Illinois Supremes: Courts Lack Jurisdiction In F'closure Actions Against Dead Homeowners; Banks Must Name Estate's Personal Rep Before Going Forward

The Illinois Supreme Court recently decided the legal question whether a mortgagee must name a personal representative for a deceased mortgagor in a mortgage foreclosure proceeding in Illinois in order for the circuit court to acquire subject matter jurisdiction. For the reasons the court sets forth in its ruling, it concluded that naming a personal representative for a deceased mortgagor is required.

The ruling has been summarized as follows (bold text is my emphasis, not in the original text):

• In Cook County, mortgage foreclosure actions were filed in 2006 against two property owners, one in Chicago and one in Bellwood, who were deceased. In each case, the circuit court held that a personal representative must be named by the mortgage lender for the court to have subject matter jurisdiction. For failure to do this, both suits were dismissed. The lenders appealed and the causes were consolidated in the appellate court. No one appeared for the appellees, but an amicus brief was filed in support of the trial court’s decision.
  
  The appellate court reversed, holding that mortgage foreclosures are in rem actions in which no personal representative has to be named.
  
  In this decision, the supreme court disagreed with the appellate court, holding that a mortgage foreclosure is properly characterized as quasi in rem. Although the Mortgage Foreclosure Law does not deal with this issue, the Code of Civil Procedure provides for substitution of a deceased party’s personal representative. Otherwise, a lawsuit against a decedent is a nullity.(1)
  
  The circuit court was affirmed as to both cases and the appellate court was reversed.

(The Illinois high court granted a motion by the Chicago Volunteer Legal Service Foundation(2) for leave to file a petition for leave to appeal, as amicus curiae, the intermediate state appellate court ruling, and later granted the Office of the Cook County Public Guardian leave to file an amicus brief.)

Source: Illinois Supreme Court Summary (ABN AMRO Mortgage Group, Inc. v. McGahan).

For the text of the ruling, see ABN AMRO Mortgage Group, Inc. v. McGahan, Docket No. 107954 (Ill. June 4, 2010).

(1) I wonder how many void, already-conducted foreclosure sales in Illinois this ruling will result in. If the lawsuit is a nullity, the foreclosure judgment arising from the lawsuit, the subsequent foreclosure sale, and any subsequent sales of the foreclosed property thereafter will presumably also be nullities.

(2) According to their website, the Chicago Volunteer Legal Services Foundation was formed to coordinate, promote and support the involvement of the legal community in the voluntary pro bono representation of individual clients from the ranks of Chicago area's poor and working poor, resolving non-fee-generating family, consumer, probate, tort, government benefits, immigration and miscellaneous cases.