In the case of US Bank Trust National Association v. Lopez, 17 IL App (2d) 160967, the Second district re-affirmed the ruling in Deutsche Bank v. Gilbert, 2012 IL App (2d) 120164, and held (hopefully once and for all) that a Plaintiff in a foreclusre must have standing on the date of the filing of the lawsuit in order to proceed with a lawsuit. However, the Court also held it was a Defendant’s burden to show that the Plaintiff lacked standing when the suit was filed. The Court held that once standing has been properly stated, the burden will shift to a plaintiff to refute this evidence or demonstrate a question of fact. See Lopez
In Lopez, the Court rejected self-serving affidavits of a Plaintiff and statements by Plaintiff’s counsel as evidence of standing once the burden had shifted. See e.g. Lopez. However, the court did require a Defendant to produce enough evidence in order to properly shift the burden to Plaintiff. In this case, the court held a Defendant must proceed with diligence in defending a lawsuit and obtaining the necessary, and sufficient, facts and evidence utilizing the discovery process. This fact was made clear by the same Court in the case of US Bank Trust National Association v. Hernandez, 17 IL App (2d) 160850. In Hernandez, the lawsuit was filed on January 2, 2014. In that case there existed an assignment dated January 16, 2014 from HUD to the Plaintiff. Because the assignment post-dated the lawsuit, the Defendant challenged standing on the basis that there was a material issue of fact with regards to whether the bank had the debt on the date of filing and pointed to the assignment as evidence in support of the argument.
Even though the evidence clearly demonstrated a possibility the bank did not have proper rights to the note on the date of filing, the Court found that the mere existence of an assignment was not sufficient to overcome the presumption of ownership conferred by an endorsement and went into great detail about the burden of a Defendant of providing as much history as necessary to demonstrate that the transfer of the Note did not occur before the Complaint was filed. Hernandez at ¶22
In fact, Hernandez made it clear that in order for a Defendant to proceed with a case, the Defendants could have, through depositions or interrogatories, definitively shown when Plaintiff obtained an interest in the mortgage and that it is a Defendant’s duty to make this effort and not simply point to assignments as evidence. Id at ¶22
Thus, the standing defense is alive and well in Illinois, but it is a Defendant’s duty to investigate a Plaintiff’s allegations in its Complaint and a Defendant cannot simply sit back and rely on documentation filed with a lawsuit unless the evidence is clear like in the Deutsche Bank or Lopez cases.Defendants thus should, through counsel, engage and utilize the powerful tools of interrogatories, requests to produce, requests to admit, and depositions made available to them in the Supreme Court Rules to investigate the claims made by a Plaintiff. If they do so, then the courts have made clear through these rulings, then they will be adequately protected from Plaintiff’s attempting to file lawsuits on debts that they do not actually own and have no rights to proceed on when the Plaintiff files a lawsuit. These are tremendously powerful rulings that no defendant in a foreclosure lawsuit should ignore.
The materials provided are for informational purposes only and should not be viewed as legal advice. It may also be viewed as advertising material. You should contact your attorney directly, or Drake Shunneson, to obtain advice to any issue or problem. This article, by itself, does not create any attorney-client relationships and the opinions are those of the individual author and do not reflect the opinions of any law office or law firm the author is, or was, associated with or any other individual attorney, entity or individual.