FIFTH DI VISI ON March 9, 2007 No. 1-05-2460 LAKESHORE DECARO, f/k/a LakeShore ) Appeal from the Digital Imaging, Inc., ) Circuit Court of ) Co ok Co un ty. Plaintiff-Appellee and ) Defendant-in-I

ntervention-Appellee, ) ) v. ) ) M. FELI X, INC., d/b/a L ake Shore ) Digital Imaging, Inc. and Color ) Com, MICHAEL F ELI

X, and ) GENARO FELI

X, ) No. 02 CH 13773 ) Defend ants )

________________________________________ ) (S te wa rt Ti tl e G ua ra nt y Co mp an y, ) Honorab le ) Sophia Ha ll, Plaintiffs-in-Intervention-Appellant). ) Judge Presi ding. PRESID ING

JUSTICE

O'BRI EN delive

red the o pinion of t

he court : Genaro Felix (Felix) owned some real property for which there were two existing mortgage liens. L akeshore Decaro (Lakeshore) subsequently obtained an $80,000 arbitration award against Felix and recorde d a memorandum of judgment against the prope rty. After Lakeshore re corded its judgment, Felix entered into a contract to sell the proper ty to Burke Chaney B uilders (Burke Chaney ). In connection with the purchase and sale of the property, the First National Bank of Brookfield (the B ank) lent Burke Chaney $104,8000 and received a mortgage on the property in the same amount. A portion of the loan proceeds was used to pay off the two prior mortgages a nd Cook County real estate taxes. The primar y question on appeal is whether the Bank's mortga ge lien was subrogated to the lien position of those ea rlier mortgages and taxes ahead of the judgment lien of Lakeshor e. We answer the question in theNo. 1-05-2460

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affirm ative , hol ding t hat th e Bank's mortga ge lien on th e prop erty is su perio r to Lakes hore's judgment lien. This matter relates to real property at 8015 Christie Avenue in Ly ons, which was owned by Felix and encumber

ed by two pree

xisting mortgages, each of which ha d been duly re corded. On November 8, 2002, Lake shore recorded its memorandum of judgment in the amount of $8 0, 00 0 a ga in st th e p ro pe rt y. On December 6, 2002, Felix closed the sale of the proper ty to Burke Chane

y. The purchase price was $131,000. I n connection with the purchase and sale of the prope rty, the Ba

nk made a m ortgage l oan to Burke C haney in t he amo unt o f $104 ,800. The pr oceeds of the Bank's mortgage loan were

used to pay off the

two prior mortgages in the amounts of $57,468.32 and $25,278.60. The proceeds of the mortgage loan also were used to pay off Cook County real estate ta xes in the a

mount of $3 ,294.60. A

t the closi ng, Fe lix received $36,79 8.23 from the sale of the property

to Burke Chaney

. Prior to closing, Burke Chaney and the Bank obtained commitments for title insurance from Stewart Title . Neither the commit

ments nor the owne r's and lender' s policies

eventua lly issued by Stewart Title to Bur ke Chaney a

nd the Bank disclosed Lake shore's memorandum of judgment. In J anu ary 2 003 , Lak esh ore in st it ut ed p ost ju dgm ent pro cee di ngs aga in st Fel ix . In Novem ber 20 03, Lakes hore s ent Bur ke Cha ney, the Ba nk, an d Ste wart T itle noti ce of a s herif f's levy sale of the

property sche duled for December 16, 2003. On Dece mber 12, 2003, Burke Chaney and the B ank filed an emergency petition to intervene in this matter, as well as anNo. 1-05-2460

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emergency

motion to stay the scheduled sheriff 's sale. In the e

mergency petition to intervene, Burke Chaney

and the B ank soug

ht a dete rmination that the B ank's mortgag e lien on t he prope rty was superior to Lakeshore 's judgment lien by virtue of subrogation, on the theory that proceeds from its mortgag e loan ha d been us ed to pay

off the tw

o senior mortgages and the Cook County real es tate t axes . Burke Chane y and the Ba nk sou ght to stay or te mpora rily rest rain t he she riff's levy sale until the lien priority issues could be determined. The trial court denied the motion to stay or restrain the sheriff's sale. L akeshore then purchased the property

at a sheriff's sale on Dece mber 16, 2003, for the sum of $83,000. Following the sheriff's sale, B urke Chaney and the Bank decided to redeem the pr operty. Prior to redeeming the property, though, they f iled a motion to allocate the proceeds of redemption. In the motion to allocate, they argued that L akeshore was not entitled to the entire redempt ion amount , but that, at best, L akeshor e was onl y e ntitled to t

he net pr oceeds F elix received from the sale of the proper ty, in the amount of $36,798.23. They further contended that a heari ng may be nece ssary

to deter mine whet

her the property

was Fel ix's homestead; if F elix had homestead rights in the property, then Lakeshore was only entitled to $29,298.23 (which represented the difference between $36,798.23 and the $7,500 homestead exemption.) On June 8, 2004, the trial court denied the motion to allocate the proceeds of rede mption. On June 15, 2 004, Stewa

rt Title, a cting un der both t he owner 's policy of

title insur

ance iss ued to Burke Chaney

and the lender's policy

of title insurance issued to the Bank, provided the funds necessary to redeem the property . Such funds amount to $87, 143.18. On May 5, 2005, Ste

wart Titl e was all owed to su bstitute a s plaintif

f in inter vention, i nNo. 1-05-2460

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place of its insureds, Burke Chaney and the Bank. The reason for the substitution was that Stewart Title had provided the funds for the redemption of the prope rty and had be come the real party in intere st. Stewart Title filed an amended complaint in intervention, alleging that the trial court had erred in deny

ing the motion to stay and the motion to allocate the proceeds of redemption. Stewart Title alleged that L akeshore had been unjustly enriched in the amount of $53, 701.77, which represented the differenc e between the $83,000 which L akeshore received from the redemption of the property , and the $29,298.23 which Lakeshore should have received. The tria l court dismissed Stewart Title 's amen ded compl aint in inte

rvention for fail ure to state a cause of action. Stewart Title filed a notice of appeal seeking review of the or der denying the motion to stay, the order deny ing the motion to allocate the proceeds of rede mption, and the order dismissing its amended complaint in intervention. The appeal of the order deny ing the motion to stay or re strain the sheriff's sale is moot, as the sheriff's sale has been made , and the parties are now disputing the allocation of the pr oceeds. Accordingly , we address the appeal of the order denying the motion to allocate and the order dismissing Stewart Title's amended complaint in intervention.

I. The Order D enying

the Motion to Allocate the Redemption Proceeds Initially , Lakeshore contends tha t the motion to allocate sought injunctive relief ( i.e. , an injunction directing the sheriff to accept an a mount less than the price successfully bid by Lake shore as

a valid r edemption of the pr

operty ) and tha t, pursua nt to Supre

me Court Ru

le 307(a)(1) (188 I ll. 2d R. 307(a)(1)), an interlocutory appeal should have been taken. Since noNo. 1-05-2460

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interlocutory appe al was taken, Lake shore contends that the appeal should be dismissed for lack of jurisdiction. Lake shore' s content

ion is witho

ut merit. O

ur supre me court has held t

hat while Rule 307(a)(1) confers on parties the rig ht to appeal certain interlocutory orders before entry

of final judgment, the rule does not require that such an interlocutory appeal must be taken. Salsitz v. Kreiss , 198 Ill. 2d 1, 11 (2001). Rather, the party has the option of waiting until after final judgment has been entered befor e seeking review of the interlocutory order. Salsitz , 198 Ill. 2d at 11. In the present case , Stewart Title timely filed its appeal a fter the trial court's final judgment dismissing its amended complaint in intervention. Accordingly, we have jurisdiction to hear the appeal. Lakeshore next contends that the motion to allocate the re demption proceeds was pro ced ura ll y imp rop er, bec aus e th ere was no u nde rlyi ng p lea di ng r equ est in g in ju nct iv e re li ef. In support, L

akeshor e cites America

n Feder ation of St

ate, Coun ty, & Munici

pal Employ

ees, Council 31 v. Ryan , 332 Ill. App. 3d 866, 870 (2002), which held that "the right to injunctive relie f neces saril y brings i nto q uesti on th e suffi ciency of t he com plain t." Co ntrar y to Lakesho re's argume nt, the re cord show s that Bur ke Chane y a nd the Ba nk filed a n underly ing plea ding to which wa s attached a prop osed comp laint in int erventi on. The pr

oposed c omplaint in intervention contained a count for preliminary and permanent injunctive relief. Lake shore al so conten

ds that the

motion to al locate the redem ption proc eeds fa

iled to properly plea

d all the elements required for injunctive relief. A par ty seeking

injunctive relief must demon strate ( 1) a cle ar and a scerta inable r ight in ne ed of protection; (2) irrep arable harm ifNo. 1-05-2460

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injunctive relief is not granted; (3) no adequate remedy a t law; and (4) reasonable likelihood of success on the merits. Allen v. Illinois Community Colleg e Board , 315 Ill. App. 3d 837, 848 (2000). The motion to allocate alleged irrepa rable loss of the Bank's lien interests for whic h no remedy a t law would be adequate, and a reasona ble likelihood of success on the merits based on existi ng c ase l aw (d

iscus sed b elow .) Ac cord ingl y, injunctive

reli ef was properl

y p lead ed. We proceed to address the merits of the appeal f rom the order deny

ing the motion to allocate. As discussed, this appeal arises from a dispute concerning lien priority. To rec ap, the real property a

t issue was owned by F elix and encumbered by two pr eexisting mortgages. L akeshore subseque ntly record ed an $80 ,000 judg

ment ag ainst the p

roperty. Felix the

n sold the p

roperty to Burke Chaney , which secured a mortgage loan from the Bank. A portion of the loan proce eds was used to pay of

f the two prior mortgages and Cook County real estate taxes. The issue: whether the Bank's mortg age lien was subrogated to the lien position of those e arlier mortgages and taxes ahead of the judgment lien of L akeshore. Young v. Morgan , 89 Ill. 199 (1878), and Cochran v. Cutler , 39 Ill. App. 3d 602 (1976), are dispositive. In Young , Whitehea d, the owner of re al prope rty , gave a trust de ed to Stee le in 1873 to secure a loan from Steele. I n March 1875, Young, a judgment cre ditor of Whitehead, recorded two judgments in the county in which the property

was located. Young , 89 Ill. at 200. The judgments became liens upon the property

. Young , 89 Ill. at 200. Thereafte r, in February 1876, Whitehead conveye d the property to Morgan. Young , 89 Ill. at 200. As part of the purchas e price , Morga

n caused the loan f

rom Steele

to be paid

off, and Steele executed a

releas e of the trust deed. Young , 89 Ill. at 200.No. 1-05-2460

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In J ul y 18 76 , Y ou ng br ou gh t a n a ct io n t o s el l t he pr op er ty b y me an s o f a sh er if f' s l ev y, and in August 1876 the property was so sold. Young , 89 Ill. at 200-01. Young was the successful bidder, and he received a certificate of sale from the sheriff

. Young , 89 Ill. at 201. Morgan then filed suit to set aside the sale on the gr ounds that the trust deed which he paid off was superior to the judgment liens of Young

. Young , 89 Ill. at 201. The circuit court granted the relief pray

ed for and set aside the sheriff' s levy. Young , 89 I ll. at 201. The supr eme court affirm ed, ho ldin g: "The trust deed here was the older and paramount lien to that of the judgments, and had the question been one between Steele, to whom the trust deed was g iven, his debt being unpaid, and Young, the judgment creditor, ther e can be no doubt the former would have been entitled to precedence; and the point of inquiry is, whether the same preference exists in fa

vor of the appelle e, Morg an, who pa id to Steele

the debt s ecured

by h is trust deed. It is the man ifest right an d equity of the case th at it shou ld." Young , 89 Ill. at 201. In Cochran , judgment creditors recorded a memor andum of judgment against the judgment debtors' property

. Cochran , 39 Ill. App. 3d at 605. On March 28, 1972, the judg ment debtors sold the property to the third- party buy ers. Cochran , 39 Ill. App. 3d at 605. The thirdparty buy ers paid off an existing vendor's lien that was prior in time and supe rior to the judgment lien and also paid off county real estate taxes. Cochran , 39 Ill. App. 3d at 605, 609. The thirdparty buy ers executed a mortgage in f avor of their lender. Cochran , 39 Ill. App. 3d at 604. The judgment creditors brought suit ag ainst the third-party buy ers and their mortgagee , seeking to have the judgment lien declar ed superior to the mortgage. Cochran , 39 Ill. App. 3d atNo. 1-05-2460

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604. The a

ppellate court he ld that to the extent the third-pa rty buyers and t

heir mort gage e paid off the liens and encumbrances incurre d by the judgme nt debtors prior to the filing of the judgment lien, "they

would be equitably entitled to be subrogated to the rights of the original vendor and ta x lienor and to assert those rights in the dis tributio n of the proceed s of any sale." Cochran , 39 Ill. App. 3 d at 60 9, cit ing Young v. Morgan , 89 Ill. 199 (1878). Similar to Youngand Cochran , the funds provided by the B ank were used to pay off the two pr eexi stin g mortga ges and real es tate t axes incur red pri or to t he fil ing of Lak eshor e's $80,000 judgment lien. As such, the Bank's mortg age lien was subrogated to the lien positions of those earlier mortgage s and taxes and therefore is superior to L akeshore's judgment lien. Lakesho re cont ends, thou gh, th at it would be ine quit able t o subr ogate t he Bank 's mortga ge lien to the lien

position of

the ear lier mort gage s and taxes . Lak

eshore' s content

ion is without merit, where Youngand Cochran held that equity favors such subrogation. Having determined that the Bank' s mortgage lien is subrogated to the lien position of the earlier mortgages a

nd taxes and is superior to Lakeshore' s judgment lien, we next must review the allocation of the proceeds of redemption. This issue was neve r fully addre ssed by the trial court, which effectively

determined that the Bank's mortga ge lien was not subrogated to the lien position of the earlier mortgages a nd taxes and which denied the motion to allocate. The trial court also never considered the effe ct of the homestead exemption on the allocation of funds. Accord ingly, we reverse the

order de nyi ng the motion to allo cate an d remand for the tr ial cour t to allocate the redemption proceeds consistent with this opinion. II . The Order Dismissing Stewart Title's Amended Complaint in I nterventionNo. 1-05-2460

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Stewart Title filed an amended complaint in intervention, alleging unjust enrichment against Lake shore. The trial court dismissed the amended complaint pursuant to section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West 2000)) for failure to state a cause of action. "The question presented by a section 2-615 motion to dismiss is whether the allegations of the complaint, when viewed in a light most favorable to the plaintiff, a re sufficient to state a cause of actio n upon which relief can be grant ed." Abbasi v. Paraskevoulakos , 187 Ill. 2d 386, 391 (1999 ). "A c ause of a ction will n

ot be dismis sed on the

pleading s unless ** * no set of facts can be proved wh ich will en title the plaintiff to recover." Abbasi , 187 I ll. 2d at 39 1. Review is de novo . Abbasi , 187 Ill. 2d at 391. A defendant is unjustly enr iched when he retains a benefit to plaintiff' s detriment and defendant's retention of the benef it violates the fundamental principles of justice, equity , and good conscience. HPI Health Care Service s, Inc. v. Mt. Vernon Hospital, I nc. , 131 Ill. 2d 145, 160 (1989). Stewart Title alleged that L akeshore was unjustly enriched in the amount of $53,701.77. Stewart Title alleged that the amount of $53,701.77 represe nted the difference between the $83,000 which Lakeshore r eceived from the redemption of the property , and the $29,298.23 which Lakesho re sho uld h ave rece ived h ad the trial court prope rly found that t he Bank 's mortgage lien was superior to Lakeshore's judgment lien. As discussed, the Bank's mortgage lien is superior to Lakeshore' s judgment lien, such that the trial court, on remand, must recalculate the amount of monies prope rly owed to Lakeshore. As the tri al court

ultimately

may determine on rema

nd that Lakeshor

e was not entitled t o the fullNo. 1-05-2460

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$83,000 redemption amount, Stewart Title's amended complaint in intervention states a ca use of action f or unjust e

nrichme nt. Lakeshore contends, thoug h, that Stewart Title may not maintain an e quitable claim for unjust enrichment, because it had "unclean hands." Specifically, Lakeshore points to Stewart Titl e's all eged fai lure t o cond uct a p roper t itle search that w ould have i denti fied Lake shore 's $80,000 ju

dgment prior to cl osing. Ste wart Titl e dispute s any

neglig ence or

wrongd oing in conducti ng the ti tle sear ch. Fur ther, in th is case, Stewart T itle is not asserting an unjust enrichment claim in its own right against Lakeshore but, rather, as subroge e of Burke Chaney and the Bank. In ef

fect, Stewart Title has stepped into the shoes of Burke Chane y and the B ank, neither of which is accused of having " unclean hands." See CNA I nsuranc e Co. v. DiP aulo , 342 Ill. App. 3d 440, 442 (2003) ("a subrogee 'steps into the shoes' of the person whose claim he has paid and may only

enforce those rights which the latter c ould enforce"). According ly, Stewart Title's causes of action as subroge e of Burke Chaney and the Bank stand. For the foregoing r

easons, we reverse the orders de nying the motion to allocate and dismissing Stewart Title's amended complaint in intervention, and remand for further procee dings. Reversed and remanded. GALL AGHER and O'MARA FROSSARD, JJ's concur.