{ "id": 1527731, "name": "GARY MATTHEWS, Plaintiff-Appellant, v. CLAIRE L. SERAFIN et al., as Trustees of the Mitchell C. Seraf\u00edn Trust, et al., Defendants-Appellees", "name_abbreviation": "Matthews v. Serafin", "decision_date": "2001-02-20", "docket_number": "No. 3 \u2014 00\u20140342", "first_page": "72", "last_page": "78", "citations": [ { "type": "official", "cite": "319 Ill. App. 3d 72" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "679 N.E.2d 387", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1996, "opinion_index": 0 }, { "cite": "287 Ill. App. 3d 582", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 521009 ], "year": 1996, "pin_cites": [ { "page": "587" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/287/0582-01" ] }, { "cite": "581 N.E.2d 860", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1991, "opinion_index": 0 }, { "cite": "221 Ill. App. 3d 330", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5798737 ], "year": 1991, "opinion_index": 0, "case_paths": [ "/ill-app-3d/221/0330-01" ] }, { "cite": "645 N.E.2d 556", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1994, "opinion_index": 0 }, { "cite": "268 Ill. App. 3d 1098", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 381815 ], "year": 1994, "opinion_index": 0, "case_paths": [ "/ill-app-3d/268/1098-01" ] } ], "analysis": { "cardinality": 544, "char_count": 11634, "ocr_confidence": 0.734, "pagerank": { "raw": 1.0450713484227525e-07, "percentile": 0.5518398949127922 }, "sha256": "9d5f414aa3312a3632fb2e8b5147f53a0adbffa05e97b99d803be87f6218bd44", "simhash": "1:458240a9750d89e4", "word_count": 1935 }, "last_updated": "2023-07-14T14:43:10.227950+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "GARY MATTHEWS, Plaintiff-Appellant, v. CLAIRE L. SERAFIN et al., as Trustees of the Mitchell C. Seraf\u00edn Trust, et al., Defendants-Appellees." ], "opinions": [ { "text": "JUSTICE BR.ESLIN\ndelivered the opinion of the court:\nPlaintiff Gary Matthews brought this action claiming that Mitchell Serafin, deceased, unlawfully transferred his entire estate into a revokable trust to avoid paying a judgment. The action was filed against the trustees of Serafin\u2019s trust and the executors of his estate (collectively trustees). During a bench trial, the court entered an order at the close of Matthews\u2019 case directing a verdict in favor of the trustees. We affirm and hold that a debtor does not violate the Illinois Uniform Fraudulent Transfer Act (Transfer Act) (740 ILCS 160/1 et seq. (West 1998)) when he transfers his estate into a revocable trust so long as he is not made insolvent and does not act to defraud a creditor.\nFACTS\nIn 1987, Northpoint, Inc. (Northpoint), leased property from Matthews located at 1500 North East Jefferson Street, Peoria, Illinois. Serafin, president of Northpoint, personally guaranteed Northpoint\u2019s obligation. The lease was to expire in the fall of 1990' but was extended to February of 1995 per an option agreement in the lease. The agreement extending the lease was not guaranteed by Serafin.\nIn January of 1992, Serafin signed a revokable trust agreement naming himself as trustee. The agreement transferred certain stock and a promissory note made by UFS Savings Center, Inc. (Savings Center), into the trust. The agreement provided that Serafin was to receive income from the trust in \u201cquarterly or other convenient installments\u201d but no less than once a year.\nIn the fall of that same year, Northpoint vacated the Peoria property, discontinued paying rent, and filed a declaratory judgment action against Matthews claiming it was constructively evicted. Matthews, in turn, filed an action against Serafin and Northpoint to determine the right to possession of the property and to collect the unpaid rent. The trial court gave Matthews possession of the property but reserved decision on the issues of unpaid rent and constructive eviction.\nIn December of 1992, Seraf\u00edn transferred additional property into the trust. The property included his investments in Northpoint and Savings Center as well as his \u201cclothing, jewelry, automobiles, household goods, provisions, furniture, furnishings and equipment and all interests in real estate.\u201d For four months the trust paid Seraf\u00edn $5,200 a month until he died in May of 1993. Upon his death, the trust\u2019s assets were valued at $973,854, the majority of which remained in trust for Serafin\u2019s wife and daughter.\nSeveral years after Serafin\u2019s death, the trial court found in favor of Matthews and against Serafin\u2019s estate regarding the issues of unpaid rent and constructive eviction. The court awarded Matthews $33,119.76, representing $6,300 for past rent and $26,819.76 for attorney fees and costs. The record provides no information regarding whether Matthews made a demand to the trustees to pay the judgment or whether the trustees refused to pay. Nevertheless, Matthews filed this action three months later to set aside Serafin\u2019s last transfer into his trust, claiming Seraf\u00edn fraudulently transferred all his assets into the trust to avoid paying the judgment in violation of sections 6(a), 5(a)(1) and 5(a)(2) of the Transfer Act (740 ILCS 160/6(a), 5(a)(1), (a)(2) (West 1998)).\nAt the close of Matthews\u2019 case, the trustees made a motion for a directed verdict, which is governed by section 2 \u2014 110 of the Code of Civil Procedure (Code) (735 ILCS 5/2 \u2014 1110 (West 1998)). The trial court granted the motion, finding that Matthews failed to prove that Seraf\u00edn was insolvent or that he became insolvent as a result of the transfer. The trial court\u2019s decision was based solely on section 6(a) of the Transfer Act. Shortly thereafter, Matthews filed a motion to reconsider his claim under sections 5(a)(1) and (a)(2) of the Transfer Act. The motion was denied and this appeal followed.\nANALYSIS\nOn appeal, Matthews disputes the trial court\u2019s determination that he failed to prove Seraf\u00edn fraudulently transferred assets in violation of the Transfer Act. When a trial court examines the weight of the evidence at the close of a plaintiffs case, the court\u2019s determination will not be overturned unless it is against the manifest weight of the evidence. Evans v. Gurnee Inns, Inc., 268 Ill. App. 3d 1098, 645 N.E.2d 556 (1994).\nMatthews first argues the trial court erred when it determined that he failed to establish Serafin was insolvent as required by section 6(a) of the Transfer Act. Section 6(a) states that \u201c[a] transfer made or obligation incurred by a debtor is fraudulent *** if the debtor made the transfer *** without receiving a reasonably equivalent value in exchange for the transfer *** and the debtor was insolvent at that time or *** became insolvent as a result of the transfer or obligation.\u201d 740 ILCS 160/6(a) (West 1998).\nAfter careful review of the record, we cannot say that the trial court\u2019s conclusion that Matthews failed to prove Seraf\u00edn was insolvent was against the manifest weight of the evidence. No evidence was presented establishing that Seraf\u00edn was not paying his debts as they became due, either before or after the transfer of assets to the trust. Seraf\u00edn received $5,200-per-month income from the trust, and if this judgment had issued during his lifetime he could have paid it from these funds. Moreover, no evidence was presented that after Serafin\u2019s death and after the judgment was entered his estate could not pay the judgment. In fact, the record fails to indicate whether Matthews ever made a demand to the trustees or whether they refused to pay. Accordingly, we affirm the trial court\u2019s holding that Matthews failed to prove that Seraf\u00edn was insolvent as required by section 6(a) of the Transfer Act.\nMatthews argues that Seraf\u00edn also violated section 5(a)(1) of the Transfer Act. Section 5(a)(1) establishes that a transfer by a debtor is fraudulent to a creditor if the debtor made the transfer \u201cwith actual intent to hinder, delay, or defraud any creditor of the debtor\u201d either before or after the creditor\u2019s claim arose. 740 ILCS 160/5(a)(l) (West 1998).\nWith respect to \u201cactual intent,\u201d section 5(b) sets forth a nonexclusive list of factors the court may consider, including whether:\n\u201c(1) the transfer or obligation was to an insider;\n(2) the debtor retained possession or control of the property transferred after the transfer;\n(3) the transfer or obligation was disclosed or concealed;\n(4) before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit;\n(5) the transfer was of substantially all of the debtor\u2019s assets;\n(7) the debtor removed or concealed assets;\n(8) the value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred;\n(9) the debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred;\n(10) the transfer occurred shortly before or shortly after a substantial debt was incurred!)]\u201d 740 ILCS 160/5(b) (West 1998).\nThe presence of these factors does not create a presumption of actual intent but, rather, is an indicator of such intent on which the trial court may rely to make its findings based on the evidence presented by the parties. Lindholm v. Holtz, 221 Ill. App. 3d 330, 581 N.E.2d 860 (1991).\nAccording to Matthews, the trust was Serafin\u2019s \u201cinsider\u201d as it was created and funded by him with a right to retain income. He kept possession and control of the property, only switching the capacity in which he was managing the assets. Matthews claims that Seraf\u00edn concealed the trust, placed all his property into it only when he was threatened with suit, and became insolvent as a result.\nMatthews\u2019 position is untenable. He provides no case law, and we find none in existence, to support his position that a trust may personify an \u201cinsider.\u201d While Seraf\u00edn transferred much of his property into the trust shortly after this action was filed, the trust was created almost a year prior to the time Northpoint stopped paying rent. There is no evidence that Seraf\u00edn concealed the trust or any of his other assets. As noted, Seraf\u00edn was not insolvent and the judgment debt was not incurred until several years after the transfer. Even if the judgment was entered during Serafin\u2019s lifetime, these facts do not support Matthews\u2019 position that Seraf\u00edn intended to hinder, delay, or defraud him. As a result, we cannot conclude that the trial court\u2019s decision was against the manifest weight of the evidence.\nFinally, Matthews argues that Seraf\u00edn violated section 5(a)(2) of the Transfer Act. Section 5(a)(2) provides that a transfer by a debtor is fraudulent as to a creditor if the debtor made the transfer \u201cwithout receiving a reasonable equivalent value in exchange for the transfer,\u201d and the debtor was engaged in a business for which the remaining assets of the debtor were unreasonably small in relation to the business, or the debtor believed he would incur debts beyond his ability to pay as they became due. 740 ILCS 160/5(a)(2) (West 1998).\nMatthews asserts Seraf\u00edn did not receive any value for his transfer. He was \u201cengaged in a business\u201d by acting as guarantor and his remaining assets were unreasonably small in relation to the debt owed to Matthews. In addition, according to Matthews, Seraf\u00edn knew he would incur debts beyond his ability to pay.\nAs noted, Seraf\u00edn created the trust almost a year before the lawsuit was filed. While he did transfer most of his assets into the trust after the lawsuit was filed, it was well before any judgment was entered. Besides, the almost $1 million worth of assets in the trust is significant compared to the $6,300 owed for past rent.\nThe trustees suggest that there is no more difficulty and expense in collecting a judgment owed by a debtor who has $1 million in various bank accounts than a debtor who has $1 million in a revocable trust. In either case, Matthews could have initiated supplementary proceedings under section 2 \u2014 1402 of the Code (735 ILCS 5/2 \u2014 1402 (West 1998)) to discover Serafin\u2019s assets in order to satisfy the unpaid judgment. We agree. Section 2 \u2014 1402 authorizes a \u201ccreditor to conduct an examination of a third party [citation], and upon a showing that the third party is holding assets belonging to the judgment debtor, empowers the court to summarily compel the application of discovered assets or income to the satisfaction of the judgment.\u201d Mid-American Elevator Co. v. Norcon, Inc., 287 Ill. App. 3d 582, 587, 679 N.E.2d 387 (1996). Whether Seraf\u00edn had his money in a bank account or in a revocable trust, as was the case here, the court could have ordered that the assets or income from either be applied to satisfy the judgment debt. But apparently no such motion was made.\nAs the record fails to indicate that Seraf\u00edn attempted to avoid the judgment or increase the difficulty and expense for Matthews to collect his debt, we find the trial court\u2019s decision was not against the manifest weight of the evidence.\nFor the foregoing reasons, the judgment of the circuit court of Peoria County is affirmed.\nAffirmed.\nHOLDRIDGE and LYTTON, JJ, concur.", "type": "majority", "author": "JUSTICE BR.ESLIN" } ], "attorneys": [ "Thomas R. Davis (argued) and Jamie L. Ross, both of Miller, Hall & Triggs, of Peoria, for appellant.", "John A. Slevin (argued), of Vonachen, Lawless, Trager & Slevin, of Peoria, for appellees Claire L. Serafin and Claire Wiegand." ], "corrections": "", "head_matter": "GARY MATTHEWS, Plaintiff-Appellant, v. CLAIRE L. SERAFIN et al., as Trustees of the Mitchell C. Seraf\u00edn Trust, et al., Defendants-Appellees.\nThird District\nNo. 3 \u2014 00\u20140342\nOpinion filed February 20, 2001.\nThomas R. Davis (argued) and Jamie L. Ross, both of Miller, Hall & Triggs, of Peoria, for appellant.\nJohn A. Slevin (argued), of Vonachen, Lawless, Trager & Slevin, of Peoria, for appellees Claire L. Serafin and Claire Wiegand." }, "file_name": "0072-01", "first_page_order": 90, "last_page_order": 96 }