News and Noteworthy
New and Noteworthy
SRZ Wins Multimillion Dollar Judgement in Case of First Impression
David Giangrossi won a decisive victory—$6.5 million, upheld on appeal—resolving a thorny collection case for an East Coast client seeking payment from a judgment debtor residing in Illinois. “Most notable about this case,” says David, “is that it was a foreign judgment originating in Florida but resolved in Illinois after Florida’s 20-year statute of limitations on judgment collection had expired. The arguments the defendant made on our fact pattern were clever, but contrary to the law and ultimately unsuccessful.”
Newsworthy about the appeal is that it presented what was very likely a case of first impression in Illinois, where the facts of the case and applicable laws had never before been ruled upon. “The relevant statutes were quite new,” David explains, “especially with respect to how they applied in conjunction to each other. Schuyler Roche's challenge was persuading the court our position was the intended and logical interpretation of such statutes.”
Toward the end of 2000, the client—a Maryland-based investment company—purchased a money judgment entered in 1992 against a multimillionaire real estate developer active in Chicago, a judgment that grew out of a mortgage loan he had guaranteed ten years earlier on a property in Florida. After the FDIC bought the financial institution that held the paper on the mortgage, which remained unpaid, it sold the judgment to Schuyler Roche's client. David filed the papers necessary to register the judgment in Illinois, thus enabling Schuyler Roche's client to attempt collection in Illinois.
“From the minute we started proceedings in Cook County to enforce the judgment,” says David, “the debtor sent legions of attorneys against us.” The defendant maintained Schuyler Roche's client could not enforce the judgment in Illinois because of its seven-year statute of limitations. The court, he claimed, should dismiss the case since the judgment was not registered in Illinois within that time and therefore void. He also claimed Schuyler Roche's client was obligated to return to the Florida court where the judgment was initially entered and undergo a process known as revival, which ensures a judgment debtor the right to know when a judgment creditor is resuming collection activity.
“It’s an archaic procedure,” notes David. Nonetheless, he and his litigation team deftly addressed the issue of revival, as well as of scire facias, the Latin term indicating every seven years a face-to-face meeting should occur between a debtor and creditor to discuss their respective claims. “Scire facias was abolished by statute,” adds David, “but the Illinois legislature kept alive the concept of reviving the judgment,” a concept some representatives in Springfield find confusing and hope to overhaul. “Whenever you give a judgment debtor a chance to complain in a courtroom,” explains David, “he will—exactly what the defendant did in this case.”
Over the course of eight months, says David, “we chipped away at the debtor’s arguments through numerous motions and pleadings and succeeded in persuading the circuit court to agree with us on the application of interest statutes, quite a coup.”
After the trial court ruled for Schuyler Roche's client, the debtor filed an appeal in Chicago, arguing that as long as he resided in Illinois, creditors could not claim his assets. “On appeal, the defendant raises the following issues,” wrote Presiding Justice Sophia Hall, “whether the 1992 Florida judgment can be enforced in Illinois and whether a foreign judgment can be revived in Illinois.”
In weighing the enforceability of the judgment in Illinois, the appellate court found for Schuyler Roche's client, preserving the $6.5 million judgment—$3 million of which was interest. The court also concluded “the trial court did not err in reviving the Florida judgment in this case. That revived judgment may be enforced in Illinois.”
“Basically,” explains David, “the appellate court ruled that the nanosecond we registered the Florida judgment in Illinois, it became an Illinois judgment subject to Illinois law, not Florida law.” Following the appellate opinion issued on June 26, 2002, the defendant filed a motion for reconsideration by the appellate court in which he appealed, among other actions, service of the citation on his attorneys as contrary to law—a petition denied one year later.