In re Estate of LaPlume , 2014 IL App (2d) 130945 ( 2015 )

Illinois Official Reports
Appellate Court
In re Estate of LaPlume, 2014 IL App (2d) 130945Appellate Court In re ESTATE of ERIKA ANNA LaPLUME, Deceased (Andrea
Caption McIntyre, as Independent Executor of the Estate of Erika Anna
LaPlume, Petitioner and Defendant and Counterplaintiff-Appellant, v.
Bank of America, N.A., Respondent and Plaintiff and
Counterdefendant-Appellee (Diamond Quest Realty, Inc.,
Respondent; Citibank (South Dakota) N.A., Capital One Bank (USA)
N.A., and Citibank N.A., s/b/m to Citibank (South Dakota) N.A.,
Respondents and Defendants; Unknown Heirs and Legatees of Erika
A. LaPlume, Unknown Owners and Nonrecord Claimants, and Julie
Fox, as Special Representative of the Estate of Erika A. LaPlume,
Deceased, Defendants)).
District & No. Second District
Docket No. 2-13-0945
Filed December 4, 2014
Held In proceedings involving the administration of decedent’s estate,
(Note: This syllabus which basically consisted of a residence encumbered by liens and
constitutes no part of the mortgages totaling over $207,000, including a primary mortgage of
opinion of the court but $165,000, and the executor claimed she could sell the residence for
has been prepared by the $200,000, the probate court erred by refusing to exercise its discretion
Reporter of Decisions under section 20-6 of the Probate Act by which a short sale could be
for the convenience of ordered, the encumbrances could be extinguished and the proceeds
the reader.) could be divided pro rata or by allowing the matter to proceed under a
foreclosure action instituted by the holder of the $165,000 mortgage,
where those with mortgage liens and other secured interests in the
property would be allowed to seek recoveries, and given the court’s
failure to exercise its discretion, the judgment dismissing the
executor’s petitions to sell the property under the Act and granting her
motion to dismiss the mortgagee’s counterclaim to foreclose was
reversed and the cause was remanded to allow the probate court to
exercise its discretion under section 20-6 of the Act.
Decision Under Appeal from the Circuit Court of Lake County, Nos. 12-P-492,
Review 12-CH-4669; the Hon. Nancy S. Waites, Judge, presiding.
Judgment Reversed and remanded.
Counsel on Fredric B. Lesser and Jeffrey P. O’Kelley, both of Lesser, Lutrey &
Appeal McGlynn, LLP, of Lake Forest, for appellant.
Alan S. Kaufman and Keith Levy, both of Manley Deas Kochalski
LLC, of Chicago, for appellee.
Panel JUSTICE BIRKETT delivered the judgment of the court, with
opinion.
Justices Zenoff and Jorgensen concurred in the judgment and opinion.
OPINION
¶1 Andrea McIntyre, the executor of the estate of decedent, Erika Anna LaPlume, challenges
the judgment of the circuit court of Lake County dismissing her first and second petitions for
approval to sell the subject property and granting Bank of America’s motion to dismiss her
counterclaim to the bank’s complaint to foreclose the mortgage on the subject property. The
executor contends that section 20-6 of the Illinois Probate Act of 1975 (Probate Act) (755
ILCS 5/20-6 (West 2012)) trumps the Illinois Mortgage Foreclosure Law (Foreclosure Law)
(735 ILCS 5/15-1401.1(b), (c), 15-1107 (West 2012)) so that the probate court should have
allowed the executor’s counterclaim and approved the sale of the subject property free and
clear of any remaining liens and mortgages. Because we determine that the probate court did
not exercise its discretion under section 20-6 of the Probate Act, we reverse and remand.
¶2 I. BACKGROUND
¶3 The pertinent facts of record reveal that, on March 26, 2012, the decedent passed away,
survived only by her daughter, the executor. The executor is also the “sole surviving heir and
legatee” under the decedent’s will. On June 25, 2012, the executor was formally appointed
by the probate court to serve as executor of the decedent’s estate. The subject property, the
decedent’s residence on Pheasant Ridge Drive in Lake Zurich, was the only asset of the
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estate. The subject property was encumbered by liens and mortgages totaling more than
$207,000. Of this amount, the bank’s lien totaled about $165,000.
¶4 On December 18, 2012, the bank filed a complaint for foreclosure against the subject
property. The foreclosure action was filed separately from the probate of the decedent’s
estate.
¶5 On March 12, 2013, the executor filed her first petition for approval to sell the subject
property. The executor represented that she had found a buyer for the subject property and
that the sale price for that transaction was $200,000. In the petition, the executor named the
bank along with all other known lienholders. The executor argued that section 20-6(b) of the
Probate Act (755 ILCS 5/20-6(b) (West 2012)) permitted the probate court to order the short
sale of the subject property and prorate the various encumbrances so that the property would
be sold free and clear of all mortgages, liens, and encumbrances. The bank filed no response
to the petition.
¶6 On April 17, 2013, the matter was consolidated in the probate court. In consolidating the
actions, the probate court agreed with the executor that a judgment in the foreclosure
proceeding could potentially conflict with the relief she was seeking in her petition for
approval of the sale of the subject property. About two weeks later, the bank filed several
motions, including a motion for an order of default in the now-consolidated foreclosure
proceeding, a motion for the entry of a judgment of foreclosure and sale, and a motion to
appoint an officer to conduct the sale. On May 28, 2013, the executor filed an answer to the
bank’s amended foreclosure complaint and a counterclaim. In the counterclaim, the executor
restated her position that section 20-6(b) allowed the probate court to order a short sale, and
she repeated the allegations of the petition for approval.
¶7 The bank did not file an answer to the counterclaim. Instead, on June 13, 2013, the bank
filed a motion to dismiss the executor’s counterclaim, pursuant to section 2-615 of the Code
of Civil Procedure (Code) (735 ILCS 5/2-615 (West 2012)). The parties proceeded to brief
the matter, setting an August 29, 2013, hearing date for the motion and the petition for
approval.
¶8 While the parties were briefing the matter, the executor managed to find a buyer who
would purchase the subject property for $205,000. The purchase price was still less than the
total amount of the encumbrances, so the executor would still be unable to sell the property
free and clear unless the probate court employed section 20-6 of the Probate Act. On August
23, 2013, the executor filed a second petition for approval to sell the subject property, based
on the August 15, 2013, contract to purchase the property for $205,000. The second petition
advanced the same arguments, under section 20-6(b) of the Probate Act, raised in the first
petition and the counterclaim. The bank did not file a response to the second petition.
¶9 On August 29, 2013, the probate court held a hearing on the executor’s first and second
petitions for approval and on the bank’s motion to dismiss the executor’s counterclaim. All
interested parties had been given proper notice of the hearing, but only the executor and the
bank appeared; another lienholder and the estate’s special representative in the foreclosure
proceeding (both of whom are not parties to this appeal) did not attend.
¶ 10 The probate court related, on the record, that it and the parties held an in camera
discussion during which they expressed and explored their positions, but no verbatim record
was maintained of the in camera discussion. The probate court further explained that, during
the in camera discussion, it had been able to “pre-try [the] matter and discuss it [with the
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parties].” The court summarized the in camera discussion for the record, noting that its main
inquiry:
“[E]ssentially [was] how does the Court get around the fact that existing statutory law
in the [Foreclosure Law] and all the case law that [the probate court had] seen that
basically says that the Court cannot invalidate, change, vacate, strike, ignore a
mortgage and allow the Estate to sell the [subject property] free and clear of any liens
and then basically net out the money in a percentage-base to all the lienholders[?]”
¶ 11 The court inquired about the specifics of the proposed sale of the subject property versus
the various encumbrances, and the parties informed the court that the proposed sale price was
$205,000, the bank held a mortgage of approximately $165,000, the total amount of the
encumbrances was about $207,500, and that total did not include the 2012 and 2013 real
estate taxes or interest for any of the judgment liens against the subject property. The probate
court observed that the $207,500 figure also did not include any commission, real estate
charges, attorney fees, or the like connected to the sale of the subject property and the
administration of the estate.
¶ 12 In summarizing the in camera discussion, counsel for the executor stated that he
disagreed with the probate court’s in camera ruling but understood the court’s position,
because the executor had been unable to provide the court with any case law to support her
position that the court was empowered by section 20-6(b) of the Probate Act to order a short
sale extinguishing the encumbrances on the subject property and divide the resulting funds in
a pro rata fashion. By contrast, counsel for the bank agreed with the probate court’s ruling,
asserting that the foreclosure action should be allowed to proceed and that, if it did, all
pending matters would be resolved.
¶ 13 The probate court then orally held:
“Today the Court is going to make the following ruling. That the original motion
for the sale of the property [(the first petition for approval)], the amended motion for
the sale of the property with an amended contract offering $205,000 as a purchase
price [(the second petition for approval),] and the [executor’s] counterclaim are going
to be denied. I’m sorry. The original petition and the amended petition will be denied
and dismissed. The counterclaim will be dismissed.
I’m going to make that a final and [appealable] Order. I think it’s time we sort
out, at least what I find, inconsistency between the [Foreclosure Law] and the cited
portion of the [P]robate [A]ct that seems to give me almost unlimited power in this
situation when read with the paragraphs preceding it. The foreclosure at this time is
being ordered to be held on hold over the objection of the bank. The Court has told
the bank that if they want to file a petition to move [the foreclosure proceeding] from
my probate court and back into chancery, they can do that. I’m not giving any time
limit. They need some time to decide whether or not that would be a proficuous idea.
And today I’ll need an Order to that effect.
And I’m hoping that we will find out whether or not in a probate situation a judge
can strip, change, amend, vacate a foreclosure and let the estate sell the property for
whatever it can get and divvy up the proceeds. So[,] thank you, gentlemen, very
much. Thank you for your research and I will see–perhaps I’ll see Mr. Shaw when he
decides to move it into foreclosure, but right now it’s on hold.”
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¶ 14 After the hearing, the parties submitted a written order conforming to the probate court’s
oral pronouncement. The order asserted that it was immediately appealable under Illinois
Supreme Court Rule 304(b)(1) (eff. Feb. 26, 2010), and, in the alternative, it also included
language pursuant to Illinois Supreme Court Rule 304(a) (eff. Feb. 26, 2010), purporting to
make it immediately appealable. The executor timely appeals.
¶ 15 II. ANALYSIS
¶ 16 On appeal, the executor argues that the probate court erred in refusing to compel the sale
of the subject property under the Probate Act and in allowing the bank to proceed in its
foreclosure action. The executor reasons first that section 20-6(b) of the Probate Act (755
ILCS 5/20-6(b) (West 2012)) empowers the probate court to direct the sale of the subject
property. The executor next concludes that there is no conflict between section 20-6(b) and
the Foreclosure Law and that, even if there is, the Probate Act controls here. From these
propositions, the executor concludes that the probate court erred in refusing to compel the
sale of the property under section 20-6(b). As a result, the executor requests that we reverse
the court’s dismissal of the petitions and the counterclaim and that we remand the cause for
further proceedings under section 20-6. We begin with a review of the pertinent statutory
language.
¶ 17 A. The Language of Section 20-6 of the Probate Act
¶ 18 Initially, the executor asks that we review and construe the language of section 20-6(b) to
determine the powers of the probate court under that provision. An issue of statutory
interpretation presents an issue of law and is reviewed de novo. Hooker v. Retirement Board
of the Firemen’s Annuity & Benefit Fund, 2013 IL 114811, ¶ 15.
¶ 19 Section 20-6 of the Probate Act states, pertinently:
“In any proceeding to sell or mortgage real estate the court may:
***
(b) direct the sale or mortgage of the property free of all mortgage, judgment or
other liens that are due, provide for the satisfaction of all those liens out of the
proceeds of the sale or mortgage and settle and adjust all equities and all questions of
priority among all interested persons;
(c) with the assent of the owner of a mortgage lien that is not due, direct that the
property be sold or mortgaged free of the lien and provide for the satisfaction of the
lien out of the proceeds of the sale or mortgage[.]” 755 ILCS 5/20-6(b), (c) (West
2012).
There is little in the way of authority interpreting section 20-6 of the Probate Act. When
interpreting a statute, the cardinal rule is to ascertain and give effect to the intent of the
legislature. National City Mortgage v. Bergman, 405 Ill. App. 3d 102, 109 (2010). The
language of the statute is the best indication of the legislature’s intent. Murray v. Chicago
Youth Center, 224 Ill. 2d 213, 235 (2007). The statute’s language must be given its plain and
ordinary meaning, and we are not free to construe a statute in a manner that changes that
meaning. Id. If the statutory language is clear and unambiguous, we must give effect to that
plain and ordinary meaning without resorting to other canons or aids of statutory
interpretation. Id.-5-
¶ 20 Section 20-6 begins with the phrase: “In any proceeding to sell or mortgage real estate
the court may: ***.” 755 ILCS 5/20-6 (West 2012). This phrase contains two items worthy
of note: first, by its own unambiguous terms, it applies to “any proceeding to sell *** real
estate.” This raises the question, what constitutes a probate proceeding to sell real estate? The
second noteworthy item is the phrase, “the court may.” The use of “may” in a statute, except
in extraordinary circumstances affecting the public interest (and not present here), indicates
the legislature’s choice to make the statute permissive instead of mandatory. Canel v.
Topinka, 212 Ill. 2d 311, 326 (2004). Here, the use of “may” confers discretion upon the
probate court. The question associated with this phrase is how to measure the probate court’s
exercise of discretion. The answers to both questions are given in a preceding section of the
Probate Act.
¶ 21 Section 20-4(a) provides, pertinently, “By leave of court and upon such terms as the court
directs, a representative of a decedent’s estate may sell *** any real estate or interest therein
to which the decedent had claim or title, *** when it is necessary for the proper
administration of the decedent’s estate.” 755 ILCS 5/20-4(a) (West 2012). This subsection
provides first that a sale of a decedent’s real estate requires a petition to the probate court.
Thus, the representative must ask the probate court for permission to sell the real estate
before selling the property. Id. Likewise, this subsection also provides the touchstone for the
probate court’s discretion, namely, whether a sale of the real estate is necessary for the
proper administration of the decedent’s estate. Id. In order to properly invoke section 20-6,
then, the representative of the decedent’s estate must ask for and receive the probate court’s
permission to sell the property, and, in deciding whether to grant leave to sell the property,
the probate court considers whether such a sale is necessary for the proper administration of
the decedent’s estate.
¶ 22 Returning to section 20-6, we note that the condition precedent to employing subsection
(b) is a “proceeding to sell *** real estate.” 755 ILCS 5/20-6 (West 2012). Once the probate
court has determined to engage in such a proceeding, subsection (b) may be invoked.
Subsection (b) contains three components: (1) the court has the power to direct the sale of
real estate free and clear of any existing encumbrances; (2) the existing encumbrances will be
satisfied from the proceeds of the sale of the property; and (3) the court will determine and
adjust the priorities of the claimants to the encumbrances. 755 ILCS 5/20-6(b) (West 2012).
Focusing on the first component, we also note that, by its express terms, it applies to “all
mortgage, judgment[,] or other liens that are due.” (Emphasis added.) Id. In addition, the
word “and,” situated between the second and third components, is generally given a
conjunctive meaning such that all of the terms linked by it must be performed together. See
County of Du Page v. Illinois Labor Relations Board, 231 Ill. 2d 593, 605-06 (2008). We
note, however, that “and” may have a disjunctive meaning, depending on the context. Id. at
606. Here, “and” makes more sense conjunctively, because a disjunctive use renders one or
two of the components occasionally superfluous, in violation of the canon of construction
that every part of a statute be given meaning and effect (Winn v. Mitsubishi Motor
Manufacturing of America, Inc., 308 Ill. App. 3d 1054, 1059 (1999)); likewise, if the
legislature meant the disjunctive, it certainly could have easily used “or” to indicate a
disjunctive construction (as it did in the first component of this very provision). See In re
Jaime P., 223 Ill. 2d 526, 538 (2006). Thus, the conjunctive “and” indicates that the
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legislature intended that all three components of the provision be applied together, or they
not be applied at all.
¶ 23 Although not a precedential decision, we note that in In re Estate of Jump, 2011 IL App
(5th) 100466-U, the court interpreted section 20-6(b) in the same manner as we have above:
“In the instant case, the statute in question contains three components: first, that the
court has the power to direct the sale or mortgage of the property; second, that
existing liens be satisfied by the proceeds of the sale; and third, that the court
determine and adjust the priorities of the claimants. The three clauses are connected
by an ‘and,’ indicating the legislature’s intent to have the provisions applied all
together or not at all. Thus, the provisions of this statute must be read together. A
plain reading of the statute therefore indicates that the court is not vested with
discretion with regard to each of the three components but instead with the power to
apply the subsection in its entirety.” Id. ¶ 8.
¶ 24 Obviously, we cannot cite a nonprecedential decision as authority for our analysis.
Rather, we cite it as an example of a court’s reasoning and as a reasonability check. Insofar
as Jump goes, then, our analysis and conclusion are neither novel nor unwarranted.
Moreover, the court was analyzing precisely the same statute that is at issue in this case.
Accordingly, our analysis is strengthened by knowing that another court, covering exactly the
same ground, reached the same conclusion as we do: section 20-6(b) must be employed all
together or not at all.
¶ 25 Continuing our examination of the statutory language, section 20-6(c) is also relevant. It
states that the probate court may, “with the assent of the owner of a mortgage lien that is not
due, direct that the property be sold *** and provide for the satisfaction of the lien out of the
proceeds of the sale.” 755 ILCS 5/20-6(c) (West 2012). First, the court may order the sale of
a property under a mortgage that is not due at the time of the sale (with the mortgagee’s
assent), which is a circumstance distinct from the application of subsection (b). Second, the
court may satisfy the lien from the proceeds of the sale, but subsection (c) does not indicate
that it may adjust the lien priority or otherwise provide for pro rata satisfaction of the lien,
unless the assent of the mortgagee implies that it may allow a short sale and subsequent
satisfaction. All of these powers and conclusions flow from the plain language of subsection
(c), given its ordinary and commonly understood meaning.
¶ 26 The interplay between subsections (b) and (c) helps to reveal the legislative intent. In the
universe of mortgaged property subject to probate proceedings, there are two conditions:
either the mortgage on the property is due at the time of the hearing, or it is not due at that
time. If it is due (i.e., the decedent or the representative of the decedent’s estate has not made
the required payments under the mortgage agreement), subsection (b) applies; if it is not due
(i.e., the payments required under the mortgage agreement are current), subsection (c)
applies. Invoking either subsection must be done in the context of a proceeding to sell real
estate (755 ILCS 5/20-6 (West 2012)), and the court must have determined that the sale was
necessary for the proper administration of the decedent’s estate (755 ILCS 5/20-4(a) (West
2012)).
¶ 27 There is a further difference in the application of the subsections. Under subsection (c),
the assent of the mortgagee, or owner of the mortgage lien, is necessary to sell the property.
Under subsection (b), the assent of the mortgagee is not necessary to sell the property. 755
ILCS 5/20-6(b), (c) (West 2012).
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¶ 28 We now turn to the parties’ arguments regarding the construction of section 20-6(b). The
executor ultimately argues that section 20-6(b) empowers the probate court to direct the sale
of the decedent’s property free and clear of all encumbrances, to adjust the existing
encumbrances, and to satisfy the adjusted encumbrances from the proceeds of the sale. We
agree with the executor’s conclusion, but we disagree with much of her reasoning.
¶ 29 The executor argues that section 20-6(b) is properly invoked when the decedent’s
property is “underwater,” meaning that the indebtedness on the property is greater than the
property’s fair market value. While we might agree that such a situation may and should
influence the probate court’s thinking on whether the use of subsection (b) is necessary for
the proper administration of the decedent’s estate, we cannot accept the argument that
subsection (b) automatically applies in situations where the decedent’s property is
underwater, because the plain language of the provision belies the claim. Subsection (b)
states that the probate court may “direct the sale *** of the property free of all mortgage,
judgment[,] or other liens that are due.” 755 ILCS 5/20-6(b) (West 2012). By its very terms,
subsection (b) applies only to situations involving property for which the mortgage is due at
the time of the proceeding to sell it. (This is confirmed by looking at subsection (c), which
expressly deals with property for which the mortgage is not due at the time of the
proceeding.) Thus, while the consideration that a property is underwater may be important to
the probate court in deciding whether a sale of that property is necessary for the proper
administration of the decedent’s estate, it has nothing to do with whether the property must
be sold under the auspices of section 20-6(b).
¶ 30 The executor takes issue with the bank’s interpretation of section 20-6 in the proceeding
below. We need not consider her contentions, as we will next deal with the bank’s
construction of section 20-6(b) on appeal. Suffice it to say that, according to the executor, the
plain language of this provision contradicts any attempt in the bank’s construction to gainsay
the conclusion that section 20-6(b) empowers the probate court to direct and oversee the sale
of a decedent’s property.
¶ 31 The executor also explains that her construction of section 20-6(b) is informed by
consideration of the reasons for the law, the problems the law seeks to remedy, the purposes
the law is seeking to achieve, and the consequences of different ways of construing the law.
We do not believe that the executor’s argument is well supported. While she cites a proper
rule of statutory construction (see Chicago Teachers Union, Local No. 1 v. Board of
Education of the City of Chicago, 2012 IL 112566, ¶ 15), she is unable to identify legislative
history or other interpretations of the provision to support her claim that it was enacted to
remedy the situation in which a decedent’s property is underwater and the decedent’s estate
is insolvent or of minimal value, or that it was enacted to provide an avenue to maximize the
value of the decedent’s property (at the potential expense of the lienholders’ interests). We
note, however, that the considerations the executor cites may be useful to the court in
determining whether a sale under section 20-6(b) is necessary for the proper administration
of the decedent’s estate. Accordingly, we will not further address the executor’s arguments
concerning the interpretation of section 20-6(b), particularly because they do not address the
Probate Act as a whole or even all of the language in that section.
¶ 32 We now turn to the bank’s construction of section 20-6(b). The bank makes two
arguments. First, the bank argues that section 20-6(b) does not automatically trump a
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foreclosure action brought under the Foreclosure Law. This is a manifestly true statement
because, as we have seen, section 20-6 is employed at the discretion of the probate court.
¶ 33 The bank further argues that, in this circumstance, we should employ the principle of
“first in time, first in right,” citing Cole Taylor Bank v. Cole Taylor Bank, 224 Ill. App. 3d
696 (1992). While Cole Taylor deals with the first-in-time principle as regards lien priority,
which is a circumstance not present in this case, we do not believe that the bank’s invocation
of the principle is completely inapt. We note that other areas of the law have enshrined the
first-in-time principle. E.g., In re Marriage of Potts, 297 Ill. App. 3d 110, 115 (1998)
(obligations to first-in-time family must be fully met before obligations to later-in-time
family can be considered); In re Petition to Annex Certain Property to the City of Wood
Dale, 244 Ill. App. 3d 820, 827 (1993) (first-filed annexation petition is generally given
priority); In re Marriage of Alder, 98 Ill. App. 3d 525, 526 (1981) (“[t]he court which first
acquires jurisdiction retains its jurisdiction to the exclusion of coordinate courts”). We
further believe that the analogy to lien cases invokes the principle sufficiently to raise the
argument for our consideration. See Ill. S. Ct. R. 341(h)(7) (eff. Feb. 6, 2013) (an argument
not supported by pertinent authority is forfeited). Successfully raising the argument, of
course, is not the same as prevailing on it, and the executor vehemently disputes the bank’s
conclusion.
¶ 34 The executor argues that, even under the first-in-time rubric, the bank still loses because
she opened the probate case long before the bank filed its foreclosure action. The executor
properly notes that, on June 22, 2012, she petitioned to probate the decedent’s estate and that,
on June 25, 2012, the probate court entered an order opening the estate for administration and
appointing the executor to her position. The opening of the estate in probate occurred well
before the bank’s December 2012 initiation of the foreclosure action. According to the
executor, opening the probate action subjected the entirety of the decedent’s estate, including
the subject property, to all of the powers of the probate court, including those under section
20-6 of the Probate Act. The executor argues that it was she who filed first and that pursuant
to the first-in-time doctrine the probate court should have the exclusive jurisdiction over the
judicially ordered sale of the subject property. We disagree.
¶ 35 As an initial matter, we note that the executor does not claim that the first-in-time
doctrine is either inapplicable or preempted by one of the various exceptions to the doctrine.
Likewise, we perceive nothing in the facts of this matter that would suggest that applying the
doctrine is either improper or excepted. Accordingly, we accept its application here. The
question then becomes, what initiates the cause of action for the purposes of determining
who filed first?
¶ 36 Our analysis here is guided by analogy to section 2-619(a)(3) of the Code (735 ILCS
5/2-619(a)(3) (West 2012)), which provides a mechanism to secure the involuntary dismissal
of a later-filed claim when an earlier-filed claim is already pending. The key in these
circumstances is whether the parties are the same and the causes of action are the same. The
same-parties requirement is satisfied where the litigants’ interests are sufficiently similar
even thought the litigants may differ in name or number. In re Estate of Hoch, 382 Ill. App.
3d 866, 869 (2008). Similarly, the same-action requirement is satisfied when the relief
requested is based on substantially the same set of facts. Id. The key inquiry for the
same-action requirement is whether both arise out of the same transaction or occurrence, and
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not whether the legal theory, issue, burden of proof, or relief sought materially differs
between the two actions. Id.¶ 37 With these principles in mind, we cannot say that the probate action and the foreclosure
action involve either the same parties or the same action. The probate action involved the
executor, trying to distribute the estate according to the decedent’s wishes. The foreclosure
action involved the bank, and all others who have interests in the subject property, attempting
to recover on the encumbrances on the subject property. Thus, the parties are not the same in
the probate action and in the foreclosure action.
¶ 38 Further, the two actions did not arise out of the same transaction or occurrence. The
probate action arose out of the decedent’s death. The foreclosure action arose out of the
decedent’s failure to pay installments on her indebtedness to the bank. The motivating action
or occurrence for each is different. Therefore, we cannot conclude that the two actions are the
same for purposes of the first-in-time doctrine and its analogy under section 2-619(a)(3).
¶ 39 Based on our conclusions as to the parties and actions, we must reject the executor’s
claim that hers is the first-filed action. The actions are different, arising out of distinct
occurrences or transactions, and the parties do not have similar interests in the actions. Thus,
the fact that the executor’s probate action was filed before the bank’s foreclosure action does
not mean that everything connected to the probate action must have priority over the
foreclosure action.
¶ 40 If, however, we change our focus to the foreclosure action and the petitions for approval
to sell the subject property, we get a clear result under the principles discussed above.
Looking at the issue of whether the actions are the same, we see that each action invokes
judicial oversight of the sale of the subject property. Each seeks to liquidate the subject
property and to transfer it to a new owner free and clear of prior encumbrances. Thus, the
transactions in each action are sufficiently similar under the first-in-time doctrine.
¶ 41 Likewise, the parties have the same interests. In the foreclosure action (and counterclaim)
and in the petitions for approval, the parties on each side of the caption are the same, namely,
the owner/estate/executor and the bank and other lienholders. In the two actions, each side
has the same interests: the executor is seeking to satisfy all of the lienholders and to
maximize the value received for the sale of the subject property; the bank is seeking to
recover the indebtedness under its mortgage on the subject property and to maximize its
recovery. The interests in the two actions are sufficiently similar to be able to deem that the
parties are the same. Because the parties and the actions are the same, the action that was first
filed takes priority. Estate of Hoch, 382 Ill. App. 3d at 869.
¶ 42 Here, on December 18, 2012, the bank filed its foreclosure action. On March 12, 2013,
the executor filed her first petition for approval of the sale of the subject property. On May
28, 2013, she filed her counterclaim to the foreclosure action, and on August 23, 2013, she
filed the second petition for approval, based on the August 15, 2013, contract to sell the
subject property. We note that the executor does not specify when the contract underlying the
first petition was signed. (In any event, we do not believe that the execution of a contract
would necessarily serve to give an action seeking judicial approval of the sale precedence
over an action filed after the execution of the contract but before the action based on it;
although the argument could be made, it is not made here.) Thus, because the bank’s
foreclosure action was filed before the first petition for approval, the foreclosure action
would have priority over the petition for approval.
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¶ 43 This does not, however, end the inquiry. Whether and what kind of an action is first filed
would seem, under these circumstances, to be factors a probate court should consider in
determining whether to direct a sale pursuant to section 20-6. Further, the probate court
should consider these factors in determining whether the sale is necessary for the proper
administration of the decedent’s estate. To determine the effect of the first-in-time doctrine
here, we will consider below the probate court’s exercise of discretion.
¶ 44 Returning to the bank’s argument regarding section 20-6(b), the bank next contends that
the section is largely irrelevant because the mortgagee chooses whether to allow a sale under
the auspices of the Probate Act or the Foreclosure Law. In support, the bank cites In re Estate
of Funk, 221 Ill. 2d 30, 93 (2006), which stated, “If a secured creditor does not wish to avail
itself of [the benefits of probate administration], it retains the option of undertaking
foreclosure proceedings on its own. Nothing in the Probate Act forecloses that remedy.” Of
course, the quoted passage has absolutely nothing to do with whether the probate court
should proceed under the Probate Act and order the sale of the decedent’s property or
whether it should decline approval to sell in favor of a foreclosure proceeding. Instead, it
deals with the mortgagee’s choices, not the court’s, and, as a result, Estate of Funk is
inapposite. Moreover, under the circumstances of this case, the bank’s argument is
unavailing because we are deciding both whether the probate court had the power to order
the sale under the Probate Act and whether it should have exercised its discretion to do so,
thereby eclipsing the bank’s first-filed foreclosure action. In other words, this case involves a
question of the probate court’s discretion, not the bank’s discretion. Accordingly, we reject
the bank’s argument, which effectively attempts to edit the probate court’s discretion out of
section 20-6(b).
¶ 45 The bank also argues that the Foreclosure Law and section 20-6 of the Probate Act are
roughly equivalent, with the Foreclosure Law being somewhat more detailed and specific.
The bank argues that, because the more specific law applies over the more general, the
Foreclosure Law should apply. There are at least two problems with the bank’s argument.1
¶ 46 First, the canon of construction that the more specific law controls over the more general
law seems inapposite. As noted, when construing a statute, the cardinal rule is to ascertain
and give effect to the legislature’s intent in enacting the statute. Moore v. Green, 219 Ill. 2d
470, 479 (2006). Where two statutes conflict, however, we must attempt to construe them
together, if reasonable and possible. Id. In essaying this construction, we may consider the
purposes of the statutes, the problems that they target, and the goals that they seek to achieve.
Id. at 479-80. In general, we will presume the more specific provision to control over the
more general provision. Id. at 480. Here, according to the bank, both statutes cover the same
ground in the same way, with the Foreclosure Law being more detailed. This assertion does
not appear to invoke the specific-versus-general canon of construction, because the bank
does not identify any way in which the laws conflict. In fact, the bank suggests that they are
roughly equivalent, thus undercutting its argument that the canon should apply. This also
leads into the second, and more important, problem with the bank’s argument.
¶ 47 The subject matter of the two statutes is slightly, but significantly, different. The
Foreclosure Law provides for a forced judicial sale of real property, at the behest of the
1
We note that the executor makes the converse argument: it is the Probate Act that is more specific
here, so it should apply. For the same reasons, we reject this contention.
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mortgagee. 735 ILCS 5/15-1404 (West 2012). By contrast, the Probate Act provides for the
private sale of property, by leave of and overseen by the court and if necessary for the proper
administration of the decedent’s estate, at the behest of the executor or administrator of the
estate. 755 ILCS 5/20-6 (West 2012). In a foreclosure setting, the mortgagee has initiated the
action and the court forces the sale of the property. 735 ILCS 5/15-1404 (West 2012). In the
probate setting, the representative of the decedent’s estate has searched for a willing buyer
and seeks leave of the court to consummate the sale. 755 ILCS 5/20-6 (West 2012). Both
provisions protect the rights of other lienholders of the property, but the focus of each
provision is different. In a foreclosure action, the focus is on maximizing the mortgagee’s
recovery; in the probate action, the focus is on maximizing and properly administering the
decedent-mortgagor’s estate. These different purposes and focuses demonstrate that the two
laws do not actually cover the same subject matter, even though they adopt similar
procedures to protect the rights of lienholders that will be affected by the sale of the property
and they involve the court in overseeing the process. Accordingly, we believe that the
specific-versus-general canon of construction does not apply under the circumstances of this
case, and we do not employ it in construing section 20-6.
¶ 48 B. The Probate Court’s Rulings
¶ 49 We turn next to the probate court’s rulings regarding section 20-6 and the court’s exercise
of its discretion. When a matter is committed to the trial court’s discretion, we review the
trial court’s judgment for an abuse of that discretion. E.g., Fraser v. Jackson, 2014 IL App
(2d) 130283, ¶ 28 (the decision whether to impose sanctions is committed to the trial court’s
discretion and that decision will be reversed only for an abuse of that discretion); Powell v.
Dean Foods Co., 2013 IL App (1st) 082513-B, ¶ 90 (the admissibility of evidence subject to
a probative-value-versus-prejudicial-effect balancing test is committed to the trial court’s
discretion and the court’s decision will not be reversed absent an abuse of that discretion);
Gastroenterology Consultants of the North Shore, S.C. v. Meiselman, 2013 IL App (1st)
123692, ¶ 9 (the grant or denial of a preliminary injunction is a matter committed to the
sound discretion of the trial court, and its decision will not be disturbed absent an abuse of
that discretion). Here, based on the terms of section 20-6, whether to employ subsection (b)
was a matter within the probate court’s discretion, and we review its decision for an abuse of
that discretion. An abuse of discretion occurs where the trial court’s decision is arbitrary,
fanciful, or unreasonable or where no reasonable person would take the view adopted by the
trial court. AT&T v. Lyons & Pinner Electric Co., 2014 IL App (2d) 130577, ¶ 24.
¶ 50 We are somewhat hampered by the lack of a verbatim transcript of the in camera
discussion before the probate court ruled. Nevertheless, there is enough information in the
record to allow us to determine what occurred and, more importantly, how or whether the
court exercised its discretion.
¶ 51 Of import to our understanding of the probate court’s reasoning and exercise of discretion
is the parties’ open-court explanation of their positions during the in camera discussion. The
executor’s counsel noted that he understood the probate court’s disagreement with the
executor’s position that section 20-6(b) empowered the court to assent to a sale of the
decedent’s property, because she had not been able to present authority (apparently beyond
the plain language of the provision itself) to support her request to direct a short sale
extinguishing the existing encumbrances and distribute the resulting funds in a pro rata
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fashion. This summarization suggests that the probate court simply refused to acknowledge
the plain language of section 20-6 and that it disbelieved that it had any power under the
Probate Act to dispose of the property once a foreclosure action had been initiated under the
Foreclosure Law.
¶ 52 The probate court’s oral holding confirms our understanding:
“I think it’s time we sort out at least what I find, inconsistency between the
[Foreclosure Law] and the cited portion of the [P]robate [A]ct that seem to give me
almost unlimited power in this situation when read with the paragraphs preceding it.
***
And I’m hoping that we will find out whether or not in a probate situation a judge
can strip, change, amend, vacate a foreclosure and let the estate sell the property for
whatever it can get and divvy up the proceeds.”
¶ 53 Based on the foregoing, namely, the executor’s summary of the in camera discussion and
the quoted portions of the probate court’s oral holding, we conclude that the probate court did
not engage in any exercise of discretion in deciding not to apply section 20-6 to the
proceedings. Instead, the probate court seemed almost nonplussed by section 20-6’s grant of
authority and believed that there was inconsistency between two statutes that, as we have
discussed, are procedurally similar but deal with distinct subjects. Moreover, the probate
court characterized the issue as one of priority between competing actions (can a probate
court “strip, change, amend, [or] vacate a foreclosure and let the estate sell the property for
whatever it can get and divvy up the proceeds”) instead of whether to employ its powers
under section 20-6.
¶ 54 Given that the probate court did not exercise its discretion here, the issue turns to the
remedy for this failure. Generally, where a trial court does not exercise its discretion under a
statute, because it erroneously believes that it has no discretion (or fails to recognize that the
provision confers discretion), the trial court has committed error. Estate of Oglesby v. Berg,
408 Ill. App. 3d 655, 659 (2011). Nevertheless, such an error might be harmless, and, if the
error is, in fact, harmless, then the trial court’s judgment need not be disturbed. Id.¶ 55 The question now becomes whether the probate court’s failure to exercise its discretion
was harmless error. For us to determine that harmless error occurred, we must be able to say
that, unequivocally, there is no set of circumstances under which the probate court could
have plausibly decided in favor of the executor. See People v. Higgins, 71 Ill. App. 3d 912,
927-28 (1979) (denying the defendant’s motion was the “ ‘only’ ” proper conclusion that
could have been reached).
¶ 56 We have outlined above some of the factors a court must consider in determining whether
to proceed under section 20-6. The touchstone is whether an agreed sale, between the estate
and a buyer and overseen by the court, is necessary for the proper administration of the
decedent’s estate. 755 ILCS 5/20-4(a) (West 2012). We have also noted that the priority
between competing claims, such as an action to foreclose on the property versus a request for
leave to sell the property under section 20-6, is a factor the court should consider. Here, we
determined that the executor’s request for leave to sell the property was subordinate to the
bank’s foreclosure action. That priority does not, however, decide the matter, because the
question of whether a sale under section 20-6 is necessary for the proper administration of
the decedent’s estate remains paramount. Further, the parties might deem other factors
relevant. Examples might be: maximizing the value of the estate’s assets; maximizing the
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recovery of the estate’s creditors; and the public policy underpinning a secured creditor’s
ability to recover its debt from the estate.
¶ 57 The probate court did not focus on the issue of the proper administration of the
decedent’s estate in considering the executor’s petitions to sell the subject property, and, in
the absence of such an inquiry, we cannot predict how the court would or should exercise its
discretion. We cannot foresee whether the probate court would allow the executor’s request
following argument on the issue of whether the sale is necessary for the proper
administration of the decedent’s estate and so we cannot determine whether the probate
court’s failure to exercise its discretion was harmless error. See People v. Pinkston, 2013 IL
App (4th) 111147, ¶ 18 (“We cannot foresee whether the court would have allowed
defendant’s discovery request in whole or in part following an opportunity to argue good
cause. We cannot determine whether the court’s failure to exercise its discretion was
harmless.”). Because we cannot say that the error here was harmless, we must remand the
cause to allow the probate court to exercise its discretion under section 20-6, after
considering whether the executor’s request is necessary for the proper administration of the
decedent’s estate.
¶ 58 III. CONCLUSION
¶ 59 For the foregoing reasons, the judgment of the circuit court of Lake County is reversed,
and the cause is remanded to allow the trial court to properly exercise its discretion under
section 20-6 of the Probate Act.
¶ 60 Reversed and remanded.
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