Court Opinion

ID: 4646366
Source: CourtListenerOpinion
Date Created: 2020-12-23 23:03:43.234827+00
Date Added: 2024-06-11T08:00:57.466631
License: Public Domain

2020 IL App (1st) 173163

                                                                            THIRD DIVISION
                                                                            December 23, 2020

                                         No. 1-17-3163

______________________________________________________________________________

                                    IN THE
                        APPELLATE COURT OF ILLINOIS
                           FIRST JUDICIAL DISTRICT
______________________________________________________________________________

DOOR PROPERTIES, LLC,                           )
                                                )
               Plaintiff-Appellee,              )     Appeal from the
                                                )     Circuit Court of
       v.                                       )     Cook County
                                                )
AYAD M. NAHLAWI,                                )     10 L 12931
                                                )
               Defendant,                       )     Honorable
                                                )     Alexander P. White,
(Mago BB, LLC,                                  )     Judge Presiding
Third-Party Citation Respondent-Appellant.)     )
_____________________________________________________________________________

       JUSTICE ELLIS delivered the judgment of the court, with opinion.
       Presiding Justice Howse and Justice Burke concurred in the judgment and opinion.

                                           OPINION

¶1     Plaintiff Door Properties, LLC obtained a judgment against defendant Ayad Nahlawi for

just over $750,000, a judgment we affirmed in all respects in an unpublished order in 2015. See

Door Properties, LLC v. Nahlawi, 2015 IL App (1st) 131256-U. Now a judgment creditor, Door

Properties sought to collect that judgment against Nahlawi (now a judgment debtor) by initiating

supplemental proceedings under section 2-1402 of the Code of Civil Procedure. See 735 ILCS 5/2-

1402(f)(1) (West 2014).

¶2     Specific to this matter, Door Properties served a citation to discover assets on respondent,

Mago BB, LLC (Mago). Nearly three years after the citation was served, Door Properties
No. 1-17-3163

discovered that Mago had paid at least $15,000 of Nahlawi’s attorney fees in various legal matters.

Door Properties moved for judgment against Mago, claiming that, contrary to its responses in the

supplementary proceeding, Mago did possess property belonging to Nahlawi, as evidenced by its

payment of some of Nahlawi’s attorney fees.

¶3      In response, Mago argued that the $15,000 paid on Nahlawi’s behalf was not Nahlawi’s

“property” as defined by section 2-1402. Instead, the payment of attorney fees was “a gift” and

“reciprocation for favors that Nahlawi had done for them in the past.” Without conducting an

evidentiary hearing, in a written memorandum order, the circuit court concluded that “these types

of funds fall within the purview of § 1402(f)(1) and are the type of assets meant to be protected by

the legislature.” Thus, the trial court entered judgment in favor of Door Properties and against

Mago.

¶4      We vacate that judgment, as questions of fact exist that do not permit judgment on the

papers and arguments alone. We remand for an evidentiary hearing.

¶5                                       BACKGROUND

¶6      In 2012, Door Properties obtained an approximately $750,000 judgment against Nahlawi.

In an effort to collect, Door Properties served a third-party citation to discover assets on Mago, an

LLC owned by Nahlawi’s parents and friends/business partners, Richard Munoz and Juan

Gonzalez. The citation stated, in relevant part:

        “YOU ARE PROHIBITED from making or allowing any transfer or other disposition of,

        or interfering with, any property not exempt from execution or garnishment belonging to

        the judgment debtor or to which the judgment debtor may be entitled or which may be

        acquired by or comes due to judgment debtor, until further order of court or termination of

        the proceedings. “

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No. 1-17-3163

¶7     In 2014, Munoz, as Mago’s manager, answered the citation and indicated that Mago did

not possess any of Nahlawi’s assets or property. Munoz reiterated the same during his citation

examination.

¶8     More than two years later, in 2016, Nahlawi and his attorney—Kevin Besetzny—appeared

in the United States Bankruptcy Court before the Honorable Jacqueline P. Cox on an unrelated

matter. (Unrelated for our purposes, at least; it involved the bankruptcy of Mark and Carol

Anderson, the latter of whom was a named plaintiff in the original state action that resulted in the

$750,000 judgment, and the former of whom was a principal in at least one of the plaintiff

companies likewise involved in that lawsuit.)

¶9     In the bankruptcy matter, Judge Cox had previously entered judgment against Nahlawi for

violating a stay order and had entered a rule to show cause for Nahlawi’s failure to pay that

judgment. During the hearing on the rule, Besetzny argued that Nahlawi did not willfully fail to

pay the judgment but did so only because he lacked the ability to do so.

¶ 10   In obvious frustration over Nahlawi’s continued claim that he had no money, Judge Cox

directly asked Besetzny who was paying his attorney fees. Besetzny told the court that Mago had

paid approximately $15,000 of Nahlawi’s legal fees. (Recall that Mago, the corporate entity,

consists of Nahlawi’s parents and two friends, Munoz and Gonzalez.)

¶ 11   Nahlawi then requested the opportunity to directly address the court about why he

shouldn’t be held in contempt. As to the payment of his attorney’s fees by Mago, he explained:

       “I have two people that have worked with and for me for a long time, Rick Munoz, a chef,

       and Juan Gonzalez, a chef. And after our demise of this because of Anderson, there’s a lot

       of bad feelings. This guy ruined a lot of lives. So when I—they worked for me, and I paid

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No. 1-17-3163

       for their legal fees, and I helped them through life, two Mexican immigrants. They wanted

       to pay me back.” (Emphasis added.)

¶ 12   Judge Cox ultimately found Nahlawi in contempt, reasoning that, if Nahlawi could find a

way to get his lawyer paid, he could find a way to pay the judgment she had entered against him.

¶ 13   A year after that bankruptcy hearing, in 2017, Nahlawi sat for a citation examination.

Nahlawi continued to insist that he had no assets and was not earning income. When questioned

about how he was paying his bills, Nahlawi explained that his parents were taking care of nearly

all his expenses. However, he recognized that Mago was paying his attorney fees. He also

acknowledged that his friends and family would often give him cash when he needed it. While not

formally employed, Nahlawi admitted that he occasionally continued to help his former business

partners with their companies.

¶ 14   Shortly after this examination, Door Properties sought a $15,000 judgment against Mago

for the payments it had made towards Nahlawi’s attorney fees. Door Properties noted that its

citation to Mago restrained Mago from transferring any assets or property belonging to Nahlawi,

and the court should thus enter judgment against Mago and in favor of Door Properties “in the

amount of the value of the property transferred.” 735 ILCS 5/2-1402(f)(1) (West 2014).

¶ 15   The motion was supported by the transcripts of the hearing before Judge Cox and

Nahlawi’s citation examination, as described above.

¶ 16   In response, Mago acknowledged that its manager (Munoz) and member (Gonzalez) had

paid those attorney fees but argued that those payments were a gift, gratuitous “reciprocation” for

favors Nahlawi had done in the past. In other words, they did not owe Nahlawi that money; they

paid it as a gratuitous gesture. The money did not belong to Nahlawi in any way.

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No. 1-17-3163

¶ 17   Neither party requested, and the court did not hold, an evidentiary hearing. Instead, the

court heard arguments on the motion, focused on whether Mago’s payment of Nahlawi’s debt

constituted a “transfer” of “property” belonging to Nahlawi under section 2-1402(f)(1). In sum,

Door Properties argued:

       “[W]hat he’s just saying is that there is a debt that the third party during the citation paid;

       they are saying it’s repayment of a favor. Now they’re saying it’s a gift. The word ‘gift’

       isn’t used here. Whether it’s a gift or whether there’s an agreement, some type of contract,

       whatever the case may be, they disposed of a debt of the judgment debtor to the preference

       of someone else during the pendency of the citation after being served with the citation,

       everything.

                It is absurd to think that you can say, ‘Well, just because I paid the obligation as a

       favor, then it’s not violating the citation.’ ”

¶ 18   Door Properties focused on the fact that Nahlawi, personally, told the bankruptcy judge

that the principals of Mago were “paying him back.” Door Properties argued that describing the

payment as a “favor” was just a clever way of circumventing the fact it was a legitimate debt:

       “ ‘Why don’t you do me a favor? You just pay my mortgage for me. You don’t have to pay

       me any wages. Just pay my mortgage for me. I have a car payment. Why don’t you do me

       a favor? Pay that for me as well. In fact, here. I’ll give you a nice list of all of my bills.

       Why don’t you do me a favor?’

                That’s violating the garnishment. It’s violating the citation. It prevents that third

       party from acting in this manner, and it’s absurd to suggest that anything other than a

       violation here has occurred.”

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No. 1-17-3163

¶ 19    Mago, on the other hand, argued that the restraining provision did not prohibit it from

voluntarily, gratuitously paying Nahlawi’s debt, which it claimed is precisely what occurred:

“Mago BB had no assets and has no assets of the judgment debtor. So that is undisputed. There is

[sic] no assets that—of the judgment debtor *** that they are using to pay for the judgment debtor’s

bills. This is repayment of a gift, repayment of a favor, and the testimony is clear on that.”

¶ 20    The circuit court issued a memorandum order entering judgment against Mago. After

acknowledging that it was “unable to locate any case law addressing the narrow issue in this case,”

the court relied on the fact that section 2-1402 is liberally construed. The court recognized Mago’s

claim that “it was never in possession of any funds or assets belonging to Nahlawi, and that the

funds used to pay Nahlawi’s attorney’s fees were transferred as a gift of favor rather than pursuant

to any debt or agreement.” Still, the court found that “these types of funds fall within the purview

of § 1402(f)(1) and are the type of assets meant to be protected by the legislature.” In the court’s

view,

        “[t]o rule otherwise would seem to allow any debtor that is owed money from another

        party, pursuant to a prior contract or agreement, to dismiss the contract and instead accept

        payment in a more informal capacity, as a favor or gift on behalf of prior services. This

        would subvert the clear intention of the legislature to protect a debtor’s assets in the

        possession of a third party from being dissipated, and allow parties to effectively

        circumvent the transfer prohibition language included in the third party citation.”

¶ 21    While the court “recogniz[ed] that not every single favor accepted or gift received by a

judgment debtor during citation proceedings will be improper, the Court finds that this is the type

of transaction that was meant to be prohibited by the legislature in crafting § 1402.”

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No. 1-17-3163

¶ 22   Mago moved for reconsideration, reiterating that the question was not whether Mago paid

Nahlawi’s debts but whether Nahlawi “had any control or legal interest over the money Mago paid

[his] attorneys.” The court denied the motion to reconsider and held it “did not need to determine

whether or not Nahlawi had control over the funds, because that was not the deciding element in

rendering judgment. The fact Mago BB was repaying Nahlawi was the sole purpose behind the

Court’s August 24, 2017 Judgment.”

¶ 23   This appeal follows.

¶ 24                                       ANALYSIS

¶ 25   On appeal, Mago claims the court erred in finding that Mago violated the restraining

provision of the citation by paying Nahlawi’s attorney’s fees. Whether certain conduct violates the

citation’s restraining provision is a question of law we review de novo. National Life Real Estate

Holdings, LLC v. Scarlato, 2017 IL App (1st) 161943, ¶ 20. Our review would be de novo, in any

event, as we are reviewing trial court findings based solely on the memoranda, exhibits, and oral

argument, and thus we sit in the same position as the trial court, owing no deference to any factual

findings or credibility determinations from an evidentiary hearing. Dinerstein v. Evanston Athletic

Clubs, Inc., 2016 IL App (1st) 153388, ¶ 34.

¶ 26   Section 2-1402 of the Code of Civil Procedure allows a judgment creditor to begin

supplementary proceedings against a third party to discover “assets belonging to the judgment

debtor that the third party may have in its possession.” Bank of Aspen v. Fox Cartage, Inc., 126

Ill. 2d 307, 313 (1989); see 735 ILCS 5/2-1402(a) (West 2014). What constitutes an “asset

belonging to the judgment debtor” is to be liberally construed. See Wells Fargo Bank Minnesota,

NA v. Envirobusiness, Inc., 2014 IL App (1st) 133575, ¶ 16.

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No. 1-17-3163

¶ 27   An “asset belonging to the judgment debtor” includes a debt owed to that judgment debtor.

See Ill. S. Ct. R. 277(a) (eff. Jan. 4, 2013) (section 2-1402 proceeding may be commenced against

“any third party the judgment creditor believes has property of or is indebted to the judgment

debtor” (emphasis added)); Poulos v. Litwin, 193 Ill. App. 3d 35, 40 (1989) (“Read as a whole,

[section 2-1402] is intended to reach debts owed to the judgment debtor which would provide

‘moneys *** which are *** to become due.’ ” (quoting Ill. Rev. Stat. 1987, ch. 110, ¶ 2-

1402(d)(1))).

¶ 28   Section 2-1402(f)(1) authorizes the citation to include a restraining provision (as Door

Properties included here): “The citation may prohibit the party to whom it is directed from making

or allowing any transfer or other disposition of *** any property *** belonging to the judgment

debtor or to which he or she may be entitled or which may thereafter be acquired by or become

due to [the judgment debtor].” 735 ILCS 2-1402(f)(1) (West 2014). Said differently, the restraining

provision requires the third party “to freeze assets” belonging to the judgment debtor that are in

the third party’s possession. Kauffman v. Wrenn, 2015 IL App (2d) 150285, ¶ 25.

¶ 29   The obvious purpose of the restraining provision is to prevent the judgment debtor or third

party from disposing of those assets before the judgment creditor can reach them. Bank of Aspen,

126 Ill. 2d at 314; Scarlato, 2017 IL App (1st) 161943, ¶ 22. Thus, if the citation contains such a

restraining provision, and the third-party respondent violates it by transferring or disposing of the

assets, the court has options at its disposal, including the one Door Properties sought here—the

court may enter judgment against that third party in the amount of the unpaid judgment, or the

value of the property transferred, whichever is less. 735 ILCS 2-1402(f)(1) (West 2014); see Bank

of Aspen, 126 Ill. 2d at 313. The court may also cite the third party for contempt. 735 ILCS 2-

1402(f)(1) (West 2014); Ill. S. Ct. R. 277(h) (eff. Jan. 4, 2013).

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No. 1-17-3163

¶ 30   Of course, this all presupposes that the third party possesses assets belonging to the

judgment debtor. After all, the only reason a third party would ever be responsible for a judgment

against a judgment debtor is if that third party holds assets of the judgment debtor, which the

judgment creditor then seeks to reach by way of supplemental proceedings.

¶ 31   Thus, the relevant question is “whether [the] third party is holding assets of the judgment

debtor that should be applied to satisfy the judgment.” Kauffman, 2015 IL App (2d) 150285, ¶ 26.

And “[i]f the third party possesses no assets of the judgment debtor, then the court has no authority

to enter any judgment against the third party in a supplementary proceeding.” Schak v. Blom, 334

Ill. App. 3d 129, 133 (2002). It is the judgment creditor’s burden of showing that the third-party

respondent possesses assets of the judgment debtor. Kauffman, 2015 IL App (2d) 150285, ¶ 26.

¶ 32   So the question before the trial court was whether Door Properties carried its burden of

proving that Mago violated the restraining provision of the citation order by paying legal fees owed

by Nahlawi to Nahlawi’s attorney. More specifically, the question under the statute is whether

Mago “transfer[red] *** any property *** belonging to the judgment debtor or to which he or she

may be entitled or which may thereafter be acquired by or become due to [the judgment debtor].”

735 ILCS 5/2-1402(f)(1) (West 2014).

¶ 33   This case does not involve tangible property like treasury notes sitting in a bank account,

or proceeds of an insurance policy. See Vendo Co. v. Stoner, 108 Ill. App. 3d 51, 56 (1982)

(treasury notes held as collateral for loan to judgment debtor); TM Ryan Co. v. 5350 South Shore,

L.L.C., 361 Ill. App. 3d 352 (2005) (insurance proceeds owed to judgment debtor). Nor is this a

more complicated situation involving an identifiable pool of money via a line of credit, with the

only question being whether the judgment debtor had sufficient control over the money for it to

constitute his “property.” See Scarlato, 2017 IL App (1st) 161943, ¶¶ 35, 40.

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No. 1-17-3163

¶ 34   This case involves the existence, or non-existence, of a debt. In the view of Door Properties

and the trial court, Mago was repaying a debt it owed Nahlawi.

¶ 35   The parties do not dispute that a debt a third party owes to a judgment debtor would be

considered the judgment debtor’s “property” or “asset.” That is clear enough from the language of

section 2-1402, which applies not only to tangible property but also property to “to which [the

judgment debtor] may be entitled or which may thereafter be acquired by or become due to [the

judgment debtor].” (Emphases added.) 735 ILCS 2-1402(f)(1) (West 2014); see Poulos, 193 Ill.

App. 3d at 40 (“Read as a whole, [section 2-1402] is intended to reach debts owed to the judgment

debtor which would provide ‘moneys *** which are *** to become due.’ ” (quoting Ill. Rev. Stat.

1987, ch. 110, ¶ 2-1402(d)(1))). But as we noted, Rule 277 removes all doubt on this question. See

Ill. S. Ct. R. 277(a) (eff. Jan. 4, 2013) (section 2-1402 proceeding may be commenced against “any

third party the judgment creditor believes has property of or is indebted to the judgment debtor”

(emphasis added)).

¶ 36   Nor do the parties dispute that, if Mago owed Nahlawi a debt that it satisfied by paying his

attorney fees on his behalf, such a payment would be an illegal “transfer” of Nahlawi’s “property”

under section 2-1402. In other words, the parties agree that, if Mago owed Nahlawi $15,000 (or

more) and paid off some or all of that debt by paying the $15,000 to Nahlawi’s lawyer, Mago

would have violated the restraining provision of section 2-1402(f)(1).

¶ 37   So the only question is whether Door Properties carried its burden of proving that Mago

owed Nahlawi a debt in the first place. In our view, Door Properties came nowhere close to

carrying that burden.

¶ 38   There was no evidentiary hearing. The only evidence that Door Properties submitted was

on paper: the transcripts of the hearing before Judge Cox in bankruptcy court and Nahlawi’s

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No. 1-17-3163

testimony at the citation examination. The bankruptcy court transcript established that Mago paid

$15,000 to Nahlawi’s lawyer, Mr. Besetzny, but it did not establish that this money was a debt—

a legal obligation—that Mago owed Nahlawi. The evidence, if anything, more fully supported

Mago’s claim that the payment of Nahlawi’s legal fees was a gratuitous gesture on the part of

Mago’s manager (Munoz) and one of its members (Gonzalez).

¶ 39   At the bankruptcy hearing, Nahlawi testified as follows:

       “I have two people that have worked with and for me for a long time, Rick Munoz, a chef,

       and Juan Gonzalez, a chef. And after our demise of this because of Anderson, there’s a lot

       of bad feelings. This guy ruined a lot of lives. So when I—they worked for me, and I paid

       for their legal fees, and I helped them through life, two Mexican immigrants. They wanted

       to pay me back.

                                                 ***

       So—so my parents and Chef Juan and Chef Rick, who own this, who are being more than

       kind to take care of some of the stuff that I’m expenses [sic], they want to see Anderson

       brought to justice. They helped me hire Jeff Bunn at the time to pursue Anderson for the

       money he owes me.”

¶ 40   Nahlawi’s testimony at the citation examination added little to the analysis. When asked if

anyone had lent him money since 2010, Nahlawi identified his parents, his brother, “Chef Juan”

Gonzalez, and “Chef Rick” Munoz. He could not give specifics on how much or how often

Gonzalez or Munoz gave him money, but it usually consisted of helping pay a bill or expense that

cropped up, and the payment was never formalized by a promissory note or any such document.

He could not specify whether attorney fees paid to Mr. Besetzny or his previous lawyer, Mr. Bunn,

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No. 1-17-3163

came from Gonzalez or Munoz personally or from one of the entities they own, such as Mago. He

did agree that he’d previously done “favors” for Munoz and Gonzalez.

¶ 41   So the citation examination testimony added nothing. And the most reasonable takeaway

from Nahlawi’s testimony before Judge Cox was that Nahlawi had helped Munoz and Gonzalez

when they first came to this country, and they wanted to repay the favor when the going got tough

for Nahlawi. Whether that, in fact, is true is not the point. The point here is that this was the sum

and substance of the evidence that Door Properties proffered—sworn testimony on paper, without

an evidentiary hearing—and by no means did Door Properties carry its burden of demonstrating

that Mago BB owed Nahlawi a legally enforceable debt, as opposed to a “debt” in the sense of

gratitude or goodwill. There was no testimony in either of these transcripts that remotely

established the existence of any debt, much less the amount of that debt or the circumstances

surrounding that debt. The mere fact that Nahlawi characterized his friends’ payment of his

attorney fees as a desire to “pay me back” does not, without more, convert what he described into

a legal debt owed to him. Section 2-1402 is not a game of gotcha.

¶ 42   As noted above, while the trial court’s reasoning was not entirely clear, it did seem to be

making a finding that a previous debt existed between Nahlawi and Mago when it wrote that

Mago’s position here “would seem to allow any debtor who is owed money from another party,

pursuant to a prior contract or agreement, to dismiss the contract and instead accept payment in

a more informal capacity, as a favor or gift on behalf of prior services.” For the reasons we have

given, we cannot accept that finding. The record comes nowhere close to establishing that a “prior

contract or agreement” existed, pursuant to which Mago legally owed Nahlawi anything at all.

¶ 43   Notably, however, Door Properties does not really disagree with our take on the facts.

Indeed, in its reply memorandum below, Door Properties acknowledged that “[t]his ‘pay back’

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No. 1-17-3163

payment of the attorneys’ fees is either made pursuant to some contractual obligation between

[Nahlawi] and Mago BB, or the payment is a gift.” We agree; it’s one or the other, but the evidence

does not say which.

¶ 44   The difference, however, is that Door Properties mistakenly believes that it doesn’t matter

which one of those facts is true. Either way, says Door Properties, it is fundamentally unfair to

allow Nahlawi to claim he has “no money, assets, occupation, income, or virtually anything of his

own” and thereby avoid his obligations to a judgment creditor, while at the same time his expenses

are paid by his friends and family. This point is encapsulated by a passage from its brief:

       “If these funds are not considered Nahlawi’s property, then what incentive is there to

       continue holding individuals accountable for their actions? If an individual can persuade a

       company, friend, or relative to pay for every single expense in their life so that individual

       can continue to live irresponsibly, what remedy is available to a judgment creditor against

       this individual’s reckless behavior? At some point there needs to be accountability in these

       types of situations. To rule otherwise would completely undermine the debtor/creditor

       relationship.”

¶ 45   However sympathetic we may be to Door Properties’ frustration with a judgment debtor

who has managed to remain relatively asset-free while having his expenses subsidized by his

family and friends, that complaint does not implicate section 2-1402. If a parent or friend were

holding “property” of the judgment debtor—for example, if they owed the judgment debtor

money—that, of course, would be subject to garnishment by the judgment creditor, as we have

already explained.

¶ 46   But a gratuitous payment on the judgment debtor’s behalf, out of goodwill or love or

familial obligation? That is not covered by section 2-1402(f)(1). And imagine if it were. Imagine

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No. 1-17-3163

parents who pay for their judgment-debtor child’s college tuition and expenses. They don’t “owe”

their child anything, at least not in the legal sense; they’re not paying off a debt to that child.

They’re doing it gratuitously. Under Door Properties’ interpretation of section 2-1402, if the

parents were served with a citation that contained a restraining provision, those parents would not

be permitted to put their child through college—or if they did, they’d have to pay that same amount

in a judgment to the judgment creditor for violating section 2-1402(f)(1), as well as being subject

to a contempt finding.

¶ 47   That is not the law. Section 2-1402 does not forbid gratuitous payments to benefit a

judgment debtor. It requires only that a third party disclose, preserve, and turn over to a judgment

creditor any property or assets in its possession that belong to the judgment debtor.

¶ 48   Our holding is just another way of reiterating the longstanding principle that, in a citation

proceeding, a judgment creditor stands in the shoes of a judgment debtor and “ ‘ “may not recover

from a third-party citation [respondent] unless the judgment debtor could have recovered from the

third-party [respondent].” ’ ” Stonecrafters, Inc. v. Wholesale Life Insurance Brokerage, Inc., 393

Ill. App. 3d 951, 958-59 (2009) (quoting Second New Haven Bank v. Kobrite, Inc., 86 Ill. App. 3d

832, 835 (1980), quoting Sobina v. Busby, 62 Ill. App. 2d 1, 13-14 (1965)). If the third party

(Mago) does not owe a legally enforceable debt to the judgment debtor (Nahlawi), then the

judgment debtor has no right to recover anything from the third party—and thus neither would the

judgment creditor (Door Properties) stepping into the judgment debtor’s shoes.

¶ 49   Make no mistake: If Munoz or Gonzalez, gratuitously, out of the kindness of their hearts,

simply handed $15,000 to Nahlawi, that money would be subject to attachment by Door

Properties—but not because of subsection (f)(1)’s third-party-transfer provision. It would be

subject to attachment because it was now in the possession of Nahlawi, the judgment debtor, and

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No. 1-17-3163

the court could compel Nahlawi to “deliver up” the money to help satisfy the judgment against

Nahlawi under subsection (c)(1). See 735 ILCS 5/2-1402(c)(1) (West 2014) (“When assets or

income of the judgment debtor *** are discovered, the court may *** (1) Compel the judgment

debtor to deliver up, to be applied in satisfaction of the judgment, in whole or in part, money ***

so discovered ***.”).

¶ 50   If, as Door Properties claims, subsection (f)(1) also applied to the scenario above, then

Munoz and Gonzalez would have to pay that same amount, again, to Door Properties (and possibly

face a contempt citation), for committing no other crime than trying to gratuitously help a friend.

Third parties, by definition, are entities not involved in the underlying lawsuit between judgment

creditor and judgment debtor that resulted in a judgment. That is why we have consistently and

repeatedly emphasized that, “[i]f the third party possesses no assets of the judgment debtor, then

the court has no authority to enter any judgment against the third party in a supplementary

proceeding.” Schak, 334 Ill. App. 3d at 133. We can think of no reason why the law would punish

that blameless third party for an act of generosity, and we find nothing in the language of section

2-1402 that would suggest otherwise.

¶ 51   It would be an entirely different story, of course, if the person or entity who paid Nahlawi’s

lawyer were, in truth, paying off a legally enforceable debt it owed Nahlawi. As we already said,

a debt Mago owed Nahlawi would constitute an asset belonging to Nahlawi in Mago’s possession,

and satisfying that debt by paying Nahlawi’s lawyer would be an unlawful transfer under section

2-1402(f)(1).

¶ 52   And there is at least some evidence in the record that this may be the case. The record

shows that Mago consists not only of Mr. Munoz and Mr. Gonzalez but also Nahlawi’s parents,

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No. 1-17-3163

via a corporate entity called Kiss the Chef. And Nahlawi did testify, in both the bankruptcy hearing

and the citation examination, that he performed various tasks for his parents and for Mago.

¶ 53      Was the $15,000 payment to Nahlawi’s lawyer a way of compensating Nahlawi for work

he performed for Mago or one of Mago’s principals (his parents, Munoz, or Gonzalez)? Was there

some informal agreement between Nahlawi and his parents, Munoz, and Gonzalez, that Nahlawi

would perform some work in exchange for them covering his expenses? There was no testimony

indicating so. As noted above, Door Properties didn’t seem to think it mattered whether Mago paid

those legal fees gratuitously or as repayment of a debt.

¶ 54      As we have explained, it makes all the difference. But we leave room for the possibility

that Door Properties might be able to prove that Nahlawi was owed money for work he performed

for Mago (or one or more of its principals), and the $15,000 payment to Nahlawi’s attorney was

in satisfaction of that debt. If the evidence showed as much, the $15,000 payment would be an

illegal transfer under section 2-1402(f)(1).

¶ 55      For that reason, rather than reverse the judgment outright, the better course is to vacate the

judgment and remand for an evidentiary hearing, as a question of fact existed that did not lend

itself to summary disposition on the papers. See Harmon v. Ladar Corp., 200 Ill. App. 3d 79, 83

(1990) (error for court in supplementary proceeding to determine ownership of property based

solely on arguments of counsel without evidentiary hearing, when credible dispute existed); Roy

Strom Excavating & Grading Co. v. National Bank of Albany Park, 4 Ill. App. 3d 561, 567 (1972)

(same).

¶ 56                                        CONCLUSION

¶ 57      Section 2-1402 does not prohibit Nahlawi’s family or friends from acts of gratuitous

generosity, such as letting Nahlawi live in a house they own or paying his bills or expenses. If the

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No. 1-17-3163

payments are not gratuitous, but rather are to pay off a legally enforceable debt they owe

Nahlawi—in exchange for work Nahlawi performed, for example—section 2-1402 is implicated.

But if the latter scenario is true, Door Properties has the burden of proving it. Because we find a

disputed question of fact existed, and the matter was thus not amenable to summary disposition on

the papers alone, we vacate the judgment of the circuit court and remand for an evidentiary hearing

consistent with this opinion.

¶ 58   Vacated and remanded.

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No. 1-17-3163

                                 No. 1-17-3163

Cite as:                 Door Properties, LLC v. Nahlawi, 2020 IL App (1st) 173163

Decision Under Review:   Appeal from the Circuit Court of Cook County, No. 10-L-
                         12931; the Hon. Alexander P. White, Judge, presiding.

Attorneys                Kevin S. Besetzny, of Besetzny Law P.C., of Chicago, for
for                      appellant.
Appellant:

Attorneys                Kevin K. McCormick, of DeWald Law Group PC, of Arlington
for                      Heights, for appellee.
Appellee:

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