Wilmington Savings Fund Society v. Herzog

2023 IL App (1st) 221467-U

• Court: Appellate Court of Illinois
• Decided: December 5, 2023
• Docket: 1-22-1467
• Status: Unpublished

Opinion

2023 IL App (1st) 221467-U No. 1-22-1467 Second Division December 5, 2023

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). ____________________________________________________________________________

IN THE APPELLATE COURT OF ILLINOIS FIRST DISTRICT ____________________________________________________________________________

) Appeal from the WILMINGTON SAVINGS FUND ) Circuit Court of SOCIETY, FSB, d/b/a Christiana Trust, not in ) Cook County. its individual capacity but solely as Trustee of ) the Brougham Fund I Trust [successor in ) interest to WELLS FARGO BANK, N.A.], ) ) Plaintiff-Appellee, ) No. 11 CH 25112 ) v. ) ) MALCOLM D. HERZOG, ) Honorable ) William B. Sullivan Defendant-Appellant. ) Judge, Presiding. ____________________________________________________________________________

JUSTICE COBBS delivered the judgment of the court. Justices McBride and Ellis concurred in the judgment.

ORDER

¶1 Held: Appeal is not moot despite appellant’s failure to obtain a stay because appellant has requested relief other than the sold property. The circuit court properly granted summary judgment in favor of Wilmington Savings where the release of the mortgage was not supported by consideration and foreclosure of the valid mortgage on Herzog’s property was warranted. The circuit court’s confirmation of sale and No. 1-22-1467

entry of deficiency judgment was not an abuse of discretion. The circuit court is directed to enter an order expunging the invalid release from the public record.

¶2 In this mortgage foreclosure action, defendant-appellant Malcolm D. Herzog appeals from

orders of the circuit court of Cook County entering summary judgment in favor of plaintiff-

appellee Wilmington Savings Fund Society, doing business as Christiana Trust, not in its

individual capacity but solely as Trustee of the Brougham Fund I Trust [successor in interest to

Wells Fargo Bank, N.A.] (Wilmington Savings), confirming the sale of the property, and entering

a deficiency judgment against Herzog in the amount of $1,574,091. On appeal, Herzog argues that

the circuit court erred in granting summary judgment in favor of Wilmington Savings because the

release of the mortgage barred its foreclosure and Wilmington Savings did not provide evidence

of fraud, duress, illegality, or mutual mistake. He also argues that the court erred in confirming the

foreclosure sale and entering a deficiency judgment without an evidentiary hearing where the

amount was patently inequitable. For the reasons that follow, we affirm and remand with

directions.

¶3 I. BACKGROUND

¶4 Preliminarily, we note that, despite the more than a thousand pages of record, Herzog’s

statement of facts is comprised of less than three pages. See Ill. S. Ct. R. 341(h)(6) (eff. Oct. 1,

2020) (Statement of facts “shall contain the facts necessary to an understanding of the case, stated

accurately and fairly without argument or comment[.]”). Those three pages provide almost none

of the procedural history of the case and contains improper argument throughout. Unfortunately,

Wilmington Savings did not provide its own statement of facts, despite the deficiency in Herzog’s

brief. See Ill. S. Ct. R. 341(i) (eff. Oct. 1, 2020) (Statement of facts need not be included in

appellee’s brief “except to the extent that the presentation by the appellant is deemed

-2- No. 1-22-1467

unsatisfactory.”). Nonetheless, we choose neither to strike the statement of facts nor dismiss the

appeal. We will, however, disregard the noncompliant portions of Herzog’s statement of facts. See

Szczesniak v. CJC Auto Parts, Inc., 2014 IL App (2d) 130636, ¶ 8. The following statement of

facts, therefore, is based on the record filed on appeal.

¶5 The property that is the subject of these foreclosure proceedings is located at 9111 West

126th Street in Palos Park, Cook County, Illinois. On September 8, 2006, Herzog executed a

mortgage in the amount of $1,499,999. The original mortgagor, Wells Fargo Bank, N.A. (Wells

Fargo), recorded the mortgage with the Cook County Recorder of Deeds on October 12, 2006.

¶6 The loan was twice modified, first on March 31, 2008, and a second time on April 3, 2008.

After the second modification, the amount of indebtedness was $1,728,798.05. Significantly, the

release of the original mortgage was recorded, five days later, on April 8, 2008.

¶7 In late 2010, Herzog failed to make the necessary mortgage payments and the note and

mortgage went into default.

¶8 Subsequently, on July 18, 2011, Wells Fargo filed its initial complaint in this action.

¶9 Between 2011 and 2017, Wells Fargo continued to pursue its foreclosure action against

Herzog. In 2016, Wells Fargo assigned Herzog’s mortgage to Wilmington Savings. On Wells

Fargo’s motion, Wilmington Savings was substituted as plaintiff. Attached to the motion was an

exhibit showing the corporate assignment of Herzog’s mortgage which reflected the mortgage as

“ReRecorded” on February 22, 2016. The court granted the motion on August 15, 2017.

¶ 10 On October 16, 2017, Wilmington Savings filed several non-dispositive motions, including

a motion for summary judgment.

¶ 11 Following briefing on Wilmington Savings’s motion for summary judgment on January

18, 2018, Herzog filed a motion and was subsequently granted leave to file an affirmative defense,

-3- No. 1-22-1467

namely release of the mortgage. Attached to the motion was an exhibit showing that, on April 18,

2008, Wells Fargo executed a “Release of Mortgage or Trust Deed,” recorded on May 8, 2008,

with the Cook County Recorder of Deeds. The release stated that Wells Fargo “for and in

consideration of the payment of indebtedness” secured by Herzog and “the cancellation of all the

notes thereby secured, and the sum of one dollar, “do hereby REMISE, RELEASE, CONVEY,

AND QUITCLAIM unto [Herzog] *** all the right, title, interest, claim, or demand *** acquired

in, through or by a certain Mortgage/Trust Deed, dated September 8, 2006[.]” The document was

signed by Milly A. Thompson, as assistant vice president of Wells Fargo.

¶ 12 On March 2, 2018, Wilmington Savings moved to amend its complaint, the version of

which is the subject of this appeal. Count I requested, inter alia, foreclosure on the mortgage.

Count II requested a judgment declaring the validity of the mortgage and expungement of the

release from the public record. The complaint stated that Wilmington Savings’s predecessor

“executed an erroneous ‘Release of Mortgage or Trust Deed’ dated April 18, 2008 and recorded

April 8, 2008[.]” The subject mortgage “was re-recorded February 22, 2016 *** to reflect that the

subject mortgage is a valid and subsisting lien [against] the subject property” and Herzog

continued to make payments on the note and mortgage “after the date of the erroneous Release of

Mortgage[.]” Wilmington Savings requested that the circuit court declare the mortgage as valid,

expunge the release of mortgage, and award such other relief as “fit and proper” under the

circumstances.

¶ 13 Attached to the complaint was an affidavit of rescission dated May 4, 2015, and signed by

Elizabeth Ripka, vice president of loan documentation of Wells Fargo. Ripka averred that the

release should be expunged as “null and void” because there is still a “valid and existing lien

against the subject property.”

-4- No. 1-22-1467

¶ 14 In his answer to the amended complaint, Herzog stated “affirmatively that [Wilmington

Savings] lacks any valid and subsisting instrument that is subject to foreclosure,” “all indebtedness

secured thereby was released” by the release of mortgage, and the re-recording of the mortgage

was not authorized or effective. He denied that the affidavit of rescission was genuine but

“admit[ted] that he made payments to Wells Fargo” after the recording of the release. Finally, he

requested that both counts be dismissed with prejudice.

¶ 15 Between 2018 and 2021, Herzog filed two motions to dismiss, as well as a motion for

summary judgment, all of which were denied. During that time, the depositions of John Gresham,

a corporate representative of BSI Financial Services (BSI), and Herzog were taken.

¶ 16 Gresham testified that BSI is the servicer for Wilmington Savings. BSI accepts payments

from borrowers, sends out mortgage statements, takes inquiries, and assists with loss mitigation.

Gresham was responsible for reviewing loans that fall into default and attending trials, mediations,

and depositions in foreclosure cases. He testified that he had not seen the agreement between Wells

Fargo and Wilmington Savings assigning the subject mortgage. He did not personally contact

Wells Fargo to see if there were any additional documents related to this mortgage. He also did

not contact any persons identified in the release document or the affidavit of rescission and he had

no knowledge as to the error made in the release of the mortgage. As far as he knew, no one at BSI

ever investigated who was involved in the execution of those documents. He further testified that

there was nothing on the face of the release that would suggest that it was made in error.

¶ 17 Herzog testified that he had other “obligations” with Wells Fargo, in addition to the one at

issue, and he did not recall making mortgage payments to Wells Fargo for the property at issue.

He testified that he believed that he did not have a mortgage on the property at issue because “it

was released as well as the debt.” He further testified that he did not recall any of the specifics

-5- No. 1-22-1467

surrounding the execution of the release. As to the continued payments to Wells Fargo after the

release, Herzog stated that he did not recall making any payments after March 26, 2008, but he

had other obligations with Wells Fargo and any payments made should have been applied to his

other mortgage.

¶ 18 During his deposition, the following colloquy occurred:

“Q. Did you receive a form 1099-C for this property after the release of mortgage was

recorded in May of 2008 from Wells Fargo Bank?

A. I do not remember.

***

Q. When people have loan forgiveness against them, it gets taxed a certain way. When

people make monthly payments or pay off a debt, it gets taxed in an entirely different way.

Do you know how that -- do you know what actions or steps you reported to the IRS relating

to the forgiveness of the $1.5 million?

A. No recollection.

Q. Do you know if it was treated as personal income?

Q. Do you recognize if you took $1.5 million of loan forgiveness and didn’t treat it as

earned income it could have tax consequences?

A. No recollection.”

¶ 19 On June 1, 2021, Wilmington Savings filed a motion for summary judgment. Therein,

Wilmington Savings asserted that Herzog admitted that the mortgage was a valid lien by failing to

deny the allegation in his answer. Further, Herzog’s admission that he continued to make payments

-6- No. 1-22-1467

on the mortgage after the release was executed is evidence that the release was in error. It also

contended that those continued payments evidenced that Herzog had not paid the entire

indebtedness at the time the release was executed. Additionally, it maintained, Herzog’s deposition

showed that he had no evidence of valid consideration for the release because he could not recall

any of the details of the release. It further pointed to Wells Fargo’s re-recording of the mortgage

as evidence of the invalidity of the release. Finally, Wilmington Savings asserted that Herzog’s

indebtedness still existed and had Herzog paid off the loan to secure the release, no amount would

be owed. Attached to the motion was an affidavit from Cheryl Mallory, an assistant vice president

of BSI, attesting that, as of January 8, 2021, the amount due under the mortgage was

$2,481,266.62.

¶ 20 Simultaneously, Wilmington Savings filed a motion to appoint a selling officer and a

motion for judgment of foreclosure.

¶ 21 On July 15, 2021, Herzog filed his response to Wilmington Savings’s motion for summary

judgment. He argued that an issue of fact existed as to whether the mortgage in this action remains

in existence and is subject to foreclosure. He further asserted that Wilmington Savings lacks any

proof that the release was mistakenly prepared, executed, and recorded by Wells Fargo.

Additionally, he claimed that evidence of unilateral mistake would be insufficient. Finally, Herzog

asserted that there is no evidence of lack of consideration and that issue was never included in

plaintiff’s amended complaint.

¶ 22 On August 5, 2021, Wilmington Savings filed its reply, arguing that there would only be

an issue of material fact if Herzog claimed that there was consideration for the release and he had

evidence to support that claim.

-7- No. 1-22-1467

¶ 23 The circuit court scheduled a hearing on the motion for September 28, 2021. There is no

transcript of this hearing, or an acceptable substitute, in the record, in contravention of Illinois

Supreme Court Rule 323(a), (c), (d) (eff. July 1, 2017). Following the hearing, the circuit court

granted summary judgment in favor of Wilmington Savings and entered a judgment of foreclosure

and sale. The court also appointed a selling officer.

¶ 24 On November 29, 2021, Herzog filed a motion for a stay pending appeal pursuant to Illinois

Supreme Court Rule 305(b) and a motion for a finding pursuant to Illinois Supreme Court Rule

304(a), which were both denied.

¶ 25 On that same day, Herzog also filed a motion for reconsideration, containing largely the

same arguments as in his response to the motion for summary judgment. On April 12, 2022, the

circuit court denied Herzog’s motion for reconsideration.

¶ 26 On April 19, 2022, the subject property was sold at auction for $1,088,000.

¶ 27 After the sale, Wilmington Savings filed a motion for approval of the sale and for an

eviction order. Herzog objected, arguing that Wilmington Savings failed to show that the value of

the collateral was less than the indebtedness and the sale was not commercially reasonable.

¶ 28 On August 30, 2022, the court approved the sale and entered a deficiency judgment of

$1,574,091.18 against Herzog. The court’s written order stated that all required notices were given,

the sale was fairly and properly made, and justice was otherwise done.

¶ 29 This timely appeal followed.

¶ 30 II. ANALYSIS

¶ 31 On appeal, Herzog argues that the circuit court erred in granting summary judgment in

favor of Wilmington Savings because the release of the mortgage barred its foreclosure and

-8- No. 1-22-1467

Wilmington Savings did not provide evidence of fraud, duress, illegality, or mutual mistake. He

also argues that the court erred in confirming the sale and entering a deficiency judgment without

an evidentiary hearing where the amount was patently inequitable.

¶ 32 A. Mootness

¶ 33 Initially, we must address Wilmington Savings’s contention that this appeal should be

dismissed. Wilmington Savings asserts that Herzog’s appeal of the circuit court’s judgment is moot

because he failed to obtain a stay of the judgment as required under Illinois Supreme Court Rule

305(k) (eff. July 1, 2017).

¶ 34 Herzog, in his reply, contends that, if this court reverses the foreclosure judgment or, in the

alternative, vacates the deficiency judgment, it will have “provided highly substantial relief

regardless of the inability of [Herzog] to recover the foreclosed property.” He further asserts that

“he will also get restitution for the value he lost by reason of the improper foreclosure and sale.”

Finally, he argues that there is no precedent for declaring an appeal moot that involves a deficiency

judgment, or “where money was at stake.”

¶ 35 Before proceeding, we note that while this appeal was pending, Wilmington Savings filed

a motion to dismiss the appeal as moot pursuant to Illinois Supreme Court Rule 305(k). Herzog

filed an objection. A different panel of this court denied the motion.

¶ 36 “The denial of a motion to dismiss an appeal is not final and ‘[t]he panel that hears the

appeal has an independent duty to determine whether it has jurisdiction and to dismiss the appeal

if it does not.’ ” Rocha v. FedEx Corporation, 2020 IL App (1st) 190041, ¶ 54 (quoting In re Estate

of Gagliardo, 391 Ill. App. 3d 343, 348-49 (2009)). Therefore, despite the prior order denying the

motion to dismiss, we reconsider whether this appeal is moot, pursuant to our inherent authority

-9- No. 1-22-1467

to reconsider our prior rulings. See Stevens v. Village of Oak Brook, 2013 IL App (2d) 120456, ¶

37 (“A court has inherent authority to reconsider and correct its rulings[.]”).

¶ 37 Whether an appeal is moot is a threshold question. Lakewood Nursing & Rehabilitation

Center v. Department of Public Health, 2015 IL App (3d) 140899, ¶ 17. “An appeal is moot if no

actual controversy exists or if events have occurred that make it impossible for the reviewing court

to grant the complaining party effectual relief.” In re Marriage of Peters-Farrell, 216 Ill. 2d 287,

291 (2005). “The existence of a real dispute is not a mere technicality but, rather, is a prerequisite

to the exercise of this court’s jurisdiction.” Id. However, the failure to obtain a stay pending appeal,

by itself, does not render an appeal moot. In re Tekela, 202 Ill. 2d 282, 292 (2002). Rather, where

a reviewing court is not capable of granting any effectual relief to a party, the case is rendered

moot. Id. at 292-93.

¶ 38 In cases involving property, an appeal is moot when the subject property “has already been

conveyed to a third party and the party seeking possession failed to obtain a stay.” Northbrook

Bank & Trust, Co. v. 2120 Division LLC, 2015 IL App (1st) 133426, ¶ 14. Where there is no stay

of judgment pending appeal, Illinois Supreme Court Rule 305(k) (eff. July 1, 2017) protects a

third-party buyer from reversal or modification of a judgment regarding the subject property.

Steinbrecher v. Steinbrecher, 197 Ill. 2d 514, 523 (2001). As such, the protections afforded to the

non-party purchaser of the subject property under Rule 305(k) prevent this court from providing

any relief that would affect the disposition of the property.

¶ 39 In his notice of appeal, as well as in his opening brief, Herzog requests merely that the trial

court’s orders be reversed. In reply to Wilmington Savings’s mootness argument, however, he

asserts that because there is a deficiency judgment at issue and there is a possibility for restitution

for the value he lost if the foreclosure is held to be improper, his appeal cannot be considered moot.

- 10 - No. 1-22-1467

¶ 40 We first note that the case to which Wilmington Savings cites for support, Deutsche Bank

National Trust Co. as Trustee for Indymax Indx Mortgage Loan Trust 2006-AR25 v. Roman, 2019

IL App (1st) 171296, is inapposite. There, although a deficiency judgment was entered against the

defendant, the defendant did not on appeal request any monetary relief and this court’s mootness

analysis lacked any reference to that deficiency judgment. Id. ¶¶ 19-27. That said, it is debatable

whether, but for Wilmington Savings’s mootness argument, Herzog would have made a specific

request for restitution. However, in the face of Rule 305(k), reversal in this case could only yield

monetary relief.

¶ 41 Although not often sought in cases such as the one now before us, restitution remains a

viable form of equitable relief following a foreclosure. See, e.g., RCB Equities #3, LLC v. Jakubow,

2021 IL App (1st) 200256-U (mootness argument rejected where defendant had no interest in

return of the foreclosed property, but instead sought reversal of the deficiency judgment or an

award of the sale proceeds); Wilmington Savings Fund v. Lockhart, 2019 IL App (1st) 181180-U

(where the appellant’s claim requesting the court reverse the trial court’s dismissal of her quiet

title claim was moot because this court could not grant any meaningful relief but her claims seeking

money damages were not moot because they did not depend on the title to the property); but see

First Horizon Home Loans v. Garcia, 2019 IL App (1st) 180092-U (where there was no evidence

in the record to support defendant’s claim on appeal that it was seeking money damages as opposed

to reversal of the judgment of foreclosure and confirmation of the sale, defendant’s appeal was

deemed moot pursuant to Rule 305(k)). 1 Indeed, case law dating back over a century has

1 Although Wilmington Savings Fund v. Lockhart and First Horizon Home Loans v. Garcia are unpublished and were issued prior to January 1, 2021, and therefore, not precedential, we find them persuasive. See Osman v. Ford Motor Co., 359 Ill. App. 3d 367, 374 (“The fact one court has used certain reasoning in an unpublished opinion does not bar courts in this state from using the same reasoning in their decisions.”).

- 11 - No. 1-22-1467

established that, on the reversal of a foreclosure judgment, when the postjudgment sale of a

property prevents a court from restoring the foreclosure defendant to the status quo ante, the proper

remedy is to award the defendant the sale proceeds in place of the property. See Thompson v.

Davis, 297 Ill. 11, 15-19 (1921) (where “[t]he decree of foreclosure was reversed and set aside,

and the parties became entitled to be restored to their former rights as nearly as possible”); see also

Williamsburg Village Owners’ Ass’n, Inc v. Lauder Associates, 200 Ill. App. 3d 474, 483 (1990)

(“[U]pon the reversal of a judgment, under which one of the parties has received benefits, he is

under an obligation to make restitution.”).

¶ 42 Here, Herzog has requested that we vacate the summary judgment entered and, if he is

ultimately successful in the circuit court, he could seek restitution in lieu of possession of the

transferred property and he would be relieved of the deficiency judgment. Because Herzog has

requested relief other than possession of the property, we find that the appeal is not moot and

proceed to the merits.

¶ 43 B. Summary Judgment

¶ 44 On appeal, Herzog argues that the release issued by Wells Fargo should have barred the

foreclosure and “cannot be avoided by parol evidence of lack of consideration for its issuance[.]”

Herzog further contends that Wilmington Savings was required to present evidence of fraud,

duress, illegality, or mutual mistake to set aside the release and it failed to present such proof.

¶ 45 Wilmington Savings responds that Herzog failed to demonstrate that the purported release

created a genuine issue of material fact. It further asserts Herzog presented no evidence that he

provided consideration for a release on the mortgage. Instead, it maintains, during his deposition,

he repeatedly asserted that he could not recall anything about the release and he admitted to

- 12 - No. 1-22-1467

continuing to make payments towards the outstanding indebtedness following the purported

release.

¶ 46 Summary judgment is appropriate “ ‘where the pleadings, depositions, and admissions on

file, together with the affidavits, if any, show that there is no genuine issue as to any material fact

and that the moving party is entitled to judgment as a matter of law.’ ” Suburban Real Estate

Services, Inc. v. Carlson, 2022 IL 126935, ¶ 15 (quoting 735 ILCS 5/2-1005(c) (West 2020)). “

‘Genuine’ means there is evidence to support the position of the nonmoving party.” Pekin Ins. Co.

v. Adams, 343 Ill. App. 3d 272, 275 (2003). The court construes the pleadings, depositions,

admissions, and affidavits strictly against the movant and liberally in favor of the opponent. Adams

v. Northern Illinois Gas Co., 211 Ill. 2d 32, 43 (2004). The party moving for summary judgment

is not required to prove its case or disprove the nonmovant’s case, but instead may be “entitled to

summary judgment by demonstrating the absence of a genuine issue of material fact.” Berke v.

Manilow, 2016 IL App (1st) 150397, ¶ 31. The nonmovant may defeat a summary judgment

motion by demonstrating that a question of fact does exist. Id. To do so, the nonmovant “must

come forth with some evidence that arguably would entitle [them to] recovery at trial.” Id.

“Summary judgment is a drastic measure and should only be granted if the movant’s right to

judgment is clear and free from doubt.” Outboard Marine Corp. v. Liberty Mutual Insurance Co.,

154 Ill. 2d 90, 102 (1992). “Mere speculation, conjecture, or guess is insufficient to withstand

summary judgment.” Sorce v. Naperville Jeep Eagle, Inc., 309 Ill. App. 3d 313, 328 (1999). Our

review of the court’s decision is de novo (Adams, 211 Ill. 2d at 43), meaning we perform the same

analysis a trial court would perform and we afford no deference to the reasoning or the disposition

of the trial court (Johnson v. Fuller Family Holdings, LLC, 2017 IL App (1st) 162130, ¶ 37).

- 13 - No. 1-22-1467

¶ 47 Count I of Wilmington Savings’s amended complaint alleges that the mortgage is a valid,

existing lien and requests that the circuit court enter a judgment of foreclosure against Herzog.

Count II, though oddly worded, seeks a declaratory judgment that the release was recorded in error

and requests that the court “expunge” it from the public record. We first note that the order entered

in this case states simply that the circuit court granted Wilmington Savings’s motion for summary

judgment. No mention is made of the release, the later filed purported recission, or expungement.2

That notwithstanding, the inference to be drawn from the court’s judgement is that the release was

recorded in error and that there was, therefore, a valid lien on the property supporting summary

judgment in favor of Wilmington Savings. See Illinois Bar Association Mutual Insurance Co. v.

Canulli, 2020 IL App (1st) 190142, ¶ 19 (an order granting summary judgment that fails to

expressly dispose of all issues may be appealed from where the order necessarily entailed the

disposition of the remaining issues). Accordingly, we first address the validity of the release, a

necessary predicate to determining whether there was a valid, existing mortgage under which

Herzog defaulted and which supported the court’s judgment. We reserve for later discussion

Wilmington Savings’s request that the release be expunged from the public record.

¶ 48 The salient facts surrounding the release are as follows. A release was executed by Wells

Fargo on April 18, 2008, and recorded on May 6, 2008. The release identified Herzog as the

mortgagor and identified the mortgage at issue in this case. Signed by the Assistant Vice President

of Wells Fargo, the release stated that Herzog was released from the mortgage. Seven years later,

Wells Fargo, just prior to assigning this mortgage to Wilmington Savings, filed an affidavit of

2 Despite Herzog’s failure to include a report of proceedings or acceptable substitute for the hearing on Wilmington Savings’s motion for summary judgment, the lack thereof does not hinder our review of the circuit court’s judgment because our review is de novo.

- 14 - No. 1-22-1467

rescission with the Cook County Recorder of Deeds, which stated generally that the release was

recorded in error. The mortgage was then “re-recorded” in 2016.

¶ 49 “A release is the abandonment of a claim to the person against whom the claim exists.”

(Internal quotation marks omitted.) Borsellino v. Putnam, 2011 IL App (1st) 102242, ¶ 103.

Because it is a contract, a release is governed by the rules of law pertinent to contracts. Bruner v.

Illinois Cent. R. Co., 219 Ill. App. 3d 177, 180 (1991). Where the release in question is valid on

its face, the burden of proof is on the party seeking to rescind or invalidate the release. Meyer v.

Murray, 70 Ill. App. 3d 106, 111 (1979).

¶ 50 Herzog asserts that, for Wilmington Savings to avoid enforcement of the release, it must

provide clear and convincing evidence that the release was obtained through fraud, duress,

illegality, or mutual mistake. See Vandenburg v. Brunswick Corporation, 2017 IL App (1st)

170181, ¶ 29; Simmons v. Blauw, 263 Ill. App. 3d 829, 832 (1994) (citing Frank Rosenberg, Inc.

v. Carson Pirie Scott & Co., 28 Ill. 2d 573, 579 (1963)). However, this argument assumes that the

release was, in fact, a valid contract. Wilmington Savings takes the position that the release was

not a valid contract because no consideration for releasing Herzog from the mortgage was given

in exchange.

¶ 51 A valid contract is one that is supported by an offer, acceptance, and consideration.

Steinberg v. Chicago Medical School, 69 Ill. 2d 320, 329 (1977); see also Moehling v. W.E. O’Neil

Construction Co., 20 Ill. 2d 255, 265 (1960) (stating that consideration is an essential element of

a valid contract). “Consideration for a contract consists of either some right, interest, profit, or

benefit accruing to one party or some forbearance, detriment, loss of responsibility given, suffered,

or undertaken by the other.” Johnson v. Maki and Associates, Inc., 289 Ill. App. 3d 1023, 1028

(1997). “There must be a consideration for every valid contract and, if there is no consideration,

- 15 - No. 1-22-1467

the contract is invalid.” Beyer v. Wolfe, 228 Ill. App. 429, 435 (1923). Further, Illinois courts have

expressly held that a release is invalid unless it is supported by consideration. See Rohr Burg

Motors, Inc. v. Kulbarsh, 2014 IL App (1st) 131664, ¶ 48; Koules v. Euro-American Arbitrage,

Inc., 293 Ill. App. 3d 823, 832 (1998). Nonetheless, “the mere pleading of lack of consideration

[does] not overcome the presumption of a valid consideration, for that can only be done by offering

evidence in support of that allegation.” Stolzenbach v. Pagoria, 71 Ill. App. 3d 863, 866 (1979).

Such evidence must be of a “very clear and cogent nature.” Pedott v. Dorman, 192 Ill. App. 3d 85,

93 (1989).

¶ 52 Initially, we point out that, despite Wilmington Savings’s repeated assertions that Herzog

has failed to demonstrate the validity of the release, for example, by proving consideration was

given for the release, the burden is on Wilmington Savings, not Herzog, to first provide clear and

cogent evidence that the facially valid release was invalid. See Blaylock v. Toledo, P. & W. R. Co.,

43 Ill. App. 3d 35, 38 (rejecting the plaintiff’s position that “it was the burden of the defendant to

prove the absence of those grounds which might vitiate the release” and finding fatal “the

plaintiff’s failure to support his charge of fraud”). If Wilmington Savings first demonstrates that

the release was invalid for lack of consideration, it will have proven that it is entitled to summary

judgment as a matter of law, unless Herzog comes forth with some evidence to create a genuine

issue regarding consideration.

¶ 53 In his attempts to defeat Wilmington Savings’s argument, Herzog cites to the principle of

law that courts will typically not inquire into the sufficiency or adequacy of consideration.

Sufficiency of consideration is not, however, the issue now before us. Wilmington Savings’s

argument is that there is a total lack of consideration in exchange for the release of the mortgage.

See White v. Village of Homewood, 256 Ill. App. 3d 354, 358 (1993) (rejecting the defendants’

- 16 - No. 1-22-1467

cited authority because the issue before the court was not adequacy of consideration but absolutely

no consideration flowed between the parties). Thus, where the issue before the court, as it is here,

is whether a valid contract was formed, a court may inquire into the actual consideration given.

Agnew v. Brown, 96 Ill. App. 3d 904, 908 (1981) (“[L]ack or failure of consideration goes to the

actual validity of contract formation [citation omitted] and cannot be swept aside by [a party’s]

argument that a court typically does not review adequacy of consideration.”). Thus, Herzog’s

argument fails.

¶ 54 Herzog fares no better with his repeated assertions regarding the inadmissibility of “parol

evidence” to validate the release. “The parol evidence rule, in general, operates to exclude evidence

which would change or alter the expressed meaning of a written document, when such evidence

concerns dealings between the parties before or at the time of making the written contract.” Davis

v. Buchholz, 101 Ill. App. 3d 388, 391 (1981). Where a contract recites consideration, “that recital

is prima facie evidence that the grantor received the amount named.” Walton v. Malcolm, 264 Ill.

389, 397 (1914). Although there is a presumption that consideration was given for a contract, the

presumption is rebuttable, although “evidence to rebut must be of a very clear and cogent nature.”

Davis, 101 Ill. App. 3d at 392. “[F]ailure of consideration may be shown by parol evidence” where

that issue is properly in dispute. Id. In the case before us, Wilmington Savings has explicitly

challenged whether any consideration was given in exchange for the release of Herzog’s mortgage.

As such, any evidence submitted on that issue was admissible and appropriately considered by the

circuit court and now this court. In re Marriage of Tabassum and Younis, 377 Ill. App. 3d 761,

770 (2007) (stating that whether a contract contains consideration is a question of law that we

review de novo).

- 17 - No. 1-22-1467

¶ 55 To support its claim that the release was recorded in error, Wilmington Savings points to

Wells Fargo’s 2015 affidavit of rescission, Herzog’s admission that he continued to make

mortgage payments after the release was recorded, and the amount of Herzog’s outstanding

indebtedness. Herzog contends that this evidence is insufficient to support recission of the release

and Wilmington Savings’s allegations are based on pure speculation.

¶ 56 Based on the evidence before us, we are not persuaded that either Wells Fargo’s affidavit

of rescission, which offers little, or Herzog’s admission of continued payments to Wells Fargo

post-release are sufficient to support Wilmington Savings’s claim of no consideration. First, the

affidavit, issued seven years after the release was recorded, generally states that the release was

recorded “in error” and is rendered “null and void.” This is hardly evidence of a lack of

consideration. Second, we do not dispute that Herzog admitted to continuing to make payments to

Wells Fargo. However, in his deposition, he testified that he had multiple obligations with Wells

Fargo and any of his payments could have been made for the purpose of a mortgage other than one

at issue here. As such, neither of these facts constitute clear and cogent evidence of the release’s

invalidity.

¶ 57 That said, we are persuaded that Wilmington Savings has presented evidence that Herzog’s

mortgage has simply not been paid off. Further, the amount of his indebtedness at the time the

motion for summary judgment was filed was $2,481,266.62, according to an affidavit from BSI

on behalf of Wilmington Savings. As Herzog himself states in his brief, “[t]he Release

unambiguously states that it was issued ‘for and in consideration of the payment of the

indebtedness secured by the borrower[.]” Although he contends that this recital defeats

Wilmington Savings’s contention that consideration was not given, we construe that recital

differently in light of the evidence of Herzog’s continuing indebtedness. In our view, the release

- 18 - No. 1-22-1467

contains a specific recital of consideration, namely the payment of Herzog’s indebtedness, which

at that time was more than $1.7 million. Although he asserts that consideration could have taken

another form, the specificity of the release leaves no room for such an inference.

¶ 58 Further, and although neither party appears to press the point here, during his deposition,

Herzog was asked a series of questions regarding tax consequences resulting from the release. He

was specifically asked whether he had received a 1099-C for the property after release of the

mortgage was recorded. In response to every question regarding tax consequences, Herzog

repeatedly stated that he had “no recollection.”

¶ 59 We need not delve too deeply into the taxation issue here. Suffice it to say that if Wells

Fargo had discharged $1.7 million of debt to Herzog, it would have been required, not only to

notify the IRS of the same, but also Herzog. See In re Estate of Hofer, 2015 IL App (3d) 140542,

¶ 22 (Form 1099-C “was created for the mandatory reporting by applicable entities to the IRS of

discharges, cancellations, or extinguishments rendering a debt unenforceable or uncollectible y the

creditor.”); see also 26 CFR § 1.6050P-1(a) (2016). And, notice would not have been the end of

the story, for forgiveness of the debt would have resulted in personal income to Herzog, also

reportable to the IRS (26 U.S.C. § 61(a)(11) (2017) (income for discharge of indebtedness is

included within gross income)) and, not likely an event that one would have forgotten.

¶ 60 Given that, we are simply hard pressed to believe, number one, that Herzog had no

recollection of not having received a 1099-C, if as he maintains, the debt had actually been

released. Number two, given that lenders are not in the habit of giving away money, it strains the

bounds of credulity that, on April 3, 2008, Wells Fargo granted a loan modification, increasing

Herzog’s mortgage to $1,728,798 and then, a few short days later, on April 18, 2008, that same

mortgage was released. Other than his protestations regarding Wilmington Savings’s lack of proof

- 19 - No. 1-22-1467

of consideration, Herzog has presented no evidence to defeat summary judgment. The simplest

proof would have been cancelled checks or some other documents bearing the account number for

payment on the mortgage identified in the release, materials clearly under Herzog’s control.

Clearly, the purported release was filed in error.

¶ 61 In sum, Herzog has presented no evidence that contradicts Wilmington Savings’s proof of

lack of consideration, and thus, there is no genuine issue of material fact before the court regarding

consideration. Because Wilmington Savings presented “clear and cogent” evidence that

consideration was not paid in exchange for the release, we conclude that the release was not a valid

contract and Wilmington Savings had a valid, existing mortgage against Herzog. Therefore,

Wilmington Savings was entitled to summary judgment as a matter of law.

¶ 62 As a final aside, it is not lost on this court that Wilmington Savings’s predecessor in

interest, Wells Fargo, was in no way prompt in seeking to rescind the invalid release. The affidavit

of rescission was not filed until seven years after the release was recorded. Considering there was

no consideration for the release, and because we have no reason to believe that Wells Fargo, having

entered into a loan modification with Herzog, intended to then effectively gift Herzog with millions

of dollars, it is obvious that Wells Fargo made a serious error. Additionally, the complete lack of

evidence presented regarding the circumstances which led to the execution and recording of the

release is disconcerting, albeit not surprising considering fifteen years have passed since then.

Nonetheless, under the circumstances before us, we cannot contemplate any better evidence

available to Wilmington Savings to prove Herzog’s failure to give consideration than proof of his

multimillion dollar outstanding indebtedness to Wilmington Savings.

¶ 63 For that reason, we conclude that the circuit court properly granted summary judgment in

favor of Wilmington Savings.

- 20 - No. 1-22-1467

¶ 64 C. Confirmation of Sale and Deficiency Judgment

¶ 65 We next address Herzog’s challenges to the confirmation of sale and deficiency judgment.

Herzog requests that this court “reject the sale” or “require an evidentiary hearing to determine

whether it should be approved[.]” Herzog contends that the deficiency judgment was unfair and

Wilmington Savings “made no effort to overcome the presumption that the value of the collateral

is equal to the indebtedness.”

¶ 66 In response, Wilmington argues that Herzog “makes no showing as to any of the factors

set forth in section 1508 of the Foreclosure Law,” his sole objection to the confirmation of the sale

“is based upon conjecture regarding the fair market value of the property,” and he provided no

proof that the sale price obtained at the foreclosure sale was unconscionable. For the following

reasons, we agree with Wilmington Savings.

¶ 67 A judicial foreclosure sale must be approved by the circuit court. Citicorp Savings v. First

Chicago Trust Co., 269 Ill. App. 3d 293, 300 (1995). Confirmation of a judicial sale is governed

by section 15-1508(b) of the Illinois Mortgage Foreclosure Law (Foreclosure Law) (735 ILCS

5/15/-1501 et seq. (West 2022)), which provides, in pertinent part:

(b) Hearing. 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 required in accordance

with subsection (c) of Section 15-1507 was not given, (ii) the terms of sale were

unconscionable, (iii) the sale was conducted fraudulently, or (iv) justice was not otherwise

done, the court shall then enter an order confirming the sale.

- 21 - No. 1-22-1467

(e) Deficiency Judgment. In any order confirming a sale pursuant to the judgment

of foreclosure, the court shall also enter a personal judgment of deficiency against any party

(i) if otherwise authorized and (ii) to the extent requested in the complaint and proven upon

presentation of the report of sale in accordance with Section 15-1508. Except as otherwise

provided in this Article, a judgment may be entered for any balance of money that may be

found due to the plaintiff, over and above the proceeds of the sale[.] *** Such judgment

may be entered, or enforcement had, only in cases where personal service has been had

upon the persons personally liable for the mortgage indebtedness, unless they have entered

their appearance in the foreclosure action.” 735 ILCS 5/15-1508(b), (e) (West 2022).

¶ 68 It is well settled that a reviewing court reviews an order confirming a judicial sale for abuse

of discretion. CitiMortgage, Inc. v. Lewis, 2014 IL App (1st) 131272, ¶ 31. This court also reviews

the denial of an evidentiary hearing under section 15-1508 for an abuse of discretion. Deutsch

Bank National Trust Co. v. Cortez, 2020 IL App (1st) 192234, ¶ 17. A circuit 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 circuit court. CitiMortgage, Inc. v. Bermudez, 2014 IL App (1st) 122824, ¶

57.

¶ 69 It is not unusual for property to bring less than its full, fair market value at a forced sale.

NAB Bank v. LaSalle Bank, 2013 IL App (1st) 121147, ¶ 20. “[M]ere inadequacy of price alone is

not sufficient cause for setting aside a judicial sale.” Illini Federal Savings & Loan Association v.

Doering, 162 Ill. App. 3d 768, 771 (1987). “This rule is premised on the policy which provides

stability and permanency to judicial sales and on the well-established acknowledgment that

property does not bring its full value at forced sales and that the price depends on many

circumstances for which the debtor must expect to suffer a loss.” World Savings & Loans Ass’n v.

- 22 - No. 1-22-1467

Amerus Bank, 317 Ill. App. 3d 772, 780-81 (2000). The party objecting to the sale bears the burden

of proving that sufficient grounds exist to disapprove the sale. Lewis, 2014 IL App (1st) 131272,

¶ 31. Finally, regarding evidentiary hearings on foreclosure sales, one is only warranted where the

debtor has presented a “current appraisal or other current indicia of value which is so measurably

different than the sale price as to be unconscionable.” Resolution Trust Corp. v. Holtzman, 248 Ill.

App. 3d 105, 115 (1993).

¶ 70 Here, the record shows that Herzog’s original mortgage on the property was for $1,499,799

and after the second modification, the amount of indebtedness was $1,728,798.05. In its motion

for confirmation of sale and deficiency judgment, Wilmington Savings attached exhibits showing

that the total amount due to Wilmington Savings at the time of the foreclosure sale was

$2,661,691.18. On April 19, 2022, the property sold for $1,088,000, which is a portion, but not

all, of Herzog’s total indebtedness. According to Wilmington Savings’s exhibits, the amount of

indebtedness remaining after the sale was $1,574,091.18. The property was then sold again in 2023

for $1,000,000, which Wilmington Savings contends is evidence that the property was sold at the

foreclosure sale for near fair market value.3

¶ 71 “When there is no fraud or other irregularity in the foreclosure proceeding, the price at

which the property is sold is the conclusive measure of its value.” Nationwide Advantage Mortg.

Co. v. Ortiz, 2012 IL App (1st) 112755, ¶ 35. Such is the case here where Herzog’s only challenge

to the sale is based on conjecture alone regarding the fair market value of the property. He does

not present any evidence that the sale price was unconscionably low or that there was any other

flaw in the sale. He only cites to an online real estate website, stating that the property’s value is

3 This court may take judicial notice of the public records of the Cook County Clerk’s Office. Bayview Loan Servicing, LLC v. Szpara, 2015 IL App (2d) 140331, ¶ 31.

- 23 - No. 1-22-1467

estimated between $1.73 and $1.91 million. This is insufficient evidence to place

unconscionability of the sale price into issue. In any case, “[r]ecent case law suggests that a sale

price below 50% of fair market value is a reasonable threshold for unconscionability.” T2

Expressway, LLC v. Tollway LLC, 2021 IL App (1st) 192616, ¶ 29. Even if we were to find that

$1.91 million is the fair market value of the property, the sale price of $1,088,000 would still not

be less than 50% of the fair market value. As such, an evidentiary hearing was not warranted on

unconscionability. Rather, the circuit court’s order expressly stated that all required notices were

given, the sale was “fairly and properly made,” and justice was otherwise done. Thus, all of the

statutory criteria were met in this case, and the court properly confirmed the sale in accordance

with section 15-1508(b) of the Foreclosure Law.

¶ 72 The deficiency judgment was also correctly entered against Herzog. The court was required

under section 15-1508(e) to enter a deficiency judgment against Herzog where a balance remained

due to Wilmington Savings after the sale of the property, the complaint properly requested a

deficiency judgment, and Herzog voluntarily entered his appearance in the foreclosure action. See

U.S. Bank Trust, N.A. v. Atchley, 2015 IL App (3d) 150144, ¶ 11 (stating that section 15-1508(e)

is mandatory, not permissive, and a trial court must grant a deficiency judgment when the

requirements of that section are met). Thus, the court did not err by granting the deficiency

judgment where all of the statutory criteria were met.

¶ 73 Finally, Herzog cites First Galesburg National Bank and Trust Co. v. Joannides, 103 Ill.

2d 294 (1984), which is inapposite. In that case, our supreme court ruled that the failure of the

creditor to give notice of the sale of the collateral to the debtor resulted in a rebuttable presumption

that the value of the collateral is equal to the indebtedness. Id. at 300. In contrast, this case does

not involve a failure of Wilmington Savings to give notice to Herzog of the property sale.

- 24 - No. 1-22-1467

Moreover, First Galesburg involved the sale of cars and the Uniform Commercial Code. Id. at

296-99. Similarly, Munao v. Lagattuta, 294 Ill. App. 3d 976, 979-83 (1998), involved the Uniform

Commercial Code and the sale of restaurant equipment and, thus, is not applicable to the case

before us which involves a foreclosure. Herzog also cites to Munao for the proposition that a sale

must have been “commercially reasonable” to support a deficiency judgment. Again, Munao

applied the law under the Uniform Commercial Code and, thus, it has no relevancy to the

proceedings in this case. Our own research has revealed that any reference to whether a sale was

“commercially reasonable” is only found in cases involving the Uniform Commercial Code. As

such, we do not find this contention or any of Herzog’s cited authority persuasive here.

¶ 74 Accordingly, the circuit court did not abuse its discretion in confirming the sale and

entering the deficiency judgment against Herzog without an evidentiary hearing.

¶ 75 D. Expungement of the Recorded Release

¶ 76 Count II of Wilmington Savings’s complaint requested a declaratory judgment expunging

the recorded release from the public record. The circuit court granted summary judgment in favor

of Wilmington Savings but its written order failed to expressly grant the requested relief under

count II. The evidence necessary to address Wilmington Savings’s request is before this court.

¶ 77 As we discussed above, Wilmington Savings demonstrated that, despite the recorded

release of mortgage, Herzog remained indebted to Wilmington Savings under the mortgage for

more than $2 million. The remaining debt was clear and cogent evidence of a lack of consideration

in exchange for the release of indebtedness. Herzog failed to provide any evidence to the contrary.

Thus, based on the record before us, we find that Wilmington Savings’s predecessor, Wells Fargo,

recorded the release in error and a declaratory judgment expunging the release was warranted in

this case.

- 25 - No. 1-22-1467

¶ 78 Pursuant to Illinois Supreme Court Rule 366 (eff. Feb. 1, 1994), a reviewing court, in any

appeal, may, in its discretion, “enter any judgment and make any order that ought to have been

given or made *** that the case may require.” As such, we exercise our supervisory power to direct

the circuit court to enter an order expunging the erroneously recorded release from the public

record.

¶ 79 III. CONCLUSION

¶ 80 For the reasons stated, the judgment of the circuit court of Cook County is affirmed, and

we remand for the circuit court to comply with the directions set forth above.

¶ 81 Affirmed and remanded with directions.

- 26 -