ING Bank, FSB v. Tanev

Illinois Official Reports
Appellate Court
ING Bank, FSB v. Tanev, 2014 IL App (2d) 131225Appellate Court ING BANK, FSB, Plaintiff-Appellee, v. BOJIDAR TANEV,
Caption Defendant-Appellant.
District & No. Second District
Docket No. 2-13-1225
Filed August 5, 2014
Rehearing denied October 9, 2014
Held In a mortgage foreclosure action, the trial court’s order vacating the
(Note: This syllabus initial judicial sale to plaintiff bank, due to a bidding error by the bank,
constitutes no part of the which resulted in a surplus, and permitting a second sale, in which the
opinion of the court but bank was again the successful bidder, but with a deficiency, was
has been prepared by the upheld on appeal, notwithstanding defendant’s contention that the trial
Reporter of Decisions court could not refuse to confirm the first sale based on the bank’s
for the convenience of unilateral mistake, e.g., the bidding error, since a judicial sale is not
the reader.) final until it is confirmed by the trial court following a hearing on a
motion for confirmation, and in the instant case, neither party filed a
motion to confirm the first sale and defendant’s inaction in the face of
the bank’s motion to vacate the first sale and conduct and confirm the
second sale waived his right to object.
Decision Under Appeal from the Circuit Court of Lake County, No. 10-CH-5375; the
Review Hon. Mitchell L. Hoffman, Judge, presiding.
Judgment Affirmed.
Counsel on Andjelko Galic, of Chicago, for appellant.
Appeal
Daniel J. May, of Weltman, Weinberg & Reis, of Chicago, for
appellee.
Panel JUSTICE JORGENSEN delivered the judgment of the court, with
opinion.
Presiding Justice Burke and Justice McLaren concurred in the
judgment and opinion.
OPINION
¶1 In this foreclosure action, defendant, Bojidar Tanev, challenges the trial court’s order
vacating, due to a bidding error, a judicial sale (in which plaintiff, ING Bank, FSB, was the
successful bidder and which resulted in a surplus) and permitting a second sale (in which
plaintiff was again the successful bidder but which resulted in a deficiency). In addition,
defendant appeals the court’s order granting plaintiff leave to file a second amended report of
sale. For the following reasons, we affirm.
¶2 I. BACKGROUND
¶3 On September 22, 2010, plaintiff filed a complaint seeking to foreclose on a mortgage
executed by defendant, in relation to defendant’s property in Libertyville. Although he was
served with a summons, defendant did not appear. On April 12, 2011, the court entered a
default judgment of foreclosure and sale in the amount of $283,816.50.
¶4 On July 14, 2011, after due notice, a judicial sale was held. Plaintiff submitted an
opening bid of $376,000 and was the successful bidder. Although various status orders in the
record reflect plaintiff’s subsequent appearance for “presentation of motion to confirm sale,”
no such motion appears in the record. Accordingly, it appears that neither plaintiff nor
defendant moved to confirm the July 14, 2011, judicial sale.
¶5 On September 28, 2011, defendant filed for bankruptcy.
¶6 On January 10, 2012, plaintiff moved to vacate the judicial sale. Again, no motion to
confirm was pending. Plaintiff represented that it had “erred in its bidding instructions
submitted to counsel, resulting in an incorrect amount being bid at the sale.” Defendant does
not dispute that he received notice of the motion. He did not respond or appear at the hearing
on the motion and, on January 27, 2012, the court granted the motion and vacated the sale.
¶7 On February 23, 2012, after due notice, a second judicial sale was held. Plaintiff was
again the successful bidder, this time bidding $286,436.
¶8 Plaintiff moved to confirm the second sale. On March 9, 2012, the motion to confirm the
sale was set for a hearing, and defendant appeared for the first time and responded to the
motion. In his response, defendant argued that: (1) the first sale should not have been
vacated; and (2) the second sale should not be confirmed, because there were deficiencies in
the preparation and filing of sheriff’s reports (including that the report of sale contained
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blank lines for the amount of the bid and the deficiency). Defendant asserted collusion
between plaintiff and the sheriff’s office. Therefore, on November 14, 2012, the court
granted defendant 45 days to depose the selling officer and to investigate facts surrounding
the second sale and any relevant documents. Also on November 14, 2012, the court granted
plaintiff leave to file a second amended report of sale, which reflected the bid and deficiency
amounts. Defendant did not depose anyone within the 45-day period, and the court found that
he waived the right to do so. The court ultimately determined that defendant’s allegations of
collusion were unfounded.1
¶9 On April 15, 2013, defendant moved to vacate the January 27, 2012, order (vacating the
first sale) and to confirm the first sale. Defendant argued that a court may not refuse to
“confirm” a properly conducted sale based on one party’s unilateral mistake (i.e., plaintiff’s
bidding error). On April 18, 2013, after a hearing, the court denied defendant’s motion. The
court found relevant that no motion to confirm the first sale was filed before the motion to
vacate. Further, the court found that waiver was at issue because defendant was given notice
of the motion to vacate the first sale but he never appeared or responded. Finally the court
noted that it did not modify the first sale but, rather, vacated it entirely and a new sale was
held. The court also rejected defendant’s arguments concerning alleged deficiencies in the
sheriff’s reports and it confirmed the second sale.
¶ 10 On May 23, 2013, defendant moved to reconsider the April 18, 2013, order. On October
16, 2013, after a hearing, the court denied defendant’s motion. Defendant appeals.
¶ 11 II. ANALYSIS
¶ 12 We first address plaintiff’s argument that defendant lacks standing to pursue this appeal.
Plaintiff argues that defendant’s arguments are all premised on an assumption that he was
harmed when the first sale (resulting in a surplus) was vacated and the second sale (resulting
in a deficiency) was confirmed. Plaintiff notes that, after the first sale, defendant filed for
bankruptcy protection. Thus, it argues, defendant would not have received any benefit if the
first sale had been confirmed, because any surplus would have been an asset of the
bankruptcy estate and any claim to that surplus would need to be pursued by a trustee.
Further, plaintiff argues that defendant is not liable for any deficiency from the second sale.
Plaintiff concludes that defendant has suffered no injury in fact and therefore lacks standing
to appeal the trial court’s decisions.
¶ 13 Plaintiff acknowledges that it did not raise the standing argument before the trial court
and that standing is considered an affirmative defense that is forfeited if not raised in a timely
manner. See 735 ILCS 5/2-613(d) (West 2012); In re Estate of Henry, 396 Ill. App. 3d 88, 93
(2009). However, plaintiff asserts that standing affects justiciability and that we should
1
The court stated:
“[Y]ou were alleging something that caused me great concern. You were alleging collusion
actually between *** this law firm and the sheriff. As a result of that I made sure that the sheriff
was notified of the allegation. I gave you leave to take whatever discovery you wanted to
pursue that rather disturbing allegation, you didn’t conduct much of any discovery, you didn’t
uncover anything new, and you really didn’t show me any evidence that there was any
collusion whatsoever. So as far as I’m concerned[,] it was just speculation on your part and a
fair [sic] conclusion with no support.”
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consider its argument because forfeiture is a limitation upon the parties, not the courts.
Henry, 396 Ill. App. 3d at 93-94. Nevertheless, we find plaintiff’s standing argument
forfeited here.
¶ 14 In Henry, despite forfeiture, the court addressed a standing argument; however, it did so
because all facts necessary to resolve the issue were before it. Id. Here, there is apparently no
dispute that defendant filed for bankruptcy. Plaintiff notes, however, that the bankruptcy case
was terminated before the first sale was vacated. It does not cite the record to support this
proposition (and we found only a bare assertion to that effect, in plaintiff’s reply in support
of a motion), but it does not address whether, if, in fact, the bankruptcy case was terminated
before the first sale was vacated, defendant might now have standing to pursue the resulting
surplus. As defendant filed no reply brief on appeal, we do not have argument from him on
the standing issue. Accordingly, where it is not clear that we possess sufficient facts or
argument to properly address it, we decline to reach the merits of plaintiff’s standing
argument and we honor the forfeiture.
¶ 15 Turning to the merits of the appeal, we address first defendant’s contention that the trial
court erred in granting plaintiff’s motion to vacate the first sale. Defendant argues that the
court did not have authority to vacate the sale because of plaintiff’s mistaken bid. He asserts
that a judicial sale must be confirmed if the only argument against confirming it is a
unilateral mistake by one of the interested parties and, similarly, that a party may not seek a
second sale to protect itself from its own negligence. Defendant argues that the court erred in
finding that he forfeited his “rights” to a surplus by failing to object to plaintiff’s motion to
vacate the first sale. We disagree.
¶ 16 Section 15-1508 of the Illinois Mortgage Foreclosure Law (Foreclosure Law) (735 ILCS
5/15-1508 (West 2012)) imposes upon courts various obligations in confirming judicial sales.
See Household Bank, FSB v. Lewis, 229 Ill. 2d 173, 178 (2008). Nevertheless, section
15-1508’s obligations are not triggered until a motion to confirm the sale is filed by one of
the parties.2 Id. Specifically, “[u]nder the terms of the statute, a court *** has mandatory
obligations to (a) conduct a hearing on confirmation of a judicial sale where a motion to
confirm has been made and notice has been given, and, (b) following the hearing, to confirm
the sale unless it finds that any of the four specified exceptions are present.” Id. However,
“[t]he exercise of discretion in applying section 15-1508(b) is necessary only when the
requirements of that law have become operative. Under the terms of the statute, they do not
become operative until they have been invoked by a motion requesting confirmation of the
sale.” Id. at 179. Accordingly, a judicial sale is not final until it is confirmed by the trial
court, after a hearing following a motion for such a hearing. See Citicorp Savings of Illinois v.
First Chicago Trust Co. of Illinois, 269 Ill. App. 3d 293, 300 (1995). Prior to a motion to
confirm, “[t]he highest bid at a judicial sale is merely an irrevocable offer to buy the subject
property, the acceptance of which does not take place until the court confirms the sale, before
2
Section 15-1508(b) provides: “(b) Hearing. Upon motion and notice in accordance with court rules
applicable to motions generally, which motion shall not be made prior to sale, the court shall conduct a
hearing to confirm the sale. Unless the court finds that (i) a notice required in accordance with
subsection (c) of Section 15-1507 was not given, (ii) the terms of sale were unconscionable, (iii) the
sale was conducted fraudulently, or (iv) justice was otherwise not done, the court shall then enter an
order confirming the sale.” (Emphasis added.) 735 ILCS 5/15-1508(b) (West 2012).
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which there is no true sale in any legal sense.” Fleet Mortgage Corp. v. Deale, 287 Ill. App.
3d 385, 388 (1997); see also Household Bank, 229 Ill. 2d at 181.
¶ 17 Here, the record reflects that neither party filed a motion to confirm the first sale (again,
section 15-1508(b) simply provides that a hearing will be held “[u]pon motion,” without
specifying who must file said motion) and, therefore, section 15-1508 was not triggered.
Given that section 15-1508’s limited bases for refusing to confirm a sale are not at issue here,
the question is simply whether the trial court had authority to vacate (as opposed to refuse to
confirm) the first sale. Nevertheless, defendant essentially argues that the trial court was
obligated to confirm the first sale, even absent a motion to do so. Specifically, he asserts that
the court did not have authority to vacate the sale and order a resale in order to “correct a
mistaken sale bid.” We initially note that this argument rests on an invalid premise, because
the court here did not “correct a mistaken sale bid.” The court vacated the first sale upon
plaintiff’s motion. In fact, the important distinction is made apparent in a case upon which
defendant heavily relies.
¶ 18 In Grubert v. Cosmopolitan National Bank of Chicago, 269 Ill. App. 3d 408 (1995), the
trial court was presented with a motion to confirm a judicial sale (unlike with the first sale
here). It entered an order confirming the sale, but, in doing so, it reduced the bid to an
amount that the plaintiff alleged comported with the parties’ agreement after the sale. The
appellate court held that section 15-1508 does not authorize a trial court to simply revise a
bid amount when confirming a sale, noting that such actions could undermine the finality of a
properly conducted sale. Id. at 411. However, critically, the appellate court remanded for the
trial court to hold an evidentiary hearing and noted that, if the trial court found that the
amended bid amount did, in fact, comport with the parties’ agreement, then the court could
hold them to that agreement, i.e., change the bid amount. Id. at 412.
¶ 19 Thus, defendant’s reliance on Grubert is misplaced. Again, as there was no pending
motion to confirm the first sale here, the parameters of section 15-1508, which prohibited the
trial court from modifying the bid in Grubert, are not at issue here. Further, the trial court
here did not modify the bid but rather vacated the nonfinal, unconfirmed sale outright, and,
subsequently, a second sale was conducted. Thus, the court here did not “correct” a mistaken
bid. Accordingly, if Grubert is at all instructive here, it is because the decision reflects that a
judicial sale is not necessarily absolutely fixed and unchangeable. As Grubert does not stand
for the proposition that a trial court is obligated to confirm a judicial sale and, again, as case
law holds that a judicial sale is not final until confirmed (Citicorp Savings, 269 Ill. App. 3d at
300), it does not convince us that the court here erred.
¶ 20 In fact, our supreme court’s decision in Household Bank, also a foreclosure case, reflects
that a trial court is not obligated to confirm a judicial sale and may, instead, vacate it when
the party who initiated the foreclosure decides not to pursue it. In Household Bank, the
plaintiff moved to confirm a judicial sale but then withdrew the motion and moved to vacate
the sale. The supreme court held that, even where it adversely affected third-party interests,
the trial court did not err in granting the motion to vacate. Household Bank, 229 Ill. 2d at
179-80. Therefore, defendant’s argument that the trial court here was somehow obligated to
confirm the first sale, or was precluded from vacating it, must fail.
¶ 21 Defendant also relies heavily on an aged supreme court case, Abbott v. Beebe, 226 Ill.
417, 420 (1907), where the court stated: “Courts will not refuse to confirm a judicial sale or
order a re-sale on the motion of an interested party, merely to protect him against the result of
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his own negligence, where he is under no disability to protect his own rights at such sale.”
Defendant argues that the court here erred in ordering a resale to protect plaintiff from its
negligence in communicating incorrect bid instructions to its counsel. While the language
defendant cites appears, at first blush, to support his argument, closer inspection reflects that
defendant’s reliance on Abbott is misplaced. First, Abbott did not involve a foreclosure or the
Foreclosure Law. Rather, in Abbott, heirs to a property were aware that it would be sold at a
judicial sale, but they made no effort to delay the sale or facilitate an increase in bid prices.
The trial court later refused to confirm the sale, because the heirs objected that the bids were
too low. The Abbott court ruled that low bids could not, alone, serve to defeat a judicial sale,
particularly where the heirs had notice of the sale but did nothing to prevent the outcome.
Id. at 421. As such, the court’s concern in Abbott, as applied here, actually works against
defendant. Indeed, the relevant failure to act here must be attributed to defendant, who
received notice of the first sheriff’s sale and notice of plaintiff’s motion to vacate the sale but
did nothing.
¶ 22 Second, while it is true that the Abbott court noted that stability in judicial sales is
necessary to induce persons to become purchasers and that, therefore, sales should “not be
disturbed for slight causes” (internal quotation marks omitted) (id. at 420), we disagree that
the sale here was disturbed for a slight cause or that, ultimately, the court’s decision to grant
plaintiff’s motion constitutes an abuse of discretion. See Northwest Diversified, Inc. v. Mauer,
341 Ill. App. 3d 27, 33 (2003) (generally, a court’s decision on a motion to vacate a judicial
sale is reviewed for an abuse of discretion). Specifically, we cannot find that the court abused
its discretion where: (1) plaintiff, the purchaser and only party to appear on record, moved to
vacate the sale, not to amend it; (2) plaintiff alleged that its bid instructions to counsel were
in error; (3) there was no pending motion to confirm the sale; and (4) despite notice,
defendant did not appear or object to plaintiff’s motion to vacate.
¶ 23 Defendant asserts that he was not required to act to avoid waiving his “right” to a surplus.
Not only does he cite no authority for this proposition, but he ignores that courts routinely
find that parties have intentionally relinquished known rights through their inactions. See,
e.g., Quick & Reilly, Inc. v. Zielinski, 306 Ill. App. 3d 93, 99 (1999) (“waiver may be inferred
when a party intentionally relinquishes a known right, either expressly, as by objection, or by
conduct, such as silence, inconsistent with an intent to enforce that right”). We further note
that, although defendant asserts that the law does not require him to “do anything” to claim a
surplus and that therefore the court erroneously found that he waived his right to a surplus,
defendant incorrectly frames the issue. The court did not find that defendant waived his right
to a surplus. Rather, the court determined that defendant waived his right to object to
plaintiff’s motion to vacate the sale. In other words, even if defendant was not required to do
anything to claim a surplus, his silence and inaction when that surplus was jeopardized by a
motion to vacate the sale resulted in a waiver thereafter of the right to object to that motion.
In sum, the trial court did not err in vacating the sale.
¶ 24 Defendant’s additional arguments on appeal pertain to the sheriff’s allegedly deficient
actions. To the extent that the arguments pertain to deficiencies in the documents filed after
the first sale, we reject them because that sale was vacated. To the extent that the arguments
pertain to the second sale, we reject them because defendant cites no authority for the
proposition that technical defects in the documents would require us to vacate a sale. Ill. S.
Ct. R. 341(h) (eff. Feb. 6, 2013); Vilardo v. Barrington Community School District 220, 406
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Ill. App. 3d 713, 720 (2010) (undeveloped arguments, or contentions with some argument
but no authority, are forfeited). Moreover, those technical defects were corrected with
amended reports. To the extent that defendant challenges the trial court’s decisions to allow
plaintiff to file the amended reports and allegedly “late” documents, those claims either are
forfeited for failure to raise them below (e.g., defendant’s contention that the court allowed
plaintiff to file a second amended report of sale without establishing good cause for the delay
in doing so) or simply do not establish an abuse of discretion. See Martinez v. River Park
Place, LLC, 2012 IL App (1st) 111478, ¶ 29 (“It is well settled that issues not raised in the
trial court are deemed forfeited and may not be raised for the first time on appeal.”). Finally,
while defendant again raises vague suggestions of collusion between plaintiff and the
sheriff’s office, he was provided ample opportunity to support his claims, failed to do so,
and, therefore, has not established that the court abused its discretion in rejecting those
claims.
¶ 25 III. CONCLUSION
¶ 26 For the reasons stated, the judgment of the circuit court of Lake County is affirmed.
¶ 27 Affirmed.
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