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June 22, 2001

No. 1-00-0156

John Hanno appeals the circuit court's order which confirmedthe foreclosure sale of his former residence. On appeal, Hannocontends the order confirming the foreclosure sale is voidbecause: (1) the appellee's motions to reinstate and to confirmthe foreclosure sale were filed prior to the docketing of thedismissal order of Hanno's last bankruptcy, and (2) it wasentered in violation of the automatic stay provision of Rule6004(g) of the Federal Rule of Bankruptcy Procedure. Fed.R.B.P.6004(g).

On May 22, 1992, Hanno obtained a variable rate mortgageloan from the appellee, Standard Federal Bank for Savings(Standard). Pursuant to the terms of the loan and mortgage,Standard agreed to lend the sum of $250,000 to Hanno, and Hannoexecuted a mortgage to Standard of his residence located at 6North Trails in Lemont, Illinois. Hanno signed a promissory noteagreeing to monthly principal, interest and tax escrow payments.

Hanno contends that he was unable to make payments under theterms of the promissory note and mortgage as a result ofStandard's breach of the loan agreement. Standard disputesHanno's contentions.

On January 10, 1994, Standard filed a complaint for mortgageforeclosure. On November 15, 1994, Hanno filed his affirmativedefenses and a counterclaim against Standard. On December 7,1995, a judgment of foreclosure was entered. The order statedthat Hanno was in default under the terms of the promissory noteas of November 9, 1995. The order provided for the foreclosureand sale of the property located at 6 North Trails in Lemont,Illinois. The judgment of foreclosure provided that the periodof redemption would end on March 8, 1996.

Hanno then proceeded to file a series of six bankruptcypetitions. During this time, on July 23, 1998, a sheriff's salewas held and the property was sold for $431,547.39. However, onOctober 15, 1998, the fourth and fifth bankruptcy petitions werefound to have been filed in bad faith and for the purposes ofblocking confirmation of the foreclosure sale.

On April 1, 1999, after Hanno filed his sixth bankruptcypetition, a stipulated order was entered which provided for theterms of a settlement between Hanno and TCF National BankIllinois (TCF), the successor in interest to Standard. The orderprovided that Hanno would have until December 1, 1999, tocomplete the sale of the property, and that if the property wasnot sold by December 1, 1999, the bankruptcy court would dismissthe case. Hanno was unable to sell the property andsubsequently, on December 2, 1999, an order was entereddismissing Hanno's sixth bankruptcy petition. On December 6,1999, the appellee filed motions to reinstate and to confirm theforeclosure sale. On December 7, 1999, the order entered on December 2, 1999, was docketed. On December 9, 1999, the circuitcourt granted TCF's motion to reinstate the foreclosure case,which was dismissed with leave to reinstate when Hanno filed hissixth bankruptcy, and entered an order that confirmed thesheriff's sale held on July 23, 1998.

As this matter involves a question of law, our standard ofreview will be de novo. Daley v. American Drug Stores, Inc., 294Ill. App. 3d 1024 (1998). The issues presented for review inthis court were not raised in the trial court. Issues presentedfor the first time on appeal are deemed waived. Barnett v. ZionPark District, 171 Ill. 2d 378 (1996). Hanno concedes that he israising these issues for the first time on appeal. Hanno arguesthat the order which he is appealing from is void, and since avoid order can be attacked at any time in any court, he thereforehas not waived his arguments. We disagree.

Hanno contends that because the appellee filed its motionsto reinstate the case and confirm the foreclosure sale prior tothe docketing of the order regarding Hanno's sixth bankruptcydismissal, the subsequent order reinstating and confirming theforeclosure sale is void. Hanno cites NBD Highland Park Bank,N.A. v. Wien, 251 Ill. App. 3d 512 (1993), to support hisargument that the circuit court lacked jurisdiction. In Wien thebankruptcy judge gave an oral ruling from the bench to remand thecase to the state court and to lift an automatic stay on October5, 1992, but the orders were not docketed until October 14 and15, respectively. On October 12, 1992, before the orders weredocketed, the disputed property was sold at a sheriff's sale.

The Wien court wrote that "'[o]rders do not become finaluntil they are docketed. The reasons for respecting finality ofjudgments do not apply to undocketed orders. They cannot beenforced. * * * Hence, judges may change their decisions untilthey are docketed. In re American Precision Vibrator Co., 863F.2d 428, 429 (5^th Cir. 1989)'" Wien, 251 Ill. App. 3d at 515-16. The Wien court held that the bankruptcy court retainedjurisdiction until its order that lifted the stay was docketed. Since the foreclosure sale occurred prior to the docketing of theorder, the circuit court lacked jurisdiction over the matter, andtherefore the foreclosure sale was void. Wien, 251 Ill. App. 3dat 517.

Hanno's reliance on Wien is misplaced. The Wien courtspecifically distinguished its set of facts from those in Noli v.Commissioner of Internal Revenue, 860 F.2d 1521 (9^th Cir. 1988),where the court dealt with a similar situation.

In Noli, the defendants filed bankruptcy petitions thatautomatically stayed a trial in the tax court. The government'scounsel moved the bankruptcy court for relief from the automaticstay, which the court granted by an oral order. The governmentthen immediately proceeded with the trial based upon thebankruptcy court's undocketed oral order. The defendants arguedthat the tax court proceedings were improper because thebankruptcy court's oral order lifting the automatic stay had notbeen docketed. The Noli court replied as follows:

"This argument misperceives both thepurpose of Federal Rule of Civil Procedure58, and the binding effect of an ordernotwithstanding the issuing court's failureto enter it on the docket. The separatedocument requirement of Rule 58 was intendedprimarily to clear up uncertainties indetermining, for purposes of appellatereview, when there is a final appealablejudgment. See Bankers Trust Co. v. Mallis,435 U.S. 381, 384, 98 S. Ct. 1117, 1120, 55L. Ed. 2d 357 (1978)(The 'sole purpose' ofthe separate document requirement is 'toclarify when the time for appeal *** beginsto run'). Similarly, the bankruptcy court'sorder lifting the stay was effective andbinding upon the parties. *** They werepresent when the oral order was issued andclearly had notice of its existence andcontent." Noli, 860 F.2d at 1525.

In In re Saunders, 240 B.R. 636 (S.D. Fla. 1999), the courtdealt with this same situation, and we believe its clearreasoning is instructional and should be followed. The Saunderscourt wrote: "Rather, common sense dictates that a court's orderis effective when a court enters such an order. If a courtorders a case dismissed, then the case is dismissed. To holdotherwise would permit the clerk's office to misplace an orderand prevent the judge's order from becoming effective. Partiesshould be able to reasonably rely on a written order, signed by aJudge, that the party has actually received, even if this Orderdoes not get docketed." Saunders, 240 B.R. at 644.

Here, Hanno clearly was not prejudiced by the order thatconfirmed the sale of his residence as required by Noli. Hannowas present at the hearing held on December 9, 1999, where theforeclosure case was reinstated. Also, the case at bar isdistinguishable from Wien, because, here, the foreclosure sale ofHanno's residence occurred before the start of Hanno's sixthbankruptcy hearing, whereas in Wien, the foreclosure saleoccurred during the stay period. We find that Hanno's sixthbankruptcy petition was dismissed when the judge's orders wereentered. As such, the trial court's orders reinstating andconfirming the foreclosure sale were valid, and Hanno's argumentis deemed waived.

Hanno contends that the order reinstating and confirming theforeclosure sale was void because it was entered in violation ofthe automatic stay provision of Federal Rule of BankruptcyProcedure 6004(g). We disagree.

The appellee contends that Hanno has waived this argumentbecause he is raising this issue for the first time on appeal. We agree. Hanno concedes that he has not raised this issue priorto this appeal and for the foregoing reasons we deem that he haswaived this issue. However, in the alternative we would findthat the order which reinstated and confirmed the foreclosuresale did not violate Rule 6004(g).

Hanno contends that Rule 6004(g) provides that an orderauthorizing the use, sale, or lease of property other than cashcollateral is stayed until the expiration of 10 days after entryof the order, unless the court orders otherwise. Hanno arguesthat the order which confirmed the sale of his residence fallsunder the provisions of Rule 6004(g) and as such was void. Wedisagree.

An automatic stay must plainly terminate upon the dismissalof the petition giving rise to it. In re De Jesus Saez, 721 F.2d848, 851 (1^st Cir. 1983). Here, the petition giving rise to thestay was dismissed prior to the order to reinstate and confirmthe foreclosure sale. As such, the foreclosure sale occurredafter the stay ended. For the foregoing reasons, we affirm thetrial court.

Affirmed.