Thorson v. LaSalle National Bank

Case Date: 03/12/1999
Court: 1st District Appellate
Docket No: 1-98-0940

Thorson v. LaSalle National Bank, No. 1-98-0940

1st District, March 12, 1999

FIFTH DIVISION

ERIC THORSON,

Plaintiff-Appellant,

v.

LASALLE NATIONAL BANK, f/k/a Exchange National Bank of Chicago, as Trustee of the Lincoln-Krilich Trust No.2,

Defendant-Appellee.

Appeal from the Circuit Court of Cook County

Honorable Alexander White, Judge Presiding.

JUSTICE GREIMAN delivered the opinion of the court:

Plaintiff Eric Thorson obtained a money judgment in California against defendant LaSalle National Bank, f/k/a Exchange National Bank of Chicago, as Trustee of the Lincoln-Krilich Trust No. 2 (sometimes hereinafter the Trustee). Although plaintiff moved to have the judgment entered against LaSalle National Bank (hereinafter the Bank) in its individual capacity, the California court failed to enter such an order. Subsequently, plaintiff registered the California judgment in Illinois and served the Bank in its several capacities with four citations to discover assets, seeking, in relevant part, to recover on the California judgment from the Bank's individual assets. Plaintiff now appeals the trial court's order that granted the Bank's motion to quash plaintiff's citations, finding that, under Illinois law, plaintiff cannot reach the corporate assets of the Bank to satisfy a judgment entered against the Bank as trustee.

The primary contention raised on appeal by plaintiff is that the substantive law of California would allow recovery from the Bank's individual assets and that Illinois, as the state enforcing the foreign judgment, should apply the substantive law of California, as the rendering state, to permit such recovery. Based on the record in the present case, however, we find that the California court already considered the identical issue now raised by plaintiff and we cannot reconsider the merits here. Accordingly, we affirm the order of the trial court.

On June 20, 1989, plaintiff filed a complaint for breach of contract against "Exchange National Bank of Chicago, an Illinois banking corporation, as Trustee of the Lincoln-Krilich Trust No. 2 (Trust No. 40441)."(1) In his complaint, plaintiff alleged that on August 28, 1985, plaintiff and the Trustee entered into a contract for the purchase and sale of real estate and escrow instructions. This contract provided for the sale by plaintiff to the Trustee of plaintiff's residence and furniture in Newport Beach, California. The contract for plaintiff's residence was signed by Exchange National Bank as the Trustee. The furniture was covered in an addendum to the contract, which was signed by Exchange National Bank. The addendum provided that the Bank would pay plaintiff $145,000 for the furniture and fixtures located on the property. In his complaint, plaintiff alleged that the Bank never paid the $145,000 for the furniture.

In October 1991, following a trial, the California judge entered a judgment against "Exchange National Bank of Chicago." The Trustee filed a motion, requesting that the judgment be amended to name the Bank only in its capacity as trustee, not as an individual. On December 16, 1997, a posttrial hearing was held on this motion, in addition to the Trustee's unsuccessful motion for a new trial. Thereafter, on October 20, 1993, after considering other matters that are not relevant to this appeal, the California court entered the final order, i.e., the fourth amended judgment against "Exchange National Bank of Chicago, an Illinois banking corporation, as Trustee of the Lincoln-Krilich Trust No. 2 (Trust No. 40441)."

On December 17, 1993, plaintiff filed an amended registration of foreign judgment for the October 20, 1993, California fourth amended judgment. The judgment debtor was named as "LaSalle National Bank f/k/a Exchange National Bank of Chicago, as Trustee of Lincoln-Krilich Trust No. 2."

In 1997, plaintiff filed four citations to discover assets, seeking to recover the monetary judgment entered in California and registered as a foreign judgment in Illinois. The citations were directed to the Bank (1) in its individual capacity, (2) as a third party in its individual capacity, (3) as a trustee, and (4) as a third party in its trust capacity.

In turn, the Bank filed a motion to quash the four citations to discover assets. The Bank argued that the trust has held no assets since February 1986 and that plaintiff is not entitled to reach assets that belong to the Bank in its individual capacity because the California judgement is solely against the Bank in its capacity as trustee. In response, plaintiff asserted that the matter is governed by California, not Illinois, law, and, under California law that was in effect prior to July 1, 1987, the monetary judgment against the Bank as trustee is enforceable against the Bank in its individual capacity.

Following a hearing in November 1997, the trial court took the matter under advisement and later issued its memorandum decision and judgment, granting the Bank's motion to quash. The trial court first found that Illinois law applied and, under Illinois law, a plaintiff cannot reach a bank's assets to satisfy a judgment.

Our review of the trial court's order granting the Bank's motion to quash plaintiff's citations to discover assets only involves questions of law and, thus, we apply a de novo standard of review. See, e.g., P.R.S. International, Inc. v. Shred Pax Corp., 184 Ill. 2d 224, 234 (1998); Hamwi v. Zollar, 299 Ill. App. 3d 1088 (1998) (de novo review applied to a question of law involving a foreign judgment).

The crux of plaintiff's position is that, under California common law prior to 1987, a bank's liability as trustee was legally interchangeable with a bank individually. Based on this premise, plaintiff maintains that the California judgment, on its face, makes the Bank individually liable, even though the judgment specifically and only names the judgment debtor to be the Trustee. To reach this result as to liability, plaintiff argues that the state enforcing a foreign judgment (Illinois) must apply the substantive law of the rendering state (California).

The federal constitution requires that "Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State." (U.S. Const., art. IV,