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Access Realty Group, Inc. v. Kane

Court of Appeals of Illinois, First District, Sixth Division

September 13, 2019

ACCESS REALTY GROUP, INC., as Successor by Assignment from SFG Capital, LLC, Plaintiff and Third-Party Citation Petitioner-Appellant,
v.
PATRICK W. KANE, Defendant-Appellee First Midwest Bank, as Successor in Interest to Bridgeview Bank Group; and Gozdecki, Del Giudice, Americus, Farkas & Brocato, LLP, Third Party Citation Respondents-Appellees. ACCESS REALTY GROUP, INC., as Successor by Assignment From SFG Capital, LLC Plaintiff-Appellant,
v.
PATRICK W. KANE, WILLIAM KANE, VICTORIA GOLDBLATTS-KANE, and FIRST MIDWEST BANK, as Successor in Interest to Bridgeview Bank Group, Defendants-Appellees.

          Appeal from the Circuit Court of Cook County, Nos. 10-L-0820, 17-L-5670; Honorable Alexander P. White, Judge Presiding, the Hon. Brigid Mary McGrath, Judge, presiding

          Attorneys for Appellant Daniel A. Hawkins, of Erwin Law, LLC, of Chicago, for appellant.

          Attorneys for Appellee Adam B. Rome, of Greiman, Rome & Griesmeyer, LLC, of Chicago, for appellee Bridgeview Bank Group. Robert A. Chapman and Patrick P. Manion, of Chapman Spingola, LLP, of Chicago, for appellees Patrick W. Kane, William Kane, and Victoria Goldblatt-Kane. Steven H. Leech, of Gozdecki, Del Giudice, Americus, Farkas & Brocato LLP, of Chicago, for other appellee.

          CUNNINGHAM JUSTICE delivered the judgment of the court, with opinion. Justice Harris concurred in the judgment and opinion. Delort Justice dissented, with opinion.

          OPINION

          CUNNINGHAM JUSTICE.

         ¶ 1 The circuit court of Cook County dismissed a citation proceeding by the plaintiff- appellant, Access Realty Group, Inc. (Access), against the defendant-appellee, Patrick W. Kane (Kane), on the basis that the merger doctrine satisfied the judgment debt. In a separate lawsuit, Access sought damages related to the same judgment debt from the defendants-appellees, Kane, William Kane, Victoria Goldblatts-Kane, and First Midwest Bank (collectively, the defendants). The circuit court dismissed that lawsuit on the basis that Access was no longer a judgment creditor because the judgment debt had been satisfied. Access now appeals both orders, which have been consolidated in this court. For the following reasons, we affirm the judgments of the circuit court of Cook County.

         ¶ 2 BACKGROUND

         ¶ 3 The Citation Proceeding

         ¶ 4 In 2010, SFG Capital, LLC (SFG), [1] filed a lawsuit against Kane, alleging that Kane defaulted on a loan from SFG. The parties settled, and in 2011, the trial court entered a $783, 000 consent judgment against Kane (the SFG judgment). SFG then initiated a supplementary proceeding to identify any assets available to satisfy the SFG judgment (the citation proceeding).

         ¶ 5 In 2012, Kane's estranged business partner, William Platt (Platt), executed a promissory note with a face value of $1.2 million, payable to Kane (the Platt note).

         ¶ 6 On April 14, 2016, as part of the citation proceeding, the trial court ordered that all right, title, and interest in the Platt note be transferred from Kane and assigned to SFG (the turnover order). The turnover order instructed that SFG "may take such further action as necessary to enforce payment on the *** note[ ]" so that SFG could use the proceeds from the Platt note to pay off the SFG judgment. As the face value of the Platt note exceeded the amount outstanding on the SFG judgment, the turnover order also required SFG to return the Platt note to Kane once the "judgment due and owing is paid in full."

         ¶ 7 On April 14, 2017, Access acquired the SFG judgment through an assignment. Access is a real estate brokerage and management company. Platt is Access' sole shareholder, president, secretary, and registered agent. At the time of the assignment, $527, 384.58 remained outstanding on the SFG judgment.

         ¶ 8 After acquiring the SFG judgment, Access substituted into the citation proceeding as the judgment creditor. Access then issued third-party citations to discover assets to Bridgeview Bank Group[2] (one of Kane's financial institutions) and Gozdecki, Del Giudice, Americus, Farkas & Brocato, LLP (Kane's previous legal counsel).

         ¶ 9 On September 21, 2017, Kane moved to dismiss the citation proceeding. Kane argued that once SFG assigned the SFG judgment to Access, the merger doctrine extinguished the judgment debt. Specifically, Kane claimed that Platt "alone controls [Access] as an 'instrumentality' to conduct his own personal affairs." Kane argued that Platt's interest in the proceeds of the SFG judgment merged with his obligation as the payor of the Platt note, which had been turned over to satisfy the SFG judgment.

         ¶ 10 On January 18, 2018, following a hearing on Kane's motion to dismiss the citation proceeding, the trial court entered an order ruling on the motion (the January 18, 2018, order). The court noted that the turnover order limited the judgment creditor's recovery against the Platt note to the balance owing on the SFG judgment. The court also noted that "Platt, through Access, the company he wholly owns and controls, acquired the SFG judgment from SFG, including all rights to collect the SFG judgment." The court held that "Platt, through Access, *** has become both the creditor and debtor on the Platt note" such that "his interests have merged pursuant to the merger doctrine," thereby extinguishing his debt. The court then dismissed the citation proceeding on the basis that the SFG judgment had been satisfied through the merger doctrine.

         ¶ 11 Access then petitioned for revival of the SFG judgment. The trial court denied the petition as moot because the January 18, 2018, order found that the SFG judgment had been satisfied (the February 1, 2018, order). The court also ordered Access to return the Platt note to Kane. Access then moved for reconsideration of the January 18, 2018, and the February 1, 2018, orders. The trial court denied the motion.

         ¶ 12 Access subsequently appealed the January 18, 2018, and February 1, 2018, orders, as well as the order ...


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