Tuesday, October 8, 2013

Mark A. Laws Argues to the Illinois Supreme Court

Oral arguments were heard in the case of Wells Fargo v. McCluskey two weeks ago in front of the highest court in the state of Illinois.  The Supreme Court took the case to decide an important issue for mortgage foreclosure cases within the state.  That issue: Can homeowners (defendants in mortgage foreclosure cases) bring motions to vacate (allowed under Illinois Code of Civil Procedure Section 2-1301) in mortgage foreclosure cases, after the lender (plaintiffs) has already sold a home at a judicial sale?

This ruling in this case will determine several important milestones for both sides in mortgage foreclosure cases.  The court could potentially decide the case on a few different issues.  The conflict arises between the code of civil procedure and the Illinois Mortgage Foreclosure Law (IMFL).  McCluskey, represented by Mark A. Laws, argued that the Code of Civil Procedure allows litigants in any civil law suit to bring a motion to vacate, under section 2-1301 of the code, at any time up until 30 days after the final judgment.  In a mortgage foreclosure case, the final judgment is the last order entered by the court - the order confirming the judicial sale.  Wells Fargo, represented by James Noonan of Noonan and Lieberman, argued that the IMFL is more restrictive and thus inconsistent with the general rules for the code of civil procedure.  Furthermore, that the IMFL must control over the Code of Civil Procedure.

Oral arguments were held on this matter before the Supreme Court of Illinois on September 17, 2013, The case number is 115469.  The full video of these arguments can be access on the Illinois Supreme Court website at:

The Case was also feature in the Chicago Law Bulletin on September 18, 2013.  The full article below:

High court takes look at foreclosure dispute

Law Bulletin staff writer

The Illinois Supreme Court heard a dispute Tuesday over foreclosure proceedings in a case that could reshape the timetable for homeowners looking to challenge a default judgment.
The case stems from the actions of defendant Katie McCluskey, who stopped paying her mortgage in April 2010, prompting her bank, Wells Fargo, to file a motion to foreclose.
On Feb. 24, 2011 — the day the home was slated for auction — McCluskey filed a motion asking a court to vacate the default order and halt the sale.
Both she and the bank agreed in court to delay the sale until May 12, 2011, a 75-day period during which both parties would attempt to renegotiate the mortgage. No deal was reached, however, and Wells Fargo subsequently took over the home once the deadline had expired.
About a month later, McCluskey filed a second motion to vacate the default, which DuPage County Associate Judge Robert G. Gibson denied in August 2011, ruling that the defendant had waived her right to file such a motion after the initial compromise to delay the home sale.
McCluskey disputed that notion, arguing that her new challenge was still timely because a trial court had not yet confirmed and entered a final order on the bank’s takeover of her home.
In an opinion by Justice Mary Seminara Schostok, the 2nd District Appellate Court reversed the trial court ruling and backed McCluskey by saying that she did not waive her right to bring a second motion after the parties’ initial agreement.
“Here, the agreed order that the trial court entered on Feb. 24, 2011, did not make any reference to the defendant’s forgoing any right to bring a second … motion at a later stage in the proceedings. We believe that the waiver of this right would have been a material term in the parties’ agreement,” Schostok wrote.
James V. Noonan, a partner at Noonan & Lieberman Ltd. who represented the bank before the high court, told the justices that a homeowner essentially loses his or her stake in the property once the sale occurs.
“Our position is that the borrower’s right to vacate a default can’t be brought after the hammer falls on the sale,” Noonan said. “He or she has no rights left to protect.”
To allow challenges like the one in this case to linger after the sale would discourage buyers and make the process even more confusing, he added.
Mark A. Laws, a sole practitioner who argued on behalf of McCluskey, said in crafting mortgage and foreclosure laws, the Illinois legislature wanted a system in which the courts had broad discretion to accept and review complaints before or after the home is sold.
“I disagree with counsel. I think they have rights on the property up until the final order by the court,” Laws told the justices. “The point is, we want our trial court judges to have that discretion, and exercise that.”
One thing the parties agreed on was the existence of a conflict between the state’s Code of Civil Procedure and the Illinois Mortgage Foreclosure Law.
The former grants a court power to “set aside any default … upon any terms and conditions that shall be reasonable” while the latter limits a court’s ability, after a sale occurs, to dismiss defaults unless “(i) a required notice (of sale) was not given, (ii) the terms of the sale were unconscionable, (iii) the sale was conducted fraudulently, or (iv) justice was otherwise not done.”
Justice Charles E. Freeman asked whether that fourth provision “aims to accomplish the same goal to promote fairness, and if that is true, then why shouldn’t (it) be available as a remedy?”
Noonan responded that giving the civil code statute more weight would be akin to “basically putting a restart in the litigation” whereas, under the foreclosure law, “all it does is disallow the sale, it does not restart the foreclosure” process.
The case is Wells Fargo Bank N.A. v. Katie McCluskey, No. 115469.