JOHN Z. LEE, District Judge.
Plaintiff, FirstMerit Bank, N.A., a national banking association ("
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 "
In support of this Motion, FirstMerit states as follows:
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.
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 "
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
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
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
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 "
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 "
11. On May 5, 2014, the Bankruptcy Court entered an order granting the Stay Relief Motion (the "
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.
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.
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
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
22. On February 21, 2013, the Circuit Court of Jefferson County in the State of Wisconsin entered its Order for Judgment and Judgment ("
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 "
24. The total amount due and owing to FirstMerit under the Judgment and Amended Judgment, secured by the Mortgage against the Property, is
25. As a result, a total of
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.
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:
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.
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:
I, Lucian Lupascu, declare as follows:
1. I am a Vice President for FirstMerit Bank, N.A., a national banking association ("
2. I submit this declaration with respect to FirstMerit's Motion for Default Judgment (the "
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 "
11. A copy of the Mortgage is attached to the Complaint as
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 "
13. On or about March 7, 2008, Borrower executed that certain Promissory Note (the "
14. On February 8, 2011, FirstMerit recorded (a) an Assignment of the Mortgage ("
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 "
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 ("
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 ("
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 ("
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 ("
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 "
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 "
23. Trustee, Guarantors, Midwest as predecessor-in-interest to FirstMerit, and CES previously entered into (collectively, "
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 "
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 "
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 following
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 ("
31. On February 21, 2013, the Circuit Court of Jefferson County in the State of Wisconsin entered its Order for Judgment and Judgment ("
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 "
33. The total amount due and owing to FirstMerit under the Judgment and Amended Judgment, secured by the Mortgage against the Property, is
34. As a result, a total of
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
This matter was before the Court on the motion (the "Motion") of FirstMerit Bank, N.A. ("
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;
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 "
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.