NAB Bank v. LaSalle Bank, N.A.

• Decision Date: 22 January 2013
• Docket Number: Docket No. 1–12–1147.
• Parties: NAB BANK, an Illinois Chartered Banking Institution, Plaintiff, v. LaSALLE BANK, N.A., as Successor Trustee to American National Bank and Trust Company of Chicago, et al., Defendants (Edward G. Tom and Deborah A. Tom, Counterplaintiffs–Appellees; Wilson Moy, Counterdefendant–Appellant).
• Court: United States Appellate Court of Illinois

2013 IL App (1st) 121147

984 N.E.2d 154

368 Ill.Dec. 429

NAB BANK, an Illinois Chartered Banking Institution, Plaintiff,

v.LaSALLE BANK, N.A., as Successor Trustee to American National Bank and Trust Company of Chicago, et al., Defendants (Edward G. Tom and Deborah A. Tom, Counterplaintiffs–Appellees; Wilson Moy, Counterdefendant–Appellant).

Docket No. 1–12–1147.

Appellate Court of Illinois, First District, First Division.

Jan. 22, 2013.

Horwood Marcus & Berk Chtrd., of Chicago (Jeffrey H. Bunn, of counsel), for appellant.

Tressler LLP, of Chicago (John P. Maniatis, Charmagne Topacio, and Elizabeth Z. Mathieson, of counsel), for appellees.

OPINION

Justice DELORT delivered the judgment of the court, with opinion:

¶ 1 BACKGROUND

¶ 2 This case involves a dispute about the sale price generated at a forced judicial sale of an undivided half-interest in a parcel of real estate. It illustrates the high burden judgment debtors face when trying to overturn such sales because the sale price was too low or the sale was unjust. Fundamental principles of economics and real estate valuation, well recognized in case law, dictate that sales such as the one at issue here are unlikely to generate a price close to the actual appraised value of the subject property. Based on that authority, the court below held that the sale price was neither unjust nor unconscionable. We affirm.

¶ 3 Disputes regarding the subject property, a single-family home in Chicago, began in 1993, and litigation regarding it has lasted almost as long. We set forth only the background necessary to address the issues raised in this latest appeal. In January 2003, the circuit court granted summary judgment in favor of Edward G. Tom and Deborah A. Tom (the Toms) and against Adeline Moy (Adeline) in litigation involving the subject property. Shortly thereafter, in May 2003, Adeline and her husband, Wilson, executed a quitclaim deed (the 2003 deed) conveying the property, which they had owned for over 30 years, to themselves as tenants by the entirety ¹.

¶ 4 On November 18, 2008, the circuit court entered a $612,324.68 judgment in favor of the Toms and against Adeline Moy, who is now deceased. No one has ever paid anything to satisfy the judgment. One reason why is because the tenancy by the entirety insulated the subject property from the Toms' attempts to collect on their judgment against Adeline.

¶ 5 In 2009, the Toms filed an action to set aside the 2003 deed. Because Adeline had died by then, her widower, Wilson, who was also the surviving tenant by the entirety, was joined as a defendant in the new case. Following the authority of Premier Property Management, Inc. v. Chavez, 191 Ill.2d 101, 245 Ill.Dec. 394, 728 N.E.2d 476 (2000), the circuit court set aside the 2003 deed because it was fraudulent and done with the sole intent to avoid Adeline's debt obligation to the Toms. Even though Adeline's obligation had not yet been quantified into the 2008 judgment when Adeline executed the 2003 deed, the court found that the debt had been “established” in 2003 through its January 2003 order granting summary judgment against Adeline. This court affirmed that ruling and determined that title to the subject property, located at 213 West 24th Place in Chicago, was properly vested in the estate of Adeline Moy and her widower, Wilson Moy (Wilson), only as tenants in common and not as tenants by the entirety. NAB Bank v. LaSalle Bank, N.A., 2011 IL App (1st) 102594–U, 2011 WL 10071861.

¶ 6 Thus freed from the obstacle created by the tenancy by the entirety, the Toms continued their efforts to collect their judgment. On May 24, 2011, a levy sale of Adeline's estate's one-half interest in the property was conducted pursuant to article 12 of the Illinois Code of Civil Procedure (Code). 735 ILCS 5/12–101 et seq. (West 2010). The Toms were the only bidders, so their bid of $20,000 was successful. Before the Toms could move to confirm the sale, however, Wilson asked the circuit court to set aside the sale completely because the inadequacy of the sale price rendered the sale unconscionable under section 12–144.5 of the Code (735 ILCS 5/12–144.5 (West 2010)). His motion relied on the Toms' own appraisal, which valued the fee simple interest in the entire property at $280,000. The court denied Wilson's motion, finding that the sale price was adequate. On March 20, 2012, the court entered a detailed order confirming the sale and finding that the sale price was not unconscionable and that the sale was not unjust. The court found, among other things, that the fact that the winning bidder would only obtain an undivided half-interest in the property depressed the sale price far below the market value. The result of the sale was that the Toms and Wilson each owned an undivided half-interest in the subject property. This appeal followed.

¶ 7 ANALYSIS

¶ 8 The relevant statute (735 ILCS 5/12–144.5(b) (West 2010)) (hereinafter the levy statute) provides in pertinent part:

“(b) Upon motion and notice in accordance with court rules applicable to motions generally, including notice to the judgment debtor, the court issuing the underlying judgment shall conduct a hearing to confirm the sale. Unless the court finds that (i) notice as required by law was not given, (ii) the terms of the sale were unconscionable, (iii) the sale was conducted fraudulently, or (iv) justice was otherwise not done, the court shall then enter an order confirming the sale. In making these findings, the court shall take into account the purchase price at the sale in relation to the fair market value of the property less the value of any mortgages and liens.”

The four enumerated standards in this statute are virtually identical to those in the statute governing confirmation of judicial sales of properties following a mortgage foreclosure. The foreclosure law (735 ILCS 5/15–1508(b) (West 2010)) provides in pertinent part:

“(b) Hearing. Upon motion and notice in accordance with court rules applicable to motions generally, which motion shall not be made prior to sale, the court shall conduct a hearing to confirm the sale. Unless the court finds that (i) a notice required in accordance with subsection (c) of Section 15–1507 was not given, (ii) the terms of sale were unconscionable, (iii) the sale was conducted fraudulently, or (iv) that justice was otherwise not done, the court shall then enter an order confirming the sale.”

These rules promote the policies of stability and permanency in judicial sales. World Savings & Loan Ass'n v. AmerUs Bank, 317 Ill.App.3d 772, 780, 251 Ill.Dec. 385, 740 N.E.2d 466 (2000).

¶ 9 It is the objecting party's burden to show why the sale should not be confirmed. Cragin Federal Bank for Savings v. American National Bank & Trust Co. of Chicago, 262 Ill.App.3d 115, 199 Ill.Dec. 215, 633 N.E.2d 1011 (1994) (interpreting foreclosure law). Moy had the right under section 12–122 to redeem the property from the levy sale within six months, but he did not do so. 735 ILCS 5/12–122 (West 2010).

¶ 10 Our primary goal in construing a statute “is to ascertain and give effect to the intent of the legislature.” Carter v. SSC Odin Operating Co., 2012 IL 113204, ¶ 37, 364 Ill.Dec. 66, 976 N.E.2d 344. The plain language of a statute is the most reliable indicator of the legislature's intent. Blum v. Koster, 235 Ill.2d 21, 29, 335 Ill.Dec. 614, 919 N.E.2d 333 (2009). When the statutory language is clear and unambiguous, we apply its plain and ordinary meaning without looking to outside sources for aid. Id. To determine the plain meaning of statutory terms, we consider the statute itself, the subject it addresses, and the intent of the legislature in enacting it. Id. The statute should be read as a whole and construed so that no term is rendered “ meaningless or superfluous.” Id. If, however, the statute is reasonably capable of being understood in different ways, it will be considered ambiguous and the court may then properly consider extrinsic aids of construction to ascertain the legislative intent. Id.

¶ 11 The terms “unconscionable” and “justice” are capable of different meanings, so we are required to first examine case law construing them in the context of the levy statute. There is, however, a paucity of case law construing section 12–144.5. This is perhaps because the provisions requiring the court to formally confirm a levy sale and to apply the four-prong test were added by Public Act 91–924. See Pub. Act 91–924 (eff. July 7, 2000) (adding 735 ILCS 5/12–144.5). Before then, a successful purchaser at a nonforeclosure levy sale could merely request a deed from the sheriff at the end of the redemption period. Northwest Diversified, Inc. v. Desai, 353 Ill.App.3d 378, 387, 288 Ill.Dec. 818, 818 N.E.2d 753 (2004).

¶ 12 In contrast, Illinois courts have scrutinized sales of foreclosed properties for over a hundred years. See, e.g., Slack v. Cooper, 219 Ill. 138, 76 N.E. 84 (1905); Coffey v. Coffey, 16 Ill. 141 (1854); Longwith v. Butler, 8 Ill. 32 (1845). Our supreme court adopted the four-part test almost 50 years before the legislature codified it as part of the Illinois Mortgage Foreclosure Law (735 ILCS 5/15–1101 et seq. (West 2010)). See Levy v. Broadway–Carmen Building Corp., 366 Ill. 279, 288–89, 8 N.E.2d 671 (1937). This long history has provided our courts with frequent occasion to construe the four standards for confirming sales, albeit in the similar context of mortgage foreclosure sales.

¶ 13 Both the levy statute and the foreclosure statute are part of the Illinois Code of Civil Procedure and relate to sales of defendants' property to satisfy judgments against them. “The legislature is presumed to have intended that statutes relating to a single subject and controlled by a single policy will be consistent and harmonious * * *.” Chavda v. Wolak, 188 Ill.2d 394, 402, 242 Ill.Dec. 606, 721 N.E.2d 1137 (1999). Our supreme court has noted that, “[r]eference to another statute by...