West Suburban Bank v. Attorneys' Title Insurance Fund, Inc.

Case Date: 12/19/2001
Court: 2nd District Appellate
Docket No: 2-00-1093 Rel

No. 2--00--1093
December 19, 2001

_______________________________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT

_______________________________________________________________________________________________

WEST SUBURBAN BANK, ) Appeal from the Circuit Court
) of Du Page County.
Plaintiff-Appellee and )
Cross-Appellant, )
)
v. ) No. 99--MR--405
)
ATTORNEYS' TITLE INSURANCE )
FUND, INC.; COLDWELL BANKER )
STANMEYER REALTORS; and )
COLDWELL BANKER HONIG BELL)
REALTORS,)
) Honorable
Defendants-Appellantsand) Bonnie M. Wheaton,
Cross-Appellees. ) Judge, Presiding.

_______________________________________________________________________________________________

JUSTICE McLAREN delivered the opinion of the court:

The parties appeal the trial court's decisions regarding thefunds held in escrow by Attorneys' Title Insurance Fund. Defendants, Attorneys' Title Insurance Fund, Inc. (Attorneys'Title), and Coldwell Banker Stanmeyer Realtors and Coldwell BankerHonig Bell Realtors (collectively, Coldwell Banker), appeal thetrial court's decision to grant the motion for summary judgment ofplaintiff, West Suburban Bank, on its complaint seeking funds froman escrow account held by Attorneys' Title. Attorneys' Titleappeals and West Suburban Bank cross-appeals the trial court'sdecisions denying both parties' requests for attorney fees. Weaffirm in part, reverse in part, vacate in part, and remand thecause.

The following facts are uncontroverted. On or about March 15,1996, West Suburban Bank made two loans to Lombard Lodge 2350 LoyalOrder of Moose (Moose Lodge), one for $560,000 and the other for$220,000. These loans were secured by mortgages on the propertyowned by the Moose Lodge located at 994 Lombard Road, Lombard,Illinois (Moose Lodge property). On April 3, 1996, these loanswere recorded as liens upon the Moose Lodge property at the officeof the Du Page County recorder of deeds.

On or about April 7, 1998, the Moose Lodge decided to sell theproperty and entered into an "Exclusive Listing Agreement" withColdwell Banker Stanmeyer Realtors. Although the written agreementis not contained in the record, these facts are supported by anaffidavit of the former president of Coldwell Banker StanmeyerRealtors, Sergio Martinucci, and have not been disputed by anyparty. Coldwell Banker found a buyer, Anthony Hotko, who offered$700,000 for the property. The Moose Lodge accepted this price. The closing date for the sale of the property was scheduled forMarch 8, 1999.

On March 4, 1999, West Suburban Bank, through its attorneys,sent a letter to Coldwell Banker Stanmeyer, stating that theproceeds from the sale of the Moose Lodge property would beinsufficient to pay off the mortgage in full and, therefore, noproceeds would be available to pay any liens asserted by ColdwellBanker Stanmeyer for its commission. The letter also stated:

"In the event that you claim a commercial real estate broker'slien, be advised the West Suburban Bank disputes such lien asbeing subject, subordinate, and inferior to West SuburbanBank's mortgage as provided by 770 ILCS 15/15. If you claima lien, an amount equivalent to your lien claim will bedeposited in escrow and you will be required to provide arelease of your claim for lien at the closing as provided by770 ILCS 15/20. If the dispute is not amicably resolved, WestSuburban Bank will then file an action for judicialdeclaration or the parties' rights to the amount deposited inescrow, together with attorneys fees, costs, and prejudgmentinterest as provided by 770 ILCS 15/10(k)."

Prior to the closing, Coldwell Banker filed and recorded alien against the Moose Lodge property in the amount of $35,000, itscommission for the sale. West Suburban Bank then issued closinginstructions and a closing statement to Attorneys' Title regardingits two prior mortgage loans given to the seller/Moose Lodge. Theinstructions indicated that West Suburban Bank would be issuing thebuyer/Hotko two loans in the amounts of $560,000 and $190,000 andthat these new loans would be secured as first and second liens,respectively, upon the newly purchased Moose Lodge property. Theinstructions contained provisions for the disbursement of the$700,000 sale price, including allocations for the payment of realestate taxes, record releases, title insurance, attorney fees, and$52,500 to be deposited in escrow, leaving $579,914.03 payable toWest Suburban Bank.

On March 8, 1999, in accordance with these instructions, WestSuburban Bank received $579,914.03 (leaving a deficiency balance onthe original mortgages in the amount of $201,268.11), and $52,500was deposited in an escrow account with Attorneys' Title.

Prior to the closing, Attorneys' Title, the seller/MooseLodge, and the buyer/Hotko entered into a "Title Indemnity-EscrowAgreement" wherein the buyer and seller agreed to deposit $52,500in escrow with Attorneys' Title to satisfy Coldwell Banker'sbroker's lien. Further, the parties agreed to satisfy or removethe broker's lien prior to March 8, 1999. This escrow money was to"constitute a fund under the absolute control of [Attorneys' Title]to indemnify [Attorneys' Title] as herein provided and for theother purposes herein set forth." The agreement also provided: "Incase of litigation involving the fund or the rights of any personor corporation hereunder, the cost, expense and attorney's fees of[Attorneys' Title] may be paid or retained by [Attorneys' Title]out of the fund." Coldwell Banker was not a party to theagreement.

Accordingly, Attorneys' Title issued a title insurance policythat insured that West Suburban's two new loans to the buyer/Hotkowould receive first and second priority upon the newly purchasedMoose Lodge property.

On March 12, 1999, West Suburban Bank issued a release of itsoriginal loans secured by mortgages issued to the Moose Lodge. This release was recorded on April 29, 1999. Coldwell Banker didnot release its broker's lien.

On June 11, 1999, West Suburban Bank filed a complaint fordeclaratory relief against Coldwell Banker and Attorneys' Titleseeking the recovery of the escrow funds and an order directingColdwell Banker to execute and deliver a release of its broker'slien. In its answer, Coldwell Banker claimed that West SuburbanBank lost any claim to the escrowed funds when it released itsmortgage liens. West Suburban Bank filed a motion for summaryjudgment. Coldwell Banker and Attorneys' Title filed responses andcross-motions for summary judgment; Attorneys' Title claimed thatit was entitled to full custody and control over the escrow fundsand that it was entitled to attorney fees and costs.

The trial court granted summary judgment in favor of WestSuburban Bank and denied the cross-motions of Coldwell Banker andAttorneys' Title. Relying on the Commercial Real Estate BrokerLien Act (Act) (770 ILCS 15/1 et seq. (West 1998)), the trial courtstated that section 20 of the Act did not require Coldwell Bankerto release its lien. However, the trial court "extinguished"Coldwell Banker's lien and stated that West Suburban Bank wasentitled to "all sums held in escrow." The court also stated thatAttorneys' Title had no property interest in the escrow fund. Thetrial court later denied Attorneys' Title's request for attorneyfees and costs and West Suburban Bank's petition for attorney fees. Coldwell Banker and Attorneys' Title both filed timely notices ofappeal, and West Suburban Bank filed a timely notice of cross-appeal.

On appeal, Coldwell Banker argues that the trial court erredby granting summary judgment in favor of West Suburban Bank andextinguishing Coldwell Banker's lien based on the Act. Inresponse, West Suburban Bank argues that the trial court properlyinterpreted the Act.

A court should enter summary judgment if the pleadings,depositions, admissions, and affidavits show that there is nogenuine issue of material fact and that the moving party isentitled to judgment as a matter of law. Jones v. Chicago HMO Ltd.of Illinois, 191 Ill. 2d 278, 291 (2000). A triable issue of factexists where there is a dispute as to a material fact or where,although the facts are not in dispute, reasonable minds mightdiffer in drawing inferences from those facts. Petrovich v. ShareHealth Plan of Illinois, Inc., 188 Ill. 2d 17, 31 (1999). Whenevaluating the facts, a court must construe the evidence strictlyagainst the movant and liberally in favor of the nonmoving party. Dowd & Dowd, Ltd. v. Gleason, 181 Ill. 2d 460, 483 (1998). Weapply a de novo standard of review to the trial court's decision togrant summary judgment. Jones, 191 Ill. 2d at 291.

In interpreting statutory language, we must give effect to theintent of the legislature. Michigan Avenue National Bank v. Countyof Cook, 191 Ill. 2d 493, 503-04 (2000). The best indication ofthe legislature's intent is the language of the statute inquestion. Michigan Avenue National Bank, 191 Ill. 2d at 504. Thus, we will give clear and unambiguous terms their plain andordinary meaning. Michigan Avenue National Bank, 191 Ill. 2d at504.

Section 10 of the Act provides in pertinent part:

"