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Community Bank of Elmhurst v. Klein

Court of Appeals of Illinois, Second District

March 11, 2014

COMMUNITY BANK OF ELMHURST, Plaintiff-Appellee,
v.
GEORGE P. KLEIN, JR., Defendant-Appellant (West Suburban Bank, as Trustee Under Trust Agreement Dated January 20, 1983, a/k/a Trust No. 2905; the Butterfield Exchange Office Condo Association; and Unknown Owners and Nonrecord Claimants, Defendants)

Appeal from the Circuit Court of Du Page County. No. 10-CH-3978. Honorable Bonnie M. Wheaton, Judge, Presiding.

Affirmed.

SYLLABUS

A trial court's order imposing a lien against distributions defendant received from a trust created by defendant's deceased mother did not violate section 2-1403 of the Code of Civil Procedure and was otherwise proper, since a creditor may not impose a lien on funds " in the hands of the trustee," but once those funds are distributed from the trust, a creditor may impose a lien against them.

Michael A. Braun, of Michael A. Braun & Associates, of Chicago, for appellant.

Robert G. Black, of Law Offices of Robert G. Black, of Naperville, for appellee.

JUSTICE SCHOSTOK delivered the judgment of the court, with opinion. Presiding Justice Burke and Justice Spence concurred in the judgment and opinion.

OPINION

SCHOSTOK, JUSTICE.

Page 842

[¶1] The defendant, George Klein, Jr., appeals from the July 9, 2012, order of the circuit court of Du Page County imposing a lien against distributions that he received from a trust. The lien was imposed in favor of the plaintiff, the Community Bank of Elmhurst (the Bank). On appeal, the defendant argues that the lien was improper because it violates section 2-1403 of the Code of Civil Procedure (the Code) (735 ILCS 5/2-1403 (West 2012)). The defendant also appeals from the trial court's order denying his motion to reconsider. We affirm.

[¶2] BACKGROUND

[¶3] On November 4, 2005, the Bank filed an action to foreclose a note and mortgage on commercial property. The complaint named the defendant as personally liable for any deficiency under the note and mortgage. On January 4, 2011, the Bank obtained a judgment of foreclosure against the defendant. The property was subsequently sold at a sheriff's sale. On October 4, 2011, the trial court entered an order confirming the sheriff's sale. The trial court's order included a deficiency judgment against the defendant for $72,980.67.

[¶4] Following judgment, the Bank issued a citation to discover the defendant's assets. The Bank subsequently learned that the defendant was involved in ongoing litigation in Cook County (the Cook County matter) regarding the Ruth Klein Living Trust (the Trust). Ruth Klein was the defendant's deceased mother. In the Cook County matter, on August 20, 2010, the defendant, as a beneficiary under the Trust, had petitioned for an interim distribution of $106,170 from liquid Trust assets. The defendant had previously received $30,000 from the Trust. On November 30, 2010, $200,000 was distributed from the Trust assets to Trust beneficiaries according to the terms of the Trust.

[¶5] On March 7, 2012, the Bank moved for a judicial lien upon any " judgment, settlement, proceeds or distribution to be paid" the defendant in the Cook County matter or under the terms of the Trust. The Bank asserted that the court had authority to impose a judicial lien under Podvinec v. Popov, 168 Ill.2d 130, 658 N.E.2d 433, 212 Ill.Dec. 951 (1995), and that any distributions from the Trust to the defendant were nonexempt assets. In response, the defendant ...


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