Northbrook Bank & Trust Co. v. 2120 Div. LLC, 1-13-3426
| Decision Date | 24 September 2015 |
| Docket Number | No. 1-13-3426,1-13-3426 |
| Citation | 2015 IL App (1st) 133426 -U |
| Parties | NORTHBROOK BANK & TRUST COMPANY, Plaintiff-Appellee, v. 2120 DIVISION LLC, an Illinois Limited Liability Company, 1353 SEDGWICK LLC, an Illinois Limited Liability Company, OLDTOWN MANAGEMENT LLC, an Illinois Limited Liability Company, and ALEX BOLTIN, Defendants-Appellants. |
| Court | United States Appellate Court of Illinois |
NOTICE: This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1).
Appeal from the Circuit Court of Cook County
Honorable John H. Ehrlich, Judge Presiding
¶ 1 Held: Summary judgment affirmed where borrowers' defenses to mortgage foreclosure were barred by D'Oench, Duhme doctrine and lender's affidavit of default and amounts owed was competent and unopposed by counteraffidavit or other evidence.
¶ 2 This is an appeal from the foreclosure of separate mortgage loans taken in 2007 and 2008 by three limited liability companies and personally guaranteed by Alex Boltin. After judicial sales netted less than the mortgage debts, the trial judge confirmed the sales and entered joint and several deficiency judgments against the companies and Boltin for $359,193, $262,702, and$2,279,954, or a total of nearly $3 million. We will refer to these appellants collectively as the borrowers or the Boltin defendants. The party we refer to as the lender is Northbrook Bank & Trust Company, or Northbrook Bank, which was not the original lender. The original lender was Ravenswood Bank, a Chicago entity that failed in 2010 and was taken over by the Federal Deposit Insurance Corporation. The FDIC sold the Boltin mortgage notes and other assets to Northbrook Bank. The Boltin defendants contend the trial judge erred by striking their affirmative defenses as factually deficient and barred by a principle of banking law that when the FDIC or its assignees attempt to collect on a failed bank's promissory note, the borrower or guarantor is estopped from relying on an unrecorded agreement with the failed bank. See D'Oench, Duhme & Co. v. Federal Deposit Insurance Corp., 315 U.S. 447 (1942). The second claim on appeal is that granting the lender's motion for summary judgment was in error because the decision was based on an affidavit from a Northbrook Bank vice president who, according to the borrowers, had no personal knowledge of loan records created and maintained by Ravenswood Bank. Northbrook Bank timely filed a response brief, but the borrowers have not filed a reply brief.
¶ 3 We first consider the lender's contentions that some of the appellate arguments are moot or have been forfeited or waived. The lender argues that any portion of the appeal which would affect the rights, titles, or interests of third-party purchasers of the subject real estate should be dismissed as moot because the Boltin defendants failed to obtain a Rule 305(k) order staying execution of the judgment before filing their notice of appeal. Ill. S. Ct. R. 305 (eff. July 1, 2004). This rule provides:
Ill. S. Ct. R. 305 (eff. July 1, 2004).
¶ 4 Thus, Rule 305(k) protects a third-party buyer from the reversal or modification of a judgment regarding that property. Furthermore, it is well established that without a stay, an appeal seeking possession or ownership of specific property that has already been conveyed to a third party is moot. Town of Libertyville v. Moran, 179 Ill. App. 3d 880, 886, 535 N.E.2d 82, 86 (1989).
¶ 5 The subject properties are in Chicago and include a ground commercial unit and first floor residential condominium unit in a four-unit building at 2120 West Division Street, a commercial unit located in a four-unit building at 1353 North Sedgwick Street, and a very large single-family residence situated at 331-333 West Schiller Street. At the court-ordered sheriff's sale, Northbrook Bank credit bid on the four properties, meaning that it bid the amount it was owed for the loans, interest, and the expenses of foreclosing. 2 Law of Real Estate Financing § 12:84 (updated July 2015). It was outbid on only the Schiller property. The trial judge confirmed the four sales on September 23, 2013, and the Boltin defendants filed their notice of appeal within 30 days. Because there was no stay on the enforcement of the judgment orders, the lender sold the Division Street residential unit to a third party on December 5, 2013, the Division Street commercial unit to a third party on April 8, 2014, and the Sedgwick property on December 10, 2014.
¶ 6 The lender is not asking us to disregard any of the borrowers' appellate arguments, but to instead curtail the effect of our ruling in accordance with Rule 305 so that we do not diminish the rights of the third-party purchasers. However, we need not analyze this request until it becomes apparent whether the appeal is successful in undoing the judgment order. We will return to this argument below.
¶ 7 The lender next contends we should limit the scope of our consideration to the only order listed in the borrowers' notice of appeal, which is the order confirming the judicial sales. The lender argues that by failing to list the orders striking the affirmative defenses and granting summary judgment, the borrowers forfeited or waived review of any error in those rulings. We are not persuaded by this argument.
¶ 8 Illinois Supreme Court Rule 303(b)(2) requires a notice of appeal to "specify the judgment or part thereof appealed from and the relief sought from the reviewing court." Ill. Sup. Ct. R. 303(b)(2) (eff. Jan.1, 2015). However, the briefs, not the notice of appeal itself, specify the precise points to be relied on for reversal. In re Estate of Sewart, 274 Ill. App. 3d 298, 302, n. 1, 652 N.E.2d 1151, 1155 (1995). "The notice of appeal, which is liberally construed, serves the purpose of informing the prevailing party in the trial court that the unsuccessful litigant seeks a review by a higher court." Sewart, 274 Ill. App. 3d at 302, n. 1, 652 N.E.2d at 1155. Where the notice adequately sets forth the judgment complained of and the relief sought, the notice is effective and the appellate court has jurisdiction to consider the issues. Citimortgage, Inc. v. Bukowski, 2015 IL (1st) 14078, ¶ 13, 26 N.E.3d 495; Taylor v. Peoples Gas Light & Coke Co., 275 Ill. App. 3d 655, 659, 656 N.E.2d 134, 138 (1995).
¶ 9 It is not necessary that the notice of appeal identify a particular order to confer jurisdiction, as long as the order that is identified in the notice of appeal directly relates back tothe order or judgment sought to be reviewed. Taylor, 275 Ill. App. 3d at 659, 656 N.E.2d at 138. Stated another way, an appeal from a final judgment order entails review of not only the final judgment order, but also any interlocutory orders that were a " 'step in the procedural progression' " leading to the judgment. Bukowski, 2015 IL (1st) 140780, ¶ 13, 26 N.E.2d 495. This well-established principle is illustrated by Burtell v. First Charter Service Corp., 76 Ill. 2d 427, 431-36, 394 N.E.2d 380 (1979), in which the court held that a notice of appeal referring only to a final judgment order was sufficient to confer jurisdiction to review a prior order for an accounting, because the final judgment was based on the accounting. In Perry v. Minor, 319 Ill. App. 3d 703, 708-09, 745 N.E.2d 113, 118 (2001), orders barring the presentation of testimony or evidence at trial were directly related to the final judgment order, and thus, were reviewable based on a notice of appeal referencing only the final judgment order. However, in Illinois Central Gulf Railroad Co. v. Sankey Brothers, Inc., 78 Ill. 2d 56, 61, 398 N.E.2d 3, 5 (1979), where the notice of appeal listed only a summary judgment order and not an earlier order dismissing a counterclaim, the court had no jurisdiction to review the propriety of the dismissal. And, in Long v. Soderquist, 126 Ill. App. 2d 1059, 1062, 467 N.E.2d 1153, 55 (1984), a notice of appeal from a summary judgment order as to certain counts against certain defendants, that did not refer to an earlier order dismissing other counts against other defendants, did not permit the reviewing court to consider the dismissal.
¶ 10 While the instant appeal was pending, a mortgage lender's contention that its borrower's notice of appeal was defective was rejected by another panel of this First District in Bukowski, 2015 IL App (1st) 140780, ¶ 13, 26 N.E.3d 495. The only order referenced in the notice of appeal in that case was an order confirming the judicial sale and, like here, the lender contended that the appellate court should not review the dismissal of affirmative defenses or the entry ofsummary judgment. Bukowski, 2015 IL (1st) 140780, ¶ 12, 26 N.E.2d 495. The court denied the lender's request, because the orders dismissing the defendant's affirmative defenses and entering summary judgment for the plaintiff were steps in the procedural progression of the foreclosure action that ultimately led to the confirmation of the sale. Bukowski, 2015 IL (1st) 140780, ¶ 13, 26 N.E.2d 495. The court also noted that when the notice of appeal was issued (whose...
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