The Bank of New York Mellon v. Laskowski

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Supreme Court Date: 2018.08.14
17:38:44 -05'00'
Bank of New York Mellon v. Laskowski, 2018 IL 121995
Caption in Supreme BANK OF NEW YORK MELLON, Appellee, v. MARK E.
Court: LASKOWSKI et al. (Pacific Realty Group, LLC, Appellant).
Docket No. 121995
Filed January 19, 2018
Decision Under Appeal from the Appellate Court for the Third District; heard in that
Review court on appeal from the Circuit Court of Will County, the Hon.
Thomas A. Thanas, Judge, presiding.
Judgment Appellate court judgment reversed.
Cause remanded.
Counsel on Carla Sherieves, of CMS Law, LLC, of Chicago, for appellant.
Appeal
Joseph D. Kern and Matthew R. Carter, of Winston & Strawn LLP, of
Chicago, for appellee.
Justices JUSTICE THOMAS delivered the judgment of the court, with
opinion.
Chief Justice Karmeier and Justices Freeman, Kilbride, Garman,
Burke, and Theis concurred in the judgment and opinion.
OPINION
¶1 The issue we must decide is whether Pacific Realty Group, LLC, timely filed its motion to
quash service. We hold that it did.
¶2 BACKGROUND
¶3 On June 11, 2010, in its capacity as the trustee for certain certificate holders of an
alternative loan trust, the Bank of New York Mellon (the Bank) filed a residential mortgage
foreclosure complaint against Mark Laskowski, Pacific Realty Group, LLC (Pacific), and
others in Will County circuit court. In July 2010, the Bank filed an affidavit for service by
publication stating that, after a due diligence search, it was unable to locate or serve Pacific.
The Bank’s search included both directory assistance records and the Illinois Secretary of
State’s business registration records. After service by publication was made, Pacific failed to
appear or otherwise respond to the complaint. In July 2012, the trial court entered an order of
default and a judgment of foreclosure. In the judgment, the trial court made a specific finding
that service of process was properly made as to Pacific. In February 2013, the subject property
was sold at a sheriff’s sale.
¶4 In April 2013, the Bank filed a motion requesting an order approving the report of the sale
of the property and the proposed distribution of the proceeds, as well as an order of possession.
The motion was noticed up for April 18, 2013, and on that date Pacific’s attorney showed up
for the first time and filed an appearance. However, because the Bank failed to appear, the trial
court on its own motion dismissed the Bank’s case for want of prosecution (DWP). Shortly
thereafter, the Bank moved to vacate the DWP. On May 30, 2013, the trial court granted the
Bank’s motion and reinstated the case.
¶5 On July 18, 2013, Pacific filed a motion to quash service of process. The motion alleged
that Pacific is a foreign LLC registered in New Mexico and that it does not have a registered
agent in Illinois. According to Pacific, this means that service by publication was improper
because section 1-50 of the Limited Liability Company Act (805 ILCS 180/1-50 (West 2010))
does not allow an unregistered foreign LLC to be served in that manner. In May 2014, the trial
court denied Pacific’s motion. In doing so, the trial court first found that the motion was
untimely because it was filed more than 60 days after Pacific filed its appearance in the case.
See 735 ILCS 5/15-1505.6(a) (West 2012). The trial court also denied the motion on the
merits, holding that service by publication was proper. The trial court subsequently entered an
order approving the report of the sheriff’s sale and the proposed distribution of the proceeds.
¶6 Pacific appealed, and a divided appellate court affirmed the trial court’s decision denying
Pacific’s motion. 2017 IL App (3d) 140566. On appeal, Pacific argued both that its motion to
quash service was timely and that it should have been granted on the merits. The appellate
court majority began with the timeliness question, citing section 15-1505.6(a) of the Illinois
Mortgage Foreclosure Law (735 ILCS 5/15-1505.6(a) (West 2012)). In relevant part, that
section states that, “unless extended by the court for good cause shown,” the deadline for filing
a motion to quash service in a residential foreclosure case is “60 days after *** the date that the
moving party filed an appearance.” Id. § 15-1505.6(a)(i). The majority explained that,
although Pacific filed its appearance on April 18, 2013, it did not file its motion to quash
service until July 18, 2013, which was nearly 90 days later. 2017 IL App (3d) 140566, ¶ 16. As
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importantly, Pacific did not seek or obtain an extension of the 60-day deadline “for good
cause,” as section 15-1505.6(a) allows. Id. Consequently, the majority held, Pacific’s motion
to quash was clearly untimely, and the trial court was correct to deny it as such. Id. As a final
matter, the majority stated that, because it affirmed the trial court’s finding that Pacific’s
motion was untimely, it “need not address *** whether the service by publication on Pacific in
this case was proper.” Id. ¶ 17.
¶7 Justice Holdridge dissented. His position was that, under the principles announced by this
court in Case v. Galesburg Cottage Hospital, 227 Ill. 2d 207 (2007), “the 60-day deadline for
contesting service could not have applied” while the case was DWP. 2017 IL App (3d) 140566,
¶ 23 (Holdridge, J., dissenting). Rather, that deadline began to run only when the case was
reinstated, which occurred on May 30, 2013. Id. Pacific’s motion to quash therefore was
timely, as it was filed 49 days later, on July 18, 2013. Id.
¶8 We granted Pacific’s petition for leave to appeal (Ill. S. Ct. R. 315 (eff. Mar. 15, 2016)).
¶9 DISCUSSION
¶ 10 In this court, Pacific raises the same two arguments that it raised in the appellate court
below. First, Pacific argues that its motion to quash service was timely. Second, Pacific argues
that its motion to quash service should have been granted because service by publication was
improper in this case. We will begin with the timeliness question.
¶ 11 Timeliness
¶ 12 Pacific’s timeliness argument raises a question of statutory interpretation, and the
principles governing such inquiries are familiar and well settled. The cardinal rule of statutory
construction is to ascertain and give effect to the legislature’s intent. People v. Johnson, 2017
IL 120310, ¶ 15. The most reliable indicator of legislative intent is the language of the statute,
given its plain and ordinary meaning. Id. That said, a court also will presume that the
legislature did not intend absurd, inconvenient, or unjust results. Id. Consequently, where a
plain or literal reading of a statute renders such results, the literal reading should yield. Id. The
construction of a statute is a question of law that we review de novo. Id.
¶ 13 The statute at issue is section 15-1505.6(a) of the Illinois Mortgage Foreclosure Law (735
ILCS 5/15-1505.6(a) (West 2012)). In relevant part, that section provides that:
“In any residential foreclosure action, the deadline for filing a motion to *** quash
service of process *** unless extended by the court for good cause shown, is 60 days
after the earlier of these events: (i) the date that the moving party filed an appearance;
or (ii) the date that the moving party participated in a hearing without filing an
appearance.” Id.
Here, it is undisputed that Pacific filed its motion to quash service on July 18, 2013, which was
approximately 90 days after it filed its appearance. The question for us is whether the 60-day
statutory clock continued to run while the Bank’s case was DWP. Pacific insists that it did not
because, as long as the case was DWP, there was neither reason nor opportunity for Pacific to
file a motion to quash service. In support, and like the dissent below, Pacific relies principally
upon this court’s decision in Case. The Bank, by contrast, argues that section 15-1505.6(a) is
“clear and unambiguous” in stating that, unless extended by the court for good cause, the
deadline for filing a motion to quash service in a residential foreclosure action is 60 days after
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the moving party files its appearance. Here, the court did not extend the 60-day deadline, and
Pacific filed its motion approximately 90 days after filing its appearance. Thus, the Bank
argues, there is no question that Pacific’s motion was untimely, and this court does not have to
look any further than the plain language of the statute to reach this obvious conclusion.
¶ 14 For two reasons, we agree with Pacific. To begin with, the plain language of section
15-1505.6(a) supports the conclusion that the 60-day clock is tolled while the underlying case
is DWP. In relevant part, section 15-1505.6(a) states that, “[i]n any residential foreclosure
action,” the deadline for filing a motion to quash service of process is 60 days after the moving
party files its appearance. Id. The key phrase here is “[i]n any residential foreclosure action,”
because that phrase expressly defines the setting in which the passage of time will be
measured. Needless to say, 60 days cannot pass in a residential foreclosure action if no such
action is pending. Nor can a party comply with the statutory filing deadline in the absence of an
active case, even if it wanted to. Thus, to suggest that Pacific was still on the clock even when
the Bank’s case was DWP is to suggest the impossible, both conceptually and practically. The
legislature’s use of the phrase “[i]n any residential foreclosure action” clearly reflects this
reality, and we therefore reject the Bank’s contention that the 60-day deadline was unaffected
by the dismissal of the Bank’s case.
¶ 15 As Pacific correctly points out, this conclusion finds solid support in our decision in Case.
In Case, the plaintiffs filed a negligence complaint on April 25, 2003. Case, 227 Ill. 2d at 209.
A month later, on May 20, 2003, the plaintiffs voluntarily dismissed that complaint pursuant to
section 2-1009 of the Code of Civil Procedure (Code) (735 ILCS 5/2-1009 (West 2006)). Case,
227 Ill. 2d at 210. Almost one year later, on April 12, 2004, the plaintiffs refiled their
complaint pursuant to section 13-217 of the Code (735 ILCS 5/13-217 (West 2006)). Case,
227 Ill. 2d at 210. Section 13-217 provides that, where a plaintiff voluntarily dismisses a timely
filed complaint, that plaintiff has either one year or the remaining limitations period,
whichever is greater, to refile the action. By April 26, 2004, the plaintiffs had obtained service
of process on all of the defendants. Id. The defendants later filed a motion to dismiss under
Illinois Supreme Court Rule 103(b) (eff. July 1, 1997), arguing that the plaintiffs had failed to
exercise reasonable diligence in obtaining service of process. Case, 227 Ill. 2d at 211. After a
hearing, the trial court held that the plaintiffs had violated Rule 103(b), in that it took the
plaintiffs almost one year after the initial filing to obtain service on the defendants, despite the
fact the defendants were all local health care providers with readily ascertained locations. Id.
Accordingly, the trial court dismissed the plaintiffs’ case with prejudice. Id.
¶ 16 In reversing the trial court’s decision, this court explained that “the pendency of an action
that a defendant argues is delayed is central to any determination of whether a passage of time
should be considered for purposes of Rule 103(b).” Id. at 217. Further, the court explained that
“[t]he requirement of a pending action against which to measure diligence is rooted in
simple logic. If an action is dismissed, and not pending, there is no reason to serve a
defendant with process. As such, there is nothing to delay, and nothing to be diligent
about.” Id.
Accordingly, the court concluded by holding that “the time that elapses between the dismissal
of a plaintiff’s complaint and its refiling pursuant to section 13-217 is not to be considered by a
court when ruling on a motion to dismiss for violation of Rule 103(b).” Id. at 222.
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¶ 17 The same logic that controlled Case controls here. Again, before 60 days can pass “[i]n any
residential foreclosure action,” such an action necessarily must be pending. And unless such an
action is pending, there is neither cause nor occasion to file a motion contesting the plaintiff’s
service of process. Accordingly, we hold that the time that elapses between the DWP of a
residential mortgage foreclosure action and its subsequent reinstatement is not to be counted in
determining whether a motion to quash service is timely under section 15-1505.6(a).
¶ 18 Our second reason for agreeing with Pacific is rooted in the principle that, in construing the
language of a statute, courts will presume that the legislature did not intend absurd,
inconvenient, or unjust results. Pacific’s reading of section 15-1505.6(a) yields no such results.
On the contrary, Pacific’s reading yields an entirely sensible and workable result, by which the
statutory time period for filing a motion to quash service in a residential foreclosure action runs
as long as the case is pending and ceases to run as long as the case is not pending. By contrast,
the Bank’s reading of section 15-1505.6(a) yields results that are at once absurd, inconvenient,
and unjust. The absurdity lies in the prospect of section 15-1505.6(a)’s 60-day filing period not
only running but also expiring while the underlying case is DWP, which is what would have
happened here had the order vacating the DWP come just two weeks later than it did. The
inconvenience comes in mandating the noticing up and filing of a motion to quash service in a
case that has been dismissed, a procedural maneuver so unprecedented that the Bank’s own
counsel concedes “there’s no way to definitively know” how it could be done. Finally, the
injustice would come in holding that a residential foreclosure defendant is bound by a statutory
filing deadline with which it is legally impossible to comply, which is exactly what we would
be saying if we endorsed the Bank’s reading of section 15-1505.6(a) and held that the 60-day
clock continues to run even while the action is dismissed. For all of these reasons, we
emphatically reject the Bank’s reading of section 15-1505.6(a) in favor of that advocated by
Pacific and compelled by the clear statutory language, given its plain and ordinary meaning.
¶ 19 The only question that remains on this point is whether Pacific’s motion to quash service
was in fact timely. We hold that it was. Again, section 15-1505.6(a) provides that, in any
residential foreclosure action, the deadline for filing a motion to quash service of process is “60
days after *** the date that the moving party filed an appearance.” 735 ILCS 5/15-1505.6(a)(i)
(West 2012). And under our holding above, the time that elapses between the DWP of a
residential mortgage foreclosure action and its subsequent reinstatement is not to be counted in
calculating the statutory deadline. Here, Pacific filed its appearance on April 18, 2013, which
was the same date that the trial court dismissed the Bank’s case for want of prosecution. This
means that, once the DWP was vacated and the Bank’s case reinstated, Pacific had 60 days to
file its motion to quash service. The trial court’s order vacating the DWP and reinstating the
Bank’s case was entered on May 30, 2013, and Pacific filed its motion 49 days later, on July
18, 2013. This was well within the statutory deadline, and we therefore hold that Pacific’s
motion to quash service was timely.
¶ 20 Service by Publication
¶ 21 Pacific’s other argument is that the trial court should have granted its motion to quash
service because service by publication was legally improper in this case. As discussed above,
because it agreed with the trial court’s conclusion that Pacific’s motion to quash service was
untimely, the appellate court below did not reach the question of whether service by
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publication was proper. We therefore remand this case to the appellate court for the
consideration of that question in the first instance.
¶ 22 CONCLUSION
¶ 23 For the foregoing reasons, we reverse the appellate court’s judgment affirming the trial
court’s decision finding that Pacific’s motion to quash service was untimely, and we remand
this cause to the appellate court for consideration of whether service by publication was proper
in this case.
¶ 24 Appellate court judgment reversed.
¶ 25 Cause remanded.
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