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11/18/87 La Salle National Bank, As v. Henry Kissane Et Al.

November 18, 1987





516 N.E.2d 790, 163 Ill. App. 3d 534, 114 Ill. Dec. 635 1987.IL.1705

Appeal from the Circuit Court of Cook County; the Hon. Richard Curry, Judge, presiding.


JUSTICE RIZZI delivered the opinion of the court. WHITE and FREEMAN, JJ., concur.


Plaintiff, La Salle National Bank (La Salle), appeals from the trial court's order canceling its trustee deed to a certain parcel of real estate and granting summary judgment in favor of defendants William Berke and Kenneth Goldberg. Defendants Berke and Goldberg cross-appeal from the trial court's denial of their request for expenses and reasonable attorney fees pursuant to section 2-611 of the Illinois Code of Civil Procedure. (Ill. Rev. Stat. 1983, ch. 110, par. 2-611). We affirm.

On appeal, La Salle raises several issues. La Salle argues that the trial court erred in (1) canceling its trustee deed as void; (2) finding that it had no standing to quiet title and recover for slander of title; (3) refusing to reform the escrow agreement; (4) denying its motions for summary judgment against Berke and Goldberg as well as a default judgment against Henry Kissane; (5) allowing Berke and Goldberg to collaterally attack its trustee deed; and (6) granting summary judgment in favor of defendants Berke and Goldberg. On cross-appeal, Berke and Goldberg argue that the trial court erred in not ordering La Salle to pay Berke and Goldberg reasonable attorney fees and expenses pursuant to section 2 -- 611.

This appeal involves a parcel of real estate (real estate) that was the subject of mortgage foreclosure proceedings in 1972 and 1977. In 1977, First Lien Company bought a tax deed to the real estate from the clerk of Cook County. Shortly thereafter, First Lien Company quitclaimed the real estate to Harry Rhode, who in turn conveyed a deed in trust to Chicago Title and Trust (Chicago Title) as trustee and Kissane as beneficiary.

On July 1, 1982, Kissane issued a quitclaim deed of the real estate to Berke. Three months later, Berke granted a ground lease to Goldberg. Goldberg recorded his ground lease on October 26, 1982, but Berke did not record his quitclaim deed until January 18, 1983. Berke then advised Chicago Title of the assignment. However, because there was a citation proceeding on the real estate pending in Federal court, Chicago Title did not want to risk being held in contempt of court by recognizing the assignment. Thereafter, Kissane met with La Salle to set up an escrow agreement regarding the real estate. Land Title Company of America (Land Title) was to be the escrowee. The purpose of the escrow was to allow La Salle to obtain insurable, fee simple title and to end all litigation against Kissane and Chicago Title regarding the real estate.

Pursuant to the terms of the escrow, Kissane deposited a quitclaim deed conveying beneficial interest to a La Salle nominee. Kissane also deposited a document directing Chicago Title to convey its interest to La Salle's nominee. La Salle deposited $17,000 as well as a quitclaim deed from its nominee to La Salle as trustee. Land Title was then to issue title insurance subject only to the standard general exceptions, 1981 real estate taxes and any other enumerated exceptions to Land Title's commitment. When Land Title was ready to issue title insurance, it was to give written notice to the parties, deliver Kissane's letter of direction to Chicago Title, receive from Chicago Title its trustee deed to La Salle's nominee, deliver $17,000 to Kissane and issue a title insurance policy. However, if Land Title could not issue title insurance, it was to return all deposits to the respective parties.

Prior to Berke and Goldberg's recording, Land Title conducted a title search on the real estate. The title report reflected no adverse interests or claims on the real estate. After all deposits were received, based on the initial title report, Land Title erroneously assumed that it could issue title insurance. Land Title then recorded both the deed it acquired from Chicago Title conveying to La Salle's nominee its interest in the real estate and the deed from La Salle's nominee to La Salle. However, prior to actually issuing the title insurance policy, Land Title decided to bring the title down and obtain a final title report. It was in this final report that Land Title discovered the interests of Berke and Goldberg. Land Title then informed the parties to the escrow that the interests of Berke and Goldberg were not "standard general exceptions," nor were they an "enumerated exception" to the insurance policy. Therefore, unless the interests of Berke and Goldberg were expunged, Land Title would not issue a title insurance policy.

While the escrow was pending, a La Salle nominee bought a sheriff's deed to the real estate. La Salle's nominee then conveyed the real estate to La Salle and the deed was recorded. However, the court had entered a "Supplemental Decree of Foreclosure and Sale," which indicated that any deed issued by the sheriff was subject to the rights of Chicago Title.

La Salle and Kissane could not reach agreeable terms, so the escrow expired by its own volition on November 1, 1983. The following day, La Salle filed a lawsuit seeking to quiet title and reform the escrow and named Kissane, Berke, Goldberg and Land Title as defendants. Kissane then demanded that Land Title return his escrow deposits. After receiving demand letters from both La Salle and Kissane, Land Title filed an action in interpleader asking the court for direction as to the escrow deposits. Berke and Goldberg filed their appearance and answer. Berke and Goldberg later moved to amend their answer and the court granted their motion.

Kissane was finally served by publication because La Salle was unable to obtain personal service on him. Kissane never appeared in court and was adJudged in default. A prove up was set ...

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