A DuPage County judge granted Hugo Diaz’s Section 2-1401 petition to vacate a default judgment in a mortgage foreclosure case and the order confirming the judicial sale of Diaz’s condominium unit, but the judge rejected his request for $56,730 in restitution from the mortgagee, Citizens Bank, as part of the same proceeding.
Affirming, even though there was no appellee’s brief, the Illinois Appellate Court concluded that “Diaz has failed to make a prima facie showing that the trial court erred in ruling that the Section 2-1401 proceeding was not a proper vehicle for a restitution award.” RBS Citizens v. Diaz, 2019 IL App (2d) 190176-U (Dec. 11, 2019).
The mortgagee credit bid for the condo unit and flipped the property to Mota Venture Group for $39,000. Although the unit was vacant when the Section 2-1401 petition was granted, Diaz wanted restitution from Citizens Bank as part of the post-judgment proceeding, without reopening the foreclosure case.
Because there was no appellee’s brief, Diaz had to establish “prima facie reversible error.” First Capitol Mortgage Corp. v. Talandis Construction Corp., 63 Ill. 2d 128 (1976).
Here are highlights of Justice Kathryn E. Zenoff’s unpublished decision (with light editing and omissions not noted):
Diaz filed a “motion and memorandum of law in support of restitution.” He sought to show that he was entitled to a money judgment of $56,730 as restitution, a figure that included the “net sale price” of $31,911, interest of $17,957, and “use and occupancy” of $6,861. He argued that, “having granted his petition to quash and vacated the void orders against him, the court was now required to order restitution”:
“Because restitution is the vehicle by which courts correct injustice done by their own rulings, and because courts are bound by duty to order restitution, restitution cannot reasonably be described as discretionary. Restitution is the right of an aggrieved party. Ordering restitution is the obligation of a court responsible for an erroneous judgment. As such, this court, having granted Diaz’s petition to quash and vacated the void orders against him, must order restitution.”
He further argued that the law requires a court to order restitution after a “reversal” in a Section 2-1401 proceeding, just as it would after a reversal by a reviewing court. Finally, he argued that, “if, upon the vacating of a void judgment, a return to the status quo ante is not possible (for instance, where the property is not capable of being returned), courts must order monetary restitution.”
The court, noting that the condominium was vacant, asked Diaz how he could claim that a return to the status quo ante was impossible when he had done nothing to get an order of possession.
Diaz conceded that he had made a deliberate choice to seek restitution from Citizens Bank rather than attempting to regain possession of the property and thus had not sought to join the condominium’s current owner in the Section 2-1401 action.
The court ruled that, because it was Diaz’s own choice to create conditions preventing the court from restoring the condominium to him, requiring Citizens Bank to pay restitution was improper.
The court next asked Diaz to persuade it that it had the power to grant monetary restitution in the Section 2-1401 proceedings proper as opposed to in the reopened underlying case.
Diaz discussed the cases he cited in his memorandum, but he did not provide direct authority for the availability of such relief. He seemed to concede that he could pursue restitution in the foreclosure case proper but suggested that, if he did so, Citizens Bank would have more procedural options open to it. The court entered an order denying restitution.
Diaz contends that only by ordering restitution could the court undo the effect of its improper judgments. Further:
“Because the power of a trial court to order restitution is inherent in its jurisdiction over the case and the parties, there is no distinction between restitution following a reversal by an appellate tribunal and restitution following a reversal by the trial court’s own judgment. The duty of the trial court to restore the parties to their original positions prior to the void judgment applies with equal force in either case. Having granted Diaz’s petition to quash and vacated the void orders against him, the trial court was obligated to order restitution without delay and erred in denying Diaz restitution.”
Diaz argues here that Illinois law mandated that the court award monetary restitution in the Section 2-1401 proceeding.
The court denied Diaz’s request for restitution on two bases, one substantive — that restitution was unavailable when Diaz might recover the property by joining the current owner as a party — and one procedural — that a request for restitution does not belong in a Section 2-1401 proceeding. These bases were independent, so, to prevail, Diaz must show that neither was proper.
We conclude that Diaz’s brief fails to show on its face that the procedural basis was improper. That is dispositive, so we address only that issue.
Diaz presents several lines of authority tending to show that a court must award monetary restitution when an order dispossessing a person of property is vacated and the property has since been sold. But he presents no authority tending to suggest that a court must make that award in a Section 2-1401 proceeding. He thus fails to demonstrate that the procedural basis for denying restitution was prima facie reversible error.
Diaz has shown prima facie that restitution is mandatory when a judgment ceases to be in effect. He appropriately cites Williamsburg Village Owners’ Associationv. Lauder, 200 Ill. App. 3d 474 (1990), for the proposition “that upon the reversal of a judgment, under which one of the parties has received benefits, he is under an obligation to make restitution.” He also appropriately cites Thompson v. Davis, 297 Ill. 11 (1921), for the proposition that, on the reversal of a foreclosure judgment, when the post-judgment sale of a property prevents a court from restoring the foreclosure defendant to the status quo ante, the proper remedy is to award the defendant the sale proceeds in place of the land.
However, Diaz’s authority for his claim that the law required the court to order restitution in the Section 2-1401 proceeding is not satisfactory. Citing Watkins v. Dunbar, 318 Ill. 174 (1925), Diaz argues that “as long as the court has jurisdiction over the parties, it has no choice but to order restitution.” He contends that, under Watkins, “once the orders were vacated as void, the court, having jurisdiction over the parties within the Section 2-1401 proceeding, was required to order restitution as the concluding order in the Section 2-1401 proceeding.”
That is a misreading of Watkins. At issue in Watkins was whether, after a reviewing court reversed a replevin order, the trial court had the power to enter an order to return the replevied property when the reviewing court failed to remand the cause. Our Supreme Court held that the trial court lacked that power:
“There is no doubt about appellee’s right to have restored to him the property taken by appellant on reversal of the judgment entered in the replevin case; but, in order to have a judgment of restitution entered, an application for it must be made in a court where the cause is pending and which has jurisdiction of the parties. The power is inherent in every court while the subject of controversy is in its custody, either in the first instance or when remanded to it by an appellate tribunal and while the parties are before it, to correct its errors and to restore, so far as possible, the parties to their former position, but the power to make a valid order cannot survive the loss of jurisdiction.” Watkins, 318 Ill. at 178.
The Watkins court therefore held that the trial court lacked jurisdiction to enter the restitution order. This holding is simply a statement of conventional jurisdictional principles.
Diaz attempts to convert the holding into a legal principle mandating that any court with jurisdiction enter all restitution orders that become necessary, but the Watkins court neither said nor implied such a thing.
Further, although Diaz cites 20 individual cases, none of them addresses what a court may properly do in a Section 2-1401 proceeding. Thus, we conclude that Diaz has failed to make a prima facie showing that the trial court erred in ruling that the Section 2-1401 proceeding was not a proper vehicle for a restitution award.
We also note that granting Diaz’s request for monetary restitution would have required the court to decide several fact issues that are unrelated to the central Section 2-1401 issue of whether he was entitled to relief from judgment.
When a Section 2-1401 petitioner alleges facts suggesting that the court should vacate a judgment to allow further proceedings in the underlying action, the relief a court typically grants is just that: [I]t reopens the underlying action without addressing its merits. Paul v. Gerald Adelman & Associates, 223 Ill. 2d 85 (2006).
Sometimes deciding whether that basic relief is available requires the court to address new issues of fact. See Smith v. Airoom Inc., 114 Ill. 2d 209 (1986). However, Diaz has not provided us with any authority supporting the propriety of a court in a Section 2-1401 proceeding deciding issues of fact beyond those required to decide the petitioner’s right to reopen the underlying case.
For the reasons stated, we affirm the court’s order declining to award Diaz monetary restitution in the Section 2-1401 proceeding.