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Malek v. Gold Coast Exotic Imports, LLC

Court of Appeals of Illinois, First District, Third Division

June 27, 2018

NANCY R. MALEK, Plaintiff-Appellee,
v.
GOLD COAST EXOTIC IMPORTS, LLC, Defendant-Appellant.

          Appeal from the Trial Court of Cook County. No. 15 L 50794 The Honorable Ann Collins-Dole, Judge Presiding.

          JUSTICE LAVIN delivered the judgment of the court, with opinion. Presiding Justice Cobbs and Justice Fitzgerald Smith concurred in the judgment and opinion.

          OPINION

          LAVIN JUSTICE.

         ¶ 1 This appeal arises out of a replevin action, seeking to recover a 2012 BMW 650i automobile. Pursuant to an alleged verbal agreement, the former owner of the BMW, Michel Malek, M.D., transferred possession of the vehicle to Gold Coast Exotic Imports, LLC (Gold Coast), in order to satisfy a debt. At the time that the BMW was transferred to Gold Coast, Michel and plaintiff Nancy Malek were in the midst of a divorce action pending in Cook County.

         ¶ 2 After Gold Coast obtained possession of the BMW, Nancy filed a motion to assign and transfer title to the vehicle from Michel to her. The divorce court granted Nancy's motion but ordered that she take the BMW subject to any liens on the vehicle. Nancy subsequently sought possession of the BMW from Gold Coast. Gold Coast refused Nancy's demand, claiming it was entitled to possession of the BMW pursuant to its agreement with Michel. Shortly thereafter, Nancy filed a replevin action against Gold Coast in the trial court. Following a bench trial on the matter, the trial court held that Nancy was entitled to the BMW because Gold Coast never recorded its lien on the vehicle.

         ¶ 3 Gold Coast now appeals from that judgment. Specifically, Gold Coast asserts that it had a perfected security interest in the form of a possessory lien on the BMW pursuant to section 9-313(a) of the Uniform Commercial Code (UCC) (810 ILCS 5/9-313(a) (West 2016)), which preceded Nancy's interest in the vehicle, thus defeating her replevin action. We agree and therefore reverse the trial court's judgment for the reasons set forth below.

         ¶ 4 BACKGROUND

         ¶ 5 On August 3, 2013, Gold Coast delivered the BMW to Michel for an agreed upon value of $88, 451.81. At that time, Michel did not pay Gold Coast for the vehicle in full, but paid only $6551.20, which represented the sales tax and license and title fees for the vehicle. Title to the BMW was issued in Michel's name only. This transaction was pursuant to a verbal agreement between Michel and Gold Coast, involving multiple vehicles from prior transactions between the parties, which resulted in a credit to Michel that was applied towards the BMW. As part of their agreement, Michel owed Gold Coast a remaining balance of $33, 294.18. Michel would either repay that balance or, alternatively, return the BMW to Gold Coast to be sold as satisfaction of his debt.

         ¶ 6 Some two years later, in September 2015, Michel's balance remained unpaid. Consequently, pursuant to his agreement with Gold Coast, Michel shipped the BMW back to Gold Coast from California, where the vehicle was being used by the couple's son at college. On October 5, 2015, the BMW arrived at Gold Coast. At that time, Michel and Nancy were in the midst of a divorce action, which was pending in the circuit court of Cook County (14-D-4449).

         ¶ 7 On October 29, 2015, Nancy filed an emergency motion in the divorce action, to immediately assign and transfer title of the BMW from Michel to her. The motion was denied and shortly thereafter, on November 3, 2015, Nancy filed a second emergency motion to immediately assign and transfer title of the BMW. In support, she filed an affidavit attesting that she had visited Gold Coast and was informed that the BMW would be sold. According to Gold Coast, it never received notice of her emergency motions.

         ¶ 8 On November 3, 2015, the divorce court granted Nancy's second motion and entered an order requiring that title to the BMW be transferred from Michel to Nancy and that Nancy take the vehicle subject to any liens as of that date. Subsequently, Nancy sent a letter as well as a copy of the title transfer order to Gold Coast and its owner, Joseph Perillo, demanding immediate possession of the BMW.

         ¶ 9 Gold Coast refused and sent a letter to Nancy, stating the terms of its agreement with Michel and claimed that the BMW was in its possession because Michel failed to satisfy his $33, 294.18 debt pursuant to their agreement.

         ¶ 10 Shortly thereafter, Nancy filed an action in replevin against Gold Coast in the trial court (15-L-50794) pursuant to section 19-101 of the Code of Civil Procedure (Code) (735 ILCS 5/19-101 (West 2016)). On June 21, 2016, the trial court entered an order requiring Gold Coast to transfer possession of the BMW to Nancy upon the presentation of a replevin bond. Nancy subsequently obtained a replevin bond and possession of the BMW from Gold Coast. Nancy then sold the BMW to Steve Foley Cadillac, Incorporated, for $36, 500.

         ¶ 11 In February 2017, the trial court held a bench trial on Nancy's replevin action. Nancy filed a motion in limine to exclude certain testimony relating to the verbal agreement between Michel and Gold Coast, arguing that it was hearsay because Michel was unavailable to testify at trial. The trial court denied her motion and heard testimony from Nancy and Joseph Perillo, reflecting the above-stated facts. At trial, Gold Coast argued that the November 3, 2015, title transfer order was void because Gold Coast was never served a copy of the motion. In response, Nancy claimed that Gold Coast was never served a copy of ...


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