Harris v. Sauk Village Development (IL)

Summary: A third party does not have standing to file a quiet title action after it has conveyed away its interest and a quitclaim deed is used to correct an erroneous legal description in the conveyance.

 

Harris, N.A. v. Sauk Village Development, LLC, 2012 IL App (1st) 120817.

 

Facts: Chicago Title Land Trust Company (CTLT) owned approximately 46 acres of vacant land. CTLT and Greg Stec (Stec) entered into a contract to purchase 16.64 acres of the land. CTLT also entered into a contract with Stec and James Planey (Planey) to purchase .8 acres of land. Stec assigned his interest in the properties to Sauk Village Development (Sauk). At the closing, CTLT and Sauk had a closing statement and a deed which stated the property was 16.64 acres, but the legal description of the property described all 46 acres.

The deed was recorded, and Sauk secured a loan on the property with Harris, N.A. (Harris). The mortgage contained the legal description describing all 46 acres. CTLT discovered the error and requested that Sauk correct the error by executing a quit claim deed. The quitclaim deed reconveyed approximately 29.49 acres to Planey as nominee for Sauk Village Venture, a beneficiary for CTLT, and a plat act affidavit was filed stating that the quit claim deed was made to correct descriptions with prior conveyances. However, the reconveyed property was still subject to the mortgage.

Sauk defaulted on the loan. CTLT filed a third party complaint for reformation due to error in the description contained in the mortgage. Harris moved to dismiss for lack of standing because CTLT was not the owner, and CTLT had already received the relief it requested when the quit claim deed was executed. The trial court granted the motion to dismiss. CTLT filed an amended two-count complaint to quiet title and for slander of title. Harris sought to dismiss the quiet title under 735 ILCS 5/2-619. The trial court dismissed the quiet title complaint because CTLT lacked standing. The trial court granted Harris’s motion for summary judgment for default and entered a judgment of foreclosure and sale of the entire 46-acre property in favor of Harris. CTLT appealed.

 

Holding: Affirmed. The appellate court rejected CTLT’s argument that it still held title to the 30 acres because the property was conveyed through an erroneous legal description. CTLT and Sauk attempted to correct the error by reconveying the property to Planey through a quit claim deed, instead of an action to reform the deed. Furthermore, the quitclaim deed was to correct descriptions in prior conveyance, not that it was a fraudulent conveyance. Therefore CTLT does not have title, and lacks standing to file an action to quiet title. The appellate court did not rule on CTLT's argument for slander of title. For these reasons, the holding of the trial court was affirmed.

 

Opinion Year: 
2012
Jurisdiction: 
Illinois
Tags: 
By: ATG Underwriting Department | Posted on: Mon, 10/21/2013 - 2:28pm