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COOK COUNTY RECORD

Tuesday, April 16, 2024

Appellate court says judge erred in blocking man from retrieving his equipment from foreclosed shop

Foreclosurenotice

An appellate panel has restored a Lake County man’s right to access expensive professional equipment inside a building he lost to foreclosure.

Baldev Raj Bhutani was the guarantor of a mortgage held by pharmaceutical preparation company Avtar LLC for a property in north suburban Gurnee in Lake County. Following foreclosure proceedings initiated in 2011 by Charter National Bank & Trust, of Hoffman Estates — now succeeded by Barrington Bank & Trust Co., the named defendant — Bhutani sought access to the property in order to remove pharmaceutical equipment worth more than $4 million.

The bank obtained its foreclosure judgement on Dev. 7, 2011. Lake County Sheriff’s deputies attempted to complete an eviction on June 26, 2012, according to court documents, but being unsure of the chemicals present, they secured the building and left. After the bank denied a series of Bhutani’s oral and written requests to retrieve his property, he filed legal paperwork Jan. 14, 2014, a two-count complaint for conversion and replevin. The bank successfully moved to dismiss his complaint, arguing the foreclosure judgment prevented Bhutani from any rights to access the equipment.

Bhutani filed a motion to reconsider, asserting the Lake County Circuit Court misinterpreted the law, but the court denied his motion. However, on Aug. 13, a three-justice panel of the Second District Appellate Court upheld Bhutani’s appeal and overturned the earlier decision.

“Nothing in the foreclosure judgment gave the bank a possessory interest in the equipment superior to Bhutani’s interest,” wrote Justice Donald C. Hudson, who authored the opinion. Justices Joseph E. Birkett and Robert B. Spence concurred in the decision.

The appellate ruling affirms the bank’s right to take ownership of the building, but notes possession of the equipment therein was not a necessary component of exercising the foreclosure rights: “Case law supports the conclusion that, when a person who has been lawfully evicted from real property leaves behind personal property, that person generally retains a right to recover the personal property.”

Further, the court noted the bank in no way tied “its claimed right to the equipment to the mortgage or a related transaction.” Though the bank attempted to make a collateral estoppel argument, Betar wrote the foreclosure litigation didn’t address either of Bhutani’s claims. He further notes the bank’s attempts to paint Bhutani’s request to access his equipment as an attempt to challenge his loss of possession of the real estate.

The court noted the bank, in a motion seeking partial dismissal of the appeal, included an affidavit of its Vice President Alexander Durek who explained “the bank’s agent for the property informed him before Sept. 30, 2013 — before Bhutani filed his complaint — that a ‘third party’ removed the equipment from the property.”

Having the equipment removed, the justices wrote, unintentionally proves Bhutani’s claim by implying “possession of the equipment does not require possession of the property.” They noted the affidavit “does not explain why the equipment was removed or who arranged for the removal,” but noted there is no inference the bank ceded control of the equipment, further noting, “the bank’s motion relates to a likely controversy between the parties: its control of the equipment. We will not wade into what appears to be a factual controversy between the parties, even if it is presented in the guise of a mootness claim.”

Unrelated to Bhutani’s appeal, Millennium Properties on its website in February reported it sold the 61,700-square-foot industrial facility on Clearview Court, part of the Hawthorn Industrial Center. It was marketed as ideal for pharmaceutical use with full air conditioning, several laboratories and multiple loading docks.

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