HSBC Bank USA, N.A. v. Leon et al

Filing 26

WRITTEN Opinion entered by the Honorable Ronald A. Guzman on 7/16/2013: For the reasons stated below, Plaintiff's motion for default [10-1] is denied. Defendants' Motion to Accept Answer and 114(a) Motion to Deny Judgment [22-1] is granted in part and denied in part as described below. Parties to appear for a status to set a discovery schedule or briefing on dispositive motions on July 26, 2013 at 9:30 a.m.Mailed notice(cjg, )

Order Form (01/2005)

United States District Court, Northern District of Illinois
Name of Assigned Judge
or Magistrate Judge

Ronald A. Guzman

CASE NUMBER

Sitting Judge if Other
than Assigned Judge

12 C 9549

DATE

7/16/2013

HSBC Bank USA, N.A. v. Victor Leon, et al.

CASE
TITLE
DOCKET ENTRY TEXT

For the reasons stated below, Plaintiff’s motion for default [10-1] is denied. Defendants’ Motion to Accept
Answer and 114(a) Motion to Deny Judgment [22-1] is granted in part and denied in part as described below.
Parties to appear for a status to set a discovery schedule or briefing on dispositive motions on July 26, 2013
at 9:30 a.m.

O[ For further details see text below.]

Docketing to mail notices.

STATEMENT
Plaintiff HSBC Bank USA, N.A., as trustee for the registered holders of First NLC Trust 2007-1
Mortgage-Backed Certificates, Series 2007-1, moves for default judgment in this foreclosure action against
Victor Leon and Monica Sanchez. For the reasons stated below, the motion is denied. Moreover,
Defendants’ Motion to Accept Answer and 114(a) Motion to Deny Judgment [22-1] is granted in part and
denied in part as described below.
Plaintiff initiated these foreclosure proceedings on November 30, 2012 and Defendants were served
on December 18, 2012. (Dkt. ## 5, 6.) Although their answers were due January 8, 2013, Defendants did not
answer or otherwise plead as of that date. On April 30, 2013, Plaintiff moved for default judgment. Counsel
for Defendants appeared in Court on May 16, 2013 and indicated that the firm had recently been retained and
asked for time to file an answer, which the Court allowed. On May 28, 2013, Defendants filed a “Motion to
Accept Answer and 114(a) Motion to Deny Judgment,” stating that while they filed on answer on May 23,
2013, due to a “technical error,” it was not properly uploaded and they had taken steps to correct the error.
Accordingly, Defendants’ motion to accept their answer late [22-1] is granted and the motion for default
judgment [10-1] is denied.
Defendants’ motion to deny judgment pursuant to Illinois Supreme Court Rule (“Rule”) 114(a) is
denied. Rule 114(a) states:
(a) Loss Mitigation. For all actions filed under the Illinois Mortgage Foreclosure Law, and
where a mortgagor has appeared or filed an answer or other responsive pleading, Plaintiff
must, prior to moving for a judgment of foreclosure, comply with the requirements of any loss
mitigation program which applies to the subject mortgage loan.

12C9549 HSBC Bank USA, N.A., v. Victor Leon, et al.

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STATEMENT
As noted recently by another court in this district, “[Rule] 114 is a procedural rule because it concerns the
‘accuracy and economy’ in litigation.” Wilmington Trust Nat’l Assoc. v. Espinoza, 12 C 7673, Dkt. # 38
(N.D. Ill. May 23, 2013). Accordingly, under the Erie doctrine, the Rule is inapplicable in federal court. See
Gacek v. Am. Airlines, Inc., 614 F.3d 298, 301-02 (7th Cir. 2010) (“Under the Erie doctrine, federal courts in
diversity cases (and any other cases in which state law supplies the rule of decision) apply state ‘substantive’
law but federal ‘procedural’ law.”).
For the reasons stated above, Defendants’ Motion to Accept Answer and 114(a) Motion to Deny
Judgment [22-1] is granted in part and denied in part. The motion to accept the answer is granted while the
motion to deny judgment under Rule 114 is denied. Plaintiff’s motion for default judgment [10-1] is denied.
Parties are directed to appear for a status on July 26, 2013 at 9:30 a.m.

12C9549 HSBC Bank USA, N.A., v. Victor Leon, et al.

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