Court Opinion

ID: 3147400
Source: CourtListenerOpinion
Date Created: 2015-10-22 18:30:57.097925+00
Date Added: 2024-06-11T11:55:17.826991
License: Public Domain

SECOND DIVISION
                                               FILED: June 22, 2010

No.   1-09-1054

ANDREW P. TOBIAS,                       )            APPEAL FROM THE
                                        )            CIRCUIT COURT OF
          Plaintiff-Appellant,          )            COOK COUNTY
                                        )
                     v.                 )
                                        )
LAKE FOREST PARTNERS, LLC, a Nevada     )
limited liability company, MARK D.      )
WEISSMAN, ALBERT J. MONTANO, and        )
CHRISTOPHER T. FRENCH,                  )
                                        )
          Defendants-Appellees,         )
                                        )            No.   06 CH 18664
                     and                )
                                        )
MEA MANAGEMENT, LLC,                    )
                                        )
          Citation Respondent-Appellee, )
                                        )
                     and                )
                                        )
GREYSTONE BUSINESS CREDIT II, LLC,      )            HONORABLE
                                        )            ALEXANDER P. WHITE,
          Intervenor-Appellee.          )            JUDGE PRESIDING.

      JUSTICE HOFFMAN delivered the opinion of the court:

      The circuit court entered an order in these supplemental

proceedings directing the citation-respondent, MEA Management, LLC

(MEA), to turnover to the plaintiff, Andrew P. Tobias, the sum of

$86,845.12 held by it and belonging to one of the defendants, Mark

D. Weissman, in satisfaction of the balance owed on a certain

judgment entered    in   favor   of   Tobias   and   against   Lake   Forest
No. 1-09-1054

Partners, LLC, a Nevada limited liability company (Lake Forest);

Weissman;    Albert   J.    Montano;        and   Christopher    T.   French

(collectively referred to as "the defendants").          The circuit court

also ordered the balance of Weissman's funds being held by MEA,

totaling    $252,598.88,   to   be   paid    as   follows:   $126,299.44   to

Weissman and the remaining $126,299.44 to the intervenor, Greystone

Business Credit II, LLC (Greystone), the holder of a judgement

rendered against Weissman, in the United States District Court for

the Southern District of Florida.           Tobias now appeals contending

that his claim for post-judgement attorney fees should have been

adjudicated and satisfied before any of the remaining $252,598.88

of Weissman's funds held by MEA was ordered paid to Greystone or

Weissman. For the reasons which follow, we affirm the judgement of

the circuit court.

     The facts leading up to this appeal are not in dispute.

Tobias loaned Lake Forest the sum of $500,000, which was personally

guaranteed by Weissman, Montano, and French.           The transaction was

evidenced by a Loan Agreement dated December 5, 2005, that was

executed by each of the defendants.          In addition to providing for

repayment of the loan with interest at the rate of 10% per annum,

the Loan Agreement provided, inter alia, that Lake Forest "promises

to pay all costs of collection in case payment shall not be made at

maturity; and further promises, in case suit is instituted to

collect the Loan or the Interest, or any portion thereof, to pay

such reasonable attorney's fees in such suit."

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No. 1-09-1054

     The defendants failed to pay the loan when due and, as a

consequence, a judgment was entered in favor of Tobias and against

the defendants on February 27, 2007, in the sum of $656,181.61,

which included outstanding principal and interest, and $12,610.61

in attorney fees and costs incurred by Tobias as of that date. The

order   also   provides    that   judgement   was   entered    against   the

defendants for "any additional attorneys' fees, costs and interest

incurred after the date of this judgment."          However, on motion of

Tobias, the judgment was amended on April 5, 2007.             The circuit

court's order of that date entered judgment in favor of Tobias and

against the defendants, jointly and severally, in the sum of

$662,172.21 plus costs, but no provision was made in the order for

any post-judgment attorney fees which Tobias might incur.

     On   April   13,     2007,   Greystone   obtained   a    $4,293,401.30

judgement against Weissman and Lake Forest in the United States

District Court for the Southern District of Florida.           Thereafter,

Greystone registered its judgment in the United States District

Court for the Northern District of Illinois and began supplementary

proceedings in that court to collect the judgment.

     In an effort to locate assets to satisfy his judgment, Tobias

served a citation to discover assets upon MEA in the instant case.

Thereafter, on September 19, 2007, an appearance was filed on

behalf of MEA.

     Greystone served a citation to discover assets upon MEA on

March 18, 2008, in the supplementary proceeding which it had

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No. 1-09-1054

instituted in the United States District Court for the Northern

District of Illinois.       However, those proceedings have been stayed

pending satisfaction of Tobias' judgment.

     On January 7, 2009, MEA filed a response to the citation to

discover assets served upon it by Tobias in the instant case,

stating   that   it   was   in   possession   of   $339,444   belonging   to

Weissman.   As a consequence, Tobias filed a motion on February 4,

2009, seeking an order directing MEA to turnover to him "an amount

sufficient to satisfy the judgment and post-judgment attorney fees,

said amount to be determined by [the] *** court after hearing."

     On February 9, 2009, Greystone filed a petition to intervene

in the instant proceedings.        Greystone pled the existence of its

April 13, 2007, judgment against Weissman and asserted that, as a

judgment creditor "with priority after *** [Tobias'] judgment is

satisfied in full, [it] *** has a direct legal interest in the

funds currently held by MEA."

     On March 17, 2009, Weissman filed a motion seeking the release

of all sums held by MEA in excess of 15% thereof, alleging that the

funds so held consist of wages and, therefore, any funds in excess

of 15% may not be used to satisfy Tobias' judgment.           See 735 ILCS

5/12-803 (West 2008).        On April 2, 2009, MEA filed an amended

response to the citation served upon it, stating that the $339,444

of Weissman's funds which it was holding consist of wages, salary,

or commissions.

     On April 9, 2009, the circuit court granted Greystone's

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No. 1-09-1054

petition to intervene.   Thereafter, the proceedings were continued

on several occasions to allow the parties to attempt to reach an

agreement as to the distribution of Weissman's funds being held by

MEA.

       On April 23, 2009, Tobias filed a petition for an award of

post-judgment attorney fees and costs. On that same day, a hearing

was held on Weissman's motion for the release of his funds in MEA's

possession.   Greystone asserts that the parties agreed that, as of

that date, a balance of $86,845.12 was still owed on Tobias'

judgment, exclusive of his unresolved claim for post-judgment

attorney fees.   At oral argument, counsel for Tobias acknowledged

that Greystone's assertion in this regard is correct.

       Following the April 23, 2009, hearing, the circuit court

entered an order directing MEA to pay Tobias $86,845.12 "as full

satisfaction" of his judgment and providing that the payment to

Tobias shall release the citation which he served upon MEA.    The

order directs MEA to pay the remaining $252,598.88 of Weissman's

funds, which it is holding, as follows: $126,299.44 to Weissman,

and $126,299.44 to Greystone.    Finally, the order provides that

there is no just cause to delay enforcement or appeal and that

Tobias' motion for the turn over of funds is moot.         Tobias'

petition for an award of post-judgment attorney fees and costs

remains pending and undetermined.

       Tobias filed a timely notice of appeal from the April 23,

2009, order, invoking our jurisdiction pursuant to Supreme Court

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No. 1-09-1054

Rule 304(a) (210 Ill. 2d R. 304(a)).          Although the circuit court’s

order of April 23, 2009, contains the language of enforceability

and appealability prescribed by Supreme Court Rule 304(a), it is

also a final order in a supplementary proceeding brought under

section 2-1402 of the Code of Civil Procedure (Code) (735 ILCS 5/2-

1402 (West 2008)) and is, therefore, appealable under Supreme Court

Rule 304(b)(4) (210 Ill. 2d R. 304(b)(4)).

       In urging reversal, Tobias argues that the circuit court erred

in providing that MEA's payment to him of $86,845.12 would act as

"full satisfaction" of the balance owed on his judgment against the

defendants, as he is still owed sums for post-judgment attorney

fees.    According to Tobias, his unresolved claim for post-judgment

attorney fees should enjoy the same priority on the funds held by

MEA as did the balance due him on the underlying judgment.                 He

argues that his petition for post-judgment attorney fees should

have been resolved and satisfied before any of Weissman's funds in

the possession of MEA was ordered distributed to any other party,

including Greystone.

       Greystone makes no argument that Tobias is not owed post-

judgment attorney fees.     Rather, in support of the circuit court's

order,    it   contends   that   the   only    predicate   of   the   instant

supplementary proceedings instituted by Tobias was the balance of

the money judgment entered against the defendants, which the trial

court ordered satisfied from Weissman's funds in the possession of

MEA.     As for Tobias' petition for post-judgment attorney fees,

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No. 1-09-1054

Greystone argues that, as the claim has never been reduced to a

judgment, it cannot be enforced in a supplementary proceeding

brought pursuant to section 2-1402 of the Code and never became a

lien upon Weissman's funds in MEA's possession.         We agree with

Greystone's contentions in this regard.

     Section 2-1402 of the Code provides a mechanism by which a

judgment   creditor   may   initiate   supplementary   proceedings    to

discover assets of a judgment debtor in the possession of a third

party and apply those assets to satisfy the judgment.        735 ILCS

5/2-1402 (West 2008). When a citation to discover assets is served

in accordance with section 2-1402(a) of the Code, the judgment "or

the balance due" thereon becomes a lien upon the nonexempt personal

property of the judgment debtor in the possession of the third

party upon whom a citation to discover assets has been served.       735

ILCS 5/2-1402(m) (West 2008); Bloink v. Olson, 265 Ill. App. 3d
711, 716-17, 638 N.E.2d 406 (1994).

     Supreme Court Rule 277 (134 Ill. 2d R. 277) prescribes the

procedure for the implementation of the supplementary proceedings

provided for in section 2-1402.        Bank of Aspen v. Fox Cartage,

Inc., 126 Ill. 2d 307, 313, 533 N.E.2d 1080 (1989).      Paragraph (a)

of Supreme Court Rule 277 states that "[a] supplementary proceeding

authorized by section 2-1402 of the Code of Civil Procedure may be

commenced at any time with respect to a judgment which is subject

to enforcement."   134 Ill. 2d R. 277(a).    Consequently, section 2-

1402 supplementary proceedings are not available to a creditor

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No. 1-09-1054

until after an enforceable judgment has been entered.             Bank of

Matteson v. Brown, 283 Ill. App. 3d 599, 602, 669 N.E.2d 1351

(1996).

       Nevertheless, Tobias argues that his claim for post-judgment

attorney fees, although unresolved, is entitled to the same lien

priority on Weissman's funds in MEA's possession as the lien for

the balance due on his underlying money judgment, no matter when

those post-judgment fees are awarded.        He makes the argument based

upon the assertion that his claim for post-judgment attorney fees,

arising from the terms of the Loan Agreement, is ancillary to the

claim which formed the basis of his money judgment against the

defendants.      We reject the argument.

       As stated earlier, the means by which a lien is perfected upon

the personal property of a judgment debtor in possession of a third

party is the service of a citation to discover assets in accordance

with   section    2-1402(a)   of   the   Code.   735   ILCS   5/2-1402(m).

However, since the supplementary proceedings authorized by section

2-1402 may only be commenced with respect to a judgment which is

subject to enforcement (134 Ill. 2d R. 277(a); Ericksen v. Rush-

Presbyterian St. Luke’s Medical Center, 289 Ill. App. 3d 159, 166,

682 N.E.2d 79 (1997)), it follows that no claim can achieve lien

status by reason of the service of a citation to discover assets

until that claim has first been reduced to an enforceable judgment.

       Commencing with service of a citation to discover assets upon

MEA and thereafter throughout the remainder of the supplementary

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No. 1-09-1054

proceedings which are the subject of this appeal, the only judgment

held by Tobias against Weissman which was subject to enforcement

was the judgment against the defendants entered on February 27,

2007, as amended by the order of April 5, 2007.              Tobias never had

an   enforceable    judgment     for    attorney     fees    incurred   in   the

collection of his underlying judgment.          As a consequence, the only

lien upon Weissman's nonexempt funds in the possession of MEA which

was created by the service of the citation to discover assets was

a lien for the "balance due" on that underlying judgment.               735 ILCS

5/2-1402(m) (West 2008); 134 Ill. 2d R. 277(a).                No lien rights

were created for the enforcement of any unresolved claim for post-

judgment attorney fees.

     Any claim which Tobias may have for post-judgment attorney

fees incurred in the collection of his underlying judgment can only

become a lien upon the personal property of any of the judgment

debtors in the possession of a third party after that claim has

been reduced to an enforceable judgment and a citation to discover

assets has been served in accordance with section 2-1402 of the

Code.   Further, if such a claim is ever reduced to an enforceable

judgment which later becomes a lien upon the property of a judgment

debtor in the possession of a third party, the              priority of such a

lien in relation to other liens against the property of the

judgment debtor in the possession of the same third party will be

determined   by    the   order   in    which   the   liens    were   perfected.

Pontikes v. Perazic, 295 Ill. App. 3d 478, 484-85, 692 N.E.2d 712

                                        9
No. 1-09-1054

(1998).

     Finally, Tobias argues that the circuit court erred when it

proceed to hearing on Weissman's motion to release the funds held

by MEA before it addressed his petition for post-judgment fees.

Again, we disagree.

     Our   reading    of   the    record    reflects   that   the   hearing   on

Weissman's motion on April 23, 2009, took place on the trial

court's 11:15 a.m. set call.         The clerk's filing stamp on Tobias'

petition for post-judgment attorney fees reflects that it was filed

at 1:35 p.m. on April 23, 2009.             Further, the record contains no

evidence that Tobias' petition was noticed for hearing before the

circuit court had heard and disposed of Weissman's motion.

     The parties are in agreement that the balance due on Tobias'

underlying judgment against the defendants as of April 23, 2009,

was $86,845.12.      Therefore, based upon the foregoing analysis, we

conclude that the circuit court properly ordered MEA to pay Tobias

$86,845.12 "in full settlement" of his underlying judgment and did

not err in providing that MEA's payment to Tobias shall release the

citation served upon it.         Further, we find no basis for reversal by

reason of the trial court having ordered the balance of the funds

being held by MEA be distributed to Weissman and Greystone as

Tobias had no lien rights in those funds.

     Affirmed.

     THEIS and KARNEZIS, JJ., concur.

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