Elawyers Elawyers
Ohio| Change

FirstMERIT BANK, N.A. v. CHICAGO TITLE LAND TRUST COMPANY, 1:13-cv-08570. (2014)

Court: District Court, N.D. Illinois Number: infdco20140723b50 Visitors: 5
Filed: Jul. 22, 2014
Latest Update: Jul. 22, 2014
Summary: MOTION FOR ENTRY OF DEFAULT JUDGMENT AND JUDGMENT OF FORECLOSURE AND SALE JOHN Z. LEE, District Judge. Plaintiff, FirstMerit Bank, N.A., a national banking association (" FirstMerit "), successor in interest to the Federal Deposit Insurance Corporation (" FDIC "), as receiver for Midwest Bank and Trust Company (" Midwest "), successor in interest to Royal American Bank, by its attorneys, hereby moves pursuant to Rule 55 of the Federal Rules of Civil Procedure and the Illinois Mortgage Foreclo
More

MOTION FOR ENTRY OF DEFAULT JUDGMENT AND JUDGMENT OF FORECLOSURE AND SALE

JOHN Z. LEE, District Judge.

Plaintiff, FirstMerit Bank, N.A., a national banking association ("FirstMerit"), successor in interest to the Federal Deposit Insurance Corporation ("FDIC"), as receiver for Midwest Bank and Trust Company ("Midwest"), successor in interest to Royal American Bank, by its attorneys, hereby moves pursuant to Rule 55 of the Federal Rules of Civil Procedure and the Illinois Mortgage Foreclosure Law (defined below), for entry of the following:

a) A default order and judgment in favor of FirstMerit and against defendants (each a "Defendant" and collectively "Defendants") Chicago Title Land Trust Company, as trustee under agreement dated March 12, 1999 and known as Trust No. 1106930 ("Borrower"); Dominic A. Gorniak ("D. Gorniak"); Barbara J. Gorniak ("B. Gorniak," and together with D. Gorniak, "Guarantors"), and Gilberts Industrial Condominium Association, an Illinois not-for-profit corporation ("Association") for foreclosure of the Mortgage1and the Judgment Lien under Count I of the Complaint; and

b) A Judgment of Foreclosure and Sale in favor of FirstMerit and against Defendants on Count I of the Complaint pursuant to 735 ILCS 5/Art. XV (the "Illinois Mortgage Foreclosure Law").

In support of this Motion, FirstMerit states as follows:

I. Jurisdiction and Venue

1. This Court has original jurisdiction over the subject matter of this action pursuant to 28 U.S.C. § 1332, because there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75,000, exclusive of interest and costs.

2. This Court has personal jurisdiction over Borrower, and venue is proper in this judicial district pursuant to 28 U.S.C. § 1391 because: (a) Borrower is headquartered, does business, and owns the Property within this District; (b) the Mortgage at issue is secured by Property located in this District; and (c) a substantial part of the events or omissions giving rise to the claim occurred here.

II. Procedural History

3. On November 27, 2013, FirstMerit filed a Complaint against Defendants, thereby commencing the above-captioned proceeding. In the Complaint, FirstMerit seeks to foreclose a mortgage and a judgment lien on property located at 38 West End Drive, Gilberts, Illinois (the "Property") owned by Borrower. The Mortgage secures debt that is due and owing pursuant to a certain Loan (as defined below) to Borrower. Borrower is currently in default under the Loan, and has failed to pay all obligations due and owing from Borrower to FirstMerit with respect to the Loan. Each of Guarantors and Association may also hold or claim interests in the Property.

4. On December 2, 2013, the Clerk of the Court issued a Summons to each Defendant, directing each Defendant to answer the Complaint and notifying each Defendant that they needed to file an answer or otherwise respond to the Complaint.

5. On December 3, 2013, Borrower was served with Summons and Complaint. A true and correct copy of the return of service is attached hereto as part of Group Exhibit A.

6. On December 4, 2013, Association was served with Summons and Complaint. A true and correct copy of the return of service is attached hereto as part of Group Exhibit A.

7. On December 5, 2013, each Guarantor was served with Summons and Complaint. A true and correct copy of the return of service is attached hereto as part of Group Exhibit A.

8. As a result of FirstMerit's service of the Complaint and Summons, Defendants were required to answer or otherwise plead in response on the following dates: (a) Borrower on December 24, 2013; (b) Association on December 26, 2013; and (c) Guarantors on December 26, 2013.

9. On December 6, 2013 — one day after they were served with the Complaint — Guarantors jointly filed for voluntary bankruptcy relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Western District of Wisconsin (the "Bankruptcy Court"), thereby establishing case No. 03-13-15827-rdm (the "Bankruptcy Case").

10. On April 1, 2014, in an abundance of caution, FirstMerit filed a Motion for Relief from the Automatic Stay Pursuant to 11 U.S.C. § 362(d)(1) and (2) (the "Stay Relief Motion") before the Bankruptcy Court. The Bankruptcy Court held a hearing on the Stay Relief Motion on April 28, 2014.

11. On May 5, 2014, the Bankruptcy Court entered an order granting the Stay Relief Motion (the "Stay Relief Order"). Attached hereto as Exhibit B is a true and correct copy of the Stay Relief Order. With respect to the instant proceeding, the Stay Relief Order provides as follows:

FirstMerit's Motion is GRANTED with respect to the property located at 38 W. End, Gilberts, Illinois (the "Gilberts Property"), which is also described on Exhibit A, for the additional reason that the Debtors stipulated to the requested relief. FirstMerit may pursue all remedies available in law or equity to enforce its liens, security interests, and other rights in or against the Gilberts Property, including, but not limited to, the right to foreclose the interests of the Debtors and the Chicago Title Land Trust Company as trustee under the agreement dated March 12, 1999 and known as Trust No. 1106930, and the right to sell or otherwise dispose of the Gilberts Property pursuant to applicable state law.

See Stay Relief Order, ¶ 2.

12. None of Defendants appeared at the status hearing held by the Court on April 1, 2014, and none of Defendants filed an answer to the Complaint, or other responsive pleading.

III. FirstMerit is Entitled to a Default Judgment Against Each Defendant.

13. Rule 55 of the Federal Rules of Civil Procedure provides: "When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default." Fed. R. Civ. P. 55(a). Rule 55 further provides that the clerk or the court may enter default judgment against a defendant on the plaintiff's request or application. Fed. R. Civ. P. 55(b).

14. Each Defendant was required to answer or otherwise plead in response to the Complaint on either December 24 or December 26, 2013. None of Defendants pled in response before such date.

15. Since FirstMerit was granted stay relief in the Bankruptcy Case on May 5, 2014, Guarantors have yet to answer or otherwise plead in response to the Complaint.

16. Rule 54 of the Federal Rules of Civil Procedure provides: "When an action presents more than one claim for relief . . . or when multiple parties are involved, the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines that there is no just reason for delay." Fed. R. Civ. P. 54(b).

17. Each Defendant is in default, and there is no just reason to delay entry of a default judgment against each Defendant at this time.

IV. FirstMerit Is Entitled To A Judgment Of Foreclosure and Sale on Count I

18. Courts in the Northern District of Illinois apply the Illinois Mortgage Foreclosure Law to mortgage foreclosure proceedings initiated in federal court. See Ocwen Fed. Bank, FSB v. Harris, Case No. 99 C 658, 2000 WL 1644377, *2 (N.D. Ill. Oct. 24, 2000) ("Foreclosure proceedings in Illinois are governed by the [Illinois Mortgage Foreclosure Law]."); Countrywide Home Loans v. Wilkerson, Case No. 03 C 50391, 2004 WL 539983, *1 (N.D. Ill. Mar. 12, 2004) (applying Illinois Mortgage Foreclosure Law to motion for summary judgment for foreclosure); Mellon Mortgage Co. v. Larios, Case No. 97 C 2330, 1998 WL 292387, *1 (N.D. Ill. May 20, 1998) ("The applicable law in this instance is the [Illinois Mortgage Foreclosure Law]."); Ocwen Fed. Bank v. The Steel City Nat'l Bank of Chicago, Case No. 97 C 5059, 1998 WL 111672, *2 (N.D. Ill. Mar. 4, 1998) (applying Illinois Mortgage Foreclosure Law to foreclosure action); Fed. Home Loan Mortgage Corp. v. Devon Bank, Case No. 94 C 5527, 1995 WL 410975, *1 (N.D. Ill. July 11, 1995) ("This is a statutory foreclosure action governed by Illinois law").

19. The Illinois Mortgage Foreclosure Law provides that, on motion of the plaintiff, the Court shall enter a judgment of foreclosure where all the allegations of fact in the complaint have been proved by verification of the complaint or affidavit. 735 ILCS 5/15-1506(a)(2).

20. All of the allegations of fact in the Complaint are proved by the attached declaration in support of this Motion, attached hereto as Exhibit C (the "Lupascu Declaration").

21. The total amount due and owing to FirstMerit under the Loan Documents, secured by the Mortgage against the Property, as of July 15, 2014, is $315,704.61.

22. On February 21, 2013, the Circuit Court of Jefferson County in the State of Wisconsin entered its Order for Judgment and Judgment ("Judgment") against, inter alia, Guarantors, granting FirstMerit a monetary judgment against D. Gorniak, jointly and severally with B. Gorniak, and two other guarantors of the CES Notes, in the amount of $4,831,249.87 as of February 11, 2013, plus interest thereafter at $1,068.91 per day, plus all costs of collection and foreclosure. (See Judgment, § 1). A copy of the Judgment is attached as Exhibit K to the Complaint.

23. On July 1, 2014, the Circuit Court of Jefferson County in the State of Wisconsin entered its Order Confirming Sheriff's Sales, Amending Monetary Judgment, And Directing Delivery Of The Sheriff's Deeds To Cascade Holdings, LLC (the "Amended Judgment"), a copy of which is attached to the Lupascu Declaration as Exhibit 1.

24. The total amount due and owing to FirstMerit under the Judgment and Amended Judgment, secured by the Mortgage against the Property, is $4,201,314.11 (as of July 1, 2014).

25. As a result, a total of $4,517,018.72 remains due and owing to FirstMerit, all of which is secured by the Mortgage. Consequently, FirstMerit is entitled to seek a judgment of foreclosure for the maximum amount — $450,000 — set forth in the Mortgage.

26. Under Count I of the Complaint, FirstMerit seeks a judgment of foreclosure against the Defendants in the amount of $450,000 under the Mortgage, pursuant to 735 ILCS 5/15-1506(a)(2) of the Illinois Mortgage Foreclosure Law. For the avoidance of doubt, FirstMerit does not seek a deficiency judgment against either the Borrower or the Guarantors.

V. Judgment of Foreclosure

27. Special matters may be included in the judgment of foreclosure if sought by a party by motion. 735 ILCS 5/15-1506(f). FirstMerit requests that the Court include the following special matters, in the form of Order submitted with this Motion:

a) The Property should be subject to a sale by public auction, for cash in hand at the time of sale; b) The Property should be subject to a sale by open, verbal bid; c) The Judicial Sales Corporation shall be appointed as the special commissioner to conduct the sale; d) Title in the Property may be subject at the sale shall include general real estate taxes for the current year and for the preceding year (if any) which have not become due and payable as of the date of this judgment, any special assessments upon the real estate, and easements and restrictions of record; and e) In the event that FirstMerit is a successful bidder at the sale, it may offset against the purchase price to be paid for any or all of the Property the amounts due, if any, under this Judgment, the order confirming the sale, or such other order or judgment as may be entered by the Court prior to the sale.

WHEREFORE, FirstMerit respectfully requests that this Court enter an Order in the form submitted with this Motion: (a) granting default judgment for foreclosure of its Mortgage against Chicago Title Land Trust Company, Dominic A. Gorniak, Barbara J. Gorniak, and Gilberts Industrial Condominium Association on Count I of the Complaint; (b) granting Judgment of Foreclosure and Sale in favor of FirstMerit and against Defendants on Count I of the Complaint pursuant to 735 ILCS 5/Art. XV; and (c) granting any other relief the Court deems just and proper.

EXHIBIT A

EXHIBIT B

UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF WISCONSIN In Re: Dominic A. and Barbara J. Gorniak, Case No. 13-15827-rdm Debtors. Chapter 11

ORDER GRANTING FIRSTMERIT'S MOTION FOR RELIEF FROM THE AUTOMATIC STAY

This matter came before the Court on FirstMerit Bank N.A. ("FirstMerit") Motion for Relief from the Automatic Stay Pursuant to 11 U.S.C. § 362(d)(1) and (2) (the "Motion"). A hearing was held on the Motion on April 28, 2014. FirstMerit and the Debtors appeared at the hearing through their counsel.

Having reviewed the Motion, the arguments of the parties on the record at the hearing, and all related pleadings in this case, IT IS HEREBY ORDERED:

1. The Court finds that the Debtors have no equity in the property subject to the Motion and such property is not necessary for an effective reorganization. The Court therefore GRANTS the Motion for Relief pursuant to 11 U.S.C. § 362(d)(2). 2. FirstMerit's Motion is GRANTED with respect to the property located at 38 W. End, Gilberts, Illinois (the "Gilberts Property"), which is also described on Exhibit A, for the additional reason that the Debtors stipulated to the requested relief. FirstMerit may pursue all remedies available in law or equity to enforce its liens, security interests, and other rights in or against the Gilberts Property, including, but not limited to, the right to foreclose the interests of the Debtors and the Chicago Title Land Trust Company as trustee under the agreement dated March 12, 1999 and known as Trust No. 1106930, and the right to sell or otherwise dispose of the Gilberts Property pursuant to applicable state law. 3. FirstMerit's Motion is GRANTED with respect to the properties located at 1000-1001 Apache Court, Fort Atkinson, Wisconsin, 1002 Apache Court, Fort Atkinson, Wisconsin, 1005 Apache Court, Fort Atkinson, Wisconsin, 1120 Seminole Drive, Fort Atkinson, Wisconsin, and all property owned by the Debtors and located in Chippewa County, Wisconsin. Each of these properties is also described in Exhibit A, attached to this Order. FirstMerit may pursue all remedies available in law or equity to enforce its liens, security interests, and other rights in or against these properties, including, but not limited to, the right to foreclose the interests of the Debtors and the right to sell or otherwise dispose of the properties pursuant to applicable state law. 4. FirstMerit's Motion is GRANTED with respect to the Game Farm Animals and the Game Farm Equipment (as those terms are defined in the Motion) located at the Chippewa County Property. FirstMerit may pursue all remedies available in law or equity to enforce its liens, security interests, and other rights in or against the Game Farm Animals and Game Farm Equipment, including, but not limited to, the right to foreclose the interests of the Debtors and the right to sell or otherwise dispose of the Game Farm Animals and Game Farm Equipment pursuant to applicable state law. 5. The 14-day stay of the order found in Bankruptcy Rule 4001(a) (3) shall not be implemented in this case. FirstMerit may immediately proceed with its remedies against the all of the properties, the Game Farm Animals, and the Game Farm Equipment, listed in this Order without further delay.

EXHIBIT C

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION FIRSTMERIT BANK, N.A., a national banking association, Case No. 1:13-cv-08570 Plaintiff, v. District Judge: Honorable John Z. Lee CHICAGO TITLE LAND TRUST COMPANY, et al., Defendant(s).

DECLARATION OF LUCIAN LUPASCU

I, Lucian Lupascu, declare as follows:

1. I am a Vice President for FirstMerit Bank, N.A., a national banking association ("FirstMerit"), successor in interest to the Federal Deposit Insurance Corporation ("FDIC"), as receiver for Midwest Bank and Trust Company ("Midwest"), successor in interest to Royal American Bank ("Royal").

2. I submit this declaration with respect to FirstMerit's Motion for Default Judgment (the "Motion")2 in the above-captioned case.

3. FirstMerit is a national banking association with its principal place of business at 111 Cascade Plaza, Akron, Ohio 44308.

4. In my position as Vice President, I have access to FirstMerit's loan records, which are kept and maintained in both hard copy form and on a computer system known as Fidelity Commercial Loan System which is produced by FIS Global. InfoAccess is an adjunct to the Fidelity Commercial Loan System which allows FirstMerit to maintain electronic copies of the loan documents and files. In addition, FirstMerit maintains the Jack Henry operating system utilized by Midwest. FirstMerit has been able to maintain the content of the Jack Henry system from Midwest to preserve the history of the loan to Borrower. I am knowledgeable regarding how information is input and maintained in the Fidelity Commercial Loan System, InfoAccess and how it was input and is maintained in the Jack Henry system.

5. For all loans, including the loans acquired from Midwest, it is FirstMerit's regular course of business to make credit and debit entries into the Fidelity Commercial Loan system at or around the time of the occurrence of the transactions reflected in the entries. The Fidelity Commercial Loan system organizes, tracks, and compiles these transactions and maintains the payment history for the loan. The Fidelity Commercial Loan system can also create a payoff statement of the amount due and owing on a loan as of a particular date.

6. It is FirstMerit's regular course of business that all documents, information, and payment entries that are input into the Fidelity Commercial Loan system or InfoAccess are input by a person in the loan operations department with direct and personal knowledge of the information being input.

7. FirstMerit employees with access, including myself, have the ability to review and print the records kept and maintained on the Fidelity Commercial Loan System, InfoAccess, and Jack Henry systems and review and copy relevant documents from FirstMerit's files (maintained by FirstMerit or its agents). In preparing this affidavit, I have reviewed the records maintained on the Fidelity Commercial Loan System, InfoAccess, and Jack Henry systems and in FirstMerit's files related to the Loan to the Borrower.

8. I have personal knowledge of the loan documents relating to, as well as the status of payments, principal and interest under, due to FirstMerit. I reviewed records kept in the ordinary course of business by FirstMerit relating to payment history, principal balance, and other amounts due and owing under the Judgment and, if called to testify, I could competently testify to the facts set forth herein.

9. FirstMerit is the legal holder of a Mortgage, dated March 7, 2003, and recorded as Document No. 2003K073697 in Kane County, Illinois (the "Mortgage") from Borrower to Royal, and an Assignment of Rents and Leases, dated March 7, 2003 and recorded as Document No. 2003K073698 in Kane County, Illinois (the "Assignment of Rents"), from Borrower to Midwest. The parties modified the Mortgage pursuant to a Modification of Mortgage dated January 29, 2009 (the "Mortgage Modification"). Each of these documents encumbers the property commonly known as 38 West End Drive, Gilberts, Illinois 60136, as more fully described in the Mortgage (the "Property").

10. In addition to the Mortgage and Assignment of Rents, Guarantors also executed, in favor of Royal, a Collateral Assignment of Beneficial Interest, dated March 7, 2003 (the "Collateral Assignment").

11. A copy of the Mortgage is attached to the Complaint as Exhibit A, a copy of the Assignment of Rents is attached to the Complaint as Exhibit B, a copy of the Mortgage Modification is attached to the Complaint as Exhibit C, and a copy of the Collateral Assignment is attached as Exhibit D.

12. On or about March 7, 2003, Borrower executed that certain Promissory Note in favor of Royal, in the original principal amount of $450,000.00 (the "2003 Note"). In conjunction with the 2003 Note, Royal lent to Borrower, and Borrower received from Royal, a loan in the original principal amount of $450,000.00. The 2003 Note matured on March 7, 2008.

13. On or about March 7, 2008, Borrower executed that certain Promissory Note (the "2008 Note") in favor of Midwest, in the original principal amount of $387,165.45 (the "Loan"). In conjunction with the 2008 Note, Borrower and Midwest entered into that certain Business Loan Agreement, dated March 7, 2008 (the "Business Loan Agreement"). As a result of the 2008 Note and the Business Loan Agreement, Midwest agreed to extend the maturity date of the original loan, which was documented by the 2003 Note and secured by the Mortgage and Collateral Assignment, from March 7, 2008 to March 7, 2013. A copy of the 2008 Note is attached to the Complaint as Exhibit E and a copy of the Business Loan Agreement is attached to the Complaint as Exhibit F. The Mortgage, Assignment of Rents and Leases, Collateral Assignment, 2003 Note, 2008 Note, Business Loan Agreement, and all other instruments, agreements, and documents executed in connection with the Loan are referred to herein as the "Loan Documents."

14. On February 8, 2011, FirstMerit recorded (a) an Assignment of the Mortgage ("Mortgage Assignment") with the Kane County Recorder of Deeds ("Recorder") as Document No. 2011K9947, and (b) an Assignment of Assignment of Rents (the "AOR Assignment"), with the Recorder as Document No. 2011K9948. A copy of each of the Mortgage Assignment and AOR Assignment is attached to the Complaint as Exhibit G, and are fully incorporated herein.

15. Additionally, on or about November 15, 2013, the Federal Deposit Insurance Corporation, as receiver for Midwest, executed that certain Allonge in favor of FirstMerit (the "Allonge"), endorsing the Note to FirstMerit. A copy of the Allonge is attached to the 2008 Note at Exhibit E, and is fully incorporated herein.

16. As set forth in the 2008 Note, the 2008 Note represented a "restatement of the indebtedness evidenced by, and is a replacement and consolidation of the $450,000.00 Promissory Note of Borrower dated March 7, 2003 payable to the order of Lender ... (principal balance of $387,165.45 as of the date hereof." (2008 Note, p. 2). Borrower also acknowledged, pursuant to the 2008 Note, that the Mortgage, Assignment of Rents, Mortgage Modification, and Collateral Assignment each constituted collateral security for the 2008 Note and the Loan.

17. Champion Environmental Services, Inc., a Wisconsin corporation owned by Guarantors ("CES"), is obligated to repay to FirstMerit a certain loan evidenced by a Promissory Note dated September 30, 2008, in the original principal amount of $4,000,000, as subsequently amended by the First Amendment to Promissory Note dated January 29, 2009, the Second Amendment to Promissory Note dated July 1, 2009, the Third Amendment to Promissory Note dated November 1, 2009, and the Fourth Amendment to Promissory Note dated March 19, 2010 (collectively, "CES Note 1").

18. CES is obligated to repay a loan evidenced by the Third Amended and Restated Term Note effective as of February 1, 2010, in the original principal amount of $864,592.52 ("CES Note 2").

19. CES is obligated to repay a loan evidenced by the Third Amended and Restated Term Note effective as of February 1, 2010, in the original principal amount of $275,000 ("CES Note 3").

20. CES is obligated to repay a loan evidenced by a Fixed Rate Note effective as of February 1, 2010 in the original principal amount of $400,000 ("CES Note 4," and collectively with CES Note 1, CES Note 2, and CES Note 3, the "CES Notes").

21. D. Gorniak is personally liable for the obligations owed by CES under the CES Notes pursuant to a Commercial Guaranty dated September 30, 2006 (the "D. Gorniak Guaranty").

22. B. Gorniak is personally liable for the obligations owed by CES under the CES Notes pursuant to a Commercial Guaranty dated September 30, 2006 (the "B. Gorniak Guaranty," and together with the D. Gorniak Guaranty, the "Guaranties").

23. Trustee, Guarantors, Midwest as predecessor-in-interest to FirstMerit, and CES previously entered into (collectively, "Cross-Collateralization and Stand-Still Agreements"): (a) that certain Cross-Collateralization and Cross-Default Agreement dated January 29, 2009; (b) that certain Cross-Collateralization and Cross-Default Agreement dated July 1, 2009 (the "Cross-Collateralization Agreement"); (c) that certain Stand-Still Agreement dated January 29, 2009; (d) that certain First Amended and Restated Stand-Still Agreement dated July 1, 2009; (e) that certain Second Amended and Restated Stand-Still Agreement dated November 1, 2009; and (f) that certain Third Amended and Restated Stand-Still Agreement dated March 19, 2010 (the "Third Stand Still Agreement"). A copy of the Cross-Collateralization Agreement is attached as Exhibit H to the Complaint, and a copy of the Third Stand Still Agreement is attached as Exhibit I to the Complaint.

24. Pursuant to the Cross-Collateralization and Stand-Still Agreements, the Mortgage secures the obligations of CES, D. Gorniak, and B. Gorniak to repay the CES Notes. (See Cross-Collateralization Agreement, p. 2).

25. CES previously defaulted on the CES Notes as a result of (collectively, the "CES Events of Default", and collectively with the Borrower Events of Default, the "Existing Events of Default"): (a) failing to repay all principal and interest (and all other amounts) under the Loan Documents on or prior to August 15, 2010; (b) the events of default set forth in the Cross-Collateralization and Stand-Still Agreements; and (iii) certain events of default that occurred prior to the date hereof. As provided in the Cross-Default and Standstill Agreements, events of default exist under the Loan Documents as a result of the Existing Events of Default.

26. Under the Loan Documents and Cross-Collateralization and Stand-Still Agreements, Borrower waived any and all offsets, defenses, or counterclaims which Borrower may have relating to the Loan. (Third Stand Still Agreement, §§ 2, 7).

27. Borrower has defaulted under the Note and the other loan documents as a result of (collectively, the "Borrower Events of Default"): (a) failing to repay all principal and interest (and all other amounts) under the Loan Documents on or prior to March 7, 2013; (b) certain events of default set forth in the Cross-Default and Standstill Agreements; and (c) certain other events of default that occurred prior to the date hereof.

28. As a result of the Existing Events of Default, FirstMerit previously elected to declare the whole of the principal sum remaining unpaid, together with interest thereon, immediately due and payable. FirstMerit confirms this election by the filing of this Complaint. Any pre-suit notice requirements have been met, and any and all grace periods have expired or have been waived.

29. As of July 15, 2014, the total amount of the indebtedness outstanding under the Loan is comprised of the following3:

Category (all through July 15, 2014) Amount Due Principal $150,622.41 Interest, Default Interest, and Late Fees $95,531.35 Late Charges $18,408.58 Taxes Advanced $51,142.27 Total Amount Due $315,704.61

30. On December 18, 2012, FirstMerit commenced a proceeding in the Circuit Court of Jefferson County in the State of Wisconsin by filing a complaint ("Wisconsin Complaint") against Guarantors and certain other defendants, seeking, inter alia, judgment against Guarantors for failure to repay the CES Notes pursuant to their obligations under the Guaranties. A copy of the Wisconsin Complaint is attached as Exhibit J to the Complaint.

31. On February 21, 2013, the Circuit Court of Jefferson County in the State of Wisconsin entered its Order for Judgment and Judgment ("Judgment") against, inter alia, Guarantors, granting FirstMerit a monetary judgment against D. Gorniak, jointly and severally with B. Gorniak, and two other guarantors of the CES Notes, in the amount of $4,831,249.87 as of February 11, 2013, plus interest thereafter at $1,068.91 per day. (See Judgment, § 1). A copy of the Judgment is attached as Exhibit K to the Complaint.

32. On July 1, 2014, the Circuit Court of Jefferson County in the State of Wisconsin entered its Order Confirming Sheriff's Sales, Amending Monetary Judgment, And Directing Delivery Of The Sheriff's Deeds To Cascade Holdings, LLC (the "Amended Judgment"), A copy of the Amended Judgment is attached hereto as Exhibit 1.

33. The total amount due and owing to FirstMerit under the Judgment and Amended Judgment, secured by the Mortgage against the Property, is $4,201,314.11 (as of July 1, 2014).

34. As a result, a total of $4,517,018.72 remains due and owing to FirstMerit, all of which is secured by the Mortgage.

Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. The declaration was executed by me in Chicago, Illinois on July 22, 2014.

EXHIBIT 1

FIRSTMERIT BANK, N.A., Plaintiff, v. DOMINIC A. GORNIAK, et al. Defendants.

ORDER CONFIRMING SHERIFF'S SALES, AMENDING MONETARY JUDGMENT, AND DIRECTING DELIVERY OF THE SHERIFF'S DEEDS TO CASCADE HOLDINGS' LLC

This matter was before the Court on the motion (the "Motion") of FirstMerit Bank, N.A. ("FirstMerit") seeking confirmation of the sheriff's sales of the real property commonly known as: (a) 1000 and 1001 Apache court, Fort Atkinson, Wisconsin; (b) 1002 Apache court, Fort Atkinson, wisconsin; (c) 1005 Apache court, Fort Atkinson, wisconsin; and (d) 1120 seminole Drive, Fort Atkinson, wisconsin 53538 (collectively, and as mole particularly described on Exhibit A attached hereto, the "properties"), amendment of the monetary judgment against E.G. Developments, L.L.C. and Belle City Equipment Resale, Inc, and directing the delivery of the Sheriff's Deeds to Cascade Holdings, LLC.

The papers submitted in support of the Motion establish that FirstMerit provided due and proper notice of the Motion, in compliance with the requirements of wis. stat. § 846.165(1). No party has filed a written objection to the Motion. The Court has read and considered the Sheriff's Reports of Sale filed by the Sheriff of Jefferson county, along with the Motion, the Affidavit of Shay A. Agsten, and other related pleadings and documents'

In light of the foregoing, and with the Court being fully advised of all the records, files and proceedings in this case;

NOW, THEREFORE, IT IS HEREBY ORDERED AND ADJUDGED:

1. Due notice of each of the Sheriff's Sales was properly advertised for three (3) consecutive weeks prior to the June 11, 2014 Sherif's Sales pursuant to Wis. Stat. § 846.103(1). Each notice was also properly posted pursuant to Wis. Stat. § 815.311 in advance of the June 11, 2014 sale dates as shown by the certification of the Sheriff attached to each of the Sheriffs Reports of Sale. Each Sheriff's Report of Sale is accepted and approved'

2. The sales of: (a) the 1000 and 1001 Apache Court property for the sale price of $520,000.00; (b) the 1002 Apache Court property for the sale price of $25,000.00; (c) the 1005 Apache Court property for the sale price of $25,000.00; and (d) the 1120 Seminole Drive property for the sale price of $100;000.00 (collectively, the "Bids") are each confirmed. Each of the Bids represents "fair value" pursuant to Wis. Stat. § 846.165 and, under the circumstances of this case, do not shock the conscience of the Court. The Court recognizes, as does Wisconsin case law, that Sheriff's Sales are forced, involuntary sales that are not expected or required to achieve full fair market value. There was no mistake, misapprehension, or inadvertence related to the Sheriffs Sales for any of the Properties.

3. After the sales but prior to the filing of the Motion, FirstMerit assigned each of the winning Bids to Cascade Holdings, LLC pursuant to Wis. Stat. § 846.17. Evidence of said assignment has been furnished to the Sheriff and this Court'

4. Immediately upon entry of this Order, the Clerk of Court shall deliver to Cascade Holdings, LLC, or its authorized representative or agent, the fully executed Sheriffs Deeds conveying the respective Properties to Cascade Holdings, LLC'

5. Further, the monetary judgment entered on February 21,2013 and amended on October 31, 2013 against E.G. Development, L.L.C. and Belle City Equipment Resale, Inc., jointly and severally (the "Monetary Judgment"), is amended a second time to account for the Bids and accrued interest (through July 1, 2014) such that the amended judgment shall be $4,201,314.11 (as of July 1,2014). FirstMerit has the right to amend that Monetary Judgment in the future to add additional interest, costs of collection and foreclosure, reasonable attorneys' fees, and other like expenses (whether incurred before or after July l, 2014) and interest after July 1, 2014. (FirstMerit also has reserved the right to, and may, amend the monetary judgments against Barbara Gomiak and Dominic Gorniak, but it is not doing so at this time due to Barbara and Dominic Gomiak's Chapter 11 Bankruptcy proceeding currently pending in the United States Bankruptcy Court for the Western District of Wisconsin.)

6. Defendants Dominic Gomiak, Barbara Gorniak, Nicole Beavers and Nick Beavers, along with all other natural persons or entities claiming under either of them or that otherwise may be residing at or otherwise in possession of any of the Properties (collectively, the "Occupants"), shall have fifteen (15) days from the date of this Order to vacate each of the Properties. The Occupants are prohibited from committing waste at the Properties and must leave the Properties in habitable condition. Any personal property belonging to the Occupants that is not removed within the time period set forth above shall be deemed abandoned, and FirstMerit may dispose of any such remaining personal property in its sole discretion (subject to any rights Barbara or Dominic Gorniak may have in said personal property by virtue of Case No. 13-15827 pending in the U.S. Bankruptcy Court for the Western District of Wisconsin). Should any of the Occupants fail to vacate any of the Properties within the time period set forth herein, FirstMerit shall be entitled to one or more Writs of Assistance pursuant to Wis. Stat. § 846.17. Said Writs shall be prepared and delivered to the Court by FirstMerit and shall be signed without further notice or hearing. The Sheriff of Jefferson County is hereby directed to execute any such Writs immediately without further instruction from the Court.

7. FirstMerit may seek any other such relief in this case as may be just, warranted, and consistent with this action and the orders entered herein.

IT IS SO ORDERED.

FootNotes


1. Capitalized terms not defined herein shall have the meanings ascribed to them in the Complaint.
2. All capitalized terms not defined herein shall have the meanings ascribed to them in the Motion or FirstMerit's Complaint (Dkt. No. 1).
3. These calculations do not include the outstanding indebtedness under the Judgment pursuant to the Cross-Collateralization Agreement.
Source:  Leagle

Can't find what you're looking for?

Post a free question on our public forum.
Ask a Question
Search for lawyers by practice areas.
Find a Lawyer