613 N.E.2d 737 (Ill. 1993), 73287, Klein v. La Salle Nat. Bank

Docket Nº:73287.
Citation:613 N.E.2d 737, 155 Ill.2d 201, 184 Ill.Dec. 420
Party Name:Hyman KLEIN et al. v. La SALLE NATIONAL BANK, as Trustee, et al. (Morris Aron, Appellant; David Ellis, Appellee).
Case Date:April 15, 1993
Court:Supreme Court of Illinois
 
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Page 737

613 N.E.2d 737 (Ill. 1993)

155 Ill.2d 201, 184 Ill.Dec. 420

Hyman KLEIN et al.

v.

La SALLE NATIONAL BANK, as Trustee, et al. (Morris Aron,

Appellant; David Ellis, Appellee).

No. 73287.

Supreme Court of Illinois.

April 15, 1993.

Rehearing Denied May 28, 1993.

Page 738

[155 Ill.2d 202] [184 Ill.Dec. 421] Fioretti & Des Jardins, Ltd., Chicago (James P. Nally, Robert W. Fioretti, and Mary E. Valenti, of counsel), for appellant.

[155 Ill.2d 203] Thomas G. Draths and Clinton J. Wesolik, Wilson & McIlvaine, Chicago, for appellee.

Justice FREEMAN delivered the opinion of the court:

The issue presented in this case is whether service of process on the trustee of a land trust confers personal jurisdiction in an action against the beneficial interest holder. We conclude it does not.

BACKGROUND

The Kleins, Hyman and Lillian, and the Ellises, David and Catherine, owned 25% interests in a land trust, the res of which was an apartment building in Evanston, Illinois. La Salle National Bank acted as trustee.

The Kleins alleged in a lawsuit filed in January 1990 that the Ellises breached an agreement among the co-beneficiaries to share in the building's operating expenses. The initial complaint identified David Ellis, alone, as a co-beneficiary of the trust. Judgment was sought "against David Ellis and his 25% interest." However, only the bank trustee, not David Ellis, was actually identified as a defendant in the complaint.

In April 1990, the Kleins obtained a default judgment against David Ellis in the circuit court of Cook County pursuant to that complaint.

Subsequently, the circuit court permitted the Kleins to amend the complaint to reflect that David and Catherine Ellis were joint co-beneficiaries of a 25% interest in the trust. In substance, the complaint was unchanged. The bank trustee remained the only party identified as a defendant.

The Kleins obtained a default judgment against Catherine Ellis in October 1990. The order reciting that [155 Ill.2d 204] judgment contains no reference to the April default judgment against David.

It is undisputed that neither David nor Catherine Ellis were served with summons or received a copy of the complaint. Only the bank trustee was served with process. Nevertheless, the Kleins were successful in compelling the Ellises' interest to be sold at a judicial auction in execution upon the default judgments. The sale was approved by order of the circuit court in February 1991.

In March 1991, pursuant to a special and limited appearance, David Ellis filed a petition for relief from the April 1990 default judgment entered against him and sought to stay effect of the order approving the sale (see Ill.Rev.Stat.1989, ch. 110, pars. 2-301, 2-1401, 2-1305). Ellis contended that the judgment was void for lack of personal jurisdiction because he had not been served with summons.

Morris Aron, who had purchased the Ellises' interest, was permitted to intervene (see Ill.Rev.Stat.1989, ch. 110, par. 2-408) in proceedings on the petition.

The circuit court of Cook County denied section 2-1401 relief. The appellate court reversed (No. 1-91-1462 (unpublished order under Supreme Court Rule 23)). We granted Aron's petition for leave to appeal. (134 Ill.2d R. 315.)...

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