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Gatto v. Walgreen Drug Co.

AUGUST 19, 1974.

FRANK GATTO, ADM'R OF THE ESTATE OF SOPHIE GATTO ET AL., PLAINTIFFS AND AS ASSIGNEES OF THIRD-PARTY JUDGMENT-APPELLEES-RESPONDENTS,

v.

WALGREEN DRUG CO. ET AL., DEFENDANTS-THIRD-PARTY PLAINTIFFS AND ASSIGNORS OF THIRD-PARTY JUDGMENT-APPELLEES-RESPONDENTS — (CALUMET FLEXICORE CORPORATION, THIRD-PARTY DEFENDANT-APPELLANT-PETITIONER.)



APPEAL from the Circuit Court of Cook County; the Hon. MEL R. JIGANTI, Judge, presiding.

MR. JUSTICE GOLDBERG DELIVERED THE OPINION OF THE COURT:

Mr. JUSTICE GOLDBERG delivered the opinion of the court:

Rehearing denied November 4, 1974.

This opinion presumes that the reader is familiar with the previous opinion of this court in this same litigation. (Gatto v. Curtis, 6 Ill. App.3d 714, 286 N.E.2d 541, leave to appeal denied, 52 Ill.2d 597.) In December of 1972, after conclusion of all appellate procedure, Calumet Flexicore Corporation (Calumet) petitioned the trial court for relief from the judgment for indemnity theretofore recovered against it by the owners of the beneficial interest in the land trust which held legal title to the property in question (collectively referred to in our previous opinion as "Lessors") which was assigned to plaintiffs. Thereafter a series of petitions, motions and amendments, which will be described later in this opinion as required, were filed. All of these legal maneuvers, and many hearings before several judges of the circuit court, resulted in a stay of execution upon the judgment and in the entry of two orders; one on June 1, 1973, which denied petitions and motions theretofore filed by Calumet for vacation of the judgment against it, and another on August 21, 1973, which denied Calumet's motion to limit execution. Calumet has appealed from both of these orders.

No evidence was heard by the trial court although numerous affidavits and other documents were filed. In our opinion, the taking of evidence is not required for decision of the issues properly before us. Before stating the contentions of the parties in their briefs in this court, we will review and summarize the massive and repetitious record. We will attempt to confine this statement to material matters so that the reader of this opinion will not be confronted with the manifold difficulties encountered by the writer. Perhaps the subheadings will assist in presentation of the pertinent issues. *fn1

I.

Previous Motions In The Appellate Court.

Our former opinion, filed June 26, 1972, noted the suggestion of the death of plaintiff, Sophie Gatto, on January 17, 1970. The same motion by the surviving plaintiff which made this suggestion set forth that Lessors had assigned the judgment which they had recovered against Calumet, in the amount of $120,000, to plaintiff. The parties to the assignment had agreed that if the judgment against Calumet was affirmed on appeal, $60,000 thereof would be paid to the Lessors plus one-half of the expenses of the appeal. In addition, there was a substitution of attorneys so that Lessors were represented in the initial appeal by the same counsel who represented the plaintiffs. (Moriarty, Rose & Hultquist, Ltd.) See 6 Ill. App.3d 714, 720, 721.

On July 17, 1972, Calumet filed in this court a motion to reduce the third-party judgment against it to $60,000, which sum was described as being the amount which the Lessors paid to plaintiffs in release and discharge of their obligation under the judgment. This motion was supported by an affidavit by one of the trial attorneys for Calumet. It stated that on July 6, 1972, he had been told in a telephone conversation with one of the trial attorneys for plaintiffs, that prior to the death of plaintiff, Sophie Gatto, the judgment of plaintiffs against the Lessors was satisfied for the sum of $60,000. The affidavit further stated that one of the trial attorneys for the Lessors had refused to provide any information. Attorneys for plaintiff filed a response to this motion including an affidavit which set forth a totally different version of the telephone conversation. This affidavit stated that the assignment of judgment contained the full and complete agreement between plaintiffs and the Lessors. On August 3, 1972, this court ordered that the motion to reduce the judgment "be denied without prejudice and with the suggestion that this motion be presented to and acted upon by the Trial Court."

II.

Calumet's Petitions For Stay Of Execution, Etc.

On December 8, 1972, Calumet filed its petition for stay of execution in the trial court. This alleged that, despite repeated requests, opposing counsel representing plaintiff and the Lessors had refused to disclose to Calumet the details of the settlement agreement and arrangement between them other than the assignment of judgment. Calumet prayed a stay of execution pending determination of the questions of fact surrounding this situation. Plaintiff filed a motion to dismiss this petition, raising the point that the petition was barred by limitations. Ill. Rev. Stat. 1971, ch. 110, par. 72.

On December 13, 1972, Calumet filed a petition for reduction of the judgment against it to the amount actually paid to plaintiffs on behalf of the Lessors, for stay of execution and for leave to engage in discovery proceedings. This petition was expressly predicated upon section 72 of the Civil Practice Act and claimed fraudulent concealment from Calumet as the basis for delay in seeking relief. Ill. Rev. Stat. 1971, ch. 110, par. 72(3).

On January 19, 1973, Calumet filed an amended motion and a lengthy amended petition. This petition also prayed for discovery, for relief under section 72 of the Civil Practice Act and for partial satisfaction of the judgment against it to conform to the amount actually paid by Lessors to plaintiff.

III.

Subsequent Proceedings And The Agreement Not To Execute, Dated August 1, 1969.

After the filing of the above pleadings, which included a large number of exhibits such as other motions, affidavits and even briefs, which need not be described in detail, a lengthy hearing was conducted by the trial court on February 15, 1973. After studying the pleadings and all other matters and hearing argument of counsel, the court announced that he would enter an order granting counsel for Calumet the right to take depositions of certain parties on written interrogatories.

On February 22, 1973, before the court had entered any order, counsel for plaintiff communicated with the attorney for Calumet, and with the trial judge. The lawyers met for a conference with the judge. Counsel for plaintiff there tendered to the attorney for Calumet a copy of a five-page agreement handprinted on legal size ruled paper of the type frequently used by attorneys, signed by plaintiffs Frank Gatto and Sophie Gatto, now deceased, and having their signatures on the margin of each page. The agreement was witnessed by two trial attorneys for plaintiffs. The agreement is dated August 1, 1969, which was a Friday. The trial of the original action in the circuit court had commenced on Monday, July 28, 1969, and the cause remained on trial until judgment was entered on the jury's verdicts on Wednesday, August 13, 1969.

This agreement provided that in consideration of the sum of $80,000, receipt of which was acknowledged by Frank and Sophie Gatto, from the Lessors, said plaintiffs agreed not to execute on any judgment against the Lessors rendered in the cause then on trial, or in subsequent litigation involving the same occurrence, in any amount in excess of $80,000. Plaintiffs also acknowledged receipt of $15,000 paid by other defendants Louis F. Sladky and others, lessees of the involved premises, in consideration of which plaintiffs agreed not to execute in any amount in excess of $15,000 against these defendants.

The agreement further recited the pendency of third-party actions and counterclaims brought by both of said groups of defendants and provided that in the event of recovery by the Lessors in such proceedings, whether in excess of or less than $80,000, any amount up to and including $80,000 should become the property of the Lessors, or the entity which had advanced $80,000 to plaintiffs, and any amount in excess should be paid to plaintiffs. A similar covenant was stated regarding payment by the lessees to plaintiffs. The agreement also provided that if judgments were rendered in such third-party action, or counterclaims, the respective defendants had the option of collecting the judgment themselves, or permitting plaintiffs to do so at their own expense.

The agreement also contained a paragraph which was deleted therefrom. This deletion was acknowledged by the signatures of the trial attorneys for plaintiffs, for the Lessors and for the lessees, Louis F. Sladky and other defendants. (The jury had returned a verdict in favor of the lessees, Sladky, et al., and against plaintiffs.)

The record shows that the sum of $80,000 mentioned in the agreement was actually paid to plaintiffs or their attorneys. A copy of the insurance draft by which this was ...


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