Page 22 - John Hundley 2008

However, citation proceedings are derived from the creditor’s bill in equity, not garnish-
ment statutes, and as codified in the old Civil Practice Act citations were subject to the
command that that Act be liberally construed. Moreover, the principle that one interprets statutory
provisions granting powers as jurisdictional has been undercut greatly by the fact that Illinois now has
circuit courts of general jurisdiction. The 7th Circuit’s implication that Rule 69 permits federal courts
to pick and choose which parts of state judgment-enforcement law they wish to respect is doubtful,
but its conclusion that the 6-month provision of Rule 277 is not a jurisdictional issue subject to strict
construction is on more solid ground. Moreover, the conclusion that the 6-month deadline can be
implicitly waived has much force.

MAT also invoked § 2-1402(c)(1), providing that a court can order turnover of “choses in action,
property or effects in his or her possession or control . . . to which his or her title or right of possession
is not substantially disputed”. Because MAT disputed the debt, it argued that the turnover order was
improper. However, the court noted that § 2-1402(c)(1) applies only to orders against judgment
debtors, and there is no “no-dispute” clause in provisions applicable to third parties. Accordingly, it
ruled that the district court was empowered to resolve the third party’s dispute by way of
evidentiary hearing and to enter the order against the third party. We think this conclusion
correct; contrary to common assumption, the no-dispute rule is a protection of the absent third-party’s
right to present evidence that he does not owe the debt (or in the amount claimed), not an analog to
the old garnishment maxims that the debt be due and liquidated.
Laborers’ Pension Fund does not dispel all questions which lurk when citations
are employed. In fact, it raises some new ones. Key among these are the lien
effects of a citation. Historically, citations created no lien; liens on personal property
were created by delivering a certified copy of the judgment to the sheriff (see 735
ILCS 5/12-111). However, citations were permitted to include a transfer-restraint
provision (see § 2-1402(f)(1)), and they often did. The date of service of a citation
with such a restraint started being treated as a date of attachment in priority disputes,
particularly in bankruptcy contexts, and out of that practice arose the idea that
service of a citation on a judgment debtor effected a lien on all his non-exempt
personal property. Eventually § 2-1402(m)(1) was added, so providing.

But what does this mean? If the debtor fails to disclose certain property at the citation examina-
tion and the proceeding is closed, has the creditor lost his priority if the property is later discovered?
What if property is not disclosed but the citation is never formally dismissed? Does the lien continue?

And since § 2-1402(m)(2) extends the lien principle to property in the possession of third
parties, how long are they affected? This question is important in light of the fact that third-party
citation proceedings are often extended, formally or informally, pending the respondent’s production
of documents, the creditor’s review of same, etc. Often the proceedings then are thought to “die on
the vine” for lack of a subsequent order under Rule 277(f). Given Laborers’ Pension Fund, to avoid
later claims that they violated the lien of an informally-extended citation, or failed to comply with the
citation’s demands, prudent third parties now will demand formal dismissal orders

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