On November 5, 2014, the Illinois Appellate Court, First District, preliminarily released its opinion in Wells Fargo Bank Minnesota, NA v. Envirobusiness, Inc., 2014 IL App (1st) 133575, which provides important guidance on several aspects of collection law under §2-1402 of Illinois’ Code of Civil Procedure (“Code”). In particular, we find the following excerpts from the Wells Fargo opinion instructive (paragraph numbers in parentheses):
- A citation to discover assets, also known as a supplementary proceeding, is the predominant procedure for enforcing judgments (¶13).
- Actions that a creditor may accomplish by another type of enforcement may be accomplished in supplemental proceedings, as a citation to discover assets has features of a creditor’s bill, execution, garnishment, levy and sale (¶13).
- The debtor bears the burden of demonstrating that property is exempt from being applied to satisfy a judgment (¶13).
- Section 2-1402(c) does not give the circuit court discretion to order the turnover of exempt property (¶15).
- An asset which is exempt from levy is also exempt from turnover (¶18).
- Illinois has two statutes governing levies upon corporate stock, Article XII of the Code, and Article 8 of the Uniform Commercial Code (“UCC”).
- These two statutes conflict with respect to a creditor’s right to levy upon certificated securities (securities evidenced by a stock or other type of certificate) issued by a jurisdiction other than Illinois (¶30). The Code does not let a creditor cannot levy on foreign stock, while the UCC does.
- The UCC prevails over the Code and pre-UCC case law with respect to a creditor’s right to levy on certificated securities (¶31).
- Section 2-1402(e) of the Code authorizes Illinois courts to appoint an agent other than the Sheriff, to sell the debtor’s property (¶38).