CitiMortgage, Inc. v. Morales

2017 IL App (1st) 160657-U

CITIMORTGAGE, INC., Plaintiff-Appellee, v. LOUIS M. MORALES, Defendant-Appellant.

No. 1-16-0657

APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT FOURTH DIVISION

May 25, 2017

NOTICE: This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1).

Appeal from the Circuit Court of Cook County

10-CH-41227

Honorable Darryl B. Simko, Judge Presiding

JUSTICE McBRIDE delivered the judgment of the court.

Presiding Justice Ellis and Justice Howse concurred in the judgment.

ORDER

¶ 1 Held: Where affidavits underlying service by publication were defective on their face, trial court erred in granting mortgage lender's motion to dismiss an alleged borrower's combined motion to quash service of process by publication and petition for relief from foreclosure judgment.

¶ 2 Louis M. Morales, a resident of Indiana and Florida, appeals from a trial court order dismissing his combined motion to quash service of process by publication and petition for relief from a judgment of foreclosure that was entered in favor of his alleged lender, CitiMortgage, Inc. The trial court granted CitiMortgage's motion to dismiss Morales's combined motion and petition, on grounds that service by publication on the out-of-state resident was effective.

Morales contends his property manager, Cynthia Ivin, fraudulently mortgaged the Chicago residential property, publication service was based on defective affidavits about the lender's efforts to personally serve him, and he learned of the mortgage loan and foreclosure suit only after the property had been sold pursuant to court order. Morales also contends he promptly prepared and filed his combined motion to quash and petition for relief from a judgment that is void for want of personal jurisdiction. Morales made these allegations in his combined motion and petition, and he repeats them on appeal as grounds for reversal of the dismissal.

¶ 3 "Louis M. Morales by Cynthia Ivin attorney in fact"¹ borrowed $90,000 from Tamayo Financial Services, Inc. on October 31, 2009, secured by a note and residential mortgage on 2338 West Taylor Street, Chicago, Illinois, 60612. The person currently before the court contends this was a fraudulent transaction performed without his knowledge or consent. The note obligated Morales to make monthly payments of $700.05 for 14 years. The mortgage required Morales to occupy the property as his primary residence for at least one year. An allonge and assignment executed that same day indicate Tamayo Financial Services sold its contract rights to CitiMortgage. According to CitiMortgage's complaint filed less than a year later on September 23, 2010, Morales defaulted almost immediately on the debt and owed $88,965 in principal. CitiMortgage sued Morales, but not Ivin.

¶ 4 CitiMortgage hired ProVest, LLC to serve the complaint and a summons on Morales at the Taylor Street apartment building. The lender later filed affidavits indicating that it looked for him there for about a week but could not serve Morales personally and wanted to serve him by publication. In actions affecting property, section 2-206(a) of the Code of Civil Procedure allows for service by publication in a local newspaper coupled with mailing a copy of the notice to thedefendant at his or her residence. 735 ILCS 5/2-206(a) (West 2010). Section 2-206(a) requires a plaintiff to first file an affidavit showing that the defendant "resides or has gone out of this State, or on due inquiry cannot be found, or is concealed within this State, so that process cannot be served upon him or her" and also "stating the place of residence of the defendant, if known, or that upon diligent inquiry his or her place of residence cannot be ascertained." 735 ILCS 5/2-206(a) (West 2010). See also Bell Federal Savings & Loan Ass'n v. Horton, 59 Ill. App. 3d 923, 927-28, 376 N.E.2d 1029, 1033 (1978) (indicating the plaintiff must conduct both "due inquiry" in ascertaining the defendant's whereabouts and "diligent inquiry" in ascertaining the defendant's residence before the plaintiff can properly execute an affidavit stating that the defendant cannot be found). After the first publication, the office of the clerk of the court is required to mail a copy of notice to the defendant at the residential address stated in the affidavit. 735 ILCS 5/2-206(a) (West 2010). The circuit court of Cook County adopted a local rule that elaborates on the requirement for the affidavits in foreclosure suits. Rule 7.3 states:

"Pursuant to 735 ILCS 5/2-206(a), due inquiry shall be made to find the defendant(s) prior to service of summons by publication. In mortgage foreclosure cases, all affidavits for service of summons by publication must be accompanied by a sworn affidavit by the individual(s) making such 'due inquiry' setting forth with particularity the action taken to demonstrate an honest and well directed effort to ascertain the whereabouts of the defendant(s) by inquiry as full as circumstances permit prior to placing any service of summons by publication." Cook Co. Cir. Ct. R. 7.3 (Oct. 1, 1996).

¶ 5 Thus, plaintiffs seeking foreclosure in Cook County must support a request for publication service with affidavits in which the individuals who tried to serve the defendant withprocess and ascertain the defendant's whereabouts "set[] forth with particularity the action" they personally took to accomplish these tasks. Cook Co. Cir. Ct. R. 7.3 (Oct. 1, 1996).

¶ 6 Blanca Vazquez's affidavit filed on November 10, 2010, states that the trial court appointed ProVest as process server on September 27, 2010, and that although two nominal municipal defendants had been served, Morales had not been served. Vazquez attached affidavits completed by Karl Brown and Teresa Duffey. Brown swore "he/she was appointed by the Court to serve process in the above mentioned cause and/or is a special appointed process server, licensed private investigator, and/or an employee/agent of ProVest, LLC, Department of Professional Regulation number 117-001336." Brown then listed eight attempts to serve Morales at the mortgaged property. Brown, however, did not disclose the name of the person who attempted to serve Morales and three of the attempts he listed were prior to the date Vazquez said the trial court appointed ProVest to the case:

"NON-SERVICE for reason that after diligent investigation found [(sic)].

Numerous attempts with no contact.

***

9/24/2010 8:06:00 AM - 2 story red brick apartment building. No garage. No response.

9/24/2010 6:38:00 PM - No response. No lights on inside.

9/26/2010 4:39:00 PM - No response. No activity seen.

9/28/2010 5:50:00 PM - No response. No activity seen.

9/30/2010 5:13:00 PM - No response. No activity seen.

10/1/2010 6:47:00 PM - No response. No lights on inside.

10/2/2010 8:15:00 PM - No response. No activity seen.

10/3/2010 7:46:00 PM - No response. No lights on inside."

In the other affidavit attached to Vazquez's affidavit, Duffey said, "I hereby certify that I am not a party to the above action or suit and I am over the age of 18 years and the affidavit is true and correct." Duffey did not state that she was employed or otherwise associated with ProVest, that she had been individually appointed to serve process in this case, or that she had personally attempted service. Instead she stated: "ADDRESS WHERE ATTEMPTED OR SERVED [on October 22, 2010 at 12:00 p.m.]: 1704 EVERGREEN ST, Sebring, FL 33870." Also:

"NON-SERVICE for reason that after diligent investigation found [(sic)].

Non-service as per Dr. Miguel A. Morales, father of Defendant Louis M. Morales a/k/a Dr. Louis M. Morales at this address, his son has a Recreational Vehicle and travels from State of Indiana to State of California and has not see [(sic] his son Louis M. Morales since 2009 and does not know his phone number."

¶ 7 CitiMortgage filed additional affidavits five days later on November 15, 2010, including Daniel H. Olswang's "Affidavit for Service by Publication" pursuant to section 2-206(a) (735 ILCS 5/2-206(a) (West 2010)), which was dated November 9, 2010, and consisted of the following preamble and three numbered paragraphs:

"DANIEL H. OLSWANG, on oath states as to defendants *** as follows:

1. On due inquiry UNKNOWN OWNERS and NONRECORD CLAIMANTS cannot be found or are concealed or are evading service of process so that process cannot be served upon defendants.

2. Defendant, LOUIS M. MORALES A/K/A DR. LOUIS M. MORALES, place of residence: 2338 W. TAYLOR ST. CHICAGO, IL 60612 was not served on October 3, 2010. Current resident stated the defendant does not reside there. Through a skip trace, Provest, LLC. [(sic)] was unable to locate an additional address. To avoid anyjurisdictional issues, LOUIS M. MORALES A/K/A DR. LOUIS M. MORALES is being served by publication.

3. Defendants, LOUIS M. MORALES A/K/A DR. LOUIS M. MORALES, CITY OF CHICAGO, TOWN OF CICERO, UNKNOWN OWNERS and NONRECORD CLAIMANTS places of residence upon diligent inquiry cannot be ascertained and their last known places of residence are *** Unknown."

Olswang's affidavit did not incorporate any exhibits. CitiMortgage also filed a document entitled "Affidavit to Allow Service by Publication Pursuant to Local Rule 7.3," in which an unnamed person stated on November 9, 2010:

"I, the undersigned attorney, on oath, states [(sic)] to [(sic)] Defendants: LOUIS M. MORALES A/K/A DR. LOUIS M. MORALES

1. Defendants reside or have gone out of this State, or on due inquiry cannot be found, or are concealed within this state, so that process cannot be served upon them.

2. Diligent inquiry has been made as to the whereabouts of all the aforesaid Defendants.

3. That upon diligent inquiry, the place of residence of the aforesaid Defendants cannot be ascertained and/or their last known place of residence is: 2338 W. TAYLOR ST. CHICAGO IL 60612.

4. Service upon the defendants has been attempted by the Court Appointed Special Process

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