Opinion ID: 2075984
Heading Depth: 1
Heading Rank: 3

Heading: ABN AMRO Mortgage Group, Inc. v. McGahan

Text: In 2005, ABN AMRO (ABN) provided a loan to Nona McGahan, who executed a note secured by a mortgage on her property located in Chicago. On May 1, 2006, McGahan defaulted. On August 30, ABN filed a complaint in the circuit court of Cook County for foreclosure pursuant to the Illinois Mortgage Foreclosure Law (735 ILCS 5/15-1101 et seq. (West 2004)). The complaint named McGahan, unknown heirs, and unknown owners. Unbeknownst to ABN, McGahan had died prior to the filing of this complaint. On October 11, 2006, after learning from a special process server that McGahan was deceased, ABN filed a motion requesting additional time to determine whether a probate estate had been opened on behalf of McGahan. Thereafter, ABN was granted leave to file a petition to name a personal representative on behalf of McGahan. On November 29, 2006, ABN advised the court that, upon further consideration, it did not intend to name a personal representative and requested leave to withdraw its earlier motion. Thereafter, the circuit court dismissed ABN's complaint pursuant to its order entered on November 2, 2006, in Wells Fargo v. McQueen, No. 05-CH-12846, 2006 WL 6085410 (November 2, 2006). Wells Fargo v. McQueen was a mortgage foreclosure action. As in this case, the mortgagor, Allen McQueen, died prior to the filing of the complaint. In its decision in the Wells Fargo case, the circuit court noted that, generally, a circuit court lacks subject matter jurisdiction when a lawsuit is filed against a deceased person because such a suit is a nullity. To avoid this rule and confer jurisdiction on the circuit court, a plaintiff may proceed under section 13-209 of the Code of Civil Procedure and substitute the deceased party's personal representative. 735 ILCS 5/13-209(c) (West 2004). However, Wells Fargo, the mortgagee, argued this rule did not apply because foreclosure proceedings are in rem actions and it is unnecessary to name a human defendant, i.e., the mortgagor, in such actions. The circuit court acknowledged there were cases in Illinois, dating back to 1835, holding that foreclosure proceedings are in rem actions. However, the court noted that in most cases this conclusion was reached without discussion or explanation. The circuit court also noted that, in a true in rem proceeding, the property itself is the defendant. The court then gave modern-day examples of a true in rem action, including civil forfeiture and proceedings against vessels under maritime law. The circuit court then discussed quasi in rem proceedings, and citing Austin v. Royal League, 316 Ill. 188, 147 N.E. 106 (1925), found that a quasi in rem proceeding describes the modern-day foreclosure action. The circuit court noted that no authority had reconciled the discussion of the differences between in rem and quasi in rem actions, set forth in Austin , with older cases stating foreclosures were in rem. The circuit court concluded that foreclosure actions are better characterized as quasi in rem. The circuit court then addressed the consequences of concluding that a foreclosure is quasi in rem. First, the court noted that mortgage foreclosures were adversarial and, pursuant to the Mortgage Foreclosure Law, the mortgagor is a necessary party who has the right to defend against the action. See 735 ILCS 5/15-1501 (West 2004). However, the circuit court found that the Mortgage Foreclosure Law does not address the consequences of a mortgagor's death and, therefore, it had to look to the rules applicable to civil actions generally. The court revisited the rule that a lawsuit against a deceased person is a nullity. The circuit court found there was nothing in Illinois law to indicate foreclosure actions were exempt from this general rule. Turning to section 13-209 of the Code of Civil Procedure (735 ILCS 5/13-209(c) (West 2004)), the provision governing the appointment of personal representatives, the circuit court considered whether a foreclosure was an action within the meaning of section 13-209, and found that previous cases had answered this question in the affirmative. Thus, the circuit court concluded that a mortgagee is required to name a personal representative for a deceased mortgagor in order for the circuit court to obtain subject matter jurisdiction. The circuit court noted also that a mortgagee could, alternatively, proceed under the Probate Act as it was an interested person like any other creditor. See 755 ILCS 5/1-2.11 (West 2004). In light of the decision in the Wells Fargo case, the circuit court held in the McGahan case that, because ABN failed to name a personal representative as a substitute for McGahan, it lacked subject matter jurisdiction. Accordingly, ABN's complaint was dismissed.