Xcel Supply, LLC v. Horowitz
100 N.E.3d 557
Ill. App. Ct.2018Background
- Xcel Supply obtained a judgment against Victor (Avigdor) Horowitz for breaches, totaling $468,021.87 plus costs and fees; plaintiff served a citation to discover assets on Hydra Properties, LLC (owned by Horowitz’s wife Ahuva) prohibiting transfers after service.
- On September 16, 2015 the court entered a conditional judgment against Hydra; beginning the next day Hydra issued six checks payable to “A. Horowitz” dated Sept–Dec 2015, totaling $5,220, which Horowitz cashed.
- Plaintiff moved for rule to show cause and turnover, attaching copies of the six cashed checks and arguing they evidenced payments to the judgment debtor after citation service.
- The trial court set a hearing, later issued an order (after hearing) directing Hydra to turnover $5,220 within 30 days, and denied Hydra leave to file a one-day-late response.
- Hydra appealed, arguing (1) the court failed to hold an evidentiary hearing, (2) no evidentiary basis supported finding the checks were Horowitz’s property, and (3) the court abused its discretion by refusing Hydra’s late filing. The appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an evidentiary hearing was required under §2‑1402 / Rule 277 before entering a turnover order | A hearing is sufficient as held by the trial court; supplementary proceedings and Rule 277 permit the court to control the proceeding and accept argument/evidence | Hydra argued Rule 277 and prior authority required an evidentiary hearing to resolve ownership disputes and it was denied that opportunity | Court held that either no reversible hearing error occurred or Hydra failed to preserve the record (no transcript); affirmed turnover (no relief) |
| Whether there was evidentiary support that the six checks were the judgment debtor’s property | Checks, cashed by Horowitz, signed and negotiated by him, establish they were his funds payable to the judgment debtor after citation service | Hydra contended checks were made to “A. Horowitz” ambiguously (could be Ahuva) and were gifts/loans used for family expenses | Court found Horowitz admitted cashing and using the funds; that, plus concession that Hydra issued the checks to him, supported turnover; affirmed |
| Whether the trial court abused discretion by denying leave to file a one‑day‑late response | Plaintiff relied on procedural rules and the court’s discretion; the late filing would not change outcome | Hydra argued denial prevented consideration of its defenses and evidence | Court reviewed the late filing and concluded it would not have changed the result; denial was not reversible error |
| Appellate jurisdiction over the turnover order | Plaintiff invoked Rule 304(b)(4) and §2‑1402 supplementary proceeding rules to render citation/turnover orders appealable | Hydra disputed timeliness and finality | Court held the turnover order was appealable under Rule 304(b)(4)/§2‑1402 and Hydra’s notice of appeal was timely (filed Monday after weekend exclusion) |
Key Cases Cited
- Dowling v. Chicago Options Associates, Inc., 226 Ill. 2d 277 (Ill. 2007) (supreme court held trial court may decide contested supplementary proceedings without an evidentiary hearing in certain circumstances)
- Foutch v. O’Bryant, 99 Ill. 2d 389 (Ill. 1984) (appellant’s failure to provide transcript leads to presumption the trial court acted properly)
- Roy Strom Excavating & Grading Co. v. National Bank of Albany Park, 4 Ill. App. 3d 561 (Ill. App. 1972) (third‑party citation respondent should be allowed to present proofs at hearing)
- Eclipse Manufacturing Co. v. U.S. Compliance Co., 381 Ill. App. 3d 127 (Ill. App.) (when turnover order is entered without an evidentiary hearing or factual findings, appellate review may be de novo)