Madison - St. Clair Record

Friday, September 20, 2019

Appeals panel overturns summary judgment in debt dispute

State Court

By Scott Holland | Aug 22, 2019


MOUNT VERNON — A state appeals panel has ruled that a dispute about a six-figure loan was not sufficiently resolved in circuit court.

Clyde Beimfohr sued real estate developer R. Adam Hill and his company, Seville Holdings, looking to recover $200,000 loaned in 2007 to buy a stake in a Caseyville retail development, as well as a personal guaranty. After Beimfohr died, independent executor Pamela Johnson continued the litigation on behalf of the estate. 

St. Clair County Circuit Court Judge Christopher Kolker granted summary judgment, awarding his estate the money as well as $256,372 in interest, $24,974 in legal fees and $1,059 in court costs.

However, a three-justice panel of the Illinois Fifth District Appellate Court ruled on the appeal of Kolker’s decision Aug. 15. Justice Thomas Welch wrote the opinion. Justices James Moore and John Barberis concurred. The order was issued under Supreme Court Rule 23, which restricts its use as precedent, except under very limited circumstances permitted by the Supreme Court rule.

When Beimfohr released his security interest in the property in 2013, the appeals panel said, he did not release Seville from its obligations under the terms of the loan. It therefore affirmed Kolker’s summary judgment against Seville.

With respect to the personal guaranty Hill signed, however, the panel determined it was “a conditional promise to pay an unfixed amount of money” and not a “negotiable instrument” that would be subject to the Uniform Commercial Code.

The parties dispute whether Beimfohr orally released Hill from the obligations. Hill said a January 2011 disclosure report indicated land costs would not be repaid, but Beimfohr said he was asking about repayment as recently as 2017.

“Thus, there is a genuine issue of material fact as to whether there had been a verbal release of the loan, and the trial court erred by entering summary judgment in Beimfohr’s favor on count II of the complaint,” Welch wrote.

The panel remanded the count involving Hill’s guaranty for further proceedings.

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