from the Circuit Court of the 12th Judicial Circuit, Will
County, Illinois. Circuit No. 10-CH-4508 Honorable Daniel
Rippy, Judge, Presiding.
PRESIDING JUSTICE O'BRIEN delivered the judgment of the
court, with opinion. Justices Holdridge and Wright concurred
in the judgment and opinion.
O'BRIEN PRESIDING JUSTICE
1 Intervenor, Gina Pattermann, filed an interlocutory appeal
from a grant of partial summary judgment disposing of her
homestead interest in mortgaged property in a foreclosure
action brought by PNC Bank against several defendants,
including Gina's ex-husband, defendant Steven Pattermann.
3 Steven and Gina Pattermann were married on August 14, 1998.
Prior to the marriage, Steven held title to the property that
is the subject of these proceedings, which was a vacant lot
at that time. On or about February 2, 2001, Steven and Gina
agreed to take out a mortgage from HSBC Mortgage Corporation
to finance the building of the marital residence on the
property. The property remained titled in Steven's name
alone, and Steven executed a mortgage and a promissory note
to finance the construction. At that time, Gina executed a
waiver of her homestead interest.
4 On April 3, 2002, Steven created the "Steven M.
Pattermann Revocable Trust" (the Trust), and transferred
title to the subject property to the Trust. The quitclaim
deed expressly stated that Steven was married to Gina and
provided: "Per the Attached [ ] hereby releasing and
waiving all rights under and by virtue of the Homestead
Exemption Laws of the State of Illinois." It was only
signed by Steven and contained only a notarization of
5 On September 2, 2003, Steven, as trustee of the Trust,
signed a new mortgage and note for the subject property with
the lender MidAmerica Bank, FSB, the predecessor in interest
of the plaintiff, PNC Bank. The proceeds from this note paid
off the original loan from HSBC Mortgage Corporation. Gina
was not a party to the MidAmerica Bank transaction, and she
did not reexecute a waiver of homestead. Thereafter, on June
24, 2005, Steven, as trustee of the Trust, borrowed
additional monies from MidAmerica Bank, signing another
promissory note and a junior mortgage.
6 On August 24, 2005, Steven filed for divorce from Gina. In
the divorce proceedings, the circuit court entered a judgment
for dissolution of marriage that disposed of the marital
assets of Steven and Gina. With respect to the subject
property, the marital residence, the circuit court found that
the vacant lot had been Steven's nonmarital property but
that it was transmuted to marital property because the home
was built with nonmarital and marital funds and maintained by
marital funds. The circuit court found that the fair market
value of the marital residence was $900, 000 and the equity
in the residence was to be determined by subtracting the
first mortgage from that amount. The circuit court further
ruled that the junior mortgage, a home equity loan, was the
sole responsibility of Steven. Upon refinancing of the
mortgage and payment by Gina to Steven of sums due pursuant
to the division of marital assets, Steven was ordered to
deliver to Gina a quitclaim deed, conveying the property to
Gina. The circuit court order stated that if Gina was unable
to refinance with six months of the judgment, then the
marital residence should be sold and the net proceeds divided
in accordance with the judgment. Commencing on July 1, 2008,
Gina was to be responsible for the payment of the mortgage,
real estate taxes, and expenses of the marital residence. The
circuit court did not address Gina's homestead interest.
Gina appealed the dissolution judgment but did not raise any
issue with respect to the marital residence other than to
challenge its value as a marital asset when it was encumbered
by the first mortgage. See In re Marriage of
Pattermann, No. 3-09-0472 (2011) (unpublished order
under Supreme Court Rule 23).
7 During the pendency of the dissolution appeal, on July 28,
2010, PNC Bank filed the current foreclosure action. PNC Bank
alleged that the first mortgage was in default and that the
balance due at that time was $506, 587.20. On July 10, 2014,
PNC Bank filed a motion for partial summary judgment, seeking
an order that Gina did not possess a homestead right in the
subject property following the dissolution of marriage. The
circuit court granted the motion, finding that Gina no longer
possessed a homestead interest pursuant to GMAC Mortgage,
LLC v. Arrigo, 2014 IL App (2d) 130938. Gina's
motion for reconsideration was denied. However, the circuit
court certified the issue to the appellate court and entered
an appropriate Illinois Supreme Court Rule 308(a) (eff. Feb.
26, 2010) order. Gina filed an application for leave to
appeal pursuant to Rule 308(b), which was allowed.
9 Gina argues that the circuit court erred in holding that
her homestead interest was extinguished by the divorce
judgment. The question certified for review is whether a
former spouse loses her homestead exemption in property
arising pursuant to section 12-901 of the Code of Civil
Procedure (the Code) (735 ILCS 5/12-901 (West 2012)) by
virtue of divorce where the divorce decree grants the former
spouse specific formal rights in the property, effects a
self-executing present conveyance of those rights, and does
not otherwise address or dispose of the former spouse's
homestead interest in the property. PNC Bank argues that the
certified question is purely hypothetical in this case but,
in any event, Gina's homestead rights terminated upon her
divorce. Our review of this issue is de novo. In
re M.M.D., 213 Ill.2d 105, 113 (2004).
10 The estate of homestead is one of statutory creation.
GMAC Mortgage, LLC v. Arrigo, 2014 IL App (2d)
130938, ¶ 15. Section 12-901 of the Code is the
homestead exemption statute and provides:
"Every individual is entitled to an estate of homestead
to the extent in value of $15, 000 of his or her interest in
a farm or lot of land and buildings thereon, a condominium,
or personal property, owned or rightly possessed by lease or
otherwise and occupied by him or her as a residence, or in a
cooperative that owns property ...