Gibbons v. Kowal
2024 IL App (1st) 232124
| Ill. App. Ct. | 2024Background
- Timothy Gibbons lent Chad Kowal $50,000 for business purposes, for which Kowal and another signed promissory notes.
- Kowal defaulted on the notes, and Gibbons obtained a default judgment against him in Cook County Circuit Court in 2010, totaling $108,425.03 (later rising with interest to over $177,000).
- Amid efforts to collect, Kowal was held in contempt for failing to comply with asset-discovery orders, and a writ of body attachment (civil arrest) was issued, requiring a $25,000 cash bond for release.
- The $25,000 bond was posted exclusively by Chad's father, James Kowal, to secure Chad’s release after later arrest.
- Gibbons moved for turnover of the $25,000 bond to partially satisfy the judgment, while Chad sought refund of the bond to his father; the circuit court awarded the $25,000 to Gibbons.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Ownership of $25,000 bail bond | Funds belong to judgment debtor, Chad; thus, can be used to satisfy the judgment | Funds were posted by 3rd party (James), so not Chad's property | Bond money belongs to James, not Chad, and should be returned to him |
| Application of bail bond in civil contempt context | Statutes (e.g., §110-7.5) and bond language allow use to satisfy judgment | Statutory scheme for body attachment and bond requires bond be returned to third parties, unless it’s the debtor’s own funds | Statutory law (735 ILCS 5/12-107.5) prohibits turnover unless bond is debtor’s, not a third party’s |
| Effect of Chad signing bail bond | Chad's signature shows ownership/control over funds | Signing was procedural; actual funds belong to James, as proved by financial records | Chad’s signature doesn’t make him the owner; ownership follows source of funds |
| Due process and equity in turnover of third-party funds | No due process violation—bond agreement notified risk of forfeiture | Taking third-party money violates equity and due process absent substantial dispute over ownership | Equity and due process demand turnover only if funds are truly debtor’sproperty; here, they are not |
Key Cases Cited
- Schak v. Blom, 334 Ill. App. 3d 129 (mechanisms for discovering/applying assets under supplementary proceedings)
- National Life Real Estate Holdings, LLC v. Scarlato, 2017 IL App (1st) 161943 (signatory control over funds relevant to asset turnover; distinguished by the court here)
- Root v. Carter, 2021 IL App (4th) 200157 (bond funds posted by third party may not be used to satisfy debtor’s obligation)