Barth v. James D. ( 2011 )

No. 3--09--0934
Opinion filed April 5, 2011
_________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
A.D., 2011
JANICE BARTH and DANIEL J. ) Appeal from the Circuit Court
ADLER, ) of the 12th Judicial Circuit,
) Will County, Illinois,
Plaintiffs-Appellants, )
)
v. ) No. 09--CH--941
)
JAMES D. and DONALD KANTOWSKI, ) Honorable
) Richard J. Siegel,
Defendants-Appellees. ) Judge, Presiding.
_________________________________________________________________
JUSTICE SCHMIDT delivered the judgment of the court, with
opinion.
Justices McDade and O'Brien concurred in the judgment and
opinion.
_________________________________________________________________
OPINION
The plaintiffs, Janice Barth and Daniel J. Adler, obtained a
judgment against Gregory Pytlewski on February 27, 2002. The
plaintiffs recorded the judgment and obtained a lien against
Pytlewski's real property at 431 East Tenth Street, Lockport,
Illinois (the subject property), that day. Pytlewski
subsequently sold the property to James D. and Donald Kantowski,
the defendants, in July 2008. Thereafter, on February 17, 2009,
the plaintiffs filed a "[p]etition for satisfaction of money
judgment by judicial sale of real property." The Kantowskis
filed a motion to dismiss the plaintiffs' petition. The trial
court granted the Kantowskis' motion. The plaintiffs appealed.
On appeal, the plaintiffs contend that the trial court had
the power to foreclose on the lien against the subject property
because they obtained an equitable lien by filing the instant
case and serving the Kantowskis prior to the expiration of the
original seven-year lien period. In the alternative, the
plaintiffs contend that their later revival of the underlying
judgment related back to the filing of the instant lawsuit. We
affirm.
FACTS
The record shows that on August 26, 1994, Pytlewski filed a
warranty deed in the office of the Will County recorder
indicating that he was the owner of the subject property.
Thereafter, on February 27, 2002, the trial court entered a
judgment against Pytlewski for $800 in attorney fees owed to
Adler and $16,403 in past-due child support owed to Barth. On
that same day, each plaintiff recorded a memorandum of judgment
against Pytlewski and cited Pytlewski's address as the subject
property.
On July 11, 2008, the Kantowskis purchased the subject
property from Pytlewski. Thereafter, on February 17, 2009, the
plaintiffs filed a "[p]etition for satisfaction of money judgment
by judicial sale of real property," alleging that as a result of
the February 27, 2002, judgment, they had obtained a lien against
the subject property that had yet to be satisfied. Thus, the
plaintiffs contended that the court should order a judicial sale
of the subject property and distribute the proceeds accordingly
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in order to satisfy their lien. The plaintiffs served the
Kantowskis with their petition on February 26, 2009, one day
prior to the expiration of the lien period. The record does not
indicate that the plaintiffs took any action regarding the
February 27, 2002, judgment prior to February 27, 2009.
On April 13, 2009, the Kantowskis filed a motion to dismiss
the plaintiffs' complaint, which the court construed as a motion
pursuant to section 2--619 (735 ILCS 5/2--619 (West 2008)) of the
Code of Civil Procedure (the Code). In it, the Kantowskis
alleged that under section 12--101 (735 ILCS 5/12--101 (West
2008)) of the Code, in order for the lien to exist on the subject
property, the plaintiffs needed to obtain an order of revival and
file a memorandum of the order of revival within seven years of
the entry of the original February 27, 2002, judgment. The
Kantowskis contended that since the plaintiffs failed to do so,
their lien against the subject property expired on February 27,
2009, and thus, the subject property was free of the lien as of
that date.
The court conducted a hearing on the motion to dismiss on
June 16, 2009. The plaintiffs argued that since they filed the
instant cause of action within seven years of the date of the
original judgment, they did not need to revive the judgment and
file a memorandum of the order of revival to preserve the lien on
the subject property. At the hearing, the court inquired whether
the plaintiffs had supporting law that "establishe[d] that [the]
filing [of the instant lawsuit] toll[ed] the requirement, either
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toll[ed] the seven years or toll[ed] the requirement, ma[de] it
superfluous to file the motion to extend the lien." Adler
responded that he "d[id]n't believe [the court was] going to find
a case like that."
The Kantowskis contended that the lien against the subject
property expired after February 27, 2009, because the plaintiffs
failed to properly revive it under section 12--101 of the Code.
Thus, while the plaintiffs could revive the original judgments
against Pytlewski, those judgments could no longer be a lien
against the subject property because Pytlewski, the judgment
debtor, no longer owned it.
The Kantowskis further argued that section 12--101 did not
provide that a judgment creditor had the option of preserving his
lien on a property by either obtaining an order of revival and
recording a new memorandum of revival within the seven-year
period, or by filing a lawsuit to close on the property within
the seven-year period. Instead, section 12--101 required the
judgment creditor to file the memorandum of revival within seven
years of the entry of the original judgment, and courts have
"strictly construe[d] [section 12--101] to a point of almost
absurdity."
The Kantowskis also stated that they did not have actual
notice of the lien against the subject property when they
purchased it. Adler stated that he "talk[ed with] the attorney
who issued the title. They missed it." Adler nonetheless
believed that the Kantowskis had constructive notice of the lien.
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The court granted the Kantowskis' motion to dismiss. The
plaintiffs filed an amended motion to reconsider. In it, they
noted that they had revived the original judgments on May 21,
2009, and recorded them on June 5, 2009. According to the
plaintiffs, the court retained jurisdiction over the parties and
the subject property because they filed the instant suit during
the requisite seven-year period of section 12--101 of the Code
(735 ILCS 5/12--101 (West 2008)). Thus, the plaintiffs believed
that they had obtained an equitable lien against the subject
property and the court could properly order a judicial sale of
the subject property to satisfy the judgment. In the
alternative, the plaintiffs argued that the revival of the
judgment should relate back to the filing of the instant cause of
action. The plaintiffs also alleged that "[t]here [we]re many
additional potential facts which could be plead [sic], including
potential knowledge by the Defendants herein of the judgment at
the time of the purchase, which would mean that the Defendants
were not bona fide purchasers." The court denied the plaintiffs'
motion. The plaintiffs appealed.
ANALYSIS
On appeal, the plaintiffs first contend that the trial court
had the power to foreclose on the judgment lien because they had
obtained an equitable lien on the subject property by filing the
instant case and serving the Kantowskis prior to the expiration
of the original seven-year lien period.
At common law, a judgment against a person did not create a
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lien against the real property of the judgment debtor. See Dunn
v. Thompson, 174 Ill. App. 3d 944 (1988). Rather, a judgment
lien is a creation of statute. See 735 ILCS 5/12--101 (West
2008). Specifically, pursuant to section 12--101 of the Code, a
judgment is a lien on the real estate of the judgment debtor only
from the time a transcript, certified copy, or memorandum of the
judgment is filed in the recorder's office in the county where
the real estate is located. 735 ILCS 5/12--101 (West 2008).
Unless a judgment is revived within seven years of its entry
or last revival and a memorandum of the order of revival is filed
before the expiration of the prior memorandum of the judgment, a
properly filed judgment lien expires seven years from the date of
its entry or last revival. 735 ILCS 5/12--101 (West 2008). Once
a judgment is revived, it is a lien on the real estate of the
person against whom it was entered from the time a transcript,
certified copy, or memorandum of the order of revival is filed
with the recorder in the county where the real estate is located.
735 ILCS 5/12--101 (West 2008); see also Wolff v. Groshong, 101
Ill. App. 3d 606, 608 (1981) ("a revived judgment is not a lien
on the real estate of a judgment debtor unless and until a
transcript, certified copy or memorandum of the order of revival
is filed in the office of the recorder of deeds in the county in
which the real estate is located"). Therefore, if the judgment
creditor fails to properly revive the judgment and file a
memorandum of the order of revival prior to the expiration of the
lien, the lien lapses. Wolff, 101 Ill. App. 3d 606.
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Since the creation and revival of a judgment lien are
statutory in nature, courts require strict compliance with
section 12--101. See Northwest Diversified, Inc. v. Desai, 353
Ill. App. 3d 378 (2004). We review de novo the trial court's
dismissal of a section 2--619 motion. Wackrow v. Niemi, 231 Ill.
2d 418 (2008).
In this case, the plaintiffs obtained the original judgment
against Pytlewski on February 27, 2002, and filed a memorandum of
the judgment that day. Thus, under section 12--101 of the Code,
the lien attached to the subject property on February 27, 2002.
On July 11, 2008, when the Kantowskis purchased the subject
property, the lien existed. However, the record does not
indicate that the plaintiffs took any action to revive the
judgment, nor did they file a memorandum of an order of revival,
prior to the expiration of the original lien on February 27,
2009, as required by section 12--101 to preserve the lien on the
subject property. Thus, the plaintiffs did not strictly comply
with section 12--101 and, as a result, their judgment lien on the
subject property expired on February 27, 2009.
At the time the lien expired, Pytlewski, the judgment
debtor, did not own the subject property; the Kantowskis owned
it. Thus, since the subsequent May 2009 revival and June 2009
recording occurred after the original lien had lapsed, and since
it constituted "a lien on the real estate of the person against
whom it [was] entered," the plaintiffs were left to try to
collect their judgment against property currently owned by
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Pytlewski, and not from the subject property as owned by the
Kantowskis. 735 ILCS 5/12--101 (West 2008).
We therefore conclude that since the plaintiffs allowed the
judgment lien against the subject property to lapse and did not
revive the judgment and make the requisite filing while the
judgment debtor owned the property, the plaintiffs' lien cannot
be asserted against the Kantowskis and the subject property. See
Wolff, 101 Ill. App. 3d 606.
The plaintiffs nonetheless contend that they obtained an
equitable lien on the property by filing the instant suit.
However, they have not cited, and our research has not revealed,
a case where a court has permitted the plaintiff to file a
lawsuit in lieu of complying with the requirements of section
12--101 and then successfully assert the judgment lien against a
subsequent owner of the property who was not the judgment debtor.
In reaching our conclusion, our careful review of the cases
cited by the plaintiffs reveals that they do not support the
plaintiffs’ contention that they obtained an equitable lien on
the subject property by filing the instant cause of action and
serving the Kantowskis prior to the expiration of the original
lien period. The plaintiffs specifically relied on Davidson v.
Burke, 143 Ill. 139 (1892), and Thomas v. Richards, 13 Ill. 2d
311 (1958).
Both the Davidson and Thomas cases involved instances where
the trial court created an equitable lien on the property at
issue in favor of a judgment creditor after the original judgment
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lien had lapsed. See Davidson, 143 Ill. at 149 ("[i]n a case
where the plaintiff ha[d] no lien on the property sought to be
reached, it [was] the filing of the bill in equity, after the
return of the execution at law, which [gave] to the plaintiff a
specific lien"); see also Thomas, 13 Ill. 2d at 316 (court
recognized "that by the filing of the original creditor's suit
against the subject property the original judgment became a lien
thereon and that the lien continued thereafter up to the time of
the decree irrespective that in the meantime seven years had
elapsed from the date of the original judgment").
Davidson and Thomas are each materially unlike the instant
case. First, Davidson involved a fraudulent transfer of the
property at issue. Specifically, the Davidson court noted that
the judgment debtor had conveyed the land at issue for "pretend[]
consideration" and with the intention of defrauding the judgment
creditor. Davidson, 143 Ill. at 143. In creating the equitable
lien on that property, the court "held that a suit in chancery
being instituted to subject land fraudulently conveyed to the
satisfaction of a judgment, the lis pendens is an equitable levy,
and secure[d] a lien to the complainant." Davidson, 143 Ill. at
149; see also Thomas, 13 Ill. 2d 311 (the judgment debtors
confessed judgment against the property at issue only after the
property had been conveyed among various family members via
quitclaim deed).
We acknowledge that for the first time in their motion to
reconsider, the plaintiffs contended that they had "potential
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knowledge" that the Kantowskis were not bona fide purchasers of
the subject property. However, the plaintiffs attached no
evidence in support of this allegation. The record also does not
support this contention, as Adler acknowledged that the title
company "missed" the instant lien during its search of the
property. Furthermore, a litigant may not raise a new legal
theory for the first time in a motion to reconsider. Holzer v.
Motorola Lighting, Inc., 295 Ill. App. 3d. 963 (1998).
Therefore, the plaintiffs have not properly shown that relief is
warranted due to fraud perpetrated by Pytlewski or the
Kantowskis.
Second, in Thomas, the court noted that "[t]he original
complaint was clearly a creditor's bill to satisfy the
plaintiff's judgment out of an equitable estate not otherwise
subject to levy and sale under execution, pursuant to the
provisions of section 49 of the Chancery Act." Thomas, 13 Ill.
2d at 315; see also Davidson, 143 Ill. at 148 ("[t]he questions
to be considered arise wholly out of the chancery proceedings").
However, the Illinois legislature repealed the last remnant of
the Chancery Act during the 1980s. Furthermore, we agree with
the statement of the Davidson court, that recognized that
"[w]here statutes prescribe the time during which judgments shall
have the force of liens on the lands of judgment debtors, one who
has neglected to enforce his judgment lien in proper time will
not, in equity, be relieved from the consequences of his
neglect." Davidson, 143 Ill. 2d at 147. We believe this
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statement has particular importance in the case of innocent
purchasers, as we disfavor a policy that would require innocent
purchasers to sell their property to pay the judgment of another,
especially in light of the judgment creditor's right to continue
to try to collect the judgment from the judgment debtor.
Thus, we find Davidson and Thomas inapposite. Rather, we
believe that pursuant to section 12--101 of the Code, the
plaintiffs were required to revive the judgment and make the
requisite filing to properly preserve the lien on the subject
property prior to its expiration. They did not. Therefore, we
conclude that the plaintiffs do not have an equitable lien on the
subject property, and the trial court did not err by refusing to
order a judicial sale.
The plaintiffs also contend that the subsequent revival of
the judgement and the filing of the memorandum of the order of
revival should relate back to the filing of the instant lawsuit
in order to preserve the plaintiffs' lien on the subject
property.
We acknowledge that a judgment can be revived 20 years after
it was entered. See 735 ILCS 5/2--1602 (West 2008) (a petition
to revive a judgment can be filed any time in the seventh year
after its entry or last revival, or at any time within 20 years
after its entry if the judgment becomes dormant). However,
merely reviving a judgment does not preserve a lien on real
property, as the law requires the judgment creditor to file the
memorandum of the order of revival before the expiration of the
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prior judgment lien to properly preserve it. See 735 ILCS 5/12--
101 (West 2008). Here, the plaintiffs did not, and they have not
cited authority that would permit this court to conclude that the
subsequent May 2009 revival of the original judgment and the June
2009 filing of the memorandum of the order of revival related
back to the filing of the instant lawsuit in order to preserve
the lien.
Thus, for the foregoing reasons, we conclude that while the
Kantowskis purchased the subject property subject to the judgment
against Pytlewski, the plaintiffs' lien on the subject property
lapsed because they failed to strictly comply with the
requirements of section 12--101 (735 ILCS 5/12--101 (West 2008)).
Therefore, the trial court properly granted the Kantowskis'
motion to dismiss.
CONCLUSION
The judgment of the circuit court of Will County is
affirmed.
Affirmed.
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