National Bank of Austin v. First Wisconsin Nat. Bank of Milwaukee

• Decision Date: 28 September 1977
• Docket Number: No. 5010,No. 75-404,BKT,5010,75-404
• Parties: , 10 Ill.Dec. 633 NATIONAL BANK OF AUSTIN, as Trustee under TrustEnterprises, a partnership, James A. Taggart, Sally Taggart, and Fred Brodie, Plaintiffs, Counter-Defendants, Third Party Defendants, and Appellants, v. FIRST WISCONSIN NATIONAL BANK OF MILWAUKEE, a national bank, Defendant, Counter-Plaintiff, Third Party Plaintiff, and Appellee.
• Court: United States Appellate Court of Illinois

Page 119

368 N.E.2d 119

53 Ill.App.3d 482, 10 Ill.Dec. 633

NATIONAL BANK OF AUSTIN, as Trustee under Trust No. 5010 BKT Enterprises, a partnership, James A. Taggart, Sally Taggart, and Fred Brodie, Plaintiffs, Counter-Defendants Third Party Defendants, and Appellants, v. FIRST WISCONSIN NATIONAL BANK OF MILWAUKEE, a national bank Defendant, Counter-Plaintiff, Third Party Plaintiff, and Appellee.

No. 75-404.

Appellate Court of Illinois, Second District.

Sept. 28, 1977.

Joseph B. Cleary, Deerfield, for plaintiff and appellant.

McDermott, Will & Emery, Stephen C. Sandels, John T. Schriver, Kimberly Laidlaw, Chicago, for defendant and appellee.

SEIDENFELD, Justice.

The plaintiffs, counter-defendants, are the trustee of a land trust holding legal title to the property in question (National Bank of Austin, as Trustee under Trust No. 5010, hereinafter Austin Trust); the Builders and Developers of Eastwood Manor Unit No. 4 (BKT Enterprises, a partnership composed of Fred Brodie and James A. Taggart, hereinafter the Partnership); the partners individually as sole beneficiaries of the Austin Trust; and Sally Taggart, the wife of James Taggart. They appeal from a judgment which denied declaratory and injunctive relief relating to construction mortgages in the amount of $550,000 and $3,000,000, respectively. They also appeal from a judgment of foreclosure together with the order approving the report of sale and distribution which was entered on the counter-claim and third-party complaint filed by the defendant, counter-plaintiff mortgagee (The First Wisconsin National Bank of Milwaukee, hereinafter First Wisconsin).

On June 15, 1972, the Austin Trust executed the two mortgages together with the notes secured by the mortgages. On the same date the Partnership executed two construction loan agreements. Fred Brodie, James A. Taggart and Sally Taggart also executed personal guarantees of the mortgages and notes. On August 14, 1973, the Austin Trust filed a declaratory judgment action against First Wisconsin. First Wisconsin answered and counter-claimed for foreclosure of the mortgages using the short form complaint (Ill.Rev.Stat.1975, ch. 95, par. 23.6) and naming James Taggart, Sally Taggart, Fred Brodie, and the Partnership as having personal liability for a deficiency decree (Ill.Rev.Stat.1975, ch. 95, par. 23.6(3)(m)). In separate counts, First Wisconsin also sought judgment against the three individuals pursuant to their status as guarantors, and it sought judgment against James Taggart, Fred Brodie and the Partnership pursuant to their liability for the Partnership debt. First Wisconsin moved for summary judgment which was denied.

Thereafter the case was set for trial and the trial date continued from time to time pending various settlement negotiations. After failure of settlement negotiations, the attorneys for the plaintiffs, counter-defendants, filed a motion to withdraw which was allowed on February 7, 1975, at a hearing also attended by Fred Brodie and James A. Taggart. At the hearing the court advised plaintiffs, counter-defendants, that they must obtain substitute counsel or otherwise cause a supplemental appearance to be filed under a local court rule (Rule 14). In substance the rule gave a seven day period to comply. At this time the plaintiffs, counter-defendants, advised the court that they would have counsel in two or three weeks. The court allowed them twenty-one days.

On March 14, 1975, First Wisconsin moved for a default on the basis that no appearances had been filed. Brodie and James Taggart were present in court at the hearing on the default motion. Brodie represented that they had been trying to get an attorney but did not have enough money and stated that they would have an attorney within five days. The court granted the motion for the entry of an order of default stating to Brodie and Taggart that if they or their counsel made an appropriate motion within 30 days, the default would be vacated but that if no steps were taken to secure counsel or to vacate the default within 30 days the court would hear the proveup of damages on April 15, 1975.

On the April 15th hearing to prove up damages James Taggart and Fred Brodie were present in court. Brodie represented that they would have funds available in 2 weeks to pay their previous attorney whom they claimed was holding their files. Taggart stated that they in fact had hired an attorney who would proceed as soon as they could get the file. The mortgagees' attorney and the attorney for various claimants who were in court objected to any further continuance. Counsel argued that the court should not permit the partners to appear as their own attorneys either for the Austin Trust or for the Partnership. The court refused to continue the matter and proceeded with the hearing. This colloquy followed:

Mr. Taggart: Could I ask a question? May I ask the court, Your Honor, are we going to be allowed to answer this as individuals?

The Court: I do not know what you mean, "Answer."

Mr. Taggart: Well, I mean to disclaim some of the things that he's saying. Are we going to be allowed to do that or do I have to have counsel to do that?

The Court: You have to have counsel.

Mr. Taggart: I have to have counsel. In other words, anything that is said today, I can't answer or come up and talk to you about it or prove differently? I'm not able to do that. I have to have counsel to do that?

The Court: Under the posture of the case, that is correct, you must have counsel.

The Court: * * * Let the record show that Mr. Taggart and Mr. Brodie left the Courtroom.

After hearing evidence as to damages, the trial court found in favor of First Wisconsin on its answer, counter-claim for foreclosure, and its third party claim. The trial court stated these findings in a judgment order dated April 15, 1975, and in addition entered a "Decree of Foreclosure and Sale" which found the Austin Trust had defaulted on the mortgages with resulting damage in the amount of $1,274,047.10. The decree ordered foreclosure of the mortgage and sale of the property and retained jurisdiction over all parties "for the purposes of * * * determining the character and amounts of the deficiency decrees to be entered in this cause as a result of the sale."

Thereafter Taggart and Brodie individually and "d/b/a BKT Enterprises" and Sally Taggart petitioned the court to vacate the default order alleging that the decree had materially affected their rights and that they were not allowed to defend. On May 16th the court denied the petition finding the petitioners had ample opportunity to secure counsel or file a supplemental appearance; there had been no showing of due diligence or to make meritorious defense, and the petition was insufficient as a matter of law under Section 72 of the Civil Practice Act.

On the same day, May 16th, a notice of appeal was filed by Brodie, the Taggarts and the Partnership. On the motion of First Wisconsin the appeal was dismissed in this court on June 17, 1975. First Wisconsin supported its motion with the argument that the appeal was not taken from a final order.

On July 15, 1975, the foreclosure sale took place. On July 17, 1975, the court entered its judicial report of sale and its order approving the report of sale and distribution. Among other things that document orders that First Wisconsin shall "have and recover a deficiency judgment against the Defendants James A. Taggart, Sally Taggart, Fred Brodie and BKT Enterprises, a partnership, in the sum of $607,184.66 and that execution issue therefore."

The present appeal commenced when the Austin Trust together with the Taggarts, Brodie, and the Partnership filed a notice of appeal on August 14, 1975, from the April 15, 1975, foreclosure decree, and the order approving the judicial report of sale and distribution entered July 17, 1975. Again First Wisconsin moved to dismiss the appeal, this time arguing that the appeal properly lay from the decree of foreclosure dated April 15th thus making the appeal from the order approving the judicial report of sale and distribution untimely. In its motion, First Wisconsin also argued that since no steps had been taken to clear the default judgment, the appeal should be dismissed on this ground as well. We denied the motion.

Defendant again argues in its brief that the foreclosure decree of April 15, 1975, was the final and appealable order with respect to the mortgage foreclosure, contending that the foreclosure decree was, in fact, final and appealable as to the Austin Trust which did not join in the earlier notice of appeal. Nevertheless the circumstances clearly place First Wisconsin in what we consider to be not only an inconsistent but an unconscionable position under the circumstances. Having secured a dismissal of the earlier appeal from the foreclosure decree, we cannot permit them to now argue that the foreclosure decree was, in fact, then appealable and that the Austin Trust is now barred because it is too late for them to appeal from that decree. Assuming without deciding that our previous order dismissing the appeal from the decree of foreclosure was erroneous, it would be an error requested and invited by the defendants. They are therefore estopped from now asserting that error even as to the Austin Trust. See Western Springs Park Dist. v. Lawrence, 343 Ill. 302, 311, 175 N.E. 579 (1931); Martin v. McIntosh, 37 Ill.App.3d 526, 531, 346 N.E.2d 450 (1976).

First Wisconsin argues that the position which it previously took, and with which we agreed in our dismissal of the former appeal, is not inconsistent with its present position that the Austin Trust is barred from appealing from the decree of foreclosure. We are not persuaded. They argue that while the former appeal was from an order which was not final as to Brodie, the Taggarts and the Partnership, it was final as to the Austin Trust. This argument is apparently based on the theory that the land...