No. 2--07--0140 Filed: 6-4-08

______________________________________________________________________________ IN THE AP PE LLATE COU RT OF ILLIN OIS SECOND DI STRICT

______________________________________________________________________________ JP MORGAN CHASE BANK, as Successor ) Appeal from the Circuit Court in Interest to Chase Manhattan B ank USA, ) of Ka ne Co un ty. N.A., ) ) Plaintiff-Appellee, ) ) v. ) No. 06--CH--227 ) BRECK FANKHAUSER, ELAI NE ) FANKHA

USER, STEVE

L. GE ORGAS, ) and LEA GEORG

AS, ) ) Defend ants ) ) (Nationa l City Mortga ge Co., D efenda

nt- ) Honorab le Appellan t; Pathfind

er Holdin gs, L LC, ) Michael J. Colwell, Intervenor-Appe llee). ) Judge , Pres idin g.

______________________________________________________________________________ JUSTICE HUTCHI NSON deli

vered the opinion o f the cou rt: Plaintiff, JP Morgan Chase Ba nk, as suc cessor i

n intere st to Chase

Manhattan Bank

USA, N.A. ( JP Morgan) , filed the instant mor

tgag e forec losure a

ction ag ainst def

endants B rec k Fankhauser, Elaine Fankhauser, S teve L. Georg as, and Lea Ge orgas (referre d to collectively as mortgagors). JP Morgan also named as a defendant National City Mortgage Co. (Na

tional City), whichalso had a mortgage intere st in the same property unde r a separate loan that

National City had made to mortgagors. None of the defe ndants appeared in court

to defend the action, and on May

12, 2006, the trial court entered a default judgme nt and a judgment of foreclosure and sa le. On July 6,No. 2--07--0140

-2-

2006, intervenor, Pathfinder Holdings, L LC (Pathfinder), was the win ning bidder at the sheriff's sale. OnJuly 28, 2006, Nation a l City moved pursuant to se ction 2-- 1301(e)of the Cod e of Civil Procedure (the Code) ( 735 IL CS 5/ 2--1301( e) (West 2 006)) to v acate t he May 12, 2006, d

efault judgment and the order of foreclosure and sale. On November 3, 2006, the trial court granted the motion an d vacate d the May 12, 2006, orde rs. On December 1, 2006, Pathfinder moved the trial court to reconsider and argued that National City 's motion

to vacat e should hav e been tr

eated a s a petition for relief pursuant to section 2--140 1 of the Code (735 IL CS 5/2--1401 (West 2006)) because it was brought more than 30 days after the entry of the May 12, 2006, orders. On January 12, 2007, the trial court granted Pathfinder's mot ion to reconsider, vacated its November 3, 2006,
or de r, an d c on fi rm ed th e s al e a nd di st ri bu ti on of th e p ro pe rt y. National City appeals from the trial court's January

12, 2007, order. National City contends that (1) the trial court erred in construing its July 28, 2006, f iling as a petition

to vacat e pursua nt to section2--1401 o f the Code rather than a mot

ion under section 2 --1301( e) of the Code; (2)even if its filing was prope

rly charac terized a s a section 2--1401 petition to vacate , the tria

l court e rred in determining that it had not satisfied the requirements for vacatur; and (3) the trial court er

r ed in confirmingthe foreclosure sale. For the re asons that follow, we affirm in part, vacate in part, and remand f or furth er proc eeding s. The rec ord docu

ments the following proceedings rele vant to the disposition of this ap peal. OnFebrua

ry 10, 2006, JP Morgan f

iled a foreclosu

re compl a int against mortgagors and National City. Thecomplain

t alleg ed that, on June 28, 20 02, mortg agors had execut ed and de livered

to JP Morgan a $26,500 note. Mortga gors al so ex ecuted and de liver ed to J P Mor gan a mo rtgage on the property loca

ted at 1428 South 9th Street in St. Charles. JP Morgan alleged that mortg agors wereNo. 2--07--0140

-3-

indefault on the note after failing to make installment pay ments for three months. JP Morgan requested the trial court to take an account of the sums owed by mortga

gors and to order pay

ment by a date certain. JP Morgan further requ ested that , absent payment of the amount due, the mortgaged

property be

sold to satisfy the indebtedness. The compl aint also alleged that National City was a mortgagee unde

r a separate mortgag e recorded September 30, 2003, on the same proper ty to secure a note of $301,500. OnFebruary

15, 2006, Natio nal City

was serv ed with no tice of the compla int throug h its agent, CT Corporation System. On Febru ar y 24, 2006, and March 3, 2006, mortgagors r eceived service of the complaint. OnMay 12, 2006, afte

r notice was given and after ne ither mortgagors nor N ational C ity appeared in court to defend the action, the trial court gra nted JP Morgan's motion for default. The trial court also entered a judgment of fore closure providing that mortgag ors owed JP Morgan $31,050.23 in princip al, inter est, fees, and costs. The order provided that the period of redemption would expire on June 13, 2006, at which time the property c ould be sold at public auction. The order further provi ded th at "th ere is no ju st cau se for d elaying th e enfor cement of thi s Ju dgm ent, or a n appeal therefrom." The order additionally provide d that the trial court "retain[ed] jurisdiction *** for the pur pos e of enf orc ing this Judg men t, f or t he purp ose

of a men din g th e amoun

ts d ue to [JP Morgan] to reflect

receipts, disbursements and charges w hich are made or accrue after the entry of this judgment and prio r to sale a nd for the purpose o f appoint

ing or c ontinuing

a Receiv er here in during the period of redemption." OnJune 28, 2006, JP Morgan gave notice to mortgag ors and National City that the propert y would be sold by sheriff' s sale on July 6, 2006.No. 2--07--0140

-4-

OnJuly 14, 2006, JP Morgan moved the trial court to confirm the sale a nd to enter an order for possession. Attached to the motion was a sheriff's report of sale indicating that the property had been sold to Pathfinder for the sum of $32,212.40. OnJuly 28, 2006, National City moved pursuant to section 2--1301(e) of the Code to vacat e the default judgment

and the judgment of foreclosure and sa le. National City further re quested the trial court to void the fo reclos ure sal e and t o grant it le ave to file a n answ er to J P Mor gan's complaint. National City arg ued that it did not become aware of the entry of the default judgment until July 17, 2006, when it received JP Morgan' s motion to confirm the sale. Na tional City

argued that the trial court had the discretion to vacate the defa ult judgment

because it had

not yet entere d
a final order

disposing of

the case . Nationa

l City argue d that a ju

dgment o f forec losure wa s not a final judgmen

t; instead , Nationa

l City argue d that the

final judg

ment in a foreclosure action is the order confirming or deny

ing the foreclosure sale. National City further argued th at it had a meritorious defense

to the com

plaint in tha t its mortg age int erest wa s superior to JP Morg an's. Fi na ll y, National

City argued that the $ 32,212.40

bid at the sheriff 's sale was gr ossly inadequa te in vi ew of th e f ai r m ar ke t v al ue of

th e p ro pe rt y. In support of its motion, National City attached the aff idavit of Dorothy Thomas, the supervisor

of National City 's defa

ult litiga tion depa rtment. National City also attached a copy of a motion filed by JP Morgan in Br eck and Elaine Fankhauser' s bankrup tcy proce e ding in w hich it stated that i ts mo rtgage l ien wa s a "SE COND m ortgage lien." National City also attached a c opy of the settlement statement prepared at the closing on National City's loan tra nsaction, which indicated that National City had loaned mortg agors $301,500. The settlemen t statemen

t reflec ted that a portion of the loa

n procee ds was use d to pay off JP Morg an's loa

n. National City

also atta ched a JulyNo. 2--07--0140

-5-

26, 2006, bro ker's p

rice opi nion indic ating that the fa ir market value of the property was $385,000. Fi na ll y, National City attached a co py of Br eck and Elaine Fankhauser' s August 2005 bankruptcy petition filed in federal court, indicating that the property had a market value of $325,000. OnAugust 9, 2006, the trial court granted Pathfinder leave to file an appearance as an intervenor. On November 3, 2006, the trial court granted N ational City's motion to vacate and entered
anorder va

cating the judg ments of d

efault and foreclosure. The trial court further vacate d the July 6, 2006, judicial sale. The trial court granted National City leave to file an answer or otherwise plea d to JP Morga

n's comp laint. OnDecember

1, 2006, Pa

thfinder filed a mo tion requesting t he trial c ourt to re consider its Novemb er

3, 2006, or

der. I n its motion, Pathfinde

r argu ed that Na

tional City

's motion to vacat e should have been brought under section 2-- 1401 of the Code rather than section 2--1301(e) of the Code. Pathfinder noted that the trial court's May 12, 2006, default and foreclosure j udgment s contained langua ge pur suant to Supreme Cour t Rule 304( a) (210 I

ll. 2d R. 304 (a)), ma

kin g th em immediate ly

enforceable and appeala

ble. Because National City did not file its motion to vac ate until 60 days afte

r the entry of

the May 12, 2006, order, Pa

thfinder argue d that Nat

ional City had to comply with the requirements of section 2--1401 of the Code to obtain any relief

. Pathfinder argued that National City failed to allege that it had exercised due diligenc e in the proceeding or that it had a meritor ious defe nse to the underly ing comp laint. OnJanuary

12, 2007, t

he trial c ourt gr

anted Pat hfinder 's motion to reconsider

and vacated its November 3, 2006, order. The trial court also confirmed the sheriff's sale. In its written order, the trial court indicated that its rulingwas based upon section 2--14 01 of t he Cod e. The t rial c ourt'sNo. 2--07--0140

-6-

order further reflected that its rulin g was based on th e "pleadings and o ral arguments. " National City filed a ti mely notice of appeal. National City first contends that the trial court er red on recon siderati on when it construe d its motion to vacate as a petition brought pursuant to section 2--1401 of the Code. National City arg

ues that section 2--1401 governs a petition seeking r elief from a final judgment more than 30da ys after judgment was entered. N ational City arg ues that the trial court's judgment of forec losure was not final and appeala ble until such time as the trial court confirmed the sale of the property and directed the distri bution. National City further contends that the pr esence of Rule 304(a) langua ge in the judgment of foreclosure did not alter the no nfinal nat ure of the judgment, because the trial c ourt expressly retained jurisdiction over the sale and the distribution of the proceeds. Natio nal City concludes that, because the judgment of forec losure was not a final order, the trial court should have construed its motion to vacate as one brought pursuant to section 2--1301(e ) of the Code. We begin by

noting our standard of review. National City has appealed from the trial court 's order granting Pathfinder's motion to reco nsider. Generally , a motion to reconsider is a matter addressed to the trial court's discretion, and we will not reverse its ruling onsuch a motion absent
anabuse of

disc r etion. Duresa v. Commonwealth Edison Co. , 348 Ill. App. 3d 90, 97 (2004). However, where a motion to reconside r raise s a questi on of whe ther the trial cou rt erre d in its previous application of existing law, we review de novo the trial court's determinations of legal issues
. Duresa , 348 Ill. App. 3d at 97. Whether the trial court pr operly characterized National City 's motion to vacate as a section 2--1401 petition r

ather th an a section 2--1 301(e) m otion depe

nds on whe

ther the trial cou rt's Ma y 12, 2006, judgment of foreclosure wasa final order. Section 2--1301(e) of the Code provides thatNo. 2--07--0140

-7-

the trial court "may

in its discretion, before final order or judgment, set aside any default, and may
onmotion filed within 30 days after entry there of set

aside an y f inal orde r or judg ment." 7 35 IL

CS 5/2--1301(e) (West 2006). Meanwhile, section 2--1401 of the Co de go verns a party's request for relief from a final judgment where more than30 days have pa ssed sinc e entry of the fin al judgment. 735 ILC S 5 /2

-- 14 01 (W es t 2 00 6) . H er e, Na ti on al Ci ty f iled i ts motion to vacate the judgment of foreclosure on July 28, 2006, wh ic h was more than 30 day s after the trial court's entry of the judgment of foreclosure. I f the trial court's judgment of forec losure was a nonfinal orde r, then National City could properly move to vacate the order p ursua nt to secti on 2-- 1301( e) even thou gh
more than 30 days had pa ssed since its entry
. However, if the trial court's judgme nt was indeed a final ord er, then National City could seek relief

only through section 2 --1401 of

the Code b ecause
mo re th an 30 da ys h ad pa ss ed si nc e i ts en tr y. As JP M organ co rrectl y notes, o ur sup reme co urt ha s stat ed tha t a jud gm ent or derin g the foreclosure of a mortgage is not final and appe alable until the trial court enters an order approving the sale and directing thedistribution. In re Marriag e of Verdung , 126 Ill. 2d 542, 555-56 (1989). A judgment of foreclosure is not final an d ap pealable because it does not dispose of all the issues between the parties and it does not terminate the litigation. Marion Metal & Roofing Co. v. Mark T wain Marine Industries, I

nc. , 114 Ill. App. 3d 33, 35 (1983). The order confirming the s ale , however , does conclusive ly e stablish the purcha ser's r ight to the prope

rty and gives final approval to the proposed distribution of the sale proceeds. Margaretten & Co. v. Martinez , 193 Ill. App. 3d 223, 227-28 (1990). Accordingly, the order confirming the sale, rathe r than the jud gm ent of foreclosure, is the fina

l and appe alable order in

a foreclosure case. Marion Metal , 114 Ill. App. 3d at 35.No. 2--07--0140

-8-

However, a judgment of foreclosure is final and immediately appea

lable where it contains langua ge pursuant to Rule 304(a) (210 Ill. 2d R. 304(a)) t hat there is no just reason for delay ing enforcement

or appeal. Verdung , 126 I ll. 2d at 55 5-56; In re Estate of Yucis , No. 2-- 06--1225 , slip op. at 9-10 (May

29, 2008) ; Plaza Bank v. Kappel , 334 I ll. App. 3d 84 7, 850 n.2 (2002); Bell Federal Savi ngs & Loan

Ass'n v. Bank of Ravenswood , 20 3 Ill . Ap p. 3 d 21 9, 2 23 ( 199 0). Inthe instant case, the j udgment of f

oreclosure contained a Rule 304(a) finding that "there [was] no just cause for delaying the enforcement of this Judgment, or an appeal the refrom." I n view of the above-cited authoriti es, we conclude that the t rial cou rt's May 12, 2006, judgme nt of foreclosure was a final judgmen t. Inso holding, we reject

National City's ar

gument that the judgment of foreclosure was not final because the trial court specifically re served j urisdicti on to enforce the judgmen t and to determine the amount

due to JP Morga

n as a re sult of disb

ursemen ts and re ceipts oc curring

prior to the sale. Pursuant to section 15--1603(d) of the Illinois Mortgage Foreclosure L aw(the Foreclosure Law), a mortg agee

is entitled to reimbursement at the time of redemption for any a dditional expenses incurr ed after the judgment of foreclosure . 735 IL CS 5/15--1603(d) (West 2006). In v iew of th e mortga gee's statutory right to rei mburs ement , we do not b eliev e that the tr ial co urt's order retaining jurisdiction to overse e such re imburseme nt rende red its judgment

of foreclosure nonfinal. Whether it expresses it or not, the trial court alway s retains the statutory author ity, following

the entry of the judgment of foreclosure, t o provide f or such r eimburse ment. 735 I

LCS 5/1 5--1603( d)(2) (

West 2006). Theref

ore, des pite the presenc e of thisprovision inthe judgment of foreclosure, we conc lude the trial court's Rule 304(a) finding rendered the judgment

final and appealable. See Verdung , 126 Ill. 2 d at 555-5 6; Plaza Bank , 334 Ill. App. 3d at 850 n.2.No. 2--07--0140

-9-

Inlight of our conclusion tha t t he Ma y 12, 2006, judgment of foreclosure was a fina l judgmen t, and given that NationalCity's motion to vacate wa s filed more than 30 days af ter the entry of the final judgment, the trial court properly considered the motion as one seeking relief pursuant to section 2 --1401 of

the Code. We thus turn

to consider whether National City was entitled to relief under section 2 --1401. A s alr eady not ed, section 2--1401 provides a statutory procedure to seek relief fr om fi na l j ud gm en ts "a ft er 30 da ys from the entry the reof." 735 IL CS 5/2--1401 (West 2006). "To be entitle d to relie f under s ection 2- -1401, the petitione r must aff irmativ el y s et forth s

pecific factual allegations supporting each of the fol lowing elements: (1) the existence of a meritorious defense or clai m; (2) due diligence in presenting this defe nse or claim to the circuit court in the original actio n; and (3) due diligence i n filing the s ection 2--14 01 petiti on for relief. " Smith v. Airoom, Inc. , 114 Ill. 2d 209, 220-21 (1986). The quantum of proof necessary

to sustain a section 2--1401 petition is a preponderance of the evidenc e. Smith , 114 Ill. 2d at 221. Whether a section 2--1401 petition should be granted lies within the sound discretionof the trial court, depending on the facts and equities presented. Smith , 114 Ill. 2d at 221. Ba sedon our review of the record, we hold that the tria l court did not abuse its discretion when it determined on reconsideration that National City was not entitled to rel ief under sec tion 2--1401. Even if N ational Ci ty had a meritorious defense to JP Morgan's action, the record plainly
es tablishe s that National City did not exercise due diligenc e in presenting its defense to the trial court. Due dilig ence under section 2--1 401 requ ires the p etitioner

to have a r

easonab le excuse for failing to act wit

hin the appropriate time. Smith , 114 Ill. 2d at 222. Section 2--1401 does not relieve the conseq

uences of a litigant's own mistake or neglig ence, and a litigant is not entitled to relief

" 'unless he shows that through no fault or negligenc e of his own, the error of fact or the e xistenceNo. 2--07--0140

-10-

of a valid defens e was not made to appear to t he trial cour t.' " Smith , 114 Ill. 2d at 22 2, quotin g Brockmey

er v. Duncan , 18 Ill. 2d 502, 505 (1960). The litigant must show that the failure to defend agains tthe action was the result of an excusable mistake and that "under the circumstance he acted
re as on ab ly, and not

neglig ently , when he

failed to initially resist the judgment." Smith , 114 Ill. 2d at 222. Here, the record reflects that JP Morgan properly served National City with a summons and
a copy of its co mplaint on Februa ry 15, 2006, by le aving a

copy with its re gister

ed age nt, CT Corporation. Additiona

lly, JP Morgan c ontinued t o send Na tional City

notices o f the pro ceeding s, including a notice of its motion for the entry of a judgment of

foreclosure, a notice of the forec losure sale, and a notice of

its motion to confirm the foreclosure sale. National City does not deny that

the summons and other notices were received by its registered agent. Despite r eceiving proper notice of the proceedings, Nation al City did not appear in court to defend the action until July 28, 2006. By this time, the trial court had already entered a judgment of forec losure and the forecl osure sa le had already occurred. The only

explanation that National City offered f or its untimely appeara

nce in the ca se was that "the appropriate personnel of [Nati onal

City ] did no t bec ome a

ware of theexparte judgment entere d by

default *** or of t

he judg ment of fo

reclosu re *** un til on or ab out July 17, 2006, when [National City] recei ved a Mot ion to Confi

rm Sale." Such an explanation is insufficient

to satisfy the due dilige

nce requirement

of section 2--1401. See Smith , 114 Ill. 2d at 224 (holding that corporate defendant had failed to dilig ently present de fense in the t rial court despite its assertion that " 'its duly authorized officers o r agents never rece ived the summons and complain t' "). The record plainly

establishes the Na tion al Ci ty's untimely appear ance wa s the res

ult of its own mistake and negligence.No. 2--07--0140

-11-

National City

notes tha

t Illin ois court s are sometimes wil ling to relax the due diligence requirement

when necessary

to preve nt the unju st

entry of de fault judgments and to effect substantial justice. Smith , 114 Ill. 2d at 226-27. This is especially true where the defaulting party is not given notice of the entry of

the judgment of default. Smith , 114 Ill. 2d at 227. However, the pe titioner must also show the presence of additional circumstance s indicating that the party obtaining the default judgment would gain an unfair, unjust, or unconscionable a dvantage if the judgment were notvacated. Smith , 1 14 Ill. 2d a t 22 7-2 8. H ere , th ere

are no s uch cir cum sta nce s. A ltho

ugh JP Morgan did not p rov ide National City with notice of the entry of judgments of default and foreclosure, i t did provide National City with notice of the hea ring at which the judgments were entered. JP Morgan also provided notice of the foreclosure sale in the manne r required by

law , whichincluded

newspap er publi cation . Additionally, on Februa ry 16, 2006, JP Morgan rec orded agains tthe subject proper ty a notice of foreclosure lis pendens . This notice recorded against the propert y provided National City with const ructi ve not ice of t he fore closu re proc eedin g. See Knodle
v. Jeffrey , 189 Ill. App. 3d 877, 883-84 (1989). Under these circumstances, we find no evidence that National City was hindered or prevented by

JP Morgan from presenting its defense and conc lude that a relaxation of the due diligence requireme nt was not appropriate in this case. National City also asserts that it wasnot lega lly r equired to defen d the insta

nt case, because it was the senior lienholder. In support of its position, National City cites to authorities holding that
a junior mor

tgag ee's f oreclos ure proc eeding

cannot affect a

senior mortgag ee's li en inter est, regar dless of w he ther the senior mortgagee participates in the junior mortgagee' s foreclosure procee ding. See, e.g. , Heritage Federa l Credit Union v. Giampa , 251 Ill. App. 3d 237, 238-39 (1993). Such a principle of law, however, does not affect our sect ion 2--14 01 analy

sis. Reg ardlessNo. 2--07--0140

-12-

of the reason for

National City's dec ision not to participate in the instant litigation, it may not obtain relief from ord

ers that were ent

ered as a result o f its own ne glige nce and disr egard

of th e procee dings. See Smith , 114 Ill. 2d at 224-25. While National City may have other legal remedies that it may choose to pursue to re cover on its note (see Giampa , 251 Ill. App. 3d at 238-39), its lack of diligen ce here forecl osed its op

portunity to obtain r

elief fr om t he judg ments alr

eady entere d. Thus, the trial court did not abuse its discretion in d eny ing the s ection 2- -1401 petition to va cate an d in granting Pathfinder's motion to reconside r. As its final c ontention , Nationa l City argue s that, ev en if the

trial cou rt did not err in refusing to vacate the judg ment of fore clo sure, it nonetheless abused its discretion in confirming the foreclosure sale. Na

tional City

argues that the winning

bid of $32, 212.40 was less than 10% of the fair mar ket value of the pr operty and that s

uch a low price wa s unconsc ionable a nd unjust. As National City correc

tly notes, a judicial forec losure sale is no t complete until it has been approved by the trial court. Commercial Credit Loa ns, I nc. v . Espi

noza , 293 Ill. App. 3d 923, 927 (1997). The high bid received at a judici al sale is merel y an irre vocable offer to purchase the property, a

nd acceptance of the offer takes place w

hen the tr ial cour t confirm s the sale. Espinoza , 293 Ill. App. 3d at 927. Under section 15--1508( b) of the Foreclosure L aw, the t rial cou rt shall confirm the sale unless: (1) there has been a fa ilure to give proper notice; (2) the terms of sale were unconscionable; (3) the sale was conducted fraudulently ; or (4) justice was otherwise not done. 735 IL CS 5/15--1508(b) (West 2006). The trial court is justified in disapproving a judicially mandated foreclosure sale if

unfairness is shown that is prejudicial to any intere sted party. Espin oza , 293 I ll. App. 3d at 927. The trial court has broad discretion to approve or disapprove a judicial foreclosure sale made at its direction. Espinoza , 293 Ill. App. 3d at 927.No. 2--07--0140

-13-

Illinois courts ha

ve generally

held that mere ina dequacy of

price is not a sufficient reason

to disturb a j udicial sa

le unless there were some other irreg ularities. Resolution Trust Corp. v. Holtzman , 248 Ill. App. 3d 105, 113-14 (1 993). Thi s rule is predicated upon a policy of providing stability and permanency

to judicial sales and a realization that "property does not bring its full value at forced sales and that the price depends on many circumstances for which the debtor must expect to suffer a loss." Holtzman , 248 Ill. App. 3d at 114. Nonetheless, pursuant to section 15--1508(b) of the Fore closure

Law , the tria

l court is di rected to conduct a hearing on the confirmation of the foreclosure sale and is empowered under certain circumstances to examine whether the terms of the sale were unconscionable. Holtzman , 248 Ill. App. 3d at 114. The extent of the hearing that the trial court must afford depends upon the circumstances. Holtzman , 248 I ll. App. 3d at 115. Following sucha hearing, the trial court retains the discretion to disapprove a judicial sale " 'where the amount bid is so grossl y inadequ ate th at it shock s the c onsci ence of a court of equ ity.' " Holtzman , 248 I ll. App. 3 d at 11 3, quo ting Levy v. Broadway

-Carmen Building Corp. , 366 Ill. 279, 288 (1937). In Holtzman , the tria

l court c onfirmed

a 1990 judicial sale in which the winning bid for a multi-unit

apartment building was $414,800. The sale resulted in a def iciency in excess of $398,000
onthe mortgage indebtedness. Holtzman , 248 Ill. App. 3d at 109. The winning bid wa s equal t o only 34% of the fair market value of the subject prope rty acc ording to a 1988 apprais a l, but was equal to 84% of the fair market value of the proper ty accor ding to a 1990 appraisal. Holtzman , 248 Ill. App. 3d at 115. On appeal, the mortgagor c ontended that the trial court erred in confirming the judicial sale. In reviewing this contention, the appellate court stated: "Wedo not beli eve that

th e Gene ral Assembly intended to re quire an extended evidentiary

hearing af

ter each sheriff's sale. To determine the extent of the hea ring to beNo. 2--07--0140

-14-

afforded the mortg agor, the cour

t should loo k to the de fendant's petit ion or motion, and if there is an all egation o f a curr ent appr aisal or other cur

rent indic ia of val

ue which is so
measura bly different than the sales price as to be unconscionable, then a hearing should be afforded the defe ndant. On the oth er hand, if the all egation of unconscionab ility rests on an appraisal rendered remot e in time, the requisite of a formal hearing is not required ***." Holtzman , 248 Ill. App. 3d at 115. The reviewing co urt dete rmin ed that evidence of the 1988 appraisal, as we ll as other evidence offered by t he mortg agor o f the existe nce of potential pu

rchase rs of the apartme nt units tha

t would satisfy the mortg age ob ligation , requir ed that th e trial c ourt cond uct an ev id entia ry hear ing on the question of the conscionability of the judicia l sale. The reviewing court reve r sed the tr ial co urt's order confirmi ng the ju dicial sa le and re manded the case f

or lim ited di scovery a

nd an evidentiary hearing. Holtzman , 248 Ill. App. 3d at 115. In Mercha

nts Bank v. Robert s , 292 Ill. App. 3d 925, 931 (1997), this court relied upon Holtzman and determined that the mortgagors were e ntitled to an evidentiary hea ring under

section 15--1508(b) of the Foreclosure L aw to determine the fairness of a judicial sale. The mortgagor s provided personal affidavits indicating that the fair marke t value of the property

at issue was $400,000, which was 50% greater than the amount secured at the judicialsale. Roberts , 292 Ill. App. 3d at 931. This court held that the mortgagors were entitled to such a hearing despite their failure to appear in court to defend aga inst the proceeding until after the fo reclosu re salehad already occurred. Roberts , 292 Ill. App. 3d at 931. Inthe instant case, as detai le d above, National City offere d two piec es of evi dence to establish the fair market v alue of t

he su bject prope rty. National City provided a broker's priceNo. 2--07--0140

-15-

opinion dated July 26, 2006, indicating that the fa ir market v alue of the property

at issue was $385,000. National City also provided a copy of mortgagors' Aug

ust 2005 bankruptcy petition indicating that the market value of the property at issue was $325, 000. We ag ree with National City that the br oker's opinion and mortgagors' own valua tion of the property pr

ovided "current

indicia of value" of t he property . See Roberts , 292 Ill. App. 3d at 931 (noting that the owners of land are qualified to express an opinion of its value, merely by virtue of their ownership ). The dr astic difference between the current value of the prope rty and the sale

price of $32,2 12.40 sup ports National City's alleg ation of unconscionability, and we conclude t

hat an evi dentiary hea

ring was required under the authorities discussed above. See Roberts , 292 I ll. App. 3d at 931; Holtzman , 248 Ill. App. 3d at

115; see also Espinoza , 293 Ill. App. 3d at 928 (holding that bid at sheriff's sale that
was one-sixth of the value of the propert y w as an unc onsciona

ble disparity). The re cord reflects that the trial court did not conduct an evidentiary hearing on the motion to confirm the sale. Ad di ti on al ly, contrar

y to Pathfinde

r's ass ertions, National

City had the r ight to object to

the confirmation

of the sheriff's sale despite its status as a lienholder rather than

a mortg agor. As a par

ty to the litigation, National City had the authority under section 15--1508 of the Foreclosure Law to object to the sale and to be heard on its complaints that the sale price was unconscionab le and that justice wa s n ot do ne . S ee ge ne ra ll y Fleet M ortgage Corp. v. D eale , 287 Ill. App. 3d 385, 392 (1997) (noting that section15--1508 requires the trialcourt to consider the interests of all interested parties before ruling on a petition to confirm a judicial sale). Moreover, National City was not precluded fromobjecting to the sale despite its failure to appear to defend the action until after the sale had already occurred. See Roberts , 292 I ll. App. 3d at 931. When National City appear ed, the trial court had not yet hear

d or rule d upon JP Morg an's mot ion to confirm and approve the sale. Na tional CityNo. 2--07--0140

-16-

thus had the r

ight to assert it s objection to the te rms of the sale on the basis that justice was not done. As alr ea dy noted, National City adequate ly supported its objection with valuation evidence indicating that the winning bid at the sale was grossly disproportionate to the fair market value of the property. Unde

r such circumstances, the trial court was obliga ted to conduct an evidentiary hearing to determine the conscionability of the sale and whether

justice was done. See Holtzman , 248 Ill. App. 3d

at 115. Notably, both JP Morgan and Pathfinder fail to specifically c ommentupon the applicability of the principles in Holtzman to the circumstances of this case. Therefore, for the
reasons discussed, we vacate that portion of the trial court's order confirming the judicial sale and
we remand t

he case for an e videntia ry hearing inaccordance with the provisions of section 15--1508 of the Foreclosure L aw. For the fo regoin g reason s, we af firm t he tri al cou rt's or der gran ting Pathfind er's mo tion to reconsider

and its May 12, 2006, judgme nts of default and foreclosure. However, we vacate the trial court 's order co nfirming the sheriff's sale and r emand the case for an evidentiary hearing and for further proceedings in acc ordance with section 15--1508 of the Forec losure Law. Affirmed in part and vacated in part; cause remanded. McLAREN and CAL

LUM, JJ., concur.