Wells Fargo Bank v. Heritage Bank (IL)


Summary: Judgment creditor lost its priority status for purposes of distribution of proceeds from a sale of foreclosed property because of its failure to file a memorandum of revived judgment within the statutorily required seven years from the date of the original judgment.


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Wells Fargo Bank, N.A. v. Heritage Bank of Cent. Ill., 2013 IL App (3d) 110706, 984 N.E.2d 1186 (Ill. App. Ct. 3d Dist. 2013).


Facts: Black Hawk Investment Properties (Black Hawk) obtained a judgment against Randi Friedrich on June 6, 1994 and recorded the memorandum of judgment on June 21, 1994. Friedrich took out a mortgage with Wells Fargo that was recorded on February 23, 1998 and he took out a second mortgage with Heritage Bank of Central Illinois (Heritage Bank) that was recorded on June 9, 1999.

In 2001, Black Hawk filed a petition to revive its judgment against Friedrich and the court entered an order reviving the judgment on June 5, which Black Hawk recorded on June 15, 2001. In 2008, Black Hawk again filed a petition to revive the original judgment and the court again entered an order reviving the judgment, which Black Hawk recorded on May 28, 2008.

In December 2008, Wells Fargo sought a judgment of foreclosure and sale of the real property in which Heritage Bank and Black Hawk also claimed a secured interest. In July of 2010 the trial court prioritized the liens against the property, holding that the liens held by Wells Fargo and Heritage Bank had priority because Black Hawk’s lien had lapsed. Ultimately, the property sold at auction with the proceeds awarded to Wells Fargo and Heritage Bank.

Black Hawk appealed the judgment, contending that the trial court erred in determining that its rights were inferior to those of Wells Fargo and Heritage Bank when disbursing the proceeds of the sale.


Holding: Affirmed. The appellate court agreed that the liens of Wells Fargo and Heritage Bank had priority over Black Hawk’s interest. The court engaged in strict statutory interpretation of the 1994 and the 2002 versions of 735 ILCS 5/12-101 (lien of judgment), concluding that the only reasonable reading of either version was that the judgment lienholder's lien against the property in Tazewell County lapsed during June of 2001.

Further, the court reasoned that anyone doing a title search between June 6 and June 15, 2001, would have found an expired memorandum of judgment. So it would appear that Black Hawk had no lien against the property from (at least) June 6, 2001 through June 14, 2001. Black Hawk's original judgment from June of 1994 could not serve as basis for "a lien on real estate for longer than 7 years from the time it is entered." 735 ILCS 5/12-101 (West 1994). The June 5, 2001 revival had no effect as to Black Hawk's lien against the property until Black Hawk filed its memorandum of the revival. Black Hawk's failure to file a memorandum of the revival judgment before the expiration of the lien created by the original judgment resulted in a lapse and thus a loss of priority.

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By: ATG Underwriting Department | Posted on: Thu, 06/13/2013 - 3:07pm