Bac Home Loans Servicing, LP v. Mitchell

• Decision Date: 20 March 2014
• Docket Number: No. 116311.,116311.
• Citation: 6 N.E.3d 162,2014 IL 116311,379 Ill.Dec. 85
• Parties: BAC HOME LOANS SERVICING, LP, f/k/a Countrywide Home Loans Servicing, LP, Appellee, v. Kim E. MITCHELL, Appellant.
• Court: Illinois Supreme Court

2014 IL 116311

6 N.E.3d 162

379 Ill.Dec. 85

BAC HOME LOANS SERVICING, LP, f/k/a Countrywide Home Loans Servicing, LP, Appellee,

v.Kim E. MITCHELL, Appellant.

No. 116311.

Supreme Court of Illinois.

March 20, 2014.

Daniel J. Voelker and Tricia L. Putzy, Voelker Litigation Group, Chicago, for appellant.

Steven F. Smith, Ashley H. Nall, and Amy E. Breihan, Bryan Cave LLP, Chicago, for appellee.

OPINION

Justice KILBRIDE delivered the judgment of the court, with opinion.

¶ 1 In this case, we consider whether a party's waiver of objections to the circuit court's personal jurisdiction applies retroactively to validate orders entered prior to the party's submission to the court's jurisdiction. The appellate court held that the waiver applied both prospectively and retroactively. For the following reasons, we hold that a party's waiver of personal jurisdiction is prospective only and does not serve to validate retroactively orders entered by the circuit court without personal jurisdiction. Accordingly, we reverse the appellate court's judgment and remand to the circuit court for further proceedings.

¶ 2 I. BACKGROUND

¶ 3 Defendant, Kim E. Mitchell, executed a promissory note with Countrywide Home Loans, Incorporated, in the amount of $75,400. The note was secured by a mortgage on defendant's home in Chicago. Approximately four years later, plaintiff BAC Home Loans Servicing, LP, formerly known as Countrywide Home Loans Servicing, LP, filed a complaint to foreclose the mortgage.

¶ 4 The special process server's affidavit states defendant was served with summons and complaint by substituted service on November 14, 2009. According to the affidavit, a copy of the process was left at defendant's residence with her daughter, Michelle Foreman, who also lived at the residence.

¶ 5 Defendant did not answer the complaint. Plaintiff mailed defendant a notice stating it intended to move for entry of a judgment of foreclosure and sale on June 9, 2010. On June 3, 2010, plaintiff filed a motion for order of default, a motion for judgment of foreclosure and sale, and a motion to appoint a selling officer. On June 9, 2010, the circuit court of Cook County granted plaintiff's motions, entering an order of default, an order appointing a selling officer, and a judgment for foreclosure and sale.

¶ 6 A notice of sale was mailed to defendant's address and a judicial sale was held on September 13, 2010. On August 2, 2011, plaintiff filed a motion for an order confirming the report of sale and distribution and for possession. Notice of the motion was mailed to defendant. The circuit court entered an order confirming the sale on September 14, 2011.

¶ 7 On October 12, 2011, defendant filed an appearance and a motion to vacate the circuit court's September 14, 2011, order confirming the report of sale and distribution and for possession. Defendant asserted “to the best of her knowledge” she was never served with summons, she did not receive notice of the motion for default judgment, she was informed by plaintiff that a loan modification had been approved, and she did not receive notice of the September 14, 2011, order. Defendant asked the court to vacate the order “in the interest of justice.”

¶ 8 Defendant later withdrew her motion and filed a motion to quash the September 14, 2011, order or, in the alternative, a petition for relief from judgment under section 2–1401 of the Code of Civil Procedure (735 ILCS 5/2–1401 (West 2010)) and section 15–1508 of the Illinois Mortgage Foreclosure Law (735 ILCS 5/15–1508 (West Supp.2011)). Defendant essentially repeated the allegations of her previous motion to vacate. Defendant added that “justice was not done, and the sale of her home was fraudulent and a due process violation.” The motion was stricken without prejudice. Defendant refiled her motion the following day, this time attaching exhibits referenced in the motion.

¶ 9 In its response to the motion, plaintiff asserted defendant was served by substituted service on November 14, 2009. Plaintiff attached a copy of the affidavit of service. The affidavit stated substituted service was made by:

“leaving a copy of this process at [defendant's] usual place of abode with: Michelle Foreman (Relationship) Daughter, a person residing therein who is of the age of 13 years or upwards and informed that person of the contents thereof and that further mailed a copy of this process in a sealed envelope with postage paid addressed to the defendant at his/her usual place of abode on 11–17–09.”

¶ 10 Defendant filed a reply, asserting the substituted service was defective because she does not have a daughter. Defendant asserted her only child is a son named William Mitchell and she does not know anyone named Michelle Foreman. Defendant attached an affidavit stating those facts.

¶ 11 The circuit court denied defendant's motion to quash the order confirming the sale. Defendant's alternative section 2–1401 and 15–1508 petition was also denied because she failed to provide the court with grounds to vacate the order confirming the sale.

¶ 12 On appeal, defendant contended that the substituted service of process was defective and the circuit court, therefore, lacked personal jurisdiction to enter the default judgment, the judgment of foreclosure, the order of sale, and the order of possession. Plaintiff acknowledged the substituted service was improper because it was not in compliance with section 2–203 of the Code (735 ILCS 5/2–203 (West 2008)). Plaintiff argued, however, that defendant waived all objections to the court's personal jurisdiction by filing a postjudgment motion to vacate the September 14, 2011, order confirming the sale.

¶ 13 The appellate court observed that challenges to personal jurisdiction are governed by section 2–301 of the Code (735 ILCS 5/2–301(a), (a–5) (West 2010)) and section 15–1505.6 of the Illinois Mortgage Foreclosure Law (735 ILCS 5/15–1505.6 (West Supp.2011)). Defendant's initial postjudgment motion filed on October 12, 2011, failed to comply with the statutory requirements for challenging the circuit court's personal jurisdiction because it was not a motion to dismiss for lack of jurisdiction or a motion to quash service of process.

¶ 14 The appellate court noted that failure to comply with the statutory requirements for challenging the court's personal jurisdiction results in waiver of “all objections to the court's jurisdiction over the party's person.” (Internal quotation marks omitted.) 2013 IL App (1st) 121713–U, ¶ 41, 2013 WL 2444193. Based on that statutory language, the appellate court held defendant's waiver “worked prospectively and retroactively.” 2013 ILApp (1st) 121713–U, ¶ 41, 2013 WL 2444193. Accordingly, defendant waived any jurisdictional challenge to the circuit court's orders entered prior to her initial postjudgment motion in this case. The trial court's judgment was, therefore, affirmed. 2013 IL App (1st) 121713–U, 2013 WL 2444193.

¶ 15 We allowed defendant's petition for leave to appeal. Ill. S.Ct. R. 315 (eff. Feb. 26, 2010).

¶ 16 II. ANALYSIS

¶ 17 To enter a valid judgment, a court must have both jurisdiction over the subject matter and jurisdiction over the parties. In re Marriage of Verdung, 126 Ill.2d 542, 547, 129 Ill.Dec. 53, 535 N.E.2d 818 (1989). A judgment entered by a court without jurisdiction over the parties is void and may be challenged at any time, either directly or collaterally. Verdung, 126 Ill.2d at 547, 129 Ill.Dec. 53, 535 N.E.2d 818. We review de novo whether the circuit court obtained personal jurisdiction. In re Detention of Hardin, 238 Ill.2d 33, 39, 342 Ill.Dec. 555, 932 N.E.2d 1016 (2010).

¶ 18 Personal jurisdiction may be established either by service of process in accordance with statutory requirements or by a party's voluntary submission to the court's jurisdiction. Verdung, 126 Ill.2d at 547, 129 Ill.Dec. 53, 535 N.E.2d 818. As in the appellate court, plaintiff concedes that the substituted service of process in this case was defective and did not confer personal jurisdiction.

¶ 19 The appellate court determined, however, that defendant voluntarily submitted to the circuit court's jurisdiction by filing her initial postjudgment motion to vacate the order confirming the sale on October 12, 2011. Defendant did not challenge that determination in her petition for leave to appeal, her opening brief, or her reply brief. Rather, defendant's only argument on appeal to this court has been that by filing her October 12, 2011, motion, she submitted to the court's jurisdiction prospectively only. Defendant “emphasize[d] the need for this court's guidance and clarification” on whether waiver of objections to personal jurisdiction under section 2–301 is both prospective and retroactive.

¶ 20 At oral argument, counsel for defendant argued for the first time in this court that defendant did not submit to the circuit court's jurisdiction by filing her October 12, 2011, motion. Counsel contended that defendant's motion was in compliance with section 2–301(a), requiring a party to file a “motion to dismiss the entire proceeding or any cause of action involved in the proceeding or * * * a motion to quash service of process” to preserve objections to the court's personal jurisdiction. 735 ILCS 5/2–301(a) (West 2010). Counsel asserted that defendant's motion only alleged that service of process was defective.

¶ 21 Plaintiff's counsel responded that this issue was not raised in defendant's petition for leave to appeal or her briefs on appeal to this court. Plaintiff's counsel, therefore, argued that the issue was not properly before this court.

¶ 22 We agree with plaintiff that defendant forfeited this argument by failing to raise it in her petition for leave to appeal, her opening brief, or her reply brief. Supreme Court Rule 315(c)(3) states a petition for leave to appeal shall contain “a statement of the points relied upon in asking the Supreme Court to review the judgment of the...