The Appellate Court of Illinois, First District, recently held that a mortgagee’s affidavits detailing the due and diligent inquiry it undertook to attempt to personally serve a borrower were sufficient to allow service by publication in a mortgage foreclosure action.

A copy of the opinion is available at: Link to Opinion.

The mortgagee filed a mortgage foreclosure complaint, but could not achieve personal service on the borrower. The trial court authorized the mortgagee to serve the borrower by publication notice. The mortgagee later filed an affidavit for service by publication.

In the affidavit, counsel for the mortgagee asserted that she had made a due and diligent inquiry to find the borrower, to ascertain her respective places of residence, and that upon due inquiry such borrower could not be found.

In addition to counsel’s affidavit, the mortgagee filed affidavits from three separate special process services. In the first affidavit, a special process server averred that he attempted to serve the borrower personally at the property address seven times in a week’s time in mid-December 2013. The affidavit further stated that he attempted to serve the borrower multiple times during the day including twice around 9:30 p.m. After each attempt of service, the process server stated that he made no contact with the borrower and “was unable to gain access onto the property.”

In the second affidavit, another special process server attested that he attempted to serve the borrower at the property address seven times in a week’s time in late December 2013. He asserted he was not able to gain entry to the property, but noted that on two occasions dogs were present within the yard of the property and on one occasion the lights inside the property were on.

In the third affidavit, another special process server averred that her search revealed only one known address for the borrower. She attested that on Jan. 2, 2014, upon conducting a “skip trace” of the borrower as well as a search of multiple databases (including, but not limited to, social security, employment, voter registration, professional licenses, the department of corrections, and other property records), no other addresses or contact information were found for the borrower. She further attested that she attempted to call the borrower on Dec. 31, 2013, using three different phone numbers, but was unable to contact the borrower. She also asserted that a vehicle registered to the borrower was at the property address.

Subsequently, the mortgagee filed a Certificate of Publication from a local newspaper, which indicated that the publication notice regarding this foreclosure matter was published on four occasions throughout a particular month.

After the borrower failed to appear, the mortgagee moved for a default judgment and a judgment of foreclosure and sale. The trial court granted the judgments. Thereafter, the mortgagee filed a notice of entry of default judgment, judgment of foreclosure, which indicated the notice of default had been mailed to the borrower at the property address.

Thereafter, notice of the judicial sale of the property was then mailed to the borrower at the property address, and indicated the sale would take place at a specific time, place and date.

The day the property was set to be sold, the borrower appeared in court pro se and presented an emergency motion to stay the sale of the property. The borrower did not challenge the trial court’s jurisdiction in this motion.

Over the mortgagee’s objection, the trial court granted the borrower’s motion and stayed the sale of the property. Thereafter, the borrower filed a series of motions. The borrower filed a motion to “vacate all orders and judgments and dismiss with prejudice.” There, she argued that service was improper because it was attempted during the December holidays. The trial court denied the borrower’s motion to vacate.

That same day, the borrower filed another motion to quash in which she argued that the mortgagee did not obtain leave to have a special process server serve the summons and did not produce any affidavits describing the diligent efforts to inquire about her whereabouts. The borrower further argued that she received no notices from the clerk of the trial court.

This motion was supported by the borrower’s own affidavit in which she attested that she resided at the property address at all times relevant, and that she had not been concealed within the state, and that her place of residence and whereabouts were readily ascertained, and that she believed that the private process servers failed to perform a diligent inquiry as to her residence and whereabouts.

Two days later, the borrower filed a motion to vacate the default judgment in which she argued that she was never served, and that the mortgagee did not have a court order that would allow it to serve the borrower via a special process server.

The trial court denied the borrower’s motion to quash and the motion to vacate, expressly finding that the borrower waived her objection to jurisdiction because she previously presented motions to dismiss and motions to continue sale.

The property was later sold to the mortgagee as the highest bidder. Thereafter, the mortgagee filed its motion to confirm the sale, requesting that an in personam deficiency judgment be entered against the borrower for the deficiency after the sale.

While the mortgagee’s motion to confirm the sale was pending, the borrower filed two motions to reconsider the circuit court’s order denying her motion to vacate the default judgment and the circuit court’s denial of her motion to quash. The borrower raised the same arguments she had in her previous motions.

The mortgagee opposed the borrower’s motions to reconsider, arguing that the motions were untimely and that the borrower failed to establish that the trial court had misapplied the existing law when it denied her motions.

The trial court denied the borrower’s motions to reconsider, and entered a briefing schedule regarding the bank’s motion to confirm the sale. The borrower did not file a response to the mortgagee’s motion to confirm the sale. Instead, the borrower filed a petition to vacate the judgment of foreclosure and set aside the sale in which she continued to assert the circuit court lacked jurisdiction over her. The mortgagee did not file a reply. The trial court granted the motion to confirm the sale and denied the borrower’s petition.

The trial court entered an order approving the sale of the property and an in personam deficiency judgment. The order further provided that the memorialization of the court’s oral pronouncements and ruling would be issued to the parties by mail. The borrower appealed.

The Illinois Appellate Court first addressed the borrower’s motion to quash service of process by publication issue. The Court held that service by publication was proper and therefore the trial court had personal jurisdiction over the borrower when it entered the default orders and the judgment of foreclosure prior to the borrower filing the emergency motion.

The Court noted that section 2-206(a) of the Illinois Code of Civil Procedure permits a plaintiff to serve process on a defendant by publication in limited cases where the plaintiff has strictly complied with the requirements for such service. The Court also cited the local rule of the trial court that further expands on the requirement for an affidavit, particularly in mortgage foreclosure actions. Specifically, in mortgage foreclosure cases in the county at issue, all affidavits for service of summons by publication must be accompanied by a sworn affidavit by the individual making a due inquiry and setting forth with particularity the action taken to demonstrate an honest and well directed effort to find the individual. Cook Co. Cir. Ct. R 7.3 (Oct. 1, 1996).

The Appellate Court determined that serving parties had to strictly comply with the mandates of service by publication, including the requirements of due diligence and due inquiry. These requirements require an honest and well-directed effort to ascertain the whereabouts of an individual. In addition, a party may challenge service by publication through his own affidavit. In such a scenario, the trial court should hold an evidentiary hearing.

In this matter, the Appellate Court held that the mortgagee’s affidavits were sufficient to meet the Illinois requirements for service by publication because they stated that the borrower could not be personally served because her whereabouts could not be ascertained at her last known place of residence. Specifically, the three special process servers submitted affidavits and detailed the significant efforts to locate the borrower.

For example, the affidavits detailed the date and time of attempted service, and even made notations about the state of the property. The Court emphasized the efforts included conducting a skip trace that revealed the only address for the borrower as the relevant real property and annotating information about a vehicle that was registered to the borrower that was kept at the relevant property.

The Appellate Court was satisfied that the extensive efforts fulfilled the requirements of the Illinois Code of Civil Procedure and the local county court. The Court also found the borrower’s own affidavit unavailing because she did not challenge the mortgagee’s assertion that the borrower could not be found with due diligence.

The Court also rejected the borrower’s position that that the special process servicers should have spoken to the borrower’s neighbors. The Court relied on Household Finance Corp. III v. Volpert, 227 Ill. App. 3d 453, 455 (1992), for the proposition that a process server need not speak with neighbors when there is evidence that someone resides at the relevant real property but refuses to accept the service.

The Court also rejected the borrower’s argument that there was no good faith effort to serve her, as the parties were both litigating a separate non-foreclosure action. The Appellate Court reasoned that the record did not demonstrate that the borrower’s whereabouts could be ascertained through an inquiry in that action.

Based on this analysis, the Appellate Court held that the trial court had personal jurisdiction over the borrower, and the authority to enter the judgment of foreclosure and sale.

Next, the Court addressed whether the trial court erred in denying her motion to reconsider the denial of her motion to vacate. The Court noted that the purpose of a motion to reconsider is to bring to the circuit court’s attention newly discovered evidence, changes in the law, or errors in the court’s previous application of existing law.

The Appellate Court acknowledged that the trial court did not substantively examine the motion to quash, but rather dismissed the motion on procedural grounds. However, the Court itself performed the substantive motion to quash analysis in the present opinion and found no error in granting the motion to quash. The Appellate Court also rejected the borrower’s argument that the mortgagee’s notice of the motion for default was not completely filled out because the record revealed this argument to be factually incorrect.

Additionally, the Appellate Court rejected the borrower’s argument that the trial court erred in denying her petition to vacate. The Court explained that a petition to vacate is only available when there is a final and appealable order. Here, the borrower requested this relief prior to a final and appealable order, as a judgment ordering the foreclosure of a mortgage is not final and appealable until the trial court enters an order approving the sale and directing the distribution.

Last, the Appellate Court addressed the issue of whether the trial court erred in entering a personal deficiency judgment. The Court was satisfied with the record to support the deficiency judgment. The Court noted the judgment amount, the total amount owed to the mortgagee, considering attorney’s fees and costs, and the deficient sale price of the property.

Furthermore, the Court found that the borrower filed an appearance to dispute the deficiency judgment, which constituted a judicial admission for the purposes of imparting in personam jurisdiction over the borrower for the personal deficiency judgment.

Accordingly, the Appellate Court affirmed the trial court’s judgment.