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Illinois

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Tobias v Lake Forest Partners, LLC, 402 Ill App 3d 484, 931 NE2d 757, 341 Ill Dec 860 (1st D, 2010).

Facts:Andrew Tobias loaned $500,000 to Lake Forest Partners, LLC (Lake Forest) via a loan agreement signed on December 5, 2005. The loan agreement provided for a 10% APR and also required Lake Forest to pay for all collection costs and attorneys fees if the loan is not repaid at maturity. The loan was personally guaranteed by Mark Weissman, Albert Montano, and Christopher French (collectively defendants).

Lake Forest failed to repay the loan. On February 27, 2007, a court entered a judgment for Tobias for unpaid principal and interest of $656,181.61 and attorney fees and costs of $12,610.61. On April 13, 2007, Greystone Business Credit II, LLC (Greystone) obtained a separate judgment against Weissman and Lake Forest for $4,293,401.30.

Sometime in 2007, Tobias served a citation to discover assets on MEA Management, LLC, (MEA) purporting that MEA held assets belonging to Weissman. Subsequently, in 2008, Greystone also served a citation to discover assets on MEA. MEA filed its response on January 7, 2009, indicating that it held $339,444 belonging to Weissman. Tobias moved for an order releasing the assets to him to satisfy his judgment. Tobias asserted that he was owed a balance of $86,845.12 and post-judgment attorney fees and costs. Greystone intervened, citing its April 13 judgment as grounds for its involvement in the distribution of the assets held by MEA. Weissman also filed a motion, asserting that all the funds held by MEA beyond 15% constitute wages that are protected from use to satisfy the judgment.

Following a hearing on April 23, 2009, the court ordered MEA to pay $86,845.12 to Tobias, which would constitute "full satisfaction" of his judgment. The rest of the assets would be paid to Weissman and Greystone in equal parts. The trial court did not rule on Tobias' request for post-judgment attorney fees and costs. Tobias appealed.

Holding:Affirmed. Tobias argued that the court should have resolved his request for post-judgment costs before distributing the assets held by MEA because these costs would have the same lien priority as his outstanding judgment. Thus, the $86,845.12 balance alone would not constitute "full satisfaction" of the judgment if he was awarded post-judgment costs.

Instead, the court agreed with Greystone's argument that the post-judgment fees were never awarded by a judgment and thus could not be reached by the instant proceeding. In rejecting Tobias's argument that post-judgment costs would be ancillary to the underlying judgment and should have the same lien priority, the court held that such costs would not be enforceable or gain lien priority until the date they were reduced to a judgment and recorded as a lien. Therefore, the trial court did not err in distributing the assets available without regard to Tobias's undetermined post-judgment costs.

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