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03/14/97 MARRIAGE MICHELLE DEL GIUDICE v. JOHN C.

March 14, 1997

IN RE MARRIAGE OF: MICHELLE DEL GIUDICE, PETITIONER, AND GERARD DEL GIUDICE, RESPONDENT. GERARD R. DEL GIUDICE, JR., AND RITA DEL GIUDICE, THIRD-PARTY DEFENDANTS-APPELLEES, AND TERRY CULLERTON, A/K/A TERRY CULLERTON BROWN, BRIAN M. KIMBALL, AND FRANKIE SPORTS, LTD., THIRD-PARTY DEFENDANTS,
v.
JOHN C. SANTEE AND ILENE M. WOLF, JUDGMENT CREDITORS-APPELLANTS.



Appeal from the Circuit Court of Cook County. No. 89-D-13805. Honorable Ronald W. Olson, Judge Presiding.

Released for Publication April 24, 1997.

The Honorable Justice Theis delivered the opinion of the court. O'brien, J., concurs. Cahill, J., dissents.

The opinion of the court was delivered by: Theis

JUSTICE THEIS delivered the opinion of the court:

In this appeal we are asked to decide whether the retitling of marital property from joint tenancy to tenancy in the entirety can be a fraudulent transfer under the Uniform Fraudulent Transfer Act. 740 ILCS 160/1 et seq. (West 1994). We find that it can and remand for further proceedings.

This action arises out of a dissolution of marriage proceeding. In the post-judgment decree, third-party defendant, Gerard R. Del Giudice, guaranteed the payment of attorney fees arising from his son's divorce action. On November 23, 1994, the court entered judgment against Del Giudice in the amount of $40,000. On December 21, 1994, a direction to levy was filed against Del Giudice's marital home, which Del Giudice and his wife held as joint tenants.

On February 15, 1995, the judgment creditors sent a notice of sheriff's sale set for April 18, 1995, to Del Giudice. However, on February 28, 1995, Del Giudice and his wife executed a warranty deed retitling their home from joint tenancy to tenancy by the entirety. The deed was recorded on March 8, 1995. Although Del Giudice's attorney had several conversations with the creditors between January and April of 1995, the creditors were not made aware of the retitling until Del Giudice filed an emergency petition to restrain the levy sale of his home. Del Giudice's emergency petition was based upon the statutory exemption from sale to satisfy a judgment entered against only one of the tenants of real estate held in tenancy by the entirety.

The creditors filed a motion to strike Del Giudice's petition. The trial court relied on E.J. McKernan Co. v. Gregory, 268 Ill. App. 3d 383, 643 N.E.2d 1370, 205 Ill. Dec. 763 (1994), and denied the creditors' motion. The trial court granted the emergency petition, issuing a permanent injunction restraining the levy sale of Del Giudice's home. The creditors filed a timely notice of appeal and we reverse.

On appeal, the creditors argue that: (1) retitling the home constituted a fraudulent transfer under the Illinois Uniform Fraudulent Transfer Act (Transfer Act) (740 ILCS 160/1 et seq. (West 1994)); (2) the trial court erred in failing to consider whether Del Giudice should have been equitably estopped from obtaining injunctive relief enjoining the sheriff's sale; and (3) the trial court erred in failing to consider whether the third-party defendants should have been barred form obtaining injunctive relief on the basis of the equitable doctrine of laches and unclean hands. Because we find that Del Giudice's transfer could have violated the Transfer Act, we need not address the creditors' other arguments.

The trial court initially found that the Del Giudices' home was protected under section 12-112 of the Illinois Code of Civil Procedure, which provides that:

"Any real property held in tenancy by the entirety shall not be liable to be sold upon judgment entered on or after October 1, 1990 against only one of the tenants." 735 ILCS 5/12-112 (West 1994).

Unlike joint tenancy, tenancy by the entirety is available only to married couples and their homestead property. The tenancy by the entirety statute provides:

"Whenever a devise, conveyance, assignment, or other transfer of homestead property maintained *** as a homestead by both husband and wife together during coverture shall be made and the instrument *** expressly declares that the devise or conveyance is made to persons *** not as joint tenants or tenants in common but as tenants by the entirety, the estate created shall be deemed to be in tenancy by the entirety." 765 ILCS 1005/1c (West 1994).

The creditors argued that the Transfer Act may be applied to Del Giudice's retitling of his marital home. See 740 ILCS 160/1 et seq. (West 1994). Section ...


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