Gayton v. Kovanda

857 N.E.2d 929, 368 Ill. App. 3d 363, 306 Ill. Dec. 530, 2006 Ill. App. LEXIS 965
Appellate Court of Illinois·Decided October 25, 2006·No. 1-06-0609·Published·Cited by 7 cases

Opinion

JUSTICE KARNEZIS

delivered the opinion of the court:

Plaintiff Monica Gayton filed suit against defendant Louis Kovanda to quiet title. Kovanda filed a counterclaim alleging that Gayton violated the Illinois Uniform Fraudulent Transfer Act (740 ILCS 160/1 et seq. (West 2002)) (Act). Gayton then filed a motion for summary judgment on Kovanda’s counterclaim, which was granted. Kovanda now appeals from the court’s order granting summary judg- - ment in favor of Gayton and argues summary judgment was improper. For the following reasons, we affirm.

BACKGROUND

The following facts are undisputed. Monica and Joseph Gayton, husband and wife, held title to the property commonly known as 3524 Riverside Drive, Wilmette, Illinois (hereinafter the property), as joint tenants with rights of survivorship. On February 2, 2001, Joseph transferred his interest in the property via a quitclaim deed to his wife Monica.

Louis Kovanda was a creditor of Joseph Gayton and had a judgment of $414,000, plus court costs, entered in his favor against Joseph Gayton on November 20, 2003 (Kovanda v. Gayton, No. 03L009656, Cir. Ct. Cook Co.). Joseph Gayton died on November 26, 2003. Kovanda recorded the notice of judgment against title to the Wilmette property on December 3, 2003.

On March 15, 2004, Monica Gayton filed an action in the circuit court of Cook County against Kovanda to quiet title to the property. Monica alleged that Kovanda had created a cloud on title by wrongfully recording the judgment as a lien against the property because she was the sole owner of the property and the judgment was against Joseph, who no longer had an interest in the property. Monica filed a motion for summary judgment on October 28, 2004, seeking an order forcing Kovanda to release the lien.

On October 13, 2004, Kovanda filed an answer to Monica’s complaint and a counterclaim wherein he alleged that Joseph’s transfer of his interest in the property to Monica violated the Illinois Uniform Fraudulent Transfer Act (740 ILCS 160/1 et seq. (West 2002)). Thereafter, on December 23, 2004, Kovanda voluntarily agreed to record a release of his judgment lien. Also on December 23, 2004, Monica withdrew the motion for summary judgment she had filed on October 28, 2004.

On February 23, 2005, Monica filed an amended complaint for slander of title wherein she alleged again that Kovanda had improperly recorded the judgment lien against the property.

Monica filed a motion for summary judgment as to Kovanda’s counterclaim on September 26, 2005. On December 7, 2005, the trial court granted Monica’s motion for summary judgment as to Kovanda’s counterclaim. On January 31, 2006, Monica voluntarily dismissed her complaint for slander of title.

Kovanda filed a notice of appeal on February 28, 2006, seeking review of the trial court’s order granting summary judgment to Monica as to his counterclaim.

ANALYSIS

Kovanda argues that the trial court erred in granting summary judgment in favor of Gayton as to his counterclaim for violation of the Act.

Summary judgment is appropriate where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Happel v. Wal-Mart Stores, Inc., 199 Ill. 2d 179, 186 (2002). Whether a genuine issue of material fact exists is determined from the pleadings, depositions, affidavits and admissions on file in a case. Komater v. Kenton Court Associates, 151 Ill. App. 3d 632, 636 (1986). Summary judgment may be granted in any case where an issue of fact is raised if, after viewing the evidence in the light most favorable to the plaintiff, the trial court concludes that no liability exists as a matter of law. McCann v. Bethesda Hospital, 80 Ill. App. 3d 544 (1979). An order granting summary judgment should be reversed only if the evidence shows that a genuine issue of material fact exists or the judgment was incorrect as a matter of law. In re Estate of Herwig, 237 Ill. App. 3d 737, 741 (1992). Our review of an order granting summary judgment is de novo. Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 102 (1992).

In her motion for summary judgment, Gayton argued that even if Joseph’s transfer of his interest in the property was fraudulent pursuant to the Act, Kovanda still had no rights in the property because he did not perfect his judgment against the property prior to Joseph’s death.

The Illinois Uniform Fraudulent Transfer Act specifically addresses the issue of fraudulent transfers and creditors and states in relevant part:

“§5. (a) A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation:
(1) with actual intent to hinder, delay, or defraud any creditor of the debtor; or
(2) without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor:
(A) was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or
(B) intended to incur, or believed or reasonably should have believed that he would incur, debts beyond his ability to pay as they became due.
(b) In determining actual intent under paragraph (1) of subsection (a), consideration may be given, among other factors, to whether:
(1) the transfer or obligation was to an insider;
(2) the debtor retained possession or control of the property transferred after the transfer;
(3) the transfer or obligation was disclosed or concealed;
(4) before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit;
(5) the transfer was of substantially all the debtor’s assets;
(6) the debtor absconded;
(7) the debtor removed or concealed assets;
(8) the value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred;
(9) the debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred;
(10) the transfer occurred shortly before or shortly after a substantial debt was incurred; and

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Gayton v. Kovanda, 857 N.E.2d 929, 368 Ill. App. 3d 363, 306 Ill. Dec. 530, 2006 Ill. App. LEXIS 965 (Ill. Ct. App. 2006).

857 N.E.2d 929 (Gayton v. Kovanda) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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