise from the incompleteness of the record

must be resolved against the appellant. Id. Accordingly, even absent forfeiture, we would presume

that the trial court’s determination, confirming the judicial sale, was in conformity with the law.

¶ 26 Laz’s next contention on appeal is that the trial court erred in entering summary judgment

in favor of Deutsche Bank on his affirmative defense challenging Deutsche Bank’s standing.

Summary judgment is appropriate only where the pleadings, depositions, admissions, and

affidavits on file, when viewed in the light most favorable to the nonmoving party, show that there

is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of

law. Lazenby v. Mark’s Construction, Inc., 236 Ill. 2d 83, 93 (2010). We review de novo a grant

of summary judgment. Metropolitan Life Insurance Co. v. Hamer, 2013 IL 114234, ¶ 17. The

issue of standing presents a question of law and is also subject to de novo review. Malec v. City

of Belleville, 384 Ill. App. 3d 465, 468 (2008).

¶ 27 “The doctrine of standing is designed to preclude persons who have no interest in a

controversy from bringing suit.” Raintree Homes, Inc. v. Village of Long Grove, 209 Ill. 2d 248,

262 (2004). Under the Foreclosure Law, a foreclosure action may be brought by (1) the legal

holder of an indebtedness secured by a mortgage, (2) any person designated or authorized to act

on behalf of such holder, or (3) an agent or successor of a mortgagee. 735 ILCS 5/15-1208, 15-

1501 (West 2014); Mortgage Electronic Registration Systems, Inc. v. Barnes, 406 Ill. App. 3d 1,

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7 (2010). A prima facie case for foreclosure is established if the complaint conforms to the

requirements set forth in section 15-1504(a) of the Foreclosure Law (735 ILCS 5/15-1504(a) (West

2008)) and the mortgage and note are attached. Barnes, 406 Ill. App. 3d at 6. If this is done, the

burden shifts to the mortgagor to prove lack of standing. Parkway Bank and Trust Co. v. Korzen,

2013 IL App (1st) 130380, ¶ 24.

¶ 28 In the present case, Laz does not dispute that Deutsche Bank established a prima facie case

of standing by complying with the requirements of section 15-1504(a) of the Foreclosure Law and

by attaching a copy of the note, mortgage, and allonge to its complaint. See 735 ILCS 5/15-

1504(a) (West 2014); Ill. S. Ct. R. 113(b) (eff. May 1, 2013). A mere attachment of a note to a

complaint is prima facie evidence that the plaintiff owns the note. Parkway Bank & Trust Co. v.

Korzen, 2013 IL App (1st) 130380, ¶ 24. Laz argues that he rebutted the prima facie case of

standing through Montoya’s affidavit. Laz argues that Montoya’s affidavit establishes that the

allonge is invalid and that Deutsche Bank lacks standing.

¶ 29 Laz’s challenge to Deutsche Bank’s standing is without merit. Under Illinois law, a note

may be enforced by the holder of the instrument or a non-holder in possession of the instrument

who has the rights of a holder. See 810 ILCS 5/3-301 (West 2014). Furthermore, “Illinois does

not require that a foreclosure be filed by the owner of the note and mortgage.” Barnes, 406 Ill.

App. 3d at 7 (Illinois law permits a plaintiff to bring a foreclosure action even if it does not own

the note at issue but can prove that it acquired the holder’s rights to repayment as the mortgagee).

Laz does not dispute that Deutsche Bank attached a copy of the note and mortgage to the complaint

and later produced the original note in court. By doing so, Deutsche Bank validated that it was a

non-holder in possession of the note. U.S. Bank Trust National Association for Queen’s Park Oval

Asset Holding Trust v. Lopez, 2018 IL App (2d) 160967, ¶ 23. Further, the assignment of the

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mortgage from MERS to Deutsche Bank showed that Deutsche Bank had the right to enforce the

note. Id. Accordingly, regardless of whether the endorsement of the note by Montoya was valid,

Deutsche Bank established standing as a non-holder in possession of the note who had the rights

of a holder. Id.

¶ 30 Laz argues that Deutsche Bank has not proven that it is a non-holder in possession because,

in its amended complaint, it pleaded only that it was the legal holder of the indebtedness. This

argument is unpersuasive. While a plaintiff in a foreclosure case must allege in the complaint, as

a pleading requirement, the capacity in which the plaintiff brings the action to foreclose (see 735

ILCS 5/15-1504(a)(3)(N) (West 2014)), a plaintiff is not required to plead proof of standing.

Barnes, 406 Ill.App.3d at 6. The pleadings in the complaint do not affect Deutsche Bank’s

standing, as it had the rights of a holder.

¶ 31 Laz’s final contention on appeal is that the trial court erred in confirming the judicial sale

because the required public notices did not comply with section 15-1507 of the Foreclosure Law

(735 ILCS 5/15-1507 (West 2014) (requiring public notice of sale and setting forth the requisite

guidelines). Section 15-1507(c)(1)(A) requires that the public notice of sale include “the name,

address and telephone number of the person to contact for information regarding the real estate.”

Id. § 1507(c)(1)(A). Section 15-1507(c)(2) requires that the public notice of the sale be, in relevant

part, as follows:

“The notice of sale shall be published *** by: (i)(A) advertisements in a newspaper

circulated to the general public in the county in which the real estate is located, in the

section of that newspaper where legal notices are commonly placed and (B) separate

advertisements in the section of such a newspaper * * * in which real estate other than real

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estate being sold as part of legal proceedings is commonly advertised to the general public

* * *.” Id. § 15-1507(c)(2).

Laz argues that the notice was not sufficient because (1) the certificates of publication filed in the

trial court by Deutsche Bank do not indicate that the notices were placed in both the legal section

and the real estate sections of the newspaper, and (2) the notice did not include the name of a

person to contact about the real estate. Laz argues that because the public notices were deficient,

the trial court should have denied the motion for confirmation of the judicial sale.

¶ 32 A trial court’s approval of a judicial sale is reviewed for an abuse of discretion.

CitiMortgage, Inc. v. Bermudez, 2014 IL App (1st) 122824. ¶ 57. A trial court abuses its discretion

when its ruling rests on an error of law or where no reasonable person would take the view adopted

by the court. Id.

¶ 33 Section 15-1508(b) of the Foreclosure Law, which governs the confirmation of judicial

sales, provides:

“Upon motion and notice in accordance with court rules applicable to motions generally,

which motion shall not be made prior to sale, the court shall conduct a hearing to confirm

the sale. Unless the court finds that (i) a notice [of the sale] * * * was not given, (ii) the

terms of sale were unconscionable, (iii) the sale was conducted fraudulently or (iv) justice

was otherwise not done, the court shall then enter an order confirming the sale.” 735 ILCS

5/15-1508(b) (West 2014).

However, section 15-1508(d) further provides:

“Except as provided in subsection (c) of Section 15-1508 [which concerns the failure to

give notice to a party], no sale under this Article shall be held invalid or be set aside because

of any defect in the notice thereof or in the publication of the same, or in the proceedings

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of the officer conducting the sale, except upon good cause shown in a hearing pursuant to

subsection (b) of Section 15-1508.” 735 ILCS 5/15-1508(d) (West 2014).

¶ 34 In the present case, Laz does not argue that he did not receive notice. Accordingly, under

section 15-1508(d), any defects in the public notice could only be a basis to set aside the

foreclosure sale if Laz had established “good cause.” As noted earlier, Laz has not provided a

transcript of the hearing on the motion to confirm the sale or the hearing on his motion to reconsider

the confirmation of sale. The lack of an adequate record on appeal precludes us from ascertaining

what evidence, testimony, or arguments were presented to the trial court. Under these

circumstances, this court must presume that the trial court acted in conformity with the law and

ruled properly after considering the evidence before it. Foutch, 99 Ill. 2d at 392. Thus, we are

compelled to affirm the trial court’s order confirming the judicial sale.

¶ 35 III. CONCLUSION

¶ 36 For the reasons stated, we affirm the judgment of the circuit court of Du Page County.

¶ 37 Affirmed.

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