APPELLATE COURT OF ILLINOIS, FIFTH DISTRICT
523 N.E.2d 693, 169 Ill. App. 3d 246, 119 Ill. Dec. 937 1988.IL.740
Appeal from the Circuit Court of Fayette County; the Hon. Richard G. Hodson, Judge, presiding.
JUSTICE LEWIS delivered the opinion of the court. CALVO and KARNS, JJ., concur.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE LEWIS
Plaintiff, Fayette County Hospital (Hospital), appeals from an order entered by the circuit court of Fayette County in a proceeding to enforce a judgment against defendants, Ira and Bernice Reavis, finding that a certain certificate of deposit was exempt from garnishment. The Hospital maintains on appeal that the trial court erred in determining that a certificate of deposit, purchased with social security benefits, payable upon death of the owner to a funeral home, is exempt under section 12-1001 of the Code of Civil Procedure (Code) (Ill. Rev. Stat. 1985, ch. 110, par. 12-1001).
On December 18, 1985, the Hospital filed an amended complaint in the circuit court of Fayette County requesting that the court enter an order directing defendants, Ira and Bernice Reavis, to pay the Hospital for the medical services rendered to Mr. Reavis. On February 11, 1986, the parties agreed to the entry of a judgment in which the trial court directed defendants to pay the Hospital the sum of $18,632.93 for the medical services rendered to Mr. Reavis by the Hospital. In an effort to enforce the February 11, 1986, judgment, the Hospital filed an affidavit for nonwage garnishment, alleging that garnishee, First National Bank of Mulberry Grove (Bank), was indebted to the defendants. In an affidavit filed on March 27, 1986, the Bank's cashier averred that the defendants had a checking account with a balance of $4,955.65 and a certificate of deposit owned by Mr. Reavis payable on his death to a funeral home.
On May 6, 1986, the Hospital filed a motion for turnover of monies held requesting that the court enter an order directing the Bank to issue a check to the Hospital in an amount equal to the sum of the balance of the checking account and the certificate of deposit. Mr. Reavis died on May 14, 1986. On May 19, 1986, Mrs. Reavis filed an affidavit of exemptions, alleging in part that the checking account and the certificate of deposit were exempt property because those funds were traceable to, and derived from, social security benefits.
During a May 20, 1986, hearing, the parties agreed that, despite Mr. Reavis' death, Mrs. Reavis could exempt $4,000 of personal property which represented both Mr. and Mrs. Reavis' exemptions under section 12-1001(b) of the Code (Ill. Rev. Stat. 1985, ch. 110, par. 12-1001(b)). The only contested issue at the hearing concerned whether the checking account and certificate of deposit funds, which were traceable to social security benefits, were exempt. In a May 29, 1986, docket entry, the trial court found that the certificate of deposit, which was payable on Mr. Reavis' death to a funeral home, and the checking account were exempt under sections 12-1001(f) and 12-1001(g) (Ill. Rev. Stat. 1985, ch. 110, pars. 12-1001(f), (g)). After applying certain exemptions, the trial court ordered that the sum of $1,255.65 be turned over to the Hospital.
On June 2, 1986, the Hospital filed a motion to reconsider or, in the alternative, for clarification of judgment. In an order entered on June 24, 1986, the trial court denied the motion to reconsider and stayed the May 29, 1986, order "as it relates to [the certificate of deposit] pending appeal." On June 27, 1986, the Hospital filed a timely notice of appeal.
Section 12 -- 1001 sets forth the personal property owned by a debtor which is exempt from judgment, attachment or distress for rent. The Hospital maintains on appeal that the trial court erred in determining that Mr. Reavis' certificate of deposit, purchased solely with social security benefits and payable upon his death to a funeral home, was exempt under sections 12 -- 1001(f) and 12 -- 1001(g) of the Code. We agree.
We initially note that the cases relied upon by the trial court to support its decision may be distinguished from the case at bar. In In re Marriage of Logston (1984), 103 Ill. 2d 266, 285, 469 N.E.2d 167, 175, the supreme court determined that section 12-1001 was not a defense to a contempt order for nonpayment of maintenance, even though all of the husband's income was from a source which section 12-1001 listed as exempt from judgment. In Cochennour v. Lofton (1978), 62 Ill. App. 3d 955, 957, 379 N.E.2d 922, 923, the court determined that a debtor's right to receive monthly public aid benefits was exempt from garnishment under section 11-3 of the Illinois Public Aid Code (Ill. Rev. Stat. 1975, ch. 23, par. 11-3). Neither the Logston nor Cochennour court addressed the issue of whether a judgment can be satisfied by garnishing property which is derived from an exempt source of funds such as social security benefits.
We further note that section 12 -- 1001(f) exempts from judgment:
"All proceeds payable because of the death of the insured and the aggregate net cash value of any or all life insurance and endowment policies and annuity contracts payable to a wife or husband of the insured, or to a child, parent or other person dependent upon the ...