                                    2014 IL App (1st) 130023
                                          No. 1-13-0023
                                    Opinion filed July 16, 2014

                                             IN THE

                             APPELLATE COURT OF ILLINOIS

                                        FIRST DISTRICT


CITIMORTGAGE, INC., Assignee of Mortgage, )              Appeal from the Circuit Court
Electronic Registration Systems, Inc., as )              Of Cook County.
Nominee for Security National Mortgage    )
Company,                                  )
                                          )              No. 10 CH 20053
              Plaintiff-Appellee,         )
                                          )              The Honorable
              v.                          )              Michael Otto,
                                          )              Judge Presiding.
RONA SCONYERS, MARCUS C. WELLS,           )
Non-Record Claimants, Unknown Tenants     )
and Unknown Owners,                       )
                                          )
              Defendants-Appellants.      )


              JUSTICE MASON delivered the judgment of the court with opinion.
              Presiding Justice Hyman concurred in the judgment and opinion.
              Justice Neville dissented, with opinion.


                                         OPINION

¶1        CitiMortgage, Inc., filed a complaint against Rona Sconyers and Marcus Wells,

seeking to foreclose a mortgage after they failed to make payments due on a note given in

exchange for a loan from Mortgage Electronic Registration Systems, Inc. (MERS), as nominee

for Security National Mortgage Company. Defendants argued that CitiMortgage did not produce

a "valid" assignment of the note.     The trial court granted summary judgment in favor of

CitiMortgage. We find that CitiMortgage sustained its burden to show that it was the holder of
No. 1-13-0023


the original note and mortgage and that defendants failed to adduce any competent evidence that

the endorsement on the note had been altered.        Accordingly, we affirm the circuit court's

judgment.

¶2                                     BACKGROUND

¶3          On July 17, 2008, Security National Mortgage Company loaned defendants $393,820,

with the loan secured by a mortgage on a home in Country Club Hills, Illinois. By December

2009, the loan was in default. On May 10, 2010, CitiMortgage filed its complaint to foreclose

the mortgage. CitiMortgage alleged it had the right to sue as "legal holder of the indebtedness."

CitiMortgage attached to the complaint a copy of the note Sconyers signed. The note bears a

stamp that reads:

                                       "Pay to the order of

                                       'CitiMortgage, Inc.'

                                         without recourse

                              Security National Mortgage Company

                                       A Utah Corporation

                                      __________________

                                    Ken Parr, Vice President"

¶4          A signature purporting to be that of Ken Parr is on the signature line. On the copy of

the note included in the record, the stamp reflecting "CitiMortgage, Inc." as the payee is

somewhat blurred. Also attached to the complaint is an assignment of the mortgage from MERS

to CitiMortgage dated April 30, 2010, which recites that the mortgage is assigned "together with

the Note or obligation described in said Mortgage ***."




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¶5           In their answer to the complaint, defendants challenged the assignment of the note to

CitiMortgage, noting what they claimed was an "alteration" of the name of the payee based on

the blurred stamp.

¶6           CitiMortgage moved for summary judgment, relying on an affidavit of its document

control officer, who identified CitiMortgage as "holder of the note." CitiMortgage also produced

the original of the note in court for examination by defense counsel, thus establishing that the

note was physically in its possession.       Defendants did not seek to depose anyone from

CitiMortgage, MERS or Security National regarding the circumstances of the assignment of the

note, but rested on their allegation that the blurry "CitiMortgage, Inc." stamp constituted an

"alteration."

¶7           At the hearing on the motion for summary judgment, the trial court ruled that the

undisputed fact that CitiMortgage took an assignment of the mortgage from MERS gave it

standing to maintain the foreclosure action so that it unnecessary to address defendants' claim

regarding the altered endorsement. The trial court also commented that had the case hinged on

the validity of the endorsement, it would have conducted an evidentiary hearing. The court

concluded that summary judgment in favor of CitiMortgage was appropriate. Defendants timely

appealed.

¶8                                        ANALYSIS

¶9          We review de novo the order granting CitiMortgage's motion for summary judgment.

Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 102 (1992). If the party

moving for summary judgment supplies facts which, if not contradicted, would entitle such party

to a judgment as a matter of law, the opposing party cannot rely on his pleadings alone to raise

issues of material fact. Harrison v. Hardin County Community Unit School District No.# 1, 197


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Ill. 2d 466, 470 (2001). Thus, facts contained in an affidavit in support of a motion for summary

judgment that are not contradicted by a counteraffidavit must be taken as true for purposes of the

motion. Purtill v. Hess, 111 Ill. 2d 229, 241 (1986).

¶ 10       Defendants argue that without a valid assignment of the note, CitiMortgage lacked

standing to bring the claim. Citing Carpenter v. Longan, 83 U.S. 271 (1872), defendants argue

that if CitiMortgage did not obtain a valid assignment of the note, its status as holder of the

mortgage is insufficient to confer standing. In Carpenter, the Supreme Court stated: "The note

and mortgage are inseparable; the former as essential, the latter as an incident. An assignment of

the note carries the mortgage with it, while an assignment of the latter alone is a nullity." 83

U.S. at 274.

¶ 11       But defendants' reliance on Carpenter overlooks the fact that CitiMortgage is the

actual holder of the note and the undisputed assignee of the mortgage. CitiMortgage produced

the original of the note in open court; it is, therefore, the holder of the note. Any issue regarding

the manner in which CitiMortgage acquired the note does not affect its undisputed status as the

holder. CitiMortgage's possession of the original note together with the assignment of the

mortgage, which was assigned "together with the Note," is prima facie proof that it is entitled to

foreclose the note and mortgage. 735 ILCS 5/15-1208 (West 2010) (defining "mortgagee" as "(i)

the holder of an indebtedness or obligee of a non-monetary obligation secured by a mortgage ***

and (ii) any person claiming through a mortgagee as successor").

¶ 12       Thus, because it was defendants who raised an issue regarding the manner in which

CitiMortgage acquired the note as a basis for challenging CitiMortgage's ability to enforce it, it

was defendants' burden to present to the court, in response to CitiMortgage's motion for

summary judgment, evidence that would raise a genuine issue of material fact that some other


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person or entity was the holder of the note. Defendants relied solely on what they characterized

as the "smudged" endorsement on the note. But this raises no issue of fact, much less a genuine

issue of material fact, regarding CitiMortgage's possession of both the note and mortgage. If

defendants meant to contend that a party other than CitiMortgage was the "rightful" holder of the

note, it was their obligation to present evidence that would support their contention.

¶ 13       Nothing in the record before the trial court called into question the fact that

CitiMortgage was the actual holder of the note. Thus, this case is not governed by the rule that

"[w]here an alteration in a deed is *** established by inspection, the burden of proof shifts to the

person claiming the benefit of the instrument, as altered, to show the alteration was made under

circumstances rendering it lawful." Ruwaldt v. W.C. McBride, Inc., 388 Ill. 285, 292-93 (1944).

Given this conclusion, once CitiMortgage established that it was the holder of the note, it was

incumbent upon defendants to present evidence to support their defense that the endorsement of

the note was altered and that some person or entity other than CitiMortgage had the right to

enforce it. Because the record lacks such evidence, the trial court properly granted summary

judgment in favor of CitiMortgage.

¶ 14                                     CONCLUSION

¶ 15       For the foregoing reasons, the order of the circuit court granting summary judgment

to CitiMortgage is affirmed.

¶ 16       Affirmed.

¶ 17       JUSTICE NEVILLE, dissenting.

¶ 18       I respectfully dissent because the majority's decision conflicts with Illinois Supreme

Court case law concerning the burden of proof when a written instrument shows on its face

evidence of an alteration.


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¶ 19        CitiMortgage, the circuit court, and now the majority in this opinion have all tried to

justify the circuit court's decision not to hear evidence concerning the smudge on the payee line

on the endorsement stamped on the note, although the smudge indicated to the circuit court the

possibility that someone had erased the name of the original payee and substituted

CitiMortgage's name. The two courts and CitiMortgage have all advanced different grounds for

the decision. They do not persuasively distinguish Ruwaldt v. W.C. McBride, Inc., 388 Ill. 285,

292-93 (1944), or show why this court should not straightforwardly apply that Illinois Supreme

Court authority.

¶ 20        The circuit court held that it did not need to hear evidence concerning the assignment

of the note because CitiMortgage proved an assignment of the mortgage. The circuit court's

reasoning conflicts with the statement of applicable law in Carpenter v. Longan, 83 U.S. 271

(1872), quoted in the majority opinion. "The note and mortgage are inseparable; the former as

essential, the latter as an incident. An assignment of the note carries the mortgage with it, while

an assignment of the latter alone is a nullity." Carpenter, 83 U.S. at 274. If CitiMortgage proved

only an assignment of the mortgage, that assignment is a nullity, conveying no rights to

CitiMortgage. Neither CitiMortgage nor the majority here tries to defend the circuit court's

rationale for its decision.

¶ 21        According to the Ruwaldt court, "Where an alteration in a deed is *** established by

inspection, the burden of proof shifts to the person claiming the benefit of the instrument, as

altered, to show the alteration was made under circumstances rendering it lawful." Ruwaldt, 388

Ill. at 292-93. CitiMortgage claims that it met its burden of proving authorization for the

alteration by presenting the affidavit of its document control officer, who identified CitiMortgage

as "holder of the note." But Supreme Court Rule 191 requires affidavits in support of a motion


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for summary judgment to consist of facts admissible in evidence, not conclusions. Ill. S. Ct. R.

191(a) (eff. Jan. 4, 2013). CitiMortgage's officer states only the bare legal conclusion that

CitiMortgage qualifies as a holder of the note, without any supporting facts to show that the

officer had personal knowledge and could competently testify about how CitiMortgage acquired

the note. Because the affidavit states only a conclusion, it cannot support the decision to grant

summary judgment in favor of CitiMortgage. See Wanous v. Balaco, 412 Ill. 545, 547 (1952);

Murphy v. Urso, 88 Ill. 2d 444, 462-63 (1981). The majority here does not try to defend

CitiMortgage's argument in favor of affirming the circuit court.

¶ 22        Instead, the majority comes up with its own argument, without any citation to

authority for its central holdings. According to the majority, CitiMortgage met its burden of

proof, under Carpenter and Ruwaldt, merely by producing a document that the circuit court

found to be the original of the note. The circuit court based its finding not on any testimony, but

solely on the way the document looked to the court. I have found no authority, and the majority,

the parties, and the circuit court cite no authority, that permits a court to determine that a

document is an original based solely on the appearance of the document, without any supporting

testimony or other evidence. Moreover, I have found no authority, and the majority, the parties,

and the circuit court cite no authority, for the proposition that the ability to present an original

document to the trial court proves that the presenter counts as the legal holder of the document.

¶ 23        Although the majority accepts the circuit court's reliance on the mere appearance of

the document as proof that the document was an original, it rejects the appearance of the

document, with a smudge on the line for the payee, as sufficient to raise a genuine issue of

material fact as to whether the alteration of the document occurred in circumstances that

rendered the alteration lawful. On this issue, the Ruwaldt court gives us clear guidance, telling


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us that inspection may establish an alteration of the deed, and when inspection indicates

alteration, the party claiming the benefit of the altered deed must meet its burden of proving that

the alteration occurred under circumstances that make the alteration lawful. Ruwaldt, 388 Ill. at

292-93. According to the Ruwaldt court, "It is immaterial whether this effect is brought about by

interlineation, substitution, change of words or erasures, or by deleting some material provision

of the instrument. Such an alteration renders the instrument void." Ruwaldt, 388 Ill. at 293.

¶ 24        The rule in Ruwaldt directly applies here. The circuit court saw, and this court can

see, evidence of alteration on the face of the document included in the record, identified as a

copy of the note. The circuit court noted the evidence of alteration, as it said, "[I]f this case were

to hinge on the validity of the endorsement, I would take it to an evidentiary hearing to determine

it. I don’t think it would be appropriate for me to make a finding at this point without the

hearing." CitiMortgage has not met its burden of coming forward with evidence to show that the

alteration of the note occurred in circumstances that rendered it lawful. See Ruwaldt, 388 Ill. at

292-93. Because CitiMortgage has not shown that it obtained a valid assignment of the note,

under Carpenter, this court should reverse the order granting CitiMortgage's motion for

summary judgment. Accordingly, I dissent.




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