Thursday, September 8, 2011

FYI: Ill App Ct Rejects Borrower's Untimely Challenge as to Service of Process

The Illinois Appellate Court for the First District recently held that a
borrower or other defendant waives his right to challenge jurisdiction
where he files a motion to stay a foreclosure sale without first or
simultaneously filing a motion challenging jurisdiction, or moving for an
extension of time to do so.

A copy of the opinion is available at:

Plaintiff Deutsche Bank National Trust Company ("Deutsche Bank") filed a
mortgage foreclosure action against defendants Carolyn A. Hall-Pilate and
John J. Pilate. The special process server executed two returns of
service indicating that John was served with a summons and complaint for
himself and on behalf of his wife, Carolyn.

When the borrowers did not appear and answer, Deutsche Bank filed a motion
for default. The trial court continued the motion on March 18, 2008,
because John Pilate had appeared pro se before the court and requested
time to consult with an attorney. The borrowers were granted 28 days to
file an appearance and answer or otherwise plead to the complaint.

After the borrowers still failed to file an appearance or response to the
complaint, the trial court granted Deutsche Bank's motion for default
judgment, and entered orders appointing a foreclosure sale officer and for
judgment for foreclosure and sale. Deutsche Bank filed a motion for an
order approving the report of sale and distribution following the judicial

On September 12, 2008, an "additional" appearance was filed by a law firm,
as counsel for the borrowers. The law firm also filed an emergency motion
to stay approval of the property sale. The trial court denied the
borrowers' emergency motion for a stay, and entered an order approving the
report of sale and distribution, confirming the sale and order of

On May 29, 2009, the borrowers filed a motion to quash service through new
counsel, asserting that John was out of state when the service of process
allegedly occurred. The trial court denied the motion to quash service.

On appeal, the borrowers argued that the trial court erred in denying
their motion to quash service because the borrowers did not file any
appearance or other pleadings prior to the entry of the default judgment.
Deutsche Bank argued that the borrowers waived their jurisdictional
objections when they filed their emergency motion to stay the approval of
a judicial sale prior to final judgment in the case.

The Appellate Court noted that section 2-301 of the Illinois Code of Civil
Procedure governs challenges to personal jurisdiction. The court held
that "[u]nder section 2-301, an objection to the court's jurisdiction must
be raised in the first pleading or motion filed, other than a motion for
an extension of time to answer or otherwise appear, but such objection may
be raised alongside other motions seeking relief on different grounds."

The Court noted that the borrowers "did not comply with the requirements
of section 2-301 to preserve their objection to the trial court's
jurisdiction because they filed a motion to stay the approval of the
property sale without also challenging the court's jurisdiction." In
addition, the Court ruled that "by participating in the case without
raising an objection to personal jurisdiction," the borrowers "voluntarily
submitted to the trial court's jurisdiction and waived any objection."

The borrowers also asserted that any waiver of personal jurisdiction did
not apply to Carolyn because she did not appear at the initial hearing.
However, the court was "not persuaded as the relevant action by the
defendants was the filing of the emergency motion for a stay which was
filed on behalf of both defendants. Thus, [Carolyn], with her husband,
sought relief from the trial court and waived any challenge to personal

The Court held that "[s]ince defendants in the instant case appeared in
this case before a final judgment was entered against them by filing a
motion seeking relief from the trial court and recognizing its
jurisdiction, defendants waived all objections to the trial court's

Ralph T. Wutscher
McGinnis Tessitore Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
Direct: (312) 551-9320
Fax: (312) 284-4751
Mobile: (312) 493-0874

NOTICE: We do not send unsolicited emails. If you received this email in
error, or if you wish to be removed from our update distribution list,
please simply reply to this email and state your intention. Thank you.

Our updates are available on the internet, in searchable format, at:
CONFIDENTIALITY NOTICE: This communication (including any related attachments) is intended only for the person/s to whom it is addressed, and may contain confidential and/or privileged material. Any unauthorized disclosure or use is prohibited. If you received this communication in error, please contact the sender immediately, and permanently delete the communication (including any related attachments) and permanently destroy any copies.

IRS CIRCULAR 230 NOTICE: To the extent that this message or any attachment concerns tax matters, it is not intended to be used and cannot be used by any taxpayer for the purpose of avoiding penalties that may be imposed by law.