Re Marriage of Davis

Illinois Appellate Court, First District, Fifth Division · 2022 · Contracts

Contractssection 2-1402citation to discover assetsturnover orderjudgment creditormarital settlement agreementreal propertychose in action

Facts

After Tracy Davis's marriage was dissolved, the dissolution judgment incorporated a marital settlement agreement resolving financial issues between Tracy and Cullen Davis. Tracy owed her former divorce counsel, Schiller DuCanto & Fleck LLP, substantial legal fees, and the firm obtained a consent judgment against her for $325,000. In supplementary proceedings under section 2-1402, the firm sought turnover of the Hudson Avenue property that the settlement agreement required to be transferred to Tracy and sought turnover of Tracy's claim against Cullen for a $500,000 lump-sum payment due under the same agreement. The circuit court granted both turnover motions.

Issue

Whether, in supplementary proceedings under section 2-1402 of the Code of Civil Procedure, a judgment creditor may obtain turnover of property that a marital settlement agreement entitles the judgment debtor to receive from a third party but that has not yet been transferred, and may also obtain turnover of the debtor's contractual claim to an unpaid lump-sum payment due under that agreement as a chose in action.

Rule

Section 2-1402 is to be construed liberally and gives courts broad power to compel discovered assets or income to satisfy a judgment. Under section 2-1402(c)(3), a court may compel a cited third party to deliver assets held under circumstances in which the judgment debtor could recover them in specie or obtain a judgment for their value; under section 2-1402(c)(1), a court may compel the judgment debtor to deliver up choses in action, meaning claims that could be litigated, including assignable contractual rights.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Chicago, Elena Mora signed a settlement agreement with her former business partner, Noah Pike, under which Noah had to deed a Logan Square duplex to Elena within 20 days. Before the deed was delivered, Elena's unpaid litigation counsel, Lakefront Equity Law Group, obtained a money judgment against her and served citations in supplementary proceedings on both Elena and Noah.

May the court order turnover of the duplex to satisfy the firm's judgment?

Explanation. Section 2-1402 is construed liberally and allows turnover from a cited third party when the debtor could recover the asset in specie or obtain its value. The key point is Elena's enforceable right to compel transfer; present legal title in her name is not required. The creditor may use supplementary proceedings to reach that right and compel delivery through the third party. (Derived from Re Marriage of Davis (n.d.).)