JoJan Corp. v. Brent

• Decision Date: 25 August 1999
• Docket Number: No. 1-98-0849.,1-98-0849.
• Citation: 307 Ill. App.3d 496,240 Ill.Dec. 906,718 N.E.2d 539
• Parties: JOJAN CORPORATION, Plaintiff-Appellee, v. Robert BRENT, Defendant-Appellant.
• Court: United States Appellate Court of Illinois

718 N.E.2d 539

307 Ill. App.3d 496

240 Ill.Dec. 906

JOJAN CORPORATION, Plaintiff-Appellee, v. Robert BRENT, Defendant-Appellant.

No. 1-98-0849.

Appellate Court of Illinois, First District, Third Division.

August 25, 1999.

Rehearing Denied October 18, 1999.

Modified Opinion Filed October 20, 1999.

Lamont Cranston Strong, of counsel, Chicago, for Robert Brent-Appellant.

Louis R. Schroeder, of counsel, Chicago, for Cole Taylor Bank, as Trustee.

Richard L. Hoffman, of counsel, Mesa Arizona, for JoJan Corporation-Appellee.

MODIFIED ON DENIAL OF REHEARING

Justice CERDA delivered the opinion of the court:

In this case, defendant, Robert Brent, seeks a declaration that he is the legal owner of property foreclosed on and acquired at a judicial sale by plaintiff, JoJan Corporation, where the foreclosure judgment entered by the circuit court in February 1985 was subsequently set aside as void.

In April 1984, JoJan filed a three-count complaint against Brent and several other parties (collectively "the defendants"), to foreclose two mortgage notes and a mechanic's lien it allegedly acquired by assignment from New World Construction, Inc. (New World), and R.M.C., Inc., respectively, on real property in which the defendants possessed an ownership interest. The complaint also sought recovery for damages as a result of the defendants' alleged breach of contract in not paying the amounts secured by the foregoing instruments.

Because the defendants failed to appear or otherwise respond, the circuit court entered a default judgment of foreclosure on February 13, 1985, in favor of JoJan. The court determined, in relevant part, that service of process by publication had been properly effectuated upon the defendants, and that JoJan was the legal holder of the mortgage notes and "the claim of R.M.C. * * * for mechanic lien in the sum of $3,066.54, which * * * is * * * good and valid." The court further determined the original mechanic's lien of R.M.C. had been "lost or misplaced and [could not] be found" by JoJan, "and in its stead, * * * [a] duplicate stamped cop[y] of said * * * Mechanic Lien, [had been presented] showing said document[] to have been properly recorded." The court noted that "true copies [of the security instruments] ha[d] been offered in evidence," and were taken by the court as proof thereof. The court ordered the sale of the subject property to satisfy the outstanding debt, and directed the issuance of a sheriff's deed conveying title to the successful bidder in the event the property remained unredeemed by its owners.

The subject property was sold to JoJan at a judicial sale held in March 1985. On April 9, 1985, the circuit court entered an order approving the sheriff's report of sale and distribution of the proceeds. The defendants failed to exercise their redemption rights within the time set by the court, and on October 1, 1985, JoJan received the sheriff's deed issuing it title to the subject property.

On October 11, 1985, Brent filed a special and limited appearance contesting the circuit court's jurisdiction over him at the time the judgment of foreclosure was entered. Following an evidentiary hearing in January 1986, the circuit court found that Brent had been properly served by publication. The court denied Brent's special appearance and upheld the conveyance of the subject property to JoJan. Brent filed an amended motion for reconsideration, which was denied on April 4, 1986.

Three days after the denial of Brent's amended motion to reconsider, on April 7, 1986, JoJan quitclaimed the subject property to a third-party, Jay Shavin.

Brent did not seek review of either the orders denying his special appearance or his motion to reconsider that decision.

On April 28, 1986, Brent instituted a collateral attack on the February 1985 foreclosure judgment by filing a motion to expunge said judgment on the basis that it was void for want of jurisdiction. In his motion, Brent asserted inter alia that JoJan's suit to foreclose the mechanic's lien was not brought within two years of the completion date of R.M.C.'s work as required by section 9 of the Mechanic's Lien Act (Act) (Ill.Rev.Stat.1979, ch. 82, par. 9)). According to Brent, the actual completion date of R.M.C's work occurred on March 5, 1982, and not April 15, 1984, as alleged by JoJan in its complaint. In support of this contention, Brent presented a copy of a claim for mechanic's lien filed against the subject property by R.M.C. That claim had been presented as an exhibit to a complaint filed earlier by R.M.C. against Brent to foreclose on the same mechanic's lien claimed by JoJan, and states that "the last of * * * material, fixtures, labor and services was so furnished, delivered and performed on the 5th day of March, 1982." Thus, Brent argued the court lacked jurisdiction to foreclose on the property, and consequently the February 1985 judgment was void.

In response, JoJan filed a special and limited appearance asserting that service of process upon it was necessary before the court could rule on Brent's motion. The court agreed and quashed the motion. Brent filed a notice of appeal from this order in September 1986.

In May 1988, and during the pendency of the appeal, Shavin transferred the subject property to Harris Trust and Savings Bank (Harris Trust), as trustee of trust number 44233, for $107,000. The deed conveyed to Harris Trust was recorded with the recorder's office on May 25, 1988.

On the original appeal, Brent claimed inter alia that the judgment of foreclosure was void for lack of jurisdiction. This court found Brent's motion and the materials submitted in support thereof presented a question of fact as to whether the circuit court had subject matter jurisdiction to foreclose on JoJan's asserted mechanic's lien. This court held that the foreclosure judgment would be void if the date reflected by R.M.C.'s pleadings was indeed the completion date. Therefore, the judgment of foreclosure was reversed, and the case was remanded for a determination of whether JoJan's action was barred for failure to be brought within the time specified by the Act, and for "such other actions or proceedings that may be appropriate." JoJan Corporation v. Brent, 182 Ill.App.3d 70, 73-75, 130 Ill.Dec. 627, 537 N.E.2d 956, 959 (1989) (JoJan I).

On August 23, 1990, and before the circuit court addressed this court's mandate issued in JoJan I, Brent filed a third-party complaint against Bernard Allen Fried, the attorney for JoJan and an alleged officer of the corporation, Jay Shavin, and other individuals and entities purportedly possessing an interest in the subject property. The third-party complaint claims JoJan fraudulently deprived Brent of the property by filing its suit to foreclose under security instruments it knew it held no rights. The complaint requests a declaration that Brent is the legal owner of the property, and is entitled to immediate possession of the premises. The complaint further seeks money damages for the third-party defendants' unlawful possession and use of the property.

On October 30, 1990, the circuit court transferred the case to the mechanic's lien division, Judge Norman Sands, for a determination of whether JoJan's foreclosure suit premised upon the mechanic's lien was timely filed. After a hearing, Judge Sands found the two-year period within which JoJan was required to assert its rights had expired before April 1984, and thus concluded JoJan had no valid lien upon which to foreclose at the time it filed its complaint. In accordance with Judge Sand's finding, and pursuant to this court's decision in JoJan I, the circuit court declared the foreclosure judgment void. On December 18, 1991, the court entered an order setting aside the judgment and vacating its February 1985 order in its entirety.

Notably, the court made no findings or conclusions concerning the validity of the April 1985 order confirming the judicial sale and directing the issuance of the sheriff's deed conveying title to JoJan. The court further did not address the issue of title to the property.

On July 21, 1995, Brent filed a first-amended third-party complaint adding Harris Trust as a defendant. The amended complaint again asserted that the third-party defendants fraudulently deprived Brent of the subject property, and seeks in part to quiet Harris Trust's title on the grounds that the title it received from Shavin was a nullity and of no effect. The complaint requests the court to confirm Brent as the legal title holder to the property and to grant him immediate possession of the premises.

On October 18, 1995, Cole Taylor Bank (Cole Taylor), as successor trustee to Harris Trust, filed its appearance as a defendant in Brent's third-party action. Brent was granted leave to file a second-amended third-party complaint against Cole Taylor on November 1, 1995.

On September 25, 1997, Brent filed a "Motion to Expunge Void Order and Sheriff's Deed." Brent's motion seeks a declaration that both the April 1985 order approving the judicial sale of the property, and the sheriff's deed issued to JoJan, are nullities on the basis that the circuit court had no authority to order the sale. According to the motion, the sale was null and void since the foreclosure decree directing the sale was itself null and void. Consequently, the sheriff's deed conveyed no valid title to JoJan, and legal title remained with Brent. The motion requests the expungement of the court's confirmation order as well as the sheriff's deed issued to JoJan, and further seeks title and possession of the property.

After initially determining that Brent's motion represented a section 2-1401 petition to vacate the judgment of sale (735 ILCS 5/2-1401 (West 1996)), the circuit court found Cole Taylor's interest in the subject property was protected under both section 2-1401(e) of the Code of Civil Procedure (Code) (735 ILCS 5/2-1401(e) (West 1996)), and Supreme Court Rule 305(j) (155 Ill.2d...