Alward v. Jacob Holding of Ontario LLC

          Appeal from the Circuit Court of Christian County. No. 16-CH-25 Honorable J. Marc Kelly, Judge, presiding.

          Attorneys for Appellant Scott E. Garwood, Craig W. Runyon, Samuels, Miller, Schroeder, Jackson & Sly, LLP.

          Attorneys for Appellee Brad A. Elward, Michael T. Kokal, Craig L. Unrath, Heyl, Royster, Voelker & Allen, P.C.

          BARBERIS JUSTICE delivered the judgment of the court, with opinion. Justices Chapman and Cates concurred in the judgment and opinion.

          OPINION

          BARBERIS JUSTICE

         ¶ 1 Plaintiff, Phillip D. Alward, brought an action to quiet title to property located in Christian County, Illinois. Plaintiff had previously executed a quitclaim deed purporting to convey title to his son, Grant Alward, and daughter-in-law, Carrie Alward (the Alwards).^[1] The agreement stated that the Alwards were responsible for the principal balance on the loan. Although the original loan was secured by a recorded mortgage through Chase Bank, the Alwards subsequently entered into a loan agreement secured by a recorded mortgage with the appellee, Jacob Holding of Ontario L.L.C. (Jacob Holding).

         ¶ 2 Plaintiff later averred that he had mistakenly forgotten that the property was held in an Illinois land trust. Thus, plaintiff did not have legal authority to convey title to the Alwards when he executed the quitclaim deed in his individual capacity. Consequently, plaintiff asserted that the quitclaim deed was invalid and the title transfer was ineffective because Chicago Title and Land Trust Company (Chicago Title), as successor trustee, had sole authority to convey title. Plaintiff, claiming superior title, dissolved the land trust and asserted that the quitclaim deed and the subsequent mortgage constituted a cloud on title. Plaintiff and Jacob Holding filed cross-motions for summary judgment. The circuit court granted Jacob Holding's motion for summary judgment and denied plaintiffs motion for summary judgment. This appeal followed.

         ¶ 3 I. Background

         ¶ 4 Plaintiff was the sole surviving beneficiary of an Illinois land trust, recorded in 1996, for property located in Christian County, Illinois. The following language gave plaintiff, as beneficiary, the power to direct the trustee to convey title:

"(b) The interest of any person or beneficiary hereunder shall consist solely of the power of direction over the title to said property and the right to receive the proceeds from rentals, mortgages, sales or other dispositions of said property or rights therein.

(g) The beneficiary or beneficiaries hereunder shall have the full management and control of said property and of the selling, renting, and handling thereof, including collection of rent and proceeds of sale, and the payment of taxes, assessments, insurance and other expenses in connection therewith."

         ¶ 5 On March 5, 2012, plaintiff executed a quitclaim deed purporting to convey title to the Alwards in exchange for paying the principal balance of the loan to Chase Bank. The quitclaim deed included the following language:

"Grantor does hereby grant, bargain and sell all of the Grantor's rights, title, and Interest in and to the above described property and premises to the Grantee(s); and to the Grantee(s) heirs and assigns forever, so that neither Grantor(s) nor Grantor's heirs, legal representatives or assigns shall have, claim or demand any right or title to the property, premises, or appurtenances, or any part thereof."

         The quitclaim deed provided the parcel number, address, and legal description of the property, but it did not designate plaintiff as a beneficiary or specify that the property was held in a land trust. Although plaintiff intended to transfer ownership to the Alwards, which he believed took place when he executed the quitclaim deed, he acknowledged that he overlooked that the property was held in a land trust.

         ¶ 6 On April 12, 2012, the Alwards recorded the quitclaim deed, even though the last recorded deed indicated that the property had been in a land trust since 1996.

         ¶ 7 From May 26, 2015, to June 1, 2015, plaintiffs legal counsel corresponded via e-mail with Macon County Title, the real estate closing agent; Chase Bank, the mortgagor; and Chicago Title, the successor trustee of the land trust. ...