                                         2015 IL App (1st) 122725
                                              No. 1-12-2725
                                                                    THIRD DIVISION
                                                                      March 31, 2015
     ______________________________________________________________________________

                                         IN THE
                             APPELLATE COURT OF ILLINOIS
                                FIRST JUDICIAL DISTRICT
     ______________________________________________________________________________

     NATIONAL UNION FIRE INSURANCE              )    Appeal from the Circuit Court
     COMPANY OF PITTSBURGH, PA, as Subrogee     )    of Cook County.
     of General American Life Insurance Company, a
                                                )
     Missouri Corporation; and LOGAN AND        )    No. 05 CH 8399
     COMPANY, INC.,                             )
                                                )    The Honorable
           Plaintiffs-Appellees,                )    Stuart Palmer and
                                                )    Thomas Allen,
           v.                                   )    Judges Presiding.
                                                )
     ANTHONY P. DiMUCCI,                        )
                                                )
           Defendant-Appellant.                 )
     ______________________________________________________________________________

            PRESIDING JUSTICE PUCINSKI delivered the judgment of the court, with opinion.
            Justice Lavin concurred in the judgment and opinion.
            Justice Mason specially concurred, with opinion.

                                              OPINION

¶1          This case presents a question of the interplay between federal bankruptcy law and the

     effect of bankruptcy judgments and stipulations regarding claims entered in bankruptcy court on

     state-court claims. For purposes of res judicata, we hold that a bankruptcy court default

     judgment on a state-law claim for fraudulent transfer of funds from a bankruptcy claim after the

     claim process is not a final judgment by a court of competent jurisdiction.

¶2          We hold that the circuit court nevertheless properly considered a stipulation entered into

     in a bankruptcy case, despite defendant's claim that his attorney did not have authority to enter
     1-12-2725


     into the stipulation. Stipulations are judicial admissions in the case in which they are made, but

     they are admissible in other cases as evidentiary admissions. Defendant never challenged that

     stipulation in the bankruptcy court and offered no evidence in this case other than his own self-

     serving conclusory affidavit. A self-serving affidavit with no other evidence does not create a

     genuine issue of material fact.

¶3          Where there is no evidence to controvert defendant's mortgagor's right to funds, the

     court's entry of summary judgment for the mortgagor's subrogee on its claim for unjust

     enrichment was proper.

¶4          Where a check was mistakenly sent to defendant's limited liability company (LLC) and

     then defendant refused to return these funds, the court's entry of summary judgment in granting a

     constructive trust was proper.

¶5          The court also did not abuse its discretion in awarding prejudgment interest where

     defendant knew the funds were the subject of a default judgment, a stipulation, and an

     assignment of rents.

¶6                                          BACKGROUND

¶7          Defendant, Anthony P. DiMucci, is the sole shareholder and president of DiMucci

     Development Corporation of Rockford (DiMucci Corporation). DiMucci Corporation, in turn, is

     the manager of DiMucci Development of Rockford, LLC (DiMucci LLC). Prior to 1998,

     DiMucci and his brother Salvatore each had a 50% interest in both the DiMucci Corporation and

     DiMucci LLC. After Salvatore died in July 1997, beginning in July 1998, DiMucci became the

     sole shareholder and president of DiMucci Corporation and the sole member of DiMucci LLC.

     DiMucci LLC developed and owned a shopping mall in Rockford Illinois. DiMucci Corporation,




                                                    -2-
     1-12-2725


     as the manager of DiMucci LLC, oversaw the construction work and maintenance of the

     Rockford mall.

¶8          Attorney Jerry H. Biederman, the managing partner of Neal Gerber & Eisenberg LLP

     (Neal Gerber), testified that his firm had represented DiMucci's corporation since its formation.

     Biederman provided legal representation to the DiMucci family and entities for approximately 20

     years. Biederman was also vice president of DiMucci Corporation prior to 1998 when DiMucci

     became the sole shareholder. In December 1994, Montgomery Ward entered into a lease with

     DiMucci LLC to be the anchor tenant at the Rockford mall. In December 1996, DiMucci LLC

     obtained a loan from General American Life Insurance Company (GALIC) in the amount of

     $12,450,000 for the development of the Rockford mall. Biederman had the authority of DiMucci

     and his brother to negotiate the loan and execute the loan documents. DiMucci acknowledged at

     his deposition that, as an officer of DiMucci Corporation, Biederman personally executed the

     GALIC note, mortgage, and collateral assignment of lease or leases for DiMucci Corporation on

     behalf of DiMucci LLC. The GALIC loan was secured by a mortgage on the Rockford mall and

     a collateral assignment of leases.

¶9          Montgomery Ward defaulted on its lease and filed chapter 11 bankruptcy in 1997 in the

     United States Bankruptcy Court in the District of Delaware. DiMucci LLC and DiMucci

     Corporation retained the law firm of Neal Gerber to represent them in the Montgomery Ward

     bankruptcy case. Attorney Thomas Wolford was the primary lawyer at Neal Gerber responsible

     for representing DiMucci LLC and DiMucci Corporation in the Montgomery Ward bankruptcy

     case. Wolford caused a proof of claim to be filed on behalf of DiMucci LLC in the bankruptcy

     case in February 1998, seeking $16,391,766.59 for unpaid past and future rents on the defaulted

     lease. The net amount of DiMucci LLC's allowed claim in the bankruptcy case was $638,537.50.


                                                    -3-
       1-12-2725


¶ 10           DiMucci in turn defaulted on its loan from GALIC and, in November 1998, GALIC filed

       a complaint for foreclosure against DiMucci LLC. The property went to foreclosure sale and was

       purchased by GALIC. GALIC obtained a judgment of foreclosure on July 29, 1999. The

       judgment included an evidentiary finding that, as of July 29, 1999, DiMucci LLC owed GALIC

       $15,805,226.01. An order to confirm sheriff's sale, award possession, enter deficiency and

       deficiency judgment, approve final accounting and discharge receiver was entered September 29,

       1999.

¶ 11           GALIC then filed a motion in the Montgomery Ward bankruptcy case seeking an

       assignment of DiMucci Corporation's claim against Montgomery Ward to GALIC. GALIC's

       counsel sent Wolford a draft stipulation to that effect. The stipulation was dated December 4,

       2000, and was signed by counsel for Montgomery Ward, counsel for GALIC, and counsel for

       DiMucci Corporation. The stipulation provided that DiMucci Corporation transferred "all of its

       right, title and interest" in its allowed claim against Montgomery Ward to GALIC and provided

       that "[a]ll payments to be made on account of the Claim shall be made payable to [GALIC]." The

       stipulation also recited that it "has been approved by the Claims Resolution Committee."

       Defendant claims that Wolford signed this stipulation without his authority.

¶ 12           On February 6, 2001, Logan and Company (Logan), the bankruptcy court's noticing

       agent, caused Wells Fargo Bank to issue a check for DiMucci LLC's allowed claim against

       Montgomery Ward in the amount of $638,537.50 to DiMucci LLC. The check was received by

       DiMucci LLC in February 2001. Defendant avers in his affidavit that "[t]he funds were deposited

       and used as a partial payment toward the payment of [a] management and construction fee" that

       DiMucci LLC allegedly owed to DiMucci Corporation. DiMucci averred in his affidavit that "as

       the sole shareholder and officer of DiMucci Development Corporation of Rockford," he


                                                      -4-
       1-12-2725


       "assumed all responsibility for management of the [shopping mall] center, its tenants, rent

       collections and performance of necessary services for the tenants and for the common areas of

       the shopping center." Attached to and incorporated in defendant's affidavit was an invoice

       defendant created, in his own individual name on letterhead, "Anthony DiMucci," to "DiMucci

       Dvlp. Corp. of Rockford," in the amount of $750,000. The invoice was dated January 1, 2001,

       after the claim was allowed and one month before DiMucci LLC received the bankruptcy claim

       check. There is no invoice in the record from DiMucci Corporation to DiMucci LLC for any

       balance for services owed by DiMucci LLC. The check was not deposited into the account for

       DiMucci LLC nor paid to DiMucci Corporation, however.

¶ 13          A copy of the bankruptcy claim check in the record shows that it was deposited by

       defendant directly into his personal account, the "Anthony DiMucci Grantor Trust" account at

       American National Bank. A copy of the check was attached to plaintiff's motion for summary

       judgment as an exhibit. In his interrogatory answers in the bankruptcy adversary case, also

       attached to plaintiff's motion for summary judgment, DiMucci stated that he deposited the check

       into this personal account.

¶ 14          The DiMucci LLC operating agreement states that all funds of DiMucci LLC shall be

       deposited in the LLC name in the LLC bank account. Defendant claims he had no notice that

       Wolford had entered into the stipulation with GALIC's counsel to transfer the allowed claim to

       GALIC. Defendant claims that these funds were applied as partial payment toward an

       outstanding "construction and management fee" owed by DiMucci LLC to DiMucci Corporation.

¶ 15          According to Biederman's deposition testimony, Wolford received a letter dated June 6,

       2001 from counsel for GALIC that the payment of the claim from the Montgomery Ward

       bankruptcy estate had been sent to DiMucci LLC and requesting return of those funds. The Neal


                                                     -5-
       1-12-2725


       Gerber attorneys advised DiMucci to return the money to the bankruptcy estate. Wolford

       specifically advised DiMucci to return the check. DiMucci's response was that he "didn't feel that

       he needed to return the money." Biederman also explained to DiMucci the legal analysis that

       "even in the absence of the stipulation, the assignment of rents would appear to make it difficult

       for any claim to successfully prevail." DiMucci denied authorizing the stipulation and denied

       that there had been any assignment of rents. Biederman faxed a copy of the assignment of rents

       to DiMucci. DiMucci continued to deny that there was an assignment of rents. DiMucci refused

       to return the money.

¶ 16           In August 2001, GALIC filed an adversary complaint in the bankruptcy court in the

       District of Delaware alleging that the $638,535 payment of the allowed claim should have been

       made to GALIC as a result of the stipulation. GALIC named Montgomery Ward Holding

       Corporation, Logan, Wells Fargo Bank and "DiMucci Development Corporation of Rockford,

       LLC" as defendants. On October 18, 2001, the bankruptcy court entered a default judgment in

       the amount of $638,535 in favor of GALIC and against "DiMucci Development Corporation of

       Rockford, LLC" for failure to participate in the preparation of a pretrial order.

¶ 17           National Union is Logan's insurer and had issued an errors and omissions insurance

       policy to Logan. On or about March 28, 2003, National Union paid $540,000 to settle the

       adversary complaint on behalf of Logan, and GALIC released Logan.

¶ 18           On September 8, 2004, Logan registered the Delaware bankruptcy court's judgment in the

       United States District Court for the Northern District of Illinois. On May 18, 2005, Logan filed

       and issued a citation to discover assets against DiMucci LLC in the Northern District of Illinois. 1




       1
           The parties do not indicate what the disposition was, if any, of the citation to discover assets.
                                                         -6-
       1-12-2725


¶ 19          In May 2005, National Union filed this action against defendant DiMucci personally, as

       subrogee of GALIC or, alternatively, as subrogee of Logan. National Union brought claims for

       unjust enrichment, fraud, conversion, and for the imposition of a constructive trust. Defendant

       filed a combined motion to dismiss, arguing that National Union's claims are barred by res

       judicata by the final judgment entered in the Montgomery Ward bankruptcy case because there

       was an identity of the two causes of action and the parties or their privies.

¶ 20          The circuit court granted defendant's motion to dismiss National Union's fraud claims on

       other grounds, but denied the motion to dismiss as to all remaining counts, and rejected

       defendant's res judicata argument. Defendant then answered National Union's complaint, raising

       res judicata as an affirmative defense. National Union moved to dismiss defendant's res judicata

       affirmative defense, and the trial court granted National Union's motion on May 29, 2008.

¶ 21          On May 18, 2009, National Union filed its first summary judgment motion regarding its

       claims for unjust enrichment and constructive trust, based on the stipulation in the bankruptcy

       court. National Union argued that the stipulation was valid because Wolford had either express

       or apparent authority to agree to the stipulation. Defendant denied that Wolford had any

       authority. On June 3, 2010, the court heard argument and considered the affidavits and

       deposition testimony. The court denied National Union's motion based on its finding that a

       material issue of fact existed regarding Wolford's authority to enter into the stipulation.

¶ 22          On July 8, 2011, National Union filed a second motion for summary judgment on its

       claims for unjust enrichment and constructive trust, again based on the stipulation. National

       Union also argued that the funds mistakenly paid to DiMucci LLC were owed to GALIC as a

       result of the foreclosure lawsuit and deficiency judgment entered against DiMucci LLC.




                                                        -7-
       1-12-2725


¶ 23          On September 27, 2011, the court granted National Union's motion for summary

       judgment on the counts for unjust enrichment and imposition of a constructive trust (Counts III,

       IV, VII and VIII). This time, the court found that the stipulation was valid and in effect when the

       payment was made to DiMucci LLC and that the payment was mistake and that "DiMucci is

       benefitting as a result of that mistake," which the court found was unjust.

¶ 24          The court heard the prove-up of damages for National Union and its motion for

       prejudgment interest pursuant to the Interest Act (815 ILCS 205/2 (West 2012)) or, in the

       alternative, pursuant to equity principles. 2 The court entered an order on March 22, 2012, finding

       that National Union was damaged in the amount of $540,000. In its order the court also granted

       National Union's motion for prejudgment interest at the annual rate of 4% from March 28, 2003,

       through the date of the March 22, 2012 order. The court rejected the claim for interest under the

       Interest Act but granted the motion based on equity, ruling that it was persuaded by the fact that

       there was a deficiency judgment in favor of GALIC at the time the check was issued to DiMucci

       LLC, and that it was also persuaded by the fact that the check was not deposited by defendant

       into the corporate account of DiMucci LLC. The order of March 22, 2012, entered judgment in

       favor of National Union in the total amount of $734,089.48. National Union's claims for

       conversion (counts II and VI) remained pending. The order included Illinois Supreme Court Rule

       304(a) (Ill. S. Ct. R. 304(a) (eff. Feb. 26, 2010)) language that "there is no just reason for

       delaying either enforcement or appeal of this Order."

¶ 25          On April 20, 2012, defendant filed a motion to reconsider the orders granting summary

       judgment and prejudgment interest in favor of National Union. The motion to reconsider was

       denied on August 14, 2012. Defendant appealed.

       2
         Prior to ruling on this motion, the presiding judge, the Honorable Stuart Palmer, was appointed
       to the appellate court and the Honorable Thomas Allen then became the presiding judge.
                                                       -8-
       1-12-2725


¶ 26                                              ANALYSIS

¶ 27          Summary judgment is proper when "the pleadings, depositions, and admissions on file,

       together with the affidavits, if any, show that there is no genuine issue as to any material fact and

       that the moving party is entitled to a judgment as a matter of law." 735 ILCS 5/2-1005(c) (West

       2012). A court ruling on a motion for summary judgment must construe the pleadings and the

       evidentiary material strictly against the movant. Morrissey v. Arlington Park Racecourse, LLC,

       404 Ill. App. 3d 711, 724 (2010). "A genuine issue of material fact exists where the facts are in

       dispute or where reasonable minds could draw different inferences from the undisputed facts."

       Morrissey, 404 Ill. App. 3d at 724. Our review of an order granting summary judgment is de

       novo. Gillespie Community Unit School District No. 7 v. Wight & Co., 2014 IL 115330, ¶ 27. De

       novo consideration means we perform the same analysis that a trial judge would perform. Khan

       v. BDO Seidman, LLP, 408 Ill. App. 3d 564, 578 (2011).

¶ 28                     I. The Bankruptcy Court Judgment is Not a Res Judicata Bar

                       Because it is Not a Final Judgment by a Court of Competent Jurisdiction

¶ 29          The issue of whether a subsequent claim is barred by res judicata, an affirmative defense,

       is a question of law, which this court also reviews de novo. Saxon Mortgage, Inc. v. United

       Financial Mortgage Corp., 312 Ill. App. 3d 1098, 1105 (2000) (citing 735 ILCS 5/2-619(a)(4)

       (West 1998) and American National Bank & Trust Co. of Chicago v. Village of Libertyville, 269

       Ill. App. 3d 400, 403 (1995)).

¶ 30          Federal law governs the res judicata effect of cases litigated in bankruptcy court. Illinois

       courts are required to apply Illinois choice of law rules. People v. Allen, 336 Ill. App. 3d 457,

       459 (2003); Western States Insurance Co. v. Zschau, 298 Ill. App. 3d 214, 223 (1998). Because

       the earlier judgment was rendered by a bankruptcy court, the federal law of res judicata or


                                                       -9-
       1-12-2725


       "claim preclusion" applies here. Peregrine Financial Group, Inc. v. Trademaven, L.L.C., 391 Ill.

       App. 3d 309, 313 (2009) (federal law governs the res judicata effect of cases litigated in federal

       court); Instituto Nacional de Comercializacion Agricola (Indeca) v. Continental Illinois National

       Bank & Trust Co., 858 F.2d 1264, 1271 (7th Cir. 1988) (Illinois choice of law rules indicate that

       the law of the jurisdiction where a judgment was rendered determines the res judicata effect of

       that judgment. "The preclusive effect of a federal-court judgment is determined by federal

       common law." Taylor v. Sturgell, 553 U.S. 880, 891 (2008) (citing Semtek International Inc. v.

       Lockheed Martin Corp., 531 U.S. 497, 507-08 (2001)). We note that the bankruptcy judgment

       was rendered in a bankruptcy court in Delaware, which is in the Third Circuit.

¶ 31          In federal court, "[a] party seeking to invoke res judicata must establish three elements:

       '(1) a final judgment on the merits in a prior suit involving (2) the same parties or their privies

       and (3) a subsequent suit based on the same cause of action.' " Marmon Coal Co. v. Director,

       Office of Workers' Compensation Programs, 726 F.3d 387, 394 (3d Cir. 2013) (quoting Duhaney

       v. Attorney General of the United States, 621 F.3d 340, 347 (3d Cir. 2010)). "Under res judicata,

       a final judgment on the merits bars further claims by parties or their privies based on the same

       cause of action.” Montana v. United States, 440 U.S. 147, 153 (1979). The doctrine of res

       judicata bars suit on matters that were raised or could have been raised in previous litigation

       between the parties. Federated Department Stores, Inc. v. Moitie, 452 U.S. 394, 398 (1981).

¶ 32          We reject outright any contention that this action does not involve the same parties

       because DiMucci was not an individual defendant in the bankruptcy case or because the

       adversary complaint misnamed "DiMucci Development Corporation of Rockford, LLC" as a

       defendant. DiMucci was the director and sole shareholder of DiMucci Corporation at all relevant

       times, and DiMucci had an equal stake in defending the bankruptcy adversary case. See Marine


                                                      -10-
       1-12-2725


       Midland Bank v. Slyman, 995 F.2d 362, 365 (2d Cir. 1993) (officers, directors, sole shareholders

       and guarantors of corporation in indebtedness litigation were in privity with corporation for res

       judicata purposes); Haefner v. North Cornwall Township, 40 F. App'x 656, 657 n.2 (3d Cir.

       2002) (finding corporation's attorney was in privity with corporation). DiMucci also signed

       verified responses in the adversary case as the president of "DiMucci Development Corporation

       of Rockford, LLC." Verified discovery responses in other cases constitute evidentiary

       admissions. See Brummet v. Farel, 217 Ill. App. 3d 264, 267 (1991). The check was made out to

       "DiMucci Development of Rockford LLC [sic]" and was deposited by DiMucci into DiMucci's

       own personal account. National Union is the subrogee of GALIC. We hold that the same parties

       are involved in both cases.

¶ 33          We also reject the contention that the present case is not based on the same cause of

       action as the bankruptcy adversary case in Delaware. In determining whether the cause of action

       is the same, the Third Circuit takes "a broad view, looking to whether there is an 'essential

       similarity of the underlying events giving rise to the various legal claims.' " CoreStates Bank,

       N.A. v. Huls America, Inc., 176 F.3d 187, 194 (3d Cir. 1999) (quoting United States v. Athlone

       Industries, Inc., 746 F.2d 977, 984 (3d Cir. 1984)). The Third Circuit considers " 'whether the

       acts complained of were the same, whether the material facts alleged in each suit were the same,

       and whether the witnesses and documentation required to prove such allegations were the same.'

       " Lubrizol Corp. v. Exxon Corp., 929 F.2d 960, 963 (3d Cir. 1991) (quoting United States v.

       Athlone Industries, Inc., 746 F.2d 977, 984 (3d Cir. 1984)). A differing theory of recovery is not

       dispositive of the issue. Id. Both the adversary complaint in the bankruptcy court and this action

       are based on the mistaken payment of the claim to DiMucci LLC and the wrongful acceptance

       and depositing of that check by DiMucci into his personal account. The acts complained of are


                                                     -11-
       1-12-2725


       the same, the material facts alleged are the same, and the same witnesses and documentation are

       involved. The two cases are based on the same cause of action. Thus, elements two and three are

       satisfied.

¶ 34           The very first element of res judicata, however, presents a problem in this case. The

       Third Circuit recognizes default judgments as final judgments with res judicata effect. See In re

       McMillan, 579 F.2d 289, 293 (3d Cir. 1978) (holding that a default judgment has res judicata

       effect and is conclusive in a subsequent suit based on the same cause of action between the same

       parties or their privies). The issue here is whether a bankruptcy adversary judgment is a final

       decision in a "court of competent jurisdiction" when state-law claims are involved. There is

       much confusion in the federal courts regarding this issue.

¶ 35           "The jurisdiction of the bankruptcy courts, like that of other federal courts, is grounded

       in, and limited by, statute." Celotex Corp. v. Edwards, 514 U.S. 300, 307 (1995). The 1978

       Bankruptcy Reform Act mandated that bankruptcy judges "shall exercise" jurisdiction over "all

       civil proceedings arising under title 11 or arising in or related to cases under title 11." 28 U.S.C.

       § 1471(b)-(c) (Supp. IV 1980). District courts have original but not exclusive jurisdiction over all

       Title 11 civil proceedings:

                    "[N]otwithstanding any Act of Congress that confers exclusive jurisdiction on a court

                    or courts other that the district courts, the district courts shall have original but not

                    exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or

                    related to cases under title 11." 28 U.S.C. § 1334(b) (2006).

¶ 36           State courts and bankruptcy courts share concurrent jurisdiction to hear state-law cases

       that are related to bankruptcy proceedings:




                                                        -12-
       1-12-2725


                      "[(c)] (2) Upon timely motion of a party in a proceeding based upon a State law

                   claim or State law cause of action, related to a case under title 11 but not arising

                   under title 11 or arising in a case under title 11, with respect to which an action could

                   not have been commenced in a court of the United States absent jurisdiction under

                   this section, the district court shall abstain from hearing such proceeding if an action

                   is commenced, and can be timely adjudicated, in a State forum of appropriate

                   jurisdiction." 28 U.S.C. § 1334(c)(2) (2006).

¶ 37          The 1978 Bankruptcy Reform Act (1978 Act) mandated that bankruptcy judges "shall

       exercise

       jurisdiction over "all civil proceedings arising under title 11 or arising in or related to cases

       under title 11." 28 U.S.C. § 1471(b)-(c) (Supp. IV 1980). Under the 1978 Act, bankruptcy judges

       were "vested with all of the 'powers of a court of equity, law, and admiralty,' " with only a few

       limited exceptions. Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50,

       55 (1982) (plurality opinion) (quoting 28 U.S.C. § 1481 (Supp. IV 1980)). But bankruptcy

       judges were not afforded the protections of article III: life tenure and a salary that may not be

       diminished. Id. at 53.

¶ 38          In Northern Pipeline, the United States Supreme Court held that bankruptcy judges under

       the 1978 Act could not "constitutionally be vested with jurisdiction to decide [a] state-law

       contract claim" against an entity not otherwise a party to the proceeding. Northern Pipeline, 458

       U.S. at 87 n.40. The Court held that a bankruptcy court lacked constitutional authority to enter

       final judgment on a debtor's state-law contract claim, which was a purely state law claim, but no

       rationale commanded a majority. Id. at 63-87 (plurality opinion), 91 (Rehnquist, J., concurring,

       joined by O'Connor, J.). Specifically, the plurality noted that "the restructuring of debtor-creditor


                                                       -13-
       1-12-2725


       relations, which is at the core of the federal bankruptcy power, must be distinguished from the

       adjudication of state-created private rights," which belong in an article III court. Id. at 71-72

       (plurality opinion). The Court held that the Act was unconstitutional, at least insofar as it allowed

       a non-article III court to "entertain and decide" a purely state-law claim. Id. at 91 (Rehnquist, J.,

       concurring, joined by O'Connor, J.).

¶ 39          In response to the Supreme Court's decision in Northern Pipeline, Congress enacted the

       Bankruptcy Amendments and Federal Judgeship Act of 1984, Pub. L. No. 98-353, 98 Stat. 333

       (1984). See 28 U.S.C. § 151 et seq. Congress delineated three types of bankruptcy proceedings:

       those (1) "arising under title 11," (2) "arising in" a title 11 case, and (3) "related to a case under

       title 11." 28 U.S.C. § 157(a). In section 157 of the 1984 amendments Congress drew a new

       distinction between "core" and "non-core" proceedings. For "all core proceedings arising under

       title 11, or arising in a case under title 11, referred under [section 157(a)]," section 157(b)(1)

       permits bankruptcy judges to "hear and determine" the proceedings and to "enter appropriate

       orders and judgments." 28 U.S.C. § 157(b)(1). A final judgment entered in a core proceeding is

       appealable to the district court, 158(a)(1), which reviews the judgment.

¶ 40          For noncore proceedings "otherwise related to a case under title 11," section 157(c)(1),

       unless the parties consent to entry of judgment (28 U.S.C. § 157(c)(2) (2006), the court is

       authorized only to "hear" the proceedings and to "submit proposed findings of fact and

       conclusions of law to the district court." 28 U.S.C. § 157(c)(1) (2006). The district court reviews

       the bankruptcy judge's proposed findings of fact and then enters any final order or judgment. 28

       U.S.C. § 157(c)(1) (2006).

¶ 41          The adversary complaint alleged it was "a core proceeding pursuant to 28 U.S.C.

       157(b)(2)." The statute contains a nonexhaustive list of examples of core proceedings including


                                                       -14-
       1-12-2725


       "proceedings to determine, avoid, or recover fraudulent conveyances." 28 U.S.C. § 157(b)(2)(H)

       (2006). The adversary complaint alleged that "Montgomery Ward, acting through Logan[,] ***

       caused the payment of the Claim to be sent to DiMucci, which act was contrary to the terms of

       the Stipulation," and sought return of the inappropriately cashed check funds. The adversary

       cause of action was a proceeding to avoid and recover a fraudulent conveyance.

¶ 42          Defendant argues that National Union's claims in this case are barred by res judicata

       because there was a final judgment and the adversary case was a core bankruptcy proceeding.

       Defendant argues that even if the claims in this case are not core proceedings, the judgment is

       still a final judgment because bankruptcy courts also have jurisdiction to hear noncore

       proceedings related to bankruptcies.

¶ 43          In Sarno v. Thermen, 239 Ill. App. 3d 1034 (1992), this court held that claims can be

       barred by res judicata only if they would have been core proceedings in bankruptcy court. Sarno,

       239 Ill. App. 3d at 1046. This court held that a state-law conspiracy claim, although based in part

       on a wrongful bankruptcy court filing, would not have been a core proceeding in bankruptcy and

       thus the claim was not barred by res judicata. Sarno, 239 Ill. App. 3d at 1047. See also Smith

       Trust & Savings Bank v. Young, 312 Ill. App. 3d 853, 857 (2000) (holding that actions involving

       claims that could have been raised as noncore issues in bankruptcy proceedings are not barred by

       res judicata, because bankruptcy courts' noncore decisions lack finality).

¶ 44          Defendant argues nevertheless that Sarno "was decided over 20 years ago, before the

       Illinois Supreme Court changed the landscape of res judicata in Illinois in the landmark decision

       in Hudson [v. City of Chicago, 228 Ill. 2d 462 (2008)]," that "[a]ll of the federal circuits that

       have more recently considered this question have rejected the distinction between core and non-

       core claims for purposes of res judicata," and that "[t]he trend in Illinois and in the federal courts


                                                       -15-
       1-12-2725


       is toward a broad application of res judicata" to bar whatever could have been decided.

       Defendant also cites to a Third Circuit decision holding that noncore bankruptcy decisions can

       present a res judicata bar to a later action. See CoreStates Bank, 176 F.3d at 194-98.

¶ 45          Though the parties alternately cite state precedent and federal precedent from various

       circuits on the issue of res judicata, Illinois precedent does not apply to determining the res

       judicata effect of a federal court judgment; federal law governs. Also, all federal courts are

       bound to follow United States Supreme Court precedent. See Rodriguez de Quijas v.

       Shearson/American Express, Inc., 490 U.S. 477, 484 (1989) ("If a precedent of this Court has

       direct application in a case, yet appears to rest on reasons rejected in some other line of

       decisions, the [lower court] should follow the case which directly controls, leaving to this Court

       the prerogative of overruling its own decisions.").

¶ 46          Fraudulent transfer causes of action have been determined by the United States Supreme

       Court to be noncore claims. The Supreme Court has also determined that although bankruptcy

       courts have jurisdiction to hear noncore proceedings, they do not have jurisdiction to enter final

       judgments on noncore causes of action. Thus, bankruptcy courts are not courts of "competent

       jurisdiction" that can enter final judgments on noncore state-law claims for res judicata

       purposes.

¶ 47          In Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989), the Court recognized that a

       state-law claim for fraudulent transfer was not a core claim. Granfinanciera, 492 U.S. at 56. The

       issue was whether there was a right to a jury trial in bankruptcy court for a state-law claim for

       fraudulent transfer. A bankruptcy trustee had brought an action to recover a fraudulent

       conveyance from third parties that had not submitted claims against the bankruptcy estate, and




                                                      -16-
       1-12-2725


       the third parties demanded a jury trial under the seventh amendment. In analyzing the issue, the

       Court noted that a claim for fraudulent transfer was not a core claim:

              "There can be little doubt that fraudulent conveyance actions by bankruptcy trustees –

              suits which, we said in Schoenthal v. Irving Trust Co., 287 U.S., at 94-95 (citation

              omitted), 'constitute no part of the proceedings in bankruptcy but concern controversies

              arising out of it' – are quintessentially suits at common law that more      nearly

              resemble state-law contract claims ***." Granfinanciera, 492 U.S. at 56.

       The Court thus held that fraudulent conveyance and preferential transfer action defendants who

       had not submitted proofs of claim against the bankruptcy estate were entitled to a jury trial,

       despite the fact that Congress had designated fraudulent conveyance actions as core bankruptcy

       proceedings. Id.

¶ 48          In Stern v. Marshall, ___ U.S. ___, 131 S. Ct. 2594 (2011), the Court considered a

       constitutional challenge to another similar statutory designation of a core claim: counterclaims

       by the estate against persons filing claims against the estate. The Court held that although the

       bankruptcy court had statutory authority under section 157(b)(2) to enter a final judgment on a

       debtor's state-law tort counterclaim, it did not have constitutional authority to do so. Stern, ___

       U.S. at ___, 131 S. Ct. at 2596-97. The Stern Court also revisited its analysis in Granfinanciera

       and reaffirmed Granfinanciera's holding that avoidance actions are the kinds of cases that under

       the Constitution require adjudication by an article III judge. Stern, ___ U.S. at ___, 131 S. Ct. at

       2614. The Court held that a counterclaim was similarly a state-tort action that existed "without

       regard to any bankruptcy proceeding." Stern, ___ U.S. at ___, 131 S. Ct. at 2618. The Court held

       that although the bankruptcy court had statutory authority under section 157(b)(2) to enter a final

       order on a debtor's state-law tort counterclaim, it did not have constitutional authority to do so.


                                                      -17-
       1-12-2725


       Stern, ___ U.S. at ___, 131 S. Ct. at 2596-97. The Court held that the counterclaim was neither

       derived from nor dependent upon bankruptcy law but instead was "a state tort action that

       exist[ed] without regard to any bankruptcy proceeding." Id. at ___, 131 S. Ct. at 2618. The Court

       concluded "that Congress may not bypass Article III simply because a proceeding may have

       some bearing on a bankruptcy case; the question is whether the action at issue stems from the

       bankruptcy itself or would necessarily be resolved in the claims allowance process." (Emphasis

       omitted.) Id.

¶ 49          Most recently, in Executive Benefits Insurance Agency v. Arkison, ___ U.S. ___, 134 S.

       Ct. 2165 (2014), the Court assumed, without deciding, that fraudulent transfer claims were so-

       called "Stern claims" that are noncore despite the fact that Congress had designated them as core

       under statute. The Court noted that the Ninth Circuit had held – and no party disputed – that

       article III does not permit fraudulent transfer claims to be treated as core. Executive Benefits, ___

       U.S. at ___, 134 S. Ct. at 2174. The Court held that "[b]ut because the claims assert that property

       of the bankruptcy estate was improperly removed, they are self-evidently 'related to a case under

       title 11' ***." Executive Benefits, ___ U.S. at ___, 134 S. Ct. at 2167-68. "At bottom, a

       fraudulent conveyance claim asserts that property that should have been part of the bankruptcy

       estate and therefore available for distribution to creditors pursuant to Title 11 was improperly

       removed. That sort of claim is 'related to a case under title 11.' " Executive Benefits, ___ U.S. at

       ___, 134 S. Ct. at 2174. Thus, fraudulent transfer claims are not core but are instead under the

       category of claims "related to a case under title 11." But the Court did not squarely hold that

       bankruptcy courts cannot enter final judgments on fraudulent transfer claims because, in that

       case, the district court's de novo review on appeal of that decision and entry of its own final

       judgment cured any error. Executive Benefits, ___ U.S. at ___, 134 S. Ct. at 2174.


                                                       -18-
       1-12-2725


¶ 50          National Union cites to the above precedent but maintains that the fraudulent transfer and

       avoidance adversary action was a core proceeding resulting in a final judgment, and argues

       instead that the present case is not barred by res judicata because it is based on different

       operative facts and alleges claims for unjust enrichment and constructive trust arising only under

       state law and founded in equity. As we noted earlier, both the adversary case and the present case

       are based on the same facts and cause of action: the mistaken payment and fraudulent transfer by

       DiMucci directly to his own personal account.

¶ 51          National Union argues that the adversary case was a core proceeding because it "involved

       matters central to the Bankruptcy Court's business – the rights and obligations of the

       Reorganized Debtor, its agent (Logan), a party that had filed a proof of claim (DiMucci LLC)

       and a creditor of DiMucci LLC (GALIC) that had secured an assignment of that claim approved

       by the Claims Resolution Committee." We note that the Supreme Court recognized an exception

       in Granfinanciera allowing bankruptcy courts to enter final judgment on a fraudulent transfer

       and avoidance action if it was part of a defendant's proof of claim process against the estate

       because then the action arises as part of the process of allowance and disallowance of claims in

       bankruptcy. Granfinanciera, 492 U.S. at 57-58. The Court cited to the earlier decision in

       Schoenthal v. Irving Trust Co., 287 U.S. 92 (1932), which held that "[s]uits to recover

       preferences constitute no part of the proceedings in bankruptcy but concern controversies arising

       out of it." Schoenthal, 287 U.S. at 94-95. Quoting Schoenthal, the Court explained:

                   " '[A]lthough petitioner might be entitled to a jury trial on the issue of preference if he

                   presented no claim in the bankruptcy proceeding and awaited a federal plenary action

                   by the trustee, Schoenthal v. Irving Trust Co., 287 U.S. 92, when the same issue




                                                        -19-
       1-12-2725


                   arises as part of the process of allowance and disallowance of claims, it is triable in

                   equity.' Id., at 336." (Emphasis added.) Granfinanciera, 492 U.S. at 58.

¶ 52           But in the present case the claim process had already been concluded and the fraudulent

       transfer adversary action arose afterwards and was not part of the claims process. DiMucci LLC's

       proof of claim was filed in the bankruptcy case in February 1998. DiMucci then defaulted on his

       loan from GALIC and the assignment of DiMucci's allowed claim to GALIC was effected by the

       stipulation signed in December 2000. GALIC then filed the adversary complaint in bankruptcy

       court in August 2001, well after the claims process had concluded. The claim for fraudulent

       transfer and avoidance thus was not part of the claims process in bankruptcy and does not fall

       within this narrow exception under Granfinanciera.

¶ 53           Taking all of the above precedent into account, we conclude that the weight of authority

       is that fraudulent transfer causes of action are not core proceedings in bankruptcy and, therefore,

       a bankruptcy court cannot enter a final judgment on such a claim. Thus, the bankruptcy court's

       earlier judgment is not a res judicata bar to the present case because there is no final judgment

       by a court of competent jurisdiction.

¶ 54                      II. The Bankruptcy Case Stipulation was Properly Considered

                          in the Summary Judgment as an Evidentiary Admission and

                          DiMucci Failed to Show Any Genuine Issue of Material Fact

¶ 55           Nevertheless, even if res judicata does not apply the circuit court properly relied on the

       bankruptcy court stipulation. Defendant argues the court erred in granting summary judgment in

       favor of National Union because there was a material question of fact regarding the validity and

       enforceability of that stipulation. National Union argues that the court did not ultimately rely on

       the stipulation.


                                                      -20-
       1-12-2725


¶ 56          Despite National Union's attempt to characterize the circuit court's judgment otherwise,

       the circuit court indeed relied on the stipulation that was executed in the bankruptcy case. The

       pleadings in this case include pleadings from the bankruptcy case, which includes the stipulation.

       The stipulation was also attached as an exhibit to plaintiff's complaint. Stipulations are included

       in the category of judicial admissions which may not be controverted in the case in which they

       are made. Brummet v. Farel, 217 Ill. App. 3d 264, 267 (1991). Evidentiary admissions include

       pleadings in a different case and may be controverted by a party. Id. The stipulation in the

       bankruptcy case was a binding judicial admission only in that case; in this case, it can only be

       considered an evidentiary admission and is not binding. See Western States Insurance Co. v.

       Kelley-Williamson Co., 211 Ill. App. 3d 7, 12 (1991) ("Although a judicial admission is binding

       upon the party making it and cannot be controverted [citation], it is only a judicial admission in

       the proceeding in which it was made, and, in a subsequent case, it becomes an ordinary

       evidentiary admission which is not binding on the party who made it."). Though not conclusive,

       the stipulation is part of the material properly considered by the circuit court in ruling on

       summary judgment.

¶ 57          Defendant first argues that summary judgment was improperly granted where the court

       had initially denied the motion and then later changed its ruling because there was no new

       evidence. But a court is within its discretion to change its ruling and may even sua sponte

       reconsider a prior ruling. See People v. Marker, 233 Ill. 2d 158, 172 (2009) (recognizing that

       prior Illinois Supreme Court decisions "expressed the clear judicial policy which favors allowing

       a trial court to reconsider its rulings"). The court here did not abuse its discretion in changing its

       ruling on the second motion for summary judgment. Also, the very same fact that there was no

       new evidence actually cuts against defendant – defendant did not come forward with any


                                                       -21-
       1-12-2725


       evidence which established that there was indeed a genuine issue of material fact regarding the

       stipulation.

¶ 58           Defendant also argues that the circuit court expressed reservations about defendant's

       liability in making its ruling when it stated: "How that gets to DiMucci individually is beyond

       me ***." But putting the court's comment in context clarifies that the court was not referring to

       placing liability but, rather, to the money being paid to DiMucci:

                         "A third party, Logan, made a mistake. As a result of that mistake, DiMucci

                      benefitted. How that gets to DiMucci individually is beyond me, but DiMucci

                      benefitted as a result of the third party's mistake. That money was not supposed to go

                      there. It's my intention to rectify that at least at this level." (Emphases added.)

¶ 59           The court's comment, placed in context, merely indicates that the court was perplexed as

       to how the check, instead of being properly issued to GALIC, was issued to DiMucci LLC and

       then wound up in DiMucci's personal account.

¶ 60           We find that DiMucci failed to create a genuine issue of material fact regarding the

       stipulation. While DiMucci argues his attorney had no authority to enter the stipulation, the rule

       is well recognized that generally a party is bound by his or her attorney's actions. See also

       Horwitz v. Holabird & Root, 212 Ill. 2d 1, 9 (2004). This includes even the mistakes or

       negligence of his or her attorney. R.M. Lucas Co. v. Peoples Gas Light & Coke Co., 2011 IL App

       (1st) 102955, ¶ 18. A litigant has a duty to follow his or her own case. Id. "An attorney has the

       authority to make judicial admissions on behalf of a client by stipulation." Fitzpatrick v. Human

       Rights Comm'n, 267 Ill. App. 3d 386, 391 (1994) (citing Fayette County Hospital v. Reavis, 169

       Ill. App. 3d 246, 252 (1988)). "Even absent express authority, a client is bound by a stipulation

       made by her attorney where the client fails to seasonably apply for relief from the stipulation."


                                                           -22-
       1-12-2725


       Fitzpatrick , 267 Ill. App. 3d at 391 (citing In re Estate of Moss, 109 Ill. App. 2d 185, 192-93

       (1969)).

¶ 61          DiMucci claims he only learned of the stipulation after the fact. But, by his own

       allegations in this case, DiMucci learned of the stipulation when GALIC filed the adversary

       complaint in bankruptcy court in 2001. DiMucci thus had knowledge of the stipulation from the

       beginning of the adversary complaint proceeding. The bankruptcy court did not enter the default

       judgment until October 18, 2001. DiMucci inexplicably did not challenge the stipulation in the

       bankruptcy court at all prior to the default judgment and offers us no explanation why he failed

       to do so. DiMucci also did not appeal the default judgment to the United States District Court in

       Delaware pursuant to section 158 (28 U.S.C. § 158 (2006)).

¶ 62          DiMucci argues that the issue of whether he waived any objection to the stipulation is a

       trial matter for the jury and is inappropriate to resolve as a matter of law on a motion for

       summary judgment. We disagree. Where undisputed facts establish waiver as a matter of law, the

       court does not err in entering summary judgment on such grounds. "Questions of waiver and

       estoppel are left to the trier of fact where the material facts are in dispute or where reasonable

       people might draw different conclusions from the evidence." Lumbermen's Mutual Casualty Co.

       v. Sykes, 384 Ill. App. 3d 207, 220 (2008) (citing Aetna Casualty & Surety Co. v. Oak Park Trust

       & Savings Bank, 168 Ill. App. 3d 1000, 1004 (1988)). "However, when the material facts are

       undisputed and only one reasonable inference may be drawn from them, waiver and estoppel

       may be determined as a matter of law." Sykes, 384 Ill. App. 3d at 220 (citing Home Insurance

       Co. v. Cincinnati Insurance Co., 213 Ill. 2d 307, 326 (2004), and Aetna Casualty & Surety Co. v.

       Oak Park Trust & Savings Bank, 168 Ill. App. 3d 1000, 1004 (1988)).




                                                     -23-
       1-12-2725


¶ 63          The facts in this case are undisputed that DiMucci did not take any steps to challenge the

       stipulation. DiMucci also did not respond to the summary judgment motion and the stipulation

       with any counteraffidavits. Failure to oppose a summary judgment motion supported by

       affidavits or stipulations by filing counteraffidavits in response is fatal. Fitzpatrick, 267 Ill. App.

       3d at 391 (citing Cano v. Village of Dolton, 250 Ill. App. 3d 130, 137-41 (1993)).

¶ 64          Moreover, the party seeking relief from stipulation must make a clear showing that matter

       stipulated is untrue. Fitzpatrick v. Human Rights Comm'n, 267 Ill. App. 3d 386, 391 (1994)

       (citing In re Estate of Moss, 109 Ill. App. 2d 185, 192-93 (1969)). See also People v. Calvert,

       326 Ill. App. 3d 414, 420 (2001) ("Parties will not be relieved from a stipulation absent ' "a clear

       showing that the matter stipulated is untrue, and then only when the application is seasonably

       made." ' " (quoting People v. Coleman, 301 Ill. App. 3d 37, 48 (1998), quoting Brink v.

       Industrial Comm'n, 368 Ill. 607, 609 (1938))). DiMucci has made no showing that the matter

       stipulated – that GALIC had the right to DiMucci's Montgomery Ward allowed claim by virtue

       of his default on his loan – was untrue. On the contrary, the pleadings on file and their exhibits

       and the depositions establish that DiMucci's counsel had authority to enter the loan documents,

       including the assignment of rents. The pleadings and their exhibits and depositions on file also

       establish that under DiMucci's loan agreement GALIC was entitled to an assignment of

       Montgomery Ward's rents on the property once DiMucci defaulted on his loan, and was therefore

       entitled to an assignment of DiMucci's bankruptcy allowed claim for Montgomery Ward's rents

       due. National Union now as the subrogee of GALIC is entitled to the assignment of the

       Montgomery Ward bankruptcy claim. None of these facts are untrue. DiMucci made no

       evidentiary showing in this action to contradict the facts in the stipulation. The circuit court

       correctly relied on the stipulation in its grant of summary judgment.


                                                        -24-
       1-12-2725


¶ 65                  III. Summary Judgment on Unjust Enrichment was Properly Granted

                          Where Plaintiff's Right to the Funds was Established and

                      Defendant Transferred the Funds to Himself and Unjustly Enriched Himself.

¶ 66          DiMucci disputes the relevant law on unjust enrichment, casting the claim in terms of a

       "duty" requirement, and argues that the court erred in granting summary judgment on the claim

       for unjust enrichment where DiMucci had no "duty" to return the money. The only authority

       DiMucci cites for this proposition is Martis v. Grinnell Mutual Reinsurance Co., 388 Ill. App. 3d

       1017, 1024-25 (2009), where the court held that for a claim of unjust enrichment to be

       recognized, "there must be an independent basis that establishes a duty on the part of the

       defendant to act and the defendant must have failed to abide by that duty." Martis, 388 Ill. App.

       3d at 1025 (citing Lewis v. Lead Industries Ass'n, 342 Ill. App. 3d 95, 105 (2003)). Martis cited

       Lewis for this statement, which in turn cited Board of Education of City of Chicago v. A, C & S,

       Inc., 131 Ill. 2d 428, 466 (1989), which involved an action brought by school districts against

       various suppliers of asbestos-containing material for strict products liability, fraudulent and

       negligent misrepresentation, breach of warranty, and restitution against various suppliers of

       asbestos-containing materials. the plaintiffs' claim for restitution sought reimbursement for

       expenditures they would incur to inspect, maintain, repair or remove asbestos-containing

       material in their buildings under section 115 of the Restatement of Restitution for "Performance

       of Another's Duty to the Public" (Restatement of Restitution § 115 (1937)). The Illinois Supreme

       Court held that to establish a cause of action for restitution under section 115 of the Restatement

       for performance of another's duty to the public, "[t]here must be an independent basis which

       establishes a duty upon the defendant to act and the defendant must have failed to abide by that

       duty." A, C & S, Inc., 131 Ill. 2d at 466. This holding by the supreme court in A, C & S, Inc.


                                                      -25-
       1-12-2725


       applied only to causes of action based on section 115 of the Restatement of Restitution, as

       applied in the context of a duty to the public, but was somehow co-opted by the court in Lewis

       and then repeated in Martis in the context of unjust enrichment. A, C & S, Inc., as an action

       brought by school districts under section 115's provision for a duty to the public, is inapplicable

       in this case. Martis is not an accurate statement of the law on the equitable claim for unjust

       enrichment.

¶ 67          To prevail on a claim for unjust enrichment, a plaintiff must prove that the defendant

       "retained a benefit to the plaintiff's detriment, and that defendant's retention of the benefit

       violates fundamental principles of justice, equity, and good conscience." HPI Health Care

       Services, Inc. v. Mt. Vernon Hospital, Inc., 131 Ill. 2d 145, 160 (1989). Where the benefit was

       transferred to the defendant by a third party, a claim for unjust enrichment is recognized in the

       following situations: (1) where the benefit should have been given to the plaintiff, but the third

       party mistakenly gave it to the defendant instead; (2) where the defendant procured the benefit

       from the third party through some type of wrongful conduct; or (3) where the plaintiff for some

       other reason had a better claim to the benefit than the defendant. Id. at 161-62. A " 'cause of

       action based upon unjust enrichment does not require fault or illegality on the part of [the]

       defendant[]; the essence of the cause of action is that one party is enriched and it would be unjust

       for that party to retain the enrichment.' " Fortech, L.L.C. v. R.W. Dunteman Co., 366 Ill. App. 3d

       804, 818 (2006) (quoting Stathis v. Geldermann, Inc., 295 Ill. App. 3d 844, 864 (1998)).

¶ 68          Here, defendant failed to show a genuine issue of material fact whether Logan should

       have caused payment on DiMucci LLC's allowed claim in the Montgomery Ward bankruptcy to

       be made to GALIC and whether the check was issued to DiMucci LLC by mistake, thus within

       the first factual situation for a claim for unjust enrichment under HPI Health Care. Other than


                                                      -26-
       1-12-2725


       his own affidavit, defendant has presented no other evidence that his counsel did not have

       authority to enter into the stipulation. Illinois Supreme Court Rule 191(a) governs affidavits in

       summary judgment motions and provides that "[a]ffidavits in support of and in opposition to a

       motion for summary judgment *** shall not consist of conclusions but of facts admissible in

       evidence." Ill. S. Ct. R. 191(a) (eff. July 1, 2002). "Unsupported assertions, opinions, and self-

       serving or conclusory statements do not comply with the rule governing summary judgment

       affidavits." Gassner v. Raynor Manufacturing Co., 409 Ill. App. 3d 995, 1005 (2011) (citing

       Jones v. Dettro, 308 Ill. App. 3d 494, 499 (1999)). See also Hagar v. State Farm Fire &

       Casualty Co., 154 Ill. App. 3d 689, 692 (1987) (holding that the "bald statement" in an affidavit

       that a sum of money was due was too conclusory to be entitled to consideration in support of a

       motion for summary judgment). Defendant literally has no other evidence to support his

       assertion that his counsel did not have authority to enter into the stipulation. The firm represented

       defendant and the DiMucci entities for a long period of time, and DiMucci acknowledged at his

       own deposition that his counsel had his authority to enter into the GALIC loan, which included

       the assignment of rents, and his counsel was specifically retained by DiMucci and had his

       authority to represent him in the bankruptcy case.

¶ 69          As noted above, even if Wolford did not have actual authority to enter into the

       stipulation, he had apparent authority sufficient to bind defendant, and defendant never

       challenged the stipulation.

¶ 70          Moreover, even accepting defendant's argument that the stipulation is ineffective,

       defendant failed to show any genuine issue of material fact that his counsel had his authority to

       enter into the mortgage and assignment of rents with GALIC and that GALIC, now National

       Union as subrogor of GALIC, was therefore entitled to payment on DiMucci LLC's allowed


                                                       -27-
       1-12-2725


       claim in the Montgomery Ward bankruptcy. It is undisputed that DiMucci defaulted on his loan

       from GALIC and that under the terms of the loan GALIC was entitled to an assignment of rents

       if DiMucci defaulted. Defendant failed to come forward with any evidence to contradict the fact

       that GALIC had the right to an assignment of defendant's claim from the Montgomery Ward

       bankruptcy for the rents due on the mortgaged property. Defendant's affidavit does not challenge

       this fact at all, and defendant provided no other counter-affidavits.

¶ 71          Defendant also argues that he cannot be personally liable for unjust enrichment under the

       Illinois Limited Liability Company Act (805 ILCS 180/1-1 et seq. (West 2010)), which provides

       that "[a] member or manager is not personally liable for a debt, obligation, or liability of the

       company solely by reason of being or acting as a member or manager." 805 ILCS 180/10-10

       (West 2010). But in this case DiMucci was not sued for a liability or obligation of the company

       in his capacity as a member of the LLC but, rather, for his own individual liability for failing to

       return the funds he wrongfully deposited to his personal account. The complaint in this case

       alleges that DiMucci individually, and not on behalf of the LLC as a member, wrongfully

       retained the funds and transferred them to his personal account, resulting in unjust enrichment to

       himself personally.

¶ 72          Defendant is not allowed to benefit from defaulting on his loan from GALIC and

       simultaneously keeping payment on DiMucci's bankruptcy claim representing the unpaid rents

       on the property. The circuit court did not err in granting summary judgment to National Union

       on its claim for unjust enrichment.

¶ 73                   IV. The Remedy of a Constructive Trust Was Properly Granted

                      Where the Check Was Issued to Defendant's LLC by Mistake and

                                    Defendant Refused to Return the Funds


                                                       -28-
       1-12-2725


¶ 74          Defendant next argues that the court erred in granting National Union summary judgment

       on its claim for a constructive trust where the court made no finding of any wrongful or

       unconscionable conduct by defendant. We may affirm on any basis appearing in the record. See

       Jandeska v. Prairie International Trucks, Inc., 383 Ill. App. 3d 396, 398 (2008).

¶ 75          We first note that a constructive trust is a remedy, not a cause of action. See Fitch v.

       McDermott, Will & Emery, LLP, 401 Ill. App. 3d 1006, 1018 (2010). A "constructive trust is an

       equitable remedy that may be imposed to redress unjust enrichment caused by a party's wrongful

       conduct." Charles Hester Enterprises, Inc. v. Illinois Founders Insurance Co., 114 Ill. 2d 278,

       293 (1986). Generally, some form of wrongful or unconscionable conduct is a prerequisite to the

       imposition of a constructive trust. Charles Hester Enterprises, Inc., 114 Ill. 2d at 293.

¶ 76          But although some form of wrongdoing is generally required for the imposition of a

       constructive trust, wrongdoing is not always a necessary element. Smithberg v. Illinois Municipal

       Retirement Fund, 192 Ill. 2d 291, 299 (2000) (citing Suttles v. Vogel, 126 Ill. 2d 186, 193 (1988),

       Norton v. City of Chicago, 293 Ill. App. 3d 620, 628 (1997), and Frederickson v. Blumenthal,

       271 Ill. App. 3d 738, 740-41 (1995)). "When a person has obtained money to which he is not

       entitled, under such circumstances that in equity and good conscience he ought not retain it, a

       constructive trust can be imposed to avoid unjust enrichment." Smithberg, 192 Ill. 2d at 299

       (citing Norton, 293 Ill. App. 3d at 628, Frederickson, 271 Ill. App. 3d at 741, and Restatement

       (First) of Restitution § 160 cmt. c (1937)). "A constructive trust is created when a court declares

       the party in possession of wrongfully acquired property the constructive trustee of that property

       because it would be inequitable for that party to retain possession of it." Smithberg, 192 Ill. 2d at

       299.




                                                       -29-
       1-12-2725


¶ 77           "[A] constructive trust may be imposed in the case of mistake, although no wrongdoing is

       involved." Smithberg, 192 Ill. 2d at 299 (citing Martin v. Heinold Commodities, Inc., 163 Ill. 2d

       33, 55 (1994), and Suttles, 126 Ill. 2d at 193). Thus, a constructive trust is imposed (1) where

       actual or constructive fraud is considered as equitable grounds for raising the trust; (2) where

       there is a fiduciary duty and a subsequent breach of that duty; or (3) when duress, coercion or

       mistake is present. Suttles, 126 Ill. 2d at 193.

¶ 78           "Typically, the imposition of a constructive trust is a matter for the discretion of the trial

       court." In re Estate of Trevino, 381 Ill. App. 3d 553, 556 (2008) (citing Lewsader v. Wal-Mart

       Stores, Inc., 296 Ill. App. 3d 169, 182 (1998)). But where the issue is whether there is a legal

       basis for the trial court's order, the standard of review is de novo. See In re Estate of Trevino, 381

       Ill. App. 3d at 556. Here, defendant argues that there was no legal basis for finding him

       personally liable for the repayment of funds under the theory of unjust enrichment and that the

       court erred in granting summary judgment for a constructive trust. We have already reviewed the

       issue of the legal basis for a constructive trust de novo above, holding that there is no genuine

       issue of material fact that there is a legal basis for the court's grant of summary judgment on the

       unjust enrichment claim. We proceed to review the trial court's decision to grant a constructive

       trust for abuse of discretion.

¶ 79           Defendant concedes that wrongful conduct is not always a prerequisite (Norton v. City of

       Chicago, 293 Ill. App. 3d 620, 628 (1997)), and that a constructive trust may be imposed in the

       case of mistake. See Smithberg v. Illinois Municipal Retirement Fund, 192 Ill. 2d 291 (2000).

       Defendant again merely reiterates his argument that the stipulation was invalid. We have already

       addressed that argument above and we find defendant has failed to show any genuine issue of

       material fact regarding the stipulation that would change the result in this case. Even if defendant


                                                          -30-
       1-12-2725


       did not give his counsel express authority to enter into the stipulation, defendant did not

       challenge the stipulation and has not come forward with any evidence establishing that the facts

       in the stipulation are not true. Under the assignment of rents that was part of DiMucci's loan,

       GALIC, and now National Union as its subrogee, was entitled to the Montgomery Ward

       bankruptcy claim funds. The only evidence defendant offered to counter the stipulation and

       National Union's motion for summary judgment (both the first and second motions) was his own

       affidavit. As we held above, defendant's own self-serving and conclusory affidavit does not

       satisfy Supreme Court Rule 191(a) (Ill. S. Ct. R. 191(a) (eff. July 1, 2002)). See Gassner, 409 Ill.

       App. 3d at 1005. There is no genuine issue of material fact that the check was paid to DiMucci

       LLC by mistake. "In order to impose a constructive trust, it is sufficient that a party has received

       money properly belonging to another under circumstances that, in equity, the party ought not be

       allowed to retain." Jackson v. Callan Publishing, Inc., 356 Ill. App. 3d 326, 334 (2005) (citing

       Suttles v. Vogel, 126 Ill. 2d 186, 193 (1988)).

¶ 80          Nevertheless, the facts of this case also establish wrongdoing for the imposition of a

       constructive trust. DiMucci knew that GALIC had a claim to the bankruptcy claim funds based

       on the adversary case filed by GALIC and the advice of his own attorneys. DiMucci did not

       challenge the stipulation assigning that claim to GALIC and still has no legal basis to challenge

       GALIC's entitlement to those funds, as his attorney had express authority to enter into the

       GALIC loan documents, including the assignment of rents. DiMucci defaulted on a large loan for

       commercial property and attempted to wrongfully retain the rents due, when at that point GALIC

       was automatically entitled to an assignment of rents. Further, when DiMucci LLC received the

       bankruptcy claim check representing Montgomery Ward's rent due, DiMucci immediately

       deposited those funds not to his LLC account but to his own personal account. Then, even after


                                                         -31-
       1-12-2725


       being explicitly told by his attorneys that he had no legal claim to those funds, DiMucci refused

       to return the money. The circuit court did not abuse its discretion in granting summary judgment

       on the request for the remedy of a constructive trust.

¶ 81                  V. The Court Did Not Abuse Its Discretion in Granting Prejudgment Interest

                      Where Defendant Knew The Funds Were the Subject of a Default Judgment,

                      a Stipulation, and an Assignment of Rents and Yet Kept the Funds.

¶ 82          Finally, defendant argues that the court erred in also awarding prejudgment interest

       because the court did not find that defendant acted in bad faith. An award of prejudgment interest

       is appropriate where it is "authorized by statute, agreement of the parties[,] or warranted by

       equitable considerations." Tully v. McLean, 409 Ill. App. 3d 659, 684-85 (2011). It has long been

       recognized that Illinois courts sitting in equity may award prejudgment interest even though not

       within the precise terms of the Interest Act (815 ILCS 205/2 (West 2012)) where, in the

       discretion of the trial court, interest is warranted by equitable considerations. City of Springfield

       v. Allphin, 82 Ill. 2d 571, 579 (1980); Tri-G, Inc. v. Burke, Bosselman & Weaver, 222 Ill. 2d 218,

       257 (2006).

¶ 83          "A trial court's determination that equitable considerations support an award of

       prejudgment interest is reviewed for an abuse of discretion." Wolinsky v. Kadison, 2013 IL App

       (1st) 111186, ¶ 100 (citing Prignano v. Prignano, 405 Ill. App. 3d 801, 821 (2010)). "[T]he

       determination of the equities of the case is 'a matter lying within the sound discretion of the trial

       judge. [Citations.] ' " Kleczek v. Jorgensen, 328 Ill. App. 3d 1012, 1025 (2002) (quoting In re

       Estate of Wernick, 127 Ill. 2d 61, 87 (1989)). "[A] reviewing court ought not substitute its

       judgment for that of the trial court unless no reasonable person could adopt the trial court's

       position." Kleczek, 328 Ill. App. 3d at 1025 (citing Beaton & Associates, Ltd. v. Joslyn


                                                       -32-
       1-12-2725


       Manufacturing & Supply Co., 159 Ill. App. 3d 834, 846 (1987), and In re Marriage of Dunseth,

       260 Ill. App. 3d 816, 831 (1994)).

¶ 84          Defendant argues that there cannot be an equitable award of prejudgment interest without

       some "bad conduct" or evidence that the funds were wrongfully obtained. Defendant argues that

       that the facts do not support a finding of bad conduct by defendant because at the time the check

       was cashed GALIC had an unsecured judgment against DiMucci LLC from the foreclosure

       action. Defendant also argues that the court made no finding of any wrongful conduct by the

       defendant.

¶ 85          Defendant cites to Calumet Construction Corp. v. Metropolitan Sanitary District of

       Greater Chicago, 178 Ill. App. 3d 415, 422-23 (1988), which held that prejudgment interest

       "may only be awarded *** where the funds are wrongfully obtained and illegally withheld."

       Calumet Construction Corp., 178 Ill. App. 3d at 423. Calumet Construction Corp. relied on the

       interpretation of the federal Seventh Circuit Court of Appeals. The following year after Calumet

       Construction Corp. was decided, the Illinois Supreme Court decided In re Estate of Wernick,

       which made clear that prejudgment interest may be awarded according to the equities of a case.

       To the extent that Calumet Construction Corp. limits the circuit court's discretion in awarding

       prejudgment interest when equitable circumstances are present, it is not in accord with In re

       Estate of Wernick. The Illinois Supreme Court in Wernick explained the basis for an equitable

       award of prejudgment interest as follows:

                       "The goal of proceedings sounding in equity is to make the injured party whole.

                    The current trend being employed to accomplish this goal is to allow an award of

                    interest on funds owing so that justice might be accomplished in each particular case.

                    [Citation.] In Illinois, prejudgment interest may be recovered when warranted by


                                                       -33-
       1-12-2725


                   equitable considerations, and disallowed if such an award would not comport with

                   justice and equity." In re Estate of Wernick, 127 Ill. 2d at 86-87.

¶ 86          Although courts in many cases awarding prejudgment interest did find bad conduct and

       were affirmed, under Illinois Supreme Court precedent bad conduct is not a precise requirement.

       This court has since noted that, "[a]t most," the cases "suggest that some element of bad conduct

       must be present before an equitable award of prejudgment interest will be made, although

       Wernick makes it clear that equitable awards of interest are not sanctions." (Emphases added.)

       Continental Casualty Co. v. Commonwealth Edison Co., 286 Ill. App. 3d 572, 580 (1997). An

       award of prejudgment interest is thus not meant as a punishment but, rather, to compensate the

       injured party in equity for the deprivation of use of the funds. "The goal of proceedings sounding

       in equity is to make the injured party whole." In re Estate of Wernick, 127 Ill. 2d at 86. In many

       cases awarding prejudgment interest, particularly in cases involving breach of fiduciary duty, the

       rationale for awarding prejudgment interest is to make the other party whole for the use of funds

       enjoyed at the deprivation of the injured party. See In re Estate of Wernick, 127 Ill. 2d at 87.

¶ 87          This concern is present in this case as well. DiMucci kept the funds for years, knowing

       that there was a stipulation assigning the funds to GALIC – which he never challenged – and

       knowing he had defaulted on his loan and that there was an assignment of rents due to GALIC

       (of which his counsel advised him). On March 28, 2003, National Union paid $540,000 to settle

       the adversary bankruptcy case filed by GALIC for DiMucci's refusal to return the funds, and thus

       National Union was entitled to those funds from DiMucci from that date. The circuit court did

       not abuse its discretion in determining that the equities weighed in favor of awarding National

       Union prejudgment interest for the deprivation of the funds all these years.




                                                       -34-
       1-12-2725


¶ 88          In any event, contrary to DiMucci's contention, the circuit court in fact did make a

       finding of wrongful conduct to support its award of prejudgment interest. The court found and

       ruled as follows in reaching its decision to grant prejudgment interest:

                       "Mr. Di[M]ucci has a business. They take out a big loan. Montgomery Wards, his

                   big tenant, goes down. They file bankruptcy and what flowed from there is an

                   eventual foreclosure, and *** a deficiency judgment is entered against the

                   corporation, the LLC, or maybe it was just a straight corporate entity, but we know it

                   was not against Mr. Di[M]ucci individually. That's clear from the documents and

                   everyone concedes that. That happens in '99 I think.

                                                       ***

                       *** Mr. Di[M]ucci and his company go in and they file in the bankruptcy court a

                   claim because they didn't get rent from the bankrupted Montgomery Ward, and so

                   they're in there on the bankruptcy ***.

                                                       ***

                       So in February 2001, a check comes flying in and this is against a backdrop of

                   what I just discussed. In '99, Mr. Di[M]ucci's companies and/or him individually lose

                   the property, it's handed over to General American ***, and now they’ve got all

                   rights, title, and interest to the real estate including *** the rents and anything else.

                                                       ***

                       *** The debt—the debt that's owed to the bank is the corporate debt. The check

                   that was issued in February of 2001 is—the payee is a corporate entity.




                                                        -35-
       1-12-2725


                       And to me this—that's very telling in terms of Mr. DiMucci's conduct. He knows

                   he is owed rent from Wards, Montgomery Wards, and he has got a claim in there, but

                   it's not in his individual capacity or his individual person, it's in his corporate person.

                       So he took the check and put [it] into a different account, not a corporate account.

                   ***.

                       *** [B]ased on the totality of the circumstances here, I understand that both

                   parties are waiting for their money, trying to get any crumbs that might fall off a table

                   in a bankruptcy deal, and I agree with your statement, [defense counsel], that he is not

                   charged with the obligation of running over and chasing down the money and giving

                   it to *** the creditor ***, but I think when you look at the conduct there, the totality

                   of the conduct in [sic] a reasonable person, a business person, and how—how he dealt

                   with this check and didn't put it in the corporate account, you know, this has been

                   going on for all these years, I think that under equitable principles that they are

                   entitled to interest. And that will be my ruling."

¶ 89          The court thus did find bad conduct and based its ruling on the fact that DiMucci

       deposited a check into his personal account, knowing he was not entitled to those funds and

       knowing that the check was additionally made out to his LLC. DiMucci was the head of several

       corporate entities engaged in large commercial real estate transactions. It was over a year and a

       half since DiMucci had defaulted on the loan and thus knew or should have known that he was

       not entitled to any further collections of rents represented by the Montgomery Ward bankruptcy

       claim; GALIC was entitled to those funds.

¶ 90          The court also noted the fact that the litigation over the check continued for a protracted

       length of time, despite DiMucci's knowledge that GALIC was entitled to those funds


                                                        -36-
       1-12-2725


       representing Montgomery Ward's unpaid rent because DiMucci defaulted on his loan. Even if

       there was no fault at the time defendant deposited the check into his personal account, defendant

       continued to refuse to return the money after learning of the stipulation and has continued to

       refuse to return the funds despite any evidence that GALIC, and now National Union as its

       subrogee, was entitled to the funds.

¶ 91          We find that these facts are sufficient to show bad faith, and we hold that the court did

       not abuse its discretion in awarding prejudgment interest from March 28, 2003 through the date

       of its order granting damages and prejudgment interest.

¶ 92                                  VI. Defendant Forfeited His Appeal

                              of the Court's Ruling on His Motion to Reconsider

¶ 93          In his notice of appeal, defendant also appealed the court's order of August 14, 2012,

       denying his motion to reconsider. But defendant makes no argument in his brief on appeal and

       fails to cite any authority and has thus forfeited this ground of review. See Ill. S. Ct. R. 341(h)(7)

       (eff. Feb. 6, 2013).

¶ 94                                            CONCLUSION

¶ 95          The circuit court did not err in granting National Union's claims for unjust enrichment

       and constructive trust, with an award of prejudgment interest. Federal precedent holds that

       fraudulent transfer claims are not "core" bankruptcy proceedings, and thus the federal bankruptcy

       court's default judgment against DiMucci LLC was not a final judgment that would bar this case

       under the doctrine of res judicata. Nevertheless, the court properly relied on the stipulation in the

       bankruptcy case assigning DiMucci LLC's bankruptcy claim to GALIC where DiMucci never

       challenged that stipulation and offered no evidence to controvert GALIC's right to those funds




                                                       -37-
        1-12-2725


        other than his own self-serving conclusory affidavit, which does not create a genuine issue of

        material fact.

¶ 96           There is no genuine issue of material fact that DiMucci was unjustly enriched by

        depositing those funds directly to his personal account and retaining them, thereby establishing

        National Union's claim for unjust enrichment.

¶ 97           There is also no genuine issue of material fact that a constructive trust was a proper

        remedy, where the check was sent to defendant's LLC by mistake and defendant deposited the

        funds into his personal account and thereafter wrongfully refused to return the funds.

¶ 98           The court further did not abuse its discretion in awarding prejudgment interest where the

        equities of the case established that DiMucci failed to return the funds to which National Union

        was entitled as of March 28, 2003, through March 22, 2012, the date of the court's order after the

        prove-up of damages.

¶ 99           We also hold DiMucci forfeited any argument regarding the court's ruling on his motion

        for reconsideration where he included no argument or citations in his brief on appeal.

¶ 100          We affirm the order of September 27, 2011 entering judgment in favor of National Union

        and the March 22, 2012 order granting damages and granting prejudgment interest for the total

        amount of $734,089.48. We also affirm the order of August 14, 2012 denying defendant's motion

        to reconsider.

¶ 101          Affirmed.

¶ 102          JUSTICE MASON, specially concurring.

¶ 103          I concur in the result reached by the majority, which affirms the summary judgment

        entered in favor of National Union and the award of prejudgment interest. I write separately

        because I do not concur in the majority's reasoning regarding the res judicata effect of the default

                                                        -38-
        1-12-2725


        judgment entered against DiMucci LLC in the Montgomery Ward bankruptcy case and believe

        that the default judgment entered in GALIC's adversary proceeding should be given preclusive

        effect on the issue of whether the payment made to DiMucci LLC was a mistake.

¶ 104          As I understand DiMucci's position invoking res judicata as a bar to National Union's

        claims against him personally, he contends that because GALIC's claim against DiMucci LLC in

        the bankruptcy adversary proceeding and National Union's claims against him in this case both

        concern the $638,537.50 payment made by Logan to DiMucci LLC, the two proceedings involve

        the "same claims" for res judicata purposes. DiMucci further concedes that as the sole member

        of DiMucci LLC, he is in privity with the LLC and National Union is the subrogee of GALIC,

        thus satisfying the "same parties" test. Finally, he contends that the default judgment entered

        against DiMucci LLC operates as a final judgment. Based on this reasoning, DiMucci argues

        that GALIC's failure to pursue in the adversary proceeding recovery from him personally under

        the various state-law theories raised in this case operates as a bar to National Union's present

        claims against him. This is clearly wrong. But it is not because the bankruptcy court was not a

        court of "competent jurisdiction" and thus could not finally adjudicate National Union's state-law

        claims. Rather, it is because GALIC's claim against DiMucci LLC and National Union's claims

        against DiMucci individually are not the "same claims."

¶ 105          GALIC's claim against DiMucci LLC was based on the stipulation (whether or not that

        stipulation was authorized by DiMucci), which required Logan and Wells Fargo to direct any

        payment on DiMucci LLC's bankruptcy claim for unpaid rent to GALIC, the lender that had

        foreclosed on the property after DiMucci LLC defaulted. The only claim before the bankruptcy

        court was whether, in fact, Logan and Wells Fargo acted contrary to the stipulation and clearly

        they did. Moreover, the adversary proceeding was the appropriate forum in which to litigate


                                                      -39-
        1-12-2725


        whether the stipulation was binding on DiMucci LLC, but since DiMucci LLC defaulted in the

        matter, that issue is foreclosed.

¶ 106          National Union's claims here do not seek to litigate whether the payment to DiMucci

        LLC was mistaken. That fact has already been finally established and is merely the starting

        point for National Union's current claims. National Union's claims against DiMucci personally

        are based on his conduct in converting the check mistakenly issued to DiMucci LLC by

        depositing it into his personal account and refusing to return the funds after being notified that he

        was not entitled to them.      National Union's state law claims have nothing to do with the

        bankruptcy proceedings per se.       GALIC and DiMucci individually were not creditors of

        Montgomery Ward's bankruptcy estate. National Union's claims against DiMucci individually

        do not stem from the bankruptcy itself nor would they be resolved in the claims allowance

        process. Stern v. Marshall, ___ U.S. ___, ___, 131 S. Ct. 2594, 2618 (2011). Thus, GALIC was

        not required to assert those claims in its adversary proceeding and res judicata does not preclude

        National Union, as subrogee of GALIC, from pursuing relief against DiMucci individually.

¶ 107          GALIC's adversary proceeding was indeed a "core" proceeding under the Bankruptcy

        Code. It concerned an allegedly mistaken payment from Montgomery Ward's bankruptcy estate

        to a creditor of the estate and thus concerns the administration of the bankruptcy estate. 28

        U.S.C. § 157(b)(2)(A) (2006).        The payment was effected by entities appointed by the

        bankruptcy court and operating under its authority. There is no other forum in which GALIC

        could have obtained the relief it sought: an order holding all of the defendants in the adversary

        proceeding—Montgomery Ward, Logan as the claims agent, Wells Fargo as the disbursing agent

        and DiMucci LLC as the recipient—jointly and severally liable for the erroneous payment.

        Because the payment was made from Montgomery Ward's bankruptcy estate, the bankruptcy


                                                        -40-
        1-12-2725


        court had exclusive jurisdiction to determine whether the payment to DiMucci LLC was proper.

        28 U.S.C. § 157(b)(1) (2006). And once the default judgment was entered against DiMucci

        LLC, DiMucci LLC and its privies, i.e., DiMucci, were precluded from collaterally attacking that

        judgment. Thus, under res judicata the trial court could properly have precluded DiMucci from

        litigating the validity of the stipulation or attempting to prove that the payment to DiMucci LLC

        was proper.

¶ 108          On this point, DiMucci takes inconsistent positions. On the one hand, he contends that

        National Union is precluded from litigating its claims against him personally because he was in

        privity, for res judicata, purposes, with DiMucci LLC, of which he was the sole member. Yet,

        DiMucci simultaneously contends that he could not have challenged the validity of the

        stipulation in the bankruptcy court because he was not a party to the adversary proceeding. This

        latter contention is without merit given that, as the sole member of DiMucci LLC, DiMucci

        could have challenged the authority of his company's lawyer to enter into the stipulation on

        behalf of DiMucci LLC. Further, the failure of DiMucci LLC to challenge the validity of the

        stipulation in the adversary proceedings precludes DiMucci from collaterally attacking the

        bankruptcy court's final order premised on the existence of the stipulation. I would affirm based

        on the preclusive effect of the default judgment entered in the adversary proceeding and the lack

        of any genuine issue of material fact as to whether DiMucci personally benefited from the

        mistaken payment at National Union's expense.




                                                      -41-
