In re Estate of Denten
972 N.E.2d 278
Ill. App. Ct.2012Background
- Guardians John and James Hoeper, as guardians for Donna Denten, faced Bank deficiency judgment liens after a foreclosure on two Lake Forest properties.
- Lis pendens was recorded July 29, 2008 against the Mayflower and Everett properties; Bank received notice of guardianship assets.
- Foreclosure court granted partial summary judgment (Mayflower) and later denied Everett due to mortgage language issues; Mayflower sold for $9M.
- Deficiency judgment of $4,646,360.20 entered against Denten and guardians; Bank recorded against Everett and issued a citation to discover assets.
- Bank sought turnover in chancery probate proceedings; probate court held Bank had priority over unperfected guardianship expenses, and lis pendens did not create priority.
- Guardians appealed, arguing estate assets are in custodia legis, and probate allowances should have priority over Bank.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did recording a deficiency judgment create a security interest in estate assets? | Hoeper: assets in custodia legis; no lien on other property. | Hoeper: Civil PracticeLaw applies; judgment liens attach to estate assets. | Bank established a security interest on estate assets. |
| Does lis pendens or Probate Act priority apply to guardian allowances? | Guardians: probate awards should outrank liens. | Bank: liens beat unperfected probate expenses; lis pendens not priority-setting. | No priority for probate allowances over Bank’s liens. |
| Should the Civil Practice Law govern enforcement of judgments in guardianship estates? | Guardians: Probate Act governs distributions; CPR not applicable to priority. | Bank: Civil Practice Law applies via 755 ILCS 5/1-6. | Civil Practice Law applies to probate proceedings. |
| Do sections 18-10 and 18-13 Probate Act priority rules apply to guardianship estates? | Guardians seek decedent-like priority for administration expenses. | Bank: priority follows secured lien; guardianship priority scheme not extendable. | Guardianship priority scheme does not apply; liens prevail. |
| Is the Bank bound by probate court fee awards and orders regarding estate funds? | Bank should be bound by probate’s determinations on proceeds/funding. | Bank filed liens; priority unaffected by probate awards. | Bank not bound to grant priority to probate awards; liens control. |
Key Cases Cited
- Gebis v. Gebis, 186 Ill. 2d 188 (1999) (priorities in insolvent guardianships do not apply to sections 18-10/18-13)
- Melbourne Corp. v. United States Fidelity & Guaranty Co., 93 Ill. App. 3d 702 (1981) (claims against guardianship not necessarily secured by priority rules)
- In re Estate of Gebis, 186 Ill. 2d 188 (1999) (custodial claims and guardianship priority discussed)
- Atwater v. American Exchange National Bank of Chicago, 152 Ill. 605 (1894) (priority of secured claims against estates)
- Roseboom v. Whittaker, 132 Ill. 81 (1890) (priority of creditors against estates)
- In re Leonard, 125 F.3d 543 (7th Cir. 1997) (lis pendens notice and priority not directly establishing liens)
- Gende v. Flemming, 55 Ill. App. 3d 659 (1977) (custody of funds and attachment limitations; not directly guardianship)
- Roberts v. Dunn, 71 Ill. 46 (1873) (funds held under bond not subject to seizure)
- Shaffer v. Heitner, 433 U.S. 186 (1977) (in rem judgments and property divestment concepts)