Merchants Bank v. Roberts

No. 2--97--0100
_________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT
_________________________________________________________________

MERCHANTS BANK, as Assignee ) Appeal from the Circuit Court
of Great Northern Mortgage, ) of Kane County.
)
Plaintiff-Appellee, )
)
v. ) No. 96--CH--193
)
WILLIAM GUY ROBERTS, JR., JOY )
M. ROBERTS, MERCHANTS NATIONAL )
BANK, as Trustee of Trust )
No. 2882 and Beneficiaries )
thereunder, )
)
Defendants-Appellants )
)
(American General Finance, )
Inc., Hinckley State Bank, )
Unknown Owners, Nonrecord ) Honorable
Claimants, and William Miller, ) Melvin E. Dunn
Defendants). ) Judge, Presiding.
_______________________________________________________________

JUSTICE RATHJE delivered the opinion of the court:
On April 4, 1996, the plaintiff, Merchants Bank, filed a
mortgage foreclosure action naming as defendants, William Guy
Roberts, Jr., Joy M. Roberts, his wife, and Merchants National
Bank, as trustee of trust No. 2882. Additional defendants are not
parties to this appeal. The above-named defendants were defaulted,
and, on July 19, 1996, the trial court entered a judgment of
foreclosure. The order provided that the last day to redeem the
property was November 4, 1996. Thereafter, on November 22, 1996,
the property was sold at a sheriff's sale. At the December 6,
1996, hearing to confirm the sale, an attorney for William Guy
Roberts, Jr., appeared seeking a continuance of the confirmation
hearing. The motion for continuance was denied.
Thereafter, on January 3, 1997, new counsel, representing
William Guy Roberts, Jr., Joy M. Roberts, and trust No. 2882,
appeared and presented an emergency motion to reconsider the order
denying the motion to continue and/or motion to vacate the order
confirming the sale. The motion for reconsideration was
accompanied by exhibits, affidavits of the defendants, and a
memorandum of law. The plaintiff filed a motion to strike the
emergency motion. William Miller, the buyer of the defendants'
property at the sheriff's sale, filed a motion to strike the
appearances of Joy M. Roberts and trust No. 2882. Following a
hearing on January 10, 1997, the trial court granted Miller's
motion to strike the appearances of Joy M. Roberts and trust No.
2882 and denied the emergency motion for reconsideration and/or to
vacate the confirmation of sale. This appeal followed.
On appeal, the defendants raise the following issues: (1)
whether the trial court erred in denying William Guy Roberts,
Jr.'s, motion to continue the confirmation of sale hearing; and (2)
whether the trial court erred in denying the defendants' emergency
motion for reconsideration and/or motion to vacate.
A litigant has no absolute right to have a case continued.
Sinram v. Nolan, 227 Ill. App. 3d 241, 243 (1992). A decisive
factor is whether the party asking for the continuance has shown
diligence in proceeding with the cause. Sinram, 227 Ill. App. 3d
at 243. The trial court has broad discretion in ruling on motions
for continuance but that discretion must not be exercised
arbitrarily. Sinram, 227 Ill. App. 3d at 243. A reviewing court
must balance the prompt disposition of the case with the equally
compelling interest in obtaining justice to determine whether an
abuse of discretion occurred. O'Neill v. Brown, 242 Ill. App. 3d
334, 343 (1993). The granting or denying of a motion for
continuance will not be disturbed on appeal unless there has been
a manifest abuse of discretion or a palpable injustice. Maslanka
v. Blanchett, 239 Ill. App. 3d 548, 553 (1992).
Section 15--1508(b) of the Code of Civil Procedure (735 ILCS
5/15--1508(b) (West 1996)) provides that the trial court shall
conduct a hearing to confirm the sheriff's sale of a foreclosed
property and shall enter an order confirming the sale unless it
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)
that justice was otherwise not done." 735 ILCS 5/15--1508(b) (West
1996).
In his motion for continuance, William Guy Roberts, Jr.,
alleged specifically that the purchase price from the sheriff's
sale was inadequate; that the parcels sold at the sheriff's sale
should not have been encumbered by the mortgage and therefore
should not have been sold at the sale; and that justice and equity
required that the sale should be set aside. Mr. Roberts, Jr.,
further alleged that, subsequent to the sale, his prior counsel had
informed him that he was unable to represent Mr. Roberts, Jr., due
to a conflict of interest and that, as a result, Mr. Roberts, Jr.,
had to obtain new counsel.
In his brief, Mr. Roberts, Jr., asserts that the purpose of
seeking the continuance was to permit his new counsel time to
present a written motion to void or otherwise set aside the sale.
The record before us establishes that Mr. Roberts, Jr., failed
to exercise diligence in seeking to challenge the confirmation of
the sheriff's sale in this case. The foreclosure suit in this case
was filed on April 4, 1996, and the judgment of foreclosure was
entered on July 19, 1996. At that point, Mr. Roberts, Jr., was, or
should have been, aware via the notices he received of the identity
of the parcels that were foreclosed upon. However, he was still
not prepared to challenge that alleged mistake some five months
later. Although the sheriff's sale was held November 22, 1996,
some 14 days prior to the confirmation hearing, Mr. Roberts, Jr.,
failed to establish in his motion why he was not prepared on the
day of the confirmation hearing to challenge the sale price as
inadequate. Finally, it is left to the reader's imagination as to
why justice and equity require that the sale be set aside.
Finally, Mr. Roberts, Jr.'s, need to obtain new counsel to
present the motion for continuance appears not to be the cause of
his lack of diligence but rather a product of Mr. Roberts Jr.'s,
own "foot dragging" where this case is concerned. The allegation
regarding the wrong parcels being encumbered by the mortgage should
have been known to Mr. Roberts, Jr., at the very least as of July
19, 1996, the day the trial court entered the judgment of
forclosure.
We conclude therefore that the trial court did not err in
denying a continuance of the hearing on the confirmation of the
sheriff's sale.
The defendants then contend that the trial court erred in
denying their emergency motion for reconsideration of the order
denying the continuance and/or motion to vacate the order
confirming the sale. The defendants style the emergency motion as
brought pursuant to section 2--1301(e) of the Code of Civil
Procedure (735 ILCS 5/2--1301(e) (West 1996)). Section 2--1301(e)
provides in pertinent part as follows:
"The court may in its discretion, before final order or
judgment, set aside any default, and may on motion filed
within 30 days after entry thereof set aside any final order
or judgment upon any terms and conditions that shall be
reasonable." 735 ILCS 5/2--1301(e) (West 1996).
The emergency motion in this case is actually two different
motions, in that it seeks reconsideration of the court's order
denying William Guy Roberts, Jr.'s, motion to continue the
confirmation hearing, and it also seeks vacation of the order
confirming the sale on behalf of all of the defendants. Different
standards of review apply to each motion and will be discussed in
turn.
First, however, we must address that part of the January 10,
1997, order which struck the appearances of Joy M. Roberts and
trust No. 2882. The defendants concede in their brief that, as to
that part of the motion seeking reconsideration of that part of the
order of December 6, 1996, denying the motion for continuance, the
appearances of Joy M. Roberts and trust No. 2882 were properly
stricken as the motion for continuance was brought solely on behalf
of William Guy Roberts, Jr. However, as to that portion of the
emergency motion seeking to vacate the order confirming the sale,
we agree with the defendants that the trial court erred in striking
the appearances of Joy M. Roberts and trust No. 2882. Both Joy M.
Roberts and trust No. 2882 were parties to the foreclosure action
in this case and received notice of the hearing to confirm the
sheriff's sale. Under section 2--1301(e), they were entitled to
bring a motion, within 30 days, to set aside the order of
December 6, 1996. Therefore, the trial court erred in striking the
appearances of Joy M. Roberts and trust No. 2882 as to that part of
the emergency motion seeking to vacate the order confirming the
sheriff's sale in this case. See Nicholson v. St. Anne Lanes,
Inc., 158 Ill. App. 3d 838, 842 (1987).
We first address the motion for reconsideration of that
portion of the December 6, 1996, order denying a continuance of the
confirmation hearing. We agree with the plaintiff that the
standard of review on a motion for reconsideration is set forth in
John Alden Life Insurance Co. v. Propp, 255 Ill. App. 3d 1005
(1994). The defendants argue that the standard in Propp does not
apply since it does not appear that the motion for reconsideration
in Propp was brought under section 2--1301(e). We reject that
argument because it is clear that, in the case before us, only that
portion of the emergency motion seeking to vacate the order
confirming the sale is properly brought under section 2--1301(e).
In and of itself, an order denying a continuance is neither a final
order nor a judgment subject to being vacated under section 2--
1301(e).
In Propp, the court explained the purpose of a motion for
reconsideration as follows:
" 'The intended purpose of a [motion] to reconsider is to
bring to the court's attention (1) newly discovered evidence
which was not available at the time of the first hearing, (2)
changes in the law, or (3) errors in the court's previous
application of existing law. *** Trial courts should not
permit litigants to stand mute, lose a motion and then
frantically gather evidentiary material to show that the court
erred in its ruling. Civil proceedings already suffer from
far too many delays and the interests of finality and
efficiency require that the trial courts not consider such
late-tendered evidentiary material, no matter what the
contents thereof may be.' " (Emphasis in original.) Propp,
255 Ill. App. 3d at 1011, quoting Gardner v. Navistar
International Transportation Corp., 213 Ill. App. 3d 242, 248-
49 (1991).
The motion for reconsideration in this case failed to satisfy
the above test in any respect. Therefore, the trial court did not
err in denying that portion of the emergency motion seeking
reconsideration of the trial court's order denying a continuance of
the confirmation hearing.
We now address that portion of the emergency motion seeking to
vacate the order confirming the sheriff's sale and which was
properly brought pursuant to section 2--1301(e).
The determination of whether to grant a motion to vacate is
within the sound discretion of the trial court. W.M. Mold & Tool
v. DeRosa, 251 Ill. App. 3d 433, 439 (1993). The overriding
concern in ruling on a motion to vacate is whether substantial
justice is being done between the litigants, and whether it is
reasonable under the circumstances to proceed to trial on the
merits. DeRosa, 251 Ill. App. 3d at 439. A circuit court has
abused its discretion when it acts arbitrarily without the
employment of conscientious judgment or if its decision exceeds the
bounds of reason and ignores principles of law such that
substantial prejudice has resulted. Venzor v. Carmen's Pizza
Corp., 235 Ill. App. 3d 1053, 1059 (1992). If reasonable persons
could differ as to the propriety of the trial court's actions, then
the trial court cannot be said to have exceeded its discretion.
Venzor, 235 Ill. App. 3d at 1059.
While a meritorious defense is no longer a necessary ground
for seeking relief under section 2--1301(e) (Venzor, 235 Ill. App.
3d at 1059), it is still a factor in determining whether the
judgment should be vacated. DeRosa, 251 Ill. App. 3d at 439.
Other factors include due diligence, the residence of the
nonmovant, the severity of the penalty as a result of the judgment,
and the hardship on the nonmovant if he is required to go to trial.
DeRosa, 251 Ill. App. 3d at 439.
Although the trial court stated that it had reviewed the file
in this case, it is clear from the transcript of the hearing on the
motion to vacate that the trial court considered only the due
diligence factor in its decision to deny the motion to vacate. The
trial court did not give consideration to any of the other factors.
Nothing in the record before us indicates that either the
location of the plaintiff's residence or any hardship caused by an
adversarial hearing on the confirmation of sale would favor the
denial of the defendants' motion to vacate.
The plaintiff argues that the defendants have failed to set
forth a meritorious defense. The plaintiff maintains that the
defendants have failed to establish the inadequacy of the price for
which the property sold at the sheriff's sale since the defendants
have provided only an appraisal done in 1991 and therefore have not
established the current value of the property.
In Resolution Trust Corp. v. Holtzman, 248 Ill. App. 3d 105
(1993), the court observed that, in requiring that the trial court
determine that sale terms were not unconscionable, the General
Assembly did not intend to require an extended evidentiary hearing
after each sheriff's sale. The court stated:
"To determine the extent of the hearing to be afforded the
mortgagor, the court should look to the defendant's petition
or motion, and if there is an allegation of a current
appraisal or other current indicia of value which is so
measurably different than the sales price as to be
unconscionable, then a hearing should be afforded the
defendant. On the other hand, if the allegation of
unconscionability rests on an appraisal rendered remote in
time, the requisite of a formal hearing is not required under
the amendatory act." Holtzman, 248 Ill. App. 3d at 115.
In addition to the 1991 appraisal, both William Guy Roberts,
Jr., and Joy M. Roberts provided affidavits in which they stated
that, in their opinions, the two parcels foreclosed on were
together valued at $400,000. As a general rule, the owner of land
is qualified to express an opinion of its value merely by virtue of
his ownership. Department of Transportation v. White, 264 Ill.
App. 3d 145, 151, (1994). Thus, their opinions provide the "other
current indicia of value." The value of the property is so
measurably different from the sale price of $200,000 obtained at
the sheriff's sale as to be unconscionable, and a hearing is
required. Holtzman, 248 Ill. App. 3d at 115.
The above analysis also supports the argument that the
defendants would suffer a severe penalty if the two parcels were
sold at less than 50% of the fair market value.
The defendants have also asserted as a meritorious defense
that they never intended that both parcels be pledged as security
for the mortgage that was the subject of this action. While we do
not favor rewarding litigants for failing to act timely to protect
their rights, the clear language of subsection 15--1508(b)(iv) (735
ILCS 5/15--1508(b)(iv) (West 1996)) does not permit the sheriff's
sale to be confirmed if there is evidence that justice was not
done. The plaintiff's challenges to the merits of this defense are
best presented in the context of an adversarial hearing.
We have no disagreement with the trial court's conclusion that
the defendants were not diligent in presenting their claims to the
trial court. However, due diligence is only one factor to
consider, and it is clear that the trial court failed to consider
the other factors in reaching its decision. After reviewing the
other factors, we conclude that the trial court abused its
discretion by failing to do substantial justice between the
parties.
In reaching this conclusion, we are guided by the following
language from Widicus v. Southwestern Electric Cooperative, Inc.,
26 Ill. App. 2d 102 (1960), which this court cited with approval in
Venzor:
" 'It seems to us that the overriding reason should be whether
or not justice is being done. Justice will not be done if
hurried defaults are allowed any more than if continuing
delays are permitted. But justice might, at times, require a
default or a delay. What is just and proper must be
determined by the facts of each case, not by a hard and fast
rule applicable to all situations regardless of the outcome.
The entering of a default is one of the most drastic
actions a court may take to punish for disobedience to its
commands. The court has other powers which are ample in most
instances. In our judgment, a default should only be condoned
when, as a last resort, it is necessary to give the plaintiff
his just demand. It should be set aside when it will not
cause a hardship upon the plaintiff to go to trial on the
merits.' " Venzor, 235 Ill. App. 3d at 1058, quoting
Widicus, 26 Ill. App. 2d at 108-09.
We therefore affirm the trial court's December 6, 1996, order
denying a continuance of the confirmation hearing and that portion
of its January 10, 1997, order denying reconsideration of its
December 6, 1996, order denying a continuance of the confirmation
of sale hearing; we affirm the trial court's order striking the
appearances of Joy M. Roberts and trust No. 2882 as to that portion
of the motion seeking reconsideration of the order of December 6,
1996, but reverse that portion of the order striking the
appearances as to that portion of the motion seeking to vacate the
confirmation of the sale order of December 6, 1996. Finally, we
reverse the trial court's January 10, 1997, order denying the
motion to vacate and remand the cause for a hearing in accordance
with the provisions of section 15--1508.
The judgment of the trial court is affirmed in part, reversed
in part, and vacated in part, and the cause is remanded.
Affirmed in part, reversed in part, and vacated in part;
cause remanded.
DOYLE and THOMAS, JJ., concur.