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Casenotes

Illinois

Fraud; Quiet Title; Slander of Title

Gambino v Boulevard Mortg Corp, 398 Ill App 3d 21, 922 NE2d 380, 337 Ill Dec 257 (1st D 2009).

Facts:Joseph J. Gambino owed significant unpaid taxes, which the Internal Revenue Service (IRS) planned to imminently collect. Gambino understood that his nephew, Salvatore DiBenedetto (Sal), had connections to the mortgage industry. Gambino asked Sal to help him refinance several properties to raise the money to pay the taxes, and he gave Sal access to certain information about the properties, some of which were held in trust by the North Star Trust Company (North Star).

Sal, along with other parties including an attorney and a title services company, subsequently forged deeds purporting to transfer the properties from North Star to them; these parties simultaneously obtained mortgages. Gambino filed a complaint for quiet title and slander to title. The trial court found for Gambino, citing overwhelming evidence that the defendants forged the deeds and thus committed fraud. The defendants appealed.

Holding:Affirmed. Among other arguments made by the defendants, they claimed that the trial court's finding of fraud was against the manifest weight of the evidence because the defendants had no intent to defraud. However, the appeals court indicated that intent was a factual determination appropriately made by the trial court from circumstantial evidence. The court affirmed because the trial court had substantial evidence of intent to defraud.

Defendants also argued that Gambino conferred agency status on Sal by asking him to look into procuring a loan. Furthermore, they argued that Gambino benefited by receiving hundreds of thousands of dollars after the closings and that the parties to the closings paid Gambino's tax obligations with closing costs. However, the appeals court found no credible evidence or testimony to support the assertion of Gambino's preliminary authorization or subsequent ratification of the fraudulent closings. The payment of his tax obligations was not done for his benefit, but for the benefit of the parties seeking to clear title to the fraudulently obtained property.

One bank also failed to claim that it should be granted a lien on one of Gambino's properties for the money is spent paying off one of the fraudulent mortgages and back taxes. However, because the bank failed to raise a claim of restitution at the trial level, the court barred the bank from raising it on appeal.

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