Gambino v. Boulevard Mortg. Corp.

922 N.E.2d 380

Joseph M. GAMBINO, Independent Administrator of the Estate of Joseph J. Gambino, and North Star Trust Company, as Trustee u/t/a Nos. 13534, 23985, 23994, Plaintiffs-Appellees, Cross-Appellants and Counter-Defendants, v. BOULEVARD MORTGAGE CORPORATION, Title America, Inc., W.W. Funding, L.L.C., Dennis D. Koonce and Stephen Wolf, Defendants and Counterplaintiffs-Appellants (Washington Mutual Bank, a Federal Association, and Plaza Bank, Defendants-Appellants and Cross-Appellees, and Salvatore DiBenedetto, and Vincenzo DiBenedetto, Defendants-Appellants).

No. 1-07-3566.

No. 1-08-0702.

No. 1-08-0746.

No. 1-08-1373.

No. 1-08-1982.

No. 1-08-1983.

No. 1-08-2151.

No. 1-08-2152.

Appellate Court of Illinois, First District, Sixth Division.

December 11, 2009.

Rehearing Denied February 24, 2010.

Donald L.F. Metzger, Chicago, IL, for Appellants Boulevard Mortgage Corporation, Title America, Inc., and Dennis D. Koonce.

Marc C. Smith, Smith Davies & Nicolau, Chicago, IL, for Appellants Stephen Wolf and W.W. Funding, L.L.C.

Victor P. Henderson, Christopher W. Carmichael, Holland & Knight, LLP, Chicago, IL, for Appellant Plaza Bank.

Michael A. Braun, Lee M. Weisz, Chicago, IL, for Appellees and Cross-Appellants.

Justice ROBERT E. GORDON delivered the opinion of the court:

These consolidated appeals arise from an action to quiet title to three parcels of real estate and to recover damages for slander of title filed in the chancery division of the circuit court of Cook County. Joseph J. Gambino (Gambino), as beneficiary of three separate land trusts, and North Star Trust Company (North Star), as trustee under land trust agreements Nos. 13534, 23985, and 23994, filed this action to quiet title to the three parcels of real estate and to recover damages for slander of title against certain defendants. The subject properties are located at 7460 North Milwaukee Avenue in Niles, Illinois (Niles Property), 2738-40 North Kedzie Avenue in Chicago (Kedzie Property), and 3619 North Lavergne Avenue in Chicago (Lavergne Property).¹ Gambino suffered a heart attack during his discovery deposition in this matter and died shortly thereafter. Joseph M. Gambino was substituted as party plaintiff as independent administrator of his father's estate.

After a two-week bench trial in late October and early November of 2007, the trial court found in favor of plaintiffs on all counts of their complaint declaring (1) title to the subject properties was vested in North Star under trust agreements Nos. 13534, 23985, and 23994, and (2) all purported inconsistent instruments of title and any clouds on title to the subject properties, including mortgage liens, were void. Further, the trial court awarded plaintiffs compensatory damages of $595,574 and (2) punitive damages of $675,000 as follows: $500,000, jointly and severally, against defendants Salvatore DiBenedetto, Vincenzo DiBenedetto, Dennis Koonce, Boulevard Mortgage Corporation, and Title America, Inc., and $175,000, jointly and severally, against defendants Stephen Wolf and W.W. Funding, L.L.C. We affirm.

BACKGROUND

1. The Pleadings

Plaintiffs' verified "Corrected Second Amended Complaint" contained six counts, two counts as to each of the three subject properties. As to each of the properties, one count sought to quiet title and a second count alleged slander of title. The allegations of the complaint common to all six counts were as follows.² Gambino, 73 years old at the time of his death in 2006, owned and operated the United Transmission Center (United), an Illinois corporation, a motor vehicle transmission repair business located at the Niles Property. The Lavergne Property consisted of a four-unit, multifamily apartment building that Gambino owned for "investment purposes." In October 2002, Gambino met with his nephew, defendant Salvatore DiBenedetto (Sal), whom Gambino believed to be a mortgage broker, to assist him in refinancing one or more of his properties in order to pay off certain financial obligations. Over the following two months, Gambino and Sal had several discussions, during which Sal obtained information concerning Gambino's business and assets, including information regarding the subject properties.

The complaint alleged that Sal represented to Gambino that he and several real estate investors were interested in purchasing the Niles and Kedzie Properties and the transmission business. Sal suggested that the transmission business should be managed by his brother, defendant Enzo DiBenedetto (Enzo). Gambino refused. Shortly thereafter in 2003, Sal offered to purchase the Lavergne Property in a written purchase agreement with an offer of $550,000. Gambino never accepted the offer.

The complaint further alleged that Sal personally loaned Gambino $70,000 to be repaid upon future refinancing or sale of any of the subject properties. The complaint alleged that Sal requested permission to remove underground liquid storage tanks at the Niles Property prior to any transfer of the property, and Gambino refused.

The complaint further alleged that Gambino never: (1) signed any agreement regarding the conveyance of any of the subject properties, or the purchase of United; (2) authorized Sal or anyone else to place liens or encumbrances upon any of the subject properties, including any mortgages; (3) authorized anyone to affix his signature to any document concerning any of the subject properties; or (4) directed his land trustee North Star to transfer title or his beneficial interest in the subject properties to anyone.

The complaint further alleged that Sal, Enzo, Boulevard, and defendants Dennis Koonce and Title America, Inc. (Title America), "participated in" forging deeds, and other documents, to "procure and secure" mortgages on those properties. The complaint alleged that Koonce, an attorney, participated in each of the transactions that purported to convey title to the subject properties. Additionally, the complaint alleged that Boulevard and Title America are both owned and controlled by Koonce, that Boulevard was the ultimate grantee in a series of forged deeds pertaining to the Lavergne Property, and that Title America acted as title agent with regard to all but one of the transactions that purported to convey title to the subject properties.

Count I of plaintiffs' complaint, pled against Sal, Enzo, Koonce, Boulevard, Title America, and Washington Mutual Bank, sought to quiet title to the Lavergne Property. Count I of plaintiff's complaint alleged that in May 2003, a mortgage lien in favor of LaSalle Bank existed on the Lavergne Property, with a principal balance of approximately $200,000. On May 5, 2003, LaSalle "informed" Gambino that the mortgage had been paid in full although Gambino was unaware of this transaction.

Count I further alleged that unbeknownst to plaintiffs, Sal, Enzo, Koonce, Boulevard, and Title America recorded against the Lavergne Property: a forged trustee's deed purportedly executed by North Star, conveying title to the Lavergne Property to Koonce; a mortgage naming Koonce as the borrower and Equity Plus, Inc., as the lender, with a principal sum of $400,000; a mortgage naming Koonce as the borrower and Washington Mutual as the lender with a principal sum of $406,000; and a quitclaim deed, listing Koonce as the grantor and Boulevard as the grantee. Count I further alleges that Sal, Enzo, Koonce, Boulevard, Title America and Washington Mutual knew or should have known that the purported trustee's deed conveying title to Koonce was forged.

Count II of plaintiffs' complaint, pled against Sal, Enzo, Koonce, Boulevard, and Title America, seeking compensatory and punitive damages, alleges slander of title with regard to the Lavergne Property.

Count III of plaintiffs' complaint, pled against Sal, Enzo, Koonce, Title America, W.W. Funding, L.L.C. (WW Funding), Stephen Wolf, and Plaza Bank, sought to quiet title to the Niles Property. Count III alleged that in the early fall of 2003, Reuben Zippershtein told Gambino that he was the mortgagee to the Niles Property and that the mortgage was in default. On January 21, 2004, Zippershtein filed suit to foreclose the mortgage. On July 9, 2004, Zippershtein voluntarily dismissed the foreclosure suit and executed a release deed of the recorded mortgage on the Niles Property.

Count III alleged that the Zippershtein mortgage was a result of forged and unauthorized instruments which were recorded by Sal, Enzo, Koonce, Boulevard, Title America, Wolf and WW Funding. Count III further alleged that the following illegal instruments were recorded against the Niles Property: a forged trustee's deed, purportedly executed by North Star, conveying title to the Niles Property to "Joseph J. Gambino"; a mortgage naming "Joseph J. Gambino" as the borrower and Zippershtein as the lender, with a principal sum of $200,000; a warrantee deed, listing "Joseph J. Gambino" as the grantor and WW Funding as the grantee; a mortgage, naming WW Funding as the borrower and defendant Plaza Bank as the lender, with a principal sum of $445,000; and an assignment, purporting to assign rents from WW Funding to Plaza Bank. Count III further alleged that Sal, Enzo, Koonce, Boulevard, Title America, WW Funding, Wolf, and Plaza Bank knew or should have known that the purported trustee's deed conveying title to "Joseph J. Gambino" was forged.

Count IV of plaintiffs' complaint, pled against Sal, Enzo, Koonce, Boulevard, Title America, WW Funding, and Wolf, seeking compensatory and punitive damages, alleged slander of title with regard to the Niles Property.

Count V of plaintiffs' complaint, pled against Sal, Enzo, Koonce, Boulevard, Title America, WW Funding, Wolf, and Plaza Bank, sought to quiet title to the Kedzie Property. Count V alleged that the following illegal instruments were recorded against the Kedzie Property: a forged trustee's deed, purportedly executed by North Star, conveying title to the Kedzie Property to "...