West Suburban Bank v. Advantage Financial Partners (IL)

Summary: Service of process by an unlicensed private detective agency was defective, even though the individual employees who served the summonses were licensed private detectives.


West Suburban Bank v. Advantage Financial Partners, LLC, 2014 IL App (2d) 131146.


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Facts: West Suburban Bank (‘WSB’), issued a $10 million loan to Advantage Financial Partners, LLC (‘Advantage’), collateralized by mortgages on 23 properties owned by Advantage. In 2008, Advantage defaulted on its obligations and WSB filed 23 foreclosure actions. In all but one case, WSB had a private detective agency, MPSI, Inc. (‘MPSI’), appointed as special process server.

WSB was successful in obtaining judgments against Advantage. In 2009, WSB bought all of the properties at sheriff's sales and sold them to third parties. About four years later, Advantage filed petitions claiming that it was improperly served. More specifically, Advantage alleged that MPSI was not certified to act as a process server at the time its employees served the summonses. Evidence indicated that when MPSI served process on Advantage, MPSI’s license had recently expired. However, the private detective who founded the agency, Alfred J. Chiappano (‘Chiappano’), held a valid license at all times, as did the employees who served the summonses on behalf of MPSI.

Considering this evidence, the trial court granted WSB’s motion to dismiss Advantages petitions. The court reasoned that, even though MPSI was not licensed at the time of service, its employees who served the summonses were licensed, and thus service was not defective. The trial court also stated that allowing Advantage’s petitions to proceed almost 5 years after the properties were sold would be inequitable. Advantage appealed.


Holding: Reverse and Remanded. On appeal, the appellate court addressed Advantage's argument that because MPSI was not a licensed private detective agency when its employees served process, service was defective. The court agreed. According to the relevant statute (735 ILCS 5/2-202), a court could only appoint as special process server a private detective agency that was “certified” under the Private Detective Act. “Certified,” when used together with “licensed” in 735 ILCS 5/2-202(a-5), meant that a private detective agency was duly licensed under the Private Detective Act when it received a valid certificate by the Department of Financial and Professional Regulation. Because MPSI’s license expired before WSB appointed it as special process server, MPSI's certificate was invalid. Therefore, it was not eligible for appointment, and MPSI could not legally act as a licensed private detective agency.

The appellate court next countered WSB’s argument that MPSI’s lack of certification did not invalidate service because Chiappano and his employees remained in good standing. The court stated that a special process server could not delegate the service of process to one who was not named in the appointment. Therefore, MPSI, the named process server, could not “cure” the invalidity of its appointment by delegating the ability to serve process to Chiappano or his employees. Further, defects in the service of process were neither “technical” nor were they insubstantial, because strict compliance with statutes governing the service of process was necessary for a court to acquire personal jurisdiction.

Because MPSI was unlicensed, service did not comply with the statue and the trial court did not have personal jurisdiction over Advantage. The appellate court reversed the dismissal of Advantage's petitions and remanded.


Justice Birkett, concurring with the majority, lamented the severity of the court’s holding, but conceded that it accorded with the statute and applicable case law. He went on to suggest that the legislature could make substantial compliance the standard, or the Illinois Supreme Court could distinguish the current case, or cases like it, from its prior holdings to allow for substantial compliance. In concluding, Justice Birkett stated his hope that the decision would bring, “about changes that prevent substantive rights from being swallowed by procedural hurdles where, as here, the party claiming defective service of process can demonstrate absolutely no prejudice from the defect.”


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By: ATG Underwriting Department | Posted on: Mon, 02/23/2015 - 10:33am