Greenpoint Mortgage Funding, Inc. v. Poniewozik

2014 IL App (1st) 132864, 23 N.E.3d 525

• Court: Appellate Court of Illinois
• Decided: December 8, 2014
• Docket: 1-13-2864
• Status: Unpublished

Opinion

2014 IL App (1st) 132864 No. 1-13-2864 FIRST DIVISION December 8, 2014

IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT

GREENPOINT MORTGAGE FUNDING, INC., ) Appeal from the ) Circuit Court of Plaintiff-Appellee, ) Cook County. ) v. ) ) MARIUSZ PONIEWOZIK, ) ) Defendant-Appellant ) No. 08 CH 44711 ) (Edward Poniewozik; Janina Poniewozik; ) One South Leavitt Condominium Association, ) NFP; Mortgage Electronic Registration ) System, Inc., GreenPoint Mortgage Funding, Inc., ) unknown owners and nonrecord claimants, ) Honorable ) Robert E. Senechalle, Defendants). ) Judge Presiding.

JUSTICE CONNORS delivered the judgment of the court, with opinion. Presiding Justice Delort and Justice Harris concurred in the judgment and opinion.

OPINION

¶1 Defendant Mariusz Poniewozik appeals from an order of the circuit court dismissing his

petition brought pursuant to section 2-1401 of the Code of Civil Procedure (Code) (735 ILCS

5/2-1401 (West 2012)) that sought to quash service of process in a foreclosure proceeding. On

appeal, defendant contends the circuit court improperly found that his claim was barred by

section 15-1505.6 of the Illinois Mortgage Foreclosure Law (Mortgage Foreclosure Law) (735 No. 1-13-2864

ILCS 5/15-1505.6 (West 2012)), which became effective on August 12, 2011. Pub. Act 97-329

(eff. Aug. 12, 2011). That statute requires that a motion to quash service of process in a

residential foreclosure action must be brought within 60 days of the date that the moving party

files an appearance or participates in a hearing without filing an appearance, unless the court

grants an extension for good cause. 735 ILCS 5/15-1505.6 (West 2012). For the following

reasons, we affirm.

¶2 The record reveals that on December 1, 2008, plaintiff, GreenPoint Mortgage Funding,

Inc. (GreenPoint), filed a complaint to foreclose a mortgage for a property located at 1 South

Leavitt Street, Unit No. 404, in Chicago, Illinois, against defendant and two other mortgagors. 1

GreenPoint subsequently attempted to serve defendant at 1 South Leavitt and three other

addresses. According to an affidavit, the process server was informed by the current resident of

the 1 South Leavitt property, Derick Pawlak, that defendant was the absentee owner. Additional

affidavits indicated that during the other attempts at service, the process server was informed that

defendant also did not live at the three other addresses.

¶3 On December 31, 2008, GreenPoint filed an affidavit to allow service by publication.

Notice of the impending foreclosure action was published in the Chicago Daily Law Bulletin

three times between January 6, 2009, and January 20, 2009.

¶4 On August 28, 2009, GreenPoint filed a notice of motion that on September 4, 2009, it

would present a motion for default and judgment of foreclosure and sale. On September 3, 2009,

an attorney entered an appearance on behalf of defendant and the two other mortgagors. The

next day, the court entered an order stating that: (1) defendant's motion for time to answer or

otherwise plead was granted; (2) defendant was given leave to file his appearance instanter; and

1 The two other mortgagors are not party to this appeal.

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(3) defendant had 28 days, until October 2, 2009, to file his answer or otherwise plead to

GreenPoint's complaint.

¶5 In November 2009, GreenPoint filed a motion for entry of an order of default and

judgment of foreclosure and sale. Notice of this motion was sent to defendant's attorney on

December 11, 2009, and an amended notice of this motion was sent to defendant's attorney on

December 16, 2009. On December 24, 2009, the court entered an order that defendant was in

default, finding that "certain Defendant(s) have failed to appear and/or plead." On the same day,

the court also entered a judgment for foreclosure and sale and found in part that the subject real

estate was residential as defined by section 15-1219 of the Mortgage Foreclosure Law (735 ILCS

5/15-1219 (West 2008)). A sale was held in May 2010, and on July 14, 2010, the court approved

a report of sale and distribution, confirmed the sale, and entered an order of possession.

GreenPoint had sent notice of its motion for an order approving the report of sale and distribution

to defendant's counsel on June 23, 2010, and had sent an amended notice on July 6, 2010.

¶6 Nothing further was filed until June 11, 2012, when defendant filed a petition pursuant to

section 2-1401 of the Code (735 ILCS 5/2-1401 (West 2012)), entitled "Motion to Quash Service

Pursuant to 735 ILCS 5/2-1401." In it, defendant stated that upon due inquiry by GreenPoint,

defendant could have been found at 1 South Leavitt. Defendant further asserted that one attempt

at service at defendant's abode did not constitute due diligence and stated that out of four

attempts at service, three were at the wrong address. Attached to the petition was an affidavit

from defendant in which he stated that he was never personally served with the summons and

complaint. Defendant also stated that he and his wife had owned and lived at 1 South Leavitt

since April 2006 and that upon due inquiry, he could have been found there. Additionally,

defendant averred that he had never heard of or known any person named Derick Pawlak and

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that other than his wife, no one else had lived with him and he had never rented out the 1 South

Leavitt property.

¶7 In its subsequent motion to dismiss, GreenPoint contended in relevant part that

defendant's petition was untimely because it was not filed within 60 days of defendant's

appearance, as required by section 15-1505.6 of the Mortgage Foreclosure Law, which was

enacted on August 12, 2011. GreenPoint asserted that section 15-1505.6 was a procedural

amendment and retroactive. As a result, having filed his appearance on September 3, 2009,

defendant had 60 days from the law's enactment to file a motion to dismiss. GreenPoint also

contended that defendant failed to show good cause for an extension and that defendant "actively

sat on his rights for nearly three years" even though his counsel received notices as the case

progressed.

¶8 In response, defendant asserted that an amendment to section 2-301 of the Code (735

ILCS 5/2-301 (West 2012)) had made "the filing of an appearance *** completely and totally

irrelevant to submission to jurisdiction." Defendant asserted that by extension, the legislature did

not intend to make section 15-1505.6 retroactive so that the filing of an appearance submitted a

party to the court's jurisdiction. Additionally, defendant stated that a retroactive application of

section 15-1505.6 would deprive defendant of the right he had to challenge service when his

appearance was filed. Defendant further asserted that even if the law applied retroactively, good

cause was shown when a statute adopted two years after the appearance was filed prevented

defendant from challenging service of process.

¶9 On August 29, 2013, the court dismissed defendant's petition with prejudice. The court

found that section 15-1505.6 was a procedural amendment and that applying it retroactively

would not offend considerations of fairness and equity, while it would offend considerations of

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fairness and equity to allow defendant to file a motion to quash service two years after the entry

of the order approving the judicial sale. The court asserted that defendant had known since 2009

that he was a named defendant in the foreclosure case and defendant had retained counsel to

defend his interest. The court recalled that counsel appeared when GreenPoint presented its

motion for entry of judgment of foreclosure and persuaded the court not to enter the judgment of

foreclosure and instead allow defendant 28 additional days to file an answer or other pleading.

The court stated that once section 15-1505.6 became effective, defendant had 60 days to file a

motion to quash, but did not do so. The court concluded it was constitutionally permissible and

equitably proper for section 15-1505.6 to be applied to this case.

¶ 10 On appeal, defendant contends that section 15-1505.6 of the Mortgage Foreclosure Law

(735 ILCS 5/15-1505.6 (West 2012)) does not bar his claim. Defendant argues that the law is

not retroactive and that such a conclusion would result in an unknowing waiver, which the

legislature sought to prevent when it amended a different section of the Code, section 2-301 (735

ILCS 5/2-301 (West 2012)). Defendant also contends that it is difficult to imagine that the

legislature would create a statute that would have the effect of retroactively displacing

homeowners from their homes.

¶ 11 When a trial court enters either a judgment on the pleadings or a dismissal in a section 2-

1401 proceeding, we review that order on appeal de novo. MB Financial Bank, N.A. v. Ted &

Paul, LLC, 2013 IL App (1st) 122077, ¶ 12. We also review de novo the meaning and effect of

statutory provisions. Allegis Realty Investors v. Novak, 223 Ill. 2d 318, 330 (2006).

¶ 12 Generally, section 2-301 of the Code (735 ILCS 5/2-301 (West 2012)) governs

challenges to personal jurisdiction and states in part:

"(a) Prior to the filing of any other pleading or motion other than a

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motion for an extension of time to answer or otherwise appear, a party may object

to the court's jurisdiction over the party's person, either on the ground that the

party is not amenable to process of a court of this State or on the ground of

insufficiency of process or insufficiency of service of process, by filing a motion

to dismiss the entire proceeding or any cause of action involved in the proceeding

or by filing a motion to quash service of process. ***

(a-5) If the objecting party files a responsive pleading or a motion (other

than a motion for an extension of time to answer or otherwise appear) prior to the

filing of a motion in compliance with subsection (a), that party waives all

objections to the court's jurisdiction over the party's person."

¶ 13 We note that section 2-301 was amended in 2000 to no longer require that a party file a

special appearance to preserve a jurisdictional objection. KSAC Corp. v. Recycle Free, Inc., 364

Ill. App. 3d 593, 595 (2006). In its current form, there is no provision that filing a general

appearance results in waiver, and the statute provides for waiver of an objection to personal

jurisdiction only if the party files a responsive pleading or motion—other than one seeking an

extension of time to answer or otherwise appear—before filing a motion asserting the

jurisdictional objection. Id.

¶ 14 On August 12, 2011, the legislature enacted a new law for objecting to personal

jurisdiction in the context of residential foreclosure proceedings. 735 ILCS 5/15-1505.6 (West

2012). Section 15-1505.6 of the Mortgage Foreclosure Law states:

"(a) In any residential foreclosure action, the deadline for filing a motion

to dismiss the entire proceeding or to quash service of process that objects to the

court's jurisdiction over the person, unless extended by the court for good cause

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shown, is 60 days after the earlier of these events: (i) the date that the moving

party filed an appearance, or (ii) the date that the moving party participated in a

hearing without filing an appearance.

(b) In any residential foreclosure action, if the objecting party files

a responsive pleading or a motion (other than a motion for an extension of time to

answer or otherwise appear) prior to the filing of a motion in compliance with

subsection (a), that party waives all objections to the court's jurisdiction over the

party's person."

¶ 15 At issue is whether section 15-1505.6 applies retroactively or prospectively. To make

such a determination, we first consider whether the legislature stated an explicit intent about

retroactivity. In re Marriage of Duggan, 376 Ill. App. 3d 725, 728 (2007). If the legislative

intent is unclear, then we determine whether the amendment is procedural or substantive in

nature. Deicke Center-Marklund Children's Home v. Illinois Health Facilities Planning Board,

389 Ill. App. 3d 300, 303 (2009). Statutory amendments and repeals that are procedural may be

applied retroactively, while those that are substantive may not. Allegis Realty Investors, 223 Ill.

2d at 331.

¶ 16 The legislative history of section 15-1505.6 provides insight into its purpose, but does not

clearly resolve whether it was intended to apply retroactively or prospectively. At one

proceeding, a sponsor stated that the proposed law "deals with the time frame of when somebody

can bring a motion to quash service in a foreclosure action" and "eliminates the ability to bring

that motion late and stall these proceedings. *** [I]t is basically to limit the ability to file these

motions to quash service that slow down these actions, and it can happen on either side." 97th

Ill. Gen. Assem., Senate Proceedings, May 17, 2011, at 155 (statements of Senator Dillard).

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¶ 17 Additionally, at one point an amendment was proposed that would have made the law

apply only to actions commenced and complaints filed on or after the law's effective date.

However, this amendment was ultimately tabled and was not made part of the law. Illinois

General Assembly,

http://ilga.gov/legislation/BillStatus.asp?DocNum=1960&GAID=11&DocTypeID

=HB&LegId=59161&SessionID=84&GA=97#actions (follow "Full Text" hyperlink; then follow

"Senate Amendment 001" hyperlink). Once it passed, the law became effective immediately.

Pub. Act. 97-329 (eff. Aug. 12, 2011) (adding 735 ILCS 5/15-1505.6). That the proposed

amendment was tabled does not clearly indicate whether the legislature intended the law to be

retroactive or prospective. As a result, we move to the next step in our analysis—determining

whether section 15-1505.6 is procedural or substantive. Schweickert v. AG Services of America,

Inc., 355 Ill. App. 3d 439, 442 (2005).

¶ 18 While a substantive change in law establishes, creates, defines, or regulates rights, and

"thus could actually make [] one a party to a suit" (internal quotation marks omitted) (Ores v.

Kennedy, 218 Ill. App. 3d 866, 871 (1991)), procedure is the machinery for carrying on the suit,

including pleading, process, evidence, and practice (Ogdon v. Gianakos, 415 Ill. 591, 596

(1953)). Additionally, " 'a procedural change in the law prescribes a method of enforcing rights'

" (Deicke Center, 389 Ill. App. 3d at 303), meaning the legal rules that direct the means to bring

parties into court or the manner in which the court process will proceed (Ores, 218 Ill. App. 3d at

871).

¶ 19 Here, we find that section 15-1505.6 is a procedural change in the law. By changing the

deadline for when a party must move to quash service of process, the law prescribes a method of

enforcing rights and directs the way a suit proceeds. Additionally, we note that the issue or

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service of process is not what makes one a party to a suit, but is merely a step in obtaining

jurisdiction over a person after he is a party to a suit. Ogdon, 415 Ill. at 596. Moreover, section

15-1505.6 does not give or take away the right to challenge jurisdiction—it simply changes the

manner in which that challenge can occur. See also Ores, 218 Ill. App. 3d at 871 (amended

long-arm statute was procedural; it was not part of the law that creates, defines, or regulates

rights and was not what made someone a party to a suit).

¶ 20 Having found that section 15-1505.6 is procedural, we next determine whether there are

reasons the law should not be applied retroactively. Procedural amendments will not be applied

retroactively when doing so would impair a vested right—a right that is sufficiently well-

established to be protected under the due process clause of the constitution. In re Marriage of

Duggan, 376 Ill. App. 3d at 729.

¶ 21 Here, defendant did not have a vested right that was impaired by the enactment of section

15-1505.6. A vested right must have become a title, legal or equitable, to the present or future

enjoyment of property. Board of Managers of Dominion Plaza One Condominium Ass'n No. 1-A

v. Chase Manhattan Bank, N.A., 116 Ill. App. 3d 690, 694 (1983). Defendant's ability to file a

motion to quash service of process on an undetermined timeframe does not rise to this level.

Moreover, no one has a vested right in any particular remedy or method of procedure (Ogdon,

415 Ill. at 597) and a vested right is more than a mere expectation based on the anticipated

continuance of the existing law (Board of Managers of Dominion Plaza, 116 Ill. App. 3d at 694).

Defendant may have expected that he would be able to challenge service of process long after the

foreclosure was complete, as would have been the case when section 2-301 alone governed the

process for objecting to the court's personal jurisdiction in foreclosure proceedings (735 ILCS

5/2-301 (West 2010)). Under section 2-301, because defendant had not filed a responsive

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pleading and had only filed a motion for extension of time to answer, there would have been no

firm deadline for him to challenge service of process. See 735 ILCS 5/2-301(a), (a-5) (West

2010). This is precisely the situation that section 15-1505.6 sought to change. Because section

15-1505.6 is procedural and defendant only expected a continuation of the existing law, he has

not shown that he had a vested right that was impaired.

¶ 22 As an additional consideration, a procedural statute will not be applied retroactively if it

would have a retroactive impact, such that it: (1) impairs rights that a party possessed when it

acted, (2) increases a party's liability for past conduct, or (3) imposes new duties with respect to

transactions already completed. Schweickert, 355 Ill. App. 3d at 444. None of these situations

are implicated here. Section 15-1505.6 does not take away defendant's right to challenge

personal jurisdiction and does not increase either party's liability for conduct related to the

foreclosure proceeding. The statute also does not impose any new duties with respect to

transactions already completed. It simply shortens the timeframe in which defendant could bring

a motion to quash service of process. We also note that courts must make subtle judgments

concerning the fairness or unfairness of applying a new statutory rule to particular cases pending

before them, and determine whether applying the new rule would offend considerations of

fairness and equity. In re Marriage of Duggan, 376 Ill. App. 3d at 730. Defendant was aware of

the suit in September 2009, as evidenced by his counsel appearing in court. Counsel requested a

28-day extension and then failed to appear in further proceedings, despite having received notice

of them. Considering that he had counsel, received notice of the proceedings, and his assertion

that he had lived at 1 South Leavitt continuously since April 2006, defendant has not shown how

he was prevented from moving to quash service of process within the time frame set by section

15-1505.6, rather than wait until nearly two years until after the foreclosure proceeding was

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complete to do so. Under these circumstances, we find that it would not offend considerations of

fairness and equity to apply section 15-1505.6 retroactively.

¶ 23 Further, we are not persuaded by defendant's reliance on BAC Home Loans Servicing, LP

v. Mitchell, 2014 IL 116311. Mitchell concerned an entirely different issue: whether a party's

waiver of objections to the circuit court's personal jurisdiction applied retroactively to validate

orders entered before the party submitted to the court's jurisdiction. Mitchell, 2014 IL 116311,

¶ 1. At issue here is whether a statutory enactment applies retroactively.

¶ 24 Additionally, to the extent that defendant argues that applying section 15-1505.6

retroactively would conflict with or undermine section 2-301, we disagree. Defendant seems to

contend that applying section 15-1505.6 retroactively would mean that by appearing in court, he

unknowingly waived his objection to jurisdiction—a situation that the legislature sought to

prevent when section 2-301 was amended. When two statutes are allegedly in conflict, a court

has a duty to interpret the statutes in a manner that avoids an inconsistency and gives effect to

both statutes, where such an interpretation is reasonably possible. Barragan v. Casco Design

Corp., 216 Ill. 2d 435, 441-42 (2005). Here, we see no conflict between the two statutes. Under

section 15-1505.6, which only applies in residential foreclosure proceedings, it is not the

appearance itself that results in waiving the objection to personal jurisdiction. It is waiting more

than 60 days after appearing or participating in a hearing that causes waiver.

¶ 25 For the foregoing reasons, the judgment of the circuit court is affirmed.

¶ 26 Affirmed.

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