Ocwen Loan Servicing, LLC v. DeGomez ( 2020 )

2020 IL App (2d) 190774No. 2-19-0774
Opinion filed December 30, 2020
______________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
SECOND DISTRICT
______________________________________________________________________________
OCWEN LOAN SERVICING, LLC, ) Appeal from the Circuit Court
) of Du Page County.
Plaintiff-Appellee, )
)
v. ) No. 2010-CH-1529
)
GUADALUPE DeGOMEZ, AUGUSTIN )
OLEA, TERESA TRUJILLO, ERIC )
GOMEZ, UNKNOWN OWNERS, and )
NONRECORD CLAIMANTS, )
)
Defendants )
) Honorable
(Guadalupe DeGomez and Teresa Trujillo, ) Bonnie M. Wheaton,
Defendants-Appellants). ) Judge, Presiding.
____________________________________________________________________________
JUSTICE McLAREN delivered the judgment of the court, with opinion.
Presiding Justice Bridges and Justice Jorgensen concurred in the judgment and opinion.
OPINION
¶1 In March 2010, plaintiff, Ocwen Loan Servicing, LLC (Ocwen), filed a foreclosure action
against defendants, Guadalupe DeGomez and Teresa Trujillo, concerning a property in Wood
Dale. Defendants were served. In June 2010, the court entered a default judgment of foreclosure
and the property was sold through a sheriff’s sale. The court confirmed the report of sale. In June
2011, Diana Bahena and Salvador Bahena (the purchasers) purchased the property.
2020 IL App (2d) 190774¶2 In September 2018, more than eight years after the filing of the foreclosure action,
defendants filed a petition for relief from void judgment, seeking to vacate the judgment of
foreclosure and sale, pursuant to section 2-1401(f) of the Code of Civil Procedure (Code) (735
ILCS 5/2-1401(f) (West 2018)). They argued that all orders entered against them in the foreclosure
action were void because defendants were not properly named on the summons and, therefore, the
court lacked personal jurisdiction over them. Ocwen moved to dismiss the petition, pursuant to
section 2-619.1 of the Code (735 ILCS 5/2-619.1 (West 2018)). The trial court granted Ocwen’s
motion. Defendants appeal. For the following reasons, we affirm.
¶3 I. BACKGROUND
¶4 On March 17, 2010, Ocwen filed a foreclosure complaint against defendants. The property
was commonly known as 407 Itasca Road, Wood Dale, Illinois, 60191. Ocwen named defendants
in the complaint as owners and mortgagors of the property. Ocwen served its complaint through a
summons bearing a caption reading in its entirety: Ocwen Loan Servicing, LLC vs. Guadalupe
DeGomez, et al.” Attached to the summons was a page stating, in relevant part:
“PLEASE SERVE THE FOLLOWING DEFENDANTS AT THE FOLLOWING
ADDRESSES:
Guadalupe DeGomez; 407 Itasca Road; Wood Dale, IL 60191 - DU
Teresa Trujillo; 407 Itasca Road; Wood Dale, IL 60191—DU
Teresa Trujillo; 13 School St; Addison, IL 60101—DU”
¶5 On March 21 and March 30, 2010, Trujillo and DeGomez, respectively, were served with
the summons and the complaint. On June 29, 2010, the trial court entered a default judgment
against defendants for, inter alios, failure to appear or plead and entered a judgment of foreclosure.
The property was sold at a judicial sale to Federal Home Loan Corporation (Federal Home). On
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2020 IL App (2d) 190774October 22, 2010, the court entered an order confirming the judicial sale. On June 6, 2011, Federal
Home executed and delivered a special warranty deed transferring title to the property to the
purchasers. On the same day, a mortgage from the purchasers to Mortgage Electronic Registration
Systems (MERS) was recorded. On February 27, 2013, a mortgage from the purchasers to MERS
was recorded. On March 1, 2013, a satisfaction of mortgage from MERS to the purchasers was
recorded.
¶6 On September 27, 2018, defendants filed their petition to vacate the judgment of
foreclosure and sale, pursuant to section 2-1401(f) of the Code (735 ILCS 5/2-1401(f) (West
2018)), against Ocwen, MERS, and the purchasers. Defendants argued that the judgment was void
because the court did not acquire personal jurisdiction over them, since the summons did not
identify them as defendants, was not directed to anyone, and did not contain Trujillo’s name.
Defendants also alleged that the lack of jurisdiction was apparent on the face of the record.
Defendants asked the court to, inter alia, (1) quash service for defendants; (2) vacate all orders
and judgments entered in the case as void ab initio; (3) find that the lack of personal jurisdiction
was apparent on the face of the record; (4) find that defendants are the owners of the property;
(5) restore possession of the property and order Ocwen, the current occupants, Federal Home, and
the purchasers to pay restitution for reasonable use and occupancy of the property from November
2010, through and including the date defendants are restored to; (6) order Ocwen, the current
occupants, Federal Home, the purchasers, and MERS to pay defendants as restitution all profits
they derived from the property; and (7) stay further proceedings until all restitution is made to
defendants.
¶7 Ocwen filed a combined motion to dismiss pursuant to section 2-619.1 of the Code (id.
§ 2-619.1), arguing that (1) defendants’ petition was deficient in that it failed to plead sufficient
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2020 IL App (2d) 190774facts to support the petition, failed to identify which Illinois Supreme Court Rules the summons
allegedly violated, contained vague and conclusory allegations, and failed to attach the summons
upon which the petition was based; (2) the summons was legally sufficient to confer personal
jurisdiction; (3) defendants’ petition was moot because (a) defendants failed to establish that they
had any current rights or interest in the property and (b) under section 2-1401(e) of the Code (id.
§ 2-1401(e)), there was no jurisdictional defect on the face of the record to support displacing the
bona fide purchasers; and (4) the foreclosure action remained effective against the remaining
parties even if jurisdiction had not been established for defendants.
¶8 MERS also filed a combined motion to dismiss pursuant to a section 2-619.1 of the Code
(id § 2-619.1), arguing that (1) the summons served in the foreclosure action was sufficient to
afford personal jurisdiction over defendants, (2) MERS was entitled to the protections of section
2-1401(e) of the Code as a bona fide purchaser, (3) laches barred defendants’ claim, and (4) the
petition requested improper relief.
¶9 On May 30, 2019, pursuant to a settlement, the trial court entered an order dismissing
defendants’ petition with prejudice as to the purchasers and MERS and quieting title to the property
in the purchasers subject only to MERS’s mortgage lien. The trial court then ordered briefing on
the issue of mootness.
¶ 10 Defendants filed their memorandum of law regarding mootness. Ocwen filed its response
arguing that defendants’ petition was moot and that it was barred by laches. Defendants replied,
noting that Ocwen inappropriately raised the affirmative defense of laches for the first time in its
response.
¶ 11 On August 8, 2019, during the hearing on defendants’ petition, defendants stated that the
only relief they sought against Ocwen was restitution in the form of money damages. The court
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2020 IL App (2d) 190774noted that Ocwen raised the defense of laches in its motion to dismiss and invited defendants to
motion up an evidentiary hearing regarding “why it took ten years for them to assert their right to
the detriment of Ocwen.” Defendants’ counsel replied, “I don’t have the authority one way or the
other, so, if the order is what seems to be that laches bars this, if [defendants] want to bring an
evidentiary hearing, I think within 30 days they can bring a motion.”
¶ 12 The trial court then dismissed defendants’ petition with prejudice as to Ocwen. The court
stated that, due to defendants’ settlement with the purchasers, defendants’ petition was moot as to
Ocwen regarding the following relief sought by defendants: possession, use, and occupancy of the
property. The court also found that laches barred defendants’ remaining requests for relief. The
court stated that its order was final with no just reason to delay appeal. On September 6, 2019,
defendants filed a timely notice of appeal.
¶ 13 II. ANALYSIS
¶ 14 A. Standard of Review
¶ 15 Defendants appeal the dismissal of their petition. For the following reasons, we conclude
that dismissal was proper under section 2-619(a)(9) of the Code, which permits dismissal of an
action where “the claim asserted against defendant is barred by other affirmative matter avoiding
the legal effect of or defeating the claim.” 735 ILCS 5/2-619(a)(9) (West 2018). We review
de novo the dismissal of a complaint pursuant to section 2-619(a)(9). McIntosh v. Walgreens Boots
Alliance, Inc., 2019 IL 123626, ¶ 17. We also review de novo a judgment on a section 2-1401
petition claiming voidness due to a lack of personal jurisdiction. Deutsche Bank National Trust
Co. v. Hall-Pilate, 2011 IL App (1st) 102632, ¶ 12.
¶ 16 B. Dismissal of Petition
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2020 IL App (2d) 190774¶ 17 Defendants argue that the trial court lacked personal jurisdiction over them in the
foreclosure action and erred by dismissing their petition to vacate.” Defendants contend that the
summons violated Illinois Supreme Court Rules because it did not name Trujillo on its face and
did not direct the summons to defendants. Therefore, according to defendants, the resulting
judgments were void and the trial court erred by dismissing their petition, because laches does not
apply to petitions to vacate void judgments.
¶ 18 Supreme Court Rule 101(a) requires, in part, that a summons “be directed to each
defendant.” Ill. S. Ct. R. 101(a) (eff. July 17, 2020). Our supreme court has further stated that “a
summons which does not name a person on its face and notify him to appear, is no summons at
all, so far as the unnamed person is concerned.” Ohio Millers Mutual Insurance Co. v. Inter-
Insurance Exchange of the Illinois Automobile Club, 367 Ill. 44, 56 (1937). In Arch Bay Holdings,
LLC-Series 2010B v. Perez, 2015 IL App (2d) 141117, ¶ 19, we held that a summons that failed
to list a defendant on its face was fatally defective.
¶ 19 Here, as to DeGomez, defendants argue that the summons was invalid because following
the line “To each Defendant:” she was not named. The record clearly shows that the summons was
proper as to DeGomez.
¶ 20 A summons issued in violation of the statute and the rules is void and results in a lack of
personal jurisdiction over the defendant. Arch Bay Holdings, 2015 IL App (2d) 141117, ¶ 14.
However, the purpose of a summons is to “notify a party that an action has been commenced
against him.” In re Application of the County Treasurer & ex officio County Collector, 307 Ill.
App. 3d 350, 355 (1999). In determining whether a summons was sufficient to provide the
opposing party with notice of the action, “we adhere to the principle that a court should not elevate
form over substance but should construe a summons liberally.” Id.-6-
2020 IL App (2d) 190774¶ 21 To determine whether the alleged technical defects in the summons were so severe as to
preclude the court from obtaining personal jurisdiction over DeGomez, we must place substance
over form and ask whether the summons adequately notified DeGomez that an action had been
commenced against her. MI Management, LLC v. Proteus Holdings, LLC, 2018 IL App (1st)
160972, ¶ 54. We determine that the summons served that function. At the outset, we note that
defendants have not explained how any of the alleged defects frustrated her ability to understand
that Ocwen had instituted foreclosure proceedings against her or what DeGomez needed to do to
prepare and defend herself. It is difficult to imagine how the caption on the summons, stating
“OCWEN LOAN SERVICING, LLC, vs. GUADALUPE DEGOMEZ, ET AL,” could have
possibly prevented DeGomez from understanding the meaning or significance of the summons:
that Ocwen was the plaintiff and that DeGomez was a defendant. Further, we cannot determine
that the alleged technical deficiency regarding the absence of DeGomez’s name following “To
Defendant:” defeated personal jurisdiction over her. There were only two names listed on the
summons, and DeGomez would have known if she were a defendant. Thus, the alleged defect in
the summons did not deprive the court of personal jurisdiction over DeGomez. Accordingly, the
trial court properly dismissed defendants’ petition regarding DeGomez.
¶ 22 We now turn our attention to whether the summons was proper as to Trujillo. The record
clearly shows that the summons was improper as to Trujillo. The summons failed to name Trujillo
on its face and thus, under the authority cited above, was no summons at all. See Ohio Millers
Mutual Insurance Co., 367 Ill. at 56; see also Arch Bay Holdings, 2015 IL App (2d) 141117, ¶ 14.
However, this is not cause for reversal.
¶ 23 Although the trial court did not rely on laches in dismissing the claim for possession, use,
and occupancy, we may affirm a dismissal on any basis in the record regardless of the basis relied
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2020 IL App (2d) 190774upon by the trial court. See Wofford v. Tracy, 2015 IL App (2d) 141220, ¶ 27. For the following
reasons, we hold that laches bars the claim for possession, use, and occupancy (infra ¶¶ 24-33)
and that the claim for restitution is not cognizable in a section 2-1401 action (infra ¶ 34).
¶ 24 Defendants argue that laches does not apply, because a void judgment may be attacked at
any time. Ocwen argues that laches applies to defendants’ petition seeking relief from an alleged
void judgment. After reviewing the parties’ arguments and the record, we conclude that laches
was a proper basis of dismissal as to Trujillo and an additional basis as to DeGomez.
¶ 25 Laches is an affirmative defense that is equitable and requires the party raising it to show
that there was an unreasonable delay in bringing an action and that the delay caused prejudice.
BankUnited, National Ass’n v. Giusti, 2020 IL App (2d) 190522, ¶ 39. We acknowledge that void
judgments can be attacked at any time and that section 2-1401 petitions alleging void judgments
are not subject to that section’s ordinary time restrictions. PNC Bank, National Ass’n v. Kusmierz,
2020 IL App (2d) 190521, ¶ 31. However, although void judgments may be attacked at any time,
in JPMorgan Chase Bank, N.A. v. Robinson, 2020 IL App (2d) 190275, ¶ 30, we noted that laches
“can preclude relief in an appropriate case where prejudice is demonstrated.” Further, we have
noted that, although it may be a “curious argument” to assert that laches bars a jurisdictional
challenge, nevertheless, “[i]n some circumstances, laches [has] been held to interpose a limit on
when a void judgment may be collaterally attacked.” West Suburban Bank v. Advantage Financial
Partners, LLC, 2014 IL App (2d) 131146, ¶ 26 (citing James v. Frantz, 21 Ill. 2d 377, 383 (1961),
Eckberg v. Benso, 182 Ill. App. 3d 126, 131-32 (1989), In re Adoption of Miller, 106 Ill. App. 3d
1025, 1030 (1982), and Rodriguez v. Koschny, 57 Ill. App. 3d 355, 361 (1978)).
¶ 26 In Kusmierz, we held that laches barred the defendants’ section 2-1401 petition, alleging a
void judgment based on improper service, because the plaintiff had established both a lack of due
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2020 IL App (2d) 190774diligence in bringing the petition and prejudice caused by such delay. Kusmierz, 2020 IL App (2d)
190521, ¶ 33. There, the defendants waited approximately six years after the default judgment had
been entered to file their section 2-1401 petition. Similarly, in Federal National Mortgage Ass’n
v. Altamirano, 2020 IL App (2d) 190198, ¶ 28, we held that laches barred the defendants’ section
2-1401 petition based on an alleged void judgment due to a defective summons. There, the
defendants filed their petition eight years after being served and over six years after being evicted
from the property. Id. ¶ 16.
¶ 27 We are not the first court to determine that laches may be applied even where the issue
concerns defective service and allegedly void orders. See, e.g., Slatin’s Properties v. Hassler, 53
Ill. 2d 325, 329-30 (1973) (noting that the defense of laches is “dependent upon the facts of each
case” and “[w]hen the facts indicate that it would be inequitable to allow a party to assert title,
[l]aches will bar this right even within the statutory period of limitation”); In re Jamari R., 2017
IL App (1st) 160850, ¶ 55 (“ ‘Illinois cases recognize that even if service of process is defective[,]
an attack on a decree may be barred by laches. [Citation.] It is basic to the laches doctrine that a
complainant may be barred when, after ascertaining the facts, he [or she] fails promptly to seek
redress.’ ” (quoting Rodriguez, 57 Ill. App. 3d at 361-62)); La Salle National Bank v. Dubin
Residential Communities Corp., 337 Ill. App. 3d 345, 350-51 (2003) (“Laches is a defense that is
asserted against a party who has knowingly slept upon his [or her] rights and acquiesced for a great
length of time, and its existence depends upon whether, under all the circumstances of a particular
case, a party is chargeable with want of due diligence and failing to institute proceedings before
he or she did”; moreover, “[w]hether the defense of laches is available is to be determined upon
the facts and circumstances of each case”); Eckberg v. Benso, 182 Ill. App. 3d 126, 131 (1989)
(“Illinois courts have applied this [laches] doctrine to bar claims that a decree is void for defective
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2020 IL App (2d) 190774service of process despite contrary arguments that such a jurisdictional claim may be brought at
any time.”); Miller v. Bloomberg, 60 Ill. App. 3d 362, 365 (1978) (noting that a void decree may
be attacked at any time, “although the equitable defense of laches may be interposed”).
Considering the foregoing precedent, defendants’ position that under no circumstances may laches
apply to this case is simply not persuasive.
¶ 28 We also reject defendants’ contention that laches may bar a challenge to an alleged void
judgment only “where special concerns were at issue.” Defendants cite Pyle v. Ferrell, 12 Ill. 2d
547 (1958) (noting that laches barred a claim regarding mineral and oil property rights), and
Jamari R., 2017 IL App (1st) 160850 (noting that laches barred a claim alleging a void order due
to defective service related to an adoption), to support their argument. However, the cases cited by
defendants do not limit the application of laches to any particular set of facts. Further, despite
arguments that a claim attacking a void judgment may be brought at any time, Illinois courts have
applied laches to bar such claims without language limiting its application to “special concerns.”
See, e.g., James, 21 Ill. 2d at 383; Rodriguez, 57 Ill. App. 3d at 361; Miller, 106 Ill. App. 3d at
1030.
¶ 29 The doctrine of laches is founded on the maxim that equity aids the vigilant and not those
who slumber on their rights. See Pyle, 12 Ill. 2d at 552; Wooded Shores Property Owners Ass’n v.
Mathews, 37 Ill. App. 3d 334, 338 (1976). Laches is principally based on the inequity of permitting
a right to be enforced, an inequity founded upon some change in the condition or relation of the
property and the parties. Pyle, 12 Ill. 2d at 552. Thus, where there is such a change as to make it
inequitable to grant relief, it will be refused. Id. “Laches is, therefore, such neglect or omission to
assert a right, taken in conjunction with a lapse of time of more or less duration and other
circumstances causing prejudice to an adverse party, as will operate to bar relief in equity.” Id. It
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2020 IL App (2d) 190774follows that to establish laches, a party must show (1) a lack of due diligence by the party asserting
a claim and (2) prejudice to the party asserting laches. Id.¶ 30 Here, Ocwen argues that both elements of laches are satisfied. We agree. Defendants do
not argue that they were not served or had no knowledge of the foreclosure action. Indeed, it is
undisputed that defendants were served with the complaint and summons on March 30 and March
31, 2010. Although the summons failed to name Trujillo on its face, defendants did nothing about
the partially defective summons until filing their section 2-1401 petition approximately eight and
one-half years later. This unreasonable delay allowed defendants to increase the damages they
could claim without any detriment to them and resulted in the transfer to the purchasers, with
whom defendants entered into a settlement agreement such that Ocwen is irreparably damaged and
cannot recover the property.
¶ 31 In addition, defendants seek against Ocwen restitution and profits from the sale of the
property. However, defendants were served with the complaint and summons notifying them that
their interest in the property was in jeopardy more than eight years prior to filing their section 2-
1401 petition. For over eight years, defendants did nothing to protect their rights in the property,
and, had they participated in court proceedings, they might have brought to the court’s attention
the defect in the summons regarding Trujillo. Again, defendants do not dispute that they received
service or that constructive notice of the property, via the recording of deeds and the purchasers’
payment of real estate taxes, would impute knowledge to them. Nevertheless, they did not bring
this cause of action until more than eight years and two transfers of title later. To permit relief
against Ocwen at this juncture and under these circumstances would be inequitable, as it has no
ability to recover the property and, depending on statutes-of-limitations issues, might have no
recourse against other parties or counsel. Further, nothing suggests that defendants’ delay in
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2020 IL App (2d) 190774bringing this action was reasonable. Accordingly, providing relief to defendants would prejudice
Ocwen and award defendants a windfall. Laches, therefore, applies to bar defendants relief, and
the trial court properly dismissed their section 2-1401 petition.
¶ 32 Defendants argue that laches cannot apply, because the purchasers and Ocwen have
“unclean hands.” The doctrine of “unclean hands” is an equitable doctrine that precludes a party
from taking advantage of its own wrong. Jameson Real Estate, LLC v. Ahmed, 2018 IL App (1st)
171534, ¶ 83. The doctrine applies only when the party’s misconduct rises to a level of fraud or
bad faith. Id. To determine whether a party acted with unclean hands, the court must look to the
intent of that party. Thompson Learning, Inc. v. Olympia Properties, LLC, 365 Ill. App. 3d 621,
634 (2006).
¶ 33 Here, defendants contend that Ocwen “profited from its representations that the underlying
foreclosure had been completed in accordance with all statutory mandates.” However, defendants
do not establish or even contend that Ocwen acted with knowledge that the summons was
improper. Because defendants failed to present any evidence to show any intent of fraud or bad
faith on the part of Ocwen, defendants’ assertion of unclean hands must fail. See Schivarelli v.
Chicago Transit Authority, 355 Ill. App. 3d 93, 103 (2005).
¶ 34 We also note that defendants’ petition’s demand for money damages in the form of
restitution and rent is inappropriate. Section 2-1401 of the Code provides a comprehensive
statutory procedure authorizing a trial court to vacate or modify a final order or judgment. Warren
County Soil & Water Conservation District v. Walters, 2015 IL 117783, ¶ 31. The purpose of a
section 2-1401 petition is to bring to the court’s attention facts not of record that would have
prevented the judgment if known by the court at the time. Kulhavy v. Burlington Northern Sante
Fe R.R., 337 App. 3d 510, 516 (2003). Thus, defendants’ claim for money damages is not
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2020 IL App (2d) 190774cognizable in their section 2-1401 petition, which is a collateral attack on the previous judgments
rendered in the foreclosure proceeding. See Burchett v. Goncher, 235 Ill. App. 3d 1091, 1098
(1991).
¶ 35 For the foregoing reasons, the judgment of the trial court is affirmed.
¶ 36 III. CONCLUSION
¶ 37 The judgment of the circuit court of Du Page County is affirmed.
¶ 38 Affirmed.
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2020 IL App (2d) 190774No. 2-19-0774
Cite as: Ocwen Loan Servicing, LLC v. DeGomez, 2020 IL App (2d)
190774Decision Under Review: Appeal from the Circuit Court of Du Page County, No. 2010-
CH-1529; the Hon. Bonnie M. Wheaton, Judge, presiding.
Attorneys Giovanni Raimondi, of RAI Law, LLC, of Chicago, for
for appellants.
Appellant:
Attorneys Jena Valdetero, Jessica D. Pedersen, and Kristin Howard
for Corradini, of Bryan Cave Leighton Paisner LLP, of Chicago,
Appellee: for appellee.
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