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Schindler v. Watson

Court of Appeals of Illinois, Second District

March 16, 2017

RALPH J. SCHINDLER, JR., Plaintiff-Appellant,
Cozzi, and Perl Mortgage, Inc., Defendants-Appellees.

         Appeal from the Circuit Court of Du Page County. No. 15-CH-1817 Honorable Bonnie M. Wheaton, Judge, Presiding.

          JUSTICE HUTCHINSON delivered the judgment of the court, with opinion. Presiding Justice Hudson and Justice Jorgensen concurred in the judgment and opinion.



         ¶ 1 This case involves the expiration of a judgment lien on real estate. Defendant Norman Watson, the judgment debtor, sold the subject property to defendants Peter H. Cozzi and Anne V. Cozzi roughly two months before the lien was scheduled to expire. Plaintiff, Ralph J. Schindler, Jr., the judgment creditor, apparently unaware of the sale, did nothing to enforce his lien rights before the expiration date. Afterward, he filed a foreclosure complaint, which the trial court dismissed as untimely. He now contends that the sale operated to extend the expiration date and allow his foreclosure on the lien. He raises arguments similar to those that were rejected in Barth v. Kantowski, 409 Ill.App.3d 420 (2011), a case decided by our Third District Appellate Court. Although we decline to follow Barth, we affirm the trial court's dismissal of plaintiff's untimely foreclosure complaint.

         ¶ 2 I. BACKGROUND

         ¶ 3 The following facts are derived from the pleadings, exhibits, and reports of proceedings.

         ¶ 4 On May 20, 2004, plaintiff obtained a judgment from the trial court against Watson in the amount of $164, 303.20. The judgment related to a $100, 000 credit line that plaintiff had extended to a limited liability company. Watson had personally guaranteed the indebtedness. On January 19, 2005, plaintiff filed a memorandum of judgment with the Du Page County recorder of deeds. Included was a certified copy of the judgment against Watson, along with the legal description and permanent real estate index number for property in Bartlett that was owned by Watson. This recording created a judgment lien on the subject property enforceable for seven years from May 20, 2004, the date of the judgment's entry. See 735 ILCS 5/12-101 (West 2004).

         ¶ 5 On March 25, 2011, approximately two months prior to the scheduled expiration of the judgment and the corresponding lien, Watson sold the subject property to the Cozzis. The Cozzis obtained mortgage loans on the subject property from defendants U.S. Bank, N.A., and Perl Mortgage, Inc. A copy of the warranty deed conveying the subject property to the Cozzis was filed with the Du Page County recorder of deeds on April 6, 2011. Plaintiff, who was not given any notice of the sale, made no timely attempt to revive his judgment or foreclose on his lien.

         ¶ 6 More than four years later, on October 26, 2015, plaintiff filed a "Verified Complaint for Foreclosure of Judgment Lien." Plaintiff alleged that he was due the principal amount of his lien, $164, 303.20, plus $101, 282.79 in accrued interest, for a total of $265, 585.99. He requested that the trial court order the sale of the subject property and find that his judgment lien had priority over any potential mortgage lien claims of U.S. Bank and Perl Mortgage.

         ¶ 7 The Cozzis filed a motion to dismiss plaintiff's complaint, pursuant to section 2-619(a)(9) of the Code of Civil Procedure (Code) (735 ILCS 5/2-619(a)(9) (West 2014)). The Cozzis argued that plaintiff's judgment lien had expired on May 20, 2011, and that plaintiff therefore lacked any interest in the subject property.[1] In a written response, plaintiff argued that his claim was "similar to a claim of financial injury." Plaintiff asserted that he was injured on March 25, 2011, when Watson sold the subject property to the Cozzis without satisfying his lien. Plaintiff argued that his "cause of action" therefore "arose" on March 25, 2011, and that he was "merely seek[ing] to assert his rights as they existed on that date."

         ¶ 8 During a hearing on the motion, the parties disputed whether this case was controlled by Barth. The trial court commented that this appeared to be a case of first impression, that the Cozzis were "rolling the dice" when they bought the property, and that the Cozzis were fortunate that plaintiff had not acted in a timely manner to enforce his lien. As in Barth, the trial court determined that plaintiff was precluded from foreclosing on the lien because it had expired. Accordingly, the trial court granted the Cozzis' motion to dismiss with prejudice. Plaintiff now brings this timely appeal.

         ¶ 9 II. ANALYSIS

         ¶ 10 The facts in this case are simple. Application of the law becomes complicated. Defendants admit that the Cozzis were aware of the lien when they purchased the subject property. They acknowledge that the Cozzis knowingly risked having to defend against a possible lien foreclosure. They argue, however, that this risk was "short-lived, " as plaintiff "never sought to enforce his lien rights before the expiration of the lien." We agree with defendants. For the reasons discussed herein, we believe that plaintiff's undoing was his inaction during the final year that his lien was enforceable against the subject property. We therefore affirm the trial court's dismissal of plaintiff's complaint.

         ¶ 11 A section 2-619 motion to dismiss admits the sufficiency of the complaint, but asserts an affirmative matter that defeats the claim. Bjork v. O'Meara, 2013 IL 114044, ¶ 21. The purpose of a section 2-619 motion is to "dispose of issues of law and easily proved issues of fact at the outset of litigation." Van Meter v. Darien Park Dist., 207 Ill.2d 359, 367 (2003). We apply the de novo standard of review to a trial court's decision on a section 2-619 motion. Simmons v. Campion, 2013 IL App (3d) 120562, ¶ 21. We may affirm the court's decision on any basis supported by the record. Id. ¶ 22.

         ¶ 12 We begin with a brief discussion of the standards governing judgment liens in Illinois. At common law, a judgment did not create a lien against the real property of the judgment debtor. Dunn v. Thompson, 174 Ill.App.3d 944, 947 (1988). A judgment lien is a creation of statute in derogation of the common law. Wells Fargo Bank, NA v. Heritage Bank of Central Illinois, 2013 IL App (3d) 110706, ¶ 26. Strict statutory compliance is therefore required of a judgment creditor who wishes to assert a lien against the debtor's real property. Id. ¶ 29.

         ¶ 13 Section 12-101 of the Code provides for the creation of liens on real estate by judgments. Pursuant to the statute, "a judgment is a lien on the real estate of the person against whom it is entered *** only from the time a transcript, certified copy or memorandum of the judgment is filed in the office of the recorder in the county in which the real estate is located." (Emphasis added.) 735 ILCS 5/12-101 (West 2004). The lien may be foreclosed in the same ...

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