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Hargrove v. Gerill Corp.





Appeal from the Circuit Court of Du Page County; the Hon. John S. Teschner, Judge, presiding.


Plaintiffs appeal from the dismissal by the circuit court of Du Page County of their complaint for an equitable mortgage. Because the complaint fails to state a cause of action, we affirm.

On July 29, 1983, plaintiffs Jack L. Hargrove and Jack L. Hargrove Builders, Inc. (Hargrove Builders), filed the complaint in the present action to foreclose upon an equitable mortgage. Named as defendants were Gerill Corporation, Gerald A. Heinz, and John F. Rosch ("defendants" collectively), as well as numerous other parties who, though having interests in the property sought to be foreclosed, are not alleged to have been party to the contract or debt asserted to have given rise to the equitable mortgage.

The complaint alleges the following facts. Gerill Corporation and Hargrove Builders entered into a partnership for the development of certain parcels of real estate in Woodridge, Illinois (Woodridge properties), which were owned by Gerill Corporation. In return for Hargrove Builders' undertaking the primary role in the development of the Woodridge properties, Hargrove Builders was given a 50% beneficial interest in the properties as security. In order to provide funding for the partnership, plaintiffs borrowed about $352,000 from Concordia Federal Savings & Loan Association. This "Concordia loan" was secured by a mortgage on property in Crestwood, Illinois, owned solely by plaintiffs. By December 1980, the partnership owed plaintiffs $200,000 in addition to its obligations regarding the Concordia loan. On March 1, 1981, plaintiffs and defendants entered into an agreement through which Hargrove Builders withdrew from the partnership and its place was taken by John Rosch. By the terms of the agreement, Hargrove Builders agreed to convey its interest in the Woodridge properties to Rosch, defendants agreed to assume all of plaintiffs' liabilities relative to the Woodridge properties, and Rosch agreed to pay Hargrove Builders $200,000. Despite this agreement, defendants defaulted on their promise to pay plaintiffs' liabilities, including the Concordia loan, resulting in a threatened mortgage foreclosure against Hargrove Builders' Crestwood property.

Pending at the time of the dismissal of the present action was a consolidated action in Du Page County Circuit Court involving many of the same facts and issues. Originally filed in the circuit court of Cook County, an action by the present plaintiff against some of the present defendants for injunctive and other relief was transferred to Du Page County as No. 82 CH 1135 and was consolidated with No. 82 CH 1032, an action by the present defendants against the present plaintiffs and Concordia Federal Savings and Loan Association.

Plaintiffs first contend that the procedure followed by the trial court in dismissing their complaint was improper and requires reversal. Plaintiffs protest three aspects of that procedure: (1) the lack of sufficient notice of the motion, (2) the fact that the motion was heard and granted by a judge other than the one assigned to the case, and (3) the fact that the motion was argued and granted on a basis different from the one upon which it was brought.

On August 9, 1983, one of defendants filed a motion to dismiss and a petition for change of venue. The motion to dismiss cited subsection (a)(3) of section 2-619 of the Code of Civil Procedure (Ill. Rev. Stat. 1981, ch. 110, par. 2-619(a)(3)) and alleged that the present action was virtually the same as the one previously filed. Counsel for the parties appeared before Judge John S. Teschner of the Du Page County Circuit Court on August 9 with regard to both the present action (No. 83 CH 736) and the related one referred to in the motion to dismiss (Nos. 82 CH 1032 and 82 CH 1135). While Nos. 82 CH 1032 and 82 CH 1135 had been assigned to Judge Teschner, the present case had been assigned to Judge S. Bruce Scidmore of the same court. At the outset of the hearing, counsel for plaintiffs stated the following:

"If I could, your Honor, for the record, perhaps set out an agenda of the different things that are — why we're here before you this afternoon.

In addition, we filed a couple weeks ago a complaint for equitable foreclosure, which was assigned to Judge Scidmore.

We received yesterday from Mr. Rosch a motion to transfer the case from Judge Scidmore.

And, in addition, we received yesterday a motion to dismiss our equitable foreclosure case.

As I indicated earlier, your Honor, the motion to dismiss the equitable foreclosure case was received yesterday without proper notice.

Because we are interested in proceeding expeditiously with this case; indeed, critical to the Hargrove contract action [No. 82 CH 1135] before you now is an early trial date because of the foreclosure of the Concordia loan, which we've alleged the contract between the parties required the assumption of those liabilities, so we are willing to go forward with oral argument today, if you would wish, your Honor, on the motion to dismiss the equitable foreclosure as well."

Argument before Judge Teschner then took place in which counsel for defendants sought dismissal on the grounds both that a similar action was pending and that the complaint failed to state a cause of action. Further, counsel for defendants asked the court to consider, with regards to the wording of fees, the ulterior motives of plaintiffs for filing the suit. The court granted the ...

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