Chapman Spingola secures trial and appellate court victories through novel merger argument, resulting in the extinguishment of judgment against our client

Chapman Spingola was retained by our client, who was a judgment debtor subjected to aggressive collection proceedings by the assignee judgment creditor. In conducting our investigation, Partner and Co-Founder, Robert Chapman, and Director of Writing and Research, Robert Shapiro, recognized that the sole shareholder of the assignee judgment creditor was also the debtor of a large promissory note in our client’s favor. Prior to our firm’s involvement, the trial court had turned over that note to the original judgment creditor to secure the judgment. After substantial research, we raised a defense based upon the doctrine of merger (a several hundred-year-old equitable doctrine, which no Illinois court had applied outside of the real estate mortgage context).

The trial court, in a forty-eight-page opinion, agreed with our argument that, under this doctrine, the judgment and the debt had merged, and deemed the judgment satisfied, relieving our client of any further obligation and terminating all collection proceedings. The trial court reached this conclusion even though the judgment creditor claimed that defenses to the promissory note existed.

In affirming the trial court, while acknowledging the existence in Illinois of the long-dormant doctrine of merger, the Illinois Appellate Court referred to Chapman Spingola’s winning arguments in urging the adoption of the doctrine under these facts as “novel.” The Court rejected the judgment debtor’s positions that the doctrine should only apply to mortgages and that the trial court erred because the sole shareholder was legally distinct from his corporation that had acquired the judgment. The Illinois Supreme Court denied the judgment creditor’s Petition for Leave to Appeal earlier this year.

In commenting on the result, Robert Chapman noted: “In our sixteen-year history, our firm has repeatedly succeeded by treating each case as unique and by raising creative arguments that have won the day for our clients under difficult circumstances. This is also one more example where our clients benefitted from thoughtfully presented briefs overseen by Robert Shapiro.”