Cosley v. Steven Bruce Builders

• Decision Date: 27 September 1985
• Docket Number: No. 83-2531,83-2531
• Citation: 91 Ill.Dec. 558,483 N.E.2d 1044,136 Ill.App.3d 868
• Parties: , 91 Ill.Dec. 558 Donald COSLEY and Darlene Cosley, his wife, Plaintiffs-Appellants, v. STEVEN BRUCE BUILDERS, Defendant, Norwood Federal Savings and Loan Association, Supplemental Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 1044

483 N.E.2d 1044

136 Ill.App.3d 868, 91 Ill.Dec. 558

Donald COSLEY and Darlene Cosley, his wife, Plaintiffs-Appellants, v. STEVEN BRUCE BUILDERS, Defendant Norwood Federal Savings and Loan Association, Supplemental Defendant-Appellee.

No. 83-2531.

Appellate Court of Illinois First District, Fifth Division.

Sept. 27, 1985.

Lucchese, McNish, Wognum & Koeppel, Chicago, for plaintiffs-appellants; Steven M. Shaykin, Vincent F. Lucchese, Chicago, of counsel.

Gomberg & Sharfman, Ltd., Chicago, for appellee; Robert J. Sharfman, Marjorie E. Schaffner, Chicago, of counsel.

LORENZ, Justice.

Plaintiffs Donald and Darlene Cosley, judgment-creditors of Steven Bruce Builders, appeal from an order of the circuit court of Cook County dismissing their citations to discover assets directed to supplemental defendant-appellee Norwood Federal Savings and Loan Association and the village of Arlington Heights and denying the Cosleys' motions that Norwood and Arlington Heights turn over certain assets allegedly belonging to Steven Bruce Builders. The circuit court so ruled because it found that none of the assets at issue belonged to the judgment debtor, Steven Bruce Builders.

We affirm.

The record discloses the following pertinent facts. In 1979 Steven Bruce Builders, Incorporated was the owner and developer of property commonly known as the Walnut Ridge Subdivision in Arlington Heights. Norwood was the land and construction lender. Arlington Heights required that certain sums of money be deposited with Norwood to serve as escrow accounts guaranteeing that Steven Bruce, as owner of the property, would build and maintain certain improvements required by Arlington Heights. Three accounts established at Norwood by Steven Bruce pursuant to those requirements are the subject matter of this appeal.

One account, the improvement fund, was established by an agreement dated April 12, 1979, which provides in pertinent part:

"If the Owner has not completed all of the required public improvements as set forth under the Subdivision Control Regulations of the Village of Arlington Heights prior to September 1, 1980, Norwood Federal Savings and Loan Association will have the right to complete all remaining public improvements. At such time that the public improvements have been completed and at such time that proper waivers have been presented to the Village, the Village of Arlington Heights will authorize the release of the remaining monies on deposit to Norwood Federal Savings and Loan Association." (Emphasis supplied.)

The two other accounts, a maintenance escrow and an inspection escrow, were also established some time in 1979.

On June 17, 1979, the Cosleys entered into a contract with Steven Bruce Builders, Incorporated in which Steven Bruce agreed to sell vacant land and erect a single-family residence thereon in the Walnut Ridge Subdivision. Before the house was completed Steven Bruce ran into financial difficulties resulting in serious deficiencies in its loan payments to Norwood. In early 1980 Steven Bruce entered into negotiations with Norwood to avoid foreclosure. On March 31, 1980 Bruce M. Hershman, Steven Bruce's secretary, informed Arlington Heights in two letters that the Village was authorized to refund the funds in the maintenance and inspection escrow to Norwood. These letters were apparently part of a comprehensive agreement with Norwood which was realized on April 30, 1980 when Norwood accepted from Steven Bruce a deed in lieu of foreclosure for certain lots in the Walnut Ridge Subdivision, including the one being developed for the Cosleys. In return Steven Bruce was released from its obligations to Norwood on the construction loans. Steven Bruce's trustee conveyed trustee quitclaim deeds to Norwood for each of Steven Bruce's lots in the subdivision. Each deed provided, inter alia, that it was:

"[S]ubject to general taxes and any special assessment or other taxes, and subject to any liens, mortgages, leases, contracts, easements, covenants or restrictions, if any, recorded or unrecorded."

Norwood then entered into a contract with the Cosleys to complete construction of their house. That contract has not been included in the record, however at the hearing in this cause Norwood's vice-president, Timothy G. Murphy, testified that the house was completed on different terms than the original contract with Steven Bruce, including a higher price.

On October 21, 1981 the Cosleys filed suit against Steven Bruce Builders (not Steven Bruce Builders, Incorporated, the entity with which they had contracted) for breach of contract. Neither Arlington Heights nor Norwood was made a party. On June 30, 1982 the Cosleys obtained a default judgment for $32,105 and costs. They then commenced the citation proceedings against Arlington Heights and Norwood which resulted in the disclosure of the three escrow accounts described earlier. Ultimately a hearing was held on the Cosleys' motions that Norwood and Arlington Heights...