PennyMac Corp. v. Colley

2015 IL App (3d) 140964Opinion filed December 14, 2015
____________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
A.D., 2015
PENNYMAC CORPORATION, ) Appeal from the Circuit Court
) of the 12th Judicial Circuit,
Plaintiff-Appellee, ) Will County, Illinois.
)
v. ) Appeal No. 3-14-0964
) Circuit No. 08-CH-4004
EDWARD COLLEY, JR., and )
CAROL J. COLLEY, ) Honorable
) Thomas A. Thanas
Defendants-Appellants ) Judge, Presiding
)
)
)
_____________________________________________________________________________
JUSTICE O’BRIEN delivered the judgment of the court, with opinion.
Presiding Justice McDade and Justice Carter concurred in the judgment and opinion.
_____________________________________________________________________________
OPINION
¶1 Plaintiff CitiMortgage filed a complaint for foreclosure against defendants Edward
and Carol Colley. During the pendency of the proceedings, CitiMortgage assigned its interest in
the mortgage and note to plaintiff PennyMac Corp. CitiMortgage moved for summary judgment
and to amend the pleadings to name PennyMac as plaintiff. The trial court granted both motions
and also granted PennyMac’s motion to confirm the judicial sale. Colley appealed. We affirm.
¶2 FACTS
¶3 Defendants Edward Colley and Carol Colley (collectively Colley) entered into a
mortgage contract with CitiMortgage and executed a promissory note. Colley defaulted on the
payments and CitiMortgage filed a complaint for foreclosure in September 2008. Attached to
the complaint were the mortgage agreement and note. The case was stricken from the call and
refiled several times. In December 2010, the case was dismissed without prejudice on
CitiMortgage’s motion but later reinstated.
¶4 In November 2013, CitiMortgage filed motions for foreclosure and sale, to substitute
plaintiffs, to amend the pleadings, and for summary judgment. Attached to the motion to
substitute was a copy of the assignment transferring interest in the foreclosure property from
CitiMortgage to PennyMac Corporation. The assignment established that it was executed on
March 10, 2010 by M. Arndt, a CitiMortgage vice president, and prepared by M.E. Wileman of
Orion Financial Group, Inc. Attached to the summary judgment motion was a proveup affidavit
executed by Teri Gerrish, a default specialist for PennyMac Loan Services. Gerrish attested that
she was “familiar with the books and records of PennyMac Loan Services, LLC as servicer and
has personally examined them.” Gerrish further attested that the “records are maintained in the
ordinary course of business made at or near the time of the event by or from information
provided by a person with knowledge” and it was “the regular practice to make and keep these
records.” Finally, Gerrish attested that she personally examined the records and that
$585,090.54 was due and owing on the mortgage and note.
¶5 The motion to substitute party plaintiff and the motion to amend the pleadings sought to
have PennyMac substituted as the plaintiff because it became the holder of the promissory note.
The assignment of mortgage to PennyMac, which was executed by M. Arndt, a CitiMortgage
vice president, was attached to the motion to substitute. In response, Colley challenged the
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motion for summary judgment and the Gerrish affidavit. The trial court entered orders of
default, summary judgment, and judgment of foreclosure and sale. It also granted
CitiMortgage’s motion to amend the pleadings to substitute PennyMac as plaintiff. The trial
court did not rule on CitiMortgage’s motion to substitute plaintiff but the trial court’s subsequent
orders captioned PennyMac as the plaintiff.
¶6 A notice of sale was filed and Colley moved to stay the foreclosure sale. Colley argued
that PennyMac was never substituted as plaintiff; CitiMortgage untimely brought its motion to
substitute; and the assignment could not be considered valid as the signatory, M. Arndt, did not
have the requisite knowledge of the transfer or authority to make the transfer. Colley attached as
exhibits a LinkedIn profile of M. Arndt and a July 2011 article in Further Fraud Digest. The
profile identifies M. Arndt as a document specialist at Orion Financial Group. The article,
entitled “Who’s Signing Now?” names Arndt as a nationally known document robosigner. The
trial court denied Colley’s motion to stay the sale and the property was sold in October 2014.
The trial court approved the report of sale and distribution and order for possession and eviction.
Colley appealed.
¶7 ANALYSIS
¶8 On appeal, Colley argues that the trial court erred when it denied the motion for stay and
confirmed the judicial sale, and when it granted summary judgment in PennyMac’s favor.
¶9 In the first issue, Colley challenges the trial court’s denial of the motion to stay the sale
and its grant of PennyMac’s motion to confirm the sale. Colley submits they demonstrated that
PennyMac lacked standing and argues that CitiMortgage’s request to substitute plaintiff was
untimely, and that the assignment did not establish PennyMac’s standing.
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¶ 10 As part of its inherent authority to control its docket, the trial court may stay proceedings
to control the disposition of cases before it. Philips Electronics, N.V. v. New Hampshire
Insurance Co., 295 Ill. App. 3d 895, 901 (1998). Factors the trial court may consider to
determine whether to stay proceedings are the orderly administration of justice and judicial
economy. Philips Electronics, 295 Ill. App. 3d at 901-02. A trial court is required to confirm a
judicial sale following a hearing unless one of four exceptions applies: (1) lack of notice under
section 15-1507 (735 ILCS 5/15-1507 (West 2012)); (2) the sale terms were unconscionable; (3)
the sale was fraudulently conducted; or (4) “justice was otherwise not done.” 735 ILCS 5/15-
1508(b)(iv) (West 2012); Household Bank, FSB v. Lewis, 229 Ill. 2d 173, 178 (2008). We will
not disturb a trial court’s decisions to deny a stay and to confirm a judicial sale unless they were
an abuse of discretion. Philips Electronics, 295 Ill. App. 3d at 902; Lewis, 229 Ill. 2d at 178-79.
¶ 11 Standing is determined as of the time the complaint is filed. Deutsche Bank National
Trust Co. v. Gilbert, 2012 IL App (2d) 120164, ¶ 15, as modified on denial of reh’g (Dec. 28,
2012). Lack of standing is an affirmative defense that is waived if not timely raised. Mortgage
Electronic Registration Systems, Inc. v. Barnes, 406 Ill. App. 3d 1, 6 (2010) (quoting Greer v.
Illinois Housing Development Authority, 122 Ill. 2d 462, 508 (1988)). When a party fails to
timely challenge standing and participates in, and benefits from, the proceedings, it has waived
the issue of standing. Deutsche Bank National Trust Co. v. Snick, 2011 IL App (3d) 100436, ¶ 9.
Where the plaintiff has moved for confirmation of the sale, it is too late for the defendant to
assert a standing defense. Snick, 2011 IL App (3d) 100436, ¶ 9. The burden of disproving
standing is on the party asserting lack of it. Gilbert, 2012 IL App (2d) 120164, ¶ 15, as modified
on denial of reh’g (Dec. 28, 2012).
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¶ 12 Colley did not challenge PennyMac’s standing until the hearing on the motion to confirm
the judicial sale. By that point in the proceedings, Colley had forfeited the affirmative defense of
standing and the trial court was required to confirm the sale unless one of the statutory grounds
applied. Colley argues the ground of “unless justice otherwise requires” applies to the
circumstances at bar and requires reversal of the order confirming the judicial sale. According to
Colley, PennyMac should have sought leave to file an amended complaint based on the
assignment from CitiMortgage, CitiMortgage’s request to substitute plaintiffs was untimely filed
nearly two years after the assignment, and PennyMac was never substituted as a plaintiff. We
disagree.
¶ 13 CitiMortgage filed a complaint for foreclosure in 2008, alleging that it held the mortgage
and it attached copies of the mortgage and promissory note to the complaint. In March 2010,
CitiMortgage assigned its interest in the foreclosed property to PennyMac, as evidenced by the
assignment filed as an exhibit in May 2012. Also in May 2012, CitiMortgage filed its first
motion to substitute plaintiff. It filed a subsequent motion to substitute plaintiff again in
November 2013. The trial court did not rule on either motion to substitute but it did grant
CitiMortgage’s motion to amend the pleadings on their face. In the motion to amend,
CitiMortgage sought to substitute PennyMac as plaintiff for CitiMortgage.
¶ 14 That CitiMortgage waited more than two years after the assignment to substitute
PennyMac as the plaintiff is of no relevance. For whatever reason that CitiMortgage continued in
the proceedings after the assignment, it was “master” of its cause of action. Lewis, 229 Ill. 2d at
180. There were no improprieties in the assignment and Colley was neither surprised nor
prejudiced by the change of plaintiff. In the later proceedings, both parties referenced PennyMac
as the plaintiff and the captions on the court orders also identified PennyMac as the plaintiff.
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None of Colley’s arguments are persuasive and do not necessitate that the sale be rejected based
on the claim that PennyMac lacked standing.
¶ 15 The next issue is whether the trial court erred in granting PennyMac’s motion for
summary judgment. Colley argues that she raised an issue of fact regarding the sufficiency of
the affidavit filed by PennyMac in support of the motion. She submits that the affiant lacked
personal knowledge and that the appropriate business records were not attached.
¶ 16 Summary judgment should be granted when the pleadings, depositions, and affidavits, if
any, establish there is no genuine issue of material fact. 735 ILCS 5/2-1005(c) (West 2012). An
affidavit that is filed in support of a summary judgment motion must comply with Illinois
Supreme Court Rule 191(a) (eff. July 1, 2002). Collins v. St. Paul Mercury Insurance Co., 381
Ill. App. 3d 41, 46 (2008). The requirements of Rule 191 include the affidavit be made on the
affiant’s personal knowledge, set forth with particularity the facts on which the claim is based,
have attached sworn or certified copies of all documents on which the affiant relied, be based on
admissible facts and not consist of conclusions; and show affirmatively that the affiant could
testify competently to the facts if sworn as a witness. Ill. S. Ct. R. 191(a) (eff. July 1, 2002). The
failure to attach supporting documents is fatal to the submission of the affidavit as substantive
evidence. Preze v. Borden Chemical, Inc., 336 Ill. App. 3d 52, 57 (2002).
¶ 17 A business record is admissible when a foundation is established demonstrating: (1) the
transaction was made in the regular course of business and (2) it was the regular course of
business to make the record at the time of, or within a reasonable time after, the transaction. Ill.
S. Ct. R. 236 (eff. Aug. 1, 1992). Other circumstances concerning the making of the record, such
as lack of personal knowledge, goes to the weight of the evidence and not its admissibility. Ill.
S. Ct. R. 236 (eff. Aug. 1, 1992). It is the business record itself that is admissible, not the
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witness’s testimony Champaign National Bank v. Babcock, 273 Ill. App. 3d 292, 298 (1995).
Where the business record includes a mass of documents, the documents are available for the
non-moving party to examine, and the computations are not questioned, a summary of loan
documents may be attached to an affidavit in support of summary judgment. See Cole Taylor
Bank v. Corrigan, 230 Ill. App. 3d 122, 129 (1992); Babcock, 273 Ill. App. 3d at 298. When the
party opposing the motion fails to file counteraffidavits, the material facts that were set forth in
the movant’s affidavit must be taken as admitted. Babcock, 273 Ill. App. 3d at 299. We
consider the propriety of an affidavit submitted in support of a summary judgment motion de
novo. US Bank, National Ass'n v. Avdic, 2014 IL App (1st) 121759, ¶ 18 (quoting Jackson v.
Graham, 323 Ill. App. 3d 766, 773 (2001)).
¶ 18 Some of the documents in this case are filed out of order. However, the documents filed
the same date as the summary judgment motion included the Gerrish affidavit and a payment
history on the mortgage account. The other relevant bank reports were filed with the trial court
and were available for inspection. The affidavit was properly supported with the attached
payment history and, as proper under the summary document rule, the remaining documents
were available for inspection. The Gerrish affidavit established that the affiant had access to the
loan records, had personally examined them, had personal knowledge of how the records were
kept and maintained, and that the records were maintained in the ordinary course of business
made at or near the time of the loan servicing by or from information that was provided by a
person with the applicable knowledge. The affiant also attested that $585,090.54 was due and
owing.
¶ 19 The attached payment history, with other documents filed with the court, satisfied the
requirements for summary judgment proveup affidavits. Colley’s argument that summary
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judgment was improperly entered because the Gerrish affidavit was insufficient must therefore
fail. Moreover, Colley did not file any counteraffidavits challenging the facts in the Gerrish
affidavit, thus, the facts must be taken as true. In the affidavit, Gerrish attests that Colley
defaulted on the loan and there were amounts due and owing on the loan. Because Colley failed
to raise any genuine issue of material fact, the trial court’s grant of summary judgment in favor
of PennyMac on its foreclosure claim was not in error.
¶ 20 Based on the foregoing reasons, the judgment of the circuit court of Will County is
affirmed.
¶ 21 Affirmed.
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