Under Illinois law, a judgment of foreclosure does not end a mortgage foreclosure case; it remains modifiable by the trial court and is strictly interlocutory. After such a judgment is entered, the property is sold once periods for reinstatement and redemption have expired. The person who conducted the sale then reports to the court and, upon motion, the court holds a hearing to confirm the sale, at which the defendant may challenge the sale (albeit on limited grounds). Only after the sale is confirmed and final judgment is entered may the purchaser obtain a deed.
So at what point in this process may a property owner appeal? That was the question posed in EMC Mortgage Corp. v. Kemp [pdf]. Yesterday, the Illinois Supreme Court held that an appeal lies only from the final judgment confirming the sale, affirming the Appellate Court in a 6-1 decision by Justice Charles E. Freeman. Click here for our detailed history of the facts and underlying holdings in Kemp, and here for our report on the oral argument.
The plaintiff in Kemp originally filed its foreclosure complaint in the summer of 2006. After a complex set of challenges from the defendant, a judgment of foreclosure was finally entered in June 2009, and a judicial sale scheduled. After unsuccessfully moving for reconsideration, the defendant filed for bankruptcy. When the bankruptcy stay was lifted, the defendant challenged plaintiff's standing, pointing out that the plaintiff appeared to have acquired its interest in the mortgage well after filing the action. The Circuit Court refused to vacate the judgment of foreclosure, but stayed the foreclosure sale for a time. The Court also added Rule 304(a) language to the order, finding that an immediate appeal was appropriate. The defendant moved for reconsideration of the refusal to vacate. The Circuit Court denied this motion as well, although it once again added Rule 304(a) language to its order. The defendant appealed, seeking review of the Court's order denying her motion to vacate and her subsequent motion for reconsideration.
Before the Appellate Court, the plaintiff argued that Rule 304 language could only make an order which was otherwise appealable final, and the judgment of foreclosure wasn't appealable. The defendant argued that since her initial motion was one to vacate under Section 2-1401 of the Code of Civil Procedure, 735 ILCS 5/2-1401, she didn't need the Rule 304 language in the first place -- the order was already appealable. The Appellate Court held that a Section 2-1401 motion was improper when the underlying order wasn't final - which the judgment of foreclosure wasn't - dismissed the appeal for lack of jurisdiction.
The Supreme Court affirmed. The defendant's appeal suffered from a series of problems, the Court found. First, since there was no underlying final order or judgment, the Appellate Court was right - relief under Section 2-1401 wasn't available. Second, although a judgment of foreclosure was final, it wasn't appealable without Section 304(a) language -- and although the defendant had sought and obtained such language for the Section 2-1401 order and the order denying reconsideration of that order, she had not gotten such language on the judgment of foreclosure itself. Third, neither the denial of the improper motion to vacate nor the denial of the motion for reconsideration were final or appealable in themselves. The mere addition of Rule 304(a) language didn't fix the problem, the Court held, because such language could only make an otherwise final order appealable.
The defendant argued that she was attacking void judgments and orders, which may be done at any time. The Court rejected defendant's argument, holding that the doctrine of void orders could not confer appellate jurisdiction where it was otherwise absent.
Justice Lloyd A. Karmeier dissented. Justice Karmeier concluded that the aim of defendant's procedurally flawed motion to vacate the judgment of foreclosure, and her subsequent motion to reconsider the denial of her motion to vacate, was clear - a frontal attack on the foreclosure itself. Therefore, Justice Karmeier argued, the orders at issue could be properly treated as motions to reconsider the judgment of foreclosure. Since Illinois courts have long held that Rule 304(a) language appended to orders on motions for reconsideration suffices to make the underlying judgment or order appealable, the Rule 304(a) language on the defendant's two orders was sufficient to make the judgment of foreclosure itself appealable.
Justice Karmeier closed by pointing out that the majority's opinion might ultimately accomplish nothing beyond expending the time and resources of the parties. When the action returned to the Circuit Court, the defendant was free to file a proper motion to reconsider the judgment of foreclosure. Having done so twice before, the Circuit Court would presumably append Rule 304(a) language to the order denying the motion for reconsideration. Once that was done, the procedural issues on which the majority's opinion turned were eliminated, and the same issues would once again rise to the Appellate Court. Even if the majority were unwilling to muddy the settled rules of appellate review by treating the defendant's motions as ones for reconsideration, Justice Karmeier suggested yet another road open to the Court to reach what he regarded as a just result while saving time and resources: simply vacate the Appellate Court's Rule 23 order dismissing the action and order the Court, as an exercise of the Supreme Court's supervisory authority, to consider the appeal on the merits.