JP Morgan Chase Bank, Nat'l Ass'n v. Talaganov

• Decision Date: 02 November 2018
• Docket Number: No. 1-18-0578,1-18-0578
• Citation: 116 N.E.3d 420,2018 IL App (1st) 180578,426 Ill.Dec. 571
• Parties: JP MORGAN CHASE BANK, NATIONAL ASSOCIATION, Successor by Merger to Chase Home Finance LLC, Successor by Merger to Chase Manhattan Mortgage Corporation, Successor by Merger With Chase Mortgage Company-West, f/k/a Mellon Mortgage Company, Plaintiff, v. Bozidar TALAGANOV a/k/a Bob Talaganov; Kazimiera Talaganov; JP Morgan Chase Bank, N.A.; RBS Citizens, National Association, Successor by Merger to Charter One Bank, N.A.; Unknown Owners and Non Record Claimants; Defendants (Kazimiera Talaganov, Defendant-Appellant, v. RBS Citizens, National Association, Successor by Merger to Charter One Bank, N.A., Defendant-Appellee).
• Court: United States Appellate Court of Illinois

2018 IL App (1st) 180578

116 N.E.3d 420

426 Ill.Dec. 571

JP MORGAN CHASE BANK, NATIONAL ASSOCIATION, Successor by Merger to Chase Home Finance LLC, Successor by Merger to Chase Manhattan Mortgage Corporation, Successor by Merger With Chase Mortgage Company-West, f/k/a Mellon Mortgage Company, Plaintiff,

v.Bozidar TALAGANOV a/k/a Bob Talaganov; Kazimiera Talaganov; JP Morgan Chase Bank, N.A.; RBS Citizens, National Association, Successor by Merger to Charter One Bank, N.A.; Unknown Owners and Non RecordClaimants; Defendants

(Kazimiera Talaganov, Defendant-Appellant,

v.RBS Citizens, National Association, Successor by Merger to Charter One Bank, N.A., Defendant-Appellee).

No. 1-18-0578

Appellate Court of Illinois, First District, SIXTH DIVISION.

November 2, 2018

Law Offices of Jacobson and Tchernev, Ltd., of Chicago (Ivo Tchernev, of counsel), for appellant.

The Wirbicki Law Group, LLC, of Chicago (Thomas J. Cassady, of counsel), for appellee.

JUSTICE HARRISdelivered the judgment of the court, with opinion.

¶ 1Defendant-appellant, Kazimiera Talaganov, appeals the order of the circuit court granting defendant-appellee RBS Citizens, National Association's (RBS), petition for turnover of surplus funds.On appeal, she contends that the court erred in allowing RBS to prove-up its lien more than 30 days after the order approving sale, where RBS did not seek a relief from judgment pursuant to section 2-1401 of the Code of Civil Procedure(Code)( 735 ILCS 5/2-1401(West 2016) ).For the following reasons, we affirm.

¶ 2 JURISDICTION

¶ 3The trial court granted RBS's petition on February 15, 2018.Talaganov filed her notice of appeal on March 15, 2018.Accordingly, this court has jurisdiction pursuant to Illinois Supreme Court Rules 301(eff. Feb. 1, 1994) and 303 (eff. July 1, 2017), governing appeals from final judgments entered below.

¶ 4 BACKGROUND

¶ 5 JP Morgan Chase Bank, National Association(JP Morgan Chase), filed a mortgage foreclosure action that included as defendants Talaganov, as mortgagor, and RBS.RBS filed an appearance and answer to the complaint, admitting that "it has an interest in the subject property by virtue of a Mortgage executed on March 16, 2006 * * * in the amount of $179,300.00 to Charter One Bank, N.A."RBS further admitted that "its lien is inferior only to that of the Plaintiff."RBS requested that "its interest in the subject property be recognized as a valid and subsisting lien on the subject premises and that in the event that a judgment is entered in this cause, that its lien be included in said judgment."RBS also requested that it be entitled to any surplus funds.Talaganov did not file an appearance or answer.

¶ 6 On December 12, 2013, the circuit court entered a judgment of foreclosure (JOF) and a default order against Talaganov.The JOF stated that RBS "has a valid and subsisting lien in the amount of $179,300.00, which lien is junior to the lien of the Plaintiff."Prior to the scheduled judicial sale, Talaganov filed a motion to vacate the JOF, which the trial court granted.On April 21, 2014, Talaganov filed an answer to JP Morgan Chase's complaint and, in response to paragraph 3(L) involving RBS's lien, stated that they"do not answer this section as Plaintiff does not make a factual allegation."

¶ 7 JP Morgan Chase filed a motion for summary judgment against defendants on November 4, 2015.RBS did not file a response, nor did it attend or participate in the hearing.After the hearing, the circuit judge Anna Loftus entered a JOF in favor of JP Morgan Chase and against defendants Talaganov and RBS.In the order, Judge Loftus found that RBS "has a valid and subsisting lien in the amount TBD, which lien is junior to the lien of the Plaintiff."The order also provided that "remittance of any surplus [is] to be held by the person appointed by the court to conduct the sale until further order of the court, pursuant to 735 ILCS 5/15-1512(d)."

¶ 8Judge Loftus entered an order approving report of sale and distribution and possession on September 22, 2016.After the judicial sale, a surplus of $66,043.74 remained.The order approving sale provided that the surplus "be turned over to the Circuit Clerk of Cook to hold pending court order of its distribution."

¶ 9 On November 15, 2016, RBS filed a petition for turnover of surplus funds with the presiding judge of the chancery division, Judge Moshe Jacobius.Attached to the petition was an affidavit indicating an amount owed to RBS by Talaganov of $182,657.84.Judge Jacobius continued the petition so that RBS could obtain an order from Judge Loftus setting forth the specific amount due to RBS.On February 1, 2017, RBS filed a motion to determine lien amount before Judge Loftus, and the judge struck the motion for lack of jurisdiction.The court found that Judge Jacobius's order "requires RBS to have an adjudicated lien to present for distribution" but does not "revest this Court with jurisdiction to effectuate an adjudication" because more than 30 days have passed since the order approving sale was entered.It reasoned that "an adjudication of RBS's lien would require a new, substantive ruling, and can identify no authority for the proposition that it may do so without jurisdiction."

¶ 10 After this ruling, Talaganov filed a petition for distribution of proceeds of sale and surplus before Judge Jacobius.RBS also filed a petition for turnover of surplus funds.Judge Jacobius granted RBS's petition and denied Talaganov's petition.In the order, the judge found that a petition for turnover of surplus funds

"is a separate proceeding under Section 15-1512(d) and General Administrative Order (GAO) 2003-03.These provisions allow this Court to Disburse [sic ] surplus funds well beyond 30 days after an order approving sale has been entered.While these provisions do not allow this Court to amend or rescind the Judgment of Foreclosure or Order Approving Sale, these provisions also do not bar the Court from considering new evidence in support of a Petition for Turnover of Surplus Funds."

Since Talaganov did not deny RBS's lien amount of $179,300 and RBS's lien priority had been established by the JOF, RBS was entitled to the surplus funds.Talaganov filed this timely appeal.

¶ 11 ANALYSIS

¶ 12 In general, this court will not disturb the circuit court's order of distribution of the surplus absent an abuse of discretion.JP Morgan Chase Bank, N.A. v. Bank of America, N.A. , 2015 IL App (1st) 140428, ¶ 42, 397 Ill.Dec. 905, 43 N.E.3d 546.Talaganov, however, raises the issue of the circuit court's jurisdiction to grant RBS's surplus petition, and her argument utilizes section 15-1512 of the Code."Questions relating to the circuit court's jurisdiction and the interpretation of a statute both present issues of law, which we review de novo ."J&J Ventures Gaming, LLC v. Wild, Inc. , 2016 IL 119870, ¶ 25, 409 Ill.Dec. 31, 67 N.E.3d 243.

¶ 13 Talaganov contends that Judge Jacobius erred in determining the amount of RBS's lien and granting RBS's petition for the turnover of surplus funds, where RBS failed to prove up the amount of its lien within 30 days of the order approving sale.She argues that since the JOF listed RBS's lien amount as "TBD," determination of that amount was an improper modification of the JOF because it was made more than 30 days after entry of the order approving sale.See735 ILCS 5/2-1203(West 2016)(requiring that if a party wants to modify a circuit court's final order in a nonjury case, a posttrial motion must be filed within 30 days of the trial court's order).She concludes that Judge Jacobius lacked jurisdiction to determine the lien amount more than 30 days after the order approving sale.

¶ 14 While the circuit court does lose jurisdiction to modify a final order more than 30 days after the order is entered, the law also recognizes the court's inherent power to enforce its orders and decrees, even if it does so after the 30-day period.Cities Service Oil Co. v. Village of Oak Brook , 84 Ill. App. 3d 381, 384, 39 Ill.Dec. 626, 405 N.E.2d 379(1980).

¶ 15 In Armour & Co. v. Mid-America Protein, Inc. , 37 Ill. App. 3d 75, 76, 344 N.E.2d 639(1976), the mortgagee Armour filed a complaint that prayed for foreclosure, a personal deficiency decree, a judicial sale, and appointment for a receiver in the event of a deficiency.The circuit court entered a foreclosure judgment on the complaint, and a sheriff's sale was conducted.An order approving sale was entered by the circuit court on January 30, 1975.Id.Three months later, on April 30, 1975, Armour moved for entry of a deficiency decree against the defendants.Id.On August 1, 1975, the court entered a personal deficiency decree in the amount of $1,204,950.47, and the defendants appealed.Id. at 77, 344 N.E.2d 639.The defendants argued that the order approving sale was a final order and, thus, the court was prevented from entering the deficiency decree more than 30 days after the order approving sale.Id.

¶ 16This court disagreed, reasoning that "[t]he law in Illinois is that the trial court retains jurisdictions [sic ] in a case until it has disposed of all matters before the court."Id.The court noted that although the order was final, it did not dispose of all matters and thus the circuit court retained jurisdiction until all of the issues in the case, including the personal deficiency, were resolved.Id.Since Armour did not deny liability for the deficiency, the circuit court had jurisdiction to enter the decree.Id. at 78, 344 N.E.2d 639.

¶ 17 Here, the circuit court in its JOF specifically found that RBS had a valid and existing junior lien with the amount "TBD," and Talaganov did not deny liability for the lien.Even if the JOF did not expressly reserve the court's jurisdiction to determine the amount, it must be given that effect in order for the circuit court to dispose of all matters before it as set forth in the JOF.See alsoHome State Bank/National Ass'n v. Potokar , 249 Ill....