Regan v. Ivanelli

• Decision Date: 01 July 1993
• Docket Number: No. 2-92-1096,2-92-1096
• Citation: 617 N.E.2d 808,187 Ill.Dec. 351,246 Ill.App.3d 798
• Parties: , 187 Ill.Dec. 351 Terry REGAN et al., Plaintiffs-Appellants, v. Carl IVANELLI, Sr. et al., Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 808

617 N.E.2d 808

246 Ill.App.3d 798, 187 Ill.Dec. 351

Terry REGAN et al., Plaintiffs-Appellants, v. Carl IVANELLI, Sr. et al., Defendants-Appellees.

No. 2-92-1096.

Appellate Court of Illinois,

Second District.

July 1, 1993.

Schlyer & Associates, P.C., Lemont, IL, Donald E. Schlyer, William P. Ryan (argued), for Terry Regan, Dennis Egan.

Anthony F. Mannina (argued), Wheaton, IL, for Carl Ivanelli, Sr., Carl Ivanelli, Jr., James R. Ivanelli, Gerald A. Ivanelli, Jeanine Ivanelli, Janice Ivanelli-Altice, Garfield Ridge Trust & Sav.

Justice COLWELL delivered the opinion of the court:

Plaintiffs, Terry Regan and Dennis Egan, appeal from the circuit court of Du Page County's orders dismissing their action for fraudulent conveyance and entering judgment against plaintiffs and their counsel for a total of $3,909.75 in fees and costs pursuant to Illinois Supreme Court Rule 137 (134 Ill.2d R. 137). Plaintiffs contend that: (1) the trial court improperly dismissed plaintiffs' complaint under section 2-619 of the Code of Civil Procedure (Code) (Ill.Rev.Stat.1991, ch. 110, par. 2-619)); (2) plaintiffs' complaint set forth a cause of action for fraudulent conveyance under both fraud in fact and fraud in law principles; and (3) the trial court's award of attorney fees to defendants was an abuse of discretion. We reverse.

Plaintiffs filed the present complaint to avoid a fraudulent transfer of beneficial interest in a land trust and for other relief on January 6, 1992. The following facts, which plaintiffs contend give rise to this claim, all took place prior to the original adjudication between these parties which was affirmed by this court in Regan v. Garfield Ridge Trust & Savings (1991), 220 Ill.App.3d 1078, 163 Ill.Dec. 605, 581 N.E.2d 759.

Plaintiffs executed a contract with a land trust on March 6, 1986, for the purchase of a 34-acre parcel of land in Lemont, Illinois. The land trust beneficiaries, all defendants in this action, included Carl Ivanelli, Jr., James Ivanelli, Gerald Ivanelli, Jeanine Ivanelli, and Janice Ivanelli-Altice. The beneficiaries entered into the contract with plaintiffs for a purchase price of $400,000. Pursuant to this contract, the plaintiffs were to make a partial payment of $100,000 on or before September 6, 1986, and the beneficiaries were to transfer to the plaintiffs four one-acre lots. Due to an existing lien encumbering the subject property, the beneficiaries were unable to transfer the title free and clear of all encumbrances, and the parties entered into an extension for the performance of the contract. Plaintiffs deposited $25,000 with beneficiaries on September 8, 1986, and the parties later entered into an escrow agreement. The lien was released on October 21, 1986, after which plaintiffs tendered $100,000 to defendants.

Plaintiffs did not make the $150,000 payment due on or before March 6, 1987, and beneficiaries did not send plaintiffs a title commitment for the lots to be conveyed at that time. There was conflicting testimony over whether the beneficiaries even demanded payment since the plaintiffs were plagued with structural problems on the property. Starting in July 1987, the beneficiaries' father, Carl Ivanelli, Sr. (Carl, Sr.), began negotiating with plaintiffs in order to facilitate progression of the sale so that the parties could close in September. In September 1987, Carl, Sr., proposed a plan in which he and a friend would receive 30% of Bluff Point Development, plaintiffs' development company, in return for providing financing. Plaintiffs rejected this proposal.

The September 6, 1987, closing date was set and continued twice. The beneficiaries then anticipatorily breached the contract on September 18, 1987, by attempting to terminate said contract. The beneficiaries assigned their beneficial interest in the trust on the same day to Carl, Sr. After September 1987, Carl, Sr., made further efforts to develop the subject property and held himself out as Bluff Point Development's owner. On May 23, 1988, Carl, Sr., assigned his interest in the land trust back to his children, who resumed as beneficiaries.

Plaintiffs filed a three-count complaint on March 10, 1988, against the beneficiaries, Carl, Sr., and Garfield Ridge Trust & Savings Bank as trustee. In count I, plaintiffs sought specific performance of a contract for the purchase of certain real estate from the land trust. In count II, they alleged that Carl, Sr., tortiously interfered with the contract, and in count III, they alleged that the children who were land trust beneficiaries when the contract was executed conspired with Carl, Sr., to interfere tortiously with the contract. In an order dated June 19, 1990, the trial court granted plaintiffs specific performance as alleged in count I. A jury entered a verdict against Carl, Sr., on the other two counts, awarding plaintiffs $400,000 on count II and $200,000 on count III. The trial court entered judgment notwithstanding the verdict in favor of Carl, Sr., on count III. Plaintiffs appealed, contending the entry of judgment notwithstanding the verdict was error and that they are entitled to a new trial on count III because the jury's finding that only one defendant was involved in the alleged conspiracy was inconsistent. The remaining jury verdict on count II in favor of plaintiffs and the trial court's judgment for specific performance were affirmed by this court in Regan v. Garfield Ridge Trust & Savings Bank (1991), 220 Ill.App.3d 1078, 163 Ill.Dec. 605, 581 N.E.2d 759. The plaintiffs, pursuant to the decree of specific performance, purchased the parcel of real estate for a sum in excess of $300,000.

Plaintiffs then filed the present complaint on January 6, 1992, to avoid a fraudulent transfer of beneficial interest. The complaint alleged that Carl, Sr., gratuitously transferred the beneficial interest in the land trust to his children on May 23, 1988, after the commencement of plaintiffs' action for tortious interference with contract was filed on March 10, 1988. Such transfer left Carl, Sr., without sufficient assets or income to satisfy the subsequent judgment entered against him. Defendants filed a motion to dismiss plaintiffs' complaint, pursuant to section 2-619 of the Code, which alleged (1) that plaintiffs' fraudulent conveyance action was barred by the judgment entered in the action for breach of contract and tortious interference with contract; (2) that the appellate court ruled that the transfer of the beneficial interest by the Ivanelli children to their father, Carl, Sr., was a "matter of convenience" for negotiation purposes; (3) that the transfer of the beneficial interest back to the children was a return of the property to its original rightful owners and was not a transfer to defraud creditors; and (4) that the appellate court affirmed the findings of fact that the debtor, Carl, Sr., was an agent of the children and that he never acquired ownership of the trust property.

The trial court determined that the children transferred the beneficial interest in the property to Carl, Sr., and for purposes of defendants' motion, it did not matter whether that transfer was for consideration. The trial court also determined there was a transfer of the property back to the children from Carl, Sr., for no consideration. On the basis of the undisputed facts presented, the trial court concluded there could not be a fraudulent transfer as intended under the Uniform Fraudulent Transfer Act (Ill.Rev.Stat.1991 ch. 59 par 10 et seq.) and thus there was no genuine issue of material fact.

Defendants filed a motion for attorney fees and costs pursuant to Supreme Court Rule 137 (134 Ill.2d R. 137). Defendants argued that plaintiffs' complaint, which alleged that the assignment of beneficial interest was a transfer of property owned by Carl, Sr., contradicted the fact that plaintiffs knew that the children, and not Carl, Sr., were the original owners of the property before it was transferred to Carl, Sr. Defendants further alleged the plaintiffs knowingly misrepresented the true facts to the court. The trial court granted defendants' motion for fees and stated in its order that the plaintiffs' complaint was "wholly unfounded in fact and law and that said complaint was not brought in good faith." Plaintiffs filed a timely appeal.

We first address defendants' oral motion presented at arguments before this court pertaining to their motion for fees and costs filed in the previous trial court action. Defendants attached to their motion and made a part thereof the statement of facts contained in plaintiffs' appellate brief from the tortious interference action. Defendants stated that this document did not become a part of the court file even though it was part of the common-law record. Defendants' motion requests that the portion of the brief referred to in their motion be made a part of the record in the instant case.

Defendants' request relates to their claim that the plaintiffs made an admission by including in the statement of facts of their appellate brief that the Ivanelli children were the owners of the beneficial interest in the land trust and that the beneficial interest was initially transferred by the children to Carl, Sr. Plaintiffs' complaint for fraudulent conveyance does not contain this fact. Defendants contend plaintiffs were trying to hide the fact that the children initially owned the beneficial interest so that the trial court in the instant action would not be fully informed.

A judicial admission is a clear, deliberate, unequivocal statement of a party regarding a concrete fact within that party's particular knowledge. (Caponi v. Larry's 66 (1992), 236 Ill.App.3d 660, 671, 176 Ill.Dec. 649, 601 N.E.2d 1347.) Plaintiffs' previous appellate brief included the fact that the children initially owned the beneficial interest because it was relevant to the tortious interference claim. However, such fact need not have been...