The opinion of the court was delivered by: Justice Theis
Appeal from the Circuit Court of Cook County.
Honorable Lester D. Foreman, Judge Presiding.
Thomas Athens (Athens) appeals an order entered in favor of Harris Trust and Savings Bank (Harris), as land trustee under a trust agreement dated October 25, 1982, and known as trust No. 41980. Athens sought a declaratory judgment that Harris, as land trustee of trust No. 41980 (the land trust), did not accept a condominium unit located at 21 Court of Greenway, Northbrook, Illinois (the Northbrook property), into the land trust. Athens, a judgment creditor of Angelo Geocaris seeking to foreclose on his judgment lien, sought an order that, upon the failure of the conveyance, a resulting trust was created rendering the Geocarises the owners of the Northbrook property. We affirm the trial court's entry of judgment in favor of Harris.
This dispute has a textured procedural history. On June 30, 1992, Athens obtained a judgment against Angelo Geocaris in the amount of $78,969.06. On February 19, 1993, Athens served a citation to discover assets on Harris and seeking information on trust No. 41980. Athens filed his second-amended verified complaint in equity for resulting trust and other relief on July 21, 1994, seeking a declaration that Angelo and Irene Geocaris held the Northbrook property in a "resulting trust" and seeking to foreclose on his judgment lien.
Athens argued that his judgment attached to the Northbrook property because defendant, Harris as trustee, failed to "accept" the Northbrook property as required by law and by the terms of the land trust agreement dated October 25, 1982, identified as trust No. 41980. Athens maintained that Harris' failure to "accept" the Northbrook property, together with its "closure" of the trust, warrant imposition of a resulting trust by which the Geocarises would obtain ownership of the Northbrook property. Additionally, Athens claimed he was unaware that the Geocarises were indebted to Harris when he recorded his judgment lien on July 16, 1992.
Athens filed a motion for summary judgment, as did Harris. In support of its summary judgment motion, Harris argued that the trust held title to the Northbrook property, that Harris had a perfected security interest in the Northbrook property pursuant to collateral assignment, and that Harris had an equitable lien against the Northbrook property. The trial court ruled that Harris had not "accepted" the Northbrook property into the trust and granted Athens' motion for summary judgment and denied Harris'. In so ruling, the trial court reasoned that property could not be "foisted" upon the trust, but must be accepted by it. The trial court concluded that the affidavit statements of Kenneth Piekut (Piekut), Harris land trust officer, claiming that Harris did "accept" the Northbrook property, were incredible given his previous deposition testimony and Harris' letters to the Geocarises referring to "closed trust" No. 41980.
Harris appealed the trial court's order granting Athens' motion for summary judgment in the declaratory judgment action. On September 5, 1996, a panel of this court reversed the trial court's entry of summary judgment in favor of Athens and affirmed its denial of Harris' motion for summary judgment. The panel found a genuine issue of material fact remained as to whether the Northbrook property was "accepted" into the trust.
After a bench trial, the trial court entered judgment in favor of Harris. The trial court found that Harris, as land trustee, and the Geocarises as beneficiaries, had intended for the Northbrook property to be deeded into trust No. 41980 and administered by Harris, subject to an existing collateral assignment under land trust (collateral ABI). Under the terms of the collateral ABI, 100% of the beneficial interest in trust No. 41980 was assigned to Harris as security for certain business loans guaranteed by Angelo and Irene Geocaris.
The trial court concluded that Harris, as land trustee, had agreed to act as trustee and to accept title to the Northbrook property. The court grounded its decision on the intention of the parties, the particular facts of this case, and on its determination that Harris, as trustee, was aware of the substance of the transaction outlined in the letter agreement between an attorney for Harris, Terry McIlroy (McIlroy), and the Geocaris attorney, Jim Roche (Roche), dated January 30, 1992. As further evidence of Harris' acceptance, the trial court noted Piekut's participation in facilitating the transaction.
Athens filed a motion for reconsideration, which was denied. Athens now appeals the trial court's determination that Harris, as trustee of land trust No. 41980, accepted title to the Northbrook property on January 30, 1992, claiming that the trial court's determination is against the manifest weight of the evidence and contrary to law.
The following events informed the trial court's decision. Angelo and Irene Geocaris had a business lending relationship with Harris. To facilitate that relationship, the Geocarises executed a trust agreement at Harris on October 25, 1982, creating land trust No. 41980. On that date, the Geocarises deeded their residence at 159 North Sheridan Road, Winnetka, Illinois (Winnetka property), into trust No. 41980. That same day, the Geocarises executed a collateral ABI, assigning 100% of the beneficial interest in trust No. 41980 to Harris as security for various business loans.
After the Geocarises suffered business setbacks, they entered into an agreement with Harris on February 13, 1990, providing terms by which they would repay their existing indebtedness to Harris. Pursuant to paragraph 5(a) of that agreement, the parties agreed that if the Geocarises' Winnetka property were sold, certain of the proceeds would be applied to the Geocarises' indebtedness to Harris. However, an amount of the proceeds of the sale not to exceed $600,000 could be used by the Geocarises to purchase a new residence, provided Harris was given a first lien in the new residence to secure the remaining indebtedness.
Thereafter, the Geocarises decided to sell their Winnetka property and purchase the condominium unit at issue, the Northbrook property, for $200,000. By a letter agreement dated January 30, 1992, between McIlroy and Roche, the Geocarises and Harris set forth the details of the transaction by which the Northbrook property would be substituted for the Winnetka property as the collateral securing their indebtedness. The Winnetka property was to be sold and deeded out of trust No. 41980 at a closing on the morning of February 3, ...