Alward v. Jacob Holding of Ont. L.L.C.
| Decision Date | 13 September 2019 |
| Docket Number | NO. 5-18-0332,5-18-0332 |
| Citation | 2019 IL App (5th) 180332,435 Ill.Dec. 630,139 N.E.3d 1010 |
| Parties | Phillip D. ALWARD, Plaintiff-Appellant, v. JACOB HOLDING OF ONTARIO L.L.C., Grant P. Alward, and Carrie M. Alward, Defendants (Jacob Holding of Ontario L.L.C., Defendant-Appellee). |
| Court | United States Appellate Court of Illinois |
Scott E. Garwood and Craig W. Runyon, of Samuels, Miller, Schroeder, Jackson & Sly, LLP, of Decatur, for appellant.
Brad A. Elward, Michael T. Kokal, and Craig L. Unrath, of Heyl, Royster, Voelker & Allen, P.C., of Peoria, for appellee.
¶ 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 plaintiff's motion for summary judgment. This appeal followed.
¶ 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:
¶ 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, plaintiff's 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. Plaintiff's legal counsel summarized the following issues via e-mail:
The sale of the property from the Alwards to the third-party purchaser did not materialize. The record supports that the Alwards were unaware of the existence of the land trust in 2012. However, the record is unclear whether the Alwards had knowledge of the land trust in June 2015.
¶ 8 In September 2015, the Alwards entered into a loan agreement, secured by a mortgage held by Jacob Holding, without plaintiff's knowledge. While the record is unclear whether the Alwards had knowledge of the land trust at that time, it is undisputed that, prior to entering into the agreement, the Alwards did not secure a trustee's deed or inform Jacob Holding of the land trust. Shortly thereafter, Jacob Holding recorded the mortgage with the Christian County Recorder of Deeds.
¶ 9 On May 27, 2016, plaintiff directed the trustee of the land trust to dissolve the trust by executing a deed to plaintiff. The deed was recorded on June 2, 2016. On June 9, 2016, plaintiff filed a quiet title complaint alleging that he held superior, fee simple title to the property. Plaintiff asserted that the 2012 quitclaim deed was ineffective to convey any interest to the Alwards because the property was held in a land trust at the time the deed was executed. Plaintiff further asserted that the recorded mortgage by Jacob Holding was "ineffective to pledge the Property as security for any loan because * * * [the Alwards] had no ownership interest in the Property." Plaintiff requested the circuit court to declare the quitclaim deed and mortgage invalid and remove the cloud on title from public record.
¶ 10 On February 22, 2017, plaintiff filed a motion for summary judgment alleging that no genuine issue of material fact existed with respect to the complaint to quiet title. Jacob Holding subsequently filed a response to plaintiff's motion for summary judgment and a cross-motion for summary judgment. Jacob Holding asserted that Illinois case law permitted a beneficiary to convey property rights even if the property was held in a land trust; thus, the quitclaim deed assigned plaintiff's beneficiary interests to the Alwards. Alternatively, Jacob Holding asserted that it was protected from adverse claims as a "bona fide purchaser for value" because it had no notice of defect in the title.
¶ 11 On May 17, 2018, the circuit court entered an order denying plaintiff's motion for summary judgment and granting Jacob Holding's motion for summary judgment. The court reasoned that it would be unjust to allow plaintiff "to subsequently take back this transfer on which subsequent parties have relied" because plaintiff had the ability to direct the transfer of the land trust and "fully intended to do so." The court did not clarify whether plaintiff had conveyed legal title or his beneficial interest in the property when he executed the quitclaim deed. Plaintiff filed a timely appeal.
¶ 13 On appeal, plaintiff contends that the circuit court erred in resolving the cross-motions for summary judgment in favor of Jacob Holding because plaintiff was not the title holder and lacked authority to convey title to property held in a land trust. Plaintiff asserts that the court should have invalidated the quitclaim deed and had the trustee retain title.
¶ 14 In response, Jacob Holding contends that the court did not err because the land trust expressly authorized plaintiff to direct the trustee to convey title to the property. In an alternative argument, Jacob Holding asserts that, even if title was not conveyed, plaintiff, as beneficiary of the land trust, assigned his interest by executing the quitclaim deed to the Alwards, who, effectively, became beneficiaries of the land trust. We agree with plaintiff.
¶ 15 A quiet title action is an equitable proceeding in which a party seeks to remove a cloud on title to a property. Gambino v. Boulevard Mortgage Corp. , 398 Ill. App. 3d 21, 52, 337 Ill.Dec. 257, 922 N.E.2d 380 (2009). "A cloud on title is the semblance of title, either legal or equitable, appearing in some legal form but which is, in fact, unfounded or which it would be inequitable to enforce." Id. A plaintiff in a quiet title action cannot claim a cloud on his title unless he actually holds title to the property. Id. ; see also Marlow v. Malone , 315 Ill. App. 3d 807, 812, 248 Ill.Dec. 487, 734 N.E.2d 195 (2000). A plaintiff must prevail on the strength of his own title, rather than merely on defects in a defendant's title. Diaz v. Home Federal Savings & Loan Ass'n of Elgin , 337 Ill. App. 3d 722, 726, 272 Ill.Dec. 199, 786 N.E.2d 1033 (2002).
¶ 16 Summary judgment is appropriate when all pleadings, depositions, admissions, and affidavits demonstrate there is no genuine issue of material fact and, therefore, the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1005(c) (West 2018). Where parties file cross-motions for summary judgment, they concede the absence of a genuine issue of material fact, agree that only questions of law are involved, and invite the court to decide the issues based on the record. Stevens v. McGuireWoods LLP , 2015 IL 118652, ¶ 11, 398 Ill.Dec. 13, 43 N.E.3d...
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