Wells Fargo Bank, N.A. v. Smith

2019 IL App (1st) 172963No. 1-17-2963
March 4, 2019
FIRST DIVISION
IN THE
APPELLATE COURT OF ILLINOIS
FIRST DISTRICT
WELLS FARGO BANK, N.A., ) Appeal from the Circuit Court
) Of Cook County.
Plaintiff-Appellee, )
) No. 15 CH 6352
v. )
) The Honorable
TYRONE SMITH; BRIGETTE SMITH; ) Fredrenna Lyle,
PORTFOLIO RECOVERY ASSOCIATES, ) Judge Presiding.
LLC; THE STATE OF ILLINOIS; THE )
ILLINOIS HOUSING DEVELOPMENT )
AUTHORITY; and UNKNOWN OWNERS )
AND NONRECORD CLAIMANTS )
)
Defendants )
(Tyrone Smith and Bridget Smith, Defendants- )
Appellants). )
JUSTICE WALKER delivered the judgment of the court, with opinion.
Justice Pierce and Justice Griffin concurred in the judgment and opinion.
OPINION
¶1 Plaintiff Wells Fargo Bank, N.A. (Wells Fargo), filed a motion for summary judgment
and requested the trial court enter a judgment of foreclosure and sale against defendant
Tyrone Smith (Smith) on September 30, 2015. Wells Fargo attached a loss mitigation
No. 1-17-2963
affidavit sworn to on September 3, 2015, specifying a loss mitigation program applicable to
Smith’s mortgage, the steps taken to offer the loss mitigation program to Smith, and the
status of those mitigation efforts as required by Illinois Supreme Court Rule 114 (eff. May 1,
2013). The trial court denied Wells Fargo’s motion. On December 2, 2016, Wells Fargo filed
a new motion for summary judgment and requested the court enter a judgment of foreclosure
and sale and attached the same September 3, 2015, loss mitigation affidavit. The trial court
granted the motion and entered a judgment of foreclosure and sale against Smith. Smith
appealed and argues that Wells Fargo failed to comply with Rule 114 because the September
3, 2015, loss mitigation affidavit was sworn to over one year before Wells Fargo filed its
motions for summary judgment and judgment of foreclosure and sale; therefore, the affidavit
did not indicate the current status of mitigation efforts embarked upon by Wells Fargo at the
time of its December 2, 2016, motion for judgment of foreclosure.
¶2 I. BACKGROUND
¶3 On July 3, 2012, Smith executed a mortgage loan for $158,272 with Wintrust Mortgage,
a division of Barrington Bank and Trust Company (Wintrust), secured by real property
located at 1026 31st Avenue, Bellwood, Illinois. On October 30, 2012, Wintrust assigned the
mortgage to Wells Fargo.
¶4 On April 16, 2015, Wells Fargo filed a foreclosure complaint against Smith. Wells Fargo
also named Brigette Smith (Brigette) as defendant on the belief that she is Smith’s spouse
and may have some interest on the property. 1
1
Wells Fargo also named as defendants (i) Portfolio Recovery Associates, LLC, who secured a
judgment against Smith, (ii) the State of Illinois, who recorded a lien against Smith for nonpayment of
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¶5 On September 30, 2015, Well Fargo filed a motion for entry of an order of default and
judgment of foreclosure and sale. In support of the motion, Wells Fargo attached two
affidavits: (1) an affidavit of amounts due and owing and (ii) a loss mitigation affidavit.
¶6 The affidavit of amounts due and owing was sworn to by Bridget A. Noble, vice
president of loan documentation for Wells Fargo on September 21, 2015. Noble averred that
Wells Fargo uses a “Mortgage Servicing Platform” to record and track mortgage payments
and that based on the platform entries, Smith had failed to make payments. The affidavit
indicated that as of September 15, 2015, the amount due and owing under the note was
$160,242.22.
¶7 The loss mitigation affidavit was sworn to by Jasmin McLean, vice president of loan
documentation for Wells Fargo on September 3, 2015. McLean averred that, after reviewing
Wells Fargo’s business records relating to Smith’s mortgage, she found Smith’s loan eligible
for a loss mitigation program called “FHA foreclosure avoidance options.” McLean further
averred that “the following steps have been taken by [Wells Fargo] to comply with its
obligations under such programs” including “Solicitation Letters,” “Outbound Calls,”
“Denial/Appeal Period Letters,” and “Additional Information Required Letters.” McLean
further averred the current status of the loss mitigation effort under the foreclosure avoidance
program was “denied.”
¶8 On November 30, 2015, Smith filed his answer to Wells Fargo’s foreclosure complaint.
Smith generally denied many of the allegations in the complaint or asserted a lack of
Illinois individual income tax, and (iii) the Illinois Housing Development Authority, to whom Smith and
Brigette executed a recapture agreement to secure a note in the principal sum of $35,000.
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sufficient knowledge to answer the allegation. On December 24, 2015, Wells Fargo filed a
second motion for entry of an order of default and judgment of foreclosure and sale and
attached the same affidavit of amounts due and owing and the loss mitigation affidavit. Wells
Fargo also filed a motion for summary judgment arguing that Smith’s general denials in his
answer did not create a genuine issue of material fact.
¶9 On March 16, 2016, Smith filed his response to Wells Fargo’s motion for summary
judgment. Smith argued both the amounts due affidavit and the mitigation affidavit failed to
comply with Illinois Supreme Court Rule 191(a) (eff. Jan. 4, 2013) because Wells Fargo
failed to attach copies of the documents the affiants relied on. On April 15, 2016, Wells
Fargo filed its reply in support of its motion for summary judgment. Wells Fargo argued that
its complaint and affidavits complied with the Illinois Mortgage Foreclosure Law (735 ILCS
5/15-1101 et seq. (West 2016)) which governs mortgage foreclosure proceedings in Illinois.
Wells Fargo contended that it established a prima facie case of foreclosure when it submitted
into evidence the note, mortgage, and the amounts due affidavit, and that it was Smith’s
burden to prove payment, which he failed to do. On May 4, 2016, the trial court denied Wells
Fargo’s motion for summary judgment without prejudice.
¶ 10 On December 2, 2016, Wells Fargo filed a new motion for summary judgment and a new
motion for entry of an order of default and judgment of foreclosure. The motion for summary
judgment again argued that Smith’s general denials in his answer did not create a genuine
issue of material fact and, therefore, Wells Fargo was entitled an entry of judgment. In
support of these motions, Wells Fargo attached the same September 3, 2015, loss mitigation
affidavit but a new affidavit of amounts due and owing. The new affidavit of amounts due
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and owning was sworn to by Matthew Joseph Julian, another vice president of loan
documentation for Wells Fargo on October 31, 2016. The affidavit indicated that as of
October 28, 2016, the amount due and owing on the note was $174,678.50.
¶ 11 On February 22, 2017, Smith filed his answer to Wells Fargo’s motion for summary
judgment. Smith argued the September 3, 2015, mitigation affidavit was “outdated and
cannot provide the ‘current status of loss mitigation’ ” where Wells Fargo moved for
foreclosure on December 2, 2016. Accordingly, Smith requested the court order Wells Fargo
to file an updated loss mitigation affidavit that was current as of the filing of the December 2,
2016, motion for summary judgment and motion for entry of an order of default and
judgment of foreclosure and sale. On March 2, 2017, Wells Fargo filed its reply in support of
its motion for summary judgment. Wells Fargo argued that at the time the mitigation
affidavit was executed, it indicated the current status of its loss mitigation efforts and that
there was no requirement to file a current loss mitigation affidavit.
¶ 12 On March 13, 2017, the trial court found that Smith’s answer, “as pleaded without
sufficient documentation,” did not raise a genuine issue of material fact and granted Wells
Fargo’s motion for summary judgment. The trial court also entered a judgment of foreclosure
and sale against Smith. 2 On September 21, 2017, the property was sold at a judicial sale and
the trial court entered an order approving the sale on November 1, 2017. Smith and Brigette
filed their notice of appeal on November 30, 2017, and filed an amended notice of appeal on
December 11, 2017.
2
The trial court also entered an order of default against named defendants Brigette, Portfolio
Recovery Associates, LLC, the State of Illinois, and the Illinois Housing Development authority after
finding that they failed to appear or plead.
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¶ 13 II. ANALYSIS
¶ 14 A. Standard of Review
¶ 15 Smith argues the trial court erred when it granted Wells Fargo’s motion for summary
judgment and entered a judgment of foreclosure and sale against Smith. Smith contends there
remained a genuine issue of material fact as to whether Wells Fargo’s loss mitigation
affidavit sufficiently complied with Rule 114. When interpreting a supreme court rule, we
ascertain and give effect to the intent of the supreme court for promulgating the rule. Wells
Fargo Bank, N.A. v. Simpson, 2015 IL App (1st) 142925, ¶ 35. The most reliable indicator of
the court’s intent is the actual language of the rule, giving the words of the rule their plain
and ordinary meaning. Id. We review the construction of a court rule de novo. Id.Furthermore, when reviewing a trial court’s ruling on a motion to strike an affidavit, which
motion was made in conjunction with the court’s ruling on a motion for summary judgment,
the appropriate standard of review is de novo. Jackson v. Graham, 323 Ill. App. 3d 766, 773
(2001).
¶ 16 B. Illinois Supreme Court Rule 114
¶ 17 Smith argues Wells Fargo did not comply with Rule 114 because it simply recycled the
September 3, 2015, loss mitigation affidavit when Wells Fargo attached it to its December 2,
2016, motions for entry of an order of default and judgment of foreclosure and sale, and
summary judgment. Smith contends that, because the loss mitigation affidavit was sworn to
over one year before Wells Fargo filed its December 2, 2016, motions, it did not indicate the
current status of mitigation efforts embarked by Wells Fargo at the time of its December 2,
2016, motion for judgment of foreclosure.
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¶ 18 Our supreme court adopted Rule 114 in response to a “huge increase” in foreclosures and
found it is in the best interest of the public to work out possible mortgage refinancing rather
than foreclose. Ill. S. Ct. R. 114(a), Committee Comments (adopted Apr. 8, 2013); Simpson,
2015 IL App (1st) 142925, ¶ 36. Rule 114 (a) provides that “[f]or all actions filed under the
Illinois Mortgage Foreclosure Law, and where a mortgagor has appeared or filed an answer
or other responsive pleading, Plaintiff must, prior to moving for a judgment of foreclosure,
comply with the requirements of any loss mitigation program which applies to the subject
mortgage loan.” (Emphasis added.) Ill. S. Ct. R. 114(a) (eff. May 1, 2013). Rule 114(b)
provides that, in order to comply with subsection (a),
“Plaintiff, prior to or at the time of moving for a judgment of foreclosure, must file an
affidavit specifying:
(1) Any type of loss mitigation which applies to the subject mortgage;
(2) What steps were taken to offer said type of loss mitigation to the mortgagor(s);
and
(3) The status of any such loss mitigation efforts.” (Emphasis added.) Ill. S. Ct. R.
114(b) (eff. May 1, 2013).
¶ 19 In this case, Wells Fargo prepared its loss mitigation affidavit on September 3, 2015.
Wells Fargo filed the affidavit, together with its motion for entry of an order of default and
judgment of foreclosure and sale on September 30, 2015. Wells Fargo then filed the same
affidavit along with its new motions for entry of an order of default and judgment of
foreclosure and sale, and summary judgment on December 2, 2016. The affidavit specified a
loss mitigation program called “FHA foreclosure avoidance options” (foreclosure avoidance
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program) as the type of loss mitigation that applied to Smith. The mitigation affidavit also
outlined the steps Wells Fargo took to offer the foreclosure avoidance program to Smith,
namely “Solicitation Letters,” “Outbound Calls,” “Denial/Appeal Period Letters,” and
“Additional Information Required Letters.” Finally, the affidavit indicated the status of the
mitigation efforts as “denied.”
¶ 20 The plain language of Rule 114(a) requires a mortgagee to comply with any loss
mitigation program prior to moving for a judgment of foreclosure. Ill. S. Ct. R. 114(a) (eff.
May 1, 2013). The plain language of Rule 114(b) requires a mortgagee to file a loss
mitigation affidavit prior to or at the time of moving for a judgment of foreclosure. Ill. S. Ct.
R. 114(b) (eff. May 1, 2013). Wells Fargo complied with the loss mitigation requirement
prior to moving for a judgment of foreclosure by specifying in an affidavit the type of loss
mitigation applicable to Smith’s mortgage, the steps taken to offer the loss mitigation
program to Smith, and the status of those mitigation efforts. Wells Fargo then filed the
affidavit at the time it moved for a judgment of foreclosure on December 2, 2016.
Accordingly, we find that because Wells Fargo complied with the requirements of a loss
mitigation program prior to moving for a judgment of foreclosure and filed its loss mitigation
affidavit at the time it filed its motion for judgment of foreclosure on December 2, 2016,
Wells Fargo’s loss mitigation affidavit complied in both substance and form with the
requirements of Rule 114.
¶ 21 Furthermore, Rule 114(d) provides that “[t]he court may, either sua sponte or upon
motion of a mortgagor, stay the proceedings or deny entry of a foreclosure judgment if
Plaintiff fails to comply with the requirements of this rule.” Ill. S. Ct. R. 114(d) (eff. May 1,
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2013). This court has held that, because subsection (d) uses the word “may” rather than
“shall,” Rule 114 is not mandatory and leaves “some room for judicial discretion regarding
the level of strictness of its enforcement.” Simpson, 2015 IL App (1st) 142925, ¶ 37.
Accordingly, even if Wells Fargo failed to comply with Rule 114, the trial court had
discretion to still grant Wells Fargo’s motion for judgment of foreclosure and sale. We hold
the trial court did not err in granting Wells Fargo’s motion for summary judgment and
entering a judgment of foreclosure and sale.
¶ 22 III. CONCLUSION
¶ 23 The trial court did not err by granting summary judgment and entering a judgment of
foreclosure and sale where the loss mitigation affidavit submitted with Wells Fargo’s earlier
motion for summary judgment was relied upon by the trial court for entry of judgments
because defendant failed to raise a genuine issue of material fact regarding Wells Fargo’s
loss mitigation affidavit. The affidavit complied in both substance and form with the
requirements of Rule 114.
¶ 24 Affirmed.
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