Filed 9/30/08 NO. 4-07-1079

IN THE APPELLATE COURT

OF ILLINOIS

FOURTH DISTRICT

In re: the Estates of HAROLD A. MARKERT,

Deceased, and JUANITA W. MARKERT, Deceased,

JAMES R. INGHRAM, the Trustee of the 

Bankruptcy Estate of Anthony L. Markert,

Proposed Intervenor,

Petitioner-Appellee,

 v.

ANTHONY L. MARKERT, TODD A. MARKERT,

CHAD M. MARKERT, KARA S. MARKERT, and

KURT J. MARKERT,

Respondents-Appellants.

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Appeal from

Circuit Court of

Brown County

No. 05CH4

Honorable

Alesia A. McMillen,

Judge Presiding.

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PRESIDING JUSTICE APPLETON delivered the opinion of the court:

Defendants, Anthony L. Markert, Todd A. Markert, Chad M. Markert, Kara

S. Markert, and Kurt J. Markert, appeal from a summary judgment against themselves

and in favor of plaintiff, James R. Inghram, the trustee of Anthony's bankruptcy estate. 

The trial court held that Anthony's conveyance of property to the other four defendants,

his children, violated section 6(a) of the Uniform Fraudulent Transfer Act (Act) (740

ILCS 160/6(a) (West 2004)). Defendants have not shown us a genuine issue of material

fact as to any of the elements of section 6(a), and we conclude that plaintiff is entitled to

judgment as a matter of law. See 735 ILCS 5/2-1005(a), (c) (West 2004). In our de

novo review (Schillerstrom Homes, Inc. v. City of Naperville, 198 Ill. 2d 281, 286, 762

N.E.2d 494, 497 (2001)), we affirm the summary judgment.
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I. BACKGROUND

Anthony owned an undivided one-fifth interest in farmland in Brown

County, Illinois. He had received this ownership interest from his father, Harold A.

Markert. Apparently, defendant farmed ground for his father, and his mother, Juanita

W. Markert; it is unclear in what capacity he did so. Both Harold and Juanita are

deceased, and at the time of the disputed conveyance, their estates were still in probate. 

The legal description of Anthony's ownership interest in the farmland was as follows:

"An undivided 1/5 interest in: The Northeast Quarter

of Section Number Eleven (11) in Township One (1) South of

the Baseline, Range Four (4) West of the Fourth Principal

Meridian, situated in the County of Brown, in the State of

Illinois, EXCEPT Two and One-half (2 1/2) acres off the

South side of said tract of land, AND ALSO EXCEPT the

right-of-way of the Wabash Railroad Company through and

across said tract of land, AND ALSO EXCEPT Commencing

at the Southeast corner of said Northeast Quarter; thence

North on the East line of said Northeast Quarter 101.25 feet

to a point on the North right-of-way line of Route #24; thence West on said North Right of Way line 33 feet to the true

point of beginning; thence North parallel to the East line of

said Quarter Section and along the West line of an existing

33 feet roadway 135 feet to a point; thence West parallel to

the South line of said Northeast Quarter 481 feet to a point;
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thence South parallel to the East line of said Northeast Quarter 135 feet, more or less, to the North right-of-way line of

Route #24; thence East along the North right-of-way line of

said Route #24, 481 feet, more or less, to the true point of

beginning, together with the right of ingress and egress over

said existing 33 feet roadway running along the East line of

the above described premises ***."

By quitclaim deed on April 13, 2004, Anthony conveyed this one-fifth interest to his

children in return for their oral agreement to assume responsibility for the mortgage on

this interest. The children paid him no cash consideration. In their brief, defendants do

not dispute that the conveyance was for inadequate consideration.

On September 20, 2005, in case No. 05-75094 in the Central District of

Illinois, Anthony filed a petition for a chapter 7 bankruptcy. 11 U.S.C. § 701 et seq.

(2002). The bankruptcy petition is in the record. In their brief, defendants cite the

schedules of the bankruptcy petition as proof that Anthony was not insolvent in April

2004, when he conveyed the one-fifth interest in the farmland, and that the conveyance,

therefore, was not constructively "fraudulent" under section 6(a) of the Act (740 ILCS

160/6(a) (West 2004)). We understand defendants to be suggesting that these schedules accurately reflect Anthony's financial situation at the time of the conveyance. 

Defendants itemize Anthony's assets as follows:
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Cash $ 100

Checking Account $ 319

Household Goods $ 800

Clothing $ 75

Interest in Parents' Estates $ 200,000

Truck $ 1,200

Tools $ 400

Equity in One-Fifth Interest $ 20,000 

in Farmland

Claim Against Parents'

Estates for Agricultural Supplies $ 38,000

TOTAL $ 260,894

Defendants itemize Anthony's debts as follows:

Armtech Insurance $ 1,205

Capital Bank $ 809

First Premier Bank $ 368

Household Credit Services $ 2,685

HSBC Card Services $ 1,239

HSBC Card Services $ 766

Pro Com Services of Illinois $ 5,384

Professional Adjustment Bureau $ 71,333

Providian Processing Services $ 881

Providian Processing Services $ 5,578

Randall L. Leshin $ 306
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Safe Petroleum $ 2,595

Father's Estate $ 2,573,889

Mother's Estate $ 2,573,889

Claim Filed by Father's Estate $ 66,889

TOTAL $ 5,307,816

Anthony had issued some notes to his parents, and under these notes, he

owed $2,573,889 to his father and another $2,573,889 to his mother; but at the time

Anthony conveyed his one-fifth interest in the farmland, an action on these notes would

have been barred by a statute of limitations. The notes still had an important legal

consequence. On March 23, 2007, in Estate of Harold A. Markert, No. 96-P-5, and

Estate of Juanita W. Markert, No. 99-P-6, the Brown County circuit court entered

summary judgment in favor of the administrators of those estates, finding that they had

"no obligation to distribute any share of either estate to Anthony L. Markert[] which

would otherwise have been distributed to him but for his indebtedness to both estates,

which [was] greatly in excess of what otherwise would have been his distributive share." 

See Herbolsheimer v. Herbolsheimer, 321 Ill. App. 285, 291, 53 N.E.2d 18, 21 (1944)

("the defense of the statute of limitations is not available to an heir of an estate when the

executor or administrator is seeking to collect notes due from one of the heirs, or charge

the amount of the notes against the distributive share of the heir").

II. ANALYSIS

In the present case, plaintiff moved for a summary judgment that Anthony's transfer of his one-fifth interest in the farmland to his children was a "fraud in

law" under section 6(a) of the Act (740 ILCS 160/6(a) (West 2004)). That section
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provides as follows: "A transfer made *** by a debtor is fraudulent as to a creditor

whose claim arose before the transfer was made *** if the debtor made the transfer ***

without receiving a reasonably equivalent value in exchange for the transfer *** and the

debtor was insolvent at that time ***." 740 ILCS 160/6(a) (West 2004). In the hearing

on his motion for summary judgment, plaintiff argued that Anthony was "insolvent"

within the meaning of section 3(a) of the Act, which provides: "A debtor is insolvent if

the sum of the debtor's debts is greater than all of the debtor's assets at a fair valuation." 

740 ILCS 160/3(a) (West 2004).

Defendants argue the trial court erred in finding that Anthony was

insolvent at the time of the conveyance. They argue that Anthony "became insolvent

only after the actions *** barring [him] from receiving his share of the [e]states[,]

estimated between $200,000 and $250,000." It was not until November 2004--months

after the conveyance to his children--that Anthony was served a summons and a copy of

the complaint in which his family "assert[ed] the old notes as a set[]off against his share

of his parents' estates." It was his "siblings['] subsequent actions[,] after the transfer[,]

[that] made him insolvent," namely, their obtaining a judicial determination that he was

entitled to no distribution from his parents' estates. Until then, he was solvent, so he

argues; an action on the notes would have been time-barred.

The fallacy of this argument lies in the assumption that on April 13, 2004,

when Anthony conveyed his one-fifth interest in the farmland to his children, his

interest in his parents' estates was really and truly worth $200,000. Anthony had not

yet received the $200,000. The asset was contingent, and we must consider its expected

value as of April 13, 2004. See In re Xonics Photochemical, Inc., 841 F.2d 198, 200 (7th
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Cir.1988) ("It makes no difference whether the firm has a contingent asset or a contingent liability; the asset or liability must be reduced to its present, or expected, value

before a determination can be made whether the firm's assets exceed its liabilities"). Its

value depended on the likelihood that the contingency would occur. Cf. Covey v.

Commercial National Bank of Peoria, 960 F.2d 657, 659 (7th Cir. 1992) ("to find the

value of a contingent liability[,] a court must determine the likelihood that the contingency will occur"). Anthony's receipt of $200,000 from his parents' estate was contingent on there being no setoff. Because it cannot be assumed that the administrators of

the estates of Harold and Juanita Markert would ignore an indebtedness to the decedents in the amount of $5,147,778, Anthony's interest in his parents' estates was worth

nothing on April 13, 2004, when he executed the quitclaim deed. The record gives us no

reason to expect that a hypothetical buyer in an arm's-length transaction would have

been willing to pay anything for that contingent asset. When we subtract the $200,000

from Anthony's assets (by reason of the setoff) and the $5,147,778 from his debts (by

reason of the statute of limitations), his assets total $60,894 ($260,894 minus

$200,000), and his debts total $160,038 ($5,307,816 minus $5,147,778). His debts

exceeded his assets, and he was "insolvent," according to the itemization that defendants

have provided in the statement of facts in their brief.
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III. CONCLUSION

For the foregoing reasons, we affirm the trial court's judgment.

Affirmed.

KNECHT and COOK, JJ., concur.