In re Marriage of Campbell (IL)

In re Marriage of Campbell, 2017 IL App (2d) 170171.

Summary: The trial court erred in granting the release of a perfected lien against the personal property of a deceased noncustodial spouse who failed to make child support payments.

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Facts: In 2009, Donald and Pamela Campbell filed for divorce. Pursuant to their judgment of dissolution, Donald was ordered to pay child support payments and maintenance to Pamela. Effective May 2011, the court set the child support obligation at $1,012.00 per month. By May 12, 2012, Pamela filed a petition for a rule to show cause alleging, in part, that Donald had failed to pay child support payments in the amount of $15,005.42 and to divide certain assets. Pamela also sought a temporary restraining order to restrain Donald from withdrawing funds from his retirement account for $17,000.00.

The court found that Donald owed an arrearage of $15,0005.42 in past-due child support, but it never entered a judgment setting an arrearage amount for Pamela to record against the property. Following the courts holding, Pamela recorded a lien on Donald's home at 1032 W. 32nd Street in Chicago (the property) for $24,530.00, as of June 26, 2012, for unpaid child support and medical insurance. The property was awarded to Donald pursuant to the judgment of dissolution and was the res of a Chicago Land Trust land trust. Pamela confirmed that she mailed a copy of the lien claim to Donald by certified mail through a return receipt on June 26, 2012.

In 2013, Donald died. On November 7, 2016, Janet, the executor of Donald's estate and beneficial owner of the property, filed an emergency motion to release Pamela's lien because the lien was preventing the sale of the property to a bona fide purchaser who was ready and able to buy the property. According to Janet, (1) there was no court order finding an arrearage against Donald as claimed by the lien, (2) the DuPage County circuit court clerk provided that Donald had no child support arrearage due, and (3) Donald only possessed a beneficial interest in the property, which was considered personal property, not real property and accordingly the lien against the property as improper.

The trial court found that any nonpayment's of child support, as an operation of law, created a lien on Donald's property. However, since Pamela failed to appear before the court to memorialize the judgments and file a citation to discover assets as required by section 2-1402 pf the code, the lien was improper. Accordingly, the provisions for the transfer set up to successor beneficiaries kicked and now the beneficial owners are now owners of the beneficial property.

Holding: Reversed and remanded. On appeal, Pamela argued that the trial court erred when it held that she failed to properly perfect her lien for past-due child support.

First the court discussed the issue of whether the lien was proper. According to the Dissolution Act, "[n]otwithstanding any other State or local law to the contrary, a lien arises by operation of law against the real and personal property of the noncustodial parent for each installment of overdue support owed by the noncustodial parent." 750 ILCS 5/505(d) (emphasis added). Pamela recorded the lien against Donald, the noncustodial parent, for each installment of overdue support owed by Donald. According, the court held that the lien was proper.

The court next analyzed whether the lien was perfected. The trial court held that pursuant to section 2-1402 of the code, the "mere filing of a notice of lien against the property did not perfect the lien." 735 ILCS 5/2-1402. Section 2-1402 provides for supplementary proceedings (i.e., citation to discover assets) to be used by a judgment creditor to discover the assets of a judgment debtor and apply such assets to satisfy the judgment. When the assets include a land trust, to create valid lien, pursuant to section 2-1402(k-10), the citation to discover assets must be served both on the judgment debtor and the trustee of the land trust. 735 ILCS 5/2-1402(k-10). Janet argued that Pamela failed to meet the requirements of section 2-1402(k-10). Pamela argued that some courts have held that the sole beneficiary of a land trust is considered the owner.

Since Donald was the sole beneficiary of the land trust, she believed that he owned the property. The appeals court agreed that for "some purposes" Pamela's argument was correct. The court held that, in this case, since a lien was created by an operation of law pursuant to section 505(d) of the Dissolution Act, a citation to discover assets would be redundant. Since the lien was created "notwithstanding any other State or local law to the contrary," section 2-1402 does not apply. Further, recording a lien in the chain of title gives a trustee or any bona fide purchaser notice of the existence of the lien. Since Janet acknowledge that she was aware of the lien, she was given constructive notice. Thus, the court finds this argument moot.

The case was remanded for the trial court to decide the amount Pamela is entitled due to the valid lien.

Opinion Year: 
By: ATG Underwriting Department | Posted on: Wed, 04/18/2018 - 1:48pm