Nationstar Mortg., LLC v. Canale

• Decision Date: 19 June 2014
• Docket Number: No. 2–13–0676.,2–13–0676.
• Citation: 381 Ill.Dec. 144,10 N.E.3d 229,2014 IL App (2d) 130676
• Parties: NATIONSTAR MORTGAGE, LLC, Plaintiff–Appellee, v. Wayne CANALE, a/k/a Wayne F. Canale, Defendant–Appellant (RBS Citizens, N.A., SBM Charter One Bank, N.A., Unknown Owners, and Nonrecord Claimants, Defendants).
• Court: United States Appellate Court of Illinois

2014 IL App (2d) 130676

10 N.E.3d 229

381 Ill.Dec. 144

NATIONSTAR MORTGAGE, LLC, Plaintiff–Appellee,

v.Wayne CANALE, a/k/a Wayne F. Canale, Defendant–Appellant (RBS Citizens, N.A., SBM Charter One Bank, N.A., Unknown Owners, and Nonrecord Claimants, Defendants).

No. 2–13–0676.

Appellate Court of Illinois,

Second District.

April 9, 2014.

Rehearing Denied June 19, 2014.

Joseph M. Williams, of Law Offices of Joseph M. Williams, of Winfield, for appellant.

Ralph T. Wutscher, F. John McGinnis, and Kevin M. Hudspeth, all of McGinnis Wutscher Beiramee LLP, of Chicago, for appellee.

OPINION

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

¶ 1 Defendant, Wayne Canale, the property owner in a foreclosure action, appeals after the trial court confirmed the judicial sale of the property at issue. He asserts that, because plaintiff, Nationstar Mortgage, LLC, failed to comply with the statutory pleading requirements for a foreclosure action (see 735 ILCS 5/15–1504(a) (West 2010)), the trial court lacked subject matter jurisdiction to enter a foreclosure judgment for plaintiff. We disagree, and thus we affirm.

¶ 2 I. BACKGROUND

¶ 3 Plaintiff filed a foreclosure complaint relating to the property at 5S365 Vest Avenue, Naperville, on September 8, 2011. It made defendant a defendant as the property owner and borrower and alleged that he was in default on the note at issue. It also named two banks—RBS Citizens, N.A. (RBS), and SBM Charter One Bank, N.A. (SBM)—and unknown owners and nonrecord claimants. The complaint stated that the “mortgagee, trustee or grantee in the Mortgage” was Mortgage Electronic Registration Systems, Inc., as nominee for Silver Mortgage Bancorp, Inc. The attached mortgage was consistent with that allegation. Plaintiff stated that the capacity in which it brought the action was “mortgagee and holder of the note.” However, the attached note showed a single endorsement, from Silver Mortgage Bancorp, Inc., to Ohio Savings Bank (OSB), “ITS SUCCESSORS AND/OR ASSIGNS.” Also part of the record is a mortgage modification agreement between defendant and Amtrust Bank (Amtrust).

¶ 4 RBS and SBM appeared and answered. Defendant did neither. Plaintiff moved for summary judgment against the banks and default judgment against defendant.

¶ 5 On June 5, 2012, the court entered a judgment of foreclosure in favor of plaintiff, i.e., it entered judgment for $107,466.04 in favor of plaintiff and ordered the sale of the property to satisfy that judgment. The judgment also described the mortgage lien as plaintiff's. The sale took place on October 11, 2012. Plaintiff bid the judgment indebtedness and was the winning bidder.

¶ 6 Plaintiff moved to confirm the sale. Defendant appeared pro se and filed an objection. His objection included the assertions that he had been present at the sale and that no public offering of the property had occurred. The court confirmed the sale on April 4, 2013. On May 3, 2013, defendant moved to vacate the confirmation, arguing that a slight delay in his arrival in the courtroom resulted in his inability to argue his objection. However, for the first time, he also asserted, on information and belief, that the original mortgagee had never properly assigned the note and mortgage to plaintiff and that plaintiff was asserting rights “without showing whether any proper assignment occurred between [the known earlier owners of the note and mortgage] over time.” He described this as an issue of standing.

¶ 7 The court denied the motion, ruling that defendant had forfeited the standing issue by failing to file an answer. Defendant timely appealed.

¶ 8 II. ANALYSIS

¶ 9 On appeal, defendant concedes that, in Lebron v. Gottlieb Memorial Hospital, 237 Ill.2d 217, 252–53, 341 Ill.Dec. 381, 930 N.E.2d 895 (2010), the supreme court held that a lack of standing is an affirmative defense, which the defendant forfeits if he does not timely plead. However, defendant asserts that, in a foreclosure action, standing must be pleaded by the plaintiff. Specifically, under the Illinois Mortgage Foreclosure Law (735 ILCS 5/15–1101 et seq. (West 2010)), the plaintiff must allege the “[c]apacity in which [the] plaintiff brings this foreclosure,” i.e., “the legal holder of the indebtedness, a pledgee, an agent, the trustee under a trust deed or otherwise.” 735 ILCS 5/15–1504(a)(3)(N) (West 2010). Noting that plaintiff's allegation that it was the “mortgagee and holder of the note” was unsupported (if not refuted) by the attached mortgage and note, defendant concludes that plaintiff failed to plead its standing and that the resulting judgment was void for lack of subject matter jurisdiction, a defect that cannot be forfeited (Lebron, 237 Ill.2d at 252, 341 Ill.Dec. 381, 930 N.E.2d 895).

¶ 10 In Deutsche Bank National Trust Co. v. Gilbert, 2012 IL App (2d) 120164, ¶ 16, 367 Ill.Dec. 665, 982 N.E.2d 815, the defendant likewise argued that the Illinois Mortgage Foreclosure Law shifted to the plaintiff the burden to plead and prove standing. We were not required to resolve that issue, “because even if [the defendant] bore the burden of showing that [the plaintiff] lacked standing, he met that burden.” Id. We need not resolve the issue here either. Here, even if plaintiff had the burden to plead its standing, and even if it failed to do so, its failure to do so did not deprive the trial court of subject matter jurisdiction.

¶ 11 Defendant relies almost exclusively on City National Bank of Hoopeston v. Langley, 161 Ill.App.3d 266, 112 Ill.Dec. 845, 514 N.E.2d 508 (1987), which does tend to support his contention. There, sua sponte, the appellate court deemed it “necessary to address the trial court's subject-matter jurisdiction based upon the short form statutory complaint for foreclosure.” Id. at 275, 112 Ill.Dec. 845, 514 N.E.2d 508. The court observed that the plaintiff was statutorily required to “attach a copy of the mortgage and a copy of the note secured thereby.” Id. at 276, 112 Ill.Dec. 845, 514 N.E.2d 508 (citing Ill.Rev.Stat.1983, ch. 110, ¶ 15–108(2) (now 735 ILCS 5/15–1504(a)(2) (West 2010))). Noting that the plaintiff, in violation of that requirement, had “fail[ed] to match up documentation,” the court deemed the judgment void. Id. at 277, 112 Ill.Dec. 845, 514 N.E.2d 508.

¶ 12 The difficulty is that Langley rests on a defunct view of subject matter jurisdiction. In Belleville Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc., 199 Ill.2d 325, 264 Ill.Dec. 283, 770 N.E.2d 177 (2002), the supreme court explained that, under the Illinois Constitution of 1870, “in cases involving purely statutory causes of action, * * * unless the statutory requirements were satisfied, a court lacked jurisdiction to grant the relief requested.” Id. at 336–37, 264 Ill.Dec. 283, 770 N.E.2d 177. However, under our present constitution, “[w]ith the exception of the circuit court's power to review administrative action, which is conferred by statute, a circuit court's subject matter jurisdiction is conferred entirely by our state constitution.” Id. at 334, 264 Ill.Dec. 283, 770 N.E.2d 177. That jurisdiction extends to all “ ‘justiciable matters.’ ” Id. (quoting Ill. Const. 1970, art. VI, § 9). “Thus, in order to invoke the subject matter jurisdiction of the circuit court, a plaintiff's case, as framed by the complaint or petition, must [merely] present a justiciable matter.” Id. Although the plaintiff's pleadings thus are pertinent, “[s]ubject matter jurisdiction does not depend upon the legal sufficiency of the pleadings.” Id. at 340, 264 Ill.Dec. 283, 770 N.E.2d 177. “Indeed, even a defectively stated claim is sufficient to invoke the court's subject matter jurisdiction * * *.” In re Luis R., 239 Ill.2d 295, 301, 346 Ill.Dec. 578, 941 N.E.2d 136 (2010). “[T]he only consideration is whether the alleged claim falls within the general class of cases that the court has the inherent power to hear and determine. If it does, then subject matter jurisdiction is present.” (Emphasis in original.) Id.

¶ 13 In Belleville Toyota, the supreme court went on the explain the practical importance of this broad view of subject matter jurisdiction:

“Our conclusion, while firmly rooted in our constitution, is also consistent with the trend of modern authority favoring finality of judgments over alleged defects in validity. [Citations.] Labeling the requirements in statutory causes of action ‘jurisdictional’ would permit an unwarranted and dangerous expansion of the situations where a final judgment may be set aside on a collateral attack. [Citation.] Even if the statutory requirement is considered a nonwaivable condition, the same concern over the finality of judgments arises. Once a statutory requirement is deemed ‘nonwaivable,’ it is on equal footing with the only other nonwaivable conditions that would cause a judgment to be void, and thus subject to collateral attack—a lack of subject matter jurisdiction, or a lack of personal jurisdiction. [Citation.] As our appellate court has observed, ‘[b]ecause of the disastrous consequences which follow when orders and judgments are allowed to be collaterally attacked, orders should be characterized as void only when no other alternative is possible.’ [Citations.]” Belleville Toyota, 199 Ill.2d at 341, 264 Ill.Dec. 283, 770 N.E.2d 177.

¶ 14 In Langley, the appellate court equated the plaintiff's violation of the statutory requirements for a foreclosure action with the trial court's lack of subject matter jurisdiction. See also Mortgage Electronic Registration Systems, Inc. v. Barnes, 406 Ill.App.3d 1, 6, 346 Ill.Dec. 118, 940 N.E.2d 118 (2010) (suggesting that trial court had jurisdiction of foreclosure action because complaint “was legally and factually sufficient and included allegations relative to standing”). This equation is error. Those requirements might go to the complaint's legal sufficiency, but they do not pertain to the court's subject matter jurisdiction. The latter turns only...