                                         2014 IL App (3d) 130204

                                Opinion filed May 20, 2014
     _____________________________________________________________________________

                                                  IN THE

                                   APPELLATE COURT OF ILLINOIS

                                            THIRD DISTRICT

                                                A.D., 2014

     BANK OF AMERICA, N.A.,                          )     Appeal from the Circuit Court
                                                     )     of the 12th Judicial Circuit,
            Plaintiff-Appellee,                      )     Will County, Illinois,
                                                     )
            v.                                       )
                                                     )     Appeal No. 3-13-0204
     PERRY BASILE a/k/a Perry A.                     )     Circuit No. 09-CH-1717
     Basile; ERICA BASILE, a/k/a                     )
     Erica G. Basile; HARRIS, N.A.;                  )
     WESLAKE COUNTRY CLUB                            )
     ASSOCIATION; UNKNOWN OWNERS                     )     The Honorable
     and NONRECORD CLAIMANTS,                        )     Richard J. Siegel,
                                                     )     Judge, Presiding.
            Defendants-Appellants.


            JUSTICE McDADE delivered the judgment of the court, with opinion.
            Justices O'Brien and Schmidt concurred in the judgment and opinion.



                                                OPINION

¶1          Defendants, Perry Basile and Erica Basile, were sued by plaintiff, Bank of America,

     N.A., under the Illinois Mortgage Foreclosure Law (735 ILCS 5/15-1101 et seq. (West 2008)).

     The circuit court entered judgment of foreclosure and sale in favor of plaintiff. We affirm.

¶2          On July 22, 2005, defendants executed a mortgage related to property located at 1758

     Autumn Woods Lane in Romeoville. The mortgage secured a $135,800 loan from plaintiff.
     After defendants failed to make any payments on the loan for more than a year, plaintiff filed a

     complaint to foreclose mortgage. The mortgage and defendants’ note were attached to the

     complaint. Defendants' last payment on the mortgage was apparently six years ago (February

     2008).

¶3            Defendants were personally served with the complaint. Defendants did not, however, file

     an appearance or respond to the complaint until after the circuit court entered a default judgment

     against them. Defendants subsequently filed a motion to vacate the default judgment, which the

     court granted.

¶4            On December 16, 2009, defendants filed an answer (the 2009 Answer), which contained

     three affirmative defenses: (1) plaintiff failed to provide notice of default, (2) plaintiff failed to

     provide sufficient or accurate copies of the notice of rescission, and (3) defendants exercised

     their right of rescission on March 6, 2008.

¶5            After plaintiff filed a motion to strike the affirmative defenses, defendants withdrew them

     and requested leave to amend the 2009 Answer or replead the affirmative defenses. The court

     entered an order withdrawing the affirmative defenses and granted defendants 28 days to replead

     their answer and/or affirmative defenses.

¶6            Defendants filed an amended answer 57 days later on September 30, 2010 (the 2010

     Answer). The 2010 Answer again included three affirmative defenses: (1) the mortgage and/or

     note were altered and/or defaced, making them unenforceable, (2) defendants had exercised their

     right of rescission on March 6, 2008, so there was no mortgage to enforce, and (3) plaintiff failed

     to provide sufficient or accurate copies of the notice of rescission.




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¶7            On October 14, 2010, plaintiff moved to strike defendants’ affirmative defenses. At the

       hearing on plaintiff’s motion, defendants requested leave to withdraw and replead their

       affirmative defenses. At the hearing on plaintiff’s motion to strike, plaintiff’s counsel informed

       the court that defendants had agreed to withdraw their affirmative defenses. Based on this

       agreement, the court granted defendants "leave to withdraw their answer and affirmative

       defenses" and ordered defendants "to answer or otherwise plead to the complaint within 28

       days." Defendants never filed an amended answer.

¶8            On December 30, 2011, plaintiff moved for summary judgment allowing it to foreclose

       and sell the property. Plaintiff attached defendants’ 2009 Answer to its motion. In response,

       defendants argued that the 2010 Answer and affirmative defenses contained therein were still in

       effect. Additionally, for the first time, defendants raised a new affirmative defense challenging

       plaintiff’s standing to bring the complaint, arguing that Fannie Mae owned the note, not plaintiff.

¶9            Defendants also moved for leave to file a motion to dismiss, which seems to contend that

       both the 2009 and 2010 Answers were still in effect. Defendants argue that they never actually

       withdrew the 2010 Answer and plaintiff has acknowledged the continued viability of the 2009

       Answer by attaching it to its motion for summary judgment. Defendants reasserted their claim

       that plaintiff lacked standing. Upon hearing argument, the court denied defendants leave to file a

       motion to dismiss.

¶ 10          The matter proceeded to a hearing on plaintiff’s motion for summary judgment. The

       circuit court heard argument on the issues of (1) whether the 2009 and 2010 Answers and

       corresponding affirmative defenses were still in effect, and (2) plaintiff’s standing. Ultimately,




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       the court granted plaintiff’s motion for summary judgment. The court specifically held that no

       affirmative defenses existed on file.

¶ 11          Defendants filed a motion to reconsider, arguing that the circuit court erred in finding

       plaintiff had standing. The motion did not challenge the court's finding that no affirmative

       defenses existed on file. 1 Instead, defendants moved for leave to file a new amended answer and

       affirmative defenses, which included the exact three affirmative defenses pled in the 2009

       Answer plus a fourth affirmative defense challenging standing. After hearing argument, the

       court denied the motion to reconsider and found the motion for leave to file amended pleadings

       to be moot.

¶ 12          Pursuant to plaintiff's motion, the court confirmed the sale in foreclosure by order of

       October 19, 2012. On November 19, 2012, defendants moved for reconsideration of the order

       confirming sale, arguing that plaintiff did not have standing to foreclose. The court rejected this

       claim. Defendants appealed.

¶ 13                                            ANALYSIS

¶ 14          At the outset, we note that there is a great deal of confusion with regard to the procedural

       posture of this case. Upon review of the record, we attribute much of this confusion to



              1
                  It is well-established that "[f]ailure to specifically allege error in the post-trial motion

       waives the issue for review." Graves v. North Shore Gas Co., 98 Ill. App. 3d 964, 969-70 (1981)

       (citing Wilson v. Clark, 84 Ill. 2d 186, 189-90 (1981)). In the interest of relieving the substantial

       confusion brought about by defendants' actions, or lack thereof, in present case, we will review

       all issues argued on appeal.


                                                            4
       defendants, who on several instances failed to comply with the circuit court’s imposed deadlines.

       First, defendants, who were personally served, did not take any legal action until a default

       judgment was entered against them. Second, after the court entered an order withdrawing the

       2009 affirmative defenses and granted defendants 28 days to replead their answer and/or

       affirmative defenses, defendants did not file an amended answer until 57 days later. Lastly, and

       most significantly, after the court granted defendants’ request for "leave to withdraw their

       [2010] answer and [2010] affirmative defenses" and ordered defendants "to answer or otherwise

       plead to the complaint within 28 days," defendants did nothing for over a year. Only after

       plaintiff filed its motion for summary judgment did defendants choose to act by moving for leave

       to file a motion to dismiss, whereby they confusingly argued that both the 2009 and 2010

       Answers were still in effect.

¶ 15          Defendants now argue that the circuit court erred in: (1) determining defendants did not

       have any affirmative defenses on file at the time plaintiff’s motion for summary judgment was

       argued, (2) denying defendants’ motion to file an amended answer and affirmative defenses after

       summary judgment was entered, and (3) refusing to adjudicate defendants’ rescission claim. We

       examine each of these three issues with the above facts in mind. We also consider (4) sua sponte

       sanctions.

¶ 16                                   I. Affirmative Defenses

¶ 17          First, defendants argue the circuit court erred in determining defendants did not have any

       affirmative defenses on file at the time plaintiff’s motion for summary judgment was argued.

       Specifically, defendants contend that the affirmative defenses contained within the 2010 Answer

       were still before the court because defendants never actually withdrew the affirmative defenses.


                                                        5
       Instead, defendants only received leave to withdraw. Stated another way, defendants argue that

       they were granted permission to withdraw, but never acted upon that permission. Because the

       facts as to this issue are uncontested, our review is de novo. People v. Chapman, 194 Ill. 2d 186,

       208 (2000).

¶ 18          Defendants clearly communicated their intent to withdraw the affirmative defenses

       contained within the 2010 Answer. This intent is established by the fact that defendants filed a

       motion for leave to withdraw said affirmative defenses. The transcript of the proceedings on

       plaintiff’s motion to strike also confirms defendants’ intent. Plaintiff’s counsel stated that the

       case was "up on plaintiff’s motion to strike defendants’ affirmative defenses. Defendants agreed

       to withdraw the affirmative defenses, and [defendants'] counsel is going to need 28 days to

       answer or otherwise plead." Defendants raised no objection to this recitation of the parties'

       agreement.    Upon review, we also find it significant that the parties came to this agreement at

       the hearing on plaintiff’s motion to strike defendants’ affirmative defenses. We view

       defendants’ agreement as a tacit stipulation to plaintiff’s motion to strike. Based on this

       agreement/stipulation, the court granted defendants’ request to withdraw. At that point, the

       affirmative defenses contained within the 2010 Answer were no longer before the court.

¶ 19          The fact that defendants did not actually replead has no bearing on the defendants'

       agreement/stipulation to withdraw or strike. Defendants remained silent for over a year, failing

       to replead within 28 days as ordered by the court. Defendants attempt to justify this silence by

       focusing on the isolated term "leave." They would have us find that an affirmative defense is not

       actually withdrawn until a new affirmative defense is filed. Such a proposition not only defies

       logic, but will result in the exact procedural confusion that has occurred in this case. Thus, we


                                                         6
       hold that where a party affirmatively agrees to withdraw his/her affirmative defenses at a hearing

       on the opposing party’s motion to strike said affirmative defenses, the affirmative defenses will

       be deemed to have been withdrawn upon entry of a court order granting leave to withdraw and/or

       replead. Withdrawal is not dependent upon the pleading of a new affirmative defense.

¶ 20            Defendants bring three alternative arguments in an effort to establish that their

       affirmative defenses either remained before the circuit court or were somehow revived. First,

       defendant relies upon the fact that the 2010 Answer was a "verified" pleading. Second,

       defendants claim that plaintiff’s act of attaching the 2009 Answer to its motion for summary

       judgment somehow revived the affirmative defenses contained therein. Third, defendants argue

       that their response to plaintiff’s motion for summary judgment and/or the corresponding attached

       affidavits revived the previously withdrawn affirmative defenses. All three of these claims lack

       merit.

¶ 21            Defendants’ reliance upon the fact that the 2010 Answer is a "verified" pleadings is

       misplaced. They argue that because the 2010 Answer was "verified," the affirmative defenses

       contained within remain before the court indefinitely. Allegations in verified pleadings remain

       part of the record, even after those pleadings have been subsequently withdrawn or amended, but

       only to the extent they are deemed to be admissions of fact. Winnetka Bank v. Mandas, 202 Ill.

       App. 3d 373, 397 (1990). Allegations of legal conclusions or admissions of law do not remain

       part of the record after withdrawal or amendment. Winnetka Bank, 202 Ill. App. 3d at 397.

       Here, we are not dealing with admissions of fact. Instead, we are dealing with affirmative

       defenses which must be pled (or repled) so they appear as part of the answer. 735 ILCS 5/2-

       613(d) (West 2010). Defendants failed to do this in the instant case.


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¶ 22          We also reject defendants' claim that plaintiff’s act of attaching the 2009 Answer to its

       motion for summary judgment somehow revived the affirmative defenses contained therein. The

       affirmative defenses in the 2009 Answer were withdrawn and therefore were no longer before

       the court. Even if we were to accept plaintiff's proposition that defendants never withdrew the

       2009 Answer, but only withdrew the contained affirmative defenses, the new answer that

       defendants filed in 2010 superseded the 2009 Answer. At that point, the 2010 Answer was the

       operative pleading, along with the affirmative defenses contained therein. This pleading was

       then voluntarily withdrawn (noting the circuit court’s order granting defendants "leave to

       withdraw their answer and affirmative defenses"). At that point, defendants did not have any

       answer or affirmative defenses before the court. Significantly, defendants were afforded the

       opportunity to replead their answer and/or affirmative defenses (noting the circuit court’s order

       allowing defendants 28 days "to answer or otherwise plead to the complaint"). Defendants failed

       to do so. Plaintiff’s subsequent act of attaching a nonoperative pleading to its motion for

       summary judgment does not excuse defendants' failure to replead. An affirmative defense must

       be specifically pled. 735 ILCS 5/2-613(d) (West 2010).

¶ 23          We also reject defendants’ argument that their response to plaintiff’s motion for summary

       judgment and/or their corresponding attached affidavits revived the previously withdrawn

       affirmative defenses. Defendants base this belief upon the fact that the response and affidavits

       referenced the previously raised affirmative defenses. 2 In support, defendants call our attention


              2
                  In discussing this particular argument on appeal, defendants only reference their

       previously raised affirmative defenses, not their standing issue, which they raised for the first

       time in their response.

                                                         8
       to the fact that Illinois law permits a defendant to file a motion for summary judgment even

       before an answer is filed, and an affirmative defense may be raised on the motion for summary

       judgment even though it was not raised in the answer. Defendants rely solely upon two cases in

       support of this rule (Costello v. Illinois Farmers Insurance Co., 263 Ill. App. 3d 1052, 1059

       (1993), and Romero v. Ciskowski, 137 Ill. App. 3d 529, 533 (1985)). We find both cases

       distinguishable. We also find the above rule inapplicable in the instant case.

¶ 24          First, we note defendants never moved for summary judgment in the instant case.

       Second, and more importantly, the present matter does not involve a scenario where defendants

       are attempting to raise an affirmative defense for the first time. Unlike the present case,

       defendants’ cited cases and the above rule do not contemplate or involve scenarios where the

       defendant voluntarily withdrew affirmative defenses and then subsequently failed to replead in

       violation of a court order. The cited cases and above rule merely stand for the proposition that a

       defendant does not need to file an answer before raising an affirmative defense. Instead, the

       defendant can raise her affirmative defense for the first time in a motion for summary judgment.

       The instant case does not present us with such a scenario.

¶ 25          Here, defendants filed two previous answers, both of which included affirmative

       defenses. Defendants voluntarily withdrew both answers and all corresponding affirmative

       defenses. 3 After the second withdrawal, defendants failed to comply with the circuit court’s

       order allowing them 28 days to replead. In light of the totality of the facts and circumstances, we

       hold defendants' failure to replead constituted a knowing and intelligent waiver of any


              3
                  As discussed above, even if defendants did not withdraw the 2009 Answer it was

       superseded by the 2010 Answer.

                                                        9
       affirmative defense. Defendants' subsequent response and/or attached affidavits do not change

       this conclusion. Accordingly, we find the circuit court was correct when it held that there were

       no affirmative defenses before the court at the time of plaintiff’s summary judgment hearing.

¶ 26                                        II. Amended Answer

¶ 27          Second, defendants argue that the circuit court erred in denying their motion to file an

       amended answer and affirmative defenses after summary judgment was entered. Defendants

       explain that the denied amended answer would have "pled the allegations raised in the response

       to plaintiff’s motion [for summary judgment] and [those] previously raised in the[ir] initial

       answer."

¶ 28          Section 2-1005(g) of the Code of Civil Procedure (the Code) expressly provides, in

       pertinent part, that "after the entry of a summary judgment, the court shall permit pleadings to be

       amended upon just and reasonable terms." (Emphasis added.) 735 ILCS 5/2-1005(g) (West

       2010). The decision to grant leave to file an amended answer or amended affirmative defense

       rests within the sound discretion of the trial court and such a decision will not be disturbed

       absent an abuse of discretion. Loyola Academy v. S&S Roof Maintenance, Inc., 146 Ill. 2d 263,

       273 (1992). See also Champaign National Bank v. Landers Seed Co., 194 Ill. App. 3d 1019,

       1027-28 (1990) (no abuse of discretion to deny the defendants’ request to file a third affirmative

       defense after a deadline in a scheduling order).

¶ 29          "In order to determine whether the trial court has abused its discretion, we must look at

       four factors ***. These factors are: (1) whether the proposed amendment would cure the

       defective pleading; (2) whether other parties would sustain prejudice or surprise by virtue of the

       proposed amendment; (3) whether the proposed amendment is timely; and (4) whether previous


                                                          10
       opportunities to amend the pleading could be identified. [Citation.]" Loyola Academy, 146 Ill.

       2d at 273.

¶ 30          Defendants argue that all four of the above factors are met. We disagree. Upon review,

       we find defendants fail to establish any of the four factors. First, we note that we do not have a

       defective pleading, we have no pleading. Defendants withdrew all of their pleadings and then

       subsequently failed to replead. Second, we believe plaintiff would be prejudiced by the proposed

       amendment. In support, we note the procedural history in this case whereby defendants have

       continually disregarded the circuit court’s imposed deadlines. Defendants’ actions or lack

       thereof have not only dragged this matter out beyond what is necessary, but also created a great

       deal of unnecessary procedural confusion in this case. This conclusion dovetails into the third

       and fourth factors. Defendants' proposed amendment is not timely. In fact, it is over a year late.

       Finally, we note that defendants were previously allowed to vacate the default judgment entered

       against them and subsequently afforded two opportunities to replead. While defendants failed to

       comply with the 28-day deadline imposed with respect to the first opportunity to replead, they

       did ultimately replead. Apparently, the circuit court excused defendants’ lack of timeliness with

       respect to this particular instance. As to the second opportunity, however, defendants simply did

       not replead. Defendants now seek a third opportunity to replead. In light of all these facts, we

       hold the circuit court did not abuse its discretion in denying defendants’ motion to file an

       amended answer and affirmative defenses after summary judgment was entered.

¶ 31                                         III. Rescission

¶ 32          Finally, defendants argue that the circuit court erred in refusing to adjudicate defendants’

       rescission claim. Defendants incorrectly believe that a claim of rescission is not an affirmative


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       defense, but a complete defense to foreclosure. Thus, defendants apparently conclude that they

       can raise a claim of rescission at any time and without restriction. Curiously, plaintiff’s brief

       does not address this issue.

¶ 33          We find the holding in Beach v. Ocwen Federal Bank, 523 U.S. 410 (1998), instructive.

       The Beach court explained:

                      "The [Truth in Lending] Act provides *** that the borrower’s right

                      of rescission ‘shall expire three years after the date of

                      consummation of the transaction or upon the sale of the property,

                      whichever occurs first,' even if the required disclosures have never

                      been made. [Citation.] The [Truth in Lending] Act gives a

                      borrower no express permission to assert the right of rescission as

                      an affirmative defense after the expiration of the 3-year period."

                      (Emphasis added.) Beach, 523 U.S. at 413.

¶34           Beach makes clear: (1) the right of rescission is an affirmative defense, and (2) section

       1635(f) of the Truth in Lending Act (15 U.S.C. § 1635(f) (1994) is a statute of repose that

       extinguishes all claims for rescission outside the three-year period. Because rescission is an

       affirmative defense, defendants were required to specifically plead it. See 735 ILCS 5/2-613(d)

       (West 2010). As discussed above, defendants have not met this burden.

¶ 35                                          IV. Sanctions

¶ 36          At the beginning of our analysis we noted the procedural confusion that defendants'

       actions, or lack thereof, caused in this case. Coupled with defendants' apparent failure to make

       any payment on the mortgage since February 2008, we view defendants' behavior as nothing


                                                        12
       more than stalling tactics. Stated another way, we believe defendants simply wanted to remain

       in possession of the property, for as long as they possibly could, without having to pay.

       Defendants used the stalling tactics discussed above, along with bringing this appeal, as a means

       to attain this goal. This conclusion is readily apparent upon review of the entire record.

¶ 37          Illinois Supreme Court Rule 375(b) (eff. Feb 1, 1994) allows us to sua sponte impose an

       appropriate sanction upon a party or a party's attorney if:

                      "[i]t is determined that the appeal or other action itself is frivolous,

                      or that an appeal or other action was not taken in good faith, for an

                      improper purpose, such as to harass or to cause unnecessary delay

                      or needless increase in the cost of litigation, or the manner of

                      prosecuting or defending the appeal or other action is for such

                      purpose."

¶ 38          "If the reviewing court initiates the sanction, it shall require the party or attorney, or both,

       to show cause why such a sanction should not be imposed before imposing the sanction."

       (Emphasis added.) Ill. S. Ct. R. 375(b) (eff. Feb 1, 1994)

¶ 39          The following quotation aptly expresses our view of this appeal:

                              "We find that this appeal, viewed as a whole, was frivolous,

                      that it was taken for an improper purpose, and that it was filed

                      specifically to harass and to cause unnecessary delay and

                      needlessly increase the cost of litigation. We choose to impose

                      sanctions for this conduct, finding that cases like this drain

                      valuable resources intended to benefit those who accept the social


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                      contract of living under a law-based system of government."

                      Parkway Bank & Trust Co. v. Korzen, 2013 IL App (1st) 130380,

                      ¶ 88.

¶ 40          "The tactics employed by defendants in this case caused the expenditure of significant

       time and resources not only by the court below, but by the judges, law clerks, librarians, and

       clerk's office of this court." Korzen, 2013 IL App (1st) 130380, ¶ 92. "By imposing a fine in

       this case, we seek not only to deter similar conduct by future litigants, but to provide some

       measure of compensation for the public fisc for that needless expenditure." Korzen, 2013 IL

       App (1st) 130380 ¶ 92. Moreover, we note the expense the public consumer suffers when

       individuals engage in behavior similar to that of the defendants in the instant case. A

       mortgagee's failure to satisfy their financial obligation along with any resulting costs and fees the

       mortgagor must expend to recover the property or asset from the mortgagee is almost always

       shifted back onto the public consumer. While we are sensitive to the fact that mortgagees are

       occasionally exposed to circumstances that may make them unable to satisfy their obligation, we

       will not approve or reward the harassing behavior/stalling tactics present in the instant case.

¶ 41          We hold sanctions should be "initiated" against defendants and their attorney for filing a

       frivolous appeal. See Ill. S. Ct. R. 375(b) (eff. Feb 1, 1994). We direct plaintiff to file within 14

       days a statement of reasonable expenses and attorney fees incurred as a result of this appeal.

       Defendants and their attorney shall have 14 days to file a response. We strictly admonish both

       parties to comply with their respective 14-day window. If the bank finds it necessary, it can have

       seven days to reply. Moreover, we order that defendants' response must "show cause [as to] why

       such a sanction should not be imposed." See Ill. S. Ct. R. 375(b) (eff. Feb 1, 1994). We


                                                        14
       admonish both parties that the actual issue of rescission or the purported right to rescission is not

       before us. For the reasons discussed above, rescission was never properly pled and cannot be

       raised here on appeal. Thus, neither party's upcoming sanction filing should address, in any

       fashion, the substantive issue/purported right of rescission. Plaintiff's statement is limited to a

       statement of reasonable expenses and attorney fees incurred as a result of this appeal.

       Defendants' response is limited to why sanctions should not be imposed.       Any deviation from

       these instructions will expose the violating party to sanctions for violation of this opinion. Upon

       receiving the party's sanction filings, this court will file a supplemental opinion determining

       whether sanctions will be imposed and if so, the appropriate amount of the sanction.

¶ 42          Accordingly, the judgment of the circuit court of Will County is affirmed

¶ 43          Affirmed.




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