2 N.E.3d 1052 (Ill.App. 1 Dist. 2013), 1-13-0380, Parkway Bank & Trust Co. v. Korzen

Docket Nº:1-13-0380
Citation:2 N.E.3d 1052, 2013 IL App (1st) 130380, 377 Ill.Dec. 771
Opinion Judge:DELORT, JUSTICE.
Party Name:PARKWAY BANK AND TRUST COMPANY, Plaintiff-Appellee, v. VICTOR KORZEN and TOMAS ZANZOLA, Defendants-Appellants (Unknown Owners and Nonrecord Claimaints, Defendants)
Attorney:Victor Korzen and Tomas Zanzola, both of Chicago, appellants pro se. Scott & Kraus, of Chicago (Eugene S. Kraus and Sonia S. Kinra, of counsel), for appellee.
Judge Panel:JUSTICE DELORT delivered the judgment of the court, with opinion. Presiding Justice Connors and Justice Cunningham concurred in the judgment and opinion.
Case Date:September 23, 2013
Court:Court of Appeals of Illinois

Page 1052

2 N.E.3d 1052 (Ill.App. 1 Dist. 2013)

2013 IL App (1st) 130380, 377 Ill.Dec. 771

PARKWAY BANK AND TRUST COMPANY, Plaintiff-Appellee,

v.

VICTOR KORZEN and TOMAS ZANZOLA, Defendants-Appellants (Unknown Owners and Nonrecord Claimaints, Defendants)

No. 1-13-0380

Court of Appeals of Illinois, First District, First Division

September 23, 2013

As Supplemented December 16, 2013.

As Corrected April 16, 2014.

Page 1053

On Appeal from the Circuit Court of Cook County. No. 10 CH 36958. Honorable Robert Senechalle, Judge Presiding.

SYLLABUS

In a groundless appeal from a foreclosure proceeding involving frivolous and confusing pleadings and procedures by defendants with respect to their vacant lot, the appellate court affirmed the judgment for plaintiff, recognized plaintiff's right to petition for attorney fees, and directed defendants to show cause why a fine of $10,000 should not be imposed on them pursuant to Supreme Court Rule 375.

Victor Korzen and Tomas Zanzola, both of Chicago, appellants pro se.

Scott & Kraus, of Chicago (Eugene S. Kraus and Sonia S. Kinra, of counsel), for appellee.

JUSTICE DELORT delivered the judgment of the court, with opinion. Presiding Justice Connors and Justice Cunningham concurred in the judgment and opinion.

OPINION

Page 1054

DELORT, JUSTICE.

This appeal of a mortgage foreclosure case involving an empty lot is so groundless that we would normally dispose of it with a brief summary order. However, it provides us an opportunity to review a number of tactics a small number of debtors use both to delay the ultimate resolution of cases against them and to use

Page 1055

the legal system for improper purposes. Some people might classify those who engage in these tactics as " sovereign citizens," but regardless of the nomenclature, their methods are not only counterproductive, but detrimental to the efficient and fair administration of justice. A recent New York Times article noted the FBI has labeled the strategy as " 'paper terrorism.'" Erica Goode, In Paper War, Floor of Liens Is the Weapon, N.Y. Times, Aug. 23, 2013, at A1.

Because of the growing number of these cases, we issue this opinion to provide guidance to the many courts confronted with similar matters.1 We affirm the judgment below and retain jurisdiction to award additional attorney fees as provided by the underlying contract and to consider the imposition of sanctions under Illinois Supreme Court Rule 375 (Ill. S.Ct. R. 375 (eff. Feb. 1, 1994)).

BACKGROUND

Defendants-appellants, Victor Korzen and Tomas Zanzola, who are the owners of the subject property, raise no less than 15 points in their pro se appeal. Establishing a framework to properly analyze these contentions requires us to set out the chronology of the case in unusually excruciating detail, as follows.

Date Event
January 5, 2007 Defendant Zanzola signs a promissory note to borrow
$100,000 from Parkway Bank & Trust Company (Parkway).
The note matures six months later, on July 5, 2007. The note
provides that Zanzola will be responsible to pay Parkway's
attorney fees, court costs, and expenses, including for
appeals, if Zanzola fails to repay the note on time. The
note states that it is secured by a January 5, 2007
mortgage, assignment of rents, and " commercial security
agreement" between Zanzola and defendant Korzen for property
located at 1527 East Thomas Street in Palatine (the
property). The note was thereafter renewed in like form for
six successive six-month terms, the last terminating on
July 5, 2010.
January 5, 2007 Zanzola and Korzen sign a mortgage on the Thomas Street
property with Parkway. The mortgage contains a standard
" due on sale" clause providing that Parkway may declare the
note immediately due and payable if the mortgagors transfer
any of their interest in the property. The mortgage also
provides that if the note is not paid on time, Parkway may
obtain a court order foreclosing the mortgagors' interest in
the property. Like the note, the mortgage provides that the
mortgagors shall pay Parkway's " reasonable" attorney fees
and court costs " at trial and upon any appeal."
In the mortgage, Zanzola and Korzen waived their rights of
redemption and reinstatement in case of a foreclosure, a
waiver which is only valid if the property is not
" residential" as defined by the Illinois Mortgage
Foreclosure Law (Foreclosure Law) (735 ILCS 5/15-1101 et
seq . (West 2010)). Under the Foreclosure Law, the property
is only " residential" if the borrower actually lives in
a residence constructed on the property. 735 ILCS 5/15-1219
(West 2010).
January 5, 2007 Zanzola and Korzen sign an assignment of rents in favor of
Parkway, another act which suggests that the property is not
" residential" under section 15-1219 of the Foreclosure Law.
January 22, 2007 Korzen signs and records a deed quitclaiming his interest in
the property to himself and Zanzola as joint tenants. Korzen
signs a certificate with the deed asserting that the
transaction between Zanzola and him is exempt from real
estate transfer taxes.
August 26, 2010 Parkway files this mortgage foreclosure lawsuit, along with
a civil cover sheet indicating that the property is " vacant
land." The lawsuit names both Korzen and Zanzola as
defendants. The lawsuit contains two counts. Count I seeks a
mortgage foreclosure and follows the standard statutory
format. Parkway attached three exhibits to the complaint to
support its allegations in count I: (a) a copy of the
January 5, 2007 promissory note, whose most recent renewal
matured on July 5, 2010; (b) a copy of the January 5, 2007
mortgage; and (c) a copy of the January 5, 2007 assignment
of rents. Count I, paragraph 3, alleges that the default on
the note and mortgage occurred through failure to pay
amounts due under the note on and after March 8, 2010, and
that the amount currently due is about $106,377.23 plus
continuing per diem interest of $28.39.
Count II is a claim for breach of the promissory note
against Zanzola.
September 1, 2010 The circuit court appoints a special process server to serve
defendants.
September 12, 2010 The special process server personally serves Zanzola at an
address in Prairie Grove, McHenry County, Illinois.
September 14, 2010 The Cook County sheriff's deputy assigned to serve
defendants reports that he could not serve Korzen at 410
South Warner in Palatine, because he moved from that
address " five years ago."
October 20, 2010 Both defendants file motions in the circuit court to defend
as poor persons without paying filing fees. The court
grants the motions.
October 28, 2010 Zanzola files an appearance, listing his Prairie Grove
address; Korzen also files an appearance, listing an address
in Chicago. The two defendants jointly file a fill-in-the-
blank form answer, denying the allegations of count I,
paragraph 3 of the complaint, and claiming that they have
insufficient knowledge to admit or deny count I,
paragraph 2.
Under the portion of the answer labeled " Other affirmative
matter," defendants state the following:
" Missing:
4.1 Proof of claim accompanied with the evidence of debt;
4.2 Original Wet Script ink Promissory Note;
4.3 Original Title;
4.4 Current complete copy of the Bank's Original
Application and the CUSIP number of the Application."
January 31, 2011 The special process server personally serves Korzen at his
address in Chicago.
February 22, 2011 Defendants fail to appear for the case management
conference.
August 16, 2011 Parkway issues a request to admit facts to defendants,
seeking admission of various basic facts regarding the
transaction. These include genuineness of the documents
signed by defendants and the default created by the missed
payments.
August 31, 2011 On Parkway's motion, the circuit court strikes the
affirmative matter contained in paragraph 4 of defendants'
answer. Defendants
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47 practice notes
  • 10 N.E.3d 339 (Ill.App. 1 Dist. 2014), 1-12-1759, U.S. Bank, NA v. Avdic
    • United States
    • Illinois Court of Appeals of Illinois
    • May 2, 2014
    ...in order to create a genuine issue of material fact." Parkway Bank & Trust Co. v. Korzen, 2013 IL App (1st) 130380, ¶ 49, 377 Ill.Dec. 771, 2 N.E.3d 1052. [¶32] As stated, the affidavit of Armstrong conformed to Rule 191 and the business records related to the mortgage and note at ......
  • 148 N.E.3d 786 (Ill.App. 5 Dist. 2020), 5-16-0007, Enbridge Pipeline (illinois), L.L.C. v. Murfin
    • United States
    • Illinois Court of Appeals of Illinois Fifth District
    • January 28, 2020
    ...to the discretion of the reviewing court." Parkway Bank & Trust Co. v. Korzen, 2013 IL App. (1st) 130380, ¶ 87, 377 Ill.Dec. 771, 2 N.E.3d 1052 (citing Kheirkhahvash v. Baniassadi, 407 Ill.App.3d 171, 182, 347 Ill.Dec. 151, 941 N.E.2d 1020 ¶ 72 Althoug......
  • 39 N.E.3d 337 (Ill.App. 4 Dist. 2015), 4-14-0141, CNB Bank & Trust, N.A. v. Rosentreter
    • United States
    • Illinois Court of Appeals of Illinois
    • September 3, 2015
    ...unconscionable." 735 ILCS 5/15-1508(b) (West 2012); see Parkway Bank & Trust Co. v. Korzen, 2013 IL App. (1st) 130380, ¶ 15, 377 Ill.Dec. 771, 2 N.E.3d 1052; Deutsche Bank Nat'l Trust Co. v. Snick, 2011 IL App. (3d) 100436, ¶ 10, 957 N.E.2d 1273, 354 Ill.Dec. 480. One of " the......
  • 70 N.E.3d 210 (Ill.App. 1 Dist. 2016), 1-15-2670, The Village of Willow Springs v. The Village of Lemont
    • United States
    • Illinois Court of Appeals of Illinois
    • December 19, 2016
    ...facts establishing standing in the first instance. Parkway Bank & Trust Co. v. Korzen, 2013 IL App. (1st) 130380, ¶ 24, 377 Ill.Dec. 771, 2 N.E.3d 1052. However, where the defense is raised as an affirmative matter and is supported by affidavits or other evidentiary&......
  • Free signup to view additional results
47 cases
  • 10 N.E.3d 339 (Ill.App. 1 Dist. 2014), 1-12-1759, U.S. Bank, NA v. Avdic
    • United States
    • Illinois Court of Appeals of Illinois
    • May 2, 2014
    ...in order to create a genuine issue of material fact." Parkway Bank & Trust Co. v. Korzen, 2013 IL App (1st) 130380, ¶ 49, 377 Ill.Dec. 771, 2 N.E.3d 1052. [¶32] As stated, the affidavit of Armstrong conformed to Rule 191 and the business records related to the mortgage and note at ......
  • 148 N.E.3d 786 (Ill.App. 5 Dist. 2020), 5-16-0007, Enbridge Pipeline (illinois), L.L.C. v. Murfin
    • United States
    • Illinois Court of Appeals of Illinois Fifth District
    • January 28, 2020
    ...to the discretion of the reviewing court." Parkway Bank & Trust Co. v. Korzen, 2013 IL App. (1st) 130380, ¶ 87, 377 Ill.Dec. 771, 2 N.E.3d 1052 (citing Kheirkhahvash v. Baniassadi, 407 Ill.App.3d 171, 182, 347 Ill.Dec. 151, 941 N.E.2d 1020 ¶ 72 Althoug......
  • 39 N.E.3d 337 (Ill.App. 4 Dist. 2015), 4-14-0141, CNB Bank & Trust, N.A. v. Rosentreter
    • United States
    • Illinois Court of Appeals of Illinois
    • September 3, 2015
    ...unconscionable." 735 ILCS 5/15-1508(b) (West 2012); see Parkway Bank & Trust Co. v. Korzen, 2013 IL App. (1st) 130380, ¶ 15, 377 Ill.Dec. 771, 2 N.E.3d 1052; Deutsche Bank Nat'l Trust Co. v. Snick, 2011 IL App. (3d) 100436, ¶ 10, 957 N.E.2d 1273, 354 Ill.Dec. 480. One of " the......
  • 70 N.E.3d 210 (Ill.App. 1 Dist. 2016), 1-15-2670, The Village of Willow Springs v. The Village of Lemont
    • United States
    • Illinois Court of Appeals of Illinois
    • December 19, 2016
    ...facts establishing standing in the first instance. Parkway Bank & Trust Co. v. Korzen, 2013 IL App. (1st) 130380, ¶ 24, 377 Ill.Dec. 771, 2 N.E.3d 1052. However, where the defense is raised as an affirmative matter and is supported by affidavits or other evidentiary&......
  • Free signup to view additional results