United Central Bank v. KMWC 845, LLC, No. 14-1491 (7th Cir. 2015)Annotate this Case
In 2005, Mutual Bank of Harvey, Illinois, made loans to the defendants, evidenced by promissory notes. As security the defendants executed mortgages. Mortgage I applies to four properties in Appleton, Menasha, and Milwaukee, Wisconsin. Mortgage II applies to a property in Grand Chute. Mortgage III applies to seven Milwaukee properties. The notes went into default in 2008. In 2009, regulators closed Mutual Bank. The Federal Insurance Deposit Corporation (FDIC) was appointed receiver. Ultimately UCB became the owner and holder of the notes and mortgages on the Wisconsin properties. In 2011, UCB commenced mortgage foreclosure. Defendants argued that under the Illinois “single refiling” rule, 735 ILCS 5/13-217, UCB was barred from enforcing the promissory notes underlying the mortgages since UCB had twice formerly filed an action against the defendants to recover on the notes and voluntarily dismissed each of these prior actions. The Seventh Circuit affirmed that Mortgage I, was governed by Illinois law and that UCB was precluded from foreclosing on Mortgage I. The defendants did not appeal a holding that Wisconsin law applied to Mortgages II and III and that Wisconsin law permitted UCB to foreclose.