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Pluciennik v. Vandenberg

Court of Appeals of Illinois, Third District

June 20, 2018

JOHN PLUCIENNIK and DAN RIPPEL, Plaintiffs-Appellants,
v.
MARK VANDENBERG; DAVID ANDERS; JOHN ATKENSON; MCV VENTURES, LLC; 600 TERRITORIAL, LLC; MOKENA CROSSINGS I, LLC; UNIVERSITY CROSSINGS NORTH, LLC; ALLEGIANCE 3, LLC; DRENTE, LLC; and FLEVOLAND, LLC, Defendants-Appellees.

          Appeal from the Circuit Court of the 12th Judicial Circuit, Will County, Illinois. Circuit No. 16-CH-778, Honorable John C. Anderson, Judge, Presiding.

          LYTTON JUSTICE delivered the judgment of the court, with opinion. Justices O'Brien and Wright concurred in the judgment and opinion.

          OPINION

          LYTTON JUSTICE.

         ¶ 1 Plaintiffs John Pluciennik and Dan Rippel appeal from the trial court's dismissal of their complaint against defendants Mark Vandenberg, David Anders, John Atkenson, MCV Ventures, LLC, 600 Territorial, LLC, Mokena Crossings I, LLC, University Crossings North, LLC, Allegiance 3, LLC, Drente, LLC, and Flevoland, LLC, seeking to avoid the transfer of real estate from companies owned and managed by defendant Vandenberg to companies held in trust for the benefit of his minor daughters. We affirm in part and reverse and remand in part.

         ¶ 2 BACKGROUND

         ¶ 3 MCV Ventures, LLC (MCV Ventures), is a commercial development company that owns several parcels of real estate in the greater Chicago area. The company is owned and managed by Mark Vandenberg. Plaintiffs are judgment creditors of MCV Ventures. On November 30, 2011, judgment was entered in favor of Pluciennik for $4, 587, 968 and in favor of Rippel for $764, 661.

         ¶ 4 Prior to the judgment in 2011, MCV Ventures held ownership interests in several limited liability companies, including three companies that are named defendants in this case: 600 Territorial, LLC (600 Territorial), Mokena Crossings I, LLC (Mokena Crossings), and University Crossings, North, LLC (University Crossings). MCV Ventures owned 100% interest in 600 Territorial and University Crossings and 51% interest in Mokena Crossings. The sole assets of those companies were three parcels of real estate: (1) 600 Territorial owned 594 Territorial Drive in Bolingbrook, (2) Mokena Crossings owned lots 9830-9851 on West 191st Street in Mokena, and (3) University Crossings held title to 300 Central in University Park.

         ¶ 5 In May 2006, 600 Territorial granted Cole Taylor Bank a construction mortgage on the real estate located at 594 Territorial Drive. The mortgage was granted to secure debt due under a promissory note dated May 18, 2006, pursuant to which the bank loaned 600 Territorial $13.5 million. On November 8, 2011, 600 Territorial sold 594 Territorial Drive to Flevoland, LLC (Flevoland), a company held in trust by the Carly C. Vandenberg and Kayla M. Vandenberg Trust. In a release letter dated May 2, 2012, the bank directed that the net sales proceeds from the sale of the property were to be paid to the bank in exchange for a release of the bank's security interest in the real estate. The letter stated that the greater of $5 million or the net sales proceeds would be paid to the bank. The closing date of the sale did not occur until May 16, 2012. The property sold for less than the debt owed to Cole Taylor Bank. The escrow trust disbursement agreement for the sale of the Territorial Driver property states that the bank was paid $4, 775, 335.95 and the seller was paid $0.

         ¶ 6 In May 2007, Mokena Crossing granted Cole Taylor Bank a construction mortgage on the real estate located on West 190th Street in Mokena. The mortgage was granted to secure debt due under a promissory note dated May 1, 2007, pursuant to which the bank loaned Mokena Crossings $4.36 million, and to secure additional debt owed on a renewal note under which the bank loaned Mokena Crossings an additional $9.32 million. On November 10, 2011, Mokena Crossings sold the Mokena property to Drente, LLC (Drente), a company held in trust by the Carly C. Vandenberg and Kayla M. Vandenberg Trust. In a release letter dated May 2, 2012, the bank directed that the net sales proceeds from the sale of the property were to be paid to the bank in exchange for a release of the bank's security interest in the real estate. The letter stated that the greater of $7.4 million or the net sales proceeds would be paid to the bank. The closing date of the sale did not occur until May 16, 2012. The property sold for less than the debt owed to Cole Taylor Bank. The escrow trust disbursement agreement for the sale of the Mokena property states that the bank was paid $7, 213, 313.49 and the seller was paid $0.

         ¶ 7 In June 2008, University Crossings granted Allegiance Community Bank a construction mortgage on the real estate located at 300 Central in University Park. The mortgage was granted to secure debt due under a promissory note dated June 18, 2008, pursuant to which the bank loaned Lockport 199 LLC, University Crossings' partner company, $1.32 million. On October 28, 2011, the mortgage and the note were part of a package assigned to a third lender, Allegiance 3, LLC (Allegiance 3), a company held in trust by the Carly C. Vandenberg and Kayla M. Vandenberg Trust. On the date of assignment, the bank certified that $1, 548, 835.53 was owed on the loan, the promissory note, and the mortgage on the University Park property.[1]

         ¶ 8 Allegiance 3 agreed to sell a portion of the University Park property to satisfy Lockport 199's loan obligations. On March 30, 2012, the sale of a portion of the property yielded $1.35 million, payable to Allegiance 3. After the sale, the debt remained unsatisfied. In its settlement of the debt, Allegiance 3 agreed that, in lieu of foreclosure, University Crossings could convey the remaining portion of the unsold property to Allegiance 3. As a result, on June 25, 2012, the remainder of the University Park property was transferred from University Crossings to Allegiance 3 by special warranty deed.

         ¶ 9 In April 2016, plaintiffs filed suit against Vandenberg, MCV Ventures, and the limited liability companies, seeking to avoid the transfers of all three parcels of real estate-600 Territorial, Mokena Crossings, and University Crossings-under the Uniform Fraudulent Transfer Act (Act) (740 ILCS 160/1 et seq. (West 2016)).[2] Plaintiffs also named as individual defendants David Anders, the manager of Flevoland, Drente, and Allegiance 3, and John Atkenson, Vandenberg's employee and financial officer.

         ¶ 10 In the complaint, plaintiffs alleged that Vandenberg, as owner and manager of MCV Ventures, fraudulently transferred the properties owned by 600 Territorial, Mokena Crossings, and University Crossings to Flevoland, Drente, and Allegiance 3, which were companies held in irrevocable trusts for the benefit of Carly and Kayla Vandenberg, Vandenberg's minor daughters. In counts I, II, and III of the complaint, plaintiffs claimed that the transfers were invalid under the Act because the trusts were established for the benefit of Vandenberg's daughters and the transfers were made with the actual intent to hinder, delay or defraud plaintiffs from collecting their judgments against MCV Ventures. Count IV of the complaint included a claim for civil conspiracy against Vandenberg and Anders.

         ¶ 11 Defendants Vandenberg and Atkenson moved to dismiss counts I, II, and III under section 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West 2016)), arguing that the properties did not constitute "assets" as defined in the Act because they were fully encumbered by valid liens at the time of transfer. Attached to their section 2-619 motion, defendants included payoff letters, disbursement statements, and an affidavit signed by Atkenson stating that the debts secured by the mortgages on all three parcels exceeded the values of the properties. Anders filed a separate motion, seeking to dismiss the ...


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