Mordkovich v. Tishman Speyer Properties
79 N.E.3d 687
| Ill. App. Ct. | 2017Background
- Plaintiff Carmella Mordkovich brought a 2011 Cook County personal-injury suit; she was represented in that action by attorney Kent Lucaccioni. Douglas B. Warlick & Associates (Warlick) had separately represented Mordkovich in a family-law matter and claimed unpaid fees.
- In March 2013 (amended March 28, 2014) Mordkovich executed a promissory note, an "Assignment of Lien," and an "Irrevocable Letter of Direction" in favor of Warlick, increasing the note to $160,000 and directing Lucaccioni to withhold funds from any personal-injury recovery to pay Warlick.
- Lucaccioni acknowledged receipt of the amended encumbrance documents and stated he would protect the lien interests; Warlick later demanded payment from the personal-injury settlement proceeds and asserted a lien.
- The personal-injury action settled for $975,000 and was dismissed with the trial court retaining jurisdiction to adjudicate liens. Warlick moved to intervene to adjudicate its lien; the trial court initially ordered escrow/accounting, then orally found no equitable lien existed and later dismissed Warlick’s intervention for lack of subject-matter jurisdiction under section 2-619(a)(1).
- Warlick appealed; the appellate court reviewed de novo whether the encumbrance documents created an equitable lien and whether dismissal for lack of jurisdiction was proper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the amended encumbrance documents created an equitable lien on the personal-injury settlement proceeds | Warlick: the promissory note + assignment/letter of direction show intent to make the settlement proceeds security for the debt and thus create an equitable lien | Mordkovich: documents are a personal promise to pay and do not assign any specific portion of the settlement to Warlick | Held: No. Documents were a promise to pay; they did not assign a specified part/percentage of the fund and therefore did not create an equitable lien |
| Whether equity/fairness required the court to recognize a lien despite lack of express assignment | Warlick: equitable powers permit courts to fashion remedies when necessary; fairness favors recognizing Warlick's interest | Mordkovich: Warlick has independent remedies (fraud, conversion, etc.) and is not without relief | Held: Forfeited by inadequate authority and, on merits, rejected — court need not invent an equitable lien when other remedies exist |
| Whether the trial court retained subject-matter jurisdiction to adjudicate Warlick’s claims after finding no lien | Warlick: (implicitly) trial court could adjudicate ancillary claims related to lien | Mordkovich: once no lien on the proceeds exists, the court lacks jurisdiction over an intervention limited to lien adjudication | Held: When an intervenor asserts only a lien and none exists, the trial court’s jurisdiction over the intervention is exhausted; dismissal for lack of jurisdiction was proper |
| Whether dismissal under section 2-619(a)(1) was appropriate | Warlick: dismissal was improper because its encumbrance created jurisdictional basis | Mordkovich: dismissal proper because no enforceable lien existed | Held: Affirmed — dismissal for lack of subject-matter jurisdiction was appropriate after court determined no equitable lien existed |
Key Cases Cited
- Oppenheimer v. Szulerecki, 297 Ill. 81 (1921) (equitable lien may arise where writing evidences intent to make property or fund security for debt)
- Lewis v. Braun, 356 Ill. 467 (1934) (assignment must designate part, proportion, or percentage of fund to create equitable lien)
- Cameron v. Boeger, 200 Ill. 84 (1902) (distinguishes an assignment of part of a claim from a mere promise to pay out of a fund)
- People v. Philip Morris, Inc., 198 Ill. 2d 87 (2001) (jurisdictional principles for ancillary proceedings and lien adjudication)
- DeKing v. Urban Investment & Development Co., 155 Ill. App. 3d 594 (1987) (if no lien on proceeds, court lacks further jurisdiction over intervenor’s ancillary claims)