## I L L I N O I S 

## O F F I C I A L 

## RE P O R T S Appellate Court

Harris N.A. v. Harri

s , 2012 IL App (1st) 113813

Appellate Court Caption HARRI S N.A., Plaintiff-Appellee
, v. SHERI HARRI S
, DefendantAppellant (Stuart L evine, De fenda nt).

District & N o. First District, F irst Division Docke t No. 1-11-3813

Filed Rehea ringdenied September 4, 2012

September 18, 2012

Held (Note : This syl lab us

con st it ute s n o par t of the opi nio n of the cour t but has bee n pre

par ed by the Repo rt er of D e c i s i o n s f

o r t h e

c o n v e n i e n c e o

f t h e

rea der

. ) Summary judgme n t was properly enter ed for plaintiff on its complaint al leg ing that defe ndant’s former husband defa ulted on a note held b y plaintiff and fra

udulently transfe rre d assets to defe ndant in an attempt to preve nt plaintiff from repossessing the m.

Dec ision Under Review Appeal from the Circuit Court of Cook County
, No. 10-CH-07536; the Hon. Nanc y

J . Arnold, Judge, pr esiding

.

J udg ment Affir med.Counsel on

Appea l L eslie J. R osen, of Chica g o, for a ppellant.

Chapman & Cutler, L LP, of Chicag o (David S. Ba rritt and J am es P. Sulli van, of c ounsel), for

appellee

.

Panel PRES IDI NG J USTI CE HOF FMAN delivere d the judgme nt of the court, with opinion.
J ustices Hall and Karne zis concur red in the judgment and opinion.

OP INION

¶ 1 The appellant, Sheri Har ris, appea ls from the circ uit court’ s ru l i n g grantingsummary judgme nt in favor of the plaintiff, Har ris N.A., on sever al counts of its complaint ag ainst her and her former husband Stuart L evine, who is not a party to this appea l. The complaint alleg ed that L evine had defa ulted on a note and had fra udulently transfe rre d assets to the appellant to avoid their being rec ouped by the bank. On appea l, the appellant arg ues that the trial court err ed in finding most of the disputed transfe rs to be fra udulent, beca

use (1) L evine had no owner ship interest to transfe r afte r his assets had been forf eited to the United States
g overnme nt; (2) the transfe rs wer e not fra udulent beca

use they wer e eff

ecte d for the purpose of maintaining the defe ndants’ home, as require d by a forf eiture agree ment with the United States; (3) the transfe rs wer e not fra udulent beca

use they wer e m ad e i n ex change for adequate consideration; (4) to the extent the trans fe rs wer e fra udulent, the plaintiff was entitled to only one-ha lf of their value, beca use the transfe rre d assets wer e marital proper ty ; (5) the circ uit court should not have ruled the transfe r of a Moore sculpture to be fra udulent, b ec ause the plaintiff never so alleg ed; and (6) the circ uit court should not have ru l ed t h e transfe r of an Andy W arh o l p ortfolio to be fra udulent, beca

use L evine never had an

owner ship interest in the portfolio. For the rea sons that follow, we aff irm the circ uit court’s judgme nt. ¶ 2 In Fe bruar

y 2002, the plaintiff filed i t s co mp l ai n t , wh i ch alleg ed that L evine ha d defa ulted on a note and that judgme nt had been enter ed ag ainst him for more than $3,3 0 0
, 0 0 0

. T h e complaint further alleg ed that, knowing that he was insolvent and acting with the intention of preve nting full collection of the judgme nt, L evine had either transfe rre d

sever al valuable assets to the appellant f or no considera

tion or had sold the assets and then transfe rre d the proce eds to the appellant for no co n s i d eration. The complaint specific ally mentioned an owner ship in Hidden Be ac h R ecords, L L C (sold for $50,000); a Mitoraj

s c u lp tu r e ( s o ld f o r a p proxi mately $130,000); “ce rtain artwor k” (one sale for $63,500, an o th e r fo r approximately $25,000); a Moore sculpture (sold for $100,000); a fede ral inco m e t ax ref und (appr ox imately $25,000); a J eanne Duval painting (sold for $39,550); a dining room set and other persona l p ro p erty (sold for approximately $63,000 in one instance and

-2-$100,000 in another); an Andy Warhol portfolio (sold for $55,000); a car (value d at

$32,000); his ownership intere st in a Weston, Florida, re sidence (value d at $600,000); and approximately $431,000 of the proce eds of the sale of his and the appellant’ s Highland Park home. The plaintiff alleg ed that these transfe rs violated the Uniform Fr audulent Transf er Act (Ac t) (740 I L CS 160/1 et seq. (West 2010)), and it asked, among other things, that the court decla re the transfe rs void and ente r judg ment ag ainst the appe llant. ¶ 3 The appellant responde d by filing a motion to dismiss that argued, inter alia
, that L evine had forfei t ed to the g overnme nt his interest in the disputed proper ty and that she g ave

rea sonable consideration in exchang e for the proper ty beca use she had leg al right to half of it. In support of her motion, the appellant prese nted L evine’ s 2006 pl ea agr ee ment in case number 05-CR-691 in the Norther n Division of the United Sta t es Di s trict Court. That
agree ment contains the followingprovision reg ardingL evine’ s forfe iture: “[ L ev i n e] further acknow ledg es that the g overnme nt will file a civil complaint
ag ainst cert ai n p roperty , namely $5 milli on, alleg ing that the proper ty is subject to forf eiture. [L evine] relinquishes all right, title, and interest he may have in this proper ty that is used to satisfy the amount due and further agree s to the entry of a judgme nt ag ainst him, exti nguishing any intere s t or claim he may have had in the proper ty subject to forf eiture, r eg ardle ss of wher e they may have been tra

nsfer red or hidden. *** [L evine]
agree s that no transfe rs of proper ty available to satisfy this judgme nt can be eff ectuated by [hi m] or his ag ents without concur renc e of the g overnme nt or approva l of the Court. To the extent that [L evine] owns any proper ty available to satisfy this judgme nt jointly
, he agree s that any eff

orts to sell, to t ra nsfer
, or otherwise convey his interest shall be subject to the same co n d i t i o n s. Fur ther, [L evine] agree s [t o] maintain all financ ial obligat ions relating to any proper ty so as t o prese rve and protec t the availability of t he
proper ty to satisfy the forf eiture judgment.” ¶ 4 The appellant also prese nted a Marc h 2008 stipulated agree ment betwee n her and fe dera l
prosec utors. That agree ment rec ited L evine’ s liability in a forf eiture suit, and it described the forf eiture suit as follows:
“5. On Fe bruar

y 21, 2008, the United States filed a verifie d complaint for forf eiture *** for funds in the amount of five milli on dollars, *** to be satisfied by proce eds of the

rea l properties loc ated [in Highla nd Park, I llinois ,] and [ Weston, Florida].

***
7. On M arc h 5, 2008, [L evine] entere d into a stipulated agree ment with the Unit ed States resolving his interests in and claims to the defe ndant proper ties and *** agree d to the entry of a judgme nt ag ainst him in the amount of five milli on dollars and waived any right ***, title or interest he may have in the defe ndant proper ties or the proce eds from the sale of

the prope rties ***.
8. The defe ndant proper

ties repr esenting the substitut e res to be sold so that proce eds
may be applied to the aforementioned outstanding ag ree d five million doll ar judgment ag ainst [L evine ] ar e h eld j ointly by [L evine] and [ the appellant]
, his spouse, as part of their marital estate. The parties agree that the assets of the marital estate of [L evine and the appellant] have an aggr eg ate value of approximately $4,230,256. [The appellant]

-3-understands and acknow ledg es [L evine’ s] obliga tion to satisfy this forf

eiture judgme nt ***. The United States understands and acknow ledg es that [the appellant] has a leg al right, title and interest to 50 perc ent of the val u e o f the assets of the marital estate she share s with [L evine], and that the United States may not seek to satisfy the forf eiture judgme nt ag ainst [L evine] with [ her] interests in the marital e state. 9. In consideration of the fore g oing an d in resolution of the respe ctive interests of [t he appellant] and the United States in the assets of the marital estate, [the appellant] and the United Sta t es agr ee t o the forf eiture of fifty perc ent (50%) of the afor ementioned
agree d value of the marital es t at e less $250,000 which amount the parties agree approximately equals $1,865,128, in par tial satisfaction of the f

orfe iture judgment. On Marc h 4, 2008, a purc hase a nd sale a gree ment *** was ex ecute d betwee n [L evine, the appella n t ]
, an d a prospec tive buyer for [the Highland Park proper ty ] in the amount of $3,850,000.00. *** Fr om the closing of the [Highland Park proper ty ], the United States, in satisfaction, will rec eive a pproxi mately

$1,865,128 of the ne t proce eds ***. ***
10. *** [T] he United States agree s that upon the partial satisfac tion of the forf eiture judgme nt de scribed above, it will have no further claim and will take no further action, including administrative, civil or other criminal proce eding ag ainst any [of] the proper ty , rea l or persona l, in which [the appe llant] prese ntly has an inter est or cla im.
11. [The appellant] further agree s that while t h e [Highland P ark] proper ty is in the
proce ss of being marke ted for sale and until such time as the completed sale has closed ***, she must maintain the defe ndant rea l proper ties and continue to satisfy all financ ial obligations associate d with the rea l proper ties in order to prese rve and protec t these rea l
proper ties *** so that the proce eds from their sale can be applied to the agree d judgme nt ***.” ¶ 5 The appellant’ s moti o n t o d i s m i s s i n cl uded a copy of a simil ar stipulated agree ment betwee n the g overnme nt and L evine. That agree ment stated that L evine agree d to relinquish his interest in proper

ty used to satisfy the forf

eiture claim ag ainst him and that the forf eiture claim was “to be satisfied by p ro cee ds from the sale of” the Highland Park and Weston
p r o p erties. It further stated that the g overnme nt’s forf eiture complaint had been filed “ag ainst five million dollars and the [ Highland Park a nd Weston] proper

ties, the proce eds fr om the sales of those rea l proper ties being substitut ed for the five milli o n dollar judgme nt and subject to forf

eiture.” As with the appellant’ s stipulated agree ment , L evine’s agree ment included a clause stating that he would maintain the rea l proper ties so that their value would be prote cted until they

wer e sold. ¶ 6 Also attache d to the motion to dismiss was a cop y o f t h e fo rf ei ture complaint filed
ag ainst L evine in Fe b ruary 2008. That complaint stated that it was a forf eiture action “for forf eiture of funds in the amount of five milli on dollars, to be satisfied by proce eds from the sale of r eal pr operties loca ted [in Highland Park a

nd Weston] .” ¶ 7 In addition, the appellant pr ovided a c opy of the July

1, 2008, judgme nt dissolving her and L evine’ s marria g e. Acc ording to the agree d p ro p er ty distribution attache d to that judgme nt, the appellant kept an A.G. Edwar ds acc ount and two Chase Ba nk acc ounts, while L evine ke pt a third Chase B ank ac count.

-4-¶ 8 Finally
, the appellant attache d to her motion to dismiss a partial transcript of a deposition

in which L evine claimed not to have owned any Andy Warhol artwor k. L evine explained that the W arhol art at i ssue was owned by someone else but kept in his house for sever al y ear s for sa feke eping

. ¶ 9 The circuit court denied the appellant’s motion t o dismiss
, and the appellant a nswere d the plaintiff’s complaint. In her answe r, the appellant admitted that assets or proce eds of
asset sales identified in the complaint had been place d into her bank acc ounts. Among these admissio n s wa s an admission that she sold the Andy Warhol portfolio for $55,000. The appellant added sever al aff irmative defe nses, including a defe nse that she used the proce eds for or dinary

financ ial aff

airs such a s household expenses. ¶ 10 The plaintiff and the appellant there afte r filed cross-motions for summary judgme nt. In her motion, the appellant rei terated her arg uments that L evine never had an interest in the disputed assets, had l o s t his interest by forf eiture, or had transfe rre d his interest to the appellant pursuant to the dissoluti on of their marria g e. The appellant attache d to her motion the above- quoted documents. She also at tache d an aff idavit in which she aver

red that she liquidated marital assets in order to meet household expen s es b ec ause “most of [t heir] liquidated marital asse ts were frozen.” I n her affidavit, the appellant acc ounted for he r use of som e o f t h e p roce eds of the asset sales. S he li sted household expenses as well as credit

car d bills, laundry service s, clea n i n g s er v i ces, living expenses for her children, persona l training expenses, m ed ical expenses, leg al fee s, automobile expenses, and taxes. She supported her aff

idavit with excerpts from her ac co unting reg ister and with sometimesreda cted ba

nk statements. ¶ 11 In its motion for summary judgme nt, the plaintiff argued, am o n g o th er t h i ng s, that L evine’ s forf

eiture encompa ssed only the two named parc els of rea l p roperty and that the appellant’ s and L evine’ s divorce did not shield their other assets fr om liabilit y

. ¶ 12 Af

t er hearing arg

ument on the cross-motions, the circ uit court grante d the p l ai n t i ff’s motion for summary judgme nt wi t h re spect to sever al of the transfe rre d or sold assets, including the Moore sculpture, the Warhol portfolio, some persona l proper ty , an income tax ref und, and the Hidde n Be ach Re cords owne rship interest. The circ uit court fixed the total value of these assets at $546,325.73. Howeve r, the circ uit court grante d summary judgme nt to the appellant with respe ct to an automobile and the proce eds of the sales of the Hig hland Park and Weston prope rties. The a ppellant now timely

appea ls the circuit cour

t’s order

. ¶ 13 Be cause all of the appellant’ s arguments on appea l challeng e the circ uit court’s de cision
to grant summary judgme nt p ar t l y in favor of the plaintiff, we beg in our analysis with the well-e stabli s h ed standards for revie w of a circ uit court’s decision to grant summary judgme nt. Summary judgme nt is proper wher e “the pleading s, depositions, and admissions

on file, toge ther with the aff idavits, if any , show that there is no g enu i n e i s s u e as t o any materia l fac t and that the moving party is entit l ed t o a j u d gment as a matter of law.” 735 I L CS 5/ 2-1005(c ) (West 2010). “T he func tion of a reviewing court on appea l from a grant of summary judgme nt is limit ed to de termining whether the trial court corr ectly conclude d that no g enuine issue of materia l fac t was raised and, if none was raised, whether judgme nt

as a matter of law was corr ectly enter ed.” American Family Mutual Insurance Co. v. Page
,

-5-366 I ll. App. 3d 1112, 1115, 852 N.E.2d 874 (2006). “The propriety o f a trial court’s

decision to grant summary judgme nt prese nts a question of law, which we revie w de novo .” Bigelow Group, Inc. v . Ricke rt , 377 I ll. App. 3d 165, 168, 877 N.E.2d 1171 (2007). ¶ 14 T h e circuit court here gr anted summ ary judgme nt to the pl aintiff on its claims that the appellant rec eived fra

udulent transfe rs of as s ets , in violation of section 6 of the Act. That section provides, in pe rtinent part, a s follows:
“A transfe r made or obligation incur red by a debtor is fra

udulent as to a cre ditor whose claim arose befor e the transfe r was made or the obligation was incurr ed i f th e debtor made the transfe r or incurre d the obligation without rec eiving a rea so n ab ly equivalent value in exchang e for the transfe r or obligation and the debtor was insolvent at that time

or the debtor beca

me insolvent as a result of the transfe r or obliga t i o n

. ” 740 I L CS 160/6(a) ( West 2006).
I f its elements are met, the Act cre ates a presumption of the debtor’s fra ud. See Cordes & Co. v. Mitche l Cos. , 605 F. Supp. 2d 1015, 1020-21 (N .D. I ll. 2009) (discussingthe Act)

. ¶ 15 The appellant does not dispute that L evine’ s indebtedness to the plaintiff arose befor e the transfe rs now at issue, nor does she dispute that L evine was insolvent at the rele vant times. Instead, she raises six distinct challeng es to the circ uit court’s finding that his transfe rs to her

wer e fr audulent under

the Act. ¶ 16 First, the appel l an t argues that the proper ty transfe rs could not have been f raudule nt, beca use L evine had no assets to transfe r to her in the first place

. Acc ording to the appellant, L evine “had nothing to transfe r beca use he had forf

eited all of his assets to the United States
g overnme nt.” We disagree with the appellant’ s interpre tation o f the fede ral forf eiture
proce eding s ag ainst L evine. Ins t ea d
, we agree with the pl aintiff that the s cope of L evine’ s forf eiture w as limited to his i ntere st in the Highla nd Park and Weston prope rties. ¶ 17 We draw this conc lusion from the documenta tion the a ppellant pre sented to the c ircuit
court. That documentation beg ins with L evine’ s plea agree ment, which states that the United States would pursue a $5 milli on forf eiture complaint ag ainst “ce rtain proper ty” of L evine’ s and encumbe r L evine’ s ability to transfe r proper ty “ava ilable to satisfy this judgme nt.” L ater documents clar ify exactly what “ce rtain proper ty” would satisfy the forf

eiture judgme nt. The stipulated agree ment betwee n the ap p el lant and the United States, like the agree ment betwee n L evine and the United States, indicates that the fo rf ei tu re judgme nt was “to be satisfied by the proce eds o f t he rea l proper ties located [i n Highland Park and Weston] .” L ikewise, the forf

eiture complaint itself states that th e forf eiture judgme nt was “to be
sat i s fi ed by proce eds from the sale of rea l proper ties located [i n Highland Park and Weston] .” These passag es unequivoca lly limit the rea ch of the forf eiture judgme nt to the two

rea l properties. ¶ 18 To urg e a differ ent interpre tation, the appellant points out that her stipulated agree ment with the United States included (1) a valuation of her and L evine’ s marital estate and (2) the
g overnme nt’s agree ment to leave just over half of t h at value for the appellant. In the appellant’ s view, these passag es indicate that the g overnme nt seized the entirety of L evine’ s portion of the marital estate, not just his rea l estate holdin gs

. W e d isagree

. The passag e to which the appellant ref

ers does indeed set a value for the marital estate, but it does so for

-6-purposes of shielding the appellant from L evine’ s forf eiture. The fac t that the gover nment put a value on the marital estate does not chang e the scope of L evine’ s forf eiture, which, as

we have stated, was limit ed to his interest in the two named rea l proper ties. For that rea son,

we reje ct the ap p el l ant’s argument that L evine’ s forf eiture bere aved him of any proper ty interests he c ould have tra nsfer red f raudule ntly

. ¶ 19 The appellant’ s second argument on appea l is that the transfe rs here wer e not f raudule nt, beca use they wer e nece ssary to allow her to maintain her and L evine’s rea l proper ty , an obligation that she and L evine assumed pursuant to their agree ments with the United States. As support for this arg

ument, the appellant points out that household expenses wer e paid out of her persona l acc ount. Ba sed on this, the appellant argues that she and L evine had no choice but to sell the disputed assets and place them in her acc ount. Howeve r, among its

sever al response s to this point in its brief, the plaintiff points out that, at the time of the disputed asset transf

ers, the appellant had acc ess to ove r $1 milli on in he r own funds. This fac t belies her claim th at s h e and L evine neede d to sell the assets in order to pay for household expenses. ¶ 20 The a

ppellant’s third argument on appea l is that the transf ers should not be c onsidered fra udulent beca

use L evine rec eived adequate consid er at i o n for them. Be cause the lack of adequate consideration is one of the three elements nece ssary to establish fra ud under section 6(a) of the Act, the appellant argues that the exchang e of consideration defe ats the plaintiff’s fra ud claim. The appellant argues that L evine transfe rre d the assets to her so that she would
pay household bills as require d by the terms of his criminal bond, and thus that he obtained a benefit–his own l iberty

–in exchang e for the assets. Howeve r, as the pl aintiff observes i n its brief, neither the appellant nor L evine r aised this “liberty” argument at t he circuit court level. Moreove r, as even the appellant observe s in her b ri ef
, “[ t ]here was no evidenc e prese nted on these cross motions for s u m m ary judgme nt as t o what [ L evine’ s] liberty ***
meant to him.” Be cause neither this argument nor any evidenc e supporting it was prese nted
to the circ uit court, we deem the argument forf eited on appea l. See Cooney v. Magnabosco
, 407 I ll. App. 3d 264, 268, 943 N.E.2d 290 (2011) (stating that an appellant that fails to raise an issue in the cir cuit court wa ives that issue for pur poses of a ppeal)

. ¶ 21 The appellant’ s fourth arg ument i s t h at m u ch of the disputed proper ty was marital
proper ty in which the appellant alre ady held a one-ha lf interest. Thus, she arg ues, at least half of the proc eeds f

rom the sale of

those assets belong ed to her irrespe ctive of any

fra udulent transfe r. Howeve r, ag ain, the plaintiff failed to raise this argument at the circ uit court level, and we deem it forf

eited. ¶ 22 The appellant next argues that the circ uit court should not have awa rded the plaintiff the value of the M oore sculpture, because the plaintiff never asserted that L evine’ s transfe r of the Moore sculpture to her was fra udulent. We disagree

. Count V of the plaintiff’s complaint, titled “Violation of I llinois Uniform Fr audulent Transf er Act Transf

er of M o o re Sculputure,”

asser ts that “[t] he sale by L evin e o f the Moore sculpture *** was fra udulent.” That count pray s that the court, among other things, “[d] ecla re the sale[ ] of the Moore sculpture *** as void” and “[o] rder that [t he judgment a gai n s t L ev ine on the pl aintiff’s note] be declare d a lien on the Moore sculpture.” T h i s count unquestionably raises the alleg ation that L evine transfe rre d the sculpture to the a ppellant in order

to defra ud the plaintiff.

-7-¶ 23 The appellant’ s final argument on appea l is that the circ uit co u rt erre d i n rulingthat

L evine fra

udulently transfe rre d the Warhol portfolio. In fac t, the appellant ar gu es , “[t] he evidenc e was undisputed that [L evine] never had an owner ship interest in this portfolio.” Be that as it may , the evidenc e is also unquestioned that the appellant sold to a third party whateve r i ntere st she an d L evine had in the portfolio. The actual value of that i ntere st is a matter for them and their buyer. F or our pur poses it is sufficie nt to know that the appellant

rec eived va lue for it, and L evine a nd the plaintiff did not. ¶ 24 For

the fore g oing r easons, we aff irm the judg ment of the c ircuit court.

¶ 25 Affir

med.

-8-