Opinion
Civil No. 00 C 50179
March 2, 2001
THEODORE LIEBOVICH, Liebovich Weber, P.C., Rockford, Illinois Counsel for Rock River Bank.
KATHLEEN McCALLISTER, Rockford, Illinois, Counsel for the Estate of Ann D. Dragna, the Keating Family Trust, and the Ann D. Dragna Revocable Living Trust.
DOUGLAS W. SNOEYENBOS, Trial Attorney, Tax Division, U.S. Department of Justice, Washington, D.C., Counsel for the United States of America.
THOMAS P. SANDQUIST, Williams and McCarthy, Rockford, Illinois, Counsel for Firstar Bank.
AGREED JUDGMENT ORDER
Each of the parties to this action, by its undersigned counsel, agree as follows:
1. By instrument dated July 25, 1991, title to the real property at 2625-2627 Woodmar Road, in Rockford, Illinois, was transferred to Ann D. Dragna. That property lies within the jurisdiction of this Court, its legal description is:
Lot Twenty-Five (25) as designated upon the Plat of The Village, Plat No. 2, being a Subdivision of part of the West Half (W 1/2) Southwest Quarter (SW 1/4), Section 10, Township 44 North. Range 2 East of the 3rd Principal Meridian, Rockford, Illinois, the Plat of which Subdivision is recorded in Book 36 of Plats on Page 82 in the Recorder's Office of Winnebago County, Illinois
and its Tax Code Number is 154C-105. That real property was owned by Ann D. Dragna on her death on September 8, 1995, and so became part of her estate.
2. On February 3, 1997, a delegate of the Secretary of the Treasury made an assessment against the Estate of Ann D. Dragna for estate tax and interest totaling $399,193.92. On May 10, 1999, a delegate of the Secretary of the Treasury made an additional assessment against the Estate of Ann D. Dragna for estate tax and interest, totaling $84,289.19. Notice of each of the assessments and demand for their payment were sent to the Estate of Ann D. Dragna, Jacqueline Ann Keating, Executrix, on or about the dates of the assessments. Despite notice and demand, the Estate of Ann D. Dragna, Jacqueline Ann Keating, Executrix, has refused or neglected to fully pay the assessments described above, and there remains due and owing to the United States with respect thereto, the sum of $232,515.63, plus interest and other statutory additions accruing pursuant to law from and after January 16, 2001.
3. The federal estate tax lien of 26 U.S.C. § 6324 arose with Ann D. Dragna's death and attached to all of her gross estate, including the real property at issue. In addition, pursuant to 26 U.S.C. § 6321, liens arose with the assessments of federal taxes against the estate on February 3, 1997, and May 10, 1999, and attached to all property and rights to property of the estate on those dates.
4. Firstar Bank holds a Mortgage on the real property commonly known as 2625-2627 Woodmar Road, in Rockford, Illinois, dated December 16, 1995, securing an unpaid matured promissory Note in the original amount of $75,000, given by the Ann D. Dragna Revocable Living Trust through its Trustee, Jacqueline Keating. Firstar Bank has asserted a counter-complaint in this case for foreclosure of its mortgage lien on the real property commonly known as 2625-2627 Woodmar Road, Rockford, Illinois, including its request for a personal judgment against Jacqueline Keating for any deficiency, a judicial sale of the property, and for attorney's fees, costs and expenses. That counter-complaint should be withdrawn and dismissed without prejudice.
5. The federal tax liens of the United States have priority over any mortgage liens of Firstar Bank and Rock River Bank with respect to the real property commonly known as 2625-2627 Woodmar Road, in Rockford, Illinois.
6. This Court should enter judgment as a matter of law in favor of the United States on its claims for a money judgment against the Estate of Ann D. Dragna in the amount of $232,515.63, plus interest and other statutory additions accruing from and after January 16, 2001.
7. This Court should enter judgment in favor of the United States on its claim for foreclosure of its estate tax lien on the real property commonly known as 2625-2627 Woodmar Road, Rockford, Illinois, including its request for the sale of that property by an officer of this Court, free and clear of any rights, title, claims, or interest of any of the parties to this action, with the net proceeds to be distributed first to the United States for application to the federal estate tax liabilities of the Estate of Ann D. Dragna.
8. Within five days of the entry of this Order, the Estate of Ann D. Dragna shall provide for the execution and delivery of (1) an Installment Promissory Note in favor of the United States by Mariemont Properties, Inc., a Texas corporation, in the full amount of the judgment set forth in paragraph 7 above, and (2) a Guaranty of that Installment Promissory Note by Van Oliver, each in the form attached hereto.
9. The United States shall not take any action to foreclose the federal tax liens against the Woodmar property prior to September 1, 2002, so long as each of the monthly payments under the Installment Promissory Note are received bearing a post-mark on or before the first day of the month. If any of the monthly payments are not received, or are received bearing a post-mark after the first day of the month, then the United States may proceed (1) on the Installment Promissory Note and/or the Guaranty under their terms, and (2) with foreclosure on the Woodmar property, after ten days after providing the Estate of Ann D. Dragna with written notice of the failure to make timely payment, unless the United States receives payment from the Estate of Ann D. Dragna prior to the expiration of that ten day period. This agreement in no way limits the rights of the United States to take any actions to collect the federal estate tax liabilities of the Estate of Ann D. Dragna other than foreclosure of its liens against the Woodmar property.
10. Notwithstanding anything else in this Agreed Judgment Order to the contrary, no provision of this Order shall be construed to prejudice Firstar Bank's rights under its Note and Mortgage referred to in paragraph 4. Without limitation, should the United States complete its foreclosure and sell the Woodmar property, Firstar Bank shall be given leave to petition this Court and establish its claim to any of the sales proceeds in excess of the federal estate tax liability. Alternatively, should the Estate of Ann D. Dragna pay the federal estate tax liability under the terms outlined herein and the United States executes a Satisfaction of Judgment or otherwise release its Judgment and lien rights to the Woodmar property, Firstar Bank's Note and Mortgage shall remain unaffected by the terms of this Order.
11. This court should retain jurisdiction to enforce the terms of this judgment.
IT IS SO ORDERED.