United States of America v. Gerts (Deceased) et al
Filing
68
MEMORANDUM Opinion and Order Signed by the Honorable Elaine E. Bucklo on 3/9/2018. Mailed notice. (mgh, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
United States of America, on
Behalf of its Agency Secretary
of U.S. Department of Housing
and Urban Development
Plaintiff,
v.
William P. Butcher, Special
Representative estate of Iva G
Gerts (Deceased), et al.,
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No. 16 C 9168
Defendants.
MEMORANDUM OPINION AND ORDER
Iva G. Gerts executed a note and mortgage on September 12,
2003, in favor of Park National Bank. The note and mortgage were
subsequently assigned to the United States. Pursuant to the loan
documents, Gerts was entitled to periodic disbursements up to a
maximum principal amount of $351,225 in exchange for a security
interest in certain real property. Gerts died on April 5, 2010,
with a portion of the debt memorialized in the loan documents
outstanding.
The United States filed this action for foreclosure naming
Gerts’s
heirs
entitle
it
to
and
others,
demand
alleging
immediate
that
payment
the
in
loan
full
documents
of
the
outstanding debt upon Gerts’s death and contemplate foreclosure
proceedings in the event such a demand is not satisfied. Before
me are several motions filed by the government, which I resolve
as follows.
I
grant
as
unopposed
the
government’s
motions:
1)
to
dismiss unknown owners and non-record claimants; 2) for judgment
on
the
pleadings
Representative;
3)
as
for
to
defendant
default
Butcher
against
as
defendants
Special
U.S.
Bank
National Association, Richard E. Gerts, Sandra J. Olson, Jack T.
Gerts,
Kerry
A.
Gerts,
Scott
J.
Gerts,
Shelly
Oleson,
and
Unknown Heirs and Legatees of Iva G. Gerts; and 4) to appoint a
special commissioner. I deny, however, the government’s motion
for
a
judgment
of
foreclosure
and
its
motion
for
summary
judgment against defendant Vicki L. Ramos, an heir of Gerts’s
who claims ownership rights in the subject property.
While it is true that the note and mortgage the government
attached
to
foreclosure
its
and
complaint
shift
the
establish
burden
a
to
prima
Ramos
facie
to
case
for
establish
a
defense, Farm Credit Bank of St. Louis v. Biethman, 634 N.E. 2d
1312,
1318
(Ill.
App.
Ct.
1994),
the
government
must
nevertheless come forward with affirmative evidence to prove up
the amount of the debt it claims is due. In this connection, the
government
offers
the
affidavit
of
Heather
Campbell,
a
loan
servicing manager for Novad Management Consulting, LLC, which is
an independent contractor for the United States Department of
Housing and Urban Development and “manages the day to day loan
servicing for the accounts held by the programs.” Campbell Aff.
at ¶ 3. Ramos objects to Campbell’s testimony regarding the debt
amount
as
knowledge
inadmissible
is
a
hearsay
document
because
Campbell
the
refers
basis
to
as
for
a
her
“Loan
Transaction History” (although on its face it is captioned “Loan
Historical Transaction”). Indeed, neither Campbell nor any other
competent witness offers testimony establishing how or when this
document was created. Accordingly, Ramos argues, the government
has
not
shown
that
the
document
meets
the
business
record
exception to the hearsay rule and thus has failed to lay an
adequate foundation for Campbell’s testimony.
It seems likely that the government could show that the
“Loan Transaction History” document meets the criteria for a
business record. Yet, rather than try to refute Ramos’s shaky
argument, the government asserts, without citation to authority
or persuasive argument, that the document is admissible under
the “public records” exception to the hearsay rule. Fed. R.
Evid. 803(8). As the Seventh Circuit has explained, however,
that exception encompasses three discrete categories of public
records:
those
that
“set
out
a
public
office’s
activities,”
those that set out “a matter observed while under a legal duty
to report,” and those that set forth “factual findings from a
legally
1123,
authorized
1132
(7th
investigation.”
Cir.
2013)
Jordan
(citing
v.
Binns,
Fed.
712
R.
F.3d
Evid.
803(8)(A)(i)(iii)). It seems unlikely from the face of the Loan
Transaction History that it falls into any of these categories,
and the government makes no effort to show that it does.
Nor is the government entitled to summary judgment on the
basis that Ramos failed to respond to its L.R. 56.1 statement of
uncontested
facts.
It
is
true
that
factual
statements
left
unanswered are generally deemed admitted, but that is only true
to the extent the asserted facts are supported by admissible
evidence. Keeton v. Morningstar, Inc., 667 F. 3d 877, 884 (7th
Cir. 2012) (court deems facts not timely contested “admitted to
the extent [they are] supported by evidence in the record,” but
failure to respond to the movant’s L.R. 56.1 statement does not
“automatically result in judgment for the movant.”). Because the
government
has
not
established
the
admissibility
of
its
proffered evidence to support the amount it claims is due under
the note and mortgage, it has not shown that the undisputed
record entitles it to judgment in the claimed amount.
ENTER ORDER:
Elaine E. Bucklo
United States District Judge
Dated: March 9, 2018
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