Court Opinion

ID: 2785640
Source: CourtListenerOpinion
Date Created: 2015-03-11 22:03:44.744399+00
Date Added: 2024-06-11T11:28:37.045238
License: Public Domain

2015 IL App (1st) 140100
                                              No. 1-14-0100

                                                                    THIRD DIVISION
                                                                      March 11, 2015
     ______________________________________________________________________________

                                         IN THE
                             APPELLATE COURT OF ILLINOIS
                                FIRST JUDICIAL DISTRICT
     ______________________________________________________________________________

                                                       )
     FIRSTMERIT BANK, N.A., as Successor in            ) Appeal from the Circuit Court
     Interest to George Washington Savings Bank,       ) of Cook County.
                                                       )
             Plaintiff-Appellant,                      )
                                                       ) No. 13 L 4625
     v.                                                )
                                                       )
     JANEK SOLTYS, a/k/a Jan Soltys, Solely in His     ) The Honorable
     Capacity as Trustee of the Wigupen Revocable      ) Raymond Mitchell,
     Trust, the Bogebert Revocable Trust, and the      ) Judge Presiding.
     Daseby Revocable Trust,                           )
                                                       )
             Defendants-Appellees                      )
                                                       )
     (John Does 1 Through 5, Individually and in Their )
     Capacity as the Trustees of the Wigupen           )
     Revocable Trust, the Bogebert Revocable Trust,    )
     and the Daseby Revocable Trust, Defendants).      )
                                                       )
     ______________________________________________________________________________

            PRESIDING JUSTICE PUCINSKI delivered the judgment of the court, with opinion.
            Justices Lavin and Hyman concurred in the judgment and opinion.

                                                 OPINION

¶1          In this case we address a plaintiff creditor's claim that it can attempt to satisfy a debt

     discharged in bankruptcy from property transferred by the debtor to land trusts under the

     exception for fraudulent transfers to third parties. We hold that Illinois land trusts are merely a

     vehicle for property ownership where the beneficiary retains control and are not "third party"
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     entities for purposes of the "fraudulent transfer to third parties" exceptions to bankruptcy

     discharge.

¶2                                          BACKGROUND

¶3           On July 3, 2008, Janek Soltys entered into a $1.1 million construction loan agreement

     with plaintiff's predecessor, George Washington Savings Bank. In connection with the loan,

     Soltys executed a construction mortgage in favor of George Washington Savings Bank on the

     property located at 4838 N. Oakley, Chicago, Illinois (Oakley property), a promissory note, and

     an assignment of rents.

¶4           Soltys also owned nine other parcels of real estate in Chicago, Illinois, at the time he

     obtained this loan: (1) 2935 N. Damen; (2) 3441 N. Seeley; (3) 1712 W. Byron; (4) 3649 N.

     Bosworth; (5) 1430 W. George; (6) 2124 W. Berteau; (7) 2446 W. Wilson; (8) 2431 W.

     Gunnison; and (9) 2017 W. Pensacola. On May 4, 2009, Soltys conveyed these nine other

     properties into three land trusts, the Wigupen Revocable Trust (Wigupen Trust), holding the

     Wilson, Gunnison, and Pensacola properties, the Bogebert Revocable Trust (Bogebert Trust),

     holding the Bosworth, George, and Berteau properties, and the Daseby Revocable Trust (Daseby

     Trust), holding the Damen, Seeley, and Byron properties. Each transfer was by quit-claim deed

     from Soltys to the applicable trust, and each deed was signed by Soltys on behalf of both the

     grantor and grantee. Copies of the individual trust documents are not in the record, but according

     to Soltys's motion and supporting affidavit, Soltys is both the trustee and the beneficiary of all

     three land trusts. Plaintiff did not file any counteraffidavit or point to any other evidence to

     dispute this fact. Plaintiff's complaint affirmatively alleges that Soltys "retained control of the

     properties after the transfers."

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¶5          The maturity date of Soltys's loan on the Oakley property was July 1, 2009. Soltys

     defaulted on the loan. On July 19, 2010 plaintiff, FirstMerit Bank, as successor in interest to

     George Washington Savings Bank, filed a foreclosure action to collect on the promissory note. A

     judgment of foreclosure and sale was entered on August 20, 2011 and the Oakley property was

     sold on October 18, 2011 for $950,000. The foreclosure court confirmed the sale on December

     15, 2011, entering a deficiency judgment against Soltys in the amount of $394,839.43.

¶6          On May 7, 2012, Soltys filed for chapter 7 bankruptcy. Soltys disclosed his ownership

     interests in the properties held in trust in the Wigupen Trust, Bogebert Trust, and Daseby Trust in

     his chapter 7 bankruptcy petition as his personal property. Soltys also listed all his creditors in

     the schedules with the bankruptcy petition, including plaintiff as an unsecured creditor based on

     the deficiency judgment against him. The deadline for creditors to file a claim or object to the

     discharge was August 12, 2012. The bankruptcy trustee determined that there was insufficient

     equity in the properties to administer on behalf of the bankruptcy estate and filed no asset report.

     On August 22, 2014, Soltys obtained an order of discharge and the bankruptcy case was

     terminated on August 27, 2012.

¶7          Plaintiff received notice of Soltys's bankruptcy filing but did not file a claim in the

     bankruptcy case and did not object to or challenge Soltys's discharge of its debts by the August

     21, 2012 bankruptcy deadline. There is no indication either from plaintiff or in the record as to

     why plaintiff did not timely file an adversary claim to object to the discharge of its deficiency

     judgment against Soltys.

¶8          On May 3, 2013, plaintiff filed this lawsuit against Soltys, as trustee of the trusts, alleging

     a violation of the Illinois Uniform Fraudulent Transfer Act (740 ILCS 160/5(a), 6 (West 2012)).

     On August 26, 2014, Soltys filed a motion to dismiss plaintiff's complaint pursuant to section 2-

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       619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West 2012)). Soltys moved for

       and was granted a substitution of judge.

¶9             On December 9, 2013 the circuit court entered an order granting Soltys's section 2-619

       motion to dismiss and stating that the order was a final order disposing of the case in its entirety.

       The circuit court found that Soltys was not attempting to hide the trust properties and accurately

       listed these properties in his bankruptcy petition. The court also found that the properties were

       transferred into land trusts in which Soltys was the trustee and beneficiary. The court ruled that,

       as the beneficiary of the land trusts, Soltys should be treated as the true owner of the trust

       properties and that since land trusts are not another party, plaintiff cannot attempt to extract the

       discharged debt from the land trusts. Plaintiff appealed.

¶ 10                                              ANALYSIS

¶ 11          The trial court dismissed plaintiff's complaint pursuant to section 2-619(a)(9) of the

       Code, which is for dismissal based on "other affirmative matter avoiding the legal effect of or

       defeating the claim." 735 ILCS 5/2-619(a)(9) (West 2012). "The purpose of a section 2-619

       motion to dismiss is to dispose of a case on the basis of issues of law or easily proved issues of

       fact." Hertel v. Sullivan, 261 Ill. App. 3d 156, 160 (1994). A motion to dismiss under section 2-

       619 of the Code admits the legal sufficiency of a plaintiff's claim but asserts certain defects or

       defenses outside the pleading that defeat the claim. Solaia Technology, LLC v. Specialty

       Publishing Co., 221 Ill. 2d 558, 579 (2006). If the affirmative matter asserted is not apparent on

       the face of the complaint, the litigant is required to support the motion with an affidavit. Kedzie

       & 103rd Currency Exchange, Inc. v. Hodge, 156 Ill. 2d 112, 116 (1993). The burden then shifts

       to the other party to provide a counteraffidavit or other proof that the defense is unfounded or

       requires resolution of an essential material fact. Hodge, 156 Ill. 2d at 116. Soltys supported his

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       motion with an affidavit. Plaintiff did not file any counteraffidavits or provide any other proof in

       response.

¶ 12           Plaintiff argues the court erred in granting Soltys's motion to dismiss where there are

       disputed issues of fact. Plaintiff also argues: (1) that it was error for the court to consider Soltys's

       intent; (2) that the court's ruling was based on erroneous factual findings; (3) that the court erred

       in dismissing the complaint when the complaint alleged a dispute as to Soltys's intent, and (4)

       that intent must be proven to establish fraudulent transfer.

¶ 13           But the complaint was dismissed under section 2-619(a)(6) upon the ground "[t]hat the

       claim set forth in the plaintiff's pleading has been released, satisfied of record, or discharged in

       bankruptcy" (735 ILCS 5/2-619(a)(6) (West 2012)), not as a summary judgment motion or a

       motion to dismiss for failure to state a claim. Even taking the allegations in the complaint as true

       that there is a dispute as to Soltys's intent, the only relevant issue in this appeal is whether this

       action is barred by Soltys's bankruptcy discharge, which is a legal issue. Whether the trial court

       erred in dismissing the complaint as barred by affirmative matter is a question of law that we

       review de novo. Kedzie & 103rd Currency Exchange, Inc., v. Hodge, 156 Ill. 2d 112, 116

       (1993). De novo consideration means we perform the same analysis that a trial judge would

       perform. Khan v. BDO Seidman, LLP, 408 Ill. App. 3d 564, 578 (2011). Also, we can affirm a

       section 2-619 dismissal on any proper basis supported by the record. Raintree Homes, Inc. v.

       Village of Long Grove, 209 Ill. 2d 248, 261 (2004) (noting, on review of section 2-619 motion,

       that the court "can affirm *** on any basis present in the record").

¶ 14           The relevant facts as to the "other affirmative matter avoiding the legal effect of or

       defeating the claim" are not in dispute. It is undisputed that Soltys listed plaintiff as a creditor in

       his bankruptcy petition based on the deficiency judgment, that plaintiff received notice of

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       Soltys's bankruptcy, and that plaintiff did not timely file an adversary complaint for its alleged

       claim against Soltys for fraudulent transfer in bankruptcy court.

¶ 15          Section 524 of the United States Bankruptcy Code (Bankruptcy Code) (11 U.S.C. § 524

       (2012)) sets forth the effects of discharge under a chapter 7 bankruptcy. Section 524 of the

       Bankruptcy Code provides that a discharge "voids any judgment at any time obtained, to the

       extent that such judgment is a determination of the personal liability of the debtor," and acts "as

       an injunction against the commencement or continuation of an action *** to collect, recover or

       offset any such debt as a personal liability of the debtor." 11 U.S.C. § 524(a)(1)-(2) (2012). All

       legal or equitable property interests as of the commencement of the bankruptcy case become

       property of the bankruptcy estate, unless otherwise excluded. 11 U.S.C. § 541(a)(1) (2012).

¶ 16          Under Rule 4007(c) of the Federal Rules of Bankruptcy Procedure (Fed. R. Bankr. P.

       4007(c)), in bankruptcy proceedings the deadline for filing a complaint to determine the

       dischargeability of a debt is 60 days after the meeting of creditors. In Soltys's bankruptcy case,

       that deadline was August 12, 2012. Plaintiff does not dispute that it received notice of Soltys's

       bankruptcy and did not file an adversary complaint by August 12, 2012. Soltys received a

       discharge in bankruptcy on August 22, 2012. Under section 524(a) of the Bankruptcy Code, the

       discharge voided plaintiff's personal liability for the deficiency judgment and barred plaintiff

       from instituting or maintaining an action against Soltys for that debt.

¶ 17          Section 524 of the Bankruptcy Code provides, however, that "[e]xcept as provided in

       subsection (a)(3) of this section [dealing with claims against community property], discharge of a

       debt of the debtor does not affect the liability of any other entity on, or the property of any other

       entity for, such debt." 11 U.S.C. § 524(e) (2012). A discharge of a debtor's personal liability for a

       judgment debt in a chapter 7 bankruptcy does not affect a creditor's right to impose a lien against

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       property fraudulently conveyed to nondebtor third parties. Casey National Bank v. Roan, 282 Ill.

       App. 3d 55, 63 (1996).

¶ 18          Plaintiff argues that the trusts set up by Soltys are third-party recipients of Soltys's

       fraudulent transfers of the property, against whom plaintiff can maintain its action. Plaintiff

       disputes that Soltys's trusts are indeed "land trusts" and argues that the trusts are third parties,

       even though Soltys is the executor, the trustee, and the sole beneficiary with exclusive control.

¶ 19          We first clarify that transferring real property to a trust where a trustee holds legal title

       indeed creates a land trust. "An Illinois land trust is an arrangement under which legal and

       equitable title to real property is held by a trustee and the interest of the beneficiary is personal

       property." Patrick v. Village Management, 129 Ill. App. 3d 936, 939 (1984) (citing Wachta v.

       First Federal Savings & Loan Ass'n of Waukegan, 103 Ill. App. 3d 174, 176 (1981)). "The

       Illinois land trust is a device by which real property is conveyed to a trustee under an

       arrangement reserving to the beneficiary the full management and control of the property." IMM

       Acceptance Corp. v. First National Bank & Trust Co. of Evanston, 148 Ill. App. 3d 949, 954

       (1986) (citing Robinson v. Chicago National Bank, 32 Ill. App. 2d 55, 58 (1961)). The Illinois

       land trust primarily serves "as a useful vehicle in real estate transactions for maintaining secrecy

       of ownership and allowing ease of transfer." People v. Chicago Title & Trust Co., 75 Ill. 2d 479,

       487 (1979).

¶ 20          Plaintiff cites to no authority for its argument that the trusts in this case are not land

       trusts. Plaintiff argues that "Soltys's attorneys referred to the Trusts as both land trusts and self-

       settled revocable trusts" but that Soltys's affidavit "did not provide any support for either

       characterization, and there were no supporting trust or other documents attached to the motion."

       Although we do not have copies of the trust agreements, in Soltys's affidavit in support of his

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       motion to dismiss Soltys avers that he is the settlor, the trustee and the beneficiary of all three

       land trusts. The land trusts in this case are all also self-settled revocable trusts where Soltys

       himself settled the trusts and, as both the trustee and the beneficiary, Soltys retained all control.

       Plaintiff did not file any counteraffidavit or point to any other evidence to dispute this fact.

¶ 21          Plaintiff attempts to characterize the land trusts as third parties to come within the third-

       party fraudulent transfer exception to discharge, but land trusts are not "third party" entities. As

       the Seventh Circuit explained, an Illinois land trust is only a form of real property ownership:

                   "The Illinois land trust, a unique creation of Illinois law, is in essence only a form of

              real property ownership. See generally H. Kenoe, Kenoe on Land Trusts (1981 & Supp.

              1985); Haswell & Levine, The Illinois Land Trust: A Fictional Best Seller, 33 DePaul L.

              Rev. 277 (1984). A land trust is created by the execution and recording of a deed in trust

              transferring all legal and equitable title to real property to a trustee. The original owner is

              designated as the beneficiary of the trust and retains an assignable personal property

              interest in the trust. A second document, the trust agreement, is contemporaneously

              executed and outlines the right of the beneficiary to retain absolute control over the

              management, use, and disposition of the property and to receive all proceeds from the

              property. Unlike the conventional trust in which the trustee is vested with broad powers

              over the management and disposition of the trust property, the land trustee may act only

              at the beneficiary's direction. The trust agreement is not recorded and normally is kept

              secret from the public." Redfield v. Continental Casualty Corp., 818 F.2d 596, 607 (7th

              Cir. 1987).

¶ 22          While a common law trust creates a split between the legal title in the trustee and the

       equitable title in the beneficiary, an Illinois land trust places both the legal and equitable title in

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       the trustee. Levine v. Pascal, 94 Ill. App. 2d 43, 50 (1968). "[I]t is well settled law in Illinois that

       the beneficiary of a land trust holds an interest in personal property." Bennett v. Chicago Title &

       Trust Co., 404 Ill. App. 3d 1088, 1096 (2010) (citing 765 ILCS 405/1 (West 2006), and Klein v.

       La Salle National Bank, 155 Ill. 2d 201, 207 (1993)). By placing with the trustee the full,

       complete and exclusive title to the real estate, both legal and equitable, the beneficiary's interest

       in the trust is said to be personal property and not a direct interest in the real estate res of the

       trust. In re Estate of Alpert, 95 Ill. 2d 377, 382 (1983).

¶ 23           But "[t]itle refers only to a legal relationship to the land, while ownership is comparable

       to control." IMM Acceptance Corp., 148 Ill. App. 3d at 954 (citing People v. Chicago Title &

       Trust Co., 75 Ill. 2d 479, 489 (1979)). "The owner of a beneficial interest in a land trust is given

       four powers: (1) to possess, manage and physically control the real estate; (2) to receive the

       income generated by the property; (3) to direct the trustee in dealing with title to the real estate;

       and (4) to receive the proceeds from the sale of the property made pursuant to the power of

       direction." In re Barone, 184 B.R. 747, 749 (Bankr. N.D. Ill. 1995) (citing In re Estate of

       Crooks, 266 Ill. App. 3d 715 (1994)). See also Patrick v. Village Management, 129 Ill. App. 3d
936, 939 (1984) (same). "While referred to as personal property, every attribute of real property

       ownership, except title, is retained by the beneficiary under the trust agreement." IMM

       Acceptance Corp., 148 Ill. App. 3d at 954 (citing Chicago Title & Trust Co., 75 Ill. 2d at 488,

       492). "Therefore, regardless of whether the beneficiary's interest may be labeled as personalty,

       courts have recognized that the beneficiary is the owner of and has an interest in the real estate

       res ***." IMM Acceptance Corp., 148 Ill. App. 3d at 954-55.

¶ 24           In Chicago Title & Trust Co., 75 Ill. 2d at 489-90, the Illinois Supreme Court disregarded

       the form of a land trust and instead focused on who had "control" over the property to determine

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       who the true "owner" of the real estate. The supreme court analyzed the land trust arrangement

       and noted that in that case the beneficiary retained absolute control of the management of the

       trust and received all proceeds of the property, and the trustee could not act except upon the

       written authority of the beneficiary. The supreme court thus concluded that the beneficiary was

       the true owner of the real estate and was therefore liable to pay real estate taxes. Chicago Title,
75 Ill. 2d at 494.

¶ 25           Whether a debtor's property is property of the bankruptcy estate is "a matter of federal

       bankruptcy law regardless of how the state characterizes the actual legal ownership of the

       property." Hopkins Illinois Elevator Co. v. Pentell (In re Pentell), 777 F.2d 1281, 1284 n.2 (7th

       Cir. 1985). Federal bankruptcy decisions and the Seventh Circuit follow the established law in

       Illinois that a land trust beneficiary's interest is considered intangible personal property but the

       beneficiary is considered the true owner. See In re Nowicki, 202 B.R. 729, 736 (Bankr. N.D. Ill.

       1996) (the beneficial interest in a land trust is considered intangible personal property); In re

       Smith, 224 B.R. 388, 398 (Bankr. N.D. Ill. 1998) (the beneficiary of an Illinois land trust is

       treated as the true owner of the trust property).

¶ 26           Bankruptcy courts hold that in determining whether a beneficial interest in Illinois land

       trust is property of a bankruptcy estate, courts are to " 'look through the form [of an Illinois land

       trust] to the substance of a transaction.' " In re Ainslie and Belle Plaine Ltd. Partnership, 145
B.R. 950, 955 (Bankr. N.D. Ill. 1992) (quoting In re Langley, 30 B.R. 595, 599 (Bankr. N.D. Ind.

       1983)). In discussing Illinois land trusts, the Seventh Circuit Court of Appeals held that a

       bankruptcy court can "look[ ] through the form to the substance of the transaction" and determine

       that a debtor who is the sole beneficiary of an Illinois land trust is the "equitable owner of real

       property." (Internal quotation marks omitted.) In re Gladstone Glen, 628 F.2d 1015, 1019 (7th

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       1-14-0100

       Cir. 1980). See also In re Pentell, 777 F.2d at 1284 n.2 (noting that while Gladstone Glen was

       decided prior to the Bankruptcy Code, its analysis is "equally applicable to § 541 of the

       Bankruptcy Code"). Looking past the form to the substance of an Illinois land trust has led

       federal bankruptcy courts to conclude that it is the beneficiary who is the owner of the real estate,

       based on the attributes of control where it is the beneficiary who has the right to control and

       manage the property and receive all the proceeds of the property, and the land trustee acts only at

       the direction of the beneficiary. See In re Ainslie & Belle Plaine Ltd. Partnership, 145 B.R. 950,

       955 (Bankr. N.D. Ill. 1992). "It is these attributes of control that determine who is the true owner

       of property and not legal fictions created to facilitate land transfers." Id.

¶ 27           The Seventh Circuit continues to adhere to this analysis. See Stable Investments

       Partnership v. Vilsak, No. 14-1712, 2015 WL 55466 (7th Cir. Jan. 5, 2015) (the Seventh Circuit

       Court of Appeals looked to the terms of a trust agreement, where the beneficiary of a land trust

       had an interest in the earnings and proceeds of the trust but had no other right, title or interest in

       the property, in holding that the beneficiary was not the owner of certain farm land for purposes

       of the United States Agriculture Department's Direct and Counter Cyclical Payment program for

       farm subsidies).

¶ 28           We note that plaintiff's own complaint in fact affirmatively alleges that "at the time of the

       Transfers, the Properties constituted the bulk of Soltys'[s] assets and Soltys retained control of

       the Properties following the transfers." (Emphasis added.) As plaintiff itself argues, we must

       take the allegations of the complaint as true. See Bjork v. O'Meara, 2013 IL 114044, ¶ 21.

       Taking this allegation as true, it is undisputed in this case that Soltys had control of the land trust

       properties. As both the trustee and beneficiary, Soltys had complete control of the trusts and is

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       the real owner of the property. The transfer of the properties to these land trusts in this case were

       not transfers to a third party.

¶ 29           In addition, the Bankruptcy Code specifically addresses self-settled trusts and does not

       treat such trusts as third parties. Section 548(e)(1) provides creditors an available cause of action

       to avoid a transfer by a debtor to a self-settled trust:

                   "(e)(1) In addition to any transfer that the trustee may otherwise avoid, the trustee

               may avoid any transfer of an interest of the debtor in property that was made on or within

               10 years before the date of the filing of the petition, if—

                         (A) such transfer was made to a self-settled trust or similar device;

                         (B) such transfer was by the debtor:

                         (C) the debtor is a beneficiary of such trust or similar device; and

                         (D) the debtor made such transfer with actual intent to hinder, delay, or defraud

                   any entity to which the debtor was or became, on or after the date that such transfer

                   was made, indebted." 11 U.S.C. § 548(e)(1) (2012).

¶ 30           But under this provision plaintiff was required to timely file an adversary claim. Plaintiff

       inexplicably did not do so. Soltys listed plaintiff as a creditor for its deficiency judgment for the

       foreclosure sale. Among all the things plaintiff disputes, plaintiff does not dispute receiving

       notice of Soltys's bankruptcy.

¶ 31           Plaintiff relies on Roan, where husband and wife debtors transferred property to their

       children (Roan, 282 Ill. App. 3d at 57) and the transfer was held to be fraudulent and recoverable

       despite bankruptcy discharge, and Kathy B. Enterprises, Inc. v. United States, 779 F.2d 1413 (9th

       Cir. 1986), where a debtor sold his business to plaintiff, who in turn resold the business, and the

       debtor's sale was held to be a fraudulent transfer and recoverable despite bankruptcy discharge.

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       Both of these cases involved sales to other individuals or business entities. In the case before us,

       Soltys formed self-settled land trusts. He was also the trustee and the beneficiary and had

       complete control. In re Chardon, LLC, 519 B.R. 211, 218 (Bankr. N.D. Ill. 2014) (the key

       elements of ownership are clearly placed with the beneficiaries of the land trust and not the

       trustee, all control over and benefits of the real property belong to the beneficiaries, and the land

       trust trustee has no discretion to take any action with respect to the property except at their

       direction). 1 The trust properties in this case do not fall under the "fraudulent transfer to third

       parties" exception to bankruptcy discharge.

¶ 32           Attempting to collect the discharged debt against real estate held in Illinois land trusts in

       which the debtor is a beneficiary is a violation of the bankruptcy discharge injunction. See Smith

       v. First Suburban National Bank (In re Smith), 224 B.R. 388, 398 (Bankr. N.D. Ill. 1998).

       Plaintiff is barred from bringing this action.

¶ 33           Further, despite plaintiff's semantic argument that "Soltys did not disclose the Trusts" and

       that "[i]nstead, he listed the parcels of real estate as if they were his own personal property,"

       Soltys appropriately disclosed his beneficial interest in the trust properties in his bankruptcy

       petition as his personal property. Section 541(a)(1) of the Bankruptcy Code provides, in relevant

       part, that the debtor's estate shall include all legal and equitable interest of the debtor in property

       as of the commencement of the case. 11 U.S.C. § 541(a)(1) (2012). As explained above, in an

       Illinois land trust, the beneficiary's interest is considered personal property. Soltys appropriately

       disclosed his interest in the properties in his bankruptcy petition as personal property. There is

       nothing improper about the manner in which Soltys listed his interest in the properties in his

       bankruptcy petition and the properties were not concealed. The bankruptcy court in fact

       1
           We note that plaintiff FirstMerit Bank, N.A., was also the creditor in In re Chardon, LLC.
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       examined these properties and determined that there was insufficient equity. Apart from the legal

       bar against doing so, as even just a factual matter it is unclear how plaintiff believes it would

       obtain any satisfaction of its deficiency judgment from these properties.

¶ 34                                           CONCLUSION

¶ 35          The circuit court did not err in granting defendant's motion to dismiss pursuant to section

       2-619 of the Code for being "barred by other affirmative matter avoiding the legal effect of or

       defeating the claim" (735 ILCS 5/2-619(a)(9) (West 2012)), based on Soltys's bankruptcy

       discharge. Plaintiff received notice of Soltys's bankruptcy proceedings and did not timely file an

       adversary claim to challenge the dischargeability of its deficiency judgment claim. The Illinois

       land trusts in this case are not third parties and do not come within the "fraudulent transfers to

       third parties exception" to bankruptcy discharge. The court correctly ruled that that plaintiff was

       barred from bringing this action by Soltys's bankruptcy discharge.

¶ 36          Affirmed.

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