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:
http://www.state.il.us/court/Opinions/AppellateCourt/2011/1stDistrict/Sept
ember/1102632.pdf
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 sale.

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 possession.

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 jurisdiction."

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 jurisdiction."