Jensen's foreclosure ruling for Deutsche Bank reversed at Fifth District
MOUNT VERNON – Madison County Associate Judge Keith Jensen improperly allowed Deutsche Bank to mount a late defense against a foreclosure, Fifth District appellate judges ruled on Aug. 30.
They found Jensen should have stuck with his original order granting default judgment in favor of Alliance Savings.
Justice James Donovan wrote that Deutsche Bank failed to appear after being served and moved to vacate judgment 184 days after receiving notice of a judicial sale.
"Due diligence requires the petitioner to show a reasonable excuse for failing to act within the appropriate time," Donovan wrote.
"Deutsche Bank has not claimed that it did not receive copies of the documents.
"Deutsche Bank has not presented any evidence to show that the person served was not its employee or registered agent.
"Deutsche Bank has not shown that its failure to defend in the original action was the result of an excusable mistake or that its inaction was reasonable under the circumstances."
Justices Thomas Welch and Stephen Spomer agreed.
Alliance was represented by Phillip Theis of Granite City.
Deutsche was represented by Ira Nevel of Chicago.
The banks battled over the former home of Magnolia's Restaurant owner Jerry Wilson in Granite City.
Alliance Savings obtained a $33,678.50 judgment against Wilson and the restaurant in 2004, and recorded a memorandum of judgment against the home.
In 2005, Wilson and wife Barbara Wilson secured a $253,800 loan from Argent Mortgage, which assigned it to Deutsche Bank.
The Wilsons defaulted, and Deutsche Bank filed a foreclosure action in 2007.
Deutsche Bank didn't name Alliance Savings as an interested party or serve it with a summons.
A process server who approached the house found the Wilsons had cleared out.
They eventually received service but didn't appear in court, so Deutsche Bank won default judgment.
At auction in 2008, Deutsche Bank offered the high bid.
On the same day, Alliance Savings moved to intervene in the foreclosure.
Its owners changed tactics, withdrawing the motion and filing a new suit to foreclose its lien on the property.
Alliance Savings served Deutsche Bank on April 3, Wilson on April 10.
Neither answered, and Jensen declared default on Sept. 12.
Alliance Savings mailed the order to Deutsche Bank that day.
On Nov. 13, Jensen entered judgment of foreclosure and set a sale for Dec. 11.
On Dec. 2, Alliance Savings mailed a sale notice to Deutsche Bank.
At the sale, Alliance Savings offered the high bid.
On Dec. 18, Jensen awarded immediate possession of the property to Alliance Savings.
On Dec. 23, Alliance Savings recorded the judicial deed.
Up to that point, according to the Fifth District, Jensen handled it perfectly.
On March 18, 2009, Deutsche Bank moved to vacate all the orders.
Deutsche Bank claimed it must have inadvertently misdirected the complaint.
It argued that Alliance Savings couldn't foreclose on property of Jerry and Barbara because it obtained judgment only against Jerry.
Jensen granted the motion, finding Deutsche Bank had a meritorious defense and exercised due diligencein filing for relief.
He also endorsed the alternate theory that by selling property of Jerry and Barbara, he awarded Alliance Savings more relief than it deserved.
He voided the judicial sale and the deed, but the Fifth District restored them.
"In the absence of any finding that the judgment was obtained by some unjust or unconscionable conduct, we conclude that any error in the trial court's judgment offore closure and sale and subsequent orders could have and should have been addressed in a direct appeal," Donovan wrote.
He found the alternate ruling manifestly erroneous and an abuse of discretion.
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