2016 IL App (3d) 140205
Opinion filed April 15, 2016 _____________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
PERU FEDERAL SAVINGS BANK, ) Appeal from the Circuit Court ) of the 13th Judicial Circuit, Plaintiff, ) La Salle County, Illinois, ) v. ) ) TINA WEIDEN, ) ) Defendant-Appellant ) ) (Olivero and Olivero Law Offices, ) ) Appeal No. 3-14-0205 Defendant-Appellee; ) Circuit No. 12-CH-389 ) Donald Weiden, Jr.; Midland State Bank; ) Successor to Amore Bank, N.A.; Collection ) Professionals, Inc.; and Unknown Owners and ) Nonrecord Claimants, ) ) Defendants). )
Honorable Eugene P. Daugherity, Judge, Presiding. _____________________________________________________________________________
JUSTICE LYTTON delivered the judgment of the court, with opinion. Presiding Justice O’Brien and Justice McDade concurred in the judgment and opinion. _____________________________________________________________________________
OPINION ¶1 Defendants, Donald and Tina Weiden, divorced in 2006. In 2012, plaintiff, Peru Federal
Savings Bank, foreclosed on the martial residence. Olivero & Olivero Law Offices, the firm that
represented Donald during the divorce, successfully requested that the surplus funds from the
sale be awarded to it in satisfaction of a judgment lien for attorney fees. Tina appeals, claiming
that she had priority based on the dissolution judgment and that her equitable lien should have
been satisfied first. We reverse and remand with directions.
¶2 In August of 1998, Donald and Tina purchased the marital residence and executed a note
and mortgage with plaintiff. In 2006, the trial court entered a judgment dissolving the Weiden's
marriage. The court awarded Donald the marital residence and ordered him to pay Tina
$34,380.40 for her equitable share in the property. A marital settlement agreement was
incorporated into the judgment. Under its terms, Tina agreed to transfer her interest in the
marital residence to Donald by executing a quitclaim deed, and Donald agreed to refinance the
mortgage and pay Tina her award of $34,380.40. The agreement provided:
"TINA shall transfer all ownership interest in and to the marital residence to
DONALD by executing a Quit Claim Deed and any other necessary documents
upon the refinance of the mortgage and note. Upon the refinance of the mortgage,
DONALD shall pay the sum of $34,380.40 within sixty (60) days of the entry of
the Judgment for Dissolution of Marriage for one-half of the equity in the
residence."
The parties also agreed that they were responsible for their own attorney fees.
¶3 The law firm of Olivero & Olivero represented Donald during the divorce proceedings.
Shortly after the dissolution judgment was entered, the firm obtained a memorandum of
2 judgment for $18,253 in attorney fees. Olivero & Olivero recorded the judgment with the county
recorder on June 5, 2008.
¶4 In August of 2012, the bank filed a complaint for foreclosure against the marital
residence. The Olivero law firm was named as a defendant pursuant to its recorded lien. Donald
and Tina were also listed as defendants as the legal owners of the real estate.
¶5 Donald did not file an appearance or otherwise contest the proceedings. Tina filed her
appearance on September 17, 2012. On October 4, 2012, Olivero & Olivero filed an answer to
the complaint for foreclosure and asserted its lien against the property. On February 13, 2013,
the trial court granted the bank’s motion for summary judgment and entered a judgment of
foreclosure.
¶6 Three months later, the sheriff conducted a judicial sale, and the property was sold. The
winning bid was $35,909.88 more than the amount Donald and Tina owed to Peru Federal.
Shortly after the sale, the bank filed a motion for approval and set a hearing on distribution of the
excess funds, stating that Olivero & Olivero was a recorded lienholder.
¶7 On October 30, 2013, Olivero & Olivero filed a motion for summary judgment on its lien
and a petition for fees. In response to the firm’s motion, Tina filed an answer to the petition and
a cross-petition for distribution, alleging that she had a lien against the property and that her lien
had priority over all other liens.
¶8 Following a hearing, the trial court denied Tina's claim of an equitable lien and found that
Olivero & Olivero had a valid judgment lien against the property that had been perfected. The
court then determined that the firm should be paid first from the surplus of the sale and that any
remaining funds should be shared by Donald and Tina as joint owners in equity.
¶9 ANALYSIS
3 ¶ 10 On appeal, Tina claims that the trial court erred in awarding the surplus proceeds to
Donald's law firm. She argues that the dissolution judgment awarding her $34,380.40 as her
equitable share in the marital residence created an equitable lien on the property that has priority
over the judgment lien recorded by Olivero & Olivero.
¶ 11 Under Illinois law, the proceeds resulting from the sale of real estate under foreclosure
shall be applied as follows: (1) the reasonable expenses of the sale; (2) the reasonable expenses
of securing possession before the sale; (3) satisfaction of claims in the order of priority
adjudicated in the judgment of foreclosure or order confirming the sale; and (4) remittance of
any surplus to the appropriate parties, as ordered by the court. 735 ILCS 5/15-1512 (West 2012).
Generally, satisfaction of claims in the order of priority is determined by debts, or liens, that
have been properly recorded. See Heritage Federal Credit Union v. Giampa, 251 Ill. App. 3d
237, 238-39 (1993). A judgment lien is created when a certified copy of a judgment is filed in
the office of the county recorder on the real estate of the person against whom it is entered. 735
ILCS 5/12-101 (West 2012) (a judgment is a lien only from the time a transcript, certified copy
or memorandum of judgment is filed in the office of the recorder in the county in which the real
estate is located).
¶ 12 Also, equitable liens may be imposed on real property out of considerations of fairness.
W.E. Erickson Construction, Inc. v. Congress-Kenilworth Corp., 132 Ill. App. 3d 260, 270-71
(1985). The essential elements of an equitable lien are: (1) a debt, duty or obligation owing by
one person to another; and (2) a res to which that obligation attaches. Uptown National Bank of
Chicago v. Stramer, 218 Ill. App. 3d 905, 907 (1991). Such liens have been imposed where
contracts manifest the intent that a particular property or funds be security for a debt whenever
there has been a promise to convey or assign the property as security. Id. at 907-08. While
4 express words are not required to create an equitable lien, "it must clearly appear from the
instrument or the surrounding circumstances *** that the maker of the instrument intended that
the property therein described is to be held, given, or transferred as security for the obligation."
Hibernian Banking Ass'n v. Davis, 295 Ill. 537, 544 (1920).
¶ 13 In this case, we find that the dissolution judgment created an equitable lien in Tina's
interest in the marital property. The dissolution judgment awarded Donald the marital residence.
Free access — add to your briefcase to read the full text and ask questions with AI
2016 IL App (3d) 140205
Opinion filed April 15, 2016 _____________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
PERU FEDERAL SAVINGS BANK, ) Appeal from the Circuit Court ) of the 13th Judicial Circuit, Plaintiff, ) La Salle County, Illinois, ) v. ) ) TINA WEIDEN, ) ) Defendant-Appellant ) ) (Olivero and Olivero Law Offices, ) ) Appeal No. 3-14-0205 Defendant-Appellee; ) Circuit No. 12-CH-389 ) Donald Weiden, Jr.; Midland State Bank; ) Successor to Amore Bank, N.A.; Collection ) Professionals, Inc.; and Unknown Owners and ) Nonrecord Claimants, ) ) Defendants). )
Honorable Eugene P. Daugherity, Judge, Presiding. _____________________________________________________________________________
JUSTICE LYTTON delivered the judgment of the court, with opinion. Presiding Justice O’Brien and Justice McDade concurred in the judgment and opinion. _____________________________________________________________________________
OPINION ¶1 Defendants, Donald and Tina Weiden, divorced in 2006. In 2012, plaintiff, Peru Federal
Savings Bank, foreclosed on the martial residence. Olivero & Olivero Law Offices, the firm that
represented Donald during the divorce, successfully requested that the surplus funds from the
sale be awarded to it in satisfaction of a judgment lien for attorney fees. Tina appeals, claiming
that she had priority based on the dissolution judgment and that her equitable lien should have
been satisfied first. We reverse and remand with directions.
¶2 In August of 1998, Donald and Tina purchased the marital residence and executed a note
and mortgage with plaintiff. In 2006, the trial court entered a judgment dissolving the Weiden's
marriage. The court awarded Donald the marital residence and ordered him to pay Tina
$34,380.40 for her equitable share in the property. A marital settlement agreement was
incorporated into the judgment. Under its terms, Tina agreed to transfer her interest in the
marital residence to Donald by executing a quitclaim deed, and Donald agreed to refinance the
mortgage and pay Tina her award of $34,380.40. The agreement provided:
"TINA shall transfer all ownership interest in and to the marital residence to
DONALD by executing a Quit Claim Deed and any other necessary documents
upon the refinance of the mortgage and note. Upon the refinance of the mortgage,
DONALD shall pay the sum of $34,380.40 within sixty (60) days of the entry of
the Judgment for Dissolution of Marriage for one-half of the equity in the
residence."
The parties also agreed that they were responsible for their own attorney fees.
¶3 The law firm of Olivero & Olivero represented Donald during the divorce proceedings.
Shortly after the dissolution judgment was entered, the firm obtained a memorandum of
2 judgment for $18,253 in attorney fees. Olivero & Olivero recorded the judgment with the county
recorder on June 5, 2008.
¶4 In August of 2012, the bank filed a complaint for foreclosure against the marital
residence. The Olivero law firm was named as a defendant pursuant to its recorded lien. Donald
and Tina were also listed as defendants as the legal owners of the real estate.
¶5 Donald did not file an appearance or otherwise contest the proceedings. Tina filed her
appearance on September 17, 2012. On October 4, 2012, Olivero & Olivero filed an answer to
the complaint for foreclosure and asserted its lien against the property. On February 13, 2013,
the trial court granted the bank’s motion for summary judgment and entered a judgment of
foreclosure.
¶6 Three months later, the sheriff conducted a judicial sale, and the property was sold. The
winning bid was $35,909.88 more than the amount Donald and Tina owed to Peru Federal.
Shortly after the sale, the bank filed a motion for approval and set a hearing on distribution of the
excess funds, stating that Olivero & Olivero was a recorded lienholder.
¶7 On October 30, 2013, Olivero & Olivero filed a motion for summary judgment on its lien
and a petition for fees. In response to the firm’s motion, Tina filed an answer to the petition and
a cross-petition for distribution, alleging that she had a lien against the property and that her lien
had priority over all other liens.
¶8 Following a hearing, the trial court denied Tina's claim of an equitable lien and found that
Olivero & Olivero had a valid judgment lien against the property that had been perfected. The
court then determined that the firm should be paid first from the surplus of the sale and that any
remaining funds should be shared by Donald and Tina as joint owners in equity.
¶9 ANALYSIS
3 ¶ 10 On appeal, Tina claims that the trial court erred in awarding the surplus proceeds to
Donald's law firm. She argues that the dissolution judgment awarding her $34,380.40 as her
equitable share in the marital residence created an equitable lien on the property that has priority
over the judgment lien recorded by Olivero & Olivero.
¶ 11 Under Illinois law, the proceeds resulting from the sale of real estate under foreclosure
shall be applied as follows: (1) the reasonable expenses of the sale; (2) the reasonable expenses
of securing possession before the sale; (3) satisfaction of claims in the order of priority
adjudicated in the judgment of foreclosure or order confirming the sale; and (4) remittance of
any surplus to the appropriate parties, as ordered by the court. 735 ILCS 5/15-1512 (West 2012).
Generally, satisfaction of claims in the order of priority is determined by debts, or liens, that
have been properly recorded. See Heritage Federal Credit Union v. Giampa, 251 Ill. App. 3d
237, 238-39 (1993). A judgment lien is created when a certified copy of a judgment is filed in
the office of the county recorder on the real estate of the person against whom it is entered. 735
ILCS 5/12-101 (West 2012) (a judgment is a lien only from the time a transcript, certified copy
or memorandum of judgment is filed in the office of the recorder in the county in which the real
estate is located).
¶ 12 Also, equitable liens may be imposed on real property out of considerations of fairness.
W.E. Erickson Construction, Inc. v. Congress-Kenilworth Corp., 132 Ill. App. 3d 260, 270-71
(1985). The essential elements of an equitable lien are: (1) a debt, duty or obligation owing by
one person to another; and (2) a res to which that obligation attaches. Uptown National Bank of
Chicago v. Stramer, 218 Ill. App. 3d 905, 907 (1991). Such liens have been imposed where
contracts manifest the intent that a particular property or funds be security for a debt whenever
there has been a promise to convey or assign the property as security. Id. at 907-08. While
4 express words are not required to create an equitable lien, "it must clearly appear from the
instrument or the surrounding circumstances *** that the maker of the instrument intended that
the property therein described is to be held, given, or transferred as security for the obligation."
Hibernian Banking Ass'n v. Davis, 295 Ill. 537, 544 (1920).
¶ 13 In this case, we find that the dissolution judgment created an equitable lien in Tina's
interest in the marital property. The dissolution judgment awarded Donald the marital residence.
In exchange for her interest in the marital property, Tina agreed to execute a quitclaim deed
giving her interest in the property to Donald, and Donald agreed to refinance the mortgage and
use those funds to pay Tina. The specific language of the dissolution judgment clearly indicated
that the martial residence was the security for Tina's equity interest. Upon refinance of the
mortgage and note, Donald would receive the money necessary to buy Tina's interest in the
property, and when Tina received her money, she would execute a quitclaim deed releasing her
interest in the property. Thus, it is apparent from the judgment and the surrounding
circumstances that the parties intended that the property would be "held *** as security for the
obligation." See Hibernian Banking, 295 Ill. at 544. The dissolution judgment therefore created
an equitable lien that has priority over the judgment lien recorded by Olivero & Olivero. On
remand, Tina should be awarded the excess surplus first and any remaining funds should be used
to satisfy the law firm's lien.
¶ 14 CONCLUSION
¶ 15 The judgment of the circuit court of La Salle County is reversed. The cause is remanded
to the trial court to redistribute the surplus proceeds as directed.
¶ 16 Reversed and remanded with directions.