Schindler v. Watson
2017 IL App (2d) 160126
Ill. App. Ct.2017Background
- Schindler obtained a $164,303.20 judgment against Watson on May 20, 2004, and recorded a memorandum of judgment (creating a judgment lien on Watson’s Bartlett property) on January 19, 2005.
- A judgment lien under 735 ILCS 5/12-101 is enforceable for seven years from the judgment date (here, through May 20, 2011); revival procedures exist under sections 2-1601/2-1602 and 13-218.
- Watson sold the property to Peter and Anne Cozzi on March 25, 2011; the deed was recorded April 6, 2011. Schindler received no notice and took no action before the lien’s expiration on May 20, 2011.
- Schindler filed a foreclosure complaint on October 26, 2015; the Cozzis moved under 735 ILCS 5/2-619(a)(9) to dismiss, claiming the lien had expired.
- The trial court dismissed Schindler’s foreclosure with prejudice; the appellate court affirmed, holding Schindler failed to preserve the lien during the seventh year and therefore lacked an enforceable interest in the property.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a judgment creditor can enforce a judgment lien against property sold to a third party after the creditor failed to revive or otherwise preserve the lien before the 7-year expiration | Schindler: sale on March 25, 2011 gave rise to a new cause of action (a “breach of lien”) or preserved rights such that foreclosure could be timely filed; analogous to mortgage default rules with a 10-year enforcement window | Cozzis: lien expired May 20, 2011; Schindler had no interest to foreclose because he failed to revive or otherwise act within the statutory period | Court: Held lien expired May 20, 2011; creditor must act during the seventh year—either revive or file foreclosure—so dismissal affirmed |
| Whether a judgment debtor may lawfully sell property subject to a recorded judgment lien without notifying creditor or satisfying the lien | Schindler: sale was “unlawful” and should not defeat creditor’s rights | Cozzis: sale was lawful; buyers take with constructive notice and assume risk; burden on creditor to monitor lien | Court: Sale lawful; recording gives constructive notice of the judgment date and buyer assumes risk of a timely enforcement action |
| Whether filing a foreclosure action after a third-party sale but before 7-year expiration preserves the lien against the new owner | Schindler: argued enforcement would be fruitless after sale and that a revival was required or action should relate back | Cozzis: foreclosure filed after expiration cannot create or preserve lien against them | Court: A timely-filed foreclosure action before the 7-year expiration preserves the lien against the property regardless of current owner; Schindler failed to file in time |
| Whether Barth v. Kantowski controls to bar foreclosure here | Schindler relied on the notion that revival after expiration cannot reach third-party purchaser | Cozzis relied on Barth to argue lien lapsed | Court: Declined to follow Barth’s rule that a creditor is powerless after sale if revival not recorded while debtor owned the property; instead adopted First National Bank of Mt. Zion reasoning that timely foreclosure preserves lien |
Key Cases Cited
- Barth v. Kantowski, 409 Ill. App. 3d 420 (Ill. App. Ct. 2011) (Third Dist.) (held lien lapsed where creditor did not revive/record while debtor owned property)
- First National Bank of Mt. Zion v. Fryman, 236 Ill. App. 3d 754 (Ill. App. Ct. 1992) (timely filing of foreclosure complaint constitutes a levy that preserves the judgment lien under section 12-108)
- Maniez v. Citibank, F.S.B., 404 Ill. App. 3d 941 (Ill. App. Ct. 2010) (discusses strict statutory requirements for judgment liens)
- Cochran v. Cutler, 39 Ill. App. 3d 602 (Ill. App. Ct. 1976) (buyer takes property with constructive notice and assumes risk if lien exists)
- Guertler v. Barlow Woods, Inc., 230 Ill. App. 3d 933 (Ill. App. Ct. 1992) (revival of judgment continues the judgment and preserves lien rights)