SIXTH DIVISION
NOVEMBER 3, 2006
No. 1-05-2720
MORTGAGE ELECTRONIC REGISTRATION ) Appeal from the
SYSTEMS, INC., ) Circuit Court
) of Cook County.
Plaintiff-Appellee, )
)
v. ) No. 02 CH 003108
)
JERRY THOMPSON and MARY )
THOMPSON, )
)
Defendants, )
)
)
Cronus Projects, LLC, ) Honorable
) Richard J. Billik,
Intervenor-Appellant. ) Judge Presiding.
JUSTICE O'MALLEY delivered the opinion of the court:
Plaintiff, Mortgage Electronic Registration Systems, filed a complaint for
mortgage foreclosure against defendants, Jerry and Mary Thompson, following a default
judgment. Intervenor, Cronus Projects, LLC, was the high bidder for the mortgaged
property at a subsequent judicial sale. After the judicial sale, but prior to the
confirmation, defendants sold the property to a third party after receiving a payoff letter
from plaintiff. The circuit court denied plaintiff's motion to confirm the judicial sale and
subsequently dismissed the case with prejudice but awarded damages to intervenor.
Intervenor filed this timely appeal arguing that the foreclosure sale should have
been confirmed and, alternatively, if the circuit court properly denied plaintiff's motion to
confirm the sale, then it was error for the circuit court to deny intervenor's motion for
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additional damages.
For the reasons that follow, we affirm the judgment of the circuit court.
BACKGROUND
On February 1, 2002, plaintiff filed a complaint for foreclosure of a mortgage that
defendants granted to plaintiff to secure financing for residential property commonly
known as 6105 South Maplewood Avenue, Chicago, Illinois, 60629. A notice of
foreclosure was recorded on February 13, 2002. On April 19, 2004, a judgment of
foreclosure and sale was obtained following the dismissal of defendants' petition for
bankruptcy in the federal district court. The Judicial Sales Corporation was appointed
as the selling officer and a sale was set for December 20, 2004, wherein intervenor was
the highest bidder on the property.
A hearing to confirm the sale was set for January 10, 2005, on the "uncontested
court call"; however, defendant Jerry Thompson appeared personally at the hearing and
indicated that he had a contract to sell the property and objected to the proceedings.
The circuit court continued the hearing to January 19, 2005, to be heard in the
"contested court call" of judicial sales. Prior to the January 19, 2005 hearing but after
the circuit court continued the confirmation hearing, defendants requested and received
a payoff letter directly from plaintiff indicating the amount and manner of payment
necessary to satisfy the debt. On January 14, 2005, the property was sold to a third
party at a closing for the contract price of $190,000.
On January 19, 2005, counsel for defendant Jerry Thompson appeared in court
and was granted leave of court to appear as counsel on behalf of the Thompsons. On
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that same day, counsel for the Thompsons attempted to tender a check to plaintiff's
counsel representing the balance of the delinquent mortgage. Counsel for plaintiff,
however, refused the tender because the payoff amount was short by approximately
$32, representing a late fee or a pro rata interest payment. On January 24, 2005,
counsel for defendants filed a motion to set aside the judicial sale. Plaintiff filed a
response acknowledging that a payoff letter had been issued to the Thompsons directly
from plaintiff's office and without notice to plaintiff's counsel. On February 19, 2005, the
circuit court denied plaintiff's motion to confirm the sale of the property and vacated the
judicial sale, finding that justice would not otherwise be done pursuant to section 15-
1508(b) of the Code of Civil Procedure (735 ILCS 5/15-1508(b) (West 2004)) (the Code)
were it to enter a contrary ruling. After addressing the interest of all interested persons,
including nonparties to the action, the circuit court ordered all sums deposited by
intervenor to be returned.
On March 25, 2005, plaintiff moved the circuit court to vacate the judgment of
foreclosure and dismiss the action with prejudice based on defendant's payment of the
mortgage in full. On June 23, 2005, intervenor filed a verified petition for damages. The
circuit court granted plaintiff's motion to vacate and dismiss with prejudice and awarded
intervenor $1,000 for attorneys' fees and $940 in interest for the 66 days that the
Judicial Sales Corporation retained his payment for the property. Intervenor filed this
timely appeal.
ANALYSIS
I. STANDARD OF REVIEW
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When confirming a judicial sale, the circuit court has broad discretion in
approving or disapproving sales. Citicorp Savings of Illinois v. First Chicago Trust
Company of Illinois 269 Ill. App. 3d 293, 300 (1995); In re Application of Rosewell, 236
Ill. App. 3d 473, 476-77 (1992); Berber v. Hass, 57 Ill. App. 2d 109 (1965). In Illinois it is
clear that a judicial sale is not complete until it has been approved by the trial court.
Citicorp, 269 Ill. App. 3d at 300, citing In re Application of Rosewell, 236 Ill. App. 3d 473.
The highest bid received by a sheriff at a judicial sale is merely an irrevocable offer to
purchase the property, and acceptance of the offer takes place when the court confirms
the sale. Citicorp, 269 Ill. App. 3d at 300, citing Straus v. Anderson, 366 Ill. 426 (1937).
Until the court confirms the sheriff's proceedings, there is not a true sale in the legal
sense. Citicorp, 269 Ill. App. 3d at 300, citing Levy v. Broadway-Carmen Building Corp.,
366 Ill. 279 (1937). A court is justified in refusing to approve a judicial sale if unfairness
is shown that is prejudicial to an interested party. Citicorp, 269 Ill. App. 3d at 300, citing
Evans v. Hunold, 393 Ill. 195 (1946).
II. CONFIRMATION OF JUDICIAL SALE
Intervenor contends that the circuit court erred by not confirming the judicial sale
of the property because the action taken by defendant occurred following the sale and
prior to the confirmation. Intervenor further argues that allowing the circuit court's ruling
to stand will destabilize and wreak havoc upon judicial sales. We disagree and find that
the circuit court did not abuse its discretion in denying plaintiff's motion to confirm the
sale.
Intervenor characterizes the issue before this court as whether a third-party
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purchaser and lender may rely on a payoff letter when a lis pendens notice has been
properly recorded. This characterization is, however, incorrect and the proper question
before this court is whether the circuit court abused its broad discretion in denying
plaintiff's motion to confirm the judicial sale. Fleet Mortgage Corp. v. Deale, 287 Ill. App.
3d 385, 388 (1997). Relative to the circuit court's exercise of discretion, intervenor
argues that it was an abuse for the circuit court to consider the interests of two lien-
holders that were paid off in the sale by the Thompsons and the third party purchasers
who would be unfairly prejudiced as a result of the confirmation.
First, we point out that this court has held that the circuit court is justified in
refusing to approve a judicial sale if unfairness is shown that is prejudicial to an
interested party even if the party is not named in the proceedings. Fleet Mortgage
Corp., 287 Ill. App. 3d at 392 (holding that a trial court is expressly required to consider
the interests of all parties, including mortgagors who were not part of the proceedings,
before ruling on a petition to confirm). Contrary to intervenor's assertions, the circuit
court did not err in considering the third-party purchasers, two additional lenders and the
Thompsons because each had an interest in the property. Second, the circuit court
acted consistently with the policy of Illinois foreclosure law that favors protection of
equity in the home of a mortgagor and allows redemption. We point out that this court
has balanced the competing policy goals which must be taken into consideration in such
matters. In Fleet Mortgage, we stated:
"We recognize and acknowledge the need to promote stability in the conduct of
a judicial sale. See Abbott v. Beebe, 226 Ill. 417, 420, 80 N.E. 991, 992 (1907),
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quoting Conover v. Musgrave, 68 Ill. 58 (1873) (' "Public policy requires stability
in all judicial sales and that they should not be disturbed for slight causes. To do
so would impair that confidence so essentially necessary to induce persons to
become purchasers when real estate is offered for sale under a judgment or
decree of a court." '). However, that policy cannot be given ascendancy over the
articulated purpose of the Illinois Mortgage Foreclosure Law to protect the equity
of a mortgagor by permitting mortgage redemptions prior to forced sales and
thereby to protect against the forced sale of property at prices well below fair
market value." (Emphasis added.) Fleet Mortgage Corp, 287 Ill. App. 3d at 389-
90.
In the instant case, the circuit court held that justice would not otherwise be done
if the sale were confirmed based on the facts before it. The circuit court was present for
and carefully considered the motions, briefs and arguments and assessed the credibility
of all parties seeking relief. A circuit court has abused its discretion when it acts
arbitrarily without the employment of conscientious judgment or if its decision exceeds
the bounds of reason and ignores principles of law such that substantial prejudice has
resulted. Merchants Bank v. Roberts, 292 Ill. App. 3d 925, 930 (1997), citing Venzor v.
Carmen's Pizza Corp., 235 Ill. App. 3d 1053, 1059 (1992). If reasonable persons could
differ as to the propriety of the trial court's actions, then the trial court cannot be said to
have exceeded its discretion. Merchants Bank, 292 Ill. App. 3d at 930.
Although we may not have come to the same conclusion as the circuit court in
this case, we cannot say that it acted arbitrarily, without conscientious judgment or
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ignored principles of law resulting in substantial prejudice. Based on the fact that
plaintiff issued a payoff letter which facilitated the sale of the property, two additional
lien-holders were paid off from the sale to the third-party purchaser, the third-party
purchaser was spared the loss of the property and the mortgagor's equity was not
forfeited, we hold that the circuit court did not abuse its discretion by denying plaintiff's
motion to confirm the sale.
III. DAMAGES
Intervenor next argues that the circuit court committed reversible error by not
awarding damages based on its tortious interference theory advanced for the first time
on appeal. "It is well settled that issues not raised in the trial court are deemed waived
and may not be raised for the first time on appeal." Haudrich v. Howmedica, Inc., 169
Ill. 2d 525, 536 (1996); see also Daniels v. Anderson, 162 Ill. 2d 47, 58-59 (1994); Geise
v. Phoenix Co. of Chicago, Inc., 159 Ill. 2d 507, 514-15 (1994); Lannom v. Kosco, 158
Ill. 2d 535, 539-40 (1994); Mittelman v. Witous, 135 Ill. 2d 220, 230 (1989). Specifically,
intervenor argues that it is entitled to damages based upon a "prospective economic
advantage."
In Daniels, our supreme court reiterated that " 'the theory upon which a case is
tried in the lower court cannot be changed on review, and * * * an issue not presented to
or considered by the trial court cannot be raised for the first time on review.' " Daniels,
162 Ill. 2d at 58, quoting Kravis v. Smith Marine, Inc., 60 Ill. 2d 141, 147 (1975). We
hold that plaintiff waived this argument and may not raise it for the first time on appeal.
Daniels, 162 Ill.2d at 59 (allowing new theory for the first time on appeal would weaken
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the adversarial process, our system of appellate jurisdiction, and cause prejudice, since
opponents may have been able to present evidence to discredit the theory had it been
raised in the trial court).
Furthermore, even if waiver were inapplicable here, intervenor's claim to
damages after the circuit court refused to confirm the sale based on a tortious
interference theory would fail nonetheless because it neither cites relevant authority nor
explains how such a theory can apply to foreclosure proceedings. Moreover, it is well-
established law in Illinois that the high bidders' "interest evaporates upon the trial court's
determination that the judicial sale will not be confirmed." Citicorp, 269 Ill. App. 3d at
301. "What the trial court decides to do with the property after it determines the sale will
not be confirmed is a matter in which the [high bidders] have no discernible legal
interest." Citicorp, 269 Ill. App. 3d at 301.
We also find it important to note plaintiff's contention that the circuit court erred in
awarding interest and attorneys' fees to intervenor at plaintiff's expense. Plaintiff raised
this contention in its response brief but it did not cross-appeal the judgment of the circuit
court ordering it to pay these costs to intervenor. Findings of the trial court adverse to
the appellee do not require the appellee's cross-appeal if the judgment of the trial court
was not at least in part against the appellee. Material Service Corp. v. Department of
Revenue, 98 Ill. 2d 382, 387 (1983). However, findings adverse to the appellee require
a cross-appeal if the judgment was in part against the appellee. General Auto Service
Station v. Maniatis, 328 Ill. App. 3d 537, 544-45 (2002). Here, the circuit court granted
plaintiff's motion to vacate the sale and dismiss the case with prejudice but it also
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assessed specified costs against plaintiff based on equitable principles. The circuit
court's judgment was in part against plaintiff. Thus, plaintiff was required to file a
cross-appeal to argue this issue on appeal. Material Services Corp., 98 Ill. 2d at 387.
We, therefore, decline to address plaintiff's argument relative to the circuit court's
judgment that was adverse to plaintiff.
IV. CONCLUSION
For the foregoing reasons, we hold that the circuit court did not abuse its
discretion in denying plaintiff's motion to confirm or its subsequent grant of plaintiff's
motion to vacate the judicial sale and dismiss the matter with prejudice. Accordingly,
the judgment of the circuit court is affirmed.
Affirmed.
FITZGERALD-SMITH, P.J., and JOSEPH GORDON, J., concur.
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