Court Opinion

ID: 8209691
Source: CourtListenerOpinion
Date Created: 2022-09-27 20:02:52.332681+00
Date Added: 2024-06-11T16:41:43.793398
License: Public Domain

2022 IL App (1st) 220193-U

      NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the
      limited circumstances allowed under Rule 23(e)(1).

                                                                                SECOND DIVISION
                                                                                 September 27, 2022
                                       No. 1-22-0193
      ______________________________________________________________________________

                                          IN THE
                              APPELLATE COURT OF ILLINOIS
                                      FIRST DISTRICT
      ______________________________________________________________________________

      ATHENE ANNUITY & LIFE ASSURANCE                             )
      COMPANY,                                                    )
                                                                  )
                            Plaintiff-Appellee,                   )     Appeal from the
                                                                  )     Circuit Court of
          v.                                                      )     Cook County
                                                                  )
      TERRI WEATHERSBY a/k/a TERRI L.                             )     No. 19 CH 7895
      WEATHERSBY, BRENDA WEATHERSBY a/k/a                         )
      BRENDA D. WEATHERSBY, UNKNOWN OWNERS                        )     The Honorable
      and NON-RECORD CLAIMANTS,                                   )     Joel Chupack,
                                                                  )     Judge Presiding.
                            Defendants                            )
                                                                  )
      (Terri Weathersby and Brenda Weathersby, Defendants-        )
      Appellants).                                                )

                 PRESIDING JUSTICE FITZGERALD SMITH delivered the judgment of the court.
                 Justices Howse and Cobbs concurred in the judgment.

                                                  ORDER

¶1   Held: Trial court’s denial of motion to vacate default judgment of foreclosure and stay judicial
           sale is affirmed.

¶2        The defendants, Terri Weathersby and Brenda Weathersby, appeal the trial court’s denial of

     their motion to vacate the order of default and judgment of foreclosure entered against them and
     No. 1-22-0193

     in favor of the plaintiff, Athene Annuity & Life Assurance Company, as well as its denial of their

     motion to stay a judicial sale. We affirm the judgment of the trial court.

¶3        On July 1, 2019, the plaintiff filed its complaint in this mortgage foreclosure action against

     the defendants with respect to a residential property on Loomis Avenue in Homewood (subject

     property). The defendants were served with summons and the complaint on July 14, 2019.

¶4        On January 3, 2020, the plaintiff filed a motion for entry of an order of default against the

     defendants based on their failure to file an appearance or answer. The plaintiff also filed a motion

     for entry of a judgment of foreclosure and order of sale based upon that default. On January 23,

     2020, the trial court granted both motions. In its judgment of foreclosure, the court made a finding

     that a total of $296,576.63 was due to the plaintiff under the mortgage and note at issue as of that

     date. The order further provided in pertinent part that the statutory redemption period expired on

     April 23, 2020, and that unless the defendants paid the required redemption amount within that

     time, the subject premises would be sold thereafter through a judicial sale.

¶5        The record on appeal reflects that on January 27, 2020, the clerk of the circuit court sent

     notice of the entry of default and judgment of foreclosure to the defendants, addressed to them at

     the subject property. That notice stated, “You may be entitled to file a Motion to Vacate this order.

     Any such motion should be filed as soon as possible.” The defendants deny that they lived at the

     subject property during this time. The record also reflects that on March 10, 2020, the selling

     officer that had been designated by the court to conduct the sale of the subject property mailed to

     the defendants, at the address of the subject property, a notice that it was scheduled for sale through

     public auction on April 24, 2020.

¶6        Soon thereafter, sales in foreclosure cases were halted because of the COVID-19 pandemic,

     and thus the scheduled auction did not proceed. The record indicates that on May 29, 2020, the

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     designated selling officer mailed a second notice of sale to the defendants, stating that the subject

     property would be sold at public auction on July 13, 2020. However, various orders by the chief

     judge of the circuit court of Cook County and the presiding judge of the chancery division extended

     the stay on foreclosure sales after this time. This continued through October 7, 2021, when the

     presiding judge of the chancery division entered an order allowing sales in foreclosure actions to

     resume. On November 29, 2021, the selling officer sent a third notice of sale to the defendants,

     stating that the subject property would be sold at public auction on January 12, 2022.

¶7        On January 10, 2022, Citizens Law Group, Ltd., filed an appearance in the case on behalf of

     the defendants. It also filed on their behalf a motion to vacate the order of default and judgment of

     foreclosure, to allow them leave to file an answer to the complaint, and to stay the judicial sale

     scheduled for January 12, 2022. Generally speaking, that motion asserted that the order of default

     and judgment of foreclosure were interlocutory orders that should be set aside as a matter of

     substantial justice, that the defendants had acted diligently by filing the motion upon the retention

     of counsel and by working to obtain a loss-mitigation solution, and that the defendants had

     meritorious defenses. Those affirmative defenses, which were set forth in the answer it sought

     leave to file, were (1) that the plaintiff had failed to provide the contractually-required notice to

     the defendants before accelerating the mortgage, (2) that the plaintiff had failed to provide the

     legally-required notice on the availability of homeownership counseling, (3) that the plaintiff

     lacked standing because it was not a proper assignee of the mortgage, and (4) that the plaintiff was

     barred from recovery due to its purchasing of force-placed insurance for the subject property and

     charging the defendants for it. Finally, the motion sought to stay the judicial sale that was

     scheduled for January 12, 2022, on the basis that, on January 6, 2022, the plaintiffs had accepted

     an offer to purchase the subject property for $260,000, subject to short sale approval from the

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       plaintiff. A contract and proof of funds were attached as exhibits to the motion.

¶8          The trial court heard the matter as an emergency motion on January 11, 2022. Its written

       order from that date reflects that it denied the defendants’ motion to vacate defaults upon a finding

       “that the granting of the Motion will result in substantial justice not being done to Plaintiff.” The

       trial court further denied the motion to stay the judicial sale, without further elaboration of its

       reasoning in the written order. No transcript of the hearing is included in the record on appeal.

¶9          Later in the day on January 11, 2022, the defendants filed an emergency motion to reconsider

       the denial of the motion to stay the judicial sale. The defendants stated in that motion the trial court

       had denied their motion to stay upon its finding “that the short sale offer was not a real offer and

       that the offer was not likely to close based upon the Judge’s experience.” The motion stated that,

       following the hearing, the defendants’ counsel was advised by the plaintiff’s mortgage servicer

       that the plaintiff’s valuation of the property was $245,900, and that it did not have time to review

       the file before the judicial sale the following day. The motion stated that the offer of $260,000 was

       a legitimate offer and that earnest money had been tendered and received. It also included the

       statement that defendants’ counsel had processed over one thousand short sale requests in the past

       decade and that, in counsel’s estimation, the current short sale offer had a high likelihood of being

       approved and closing. The trial court denied the motion to reconsider without prejudice on the

       basis that it did not present an emergency.

¶ 10        On January 14, 2022, the plaintiff filed motions for confirmation of the foreclosure sale and

       for entry of a personal deficiency judgment against the defendants. The selling officer’s report of

       sale stated that the subject property had been offered for sale at public auction on January 12, 2022,

       at which the highest bid had been the plaintiff’s bid of $230,000. It further set forth that, after

       adding interest, additional escrow items and attorney fees advanced by the plaintiff, and costs of

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       sale to the original judgment amount, the total amount due to the plaintiff was $332,804.02. Thus,

       after distribution of the sale proceeds, a deficiency of $102,804.02 would be owed by the

       defendants. The plaintiff’s motions were scheduled for presentment on February 4, 2022.

¶ 11        On February 2, 2022, the defendants filed another motion to reconsider the denial of their

       emergency motion to stay the sale and to vacate the orders of default and judgment of foreclosure.

       On February 4, 2022, the trial court denied the defendants’ motion to reconsider, with no further

       explanation of its reasoning included in the written order. It also confirmed the sale and entered an

       in personam judgment against the defendants in the amount of $102,804.02. Thereafter, the

       defendants filed a timely notice of appeal.

¶ 12                                                 ANALYSIS

¶ 13        The defendants raise three principal arguments on appeal. First, they argue that the trial court

       erred in denying their motion to vacate the order of default and the judgment of foreclosure.

       Second, they argue that the trial court erred in denying their emergency motion to stay the judicial

       sale scheduled for January 12, 2022, and in refusing to hear their motion to reconsider that ruling

       on an emergency basis. Finally, they argue that, as a result of the trial court’s erroneous rulings on

       these motions, it also erred in its calculation of any deficiency judgment that they owed. The

       plaintiff’s position is that the arguments raised by the defendants involve matters within the

       discretion of the trial court, and without transcripts of the trial court proceedings, the record on

       appeal is inadequate for review of these discretionary decisions of the trial court. They also argue

       that the trial court did not abuse its discretion in entering the orders challenged by the defendants.

¶ 14        The defendants’ motion to vacate the order of default and judgment of foreclosure was

       brought under section 2-1301(e) of the Code of Civil Procedure, which provides that “[t]he court

       may in its discretion, before final order or judgment, set aside any default, and may on motion filed

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       within 30 days after entry thereof set aside any final order or judgment upon any terms and

       conditions that shall be reasonable.” 735 ILCS 5/2-1301(e) (West 2020). In a mortgage foreclosure

       case, the final judgment is the order confirming the sale. EMC Mortgage Corp. v. Kemp, 2012 IL

       113419, ¶ 11. Until a motion to confirm a judicial sale is filed, section 2-1301(e) provides the

       standards by which a defendant in a foreclosure case may seek to vacate an order of default or a

       default judgment of foreclosure. Wells Fargo Bank, N.A. v. McCluskey, 2013 IL 115469, ¶ 27.

¶ 15        As the plain language of 2-1301(e) makes clear, the decision about whether to grant a timely

       motion to vacate an order or judgment of default rests in the discretion of the trial court. In re

       Haley D., 2011 IL 110886, ¶ 69. However, a liberal policy exists with respect to vacating defaults

       under that statute. McCluskey, 2013 IL 115469, ¶ 16. The overriding question for a trial court

       evaluating whether to grant a motion to set aside a default judgment is “ ‘whether or not substantial

       justice is being done between the litigants and whether it is reasonable, under the circumstances,

       to compel the other party to go to trial on the merits.’ ” Id. (quoting Haley D., 2011 IL 110886,

       ¶ 69). In the exercise of its discretion, the trial court must balance the severity of the penalty to the

       defendant resulting from the default with the attendant hardship to the plaintiff if it is required to

       proceed to trial. McCluskey, 2013 IL 115469, ¶ 17. A party moving to vacate a default is not

       necessarily required to show a meritorious defense or a reasonable excuse for failing to assert such

       defense in a timely manner. Id. ¶ 16. However, considerations of due diligence and the existence

       of a meritorious defense are relevant in the trial court’s determination of whether substantial justice

       has been done between the parties and whether it is reasonable to vacate the default. Id. ¶ 27.

¶ 16        Before proceeding to the specific arguments raised by the defendants, we begin with the

       plaintiff’s argument that the defendants have failed to provide a record on appeal that is adequate

       to enable our review of the issues that the defendants have raised. It is well established that an

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       appellant bears the burden to present a sufficiently complete record of the proceedings in the trial

       court to support a claim of error, and in the absence a sufficiently complete record on appeal, we

       will presume that the order entered by the trial court was in conformity with law and had a

       sufficient factual basis. Foutch v. O’Bryant, 99 Ill. 2d 389, 391-92 (1984). Any doubts that may

       arise from the incompleteness of the record must be resolved against the appellants. Id. at 392.

¶ 17        The record on appeal in this case contains no transcript of the hearings that occurred before

       the trial court on January 11, 2022, when it heard the motion to vacate defaults, or on February 4,

       2022, when it heard the motion to reconsider. The trial court’s written order from January 11,

       2022, reflects that it denied the defendants’ motion to vacate upon its finding “that the granting of

       the Motion will result in substantial justice not being done to Plaintiff.” This indicates that the trial

       court clearly understood the correct legal standard to apply. However, without a transcript of the

       hearing or a sufficient alternative (see Ill. S. Ct. R. 323 (eff. July 1, 2017)), we have no means of

       further understanding how the trial court balanced the relevant considerations in determining that

       substantial justice would not be done by vacating the defaults and therefore no way of evaluating

       whether it abused its discretion in doing so. Given this insufficiency in the record, we must resolve

       any doubts against the defendants, who are the appellants in this case, and we presume that the

       trial court’s order was entered in conformance with the law upon a sufficient factual basis. See

       Foutch, 99 Ill. 2d at 392 (court had no basis for holding trial court abused its discretion where

       transcript of hearing on motion to vacate was not included in record on appeal); see also Wells

       Fargo Bank, N.A. v. Hansen, 2016 IL App (1st) 143720, ¶ 15.

¶ 18        Even without a transcript, however, we have no difficulty affirming the trial court’s

       determination that substantial justice would not be done by vacating the order of default or

       judgment of foreclosure. The statement in its written order that vacating the default would “result

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       in substantial justice not being done to Plaintiff” leads us to conclude that the trial court found that

       the plaintiff would suffer hardship if the default was vacated and the plaintiff was compelled at

       that point to proceed with litigation to trial on the merits. It is clear by this time that, as a result of

       the moratorium on foreclosure sales caused by the COVID-19 pandemic, two years had passed

       from the entry of the default judgment of foreclosure to the date of the judicial sale. As the plaintiff

       correctly points out, the report of sale shows that during this two-year delay between the judgment

       and sale, the plaintiff had advanced $18,529.96 for additional escrow items for the subject

       property, such as property taxes and insurance. Thus, if the judgment were vacated at that point

       and the litigation recommenced from the beginning, the plaintiff was likely to incur substantial

       additional escrow costs while the case progressed. We disagree with the defendants’

       characterization of the hardship to the plaintiff of proceeding to trial as merely “nominal.” See

       CitiMortgage, Inc. v. Moran, 2014 IL App (1st) 132430, ¶¶ 47-49 (bank’s advance of funds for

       property taxes and insurance in protracted litigation weighed against vacating order of default).

¶ 19        The defendants argue that the hardship to the plaintiff in going to trial is far outweighed by

       the severity of the penalty to them in upholding the default judgment. Specifically, they argue, in

       addition to foreclosing on their rental property, the default resulted in an in personam judgment

       entered against them for $102,804.02. While we do not wish to minimize the impact the default

       judgment has had on them, a large part of the blame for it must be placed on the defendants for

       failing to appear or participate in this litigation until two days before the judicial sale was scheduled

       to occur. This was nearly two years and six months after the date they were served with summons,

       two years after they were first given notice of the default judgment of foreclosure, and six weeks

       after they were given notice that the judicial sale was scheduled for January 12, 2022. Even if they

       did not receive all of the notices sent to them, they were clearly aware that a foreclosure case was

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       pending. While there was a period during this timeframe that circuit court’s COVID-19 mitigation

       measures excused the defendants’ inaction, they were not prevented from appearing or filing

       motions in the case for most of this time. In fact, it stands to reason that the moratorium on sales

       in foreclosure cases due the pandemic would have made it more likely for them to receive a

       favorable result on a motion to vacate if they had acted in a timelier manner. However, as a result

       of their waiting until the absolute last minute to seek to vacate the default after two years, the

       balance of hardships here appears to weigh in favor of the plaintiff.

¶ 20        The defendants argue that they acted diligently by “aggressively working towards the

       completion of a short sale.” They point out that they had submitted to the plaintiff a complete short

       sale package wherein the offer presented was higher than the plaintiff’s valuation of the subject

       property. By contrast, the plaintiff contends that the defendants did not show diligence in this

       regard. It points out that the plaintiffs did not receive an offer to purchase the subject property until

       six days prior to the judicial sale. It asserts that the applicable federal regulation governing loss

       mitigation applications on residential mortgages only prohibits the conducting of a foreclosure sale

       if a borrower submits such an application “more than 37 days before a foreclosure sale.” 12 C.F.R.

       § 1024.41(g) (2021). We find that the record is silent concerning anything that would constitute

       diligence prior to at least January 6, 2022. Whatever was occurring on the defendants’ part, it did

       not include appearing in this litigation to keep the trial court apprised of their efforts until two days

       before the scheduled sale date. Again, nothing about this causes us to find that the balance of

       hardships weighs in favor of vacating the default.

¶ 21        The defendants argue that their answer demonstrates that they had meritorious defenses to

       the plaintiff’s foreclosure complaint. However, other than reiterating their allegations that the

       plaintiff failed to send an acceleration notice as required by the mortgage and that they question

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       the validity of the underlying assignment of the mortgage that give the plaintiff purported standing

       to bring this case, the defendants’ appellate brief fails to make any argument why one or more of

       these defenses were likely to be meritorious in this particular case. While the showing of a

       meritorious defense is not required to obtain the vacating of a default under section 2-1301(e),

       merely stating that these defenses were pled does not persuade us that they serve as a basis for

       finding that the trial court abused its discretion in declining to vacate the default in this case.

¶ 22        The defendants’ second principal argument is that the trial court erred in denying their

       emergency motion to stay the judicial sale scheduled for January 12, 2022. They point out that as

       part of their motion, they submitted proof that on January 6, 2022, they received a bona fide offer

       to purchase the subject property for $260,000, subject to short-sale approval from the plaintiff.

       They assert that the requisite documents had been submitted to the plaintiff to initiate the short-

       sale process, but the close proximity between the January 6 offer and the January 12 auction

       prevented it from having enough time to review their submission to a decision on the merits. They

       state that, at the hearing on their motion, the plaintiff’s attorney stated that he had no answer from

       the plaintiff on its short-sale review and expressed no opinion as to what that decision would be.

       They further state that, as of that time, the plaintiff did not have a valuation of the property to

       enable a determination of whether the offer was likely to be approved. They assert that January 12

       was the first time that a sale was actually scheduled to take place in the case and that there had

       been “only minimal activity in the underlying case” since the default had been entered two years

       earlier. They argue that, if the trial court would have stayed the sale “for just 38 days,” the plaintiff

       would have been required under the applicable federal regulations to review the short-sale

       application to a decision on the merits. See 12 C.F.R. § 1024.41(c)(1) (2021) (setting forth

       mortgage servicer’s duties if it “receives a complete loss mitigation application more than 37 days

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       before a foreclosure sale”). They argue that no reasonable person would have denied their request

       for a stay of the judicial sale under the facts of this case.

¶ 23        A trial court’s decision about whether to grant or deny a motion to stay a judicial sale is a

       matter that we review for abuse of discretion. PennyMac Corp. v. Colley, 2015 IL App (3d)

       140964, ¶ 10. A trial court may stay proceedings to control the disposition of cases before it as

       part of its inherent authority to control its docket. Id. Matters of judicial economy and the orderly

       administration of justice are among the factors a trial court may consider in determining whether

       to stay proceedings. Id. (citing Philips Electronics, N.V. v. New Hampshire Insurance Co., 295 Ill.

       App. 3d 895, 901-02 (1998)).

¶ 24        For the same reasons that we discussed above (supra ¶¶ 16-17), the absence of a transcript of

       the hearing on the motion to stay prevents us from understanding the precise basis upon which the

       trial court exercised its discretion to deny the motion. Accordingly, we must resolve any doubts

       against the defendants and presume that an adequate basis in law and fact existed to support the

       trial court’s decision to deny the stay. Foutch, 99 Ill. 2d at 391-92. We affirm the trial court’s

       decision on this basis. Even without a transcript, however, we would affirm based on the last-

       minute nature of the defendants’ motion, brought two years after the order of sale had been first

       entered and after the lifting of a lengthy moratorium on sales in foreclosure cases. We find it

       reasonable under these circumstances for the trial court to have concluded that matters of justice

       and judicial economy warranted denial of the defendants’ motion to stay the judicial sale.

¶ 25        Based on our conclusion that the trial court did not err in denying the motion to vacate the

       default judgment of foreclosure or the motion to stay the judicial sale, we have no reason to address

       the defendants’ remaining arguments. We point out, though, that we find no error in the trial court

       declining to hear on an emergency basis the defendants’ motion to reconsider the denial of the

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       motion to stay the judicial sale, where the trial court had already considered the original motion

       on an emergency basis earlier that day.

¶ 26                                             CONCLUSION

¶ 27        For the foregoing reasons, the judgment of the trial court is affirmed.

¶ 28        Affirmed.

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