Urban Partnership Bank v. Chicago Title Land and Trust Company

2017 IL App (1st) 162086

• Court: Appellate Court of Illinois
• Decided: September 27, 2017
• Docket: 1-16-2086
• Status: Unpublished

Opinion

2017 IL App (1st) 162086 No. 1-16-2086 Third Division September 27, 2017

______________________________________________________________________________

IN THE APPELLATE COURT OF ILLINOIS FIRST DISTRICT ______________________________________________________________________________

URBAN PARTNERSHIP BANK, ) Appeal from the Plaintiff-Appellee, ) Circuit Court of ) Cook County. v. ) ) No. 15 CH 8996 CHICAGO TITLE LAND TRUST ) COMPANY, ) Honorable Defendant, ) Anna M. Loftus, ) Judge, presiding. (Marcella Wuertenberger ) Intervening Defendant-Appellant). )

______________________________________________________________________________

PRESIDING JUSTICE COBBS delivered the judgment of the court, with opinion. Justices Howse and Lavin concurred in the judgment and opinion.

OPINION

¶1 Defendant, Marcella Wuertenberger, appeals the denial of her motion for leave to

intervene in a mortgage foreclosure proceeding and to vacate orders that the trial court

entered prior to confirming the judicial sale of the subject property. Defendant contends that

the trial court’s denial of her motion to intervene was in error because (1) her interests, as a No. 1-16-2086

beneficiary of the trust, were not fully protected by the trustee, Chicago Title Land and Trust

Company (CTLT), and (2) the trial court lacked subject matter jurisdiction.

¶2 BACKGROUND

¶3 The following recitation of the facts is taken from the pleadings and exhibits in the record

and, to the extent supported by the record, the party’s briefs. On August 26, 1993, appellant’s

parents, Martha and Wallace Burns, created a land trust agreement for property located at

4806 St. Charles Road, Bellwood, Illinois 60104. In 2008, following Wallace’s death,

Martha, as sole beneficiary of the trust, amended the agreement to provide for the transferral

of her rights upon her death to Paul J. Sidney, Steven D. Sidney, Marcella D. Wuertenberger,

and Angela S. Brandon. Martha subsequently died on February 27, 2012.

¶4 The property secured a mortgage note held by plaintiff, Urban Partnership Bank (UPB).

According to the complaint, the Burnses defaulted on the mortgage on or around November

30, 2014. Subsequently, on June 8, 2015, UPB filed a complaint to foreclose the mortgage on

the property, naming as defendants CTLT, as trustee; Martha and Wallace Burns; unknown

owners; and non-record claimants. Notice of the foreclosure proceeding was posted in the

Chicago Daily Law Bulletin on June 24, and July 1 and 8, 2015. On March 10, 2016, plaintiff

filed a motion, seeking a default judgment against the defendants. In support of its motion,

plaintiff alleged that more than 30 days had passed since defendants were served and that the

defendants had failed to appear, answer, or otherwise respond to the complaint. On that same

day, plaintiff filed motions, seeking dismissal of Martha and Wallace Burns as defendants, a

judgment of foreclosure, and an order appointing a judicial sales officer. On April 20, 2016,

the court granted plaintiff’s motions.

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¶5 Notice of the judicial sale of the property was posted on April 26, 2016; the property was

sold on May 26, 2016; and the court confirmed the sale on June 21, 2016. On June 23, 2016,

appellant filed an “Emergency Motion for Leave to Intervene and Stay Possession and

Judicial Sale.” In her motion, appellant argued that CTLT could not fully protect her interests

and she would be irreparably harmed and prejudiced if her motion was not granted. On that

same day, appellant also filed a “Motion to Vacate the April 20, 2016 Orders and Stay or

Strike the June 21, 2016 Orders.” In her motion, appellant argued that, due to plaintiff’s

failure to name her in the complaint as a necessary party, she was unable to defend her

interests. Further, appellant argued that because CTLT trustee could not defend the

beneficiaries in the foreclosure proceedings, she would be prejudiced if the property was

foreclosed without her participation in the proceedings.

¶6 The court denied appellant’s motion for leave to intervene and to stay possession and

judicial sale. Additionally, the court denied, as moot, appellant’s motion to vacate the April

20, 2016 default foreclosure judgment order and the June 21, 2016 sale confirmation order.

Appellant appeals.

¶7 ANALYSIS

¶8 Appellant raises two major contentions on appeal. She first contends that the trial court

erred in denying her petition for intervention. For her second contention, she argues that the

court lacked subject matter jurisdiction to enter any orders in this case. Thus, she maintains,

the orders must be vacated. Because any order entered by a court that lacks subject matter

jurisdiction is void (LVNV Funding, LLC v. Trice, 2015 IL 116129, ¶ 27 (citing In re

Marriage of Mitchell, 181 Ill. 2d 169, 174 (1998)), we address appellant’s jurisdictional

challenge before proceeding further.

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¶9 SUBJECT MATTER JURISDICTION

¶ 10 Here on appeal, appellant contends that the court should have vacated its April 20, 2016,

order because “it lacked subject matter jurisdiction over deceased defendants, Martha Burns

and Wallace Burns.” Citing ABN AMRO Mortgage Group, Inc. v. McGahan, 237 Ill. 2d 526

(2010), she posits that a suit against a dead person is a nullity and deprives the court of

jurisdiction. Because neither the decedents, nor the personal representatives of the decedents’

estates, were named in the underlying foreclosure proceeding, the trial court did not have

subject matter jurisdiction. As such, appellant argues, the trial court’s orders are void.

¶ 11 Simply stated, appellant’s argument is flawed. First, the underlying foreclosure

proceeding was neither against the decedents nor the decedents' estates, but was instead

against the named trustees, CTLT, unknown owners, and record claimants. 1 Thus, appellant’s

reliance on ABN AMRO is unavailing. Moreover, the personal representatives of the

decedents’ estates, if any, are not parties to this appeal. Any challenge to the court’s

jurisdiction for a lack of notice to the personal representatives rests with the personal

representatives and not with appellant.

¶ 12 Further, the failure to name even an interested party in litigation would not defeat the

court’s subject matter jurisdiction. See In re M.W., 232 Ill. 2d 408 (2009). Subject matter

jurisdiction refers to the court’s power to hear and to determine cases of the general class to

which the proceeding in question belongs. Id. at 415. Subject matter jurisdiction exists as a

matter of law if the matter brought before the court by the plaintiff or the petitioner is

justiciable. Id. at 424. Generally, a justiciable matter is a controversy appropriate for review

1 Martha and Wallace Burns were originally named as defendants in the underlying mortgage foreclosure complaint. However, after attempting service on them, Urban Partnership Bank,

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by the court, in that it is definite and concrete, as opposed to hypothetical or moot, touching

upon the legal relationship of parties having adverse legal interests. Id. With the exception of

the circuit court’s power to review administrative actions, which is conferred by statute, a

circuit court’s subject matter jurisdiction is conferred entirely by our constitution. Id. (citing

Belleville Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc., 199 Ill. 2d 325, 334 (2002)). For

purposes of subject matter jurisdiction, courts have inherent power to hear and determine

foreclosure cases. Nationstar Mortgage, LLC v. Canale, 2014 IL App (2d) 130676, ¶ 12.

Thus, subject matter jurisdiction exists in this case as a matter of law and the trial court's

orders, therefore, are not void.

¶ 13 Having determined that the trial court had subject matter jurisdiction, we turn our

attention to the appellant’s remaining contention on appeal regarding the trial court’s

disposition of her petition for intervention.

¶ 14 STANDARD OF REVIEW

¶ 15 Appellant identifies provisions on intervention in both the Illinois Mortgage Foreclosure

Law (Foreclosure Law) (735 ILCS 5/15-1501) (West 2014) and the Code of Civil Procedure

(Code) (735 ILCS 5/2-408) (West 2014), as the statutes involved in this appeal. Citing

Argonaut Insurance Co. v. Safway Steel Products, Inc., 355 Ill. App. 3d 1, 7 (2004),

appellant acknowledges that a decision to either grant or deny a petition to intervene rests

within the sound discretion of the trial court. She additionally acknowledges that absent an

abuse of that discretion, the court’s decision will not be reversed. Waters v. City of Chicago,

95 Ill. App. 3d 919, 923 (1981). We note additionally that a trial court abuses its discretion

when its ruling is arbitrary, fanciful, or unreasonable (Peeples v. Village of Johnsburg, 403

as plaintiff-mortgagor, filed Suggestions of Death for both individuals. On April 20, 2016, both

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Ill. App. 3d, 333, 339 (2010)), or where its ruling rests on an error of law (CitiMortgage, Inc.

v. Johnson 2013 IL App (2d) 120719, ¶ 18). That said, appellant nevertheless maintains,

without citation to authority, that because there was no evidentiary hearing on her motion to

intervene, the issues presented on appeal merit our review de novo.

¶ 16 We disagree. We reserve de novo review for questions of law. See Reserve at Woodstock,

LLC v. City of Woodstock, 2011 IL App (2d) 100676. No question of law is presented in this

appeal.

¶ 17 Section 2-408 of the Code sets forth the procedures for intervention generally. 735 ILCS

5/2-408 (West 2014). Intervention in foreclosure proceedings is specifically provided for in

section 15-1501 of the Act (735 ILCS 5/15-1501(d) (West 2014)). Similar to provisions

under the Act, the Code provides for intervention as of right (735 ILCS 5/2-408(a) (West

2014)), as well as permissive, or in the discretion of the court. (735 ILCS 5/2-408(b) (West

2014). See 735 ILCS 5/15-1501(e)(1) (West 2014) (intervention as of right); 735 ILCS 5/15-

1501(e)(2) (West 2014) (intervention in the court’s discretion). Under section 2-408(f) of the

Code, an intervenor, whether discretionary or as of right, is bound by orders or judgments

entered by the court. 735 ILCS 5/2-408(f) (West 2014). Similarly, under the Act, an

individual granted intervention prior to entry of an order confirming the sale is subject to all

orders and judgments entered in the foreclosure. 735 ILCS 5/15-1501(e)(3) (West 2014). In

In re Application of the County Collector of DuPage for Judgment for Delinquent Taxes for

the Year 1992, 181 Ill. 2d 237, 247-48 (1998), our supreme court held that the court’s

decision regarding an individual’s right to intervene under the Code, whether as of right or

permissively, is a matter of judicial discretion. Given the similarities between the provisions

individuals were dismissed from the case.

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for intervention as set forth generally in the Code and those specifically under the

Foreclosure Law, for purposes of consistency, we believe that the standard of review under

both is abuse of discretion.

¶ 18 Appellant presents three largely undeveloped arguments in support of her challenge to the

trial court's denial of her motion to intervene. We review each in turn. The following general

principles of law inform our analysis and disposition.

¶ 19 As a general rule, all persons interested in the subject matter of a suit should be made

parties thereto. Hickey v. Union National Bank & Trust Co. of Joliet, 190 Ill. App. 3d 186,

189 (1989). There is, however, an exception in the case of the foreclosure of a mortgage or

trust deed. Id. “The rule enunciated in precedential case law does not confer joinder to land

trust beneficiaries.” Id. In an Illinois land trust, both legal and equitable title to real property

rests in the trustee, while the interest of the beneficiary of the trust is personal property.

LaSalle Bank, N.I. v. First American Bank, 316 Ill. App. 3d 515, 524 (2000) (citing Parkway

Bank & Trust Co. v. Gleich, 213 Ill. App. 3d 444, 448-49 (1991), and First National Bank of

Barrington, Trust No. 11-1317 v. Oldenburg, 101 Ill. App. 3d 283, 286-87 (1981)). The

trustee is the absolute owner of the real estate. Id.

¶ 20 “The beneficiary of a land trust is not a necessary party in a foreclosure proceeding.”

Hickey, 190 Ill. App. 3d at 189; see also 735 ILCS 5/15-1501(b)(3) (West 2014). The

beneficiary in a land trust may be a proper party, however, if his rights and liabilities

respecting management and control, use, or possession of the property are involved and the

trustee cannot fully protect his interests. Hickey, 189 Ill. App. 3d at 189 (citing Marathon

Finance Co. v. Pioneer Bank & Trust Co., 168 Ill. App. 3d 148, 152-53 (1988)). In the

context of a mortgage foreclosure proceeding, the Foreclosure Law is controlling. See 735

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ILCS 5/15-1501 (West 2014). The Foreclosure Law takes precedence over any inconsistent

statutory provisions. Mortgage Electronic Registration Systems, Inc. v. Barnes, 406 Ill. App.

3d 1, 4-5 (2010).

¶ 21 Under the Foreclosure Law, “[a]ny person who has or claims an interest in real estate

which is the subject of a foreclosure *** shall have an unconditional right to appear and

become a party in such foreclosure.” 735 ILCS 5/15-1501(d) (West 2014). Section 15-

1501(e) of the Foreclosure Law sets forth the times during the foreclosure proceeding that

intervention may be permitted. 735 ILCS 5/15-1501(e) (West 2014). A person seeking to

intervene as of right may appear and become a party at any time prior to the entry of

judgment of foreclosure. 735 ILCS 5/15-1501(e)(1) (West 2014). After the right to intervene

has expired, but prior to the sale in accordance with the judgment, the court may, in its

discretion, permit a person to intervene on such terms as the court deems just. See 735 ILCS

5/15-1501(e)(2) (West 2014). The Foreclosure Law also permits intervention after the sale of

the mortgaged real estate, but prior to the entry of an order confirming the sale. See 735

ILCS 5/15-1501(e)(3) (West 2014). However, such intervention is limited to claiming an

interest in the proceeds of the sale. Further, at this stage of the proceeding, the intervening

party is subject to all orders and judgments entered in the foreclosure. Id.

¶ 22 Appellant first argues that intervention was necessary because the trustee appellees did

not protect her interest in the land trust. She notes, without dispute, that under the terms of

the trust agreement the trustee appellee was not required to pay mortgage on the property.

Appellant argues that without such a duty, however, the appellee as trustees could not have

adequately protected her interests. Appellee responds that appellant’s motion to intervene

was untimely because a nonparty is only permitted to intervene up until the time that an order

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confirming a judicial sale is entered. Appellant replies that had the court first considered her

motion to vacate the underlying foreclosure judgment, her motion to intervene would have

been properly considered and deemed timely.

¶ 23 Appellant’s position appears to be grounded in the erroneous notion that the trial court

lacked subject matter jurisdiction to enter any orders in the foreclosure proceedings. As we

have already addressed this issue, we need not consider it further. We pause to note however

that a party seeking to vacate a default judgment of foreclosure after the judicial sale of the

subject property, must also seek to set aside the judicial sale. Wells Fargo Bank, N.A. v.

McCluskey, 2013 IL 115469, ¶ 18. The trial court’s discretion to vacate a default judgment of

foreclosure is governed by the mandatory provisions of section 15-1508(b). DLJ Mortgage

Capital, Inc. v. Frederick, 2014 IL App. (1st) 123176, ¶ 15. Under the Foreclosure Law,

“after a judicial sale and a motion to confirm the sale has been filed, the court’s discretion to

vacate the sale is governed by the mandatory provisions of section 15-1508(b).” McCluskey,

2013 IL 115649, ¶ 18. Pursuant to section 15-1508(b), upon motion and notice, the court

shall confirm the sale unless it finds that (1) proper notice was not given, (2) terms of the sale

were unconscionable, (3) the sale was conducted fraudulently, or (4) justice was otherwise

not done. Id.

¶ 24 In her June 23, 2016, motion to vacate the court’s order of foreclosure, appellant asserted

that the trustee could not protect her interests and that, therefore, she would be irreparably

harmed. Additionally, she asserted that no other beneficiaries to the trust had been named in

the foreclosure suit and that she was a defendant in the lawsuit. Appellant does not allege any

of the bases set forth in section 15-1508(b) of the Foreclosure Law in support of her motion

to vacate. In fact, appellant did not reference the Foreclosure Law with respect to this

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argument at all, but with seeming reliance on section 2-408(a)(2) of the Code, offered as a

general proposition that appellee’s representation of her interest was inadequate. Under either

the Code or the Foreclosure Law, appellant presented the court with no basis upon which to

vacate either its judgment order or the order confirming the sale.

¶ 25 Further, as we have previously noted, appellant’s motion to intervene was not filed until

after the court’s order confirming the sale. The effect of that order was the termination of the

foreclosure proceedings. See id. ¶ 24. As such, there was no proceeding into which to

intervene.

¶ 26 For her second argument, appellant urges that denial of her motion to intervene permitted

“appellee” to sell the property to itself at less than fair market value. 2 Again, appellant filed

her motion to intervene on June 23, 2016. The court entered its order confirming the sale,

two days earlier, on June 21, 2016. It was appellant’s conduct, and not the trial court, that

precluded intervention. The Act expressly provides that any person who has or claims an

interest in real estate shall have an unconditional right to appear, as of right, if prior to

judgment; in the court’s discretion, if after judgment; or later, if prior to an order confirming

the sale. 735 ILCS 5/15-1501(d), (e)(1) to (3) (West 2014). Moreover, appellant misperceives

the scope of participation permitted an intervenor under the Act. Even had she timely filed

her motion to intervene, there is nothing in the record to suggest that she either could have or

would have been permitted to alter the course of the foreclosure proceedings. See 735 ILCS

5/15-1505(e)(2), (3) (West 2014). In any case, even if we could find the argument valid, not

only is it speculative, but in the face of the Act, it is also irrelevant.

2 Although appellant identifies “appellee” as the purchasers of the property, the record reveals that the plaintiff, UBP, was the sole bidder at the sale and purchaser of the property.

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¶ 27 For her third and final argument, appellant asserts that the trial court’s denial of the

motion to intervene leaves as her remaining recourse the filing of a separate law suit against

the trustee. Although we express no opinion on the viability of appellant's separate law suit,

we acknowledge that in the interest of judicial economy, and when appropriate, intervention

is favored. See PJS Enterprises v. Klincar, 125 Ill. App. 3d 643, 648 (1984). However, that

separate litigation might occur as a result of a party's failed motion to intervene is not reason

to permit it, especially here, where to do so would contravene the Foreclosure Law. In our

view, the Foreclosure Law strikes the proper balance between the interest in judicial

economy and finality of judgments in the context of mortgage foreclosures.

¶ 28 Here, the record reveals that notice of the foreclosure proceedings was given to appellees,

the unknown owners, and non-record claimants by publication in the Chicago Daily Law

Bulletin on June 24 and July 1, and 8, 2015. Although appellant was not given notice, nor

was she entitled to it, she was aware of the foreclosure litigation. Yet, upon being made

aware of the foreclosure action, and further, being made aware of appellee's intent not to

defend against it, she filed no motion to intervene at that time. Notice of the judicial sale was

subsequently posted on April 20, 2016. Yet appellant filed no notice to intervene at that time.

Instead, appellant waited to file her motion to intervene two days after confirmation of the

judicial sale. By then, the trustee was divested of any property rights. See 735 ILCS 5/15-

1404 (West 2014); see also McCluskey, 2013 IL 115469, ¶ 24 (once judgment of foreclosure

is entered, the procedural framework culminates in the confirmation of sale and possession of

the property).

¶ 29 CONCLUSION

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¶ 30 Because the trial court had subject matter jurisdiction over the proceedings, the court’s

foreclosure judgment order was not void. Additionally, appellant, having filed her motion to

intervene after the court’s entry of the order confirming the sale, failed to comply with the

governing provisions under the Foreclosure Law. Thus, we conclude that the trial court did

not abuse its discretion in denying the motion to intervene. For all of the foregoing reasons,

we affirm the trial court.

¶ 31 Affirmed.

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