Wells Fargo Bank, N.A., v. McCluskeyAnnotate this Case
This mortgage foreclosure case comes from Du Page County and involves a residential property located in Naperville. In 2009, defendant McCluskey executed a promissory note for $330,186, on the property, with Wells Fargo Bank as the mortgage holder. Foreclosure proceedings were begun in 2010 for nonpayment, but defendant, after service, did not answer or plead. An order of default and judgment of foreclosure were entered in 2011. This appeal involves the interplay of the Mortgage Foreclosure Law and the Code of Civil Procedure when vacation of a default judgment is sought.
After negotiations on a loan modification collapsed and a rescheduled sale date arrived, Wells Fargo was the successful bidder on the property for a price of $235,985.69, but, before Wells Fargo moved to confirm the sale, the defendant filed a motion to vacate the default judgment and set aside the sale under the law of civil procedure, rather than mortgage law. The circuit court denied her motion and, later, confirmed the sale.
The defendant appealed, challenging the denial of her motion to vacate. In opposition, Wells Fargo argued that mortgage law, which is more restrictive than civil procedure law, takes precedence here and limits a court’s discretion to refuse confirmation of a sale to four specific grounds. The appellate court reversed and remanded, holding that the circuit court could exercise its discretion under civil procedure law, even after a judicial sale, if the movant could present a compelling excuse for lack of diligence and a meritorious defense. Wells Fargo appealed to the Illinois Supreme Court.
The supreme court held that, after a motion to confirm a judicial sale has been filed, the foreclosure statute governs and provides the standards for a court’s exercise of discretion in dealing with a motion to vacate. At this point, it is not sufficient under the mortgage statute to merely raise a meritorious defense to the complaint. However, that is not what happened here because the motion to vacate preceded the motion to confirm. Here, the circuit court could consider the motion to vacate under civil procedure law. However, under these facts, the circuit court did not err in denying the motion, even under that more liberal standard. The defendant, who admitted her default, was properly served, and had notice of the default, the judgment of foreclosure, and the sale. What she later raised were pleading defenses asserted for the first time.
The appellate court was reversed and the circuit court was affirmed.