Bank of New York v. Unknown Heirs and Legatees

                                             Second Division
                                             December 5, 2006




No. 1-05-2299


BANK OF NEW YORK, Acting Solely         )    Appeal from the
as Trustee for                          )    Circuit Court of
EQCC Trust 2001-2,                      )    Cook County,
                                        )    Chancery Division
          Plaintiff-Appellee,           )
                                        )
(Sheila Portlock and                    )
Dewey J. Hall,                          )
Intervenors-Appellees).                 )
                                        )
     v.                                 )    No. 03 CH 12460
                                        )
UNKNOWN HEIRS AND LEGATEES, if any,     )    Honorable
of Ruth Hatch a/k/a Ruth Slater,        )    Martin S. Agren
UNKNOWN OWNERS, and NONRECORD           )    Judge Presiding
CLAIMANTS,                              )
                                        )
          Defendants-Appellants         )


     JUSTICE HALL delivered the opinion of the court:

     Defendant Jesse M. Hatch appeals, pro se, the trial court's

order granting the motion to reconsider of plaintiff, Bank of New

York, acting solely in its capacity as trustee for EquiCredit

Corporation(EQCC) Trust 2001-2, and the motion to vacate of

intervenors Sheila Portlock and Dewey J. Hall.   For the reasons

that follow, we reverse and remand.

     This appeal arises from proceedings relating to a

foreclosure complaint filed by plaintiff bank.   On July 28, 2003,

plaintiff filed a complaint to foreclose a mortgage secured by

residential property of the decedent Ruth Hatch, also known as
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Ruth Slater.

     The complaint named as defendants the unknown heirs and

legatees, if any, of Ruth Hatch, a/k/a Ruth Slater, unknown

owners and nonrecord claimants.    On November 7, 2003, plaintiff

filed an affidavit as required by section 2-206(a) the Code of

Civil Procedure (Code) (735 ILCS 5/2-206(a) (West 2004)), for

service by publication.    Plaintiff then served the unknown heirs

of Ruth Hatch by publication in the Chicago Daily Law Bulletin on

November 11, 18, 25, 2003.

     On December 4, 2003, defendant, an inmate currently serving

a natural-life sentence at the Joliet Correctional Center, filed

a pro se motion1 to dismiss the foreclosure complaint, alleging

that he was one of Ruth Hatch's heirs (her son) and that service

by publication was insufficient as to him because plaintiff

failed to conduct a proper investigation to locate his

whereabouts and effect personal service upon him prior to service

by publication.    Attached to the motion was an affidavit from

defendant averring that he mailed a copy of the motion to

plaintiff's attorneys' office.

     On December 8, 2003, defendant wrote the clerk of the court

inquiring as to the status of his motion to dismiss.    On December

     1
         In his pro se appellant brief, defendant maintains he

filed all his pleadings from prison.

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12, 2003, another of Ruth Hatch's sons, Hosie Hatch, filed an

answer and appearance, along with an application to sue or defend

as an indigent person.

     On January 14, 2004, plaintiff mailed defendant a notice of

motion advising him that the case was set for hearing in February

2004, at which time plaintiff would move for entry of orders for

summary judgment, default, judgment of foreclosure and sale, and

appointment of a foreclosure sale officer.

     On February 3, 2004, defendant filed a supplemental motion

to dismiss for insufficiency of service of process.   In the

supplemental motion, defendant argued that plaintiff's pleadings

were not signed by an attorney of record and therefore should be

stricken.   He also argued that the action should be dismissed

because the insufficient service defrauded defendants out of

their right to be served with copies of the summons and complaint

thereby preventing them from setting forth reasonable and

informed answers and defenses.

     On February 5, 2004, at a hearing on plaintiff's motion for

judgment of foreclosure and sale, counsel for defendant's

brother, Elijah R. Hatch, was granted leave to file substitute

appearance on his behalf and given seven days to answer or

otherwise plead.   The matter was then continued to February 26,

2004.


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     On February 26, 2004, a judgment for foreclosure and sale

and related orders were entered.    On the same date, the trial

court also entered summary judgment in favor of plaintiff and

against Hosie Hatch and Elijah R. Hatch.    The trial court entered

the judgment for foreclosure and sale without ruling upon

defendant's prior motion to dismiss and supplemental motion to

dismiss.

     Elijah R. Hatch was appointed the supervised administrator

of Ruth's estate on April 8, 2004.    On May 28, 2004, defendant

again wrote the clerk of the circuit court inquiring as to

whether his pro se motions to dismiss had been ruled upon and if

not, to alert the trial court to his inquiry and request for a

ruling in the matter.

     On July 13, 2004, the subject property was sold at auction

to third-party bidder Thuruthikara Kurian for an amount in excess

of the debt secured by the property.    The judicial sale was

approved by the trial court on August 19, 2004, with a 30-day

stay on possession.

     On September 7, 2004, defendant filed a motion to vacate the

judgment of foreclosure and sale.     On October 15, 2004, he filed

a motion for hearing and/or ruling upon his motion for relief

from judgment.   The trial court maintained it first became aware

of defendant's existence the first week of November 2004, when a


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letter from defendant postmarked September 28, 2004, made its way

to the court.

     On December 16, 2004, Thuruthikara Kurian sold the subject

property to Sheila Portlock and Dewey J. Hall pursuant to a

warranty deed.

     On February 8, 2005, pursuant to section 2-1401 of the Code

of Civil Procedure (Code) (735 ILCS 5/2-1401 (West 2002)), the

trial court granted defendant's motion for relief from judgment

on the grounds that plaintiff failed in its obligation to make

the court aware of defendant's existence.   The trial court

determined that plaintiff knew of defendant's existence prior to

the judgment of foreclosure and sale, and as early as December 4,

2003, when it received defendant's pleadings, and yet had failed

to serve defendant personally, make him a party defendant, or

make the court aware of his existence.   The trial court then

vacated the judgment of foreclosure and sale declaring it void ab

initio.

     In response, the plaintiff filed a motion to reconsider, and

the purchasers Sheila Portlock and Dewey J. Hall were granted

leave to intervene and to file their motion to vacate.

     On May 31, 2005, the trial court granted the plaintiff's

motion to reconsider and the intervenors' motion to vacate.     The

trial court determined that the intervenors' interest in the


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subject property was protected by section 2-1401(e) of the Code

(735 ILCS 5/2-1401(e) (West 2002)), which protects bona fide

purchasers of property from the effects of an order setting aside

a judgment affecting title to the property if the purchasers were

not parties to the original action and a lack of jurisdiction did

not affirmatively appear in the record.    Defendant now appeals.

                              ANALYSIS

     As an initial matter, plaintiff requests that we strike

defendant's brief because its length exceeds that allowed by

Supreme Court Rule 341(a) (see Official Reports Advance Sheet No.

21 (October 17, 2001), R. 341(a), eff. October 1, 2001).    In

light of defendant's pro se status and our desire to decide this

case on the merits rather than a technicality, we decline

plaintiff's request.

     Turning to the merits, defendant raises a number of issues

on appeal.    However, based on our disposition of the case, we

need only address one issue: whether the trial court obtained

personal jurisdiction over defendant by publication prior to

entry of the judgment of foreclosure and sale.    For the reasons

that follow, we find that the trial court failed to obtain such

personal jurisdiction over defendant, and therefore, we reverse

and remand.

     In the trial court's order granting the plaintiff's motion


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to reconsider and the intervenors' motion to vacate, the court

claimed to have properly obtained personal jurisdiction over

defendant by relying on service by publication pursuant to

section 2-206(a) of the Code (735 ILCS 5/2-206(a) (West 2004)).

     Personal jurisdiction acquired by means of publication is

only allowed in certain limited cases and then only after strict

compliance with the statutory prerequisites governing such

service. Bell Federal Savings & Loan Association v. Horton, 59

Ill. App. 3d 923, 926, 376 N.E.2d 1029 (1978).    In order for a

trial court to obtain personal jurisdiction over a defendant by

publication, section 2-206(a) of the Code requires a plaintiff to

file an affidavit stating that the defendant "on due inquiry

cannot be found *** so that process cannot be served upon him or

her" and "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

2004).    Thus, due inquiry and due diligence are statutory

prerequisites for service by publication. Home State Savings

Association v. Powell, 73 Ill. App. 3d 915, 917, 392 N.E.2d 598

(1979).

     Our courts have determined that these statutory

prerequisites are not intended as pro forma or useless phrases

requiring mere perfunctory performance, but, on the contrary,


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require an honest and well-directed effort to ascertain the

whereabouts of a defendant by inquiry as full as circumstances

permit. See Graham v. O'Connor, 350 Ill. 36, 41, 182 N.E. 764

(1932); City of Chicago v. Leakas, 6 Ill. App. 3d 20, 27, 284

N.E.2d 449 (1972).   Where the efforts to comply with these

statutory provisions have been casual, routine, or spiritless,

service by publication is not justified. Home State Savings

Association, 73 Ill. App. 3d at 917; Bell Federal Savings & Loan

Association, 59 Ill. App. 3d at 927.

     A defendant may challenge a plaintiff's section 2-206(a)

affidavit by filing an affidavit showing that upon due inquiry,

he could have been found. Household Finance Corp. III v. Volpert,

227 Ill. App. 3d 453, 455, 592 N.E.2d 98 (1992).   Upon such a

challenge, a plaintiff must produce evidence establishing due

inquiry. First Bank & Trust Co. v. King, 311 Ill. App. 3d 1053,

1056, 726 N.E.2d 621 (2000).

     The record in this case reveals that no more than a cursory

inquiry was made prior to plaintiff filing the affidavit for

service by publication.   The record indicates that plaintiff was

in contact with at least two of the decedent's heirs, Hosie Hatch

and Elijah R. Hatch, yet failed to question either of them as to

defendant's existence or whereabouts prior to seeking service by

publication.


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     Plaintiff clearly failed to exercise the due inquiry and

diligence required by section 2-206(a) to permit service by

publication upon defendant. See Bell Federal Savings & Loan

Association, 59 Ill. App. 3d at 927 (diligent inquiry required

plaintiff to, among other things, make inquiries of defendants'

neighbors).   Moreover, the trial court found that plaintiff knew

of defendant's existence prior to the judgment of foreclosure and

sale, as early as December 4, 2003, when it received defendant's

pleadings, and yet failed to serve defendant personally, make him

a party defendant, or make the court aware of his existence.

Plaintiff's affidavit for service by publication does not

affirmatively establish due inquiry and diligence, and was

therefore insufficient to give the trial court personal

jurisdiction over defendant.

     We also find the trial court erred in holding that the

intervenors were bona fide purchasers of the subject property

entitled to protection under section 2-1401(e) of the Code (735

ILCS 5/2-1401(e) (West 2002)).   The trial court found that the

intervenors' interest in the subject property was protected by

section 2-1401(e) of the Code, which protects bona fide

purchasers of property from the effects of an order setting aside

a judgment affecting title to the property if the purchasers were

not parties to the original action and a lack of jurisdiction did


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not affirmatively appear from the record.   We disagree with the

trial court's finding on this issue, because the lack of

jurisdiction affirmatively appears in the record such that the

sale of the subject property to the intervenors should be set

aside.

     In determining whether a lack of jurisdiction is apparent

from the record, reviewing courts look to the whole record, which

includes the pleadings, the return on process, the jury verdict,

and the court's judgment or decree. State Bank of Lake Zurich v.

Thill, 113 Ill. 2d 294, 313, 497 N.E.2d 1156 (1986).   In this

case, the lack of jurisdiction affirmatively appears in the

record in the form of plaintiff's defective affidavit and the

allegations set forth in defendant's motions to dismiss for

insufficiency of service, which were sufficient to put the

intervenors on notice that service by publication on defendant

might have been improper.   A subsequent purchaser cannot be a

bona fide purchaser for value if he has actual or constructive

notice of the outstanding rights of other parties. City of

Chicago v. Cosmopolitan National Bank, 120 Ill. App. 3d 364, 367,

458 N.E.2d 11 (1983).   Moreover, a purchaser having notice of

facts that would put a prudent man on inquiry is chargeable with

knowledge of other facts he might have discovered by diligent

inquiry. In re Application of County Treasurer, 30 Ill. App. 3d


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235, 240, 332 N.E.2d 557 (1975).

     In the case at bar, the intervenors had constructive notice

of defendant's interest in the subject property.   The intervenors

were bound to inquire into the nature and extent of the

defendant's interest.

     In conclusion, we find that the trial court failed to obtain

personal jurisdiction over defendant by publication prior to

entering the judgment of foreclosure and sale, and therefore the

judgment was void ab initio. See In re Marriage of Schmitt, 321

Ill. App. 3d 360, 367, 747 N.E.2d 524 (2001) (where a trial court

does not have personal jurisdiction over a party, any order or

judgment entered against him is void ab initio and subject to

direct or collateral attack at any time).   In addition, the

intervenors' interests in the subject property was not protected

by section 2-1401(e) of the Code because a lack of jurisdiction

affirmatively appears from the record. See Pruitt v. Jockisch,

228 Ill. App. 3d 295, 304, 591 N.E.2d 942 (1992) (protection

under section 2-1401(e) of the Code is not available where a lack

of jurisdiction affirmatively appears from the record).

Consequently, we find that the trial court erred in granting the

plaintiff's motion to reconsider and the intervenors' motion to

vacate.

     Accordingly, the judgment of the circuit court of Cook


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County is reversed and the cause remanded to the court for

further proceedings consistent with the views expressed herein.

     Reversed and remanded.

     WOLFSON, P.J., and SOUTH, J., concur.




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