Petitions For Relief From Judgments Under 7351lcs 5/2-1401
By Kimberly A. Davis and James F. Mccluskey
Pursuant to the Illinois Code of Civil Procedure, a litigant is allowed the proverbial two bites at the apple to vacate a default order or other final order or judgment. Practitioners should be aware of the distinctions among the two statutes which allow such relief, as well as a cautionary instruction regarding the statute of limitations.
Motions to Vacate within 30 Davs
The first opportunity to vacate a default order, final order or judgment is described in 735 ILCS 5/2-1301. Section 1301 is a discretionary rule allowing the court to set aside a default order before final order or judgment. Additionally, Section 1301 allows the court to vacate a final order or judgment upon motion filed within 30 days after its entry, and "upon any terms and conditions that shall be reasonable.,,1 In essence, so long as the moving party provides the Court with a reasonable justification for vacating the order or judgment, the Court will likely exercise its discretion and grant the motion.2 In granting such a motion, however, the Court is not obligated to set aside the final order or judgment as to all parties; in the event the Court limits its order vacating to the moving party, the final order or judgment remains binding as to the other parties.3
Relief after 30 Davs from entry of Final Order or Judament
If the final order or judgment was entered more than 30 days prior to the filing of any motion to vacate, the Illinois legislature affords a litigant a second chance for relief under 735 ILCS 5/2-1401. In order to seek relief from a final Order or Judgment that is entered after 30 days, a petition must be filed pursuant to 735 ILCS 5/2-1401. Courts have long noted that the purpose of the 1401 petition is to make the court aware of those facts which do not appear in the record that, if known, would have prevented entry of the final order or judgment. See. e.g. Prenam No. 2, Inc. v. Village of Schiller Park, 2006 WL 2381564 (1st Dist. 2006).
Requirements for the Petition to Vacate
The time limitation on the filing of the petition is two years from the date of the final order or judgment. The only exceptions to the two-year filing period are when the person seeking relief is under legal disability or duress, or when the ground for the relief is fraudulently concealed.4 A petition to vacate filed under Section 1401 must be filed in the same proceeding and must be supported by affidavit "or other appropriate showing as to matters not of record.,,5
According to the statute, the petitioner must show, based upon a preponderance of the evidence, (1) the existence of a meritorious defense or claim; (2) due diligence in presenting the defense or claim in the original action; and (3) due diligence in filing the petition. See, ~ Smith v. Airoom, 499 N.E.2d 1381 (III. 1986); Juszcyzk v. Flores, 777 N.E.2d 454 (1st Dist. 2002). The decision regarding whether to grant or deny a petition to vacate lies within the sound discretion of the court and depends upon the equities involved and the facts presented. Pirman v. A&M Cartage, Inc., 215 III. App. 3d 993, 674 N.E.2d 874 (1st Dist. 1996). As the Illinois Supreme Court recently noted, such an equitable power should be exercised" for the prevention of injury and for the furtherance of justice." Paul v. Gerald Adelman & Associates, Ltd., 223 1I1.2d 85, 858 N.E.2d 1 (III. 2006).
According to the rule, "All relief heretofore obtainable and the grounds for such relief heretofore available, whether by any of the foregoing remedies or otherwise, shall be available in every case, by proceedings hereunder, regardless of the nature of the order or judgment from which the relief is sought or the proceedings in which it was entered." (Emphasis added.) These petitions do not affect the Order or judgment or suspend its operations, such as collection procedures initiated after the judgment.
Requirement Number 1:
The first requirement, that the petitioner show the existence of a meritorious defense or claim, is self-explanatory and easy to meet.
Requirement Number 2:
Due Diligence in the Underlying Action
A petitioner must show the Court that his failure to prosecute or defend a lawsuit was the result of an excusable mistake and that, under the circumstances, she acted reasonably and not negligently in failing to resist the judgment. Id. It is within the sound discretion of the Circuit Court, depending upon the facts and equities presented by the petitioner, as to whether or not such a petition should be granted. Ostendorf v. International Harvester Co., 433 N.E.2d 253 (1982) (emphasis added). There is no bright line rule for judging due diligence. Paul v. Gerald Adelman & Associates, Ltd., 233 III. 2d 85, 306 III. Dec. 556 (III. 2006) (noting that a six-month delay in filing a Section 1401 petition "does not, ipso facto, demonstrate a fatal lack of diligence.") ~ at 100.
In this key element of the petition, the petitioner must set forth in detail the "facts and equities" which support petitioner’s efforts to diligently prosecute or defend the underlying case via Affidavit and relevant documentation. This documentation could consist of letters to opposing counsel, service attempts, compliance with the Court’s orders, appearance in court, and the like. It is key to remember that a petitioner may not rely upon conclusions when fashioning her petition. She must submit a factual affidavit and should include documentation supporting petitioner’s diligence.
If the respondent to the petition believes that the petitioner lacked diligence in the underlying action, it would behoove her to apprise the court of this via respondent’s own affidavit and documents (e.g., Rule 201 (k) letters, copies of court orders concerning discovery, DWP orders, etc. that illustrate petitioner’s lack of diligence in the underlying case(s)). Inclusion of evidentiary documentation and material in either side’s pleadings assures that, in the event the matter is appealed, the appellate court would have the benefit of reviewing a more comprehensive record.
The Illinois Supreme Court in its decision in Smith v. Airoom, Inc., 114 1I1.2d 209 (1986), stated that a party relying on a Section 1401 petition must show that he failed to appear because of an excusable mistake and not because of his own fault or negligence. In determining the reasonableness of the excuse offered by the petitioner, all of the circumstances intended upon the entry of a judgment must be considered, including the conduct of the litigants and their attorneys. In 2005, the First District noted that "the current trend in Illinois ... [has] been to relax the due diligence standard where necessary to prevent the unjust entry of default judgments and to effect substantial justice." Coleman v. Caliendo, 361 III. App. 3d 850, 838 N.E.2d 155, 159 (1st Dist. 2005), citing In re County Treasurer, 347 III.App.3d at 774,283 III. Dec. 201, 807 N.E.2d 1042, quoting Pirman v. A&M Cartage, Inc., 285 III. App. 3d 993, 1003, 674 N.E.2d 874 (1996).
In evaluating the diligence of the petitioner, Courts have considered the principals of justice and clean hands. For example, a party opposing a petition to vacate may not benefit from his conduct, or lack thereof, in notifying the petitioner of the action taken by the Court in the underlying case. In Halle v. Robertson, 219 III. App. 3d 564, 579 N.E.2d 1243 (2d Dist. 1991), the court specifically noted the fact that "plaintiff failed to notify defendant of the entry of the default judgment in a timely manner, [and] failed to place the garnishment summons for service in a timely manner" as "clearly sufficient grounds" to vacate the default. Likewise, in Pirman v. A&M Cartage, Inc., 285 III. App. 3d 993,1003-4,674 N.S.2d 874 (1st Dist. 1996), the court held that the plaintiff’s failure to provide notice of entry of default preventing the defendant from discovering a default until citation proceedings required vacating the default "even absent due diligence".!Q. As Halle noted, "all of the circumstances ... including the conduct of the litigants and their attorneys" factor into reasonableness. Halle v. Robertson, 219 III. App. 3d 564, 569, 579 .E.2d 1243 (2d Dist. 1991).
Likewise, in Cunningham v. Miller’s General Insurance Company, 188 III.App.3d 689, 554 N.E.2d 441 (4th Dist. 1989), the Fourth District determined that a reasonable and excusable mistake for failing to file an answer and defenses was the "breakdown in defendant’s customary procedure for processing legal documents." 1st. at 694-5. In Cunningham, the defendant was served with the complaint, forwarded it to counsel in Chicago who prepared an answer and then arranged for local counsel in Decatur to file the answer after delivery by a service. 1st., at 691. However, the answer "never arrived." 1st. "The first anyone knew of the problem was when plaintiffs garnisheed defendant’s bank account." Id. When an excusable mistake is not noticed and petitioner’s counsel acted properly to answer the complaint, petitioner should be allowed to have its day in court. Cunningham, 188 III.App.3d at 694-5.
Requirement Number 3: Due Diligence in Filing the Petition to Vacate
Courts have consistently held that in order for a judgment to be vacated, the party seeking relief must diligently pursue a petition to vacate. Smith v. Airoom, 1387. Due diligence requires that the petitioner have and present to the Court evidence by a preponderance of reasonable excuse(s) for failing to act within the appropriate time. Smith, 499 N.E.2d 198. Diligence requires that the petitioner possess "reasonable excuse" for failing to act within the appropriate time and that when he failed to object to the judgment, he acted reasonably and not negligently. Id. at 1387. Further, in order to grant a petition to vacate, the petitioner must prove that entry of the order was not known to the petitioner and could not have been discovered utilizing reasonable diligence. See Jusczyk v. Flores, 334 III. App. 3d 122, 128, 777 N.E.2d 454 (1st Dist. 2002).
Numerous courts have held that a mere failure to receive notice of the order or judgment by the petitioner in the underlying case is not a circumstance sufficient to grant a Section 1401 petition to vacate. See, e.Q. Fiallo v. Lee, 205 WL 659122 (III. App. 1st Dist. 2005) (holding that plaintiff’s sole excuse for not moving to vacate a default judgment sooner consisted of a lack of notice and that such claim did not amount to "evidence of her due diligence" since she failed to apprise herself of the status of the case; thus her petition to vacate should have been denied); Jusczyk v. Flores, 334 III. App. 3d 122, 777 N.E.2d 454 (1st Dist. 2002) (holding that two and a half-month delay in filing petition to vacate judgment on an arbitration award where defendant claimed he received notice of the arbitration hearing was not diligent); Gall v. Flash Cab Co., 100 III. App. 2d 64, 41 N.E.2d 673 (1st Dist. 1968).
Notice of the Petition to OpposinQ Parties
According to Section 1401, service of the petition to vacate must be had in accordance with Supreme Court Rule 106, which directs that service shall be given by the methods provided in Supreme Court Rule 105. Service must be had on the opposing party, and not her attorney in the underlying action, since that party may no longer be represented by the same attorney. Public Taxi Service, Inc. v. Ayrton, 15 III. App. 3d, 304 N.E.2d 733 (1st Dist. 1973). As such, service of the Section 1401 petition must be given by (1) summons to the person or member of household; (2) by prepaid certified or registered mail to the opposing party; or by publication with affidavit.8 Invalid notice results in a lack of jurisdiction, rendering subsequent orders invalid. Welfelt v. Schultz Transit Co., 144 III. App. 3d 767,772,494 N.E.2d 699 (1st Dist. 1986).
An examination of Illinois case law reveals that there are two general exceptions to the service rule. First, a party waives the jurisdictional defect and is deemed to have entered a general appearance when she appears and argues the merits of the petition. Welfelt v. Schultz Transit Co., 144 III. App. 3d 767, 772, 494 N.E.2d 699 (1st Dist. 1986). The second, and more narrow exception, allows for service of the petition upon the party’s attorney of record in the original proceeding where the attorney is representing the same party in court in a matter "ancillary to the original judgment." lQ.
Opposition to the Petition to Vacate
In addition to the jurisdictional issues discussed above, the responding party may object to the substance of the Section 1401 petition to vacate. Initially, if the petition is insufficient in any way, the respondent must initially file a motion to strike the petition; otherwise, she waives the objection. Selvaggio v. Kickert School Bus Line, Inc., 46 III. App. 2d 398, 197 N.E.2d 128 (1st Dist. 1964). A Section 1401 petition is a new cause of action subject to civil practice rules, is considered in the same manner as a civil complaint, and is subject to dismissal if it "fails to state a cause of action or shows on its face that the petitioner is not entitled to relief." Ostendorf v. International Harvester Co., 433 N.E.2d 253 (1982).
If the non-moving party responds to the allegations contained in the petition, an evidentiary hearing must be held where the petitioner must prove the factual allegations in her petition by a preponderance of the evidence, based upon all of the circumstances of the underlying case. .!s:L
Vacating a DWP Order in a Re-Filed Case
If a plaintiff is attempting to vacate a DWP order in a case that was previously voluntarily dismissed, the defendant may have a statute of limitations defense to the Section 1401 petition. In the event a lawsuit was previously dismissed pursuant to 735 ILCS 5/2-1009, the Illinois Code of Civil Procedure allows for re-filing of said action within one year from date of entry of said dismissal order (or within the remaining period of limitation). 735 ILCS 5/13-217. This statute affords, essentially, a one-time re-filing. After the second opportunity to file a lawsuit following a voluntary dismissal, a plaintiff cannot file any additional suits against the same defendant arising out of the same occurrence. Rodgers-Orduno v. Cecil-Genrer, 728 N.E.2d 62 (2d Dist. 2000).
A petition to vacate pursuant to 735 ILCS 5/2-1401 "must be filed in the same proceeding in which the order or judgment was entered but is not a continuation thereof." 735 ILCS 5/2-1401 (b) (emphasis added); Kulhavy v. Burlington Northern Santa Fe Railroad, 785 N.E.2d 928, 933 (1st Dist. 2003). As such, if a Section 1401 petition to vacate is filed after expiration of the statute of limitations, the petition should be denied. Kulhavyat 394 (involving a FELA statute of limitations).
In Kulhavy, plaintiff filed his Section 1401 petition nine months after expiration of the applicable statute of limitations. Plaintiff claimed that he never received notice of the Court date which plaintiff did not attend and when plaintiff’s case was dismissed for want of prosecution. In denying plaintiff’s petition to vacate, the First District held that a Section 1401 petition is considered a "new action" and not a continuation of the underlying case; since the federal statute of limitations for plaintiff’s claims had expired prior to plaintiff filing his "new action", plaintiff was not entitled to relief. Id.
Although Kulhavy involved a federal statute that essentially pre-empted the one year re-filing rule and potential tolling of the statute of limitations following a notice of voluntary dismissal, this case provides practitioners with a stern warning that diligent prosecution of a case could prove fatal in a future Section 1401 petition to vacate. For example, a plaintiff is injured on January 1, 2002; the statute of limitations for a bodily injury is two years (January 1, 2004). Suit is timely filed on June 1, 2003, but is voluntarily dismissed 18 months from the date of filing on December 1, 2004 (thus allowing for re-filing of the lawsuit within one year and tolling the statute of limitations from January 1, 2004 to December 1, 2005). Plaintiff waits until 11 months following the voluntary dismissal to file a new suit on November 1, 2005. That suit is dismissed for want of prosecution two months later on January 1, 2006. Plaintiff files her Section 1401 petition 60 days later on March 1, 2006. Since the filing of the petition (March 1, 2006) is a "new action", the filing occurs after expiration of the statute of limitations (December 1, 2005) and should be dismissed with prejudice pursuant to Kulhavy.
The Underlying Case
The appellate courts for almost 30 years have held that a Section 72 petition [now Section 1401] is to determine the propriety of vacating the prior judgment and is not concerned with litigating the merits of the underlying complaint. See Ruben H. Donnelley Corp. v. Thomas, 79 III.App.3d 729, 730 (1 st Dist. 1979). The Thomas court clearly held that it is improper to argue the ultimate facts relating to a defense, or to refute a defendant’s ultimate success in order to oppose vacating a default. Id. As the court stated, it "is not the trial court’s responsibility to determine the merits of the underlying cause of action." Id. This rule of law has been steadfastly followed for decades. See, Cunningham v. Miller’s General Ins. Co., 188 IILAp.3d 689, 693 (4th Dist. 1989) (affirming vacated judgment and holding "conflict of facts goes to merits ... It does not affect whether there is the existence of a meritorious defense"); Halle v. Robertson, 219 IILApp.3d 564, 569-70 (2nd Dist. 1991) (affirming vacated judgment and holding 1401 petition does not "determine the ultimate outcome of the proceeding"); Smith v. Cole, 256 IILApp.3d 806, 811-12 (1st Dist. 1992) (affirming vacated judgment and holding plaintiff’s "counter-affidavits disputing the factual basis of the claim defense" were improper); Pirman v. A&M Cartage, Inc., 285 IILApp.3d 993, 1001-04 (1st Dist. 1996) (affirming vacated judgment and holding plaintiffs’ counter-affidavits could not refute 1401 petition and defenses and were not preemptive).
However, if the petitioner was dilatory in prosecuting or defending the underlying case(s), then respondent must bring these "additional facts" to the attention to the Court to defeat the petition.
The general rule is that Section 1401 petitions for relief must affirmatively set forth specific factual allegations supporting each of the following elements:
1 The existence of a meritorious defense or claim;
2 Due diligence in presenting this defense or claim to Circuit Court in the original action; and
3 Due diligence in filing the Section 1401 petition.
In opposing such a petition, a practitioner must be mindful to not waive a client’s rights by submitting to the jurisdiction of the court and/or failing to preserve her client’s right to substantively object to the petition in writing and at hearing by first moving to strike the petition.
While there is no bright line for judging due diligence, attorneys are urged to monitor the progress of their cases to avoid the effort associated with seeking relief from a final order or judgment.
1 735 ILCS 5/2-1301(e)
3 735 ILCS 5/2-1301(f)
4 735 ILCS 5/2-1401(c)
5 735 ILCS 5/2-1401(b)
6 735 ILCS 5/2-1401(a)
7 Service is not complete until the notice and petition are received by the opposing party and the registry receipt serves as prima facie evidence thereof. S.C.R. 1 05(b).
8 S.C.R. 1 05(b)
Kimberly A. Davis and James F. McCluskey Momkus McCluskey Monroe Marsh & Spyratos, LLC