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No. 3--03--0808
(Consolidated with No. 3--03--0862)

IN THE

APPELLATE COURT OF ILLINOIS

THIRD DISTRICT

A.D., 2004

JUSTICE SLATER delivered the opinion of the court:

In case No. 96--LM--184, the plaintiff, Harold Salisbury,secured an $85,000 judgment against defendant Robert Majesky. Harold then filed case No. 01--CH--116, seeking to collect on hisprior judgment and to set aside several allegedly fraudulenttransfers made by Robert to his wife, defendant Mary Lou Majesky. The trial court consolidated these cases for postjudgmentcollection purposes.

The defendants moved to dismiss the complaints to set asidefraudulent transfers on statute of limitations grounds. Thetrial court denied the defendants' motions, and ultimately ruledthat some of the assets at issue were transferred fraudulently.

Harold appealed and the defendant cross-appealed. These twoappeals were also consolidated. Because we find that the trialcourt erred in failing to grant the defendants' motions todismiss, we reverse.

I. FACTS

In 1996, Harold sued Robert for intentional battery after anincident that occurred on Robert's property (case No. 96--LM--184). On March 19, 1999, Harold secured an $85,000 judgmentagainst Robert.

In 2001, Harold filed case No. 01--CH--116 to collect on hisprior judgment. Harold filed a number of citations to discoverthe assets of Robert and his wife. On June 21, 2001, Haroldfiled a complaint to set aside the allegedly fraudulent transferof Robert's interest in the marital residence to his wife. Thedefendants moved to dismiss that complaint on statute oflimitations grounds. The trial court denied the motion onApril 10, 2002. On that same date, the trial court found thatthe transfer of the marital residence was indeed fraudulent.

On November 19, 2002, Harold filed a second complaint,seeking to set aside the allegedly fraudulent transfer of threecertificates of deposit (CDs) by Robert to his wife. Theevidence introduced revealed that the allegedly fraudulenttransfers involving these CDs all occurred between 1996 and Aprilof 1998. The defendants were again unsuccessful in moving todismiss on statute of limitations grounds. On June 6, 2003, thetrial court found that one of these CDs, worth $30,000, wasfraudulently transferred. The trial court also held that asecond $20,000 CD was not transferred fraudulently and apparentlydid not rule at all on the status of a third $5,000 CD.

Posttrial motions were heard and denied on October 2, 2003. Harold appealed and the defendants cross-appealed.

II. ISSUES AND ANALYSIS

On appeal, Harold contends that the trial court erred infailing to find both the second and third CDs fraudulentlytransferred. In their cross-appeal, the defendants contend thatthe trial court erred in failing to grant their motion to dismisson statute of limitations grounds. Because we find it to bedispositive, we address only the statute of limitations issue.

A complaint may be dismissed involuntarily if the action wasnot filed within the time allowed by law. 735 ILCS 5/2--619(a)(5) (West 2002). In resolving a motion to dismiss, a courtmust assume that all well-pleaded facts are true and may considerall reasonable inferences that can be drawn from those facts. Williams v. Board of Education of the City of Chicago, 222 Ill.App. 3d 559, 584 N.E.2d 257 (1991). A motion to dismiss shouldonly be granted where it clearly appears that no set of facts canbe proved which will entitle plaintiff to recover. Ogle v.Fuiten, 102 Ill. 2d 356, 466 N.E.2d 224 (1984). We review denovo a trial court's ruling on a motion to dismiss. Zelenka v.Krone, 294 Ill. App. 3d 248, 689 N.E.2d 1154 (1997).

The applicable statute of limitations for this action isfound in section 10 of the Uniform Fraudulent Transfer Act. 740ILCS 160/10 (West 2002). Section 10 provides, in relevant part:

"A cause of action with respect to a fraudulenttransfer *** under this Act is extinguished unlessaction is brought:

(a) *** within 4 years after the transfer was made ***or, if later, within one year after the transfer ***was or could reasonably have been discovered by theclaimant." 740 ILCS 160/10(a) (West 2002).

Below, the trial court agreed with Harold that thelimitations period did not begin to run until the date Haroldsecured a judgment in his intentional battery case, i.e.,March 19, 1999. The complaints to set aside the transfers werefiled in June of 2001 and November of 2002. Therefore, the trialcourt found that Harold had timely filed his complaints wellbefore the March 2003 deadline. The court thus denied thedefendants' motions to dismiss. We find this holding to be inerror.

The aim of statutory construction is to give effect to theintent of the legislature. In re C.M., 282 Ill. App. 3d 990, 669N.E.2d 707 (1996). The best indication of that intent is theexpress wording of the statute, and that wording is given itsplain and ordinary meaning. Swank v. Department of Revenue, 336Ill. App. 3d 851, 785 N.E.2d 204 (2003).

The limitations period found in Section 10(a) was previouslyaddressed by the First District of the Appellate Court in Levy v.Markal Sales Corporation, 311 Ill. App. 3d 552, 724 N.E.2d 1008(2000). There, the court held that as "the clear and unambiguouswording of the Act demonstrates, the four-year limitation periodbegins to run on the date the challenged transfer was made. Theexplicit language of section 10(a) defeats any construction thatthe limitation period runs from the entry of judgment." Levy,311 Ill. App. 3d at 555, 724 N.E.2d at 1010.

Although noting the possibility of needless litigation, theLevy court found that the limitations provision clearly requiredthat in certain situations a creditor must initiate an actionbefore procuring a judgment in order to preserve a fraudulenttransfer claim. Levy, 311 Ill. App. 3d 552, 724 N.E.2d 1008. While we are also cognizant of the potential for needlesslitigation under the statute as written, we find the Levyconstruction to be correct.

Applying this construction to the case at hand, it is clearthat Harold did not bring his action within four years of any ofthe transfers involved. The record reveals that Roberttransferred his interest in the marital residence on August 30,1996. However, Harold did not file his complaint to set asidethat transfer until June of 2001, nearly five years later. Moreover, none of the allegedly fraudulent transfers related tothe CDs occurred later than April of 1998. Nevertheless,Harold's complaint to set aside those transfers was not fileduntil November 19, 2002, well beyond the four-year time limit.

However, finding that Harold's complaints were brought morethan four years after the respective transfers were made does notend the inquiry. We must still consider whether, pursuant tosection 10(a), those complaints were brought "within one yearafter the transfer *** was or could reasonably have beendiscovered by the claimant." 740 ILCS 160/10(a) (West 2002). Wefind that they were not.

On April 8, 1999, during the course of the underlyingintentional battery litigation, Harold's attorney took adiscovery deposition of Robert. Robert's testimony should haveput Harold on notice about potential fraudulent transfers. WhenHarold's attorney questioned Robert about his home and the lotson which it was located, the following exchange ensued:

"Q. Do you own them [the lots] jointly with your wife?

A. Yes.

Q. Title to your residence, is that held jointly with yourwife?

A. Yes.

Q. Subject to the mortgage of the Bank of Pontiac, correct?

A. It's in her name and the mortgage is at Bank of Pontiac.

Q. Title to the real estate is in her name?

A. Yes.

Q. Was title to the real estate when you built the houseoriginally put in her name --

A. No.

Q. -- or was there a transfer of title at some point?

A. Yes.

Q. When was the transfer of title?

A. Oh, geez, I can't remember. Let me see, approximately atthe time of the incident.

* * *

Q. It was done after the March 9, 1996, incident?

A. I think so, yes."

Harold's attorney also asked Robert about the defendants'other financial accounts at the Bank of Pontiac, leading to thefollowing exchange:

"Q. Can you tell me whether there were transfers of money inthe various accounts that may have existed at the Bank of Pontiacshortly after the March of 1996 incident?

A. [I] [t]ransfer money all the time, sir.

Q. Specifically in regard, though, to potential exposure andliability arising from the March 9, 1996, incident?

A. I pass money all the time, sir, taking care of mypersonal business."

We find that this deposition excerpt clearly shows that asof April of 1998, Harold was both suspicious of the defendants'financial activity and on notice that those suspicions werepotentially justified. At that point, Harold "should havereasonably known, at the very least, that a possible cause ofaction may have existed for fraudulent transfer *** and [he]should have investigated further." Gilbert Brothers, Inc. v.Gilbert, 258 Ill. App. 3d 395, 400, 630 N.E.2d 189, 192 (1994).

Nevertheless, Harold waited until three years later--a fulltwo years after he received his judgment--to initiate citationproceedings. His complaint to set aside the transfer of thehouse was also not filed until three years later, and thecomplaint to set aside the other transfers was not filed untilsix months after that. Clearly, none of these actions were filedwithin one year of the time Harold was or could reasonably havediscovered the transfers.

We are not unsympathetic to the fact that it appears fromthe trial court's subsequent rulings that Robert and his wife mayvery well have been involved in improper financial activity, orto the fact that this activity may have left Robert withoutassets to satisfy the judgment against him. Nevertheless, we arenot in a position to abrogate the statute of limitations or toquestion the wisdom of the legislature. Because Harold did notact within the limitations period prescribed in section 10(a),the trial court erred in failing to grant the defendants' motionsto dismiss.

III. CONCLUSION

For the foregoing reasons, the judgment of the circuit courtof La Salle County is reversed.

Reversed.

LYTTON and SCHMIDT, J.J., concur.