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Community Bankers Association of Illinois
Bank
notes
by filing a petition to revive the judgment in the seventh year
after its entry or in the seventh year after its last revival or in
the twentieth year after its entry or at any other time within
twenty years after its entry if the judgment becomes dormant.
In our above example, ABC Bank’s judgment lien expired on
May 2, 2015 and was never properly revived. While the entry
“of a reviving order should be a clerical task; all it entails is
assurance that the judgment has not been vacated or marked
satisfied since its rendition.”
TDK Electronics Corp. v. Draiman,
321 F.3d 677, 680 (7th Cir. 2003) (a creditor must remain
diligent in protecting its rights by reviving judgments in a
timely manner.). A recent ruling by the Illinois Appellate Court,
Craig A. Burman v. Daniel Schneider III,
2014 IL App (1st)
130772 provides a cautionary tale and an excellent opportunity
to review the requirements of reviving a judgment.
In
Burman
, Burman obtained a $91,284.25 judgment against
Daniel W. Schneider and the Schneider Development Group on
September 6, 1991. Thereafter, on June 9, 1998, Burman filed
a timely petition to revive the judgment, however, the petition
was returned not served. Over 13 years later, on December 6,
2011, Burman again attempted service of the 1998 petition and
Schneider was eventually served with the petition on November
23, 2012. Schneider moved to dismiss under Illinois Supreme
court Rule 103(b) for lack of diligence on the part of Burman. The
trial court found that the 1998 petition to revive the judgment,
the only petition filed, could not, under Illinois law (735 ILCS
5/12-108(a)) serve as a basis to revive the judgment after 2005.
The court held that even if the 1998 petition to revive judgment
remained viable, the 20-year statute of limitations expired on
September 6, 2011, demonstrating a lack of diligence and
warranting dismissal under Illinois Supreme Court Rule 103(b).
On appeal, Burman argued that he properly revived the 1991
judgment by filing a petition to revive the judgment in 1998,
within seven years of its entry, in compliance with 2-1602(a)
of the Illinois Code of Civil Procedure. Burman argued that as
long as a party files a single timely petition for revival, a later
petition is not necessary to keep the judgment alive. The Court
disagreed, finding that Burman’s interpretation of the statute,
that filing a single petition to revive within seven years of the
entry of judgment suffices, contradicts the express language
of Section 2-1602(a). Therefore, the Appellate Court affirmed
the lower court’s decision finding that Burman’s 1998 petition
could not be the basis for seeking to enforce the judgment.
The Great Recession that began in December of 2007 saw
financial institutions obtaining judgments against defaulted
borrowers and guarantors at a rapid pace. Financial institutions
found themselves spending time, effort and attorney’s fees to
obtain judgments against delinquent borrowers and guarantors.
Some of the judgments were presumably not worth the paper
upon which they were entered. Rather than spend additional
resources to collect on those judgments, some banks chose
to accumulate the judgments and wait. More than seven
years have passed since the onset of the Great Recession and
the economy has shown signs of improvement. Perhaps your
debtor’s financial condition improved and you are motivated
to re-examine your collection efforts and take action? Don’t let
ignorance of the law or a lack of diligence cost you a recovery.
Bankers and attorneys need also be concerned with the scenario
described at the beginning of this article, the forgotten judgment
lien. Pursuant to 735 ILCS 5/12-101, a judgment is not a lien
on real estate for longer than seven years from the time it is
entered or revived, unless the judgment is revived within seven
years after its entry or last revival
and
a new memorandum of
judgment is recorded prior to the judgment and its recorded
memorandum of judgment becoming dormant. Remember,
the revival of a judgment is a two-step process if you have a
judgment lien. Not only do you need to file a petition to revive
the judgment, but you must also record the revived judgment
and make it of record.
Burman
stresses the importance of both
knowing the law and acting with diligence.
n
Gilmartin may be reached at 312/372-4000 or
