PNC Bank, Nat'l Ass'n v. Kusmierz

• Citation: 2022 IL 126606,193 N.E.3d 1196,456 Ill.Dec. 788
• Decision Date: 21 January 2022
• Docket Number: Docket No. 126606
• Parties: PNC BANK, NATIONAL ASSOCIATION, Appellee, v. Jerzy KUSMIERZ et al., Appellants (Brian T. Heath et al., Appellees).
• Court: Supreme Court of Illinois

2022 IL 126606

193 N.E.3d 1196

456 Ill.Dec. 788

PNC BANK, NATIONAL ASSOCIATION, Appellee,

v.Jerzy KUSMIERZ et al., Appellants (Brian T. Heath et al., Appellees).

Docket No. 126606

Supreme Court of Illinois.

Opinion filed January 21, 2022.

Giovanni Raimondi, of RAI Law, LLC, of Chicago, for appellants.

Fredrick S. Levin, Scott Sakiyama, and Justin Seccombe, of Buckley LLP, of Chicago, for appellee PNC Bank, National Association.

James A. Larson and Nathan Grzegorek, of Plunkett Cooney, P.C., of Chicago, for other appellees.

Ronald A. Damashek, of Dickinson Wright PLLC, of Chicago, for amicus curiae Illinois Land Title Association.

James V. Noonan and Solomon Maman, of Noonan & Lieberman, Ltd., of Chicago, for amicus curiae Illinois Mortgage Bankers Association.

CHIEF JUSTICE ANNE M. BURKE delivered the judgment of the court, with opinion.

¶ 1 This case concerns whether a petition for relief from a void judgment filed under section 2-1401(f) of the Code of Civil Procedure (Code) ( 735 ILCS 5/2-1401(f) (West 2016)) is subject to dismissal based on laches. The circuit court of Du Page County dismissed the petition at issue, applying both laches and the bona fide purchaser protections set forth in section 2-1401(e) of the Code (id. § 2-1401(e) ). The appellate court affirmed. 2020 IL App (2d) 190521, 443 Ill.Dec. 529, 161 N.E.3d 1181. For the reasons that follow, we affirm the appellate court's judgment.

¶ 2 BACKGROUND

¶ 3 On March 30, 2011, plaintiff, PNC Bank, National Association (PNC), filed a foreclosure complaint in the circuit court of Du Page County against defendants, Jerzy and Halina Kusmierz. The complaint sought foreclosure of the real property commonly known as 1405 Wisconsin Avenue, Lombard, Illinois, 60148. PNC retained Metro Detective Agency, LLC (Metro), to serve the summons. On March 31, 2011, Jennifer I. Magida, a Metro employee, attempted to serve defendants at the subject address but discovered that the property consisted of a vacant lot. On April 1, Magida served both defendants at the property commonly known as 1107 West Eaton Court, Palatine, Illinois, 60067. Three days later, on April 4, PNC filed a motion in the trial court requesting appointment of a special process server. The court granted the motion on the same day and entered an order appointing Metro as special process server. On April 7, PNC filed affidavits of service with the clerk of the court showing that Magida served defendants with summons on April 1 at the Palatine address.

¶ 4 Defendants failed to appear in court to defend the action. On February 27, 2012, PNC moved for an order of default against defendants and a judgment of foreclosure and sale. On February 28, 2012, the trial court granted the motions and entered the requested orders. PNC complied with all statutory notice requirements, and the property was sold at a judicial sale back to PNC. On June 12, 2012, the court confirmed the judicial sale of the property. Notices of the foregoing proceedings were mailed to defendants at the Palatine address. In 2013, Nellisa S. Ragland and Brian T. Heath purchased the property from PNC for $24,000 and constructed a single-family home on the property, financing the construction with $42,000 in personal funds and two mortgage loans totaling $292,650.

¶ 5 On September 12, 2018, more than seven years after being served with the foreclosure complaint and summons, defendants filed a petition for relief from void judgments pursuant to section 2-1401(f) of the Code ( 735 ILCS 5/2-1401(f) (West 2016)). The petition alleged that the orders entered against defendants were void ab initio because the trial court lacked personal jurisdiction over them. Defendants claimed that they were never properly served because the process server was not appointed by the court at the time of service, in violation of section 2-202(a) of the Code. See id. § 2-202(a) (requiring a private detective to be specially appointed by the court before serving process in Cook County). In their prayer for relief, defendants requested that the court quash service, vacate all orders entered against them, find that defendants are the owners of the property, restore possession of the property to them, and order PNC and the current owners to pay monetary restitution for use and occupancy and profits derived from the property from June 12, 2012, to the present.

¶ 6 Third-party respondents, Ragland and Heath, filed a combined motion to dismiss the petition pursuant to section 2-619.1 (id. § 2-619.1). They contended that they were entitled to the protections afforded to bona fide purchasers under section 2-1401(e) (id. § 2-1401(e) ) because they were unaware of the alleged jurisdictional defect and such defect was not apparent on the face of the record. They also contended that the petition was barred by laches and requested improper relief. In their supporting affidavits, respondents attested that, from 2013 to the present, they paid at least $29,500 in property taxes and $6500 in insurance coverage, in addition to the personal funds and mortgage loans they used to purchase the property and construct their home. Their mortgagee, Mortgage Electronic Registration Systems, Inc., as nominee for STC Capital Bank, was given leave by the court to join respondents’ motion. PNC subsequently filed its own section 2-619.1 combined dismissal motion, arguing that defendants’ section 2-1401 petition was barred by laches , was moot, and requested improper relief.

¶ 7 On May 21, 2019, the trial court entered an order granting the dismissal motions and dismissing the petition with prejudice. Among other things, the trial court held that defendants’ petition was barred by laches as to both PNC and third-party respondents. The appellate court affirmed the judgment of dismissal. 2020 IL App (2d) 190521, 443 Ill.Dec. 529, 161 N.E.3d 1181. The court concluded that third-party respondents were entitled to the statutory protections for bona fide purchasers under section 2-1401(e) because the alleged defect in service was not apparent on the face of the record. Id. ¶¶ 24-27 (citing 735 ILCS 5/2-1401(e) (West 2018)). The court also held that defendants’ petition, as applied to PNC, was barred by laches. Id. ¶¶ 28-34. The court held that laches may preclude a party from obtaining relief where the other party has suffered prejudice from the unreasonable delay, even where the judgment being challenged is void. Id.

¶ 8 This court allowed defendants’ petition for leave to appeal. Ill. S. Ct. R. 315 (eff. Oct. 1, 2019). We also allowed the Illinois Land Title Association and the Illinois Mortgage Bankers Association to file amicus curiae briefs in support of PNC's position. Ill. S. Ct. R. 345 (eff. Sept. 20, 2010).

¶ 9 ANALYSIS

¶ 10 On appeal to this court, defendants argue that the dismissal of their petition was improper because (1) third-party respondents do not qualify as bona fide purchasers under section 2-1401(e) and (2) laches does not apply to a petition challenging a judgment as void. The issues raised in this appeal require this court to review the dismissal of a petition pursuant to section 2-619(a)(9). 735 ILCS 5/2-619(a)(9) (West 2016). A motion to dismiss filed under this section admits the legal sufficiency of the complaint but raises an affirmative defense or other matter that avoids the legal effect of or defeats the claim. Id. ; Rehfield v. Diocese of Joliet , 2021 IL 125656, ¶ 21, 450 Ill.Dec. 677, 182 N.E.3d 123. Our review of the trial court's dismissal of defendants’ petition under section 2-619 is de novo. Rehfield , 2021 IL 125656, ¶ 23, 450 Ill.Dec. 677, 182 N.E.3d 123. We also review de novo the dismissal of a section 2-1401 petition. People v. Carter , 2015 IL 117709, ¶ 13, 398 Ill.Dec. 62, 43 N.E.3d 972.

¶ 11 In their petition, defendants contend the orders entered against them in the foreclosure action were void because service was defective and, thus, the trial court never obtained personal jurisdiction over them. Defendants’ claim is based on a violation of section 2-202(a), which provides that a private process server cannot serve process on a defendant in Cook County without first being appointed by the circuit court. 735 ILCS 5/2-202(a) (West 2016). Since the court did not specially appoint Magida until three days after service took place, defendants allege that service was defective, rendering the resulting judgments void.

¶ 12 This court recently addressed section 2-202(a) in Municipal Trust & Savings Bank v. Moriarty , 2021 IL 126290, 451 Ill.Dec. 100, 183 N.E.3d 146. In that case, we held that section 2-202(a) requires strict compliance where the case originates in a county outside Cook County but the defendant is served in Cook County. Id. ¶¶ 21, 23. We thus held that service of a defendant in Cook County by a process server who was not specially appointed to do so was defective, even though the case was filed in Kankakee County. Id. ¶ 23. In so holding, we reiterated the following well-established principles governing personal jurisdiction:

"A judgment entered by a court that lacks jurisdiction over the parties is void and may be challenged at any time, either directly or collaterally. [Citation.] 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. [Citation.] A judgment rendered without voluntary submission or service of process in strict statutory compliance is void regardless of whether the defendant had actual knowledge of the proceedings. [Citation.]" Id. ¶ 17.

¶ 13 Plaintiffs do not dispute that a void judgment is not subject to ordinary time limits and may be challenged at any time. Plaintiffs contend, however, that defendants do not have a right to relief here based on the bona fide purchaser protections set forth in section 2-1401(e) of the Code and the equitable doctrine of laches. We address each in turn.

¶ 14 I. Section 2-1401 (e)

¶ 15 Section...