Bank of New York Mellion v. McSmith et al

Filing 44

JUDGMENT of Foreclosure and ORDER of Sale, Granting 43 MOTION for Default Judgment as to Foreclosure and Order of Sale filed by Bank of New York Mellon, 31 MOTION for Order to Appoint a Special Commissioner filed by Bank of New York Mellon, 30 MOTION for Judgment as a Matter of Law of Foreclosure and Order for Sale filed by Bank of New York Mellon.Signed by Judge J. Phil Gilbert on 3/14/2013. (jdh)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
THE BANK OF NEW YORK MELLON f/k/a The Bank Of
New York, As Trustee For The Certificate Holders Of
Cwabs, Inc., Asset-Backed Certificates, Series 2006-7,
vs.

Plaintiff,

CIVIL NO. 11-cv-972 JPG DGW

CARLA J. MCSMITH, ROBERT D. MCSMITH, US BANK
NATIONAL ASSOCIATION, As Trustee For The C-Bass
Mortgage Loan Asset-Backed Certificates, Series 2006DL1, STATE OF ILLINOIS DEPARTMENT OF
EMPLOYMENT SECURITY, UNITED STATES OF
AMERICA, BENEFICIAL ILLINOIS, INC., d/b/a Beneficial
Mortgage Company Of Illinois, CITIBANK (SOUTH
DAKOTA), N.A., UNKNOWN TENANTS, UNKNOWN
OWNERS and NON-RECORD CLAIMANTS,
Defendant(s).
JUDGMENT OF FORECLOSURE AND ORDER OF SALE
THIS matter is before the Court on a Complaint to Foreclose Mortgage filed by the Plaintiff, THE
BANK OF NEW YORK MELLON f/k/a The Bank Of New York, As Trustee For The Certificate Holders Of
Cwabs, Inc., Asset-Backed Certificates, Series 2006-7 (“BONY”), against Defendants CARLA J. MCSMITH,
ROBERT D. MCSMITH, US BANK NATIONAL ASSOCIATION, As Trustee For The C-Bass Mortgage Loan
Asset-Backed Certificates, Series 2006-DL1, STATE OF ILLINOIS DEPARTMENT OF EMPLOYMENT
SECURITY, UNITED STATES OF AMERICA, By Virtue Of Federal Tax Liens Recorded As Document
Numbers 228468, 2007R00305, 2008R01923, 2008R04951, 2011R02158, BENEFICIAL ILLINOIS, INC.,
d/b/a Beneficial Mortgage Company Of Illinois, and CITIBANK (SOUTH DAKOTA), N.A. (Doc. 3-2) and
pursuant to Order setting a bench trial for February 25, 2013 (Doc. 40). The property at issue is located in
Randolph County, Illinois, and is legally described as follows:
LOT 22 IN BLOCK 7 IN CRESCENT LAKE SUBDIVISION IN THE VILLAGE OF STEELEVILLE,
RANDOLPH COUNTY, ILLINOIS AS SHOWN BY PLAT FILED FOR RECORD ON DECEMBER
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9, 1964 AND RECORDED IN VOLUME “I” OF PLATS OF PAGE 4 IN THE RECORDER'S
OFFICE, RANDOLPH COUNTY, ILLINOIS.
SUBJECT TO BUILDING LINES AND UTILITY EASEMENTS AS SHOWN ON THE PLAT OF
SAID SUBDIVISION.
SUBJECT TO COVENANTS AND RESTRICTIONS DATED OCTOBER 31, 1964 AND
RECORDED IN DECEMBER 9, 1964 IN BOOK 212 AT PAGE 1140, RECORDER'S OFFICE,
RANDOLPH COUNTY, ILLINOIS.
SAID CONVEYANCE IS FURTHER SUBJECT TO ALL RESTRICTIONS, EASEMENTS AND
COVENANTS OF RECORD OR DISCLOSED BY INSPECTIONS AND THE LIEN OF THE 2004
AND SUBSEQUENT REAL ESTATE TAXES.
THE PREPARER OF THIS DEED HAS MADE NO INVESTIGATION CONCERNING ANY
POSSIBLE VIOLATIONS OF ANY ENVIRONMENTAL LAWS OR REGULATIONS INCLUDING,
BUT NOT LIMITED TO, THE ILLINOIS RESPONSIBLE TRANSFER ACT AND ACCEPTS NO
LIABILITY FOR ANY VIOLATIONS.
The common address of the property is 610 HILLANDALE DRIVE, STEELEVILLE, IL 62288, and the
Permanent Tax Number is 17-069-014-00.
Plaintiff BONY has voluntarily dismissed the defendants designated as Unknown Tenants,
Unknown Owners and Non-Record Claimants (Doc. 32). Plaintiff previously filed for entry of default against
Defendants Carla J. McSmith, Robert D. McSmith, US Bank National Association, as Trustee for the CBASS Mortgage Loan Asset-Backed Certificates, Series 2006-DL1, State of Illinois Department of
Employment Security, Beneficial Illinois, Inc., d/b/a Beneficial Mortgage Company of Illinois, and CitiBank
(South Dakota), N.A. (Doc. 33). The Clerk of the Court previously entered default as to Defendants Carla
J. McSmith, Robert D. McSmith, US Bank National Association, as Trustee for the C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2006-DL1, State of Illinois Department of Employment Security,
Beneficial Illinois, Inc., d/b/a Beneficial Mortgage Company of Illinois, and CitiBank (South Dakota), N.A.
(Doc. 34). Plaintiff also filed motions for entry of Judgment of Foreclosure and Order of Sale (Docs. 30 &
43) and to appoint a Special Commissioner (Doc. 31). Concurrently with the entry of a default judgment,
Plaintiff seeks a judgment of foreclosure and sale, including an award of its attorneys’ fees, costs and

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expenses, a determination of the priority of the parties’ liens on the property, and an order fixing the
mortgagors’ final date to redeem the mortgage.
1.

DEFAULT JUDGMENT

Defendants Carla J. McSmith, Robert D. McSmith, US Bank National Association, as Trustee for
the C-BASS Mortgage Loan Asset-Backed Certificates, Series 2006-DL1, State of Illinois Department of
Employment Security, Beneficial Illinois, Inc., d/b/a Beneficial Mortgage Company of Illinois, and CitiBank
(South Dakota), N.A. failed to respond to the Complaint within the time required by law. Pursuant to
Federal Rule of Civil Procedure 55(a), the Clerk of Court entered default against those defendants (Doc.
34). Plaintiff BONY now moves for entry of default judgment pursuant to Federal Rule of Civil Procedure
55(b)(2).
Granting or denying default judgment is within the Court’s sound discretion. Swaim v. Moltan Co.,
73 F.3d 711, 716 (7th Cir. 1996). Entering a judgment by default against a party establishes that
defendant’s liability to the plaintiff for each claim alleged in the complaint as a matter of law. Dundee
Cement Co. v. Howard Pipe & Concrete Products, 722 F.3d 1319, 1323 (7th Cir. 1983). “Upon default, the
well-pleaded allegations of a complaint relating to liability are taken as true.” Id. at 1323. While the
pleadings in a complaint are taken to be true upon the entering of a default judgment, allegations regarding
damages are not automatically taken as true. In re Catt, 368 F.3d 789, 793 (7th Cir. 2004). The court must
conduct an inquiry in order to ascertain the amount of damages with reasonable certainty. Dundee Cement
at 1323.
Under Illinois law, when a party does not submit a verified answer denying the facts in the
complaint, then a “sworn verification of the complaint or a separate affidavit setting forth such fact is
sufficient evidence thereof against such party and no further evidence of such fact shall be required.” 735
ILCS 5/15-1506(a)(1). The Court may enter a judgment of foreclosure “upon motion supported by an

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affidavit stating the amount which is due the mortgagee… where all the allegations of fact in the complaint
have been proved by verification of the complaint or affidavit.” 735 ILCS 5/15-1506(a)(2).
In this case, Defendants Carla J. McSmith, Robert D. McSmith, US Bank National Association, as
Trustee for the C-BASS Mortgage Loan Asset-Backed Certificates, Series 2006-DL1, State of Illinois
Department of Employment Security, Beneficial Illinois, Inc., d/b/a Beneficial Mortgage Company of Illinois,
and CitiBank (South Dakota), N.A. have all failed to participate in or defend against the foreclosure and
pursuant to the terms of the note and mortgage, foreclosure and an award of all costs associated with
BONY’s foreclosure efforts is warranted. Furthermore, the amount of damages is readily ascertainable
from the terms of the note and mortgage, and the documentary evidence and affidavits on the record (Doc.
3-2, Doc. 30-1, 30-2, 30-3). Therefore, BONY’s motion for entry of Judgment of Foreclosure and Order of
Sale against Defendants Carla J. McSmith, Robert D. McSmith, US Bank National Association, as Trustee
for the C-BASS Mortgage Loan Asset-Backed Certificates, Series 2006-DL1, without recourse, State of
Illinois Department of Employment Security, Beneficial Illinois, Inc., d/b/a Beneficial Mortgage Company of
Illinois, and CitiBank (South Dakota), N.A. (Doc. 30) is GRANTED..
2.

STIPULATION

Plaintiff and Defendant United States of America have stipulated to the amounts due pursuant to
the note and mortgage attached to Plaintiff’s Complaint (Doc. 3-2) and the Plaintiff’s right to foreclose the
federal tax liens recorded against the property by Defendant United States of America. (Doc. 42) The
Court has received affidavits and evidence from BONY in support of its Motion for Entry of Judgment of
Foreclosure and Order of Sale (Doc. 30, 30-1, 30-2, 30-3). The Court, being fully advised in the
premises, finds that the United States of America has been duly and properly brought before the Court,
all in the manner provided by law; that due and proper notice has been given to the United States of
America and all other defendants during the progress of this cause as required by law. Therefore,
BONY’s agreed motion for entry of Judgment of Foreclosure and Order of Sale against Defendant United
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States of America (Doc. 43) is GRANTED.
3.

CONCLUSION

For the reasons stated, the Court hereby FINDS AS FOLLOWS:
1.

That the Court has jurisdiction of the parties to and the subject matter of this cause.

2.

That all of the material allegations of the Complaint are true and proven against said

Defendants, as demonstrated by the evidence submitted in support of Plaintiff’s Motion for Entry of
Judgment of Foreclosure and Order of Sale and the stipulation executed by Plaintiff and the United States
of America. More specifically, BONY holds the original Note and Mortgage, and said documents have been
properly assigned to BONY. Thus, BONY has standing to foreclose, and the mortgagors have defaulted
pursuant to the terms of the Note. The Mortgage upon which this action is based was recorded in the office
of the Randolph County Clerk and Recorder of Deeds on April 17, 2006, and is known as Document
Number 226081; and that copies of the note and mortgage foreclosed have been and are attached to the
Complaint.
3.

That the material allegations of the Complaint filed herein are true and proven; that the

equities of this cause are with the Plaintiff who is entitled to a Decree of Foreclosure in accordance with the
prayer of the Complaint; and that there was, on the date the Plaintiff’s Motion for Entry of Judgment of
Foreclosure and Order of Sale was filed, due to Plaintiff upon the Note and Mortgage the amount of
$136,822.22. This amount is set forth in Exhibits A, B and C to Plaintiff’s Motion for Entry of Judgment of
Foreclosure and Order of Sale and the stipulation executed by Plaintiff and the United States.
Furthermore, Plaintiff has accrued and will continue to accrue fees and costs after the date it filed its Motion
for Entry of Judgment of Foreclosure and Order of Sale, and Plaintiff is entitled to recoup those additional
fees and costs, including per diem interest, from the proceeds of the judicial sale.

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4.

That under the provisions of said Mortgage herein sought to be foreclosed, the costs of

foreclosure are an additional indebtedness for which the Plaintiff should be reimbursed and such expenses
are hereby allowed to the Plaintiff.
5.

That the Plaintiff's Mortgage is superior to all other served Defendants' liens, rights or

claims upon the real estate, including but not limited to the federal tax liens held by the United States.
6.

That in said Mortgage it is provided that the Attorneys for the Plaintiff are entitled to

reasonable attorney's fees; that the sum of $18,365.33 reflects the fees and costs incurred up to the
Plaintiff filing its Motion for Entry of Judgment of Foreclosure and Order of Sale and that this sum has been
included in the above indebtedness as aforesaid attorney's fees and court costs as provided in the
Mortgage, that said sum is the usual, customary and reasonable charge made by attorneys in like cases;
that said sum shall be retained by the Attorneys for the Plaintiff and that said sum is hereby allowed.
Plaintiff may continue to accrue attorneys’ fees and costs until the foreclosure sale; Plaintiff may recoup
any such fees and costs, along with all other losses and amounts due and owing under the Note and
Mortgage, from the proceeds of the sale.
7.

That this Court finds that the subject property is residential property pursuant to 735 ILCS

5/15-1219. The redemption period shall expire seven months from the date the last mortgagor was served
or three months from the entry of this order, whichever date is later.
8.

The Court further finds that the United States of America has properly recorded Notices of

Federal Tax Liens against the subject property. The Court further finds that the United States has a valid
and subsisting lien, subordinate only to Plaintiff’s lien, proper advances and the cost of the sale. As of
November 25, 2011 the amount of the United State’s lien was $61,321.64. This lien shall be paid from
surplus finds, if any, derived from the sale of the subject property as set forth below.
IT IS, THEREFORE, ORDERED, ADJUDGED AND DECREED that if the property is not
redeemed according to law, upon expiration of the statutory period of redemption on June 3, 2013, a
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Special Commissioner's Sale or other Judicial Sale shall be held and the Plaintiff herein, or his successor in
interest, or assigns, shall be entitled to a Special Commissioner's Deed or other Judicial Deed conveying
the subject premises.
IT IS FURTHER ORDER THAT the Motion for Appointment of Special Commissioner (Doc. 31) is
GRANTED and the Judicial Sales Corporation, 1 South Wacker Drive, Chicago, Illinois 60606, is hereby
appointed Special Commissioner for the purpose of the sale by public auction of the property that is the
subject matter of this action, pursuant to the Judgment of Foreclosure and Order of Sale entered herein.
IT IS FURTHER ORDERED that unless the Defendants in this cause, or any one of them, within
the period of redemption, pay or cause to be paid to Plaintiff the amount required to redeem, the premises
hereinafter and in said Complaint described, or so much thereof as may be necessary to pay the amounts
found to be due to the Plaintiff, with interest thereon and the costs aforesaid, and which may be sold
separately without material injury to the parties in interest, be sold at public venue, upon the expiration of
the redemption period as aforesaid, to the highest bidder for cash, by the Special Commissioner, at the
Randolph County Courthouse, located at 1 TAYLOR STREET, CHESTER, IL 62233, or as otherwise
designated by the Special Commissioner, and that the Special Commissioner give public notice of the time,
place and date of such Sale by publishing the same at least once a week for three (3) consecutive weeks in
some secular newspaper of general circulation published in the County of Randolph, and State of Illinois;
that the Plaintiff or any of the parties to this cause may become purchasers at such Sale, and that the
Plaintiff may bid the amount of its Judgment in lieu of cash at said Sale; that the Special Commissioner
may, in its discretion, for good cause, adjourn or continue the Sale so advertised by oral proclamation and
without further publication; that upon said Sale being made, the Special Commissioner shall execute and
deliver to the purchaser or purchasers a Certificate of Sale evidencing such purchase and describing the
premises purchased and the amount paid therefore, of, if purchased by the Plaintiff, the amount of its bid
and the time when such purchaser or purchasers will be entitled to a Deed to said premises, and within ten
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(10) days from the date of Sale, he may file a duplicate of such Certificate in the office of the RANDOLPH
COUNTY CLERK AND RECORDER OF DEEDS.
IT IS FURTHER ORDERED that the Special Commissioner, out of the proceeds of such Sale, shall
retain its fee, disbursements and commissions herein and pay to the Officers of this Court their costs in this
cause, and out of the remainder, pay to the Plaintiff its otherwise unreimbursed costs to be incurred
subsequent to the entry of this Decree in connection with this foreclosure Sale and perfection of the
Certificate of Sale thereunder; and also out of the remainder, pay to the Plaintiff the amount by this Decree
found to be due to said Plaintiff, with interest thereon at the rate of nine (9) percent per annum from the
date of this Decree to the date of Sale, and if such remainder shall be more than sufficient to pay the
aforesaid amounts, that it bring such surplus into the Court to abide the further Order of said Court, and that
it take receipts from the respective parties to whom it might have made payment as aforesaid and file the
same with his Report of Sale with the Court.
IT IS FURTHER ORDERED that if the Plaintiff shall pay any real estate taxes, assessments or any
other advances, either pursuant to the security instrument or note or pursuant to statute, as may be
equitable, with respect to the property foreclosed herein during the period of redemption, the sum paid, plus
statutory interest therefrom from the date of payment, shall be added to the sum outstanding subsequent to
Judgment and prior to Sale or the Defendants' statutory special rights of redemption, plus any additional
reasonable attorney's fees incurred.
IT IS FURTHER ORDERED that should the real estate be improved with a manufactured or mobile
home, it is found that the improvement has been permanently affixed to the real estate and deemed to be
real estate, transferable hereunder at any forthcoming Special Commissioner’s Sale without transfer of any
title.
IT IS FURTHER ORDERED that upon the expiration of the time specified by 735 ILCS 5/15-1603,
if the premises are not redeemed according to law, and are sold at Special Commissioner's Sale, upon
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confirmation of said Sale by this Court, pursuant to 735 ILCS 5/15-1509, the served Defendants and all
persons claiming under them or any of them since the commencement of this suit be forever barred and
foreclosed of and from all rights and equity and redemption or claim of, in and to said premises or any part
thereof; that in case said property shall not have been specifically redeemed as provided by statute, then
upon production to the Special Commissioner, or his successor or duly authorized Deputy, of said
Certificate of Sale by the legal holder of such Certificate, along with an Order confirming said Sale, a good
and sufficient Special Commissioner's Deed or other Judicial Sale Deed of conveyance of said premises
shall be issued; that thereupon, the grantee or grantees in such Deed, or his or her legal representative or
assigns, be let into possession of said premises; in default of so doing, an Order of Possession shall be
provided in the Order confirming said Sale.
THE PREMISES by the Decree authorized to be sold are situated in the County of Randolph, State
of Illinois, and are described as follows:
LOT 22 IN BLOCK 7 IN CRESCENT LAKE SUBDIVISION IN THE VILLAGE OF STEELEVILLE,
RANDOLPH COUNTY, ILLINOIS AS SHOWN BY PLAT FILED FOR RECORD ON DECEMBER
9, 1964 AND RECORDED IN VOLUME “I” OF PLATS OF PAGE 4 IN THE RECORDER'S
OFFICE, RANDOLPH COUNTY, ILLINOIS.
SUBJECT TO BUILDING LINES AND UTILITY EASEMENTS AS SHOWN ON THE PLAT OF
SAID SUBDIVISION.
SUBJECT TO COVENANTS AND RESTRICTIONS DATED OCTOBER 31, 1964 AND
RECORDED IN DECEMBER 9, 1964 IN BOOK 212 AT PAGE 1140, RECORDER'S OFFICE,
RANDOLPH COUNTY, ILLINOIS.
SAID CONVEYANCE IS FURTHER SUBJECT TO ALL RESTRICTIONS, EASEMENTS AND
COVENANTS OF RECORD OR DISCLOSED BY INSPECTIONS AND THE LIEN OF THE 2004
AND SUBSEQUENT REAL ESTATE TAXES.
THE PREPARER OF THIS DEED HAS MADE NO INVESTIGATION CONCERNING ANY
POSSIBLE VIOLATIONS OF ANY ENVIRONMENTAL LAWS OR REGULATIONS INCLUDING,
BUT NOT LIMITED TO, THE ILLINOIS RESPONSIBLE TRANSFER ACT AND ACCEPTS NO
LIABILITY FOR ANY VIOLATIONS.

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and is commonly known as 610 HILLANDALE DRIVE, STEELEVILLE, IL 62288. The Permanent Tax
Number is 17-069-014-00.
THE COURT expressly retains jurisdiction of the property which is the subject of this foreclosure
for the entire period of redemption and Sale, and for so long thereafter as may be necessary for the
purpose of placing in possession of the premises the grantee or grantees in said Judicial Sale Deed, or his
or their legal representatives or assigns, and reserves the right to appoint a receiver to take possession of
said premises in order to prevent impairment of the value of the premises, manage and conserve the
premises or satisfy any deficiency which may be found due to the Plaintiff.
IT IS SO ORDERED.
DATED: March 4, 2013

s/J. Phil Gilbert
HON. J. PHIL GILBERT
UNITED STATES DISTRICT COURT JUDGE

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