NAB Bank v. LaSalle Bank (IL)

Summary: In foreclosure or levy sales, unless a sales price “shocks the conscience,” it will generally be confirmed.


NAB Bank v. LaSalle Bank, 2013 IL App (1st) 121147.

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Facts: Two couples, the Toms and the Moys, had been engaged in disputes and litigation throughout the past twenty years. In January 2003, the circuit court granted summary judgment in favor of the Toms against Adeline Moy involving property that the Moys had owned for 30 years. In May 2003, the Moys executed a quitclaim deed conveying the property to themselves as tenants by the entirety. In 2008, the Toms received a monetary judgment against Mrs. Moy, who died sometime thereafter. The Toms were not paid on the judgment, partly because the tenancy by the entirety insulated the property from Toms' attempts to collect on the judgment. In 2009, the court granted Toms' motion to set aside the 2003 quitclaim deed, thereby creating a tenancy in common. The court found that the 2003 conveyance was fraudulent and done with the sole intent to avoid Mrs. Moy's debt obligations to the Toms.

In 2011, the Toms purchased Mrs. Moy’s estate’s one-half interest in the property for $20,000 during a levy sale. The Toms were the only bidders. Before the Toms could move to confirm the sale, however, Mr. Moy asked the circuit court to set aside the sale completely because the inadequacy of the sale price rendered the sale unconscionable under 735 ILCS 5/12-144.5 of the Code of Civil Procedure. He argued that the sale price was inadequate and that the sale was unjust. The court denied the motion finding both that the price was not unconscionable and that the sale was just. Moy then filed a timely appeal.


Holding: Affirmed. The district court agreed with the circuit court in ruling that the sale price was not unconscionable and the sale was not unjust. The court determined that the justice clause of section 12-144.5 gave the courts a narrow window through which they can undo sales because of “serious defects in the actual sale process.” Because Moy did not allege any defects in the process the court found the clause inapplicable.

The court determined that in order to deny confirmation of a sale due to an inadequate price, the price must be one that “shocks the conscience.” This is a price where a tremendous disparity exists between the “fair market value” and the sales price. However, merely comparing the bid to the appraisal does not establish whether the price is unconscionably low, because it is well recognized that it is unusual to obtain fair market value at a forced sale. The court determined the best gauge of the market value of a property is generally the price it gets at auction.

The court stated that there are many factors that would discount the value of a one-half interest well below the alleged fair market value. The court specifically pointed out the following factors: the “looming cost and delay” of additional future litigation related to partitioning and then selling the property; the burden of financial contribution to Moy for maintenance and taxes; the unusual nature of an undivided half-interest in property in the market generally; and the possibility of the original appraisal being overly generous given the current market conditions. The court also considered the facts that the Toms were the only bidders on the property and that Mr. Moy did not exercise his right of redemption, even at this depressed price. Therefore, the court found the price did not shock the conscience and affirmed the lower ruling.


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By: ATG Underwriting Department | Posted on: Tue, 02/12/2013 - 11:47am