RTS Plumbing Co. v. DeFazio

536 N.E.2d 836, 180 Ill. App. 3d 1037, 129 Ill. Dec. 786, 1989 Ill. App. LEXIS 294
CourtAppellate Court of Illinois
DecidedMarch 15, 1989
Docket1-87-3761
StatusPublished
Cited by10 cases

This text of 536 N.E.2d 836 (RTS Plumbing Co. v. DeFazio) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
RTS Plumbing Co. v. DeFazio, 536 N.E.2d 836, 180 Ill. App. 3d 1037, 129 Ill. Dec. 786, 1989 Ill. App. LEXIS 294 (Ill. Ct. App. 1989).

Opinion

JUSTICE WHITE

delivered the opinion of the court:

Appellants, Stephen J. Sharley, Diane Perrier, Tadeusz and Lucyna Hejna, Damen Savings and Loan, and United Savings of America; appeal from an order of the circuit court denying their petition to intervene in a foreclosure action brought by the Summit First Federal Savings and Loan Association (Summit). Appellants argue that they were entitled to intervene as a matter of right and that the trial court erred in finding that a notice of lis pendens recorded by Summit barred them from intervening in the action.

The action was initiated in September 1984 when RTS Plumbing Co., Inc. (RTS), filed a complaint for foreclosure of a mechanic’s lien against Summit, Louis and David DeFazio, the Bank of Lyons (Lyons), the Bridgeview Bank and Trust, and the Midland Savings and Loan Association. RTS alleged that pursuant to a written contract with Louis DeFazio, it had furnished services in connection with certain real property located in Bridgeview, Illinois, that defendants failed to pay for the services rendered, and that a mechanic’s lien had been recorded against the property. RTS’ complaint requested that defendants be ordered to pay the amount owed or, in the alternative, that the property be sold to satisfy RTS’ lien.

On May 20, 1985, Summit filed a counterclaim and third-party complaint to foreclose against the DeFazios, Lyons, RTS, and others. Summit alleged that it held a mortgage on the Bridgeview property and that the mortgage was in default in the amount of $78,390.64. Summit asserts that it also filed a notice of Us pendens on May 20, 1985.

Lyons failed to appear in the foreclosure action and default orders were entered against it on October 1, 1985, and November 25, 1985. On December 30, 1985, Lyons transferred a portion of the Bridgeview property to Sharley and Perrier. Another portion of the property was transferred from Lyons to Tadeusz and Lucyna Hejna on July 24, 1986. Damen Savings and Loan and United Savings of America financed the purchases and executed mortgages on the transferred properties.

On June 16, 1987, appellants filed a petition to intervene in Summit’s foreclosure action. Appellants also filed a proposed answer and affirmative defense in which they requested that any judgment entered for Summit be satisfied by the sale of the vacant, unimproved portion of the Bridgeview property. Summit opposed intervention on the ground that Lyons, appellants’ predecessors in interest, had been defaulted nearly two years previously and, therefore, the petition was untimely. Following a hearing, the trial court denied appellants’ petition to intervene.

Appellants contend that the trial court’s decision to deny intervention was based on the court’s belief that Summit’s recording of a Us pendens notice barred intervention as a matter of law. Appellants argue that although the recording of a Us pendens notice serves to bind subsequent purchasers to any final judgment entered in the litigation in their absence, it does not prevent a subsequent purchaser from intervening in the action prior to final judgment. Therefore, appellants argue that the trial court’s decision should be reversed and they should be allowed to intervene in Summit’s foreclosure action. We agree with appellants’ contention that the filing of a Us pendens notice does not bar intervention as a matter of law.

The Illinois Us pendens statute (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 1901) provides that in an action seeking equitable relief affecting or involving real property, the filing of a notice in the office of the recorder of deeds in the county where the real estate is located, signed by a party to the action and setting forth the title of the action, the parties thereto, the court where the action was brought, and a description of the real estate shall be constructive notice to every person subsequently acquiring an interest in the property. The statute further provides that every person whose interest is not shown of record at the time the notice is filed shall be deemed a subsequent purchaser and shall be bound by the proceeding as if he or she were a party thereto. Summit concedes that there is nothing in the language of the statute that bars intervention by a subsequent purchaser as a matter of law. However, it points out that a subsequent purchaser who takes subject to a notice of lis pendens need not be made a party to the pending action (Norris v. Ile (1894), 152 Ill. 190, 38 N.E. 762; Stavros v. Karkomi (1976), 39 Ill. App. 3d 113, 349 N.E.2d 599), and argues that to allow intervention would defeat the purpose of the Us pendens doctrine. We disagree.

The purpose of the doctrine of Us pendens is the avoidance of endless litigation of property rights precipitated by the transfer of interests in the property after litigation has begun. (Admiral Builders Corp. v. Robert Hall Village (1981), 101 Ill. App. 3d 132, 427 N.E.2d 1032.) This purpose is achieved by conclusively binding the party receiving the interest to the result of the litigation as though he or she had been a party from the outset. (Norris v. Ile (1894), 152 Ill. 190, 38 N.E. 762; Admiral Builders Corp. v. Robert Hall Village (1981), 101 Ill. App. 3d 132, 427 N.E .2d 1032.) Allowing intervention does not impair a court’s power to bind conclusively a subsequent purchaser, and because a court has the power to enter orders assuring that an intervenor will not interfere with or unduly delay the litigation (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 408(f)), it cannot be said that as a matter of law allowing a subsequent purchaser to intervene will defeat the purpose of lis pendens.

In an 1889 decision, the United States Supreme Court set forth the rule that purchasers of property involved in a pending suit may be admitted as parties in the discretion of the court. (See Mellen v. Moline Malleable Iron Works (1889), 131 U.S. 352, 33 L. Ed. 178, 9 S. Ct. 781.) Summit concedes that the question of whether to allow purchasers pendente lite to intervene in a pending action is addressed to the discretion of the trial court. However, it argues that in the present case, the trial court properly exercised its discretion in denying appellants’ petition to intervene. Again we disagree.

Our review of the transcript of the hearing on appellants’ petition to intervene leads us to conclude that, in denying the petition, the trial court acted under the mistaken belief that the filing of the lis pendens notice required it to deny intervention as a matter of law. A court commits error when it fails to exercise its discretion due to a belief that it has no discretion to exercise. (Avery v. Garbutt (1974), 19 Ill. App. 3d 1001, 313 N.E .2d 274.) Thus, the trial court erred when it ruled that Summit’s filing of the lis pendens notice barred appellants from intervening in the action.

Although we find that the trial court erred in holding that appellants were barred from intervening, we believe that the court’s order denying intervention was proper.

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Bluebook (online)
536 N.E.2d 836, 180 Ill. App. 3d 1037, 129 Ill. Dec. 786, 1989 Ill. App. LEXIS 294, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rts-plumbing-co-v-defazio-illappct-1989.