Maniez v. Citibank ( 2010 )

FIRST DIVISION
September 20, 2010
No. 1-09-0583
LOUIS MANIEZ, )
Appeal from the
)
Circuit Court of
Plaintiff-Appellant, ) Cook
County.
)
v. )
)
CITIBANK, F.S.B., HARBOR DRIVE )
CONDOMINIUM ASSOCIATION, ) No.
05 CH 20618
UNKNOWN OWNERS and NONRECORD )
CLAIMANTS, )
)
Defendants )
Honorable
)
Darryl B. Simko,
(Masayo Koshiyama and Robert )
Judge Presiding.
Jolly, )
)
Defendants-Appellees). )
PRESIDING JUSTICE HALL delivered
the opinion of the court:
This is the second appeal
generated by the efforts of the
plaintiff, Louis Maniez, to prevail on
his complaint to foreclose a judgment
lien against the defendants, Masayo
Koshiyama and her husband, Robert
Jolly. In answer to a certified
question, this court held that a 1997
memorandum of judgment recorded by the
plaintiff did not create a valid lien
2
against the defendants' real property.
See Maniez v. Citibank, F.S.B., 383
Ill. App. 3d 38, 890 N.E.2d 662(2008).
On remand, the circuit court
granted the defendants' motion to
dismiss the complaint pursuant to
section 2-619 of the Code of Civil
Procedure (735 ILCS 5/2-619 (West
2008)) (the Code). The plaintiff
appeals, raising the following issues:
(1) whether the doctrines of judicial
estoppel and equitable estoppel bar
Ms. Koshiyama from asserting the
3
invalidity of the plaintiff's 1997
judgment lien; (2) whether the
plaintiff's 2004 memorandum of
judgment created a valid judgment lien
that is binding on the Jolly estate;1
and (3) whether this court's prior
decision in Maniez should be overruled
under the exceptions to the law of the
case doctrine.
Our prior opinion was limited to
answering the certified question. The
issues presented in this appeal
require a more detailed history of
1
Defendant Robert Jolly died during the pendency of the
original circuit court proceedings.
4
this litigation.
BACKGROUND
I. Circuit Court Proceedings
In 1993, the plaintiff, Louis
Maniez, and the defendants entered
into a settlement agreement to resolve
pending litigation. The order entered
by the circuit court provided that Ms.
Koshiyama was to make certain payments
to the plaintiff. In the event she
failed to make the payments, a default
judgment would be entered against both
defendants for the remaining balance.
Ms. Koshiyama failed to make the
5
No. 1-09-0583
payments, and on February 28, 1997,
the plaintiff obtained a default
judgment against the defendants in the
amount of $110,348.83, plus statutory
interest. It is undisputed that a
memorandum of judgment was recorded on
February 28, 1997, and that the
memorandum specified the judgment date
as February 27, 1997, rather than
February 28, 1997, the actual date of
the judgment.
On February 6, 1998, Ms.
Koshiyama filed for bankruptcy. On
her Schedule A - Real Property, she
6
No. 1-09-0583
listed a 50% interest in a condominium
unit at 155 Harbor Drive, Chicago,
Illinois (the Harbor Drive Unit),
which she owned in joint tenancy with
Mr. Jolly. On her Schedule D -
Creditors Holding Secured Claims, she
listed the plaintiff and described his
claim as a "Judicial Lien" against the
Harbor Drive Unit. She listed the
value of the property as $550,000 and
the amount of the plaintiff's claim as
$110,348.83. She did not indicate on
the schedule that the plaintiff's
claim was disputed.
7
No. 1-09-0583
On February 25, 2004, the circuit
court granted the plaintiff's motion
to revive his judgment against the
defendants. The order specified the
correct judgment date of February 28,
1997, and provided that the judgment
was revived against both defendants.
However, as to Ms. Koshiyama, it was
"limited to in rem effect and only as
to real estate owned by Masayo
Koshiyama at the time she filed her
bankruptcy proceedings." Based on the
revived judgment, the plaintiff
recorded a memorandum of judgment on
8
No. 1-09-0583
February 26, 2004. However, the
memorandum stated the year of the
judgment as 1998 rather 1997, the
correct year of the judgment.
Ms. Koshiyama's bankruptcy case
was closed on January 21, 2005. On October
24, 2005, the plaintiff recorded the circuit court's February 25,
2004, order reviving the judgment and which specified
the correct judgment date of February
28, 1997.
On December 1, 2005, the
plaintiff filed the instant
foreclosure complaint against the
defendants. The defendants filed a
9
No. 1-09-0583
motion to dismiss the complaint
pursuant to section 2-619(a)(9) of the
Code (735 ILCS 5/2-619(a)(9) (West
2006)). The defendants alleged that
the 1997 memorandum of judgment did
not create a judgment lien on the
Harbor Drive Unit because the
memorandum referred to the judgment as
having been entered on February 27,
1997, whereas the judgment was entered
on February 28, 1997.
Defendant Robert Jolly died on
June 21, 2006.2 On October 19, 2006,
2
Hereinafter, the word "defendants" refers to Ms. Koshiyama
10
No. 1-09-0583
the circuit court granted the
plaintiff's motion to amend the
complaint to add Ms. Koshiyama, as
executrix of Mr. Jolly's estate, as a
party defendant. The court entered an
order denying the defendants' motion
to dismiss. On December 13, 2006, the
court modified its order by certifying
the following question to this court:
"'[w]hether a Memorandum of
Judgment inaccurately describing a
judgment as having been entered on
a specific date can serve to create
and the Jolly estate.
11
No. 1-09-0583
a lien as provided by the relevant
statute.'" Maniez, 383 Ill. App.
3d at 39.
This court allowed the appeal pursuant
to Supreme Court Rule 308 (155 Ill. 2d
R. 308).
II. Appellate Court Proceedings
In answer to the certified
question, this court held that a
memorandum of judgment inaccurately
describing a judgment as having been
entered on a specific date did not
create a lien under section 12-101 of
the Code. Maniez, 383 Ill. App. 3d at
12
No. 1-09-0583
45. In reaching that conclusion, the
court noted that under section 12-101,
a judgment was a lien on real estate
only from the time the memorandum of
judgment was filed in the recorder's
office. See 735 ILCS 5/12-101 (West
2002). However, there must also be an
enforceable judgment standing behind
the memorandum. Maniez, 383 Ill. App.
3d at 41, citing Northwest
Diversified, Inc. v. Desai, 353 Ill.
App. 3d 378, 388, 818 N.E.2d 753(2004).
The plaintiff argued that the
13
No. 1-09-0583
memorandum was a notice document and
pointed out that the defendants never
denied that a judgment was entered on
February 28, 1997. While the
plaintiff did not dispute the fact
that the memorandum of judgment
contained the wrong judgment date, he
maintained that the mistake was merely
a scrivener's error.
This court rejected the
plaintiff's arguments. The court
pointed out that the memorandum gave
notice to prospective purchasers as
well as the debtor. The memorandum
14
No. 1-09-0583
setting forth February 27, 1997, as
the date of the judgment did not place
a prospective purchaser on notice that
a judgment had been entered on
February 28, 1997. Maniez, 383 Ill.
App. 3d at 43. The plaintiff's
scrivener's error argument lacked
merit because case law required strict
compliance with section 12-101.
Maniez, 383 Ill. App. 3d at 44, citing
Northwest Diversified, Inc., 353 Ill.
App. 3d at 391. Even if the wrong
date was a scrivener's error, no
judgment was entered on February 28,
15
No. 1-09-0583
1997. Without a judgment on that
date, the 1997 memorandum referred to
a nonexistent judgment; therefore, it
did not create a judgment lien against
the defendants' real property.
Maniez, 383 Ill. App. 3d at 44.
Having answered the certified
question, this court declined the
defendants' request to go beyond the
certified question and dismiss the
complaint on the basis that the 2004
revival of the judgment lien was a
nullity. The case was remanded to the
circuit court. Maniez, 383 Ill. App.
16No. 1-09-0583
3d at 44-45. The plaintiff did not
seek leave to appeal to the supreme
court.
III. Circuit Court Proceedings on
Remand
Upon remand to the circuit court,
the defendants moved to dismiss the
foreclosure complaint based on this
court's determination in Maniez that
no lien was created. They alleged
that, as no subsequent lien could have
been created due to Ms. Koshiyama's
discharge of the debt in bankruptcy,
the complaint should be dismissed with
17
No. 1-09-0583
prejudice. The defendants alleged
further that, even if the 2004
memorandum created a valid lien, it
impaired Ms. Koshiyama's survivorship
rights, rendering the lien void under
the automatic stay issued in her
bankruptcy case.
In his response to the motion to
dismiss, the plaintiff maintained that
Ms. Koshiyama was barred by judicial
and equitable estoppel from asserting
that he did not have a valid lien
against her interest in the Harbor
Drive Unit. The plaintiff further
18
No. 1-09-0583
argued that, even if the 1997
memorandum was invalid, the 2004
memorandum created a valid lien
against the Jolly estate's half
interest in the Harbor Drive Unit
because Ms. Koshiyama's and Mr.
Jolly's joint tenancy ownership of the
Harbor Drive Unit was severed when Ms.
Koshiyama filed her bankruptcy
petition.
On January 27, 2009, the circuit
court granted the defendants' motion
to dismiss. The plaintiff filed a
timely notice of appeal.
19
No. 1-09-0583
ANALYSIS
I. Dismissal of the Foreclosure
Complaint
A. Standard of Review
This court reviews the dismissal
of a complaint under section 2-619 de
novo. Westmeyer v. Flynn, 382 Ill.
App. 3d 952, 954-55, 889 N.E.2d 671(2008). Review of an appeal from a
section 2-619 dismissal is similar to
the review of an appeal from the grant
of summary judgment. Westmeyer, 382
Ill. App. 3d at 955. The court
considers whether a genuine issue of
20
No. 1-09-0583
material fact exists that would
preclude the dismissal, or whether the
dismissal is proper as a matter of
law. Westmeyer, 382 Ill. App. 3d at
955.
B. Discussion
1. Judicial and Equitable Estoppel
The plaintiff contends that Ms.
Koshiyama is judicially and equitably
estopped from contesting the validity
of his 1997 judgment lien because she
listed the plaintiff as a secured
creditor on her bankruptcy schedule.3
3
The plaintiff acknowledges that his
21
No. 1-09-0583
The plaintiff argues that judicial
estoppel applies because, in the
foreclosure case, Ms. Koshiyama took a
position that conflicted with the
position she took in her bankruptcy
case. He further argues that
equitable estoppel applies because the
scheduling of the lien in her
bankruptcy case caused the plaintiff
to refrain from asserting rights he
might otherwise have asserted in the
bankruptcy proceeding.
estoppel arguments do not apply to the
Jolly estate.
22
No. 1-09-0583
a. Waiver and Forfeiture
The defendants respond that the
plaintiff has either waived or
forfeited his right to raise judicial
estoppel.4 They point out that in
their original motion to dismiss, they
raised the validity of the judgment
lien, but the plaintiff failed to
argue judicial estoppel, either in the
original circuit court proceedings or
in the Rule 308 appeal to this court.
"Waiver" means the voluntary
4
The defendants do not specifically address equitable
estoppel in their waiver and forfeiture arguments.
23
No. 1-09-0583
relinquishment of a known right.
People v. Blair, 215 Ill. 2d 427, 444
n.2, 831 N.E.2d 604 (2005). Waiver
arises from an affirmative act, is
consensual and consists of an
intentional relinquishment of a known
right. People v. Houston, 229 Ill. 2d
1, 9 n.3, 890 N.E.2d 424 (2008).
Forfeiture occurs when a party seeks
to raise an issue on appeal it failed
to raise in the lower court. Blair,
215 Ill. 2d at 443-44.
Notwithstanding the distinction
between "waiver" and "forfeiture,"
24
No. 1-09-0583
neither applies in this case.
Contrary to the defendants'
argument, the plaintiff was not
required to raise judicial estoppel as
a defense to the defendants' motion to
dismiss. Section 2-613 of the Code
requires that affirmative defenses,
such as estoppel, must be raised in
the answer to the complaint or in the
reply to the answer. See 735 ILCS
5/2-613(d) (West 2008). In R&B
Kapital Development, LLC v. North
Shore Community Bank & Trust Co., 358
Ill. App. 3d 912, 921, 832 N.E.2d 24625
No. 1-09-0583
(2005), this court held that an
affirmative defense is properly
asserted in a section 2-615 motion to
dismiss only if the defense is
apparent from the face of the
complaint. R&B Kapital Development,
LLC, 358 Ill. App. 3d at 921. The
court did not hold that the defendant
was required to raise the affirmative
defense in the motion to dismiss.
Therefore, the plaintiff has not
intentionally relinquished his right
to raise the defense of judicial
estoppel.
26
No. 1-09-0583
Similarly, the plaintiff did not
forfeit his right to raise judicial
estoppel in the present proceedings by
not raising it in the prior
proceedings. The circuit court denied
the defendants' motion to dismiss,
rejecting the defendants' argument
challenging the validity of the
plaintiff's lien. Due to the
intervening Rule 308 appeal, and the
filing of their motion to dismiss
after remand to the circuit court, the
defendants had not yet answered the
complaint. Only then would the
27
No. 1-09-0583
plaintiff be required to file a reply,
if he wished to raise any estoppel
defenses.
Finally, the principles of waiver
and forfeiture are binding on the
parties but do not limit this court's
jurisdiction. See People v. McCarty,
223 Ill. 2d 109, 142, 858 N.E.2d 15(2006); Redelmann v. K.A. Steel
Chemicals, Inc., 377 Ill. App. 3d 971,
879 N.E.2d 505 (2007). We turn to the
merits of the plaintiff's estoppel
arguments.
b. Judicial Estoppel
28
No. 1-09-0583
Under the doctrine of judicial
estoppel, a party who takes a
particular position in a legal
proceeding is estopped from taking a
contrary position in a subsequent
legal proceeding. Moy v. Ng, 371 Ill.
App. 3d 957, 962, 864 N.E.2d 752(2007). Our courts have identified
five elements necessary for judicial
estoppel to apply: (1) the party must
have taken two positions; (2) the
positions must be factually
inconsistent; (3) the positions were
taken in separate judicial or quasi-
29
No. 1-09-0583
judicial proceedings; (4) the person
intended the trier of fact to accept
the truth of the facts alleged; and
(5) the party succeeded in the first
proceeding and received some benefit
therefrom. Moy, 371 Ill. App. 3d at
962. Judicial estoppel applies to
statements of fact and not to legal
opinions or conclusions. McNamee v.
Sandore, 373 Ill. App. 3d 636, 650,
869 N.E.2d 1102 (2007).5
5
While Johnson v. Du Page Airport Authority, 268 Ill. App.
3d 409, 644 N.E.2d 802 (1994), extended judicial estoppel to
legal inconsistencies, the supreme court's decision in People v.
Jones, 223 Ill. 2d 569, 861 N.E.2d 967 (2006), restored the
understanding of judicial estoppel as barring factual
30
No. 1-09-0583
In the present case, Ms.
Koshiyama disclosed the existence of
the plaintiff's judgment lien in her
bankruptcy case. She later contested
the validity of the lien in the
instant proceedings when the plaintiff
sought to foreclose it. The listing
of the claim was a statement of fact.
By challenging the validity of the
lien, she was not denying the fact
that the plaintiff had recorded a
memorandum of judgment against the
inconsistencies, not legal inconsistencies. McNamee, 373 Ill.
App. 3d at 650.
31
No. 1-09-0583
Harbor Drive Unit. The plaintiff
points out that Ms. Koshiyama failed
to indicate on her bankruptcy schedule
that the lien claim was disputed.
However, there is no evidence that the
lien claim was the subject of a
dispute at the time the schedule was
filed. Therefore, Ms. Koshiyama did
not take a position in the foreclosure
case factually inconsistent with the
one she took in her bankruptcy case.
c. Equitable Estoppel
"Equitable estoppel is typically
invoked 'where a person by his or her
32
No. 1-09-0583
statements and conduct leads a party
to do something that the party would
not have done but for such statements
and conduct.'" Trossman v.
Philipsborn, 373 Ill. App. 3d 1020,
1040, 869 N.E.2d 1147 (2007), quoting
Geddes v. Mill Creek Country Club,
Inc., 196 Ill. 2d 302, 313, 751 N.E.2d
1150 (2001). Our supreme court has
defined equitable estoppel "as the
effect of the person's conduct whereby
the person is barred from asserting
rights that might otherwise have
existed against the other party who,
33
No. 1-09-0583
in good faith, relied upon such
conduct and has been thereby led to
change his or her position for the
worse." Geddes, 196 Ill. 2d at 313.
In order to establish equitable
estoppel, the party claiming it must
demonstrate: (1) that the other party
misrepresented or concealed material
facts; (2) that the other party knew
at the time that he or she made the
representations that they were untrue;
(3) that the party claiming estoppel
did not know that the representations
were untrue when they were made and
34
No. 1-09-0583
when they were acted upon; (4) that
the other person intended the party
claiming estoppel would act upon the
representations; (5) that the party
claiming estoppel reasonably relied on
the representations to his or her
detriment; and (6) that the party
claiming estoppel would be prejudiced
by his or her reliance on the
representations if the other person
were allowed to deny the truth
thereof. Geddes, 196 Ill. 2d at 313-
14. The "fraud element" may be
satisfied where a fraudulent or unjust
35
No. 1-09-0583
effect results from allowing another
person to raise a claim inconsistent
with his or her former declarations.
Geddes, 196 Ill. 2d at 314.
The party claiming estoppel has
the burden of proving it by clear and
unequivocal evidence. Geddes, 196
Ill. App. 3d at 314. Whether estoppel
has been established is dependant on
the facts of each case. Geddes, 196
Ill. 2d at 314.
The plaintiff maintains that he
relied to his detriment on Ms.
Koshiyama's representation in her
36
No. 1-09-0583
bankruptcy proceeding that he had a
judgment lien against the Harbor Drive
Unit. The plaintiff alleges that, had
Ms. Koshiyama's 50% interest in the
Harbor Drive Unit been liquidated, the
unsecured creditors would have
received an $80,000 distribution from
her bankruptcy estate, rather then the
$15,000 actual distribution. He
further alleges that since Ms.
Koshiyama listed him as a secured
creditor, he was unable to file an
unsecured claim, which would have
allowed him to participate in the
37
No. 1-09-0583
$15,000 distribution.
There is no evidence that at the
time she filed her bankruptcy petition
in 1998, Ms. Koshiyama knew that the
plaintiff's judgment lien was invalid
and concealed that fact from the
plaintiff. The plaintiff could not
claim that he reasonably relied on the
bankruptcy filing because he possessed
the same knowledge regarding the date
of the judgment and the date on the
memorandum of judgment that he
attributed to Ms. Koshiyama. In other
words, if Ms. Koshiyama knew at the
38
No. 1-09-0583
time she filed for bankruptcy that the
plaintiff's lien was invalid, so did
the plaintiff because the basis of
their knowledge was the same.
The plaintiff argues that
estoppel may be based on a failure to
disclose when coupled with an
affirmative statement or act,
misleading the party asserting
estoppel. Estoppel by silence may
arise only where there is knowledge of
the facts on one side and ignorance on
the other. In Town & Country Bank of
Springfield v. James M. Canfield
39
No. 1-09-0583
Contracting Co., 55 Ill. App. 3d 91,
370 N.E.2d 630 (1977), the court
explained:
"'[I]f the means of knowledge are
equally open to both parties, there
can be no estoppel. ***
A person is not estopped by
his silence where there is no
positive
duty and
opportun
ity to
speak,
or the
40
No. 1-09-0583
party is
in
ignoranc
e of his
rights.'
" Town
&
Country
Bank of
Springfi
eld, 55
Ill.
App. 3d
at 95,
41
No. 1-09-0583
quoting
Puterbau
gh,
Chancery
Pleading
&
Practice
§675, at
1372
(7th ed.
1930).
In this case, both the plaintiff and
Ms. Koshiyama were ignorant of the
fact that the 1997 judgment lien was
42
No. 1-09-0583
invalid at the time of the bankruptcy
proceedings.
The plaintiff cites Bianucci v.
Prairie Production Credit Ass'n, No.
92-3046 (C.D. Ill. August 21, 1992)
(not reported in F. Supp.), aff'd sub
nom In re Bianucci, 4 F.3d 526 (7th
Cir. 1993), and In re Elmes, 289 B.R.
100 (Bankr. N.D. Ill. 2003). In
Bianucci, the district court ruled
that the debtors waited too long
before moving to reopen their
bankruptcy to discharge a judgment
lien they failed to list in their
43
No. 1-09-0583
bankruptcy proceedings. In Elmes, the
court held that a lien holder did not
violate the debtors' bankruptcy
discharge by filing contempt action in
state court against them to enforce a
lien. However, the court then held
that the debtors could properly avoid
the lien, rejecting the lienholder's
argument that the debtors had waited
too long before moving to avoid the
lien. Neither the facts nor the
holdings in those cases support the
plaintiff's estoppel arguments.
We conclude that neither judicial
44
No. 1-09-0583
estoppel nor equitable estoppel barred
Ms. Koshiyama from asserting that the
plaintiff's 1997 judgment lien was
invalid.
2. Validity of the 2004 Judgment Lien
Against
the Jolly Estate
The plaintiff maintains that the
2004 memorandum created a valid lien,
enforceable against the Jolly estate.
The defendants respond that the 2004
memorandum was void because it
violated the automatic stay order
entered in Ms. Koshiyama's bankruptcy
45
No. 1-09-0583
case by interfering with her right of
survivorship in the Harbor Drive Unit.
See In re Berg, 387 B.R. 524, 564
(Bankr. N.D. Ill. 2008); but see In re
Lipuma, 167 B.R. 522 (Bankr. N.D. Ill.
1994) (recognizing a split of
authority among the federal circuits
as to whether an act violating an
automatic stay was void or voidable).
At oral argument of this case,
counsel for the defendants pointed out
that the 2004 memorandum specified the
wrong year, 1998 instead of 1997.
Therefore, under Maniez, as the 2004
46
No. 1-09-0583
memorandum failed to comply with the
requirements of section 12-101, it
failed to create a valid lien.
However, following the close of Ms.
Koshiyama's bankruptcy case, the
plaintiff recorded the order reviving
the judgment. The order contained the
correct date of the judgment, and
under section 12-101, the order
qualified as a memorandum of judgment.
See Maniez, 383 Ill. App. 3d at 40-41;
735 ILCS 5/12-101 (West 2004).6
6
Under section 12-101, a memorandum includes a copy of the
judgment "signed by a judge." 735 ILCS 5/12-101(d) (West 2004).
We note that, while it contains the information required by
47
No. 1-09-0583
Therefore, while the 2004 memorandum
was void, the October 24, 2005,
recording of the court order reviving
the judgment created a valid lien and
did not violate the automatic stay
because it was filed after the close
of Ms. Koshiyama's bankruptcy case.
The defendants then argue that,
section 12-101, the October 24, 2005, order does not bear the
judge's signature. However, the order is stamped with the
judge's name and the date. As this court has recognized, "the
law has consistently interpreted 'signed' to embody not only the
act of subscribing a document, but also anything which can
reasonably be understood to symbolize or manifest the signer's
intent to adopt a writing as his or her own and be bound by it.
This may be accomplished in a multitude of ways, only one of
which is a handwritten subscription." Just Pants v. Wagner, 247
Ill. App. 3d 166, 173-74, 617 N.E.2d 246 (1993).
48
No. 1-09-0583
even if the plaintiff had a valid
judgment lien against the Harbor Drive
Unit that he could enforce against Mr.
Jolly, upon Mr. Jolly's death, the
lien was not enforceable against Ms.
Koshiyama, the surviving joint tenant.
In Harms v. Sprague, 105 Ill. 2d 215,
473 N.E.2d 930 (1984), the supreme
court held that a mortgage executed by
one joint tenant did not survive as a
lien on the property upon the death of
the joint tenant/mortgagor. The court
explained as follows:
"A surviving joint tenant succeeds
49
No. 1-09-0583
to the share of the deceased joint
tenant by virtue of the conveyance
which created the joint tenancy,
not as the successor of the
deceased. [Citation.] The property
right of the mortgaging joint
tenant is extinguished at the
moment of his death. While John
Harms was alive, the mortgage
existed as a lien on his interest
in the joint tenancy. Upon his
death, his interest ceased to exist
and along with it the lien of the
mortgage." Harms, 105 Ill. 2d at
50
No. 1-09-0583
224.
In the present case, the
plaintiff's judgment against Ms.
Koshiyama was discharged in
bankruptcy. While Mr. Jolly was
alive, the plaintiff had a judgment
lien against Mr. Jolly's interest in
the joint tenancy, as of October 24,
2005, when the court order reviving
the judgment was recorded. As in
Harms, when Mr. Jolly died in 2006,
his interest ceased to exist, and Ms.
Koshiyama, as the surviving joint
tenant, took the property free of the
51
No. 1-09-0583
plaintiff's judgment lien.
The plaintiff then asserts that
the judgment lien survived the death
of Mr. Jolly because the filing of the
bankruptcy petition severed the joint
tenancy and rendered Ms. Koshiyama and
Mr. Jolly tenants-in-common.
Therefore, the judgment lien remained
on Mr. Jolly's undivided one-half
interest in the Harbor Drive Unit
because it passed to Ms. Koshiyama by
inheritance, not as the surviving
joint tenant. In order to resolve
whether the plaintiff's judgment
52
No. 1-09-0583
remained a lien on the Harbor Drive
Unit upon Mr. Jolly's death, we must
determine if the filing of a petition
in bankruptcy severs the joint tenancy
There is a split of authority
among the courts on this issue. Some
federal and state courts have
concluded that the filing of a
bankruptcy petition severs the joint
tenancy. See Taylor v. Canterbury, 92
P.3d 961 (Colo. 2004); In re Chadwick,
113 B.R. 540 (Bankr. W.D. Mo. 1990);
In re Tyson, 48 B.R. 412 (Bankr. C.D.
Ill. 1985); In re Panholzer, 36 B.R.
53No. 1-09-0583
647 (Bankr. D. Md. 1984); In re
Lambert, 34 B.R. 41 (Bankr. D. Colo.
1983). Other courts have found that
the filing of the petition does not
sever the joint tenancy. See In re
DeMarco, 114 B.R. 121 (Bankr. N.D. W.
Va. 1990); In re Anthony, 82 B.R. 386(Bankr. W.D. Pa. 1987); In re Spain,
55 B.R. 849 (N.D. Ala. 1985).
The Bankruptcy Code (11 U.S.C. §
101 et seq. (2006)) does not address
specifically whether the filing of a
petition in bankruptcy severs the
joint tenancy. The courts in the
54
No. 1-09-0583
above cases arrived at their
conclusions by analyzing the
provisions of the Bankruptcy Code in
light of their own state laws
governing property interests. See
Lambert, 34 B.R. at 42 (state law
determines the nature, extent and
effect of the debtor's interest in
property). We examine first the
interest of a joint tenant under
Illinois law.
a. Property Interests Under Illinois
Joint Tenancy Law
A joint tenancy is "'a present
55
No. 1-09-0583
estate in all the joint tenants, each
being seized of the whole.'" Harms,
105 Ill. 2d at 224, quoting Partridge
v. Berliner, 325 Ill. 253, 257, 156
N.E.2d 352 (1927). An inherent
feature in the estate of joint tenancy
is the right of survivorship, which is
the right of the last survivor to take
the whole of the estate. Harms, 105
Ill. 2d at 224. The creation and the
perpetuation of the joint tenancy are
dependent on four unities: interest,
title, time, and possession. Harms,
105 Ill. 2d at 220. The voluntary or
56
No. 1-09-0583
involuntary destruction of any of the
unities by one of the joint tenants
will sever the joint tenancy. Harms,
105 Ill. 2d at 220. The severance of
the joint tenancy extinguishes the
right of survivorship. Jackson v.
O'Connell, 23 Ill. 2d 52, 55, 177
N.E.2d 194 (1961).
Illinois courts have held that a
joint tenant can sever a joint tenancy
by conveying his or her interest to a
third party, even without the consent
or permission of the other joint
tenant. See Olney Trust Bank v.
57
No. 1-09-0583
Pitts, 200 Ill. App. 3d 917, 921, 558
N.E.2d 398 (1990), citing Johnson v.
Beneficial Finance Co. of Illinois,
Inc., 154 Ill. App. 3d 672, 674, 506
N.E.2d 1025 (1987), and Johnson v.
Johnson, 11 Ill. App. 3d 681, 684, 297
N.E.2d 285 (1973). In Olney Trust
Bank, the court held that the joint
tenancy was severed where one joint
tenant conveyed his interest by way of
a deed in lieu of foreclosure. Olney
Trust Bank, 200 Ill. App. 3d at 921.
Our courts have held that a lien
or a mortgage on a joint tenant's
58
No. 1-09-0583
interest does not sever the joint
tenancy. See Harms, 105 Ill. 2d at
223; Jackson v. Lacey, 408 Ill. 530,
97 N.E.2d 839 (1951); Van Antwerp v.
Horan, 390 Ill. 449, 61 N.E.2d 358(1945). Even the making of a levy
upon a joint tenant's interest does
not sever the joint tenancy. As the
court in Van Antwerp explained:
"Under the law and procedure
in this State, it appears that the
levy is
just
another
59
No. 1-09-0583
step in
the
process
directed
toward a
final
sale.
It is,
however,
not such
an act
as can
be said
to have
60
No. 1-09-0583
the
effect
of a
divestit
ure of
title.
There
has not
been, as
yet, the
destruct
ion of
identity
of
61
No. 1-09-0583
interest
or of
any
other
unity
which
must
occur
before
we can
say the
estate
of joint
tenancy
62
No. 1-09-0583
has been
severed
and
destroye
d.
There
does not
appear
to have
been, by
reason
of the
levy,
such
63
No. 1-09-0583
interfer
ence
with, or
diminuti
on of,
the
interest
of the
one
joint
tenant
as to
enable
us to
64
No. 1-09-0583
say that
there
has been
a
destruct
ion of
the
identity
of
interest
; and
such a
destruct
ion is
65
No. 1-09-0583
necessar
y before
we can
say that
there
has been
a
terminat
ion and
severanc
e of the
joint
tenancy.
We
66
No. 1-09-0583
therefor
e hold
that the
levy of
the
executio
n upon
the
share of
one of
the
joint
tenants
does not
67
No. 1-09-0583
sever or
terminat
e the
joint
tenancy.
" Van
Antwerp,
390 Ill.
at 455.
In Jackson, the court held that, even
though there had been a sale of the
joint tenant's interest, there was no
conveyance until the period of
redemption had passed. The court
68
No. 1-09-0583
concluded that the title was not
divested and, therefore, the joint
tenancy was unaltered. Jackson, 408
Ill. at 533.
We conclude that Illinois
requires a conveyance of the joint
tenant's interest in the property to
sever a joint tenancy. We now turn to
the relevant sections of the
Bankruptcy Code to determine if the
filing of a petition in bankruptcy
constitutes a conveyance of the
debtor/joint tenant's interest in the
property.
69
No. 1-09-0583
b. The Bankruptcy Code
Prior to the reforms to
bankruptcy law in the late 1970s,
section 70a of the Bankruptcy Act (11
U.S.C. §70a (1976)) provided that the
bankruptcy trustee was vested with the
title of the debtor to all his or her
nonexempted property as of the date of
the filing of the bankruptcy petition.
Spain, 55 B.R. at 852; 4A Collier on
Bankruptcy §70, at 60 (14th ed. 1978);
see Flynn v. O'Dell, 281 F.2d 810 (7th
Cir. 1960) (holding that the filing of
the bankruptcy petition severed the
70
No. 1-09-0583
joint tenancy since the debtor's
interest (title) was transferred to
the trustee, distinguishing Jackson
and Van Antwerp).
The 1979 Bankruptcy Code omitted
section 70a. In its place,
Congress enacted section 541, which
provides in pertinent part as
follows:
"Sec. 541. Property of the estate
(a) The commencement of a case
*** creates an estate. Such estate
is comprised of all of the
following property, wherever
71
No. 1-09-0583
located and by whomever held:
(1) *** all legal or
equitable interests of the debto
r in
prope
rty
as of
the
comme
nceme
nt of
the
case.
" 11
72
No. 1-09-0583
U.S.C
.
§541(
a)
(1994
).
In place of the title of the debtor's
property passing to the
trustee, the debtor's legal and
equitable interests in the property
become part of the bankruptcy estate.
In support of his position that
filing a petition in bankruptcy severs
a joint tenancy, the plaintiff relies
73
No. 1-09-0583
on Tyson.
The defendants respond that decisions
of the federal courts are not binding
on this court. See SI Securities v.
Bank of Edwardsville, 362 Ill. App. 3d
925, 933, 841 N.E.2d 995 (2005).
However, this court may follow federal
decisions if it finds them persuasive.
Baker v. Jewel Food Stores, Inc., 355
Ill. App. 3d 62, 69, 823 N.E.2d 93(2005).
In Tyson, the bankruptcy court
held that the filing of a
chapter 11 bankruptcy petition severed
74
No. 1-09-0583
the joint tenancy, relying on Lambert.7
The court in Lambert noted that, while
cases under the prior Bankruptcy Act
held that a filing in bankruptcy
severed a joint tenancy, the present
Bankruptcy Code did not explicitly
provide for the transfer of title of
the debtor's property to the
bankruptcy trustee; merely that the
trustee could administer the property
of the estate. The court found that
the legislative history provided
clarification, explaining as follows:
7
The debtor in Lambert filed a chapter 7 petition.
75
No. 1-09-0583
"'The debtor's interest in property
also includes "title" to property,
which is an interest, just as are a
possessory interest, or leasehold
interest, for example.' [Citation.]
And further, in that same report,
it is stated: 'Once the estate is
created, no interests in property
of the estate remain in the
debtor.'" Lambert, 34 B.R. at 43,
quoting S. Rep. No. 95-989, at 82-
83 (1978), reprinted in 1978
U.S.C.A.N. 5758, 5868.
While some sections of the
76
No. 1-09-0583
Bankruptcy Code appeared to
indicate that a joint tenancy survived
the filing of a bankruptcy petition,
the court in Lambert found that the
same sections supported a finding that
the joint tenancy was severed, further
explaining as follows:
"Sec[tion] 363(h) provides in
pertinent part, '... the trustee
may sell both the estate's interest
... and the interest of any co-
owner in property which the debtor
had, immediately before the
commencement of the case, an
77
No. 1-09-0583
undivided interest as a ... joint
tenant ... .' (Emphasis added.)
Likewise, Sec[tion] 522(b)(2)(B)
provides in pertinent part that a
debtor may exempt from property of
the estate '... any interest in
property in which the debtor had,
immediately before the commencement
of the case, an interest as a ...
joint tenant ... . (Emphasis
added.)" Lambert, 34 B.R. at 43,
quoting 11 U.S.C. §§363(h),
522(b)(2)(B) (1982).
Relying on Lambert, the court in
78
No. 1-09-0583
Tyson held that, by filing
his petition in bankruptcy, the
husband lost any joint tenancy
interest he may have had in real
property he owned with his wife.
Therefore, his bankruptcy estate had a
one-half interest in the real
property. Tyson, 48 B.R. at 412.
Notwithstanding their position
that federal decisions are not binding
on this court, the defendants maintain
that the
decision in Anthony demonstrates that
where state law requires
79
No. 1-09-0583
the severance of title and not just
the possibility of a change in title,
the filing of a chapter 7 bankruptcy
petition will not sever the joint
tenancy.
In Anthony, the debtor owned
property in joint tenancy with her
mother. Following the filing of the
debtor's bankruptcy petition, her
mother died. A creditor argued that
the filing of the bankruptcy petition
severed the joint tenancy, rendering
the debtor and her mother, tenants-in-
common. The creditor further argued
80
No. 1-09-0583
that the debtor "inherited" her
mother's one-half interest with the
judgment lien attached because she did
not acquire her mother's interest by
right of survivorship. The bankruptcy
court held that the filing of the
petition did not sever the joint
tenancy.
In reaching that conclusion, the
court, as did the court in Lambert,
examined the language of section
363(h) of the Bankruptcy Code under
which the trustee was given the
authority to use, sell or lease an
81
No. 1-09-0583
undivided interest in property, such
as a joint tenancy. Unlike the court
in Lambert, the court in Anthony did
not find the use of the past tense
"had" to describe the debtor's
interest in the property significant.
Instead, the court focused on the
provision that the trustee was
permitted to sell the debtor's
interest only if partition were
impractical, if the sale would produce
significantly more than its parts and
if the benefits to the estate
outweighed the detriment to the co-
82
No. 1-09-0583
owners. The court concluded as
follows:
"The language of 11 U.S.C. §363(h),
(i), and (j) does not sound as
though a joint tenancy is
automatically severed by the filing
of a bankruptcy petition as a
federal rule of bankruptcy law. It
sounds permissive, as though the
trustee may sever a joint tenancy
if the estate benefits and if the
rights of the non-debtor/co-tenant
are protected.
In this case the trustee has
83
No. 1-09-0583
not attempted to administer this
property by severing or selling the
whole. We hold that the filing of
a petition does not sever a joint
tenancy with right of survivorship,
unless the trustee actually
executes against such property by
attempting to sever or to sell the
whole in order to liquidate such
property. Pennsylvania does not
sever a joint tenancy upon the
entry of a judgment, but severs
upon alienation, such as execution.
We would go no further." Anthony,
84
No. 1-09-0583
82 B.R. at 388.
Additional support for the
defendants' position is found in
Spain. There, the bankruptcy court
maintained that the failure of the
Code to carry forward section 70a,
which transferred the title of the
debtor to the trustee was an error.
The court
in Spain found no authority in the
Code for the decisions in Panholzer
and Lambert, where the courts held
that the filing of the petition was a
conveyance that severed the joint
85
No. 1-09-0583
tenancy. The court in Spain concluded
as follows:
"The debtor does not transfer his
title to [section] 541 property of
the estate but holds his title
subject to the exercise by the
trustee of his rights to sell, use
or lease such property by
appropriation ***. The debtor
retains the full use, possession
and enjoyment jointly with the
trustee and the right to refuse to
turn over or deliver such property
in proper cases. There is no
86
No. 1-09-0583
voluntary or involuntary transfer
of property upon filing. It may
never take place at the option of
the trustee and never occurs as to
wholly exempt property. The
trustee has no title to property of
the estate until he elects to take
affirmative action and proceedings
are had or orders made." Spain, 55
B.R. at 854.
As did the court in Anthony, the court
relied on section 363(h) to find that
no transfer took place by the filing
of the petition
87
No. 1-09-0583
and that the trustee's rights were no
better than those of a
creditor who proceeds to levy and
sale. Spain, 55 B.R. at 855.
In summary, the Bankruptcy Code
provides that the debtor's legal and
equitable interests in property are
transferred to the bankruptcy estate.
However, under Illinois law, more than
a transfer of the debtor's interest in
property is required to sever the
joint tenancy. Illinois law requires
a conveyance, which does not occur
until the trustee sells or otherwise
88
No. 1-09-0583
disposes of the property and title
passes. Therefore, in Illinois, the
filing of a bankruptcy petition does
not sever a joint tenancy.
We conclude that the filing of
Ms. Koshiyama's bankruptcy petition
did not sever the joint tenancy. The
October 24, 2005, recording of the
court order reviving the judgment
created a valid lien against Mr.
Jolly's interest in the Harbor Drive
Unit. But, upon his death, his
interest in the property ceased to
exist and with it the plaintiff's
89
No. 1-09-0583
judgment lien. Harms, 105 Ill. 2d at
224. Therefore, the plaintiff does
not have a judgment lien on the Harbor
Drive Unit, enforceable against the
Jolly estate.
II. Whether the Decision in Maniez
Should be Overruled
A. Law of the Case Doctrine
Under the law of the case
doctrine, parties may not relitigate
issues previously decided in the same
case. Long v. Elborno, 397 Ill. App.
3d 982, 989, 922 N.E.2d 555 (2010).
Questions of law that were decided on
90
No. 1-09-0583
a previous appeal are binding on the
trial court as well as on the
appellate court in subsequent appeals.
Long, 397 Ill. App. 3d at 989. The
purpose of the doctrine is
"to protect settled expectations of
the parties, ensure uniformity of
decisions, maintain consistency
during the course of a single case,
effectuate proper administration of
justice, and bring litigation to an
end. [Citation.] An additional
concern addressed by the law of the
case doctrine is the maintenance of
91
No. 1-09-0583
the prestige of the courts, for the
reason that if an appellate court
issues contrary opinions on the
same issue in the same case, its
prestige is undercut. [Citation.]"
Emerson Electric Co. v. Aetna
Casualty & Surety Co., 352 Ill.
App. 3d 399, 417, 815 N.E.2d 924(2004).
There are two recognized
exceptions to the law of the case
doctrine: (1) when a higher court
makes a contrary ruling on the same
issue subsequent to the lower court's
92
No. 1-09-0583
decision, and (2) when a reviewing
court finds that its prior decision
was palpably erroneous. Long, 397
Ill. App. 3d at 989. The plaintiff
asserts that the law of the case
doctrine does not preclude
reconsideration where the facts before
the court have changed or error or
injustice is manifest. See Aardvark
Art, Inc. v. Lehigh/Steck-Warlick,
Inc., 284 Ill. App. 3d 627, 633, 627
N.E.2d 1271 (1996).
B. Discussion
The plaintiff acknowledges that
93
No. 1-09-0583
this court's prior opinion in Maniez
constitutes the law of the case.
However, he maintains that this court
may reconsider its decision under the
exceptions to the law of the case
doctrine.
1. The Palpably Erroneous Exception
The defendants maintain that the
palpably erroneous exception applies
only where the appellate court has
remanded the case for a new trial on
all issues. See Alwin v. Village of
Wheeling, 371 Ill. App. 3d 898, 911,
864 N.E.2d 897 (2007). However, in
94
No. 1-09-0583
People v. Sutton, 375 Ill. App. 3d
889, 894, 874 N.E.2d 212 (2007), this
court referred to the palpably
erroneous exception without the new
trial qualifier. See Sutton, 375 Ill.
App. 3d at 894. Recently, in People
v. Jacobazzi, 398 Ill. App. 3d 890(2009), the Second District Appellate
Court reviewed the relevant case law
and concluded that the new trial
qualifier was not a definitive part of
the palpably erroneous exception.
Jacobazzi, 398 Ill. App. 3d at 931.
Because its prior decision "was
95
No. 1-09-0583
palpably erroneous and worked a
manifest injustice," the court chose
to revisit it. See Jacobazzi, 398
Ill. App. 3d at 932.
In arguing that the decision in
Maniez was palpably
erroneous, the plaintiff maintains
that this court should have
determined that the order reviving the
judgment and the recording of the
order with the correct date of the
judgment acted to reform the original
judgment memorandum.8 The plaintiff's
8
The plaintiff's reformation argument referred to the 2004
96
No. 1-09-0583
reliance on L. E. Myers Co. v. Harbor
Insurance Co., 67 Ill. App. 3d 496,
384 N.E.2d 1340 (1978), is misplaced.
In that case, the court held that a
third party was bound by the voluntary
reformation of an insurance policy to
correct a mutual mistake by the
contracting parties. The court
determined that the third party's lack
of knowledge of the mistake was not
determinative because there was no
memorandum of judgment. As we have found that the 2004 memorandum
did not create a valid judgment lien, we will consider the
October 24, 2005, order, which did create a valid lien, in
connection with the reformation argument.
97
No. 1-09-0583
reliance on the mistake. L. E. Myers
Co., 67 Ill. App. 3d at 504. In the
present case, the parties never agreed
that there was a mutual mistake, and
the plaintiff never sought reformation
of the 1997 memorandum.
The plaintiff then maintains that
this court's decision in Maniez is
erroneous because it contradicted the
holding in Dillman v. Nadelhoffer, 23
Ill App. 168 (1887). In that case,
the appellate court held that a
judgment debtor could not defeat the
execution of a judgment by showing
98
No. 1-09-0583
that the judgment date was incorrect.
Dillman was decided prior to 1935 and
therefore lacks precedential
authority. See Bryson v. News America
Publications, Inc., 174 Ill. 2d 77,
95, 672 N.E.2d 1207 (1996) (appellate
decisions issued prior to 1935 have no
binding authority). Moreover, the
plaintiff's reliance on Dillman is
misplaced. In the present case, there
was no issue as to the correctness of
the date of the plaintiff's judgment
and no question that the plaintiff
could execute on his judgment, which
99
No. 1-09-0583
were the issues in Dillman. Dillman
did not address whether an incorrect
judgment date in the recorded
memorandum of judgment created a lien
on real property.
The plaintiff does not address or
distinguish the cases this court
relied on in reaching its decision in
Maniez. While maintaining that it was
error to allow a scrivener's error to
defeat the lien in this case, the
plaintiff ignores the basis for this
court's decision: that the recording
of the memorandum of judgment with an
100
No. 1-09-0583
incorrect judgment date did not
satisfy the strict compliance standard
required in complying with section 12-
101. Maniez, 383 Ill. App. 3d at 42.
Moreover, this court explained why the
scrivener's error argument did not aid
the plaintiff. See Maniez, 383 Ill.
App. 3d at 44 ("Even if we were to
agree with the plaintiff that the
inclusion of the incorrect date in the
memorandum of judgment was a
scrivener's error, we must strictly
adhere to the requirements of section
12-101"). Therefore, the plaintiff
101
No. 1-09-0583
has failed to establish that this
court's decision in Maniez was
palpably erroneous.
2. Best Interest of Society and
Manifest Injustice
As an alternative ground for
overturning this court's decision in
Maniez, the plaintiff contends that
the decision was contrary to the best
interests of society and resulted in a
manifest injustice in this case,
citing Devines v. Maier, 728 F.2d 876(7th Cir. 1984). In that case, the
court held that the law of the case
102
No. 1-09-0583
doctrine should not be applied "'where
the law as announced is clearly
erroneous, and establishes a practice
which is contrary to the best
interests of society, and works a
manifest injustice in a particular
case.'" Devines, 728 F.2d at 880,
quoting United States v. Habig, 474
F.2d 57, 60 (7th Cir. 1973).
As we noted previously, federal
decisions are not binding on
this court. The two Illinois cases
cited by the plaintiff do not
reference consideration of the "best
103
No. 1-09-0583
interest of society." See People v.
Williams, 138 Ill. 2d 377, 391-92, 563
N.E.2d 385 (1990); Aardvark Art, Inc.,
284 Ill. App. 3d at 633; see also
Jacobazzi, 398 Ill. App. 3d at 931.
The plaintiff's discussion of the
reformation of judgments under the
mortgage foreclosure law fails to
consider that, because the
requirements of section 12-101 were
not strictly adhered to, no lien was
created in this case. Therefore,
there was nothing to be reformed or
foreclosed upon. In any event, we
104
No. 1-09-0583
strongly disagree with the plaintiff
that the decision in Maniez was
contrary to the best interests of
society. As we explained in Maniez,
"the purpose of recording the
memorandum of judgment is not just to
alert the debtor that a judgment had
been entered but prospective
purchasers as well." Maniez, 383 Ill.
App. 3d at 43. Strict adherence to
section 12-101 assures that the
public, as well as the judgment
debtor, has reliable information as to
existence of a lien on real property.
105
No. 1-09-0583
Finally, the plaintiff argues
that the decision in Maniez resulted
in a manifest injustice to him. He
incorporates his prior arguments on
judicial and equitable estoppel. As
neither
judicial nor equitable estoppel barred
Ms. Koshiyama from
asserting the invalidity of the
plaintiff's lien, those
arguments do not establish that an
injustice occurred.
The plaintiff also argues that it
would be a manifest
106
No. 1-09-0583
injustice to allow Ms. Koshiyama, as
the surviving joint tenant,
to benefit by receiving the property
free from the plaintiff's
judgment lien because of a scrivener's
error. As we explained in rejecting
the plaintiff's palpably erroneous
argument, this was not a case of
scrivener's error. Moreover, if the
plaintiff believed that he had a valid
judgment lien on the Harbor Drive Unit
property, he fails to explain why he
waited almost a year after the close
of Ms. Koshiyama's bankruptcy case to
107
No. 1-09-0583
seek to foreclose the judgment lien.
Finally, the plaintiff is not without
a remedy for inaccuracy of the
judgment date in the memorandums. We
conclude that the plaintiff has failed
to establish that the decision in
Maniez resulted in a manifest
injustice under the circumstances of
this case.
CONCLUSION
As the plaintiff no longer had a
valid judgment lien against the Harbor
Drive Unit, the circuit court's
dismissal of the complaint to
108
No. 1-09-0583
foreclose the judgment lien was
proper.
The judgment of the circuit court
of Cook County is affirmed.
Affirmed.
GARCIA and LAMPKIN, JJ., concur.
109
No. 1-09-0583
110
No. 1-09-0583
111
No. 1-09-0583
112
No. 1-09-0583
113