## I L L I N O I S 

## O F F I C I A L 

## RE P O R T S Appellate Court

A.J. Sm ith F

ederal Savings Ban k v. Sabuco , 2013 IL App (3d) 120578

Appellate Court Caption A.J

. SMI TH FED ERAL SAVI NGS BA NK, Plaintiff-Appellee
, v. J OHN SABUCO, De fenda

nt-Appellant.

District & N o. Third District Docke t No. 3-12-0578

Filed May 10, 2013

Held (Note : Thi s syl lab us

con s t it ute s no par t of the opi nio n of the cour t but has bee n pre

par ed b y the Repo rt er of D e c i s i o n s f

o r t h e

c o n v e n i e n c e o

f t h e

rea der

. ) In proce eding s arising from the fore closure of defe ndant’s mortg ag e on

a commerc ial office building, the appellate court had no jurisdiction to addre ss defe ndant’s appea l from the denial of his motion for the entry of

a rele ase and satisfac t i o n o f the defic iency judgme nt underly ing the mortg ag ee’ s wag e deduction sum m o n s t wo day s prior to the wag e deduction hearing, since t h e d en ial of defe ndant’s motion was interlocutory and not ap p ea l able until the validity of the defic iency judgme nt was dec ided at the he aring

.

Dec ision Under Review Appea l from the Circuit C o u rt o f Wil l County
, No. 09-CH-3403; the Hon. Mark T homas Carne y , J udg e, pre siding.

J udg ment Appea l dismi ssed.Counsel on

Appea l J ohn V. Schrock, of Sabuco, Be ck, Hanse n & Schrock, P.C., of J oliet, for appellant.

Ray mond J

. Ostler, Nazia J

. Ha s an , Erin E. Showerman, and Chuck T. L ittle, all of Gomberg
, Sharfman, Gold & Ost l er , P.C., of Chicag o, for appellee

.

Panel J USTI CE LYTTON de livered the judgme nt of the cour t, with opinion. Presiding J ustice Wright and J ustice Holdridg e conc u r r e d in th e ju d g ment and opinion.

OP INION

¶ 1 Plaintiff A.J . Smith Fe dera l Savings Bank made a loa n to defe ndant J ohn Sabuco. The loan was secu re d b y a m o rtg ag e on a commerc ial office building. At the time of the mortg ag e, Sabuco also executed an assig nment of rents in favor of plaintiff. Severa l months later, after Sabuco made no pay ments on the m ortg ag e l oan, plainti ff filed a complaint for mortg ag e fore closure and a petition for possession of the proper ty

. The trial court enter ed an order g ranting plaintiff possession of the proper ty and later enter ed a judgme nt of fore closure and a defic iency judgme nt ag ainst Sabuco for $40,500. Be fore a wag e deduction hearing was held, S abuco filed a mot ion for entry of release and satisfaction o f judgme nt, alleg ing that the defic iency judgme nt could b e s atisfied by renta l pay ments plaintiff rec eived for the mortg ag ed proper

ty

. The t ri al court denied the motion, and Sabuco appea led. Be cause the trial court’ s order

was not a f

inal and appe alable judgment, we dismiss this appeal. ¶ 2 On May 20, 2008, Sabuco obtai n ed a l o an fr o m p l aintiff for $300,508, which wa s

secur ed by a mortg ag e on a commer cial off ice buildinglocated at 10269 L incoln Hig hway in Fr ankfor

t. On the same date, Sabuco executed an assignment of rents in favor of plaintiff for any rent paid by a lessee of the mortg ag ed proper ty

. The assig nm en t p rovided that plaintiff could use the rents collecte d to pay costs and expenses incurre d by plai ntiff “in

conne ction with the Property” and that “any such Rents rec eived by L ender which are not applied to such c osts and expenses shall be applied to the Indebtedne ss.” ¶ 3 Sabuco made no pay ments on the loan. On August 10, 2009, plaintiff filed a complaint for fore closure ag ainst defe ndant. Plaintiff later filed a petition seeking possessio n of the mortg ag ed premises. On the same day
, plaintiff filed a motion to file an amende d complaint for mortg ag e fore closure, joining L ott Manag ement, Inc., a tenant of the mortg ag ed proper ty , as a de fenda

nt in the forec losure ac tion. ¶ 4 On Fe bruar

y 9, 2010, the court g rante d plaintiff’s motion to file an amende d complaint and enter ed an order appointing plaintiff as the mortg ag ee in po s s es s i o n o f the proper ty

.

-2-Among other things, the order g ave plaintiff “the power to *** collect rents, operate, manag e

and conse rve sa id property , find tenants and e nter into lease s.” ¶ 5 S ab u co did not file an answe r or respond to plaintif f’ s co mp l ai n t fo r m o rt gage fore closure. Plaintiff filed a motion for defa ult ag ainst Sabuco, which the trial court g rante d. The trial court also enter ed a judgme nt of fore closure and sale ag ainst Sabuco. Acc ording to the judg ment, Sabuco owe d plaintiff a total of $345,014.43. ¶ 6 A public sale of the proper ty was held on Marc h 9, 2011. Plaintiff w as the only bidder,
at $160,000. Acc ording to the sheriff ’s repor t of sale and distribution, the plaintiff calc ulated defe ndant’s defic iency to be $197,864.92. One month later, plai n t i ff fi led a motion for
persona l defic iency judgme nt ag ainst Sabuco in the amount of $197,864.92. The trial court enter ed an order approving the re p o rt o f sale and distribution and confirming the sale and

o rd er o f p ossession. The court also enter ed a defic iency judgme nt ag ainst Sabuco for $ 4 0
, 500. There afte r, plaintiff serve d an aff idavit for a wag e deduction order
, a wage deduction notice and a wag e deduction summons on Sabuco and Eldertre e Envec o, Inc., in an attempt to satisfy

the def iciency judgme nt. ¶ 7 Sabuco filed a mot i o n t o d i s m iss plaintiff’s wag e deduction summons, arguing that plaintiff sent him a For

m 1099-C Cance llation of Debt, which prec luded plaintiff from pursuing a defici ency judgme nt ag ainst him. There afte r, Sabuco withdrew his motion to dismiss and filed a

motion for entry

of re lease and satisfa ction of judg ment. In his moti on, Sabuco alleg ed that plaintiff had rec ei ved $27,900 in renta l pay ments from L ott Manag ement, a tenant of the mortg ag ed proper ty

. Sabuco argued that those renta l pay ments should satisfy the judgme nt ag ainst him. Attache d to S ab u co ’s motion was his aff idavit, stating that in late September 2009, Sabuco “signed L ott Manag ement, a top-quality tenant, (base d on cre dit r ating ) to a long- term (12-year+) automatically -re newa ble lease at the rate of $1500/mo. with y ear ly esca lations of $150/mo.” The aff idavit further stated that as soon

as the lease was signe d, Sabuco “assigned the lease to A.J

. Smith Fe dera l Savings Ba nk, and all lease pay

ments and esc alations wer e sent dire ctly to the bank.” ¶ 8 On J une 20, 2012, the trial court denied Sabuco’s motion for rele ase and satisfac tion of judgme nt, and scheduled t he wag e deduction hearing for J uly 12, 2012. On J uly 10, 2012, Sabuco filed a n o t i ce o f appea l from the trial court’s denial of his motion for rele ase and satisfac tion.

¶ 9 I ¶ 10 A mortg ag ee in possession is a trustee of the mortg ag or and i s b o u n d t o keep pr oper

acc ount of the rents and profits rec eived by him. Rogers v. Barton
, 386 I ll. 244, 256 (1944); Hirsh v. Arnold
, 318 I ll. 28, 39 (1925); W a lker v. W

arner , 179 I ll. 16, 28 (1899); Moshier

v. Norton
, 100 I ll. 63, 68 (1881). A mortg ag ee in possession must apply the rents and profits he collects toward the mortg ag or’s debt. Miller v. Frederic k’s Brewing Co.
, 405 I ll. 591, 595 (1950); W

illiams v. Marmor
, 3 2 1 I ll. 283, 288 (1926); W alker
, 179 I ll. at 28. When a mortg ag or assi g ns rents to a mortg ag ee, the mortg ag ee must apply those rents toward the
pay ment of principal and interest on the note and mortg ag e held by the mortg ag ee. Bartholf v. Be nsley , 234 I ll. 336, 342 (1908).

-3-¶ 11 The “Wag e Deduc tion Act” (735 I L CS 5/12-801 et s eq

. (W es t 2 010)) contains the

statutory authority for e nforc ement of judgments by levying ag ainst the j udg ment debtor’s
wag es. Felton v. Shead
, 6 I ll. App. 3d 123, 126 (1972). After a judgme nt cre ditor applies for issuance of a summons, a hearing is held to deter mine whether a wag e deduction o rder, requiring the employer to make periodic deduction from his employee’ s wag es to satisfy the judgme nt, is to be enter ed. Id. At that hearing, the court, g arnishee or judgme nt debtor may challeng e the amount or validity of the underly ing judgme nt. Id. ; 735 I L CS 5/12-808.5(4) (West 2010).

¶ 12 I I ¶ 13 When a debtor files a motion contesting the validity of the judgme nt underly ing a wag e deduction proce eding prior to a wag e deduction hearing, a t ri al co u rt ’s denial of such a motion is not final and appea lable beca use “the same attack could later be made at the wag e deduction hearing.” Felton
, 6 I ll. App. 3d at 126. A court order denying a debtor relief from

a j udg ment underlying a wag e deduction proce eding is mere ly interlocutory and n o t appea lable beca

use the issue of the validity of the underly ing judgme n t will not be finally decide d until the wag e deduc tion hearing

. Id. Only afte r a w ag e deduction hearing w ill the trial court’ s judgme nt be final a nd appea lable. Id. ¶ 14 We have jurisdiction to rev i ew o n l y o rd ers that are final and appea lable. American Country Insurance Co. v. Chicago Carriage Cab Corp.
, 2012 I L App (1st) 110761, ¶ 21. An order is f inal and appea lable if it ter minates the litigation betwee n the par ties on the merits

or disposes of the rights of the parties, either on the entire controve rsy o r a separ ate part there of. In re Marriage of Bolte
, 2012 I L App (3d) 110791, ¶ 1 4

. An appea l lies when the decision appea led from disposes of the entire controve rsy on the merits so that, if aff irmed, the trial court need only proce ed with execution of the judgme nt. Felton v. Shead
, 6 I ll. App. 3d 123, 126 (1972). ¶ 15 Her e, prior to the wag e d ed u ct i o n h ea ri n g, S ab u co fi l ed a motion for rele ase a nd satisfac tion from the defic iency judgme nt. That m otion was d en i ed. Two day s prior to the

s ch eduled wag e deduction hearing, Sabuco appea led the trial court’s order denying his motion for rele ase and satisfac tion. Sabuco’s motion for rele ase and satisfac tion was an attack on the judgme nt underlying the wag e deduction proce eding
, which could be made at th e wage deduction hearing. See Felton
, 6 I ll. App. 3d at 126. Since the validity of the underlying judgment will not be finally decide d until the wagededuction hea ring , the trial court’s order denying Sabu c o ’ s mo ti o n f o r acc ord and satisfac tion is mere ly interlocutory and not appea lable. See id. ¶ 16 Thus, we lack jurisdiction to consider the trial court’s order denying Sabuco’s motion for entry of re lease and satisfa ction and dismiss thi s appea l.

¶ 17 Appea l dismi ssed.

-4-