Substitution of judge – a right of delay? Maybe not.

In Illinois, parties to a lawsuit each have one right to substitution of judge (SOJ). While this right is liberally granted, it is not absolute. In recent years and as a result of the Great Recession, many troubled real estate investors have faced judicial foreclosure proceedings. In most of these cases, the defendants benefit from a delay in proceedings which allows them to retain the properties during the pendency of the foreclosure process.

While SOJs were not intended to delay proceedings, some defendants have exercised the right to simply buy additional time. The substitution process can take some time, depending on the courts caseload and administrative capacity.

In some cases, the SOJ tactic has been taken a step further. Some defendants have recorded a series of quitclaim deeds and/or leases involving related or “friendly” parties shortly prior to foreclosure proceedings initiated by a lender. As a result of the new “interested” parties, the foreclosing plaintiff must name them all in order to foreclose out their interest. Suddenly, there is a glut of defendants who now each have a right of SOJ (each of which adds time and expense to a foreclosure case).

Courts generally have followed the liberal construction of Section 2-1001 which states that “each party shall be entitled to one substitution of judge without cause as a matter of right.” In the Dominique F case, the Illinois Supreme Court held that a timely and properly filed motion for substitution “must” be granted. And it is a matter of right even where multiple parties are represented by the same counsel as explained in case Boatman v. A.P. Green Refractories Co.

This is not to say that litigants, and the courts to a certain extent, aren’t getting wise to the strategy. Indeed, a recent memorandum opinion entered in Madmorg, LLC v. 731 Randolph, LLC, et. al. indicates that the right to SOJ is not absolute. In Madmorg, Cook County’s Presiding Judge noted, in dicta, that courts have discretion to determine whether the exercise is being made in good faith. In that case, the plaintiff, Madmorg, argued that the 2015 Illinois appellate decision in Bowman v. Ottney stood for the proposition that SOJs are not intended to encourage judge shopping or lead to unjust results. The court in Madmorg noted that the ruling in Bowman could lead to the conclusion that “organizing under separate names which are in fact merely alter egos of a single entity – which may perhaps even be located at the same place, controlled by the same managers and have cross-collateralized debts – may not render such entity ipso facto a different ‘party’ for purposes of obtaining additional SOJs.” Despite the commentary, the court did not rule on the matter as the issue of a new SOJ was not yet before it.

While Madmorg is certainly not controlling law, it may be an indication that the courts are beginning to scrutinize the right to SOJ and considering the circumstances around it. Should the trial courts follow this trend, it may render this “delay” tactic less effective in the future.

This Chuhak & Tecson, P.C. communication is intended only to provide information regarding developments in the law and information of general interest. It is not intended to constitute advice regarding legal problems and should not be relied upon as such.

Client alert authored by: Francisco E. Connell, Principal and Kara Allen, Associate

This alert originally appeared in the Spring 2018 Banking Focus newsletter.