National Life Real Estate Holdings, LLC v. Scarlato

Digitally signed by Reporter of Decisions Reason: I attest to the Illinois Official Reports accuracy and integrity of this document Appellate Court Date: 2017.10.10 13:16:53 -05'00' National Life Real Estate Holdings, LLC v. Scarlato, 2017 IL App (1st) 161943 Appellate Court NATIONAL LIFE REAL ESTATE HOLDINGS, LLC, Plaintiff and Caption Citation Petitioner-Appellant, v. RONALD SCARLATO, Defendant (International Bank of Chicago, Citation Respondent-Appellee). District & No. First District, First Division Docket No. 1-16-1943 Filed July 24, 2017 Rehearing denied August 23, 2017 Decision Under Appeal from the Circuit Court of Cook County, No. 10-CH-36838; the Review Hon. Alexander White, Judge, presiding. Judgment Order vacated and remanded with directions. Counsel on Donald A. Murday, David J. Novotny, and Stuart F. Primack, of Appeal Chittenden, Murday & Novotny LLC, of Chicago, for appellant. Michael Lee Tinalgia, of Law Offices of Michael Lee Tinalgia, Ltd., of Park Ridge, for appellee. Panel PRESIDING JUSTICE CONNORS delivered the judgment of the court, with opinion. Justice Harris concurred in the judgment and opinion. Justice Mikva dissented, with opinion. OPINION ¶1 Plaintiff, National Life Real Estate Holdings, LLC (National Life), appeals the trial court’s ruling that denied its motion for entry of judgment against third-party citation respondent, International Bank of Chicago (IBC), arguing that the court’s decision was improper where after being served with a citation, IBC violated the restraining provision of the citation by extending a loan to judgment debtor, Ronald S. Scarlato. National Life specifically asserts that the citation was violated when IBC advanced and disbursed proceeds of the loan to third-parties on behalf of Scarlato. IBC responds that the trial court was correct in denying the motion for entry of judgment because National Life has not and cannot establish that IBC ever held 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 him or her.” See 735 ILCS 5/2-1402(f)(1) (West 2012). We reverse the trial court’s decision to deny National Life’s motion for entry of judgment. ¶2 I. BACKGROUND ¶3 This case stems from an approximately $3.5 million judgment entered against Scarlato and the resulting supplementary proceeding in which National Life attempted to collect the judgment amount by serving IBC, a bank that conducted business with Scarlato, with a third-party citation to discover assets. Ultimately, National Life became aware that IBC had entered into a loan agreement with Scarlato after being served with the citation and moved to enter judgment against IBC as a result of its alleged violation of the citation, which prohibited the transfer of any property belonging to Scarlato. ¶4 Prior to entering into the $3.5 million “Construction Loan Agreement” (agreement) and promissory note (note) that form the basis of the dispute here, IBC held a $4 million note from Scarlato and two limited liability corporations for which he was the managing member, Bellwood Place, LLC (BP), and Scarlato Holdings Bellwood Place, LLC (SHBP), dated September 19, 2008 (September 2008 note), and a $2.6 million ...

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