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GENERAL TELEPHONE CO. OF ILLINOIS v. ROBINSON

July 23, 1982

GENERAL TELEPHONE COMPANY OF ILLINOIS, A CORPORATION, PLAINTIFF,
v.
CHARLES ROBINSON, ET AL., DEFENDANTS.



The opinion of the court was delivered by: J. Waldo Ackerman, Chief Judge.

ORDER

This is an interpleader action filed by General Telephone Company to determine who has priority among the competing claimants as to $83,916.28 which General Telephone owes under a contract entered into with C & R Cable Splicing Contractor on March 23, 1976. The sum total of the claims exceeds the amount due under the contract. The question simply is, under Illinois law, which creditors' claims have priority. Although the question is simple, the answer, unfortunately, does not lend itself to easy resolution.

The various claimants, the amounts of their respective claims, the dates those claims arose, the dates those claims were allegedly "perfected," and the manner in which those claims were allegedly perfected are set forth as follows:

                               Date              Date            Manner
                               Claim             "Per-           Of Per-
   Claimant       Amount       Arose             fected"         fection
J.A.W.       $2,740.50        Judgment        Sept. 6, 1978    Service of
Contractor   plus 74.80 costs  obtained                        Garnishment
               --------
               2,815.30        Against                             Summons
                               C&R Cable                                on
                               Splicing, Inc.                    Gen. Tel.
                               July 2, 1978
Roland         3,600.71        Mechanic's      Oct. 20, 1978     Notice of
Machinery                      lien on                           claim for
Company                        materials                       lien served
                               furnished                           on Gen.
                               between April                      Tel. and
                               10, 1978 and                        Charles
                               Aug. 20, 1978                      Robinson
First State   19,947.87        Two judgments   Oct. 19, 1978      Citation
Bank of                        obtained                        to discover
Maple Park                     Oct. 17, 1978                        assets
                               against                              issued
                               Charles                        to Gen. Tel.
                               Robinson and
                               Dorothy
                               Robinson
L.W. Williams  4,780.00        July 27, 1978   Nov. 9, 1978      Notice of
Contractor,                    Mechanic's                       mechanic's
Inc.                           lien                            lien served
                                                              on Gen. Tel.
McLean Co.    35,490.77        Judgment        Jan. 10, 1979   Garnishment
Bank                           obtained                            summons
                               Oct. 24, 1978                     served on
                               against                           Gen. Tel.
                               Charles
                               Robinson and
                               Dorothy
                               Robinson
United        21,036.25        Date of         Dec. 12, 1978        Notice
States                         assessment                      of tax lien
                               of tax                             filed in
                               deficiency:                       office of
                               July 27, 1978                      Recorder
                                                                  of Deeds

              30,145.79        Dec. 18, 1978   Feb. 20, 1979     Notice of
              ---------                                           tax lien
   Total      51,182.04                                           filed in
                                                                 office of
                                                               Recorder of
                                                                     Deeds
Gen. Tel.        603.00        Attorney's
                               fees and
                               costs

Initially, I note that not only is Illinois law concerning the creation of liens unclear, but additionally, the actions of several parties in this case have served to confuse the issues even more. On December 29, 1980, the Government filed a motion for summary judgment in which it asserted that the parties who had proceeded to enforce their claims by way of citation to discover assets, namely J.A.W. Contractor and First State Bank of Maple Park, took prior to the Government's tax liens, but all other creditors took subsequent thereto. At oral argument, the Government turned about face and adopted the position of McLean County Bank. McLean County Bank, in its memorandum of January 28, 1981, asserted that the Government's tax liens took priority over all other liens; that issuance of a citation to discover assets does not create a lien; and, that its lien, created by service of garnishment summons, was second in priority. It also stated that J.A.W. had proceeded by way of citation to discover assets. In response to inquiry by the Court via its order dated November 14, 1981, and filed November 16, 1981, McLean County Bank also did an about face and now claims that its lien is prior to the Government's second tax lien. Moreover, it turns out that J.A.W. Contractor attempted to enforce its judgment by serving a garnishment summons on General Telephone, not by way of citation to discover assets.

Turning now to the legal issues in this case, an initial matter raised by the Trustee is whether First State Bank of Maple Park obtained a final judgment upon which execution could issue. The Trustee contends correctly that a citation may issue only with respect to "a judgment upon which execution may issue." Ill.Rev.Stat. ch. 110A § 277(a)(1981).

The judgment order obtained by First State Bank and entered October 17, 1978, specifically reserved the question of the addition of reasonable attorney's fees and directed the plaintiff to set the issue of attorney fees for prove-up. Moreover, the words "execution may issue" were stricken from the judgment order.

"To be final, an order must conclude the litigation between the parties so that only execution remains to be accomplished if affirmed on appeal." Kulins v. Malco, Inc., 79 Ill.App.3d 982, 985, 35 Ill.Dec. 194, 398 N.E.2d 1144 (1979). Execution may issue only as to final judgments. Wilson-Jump Co. v. McCarthy, Hundrieser and Associates, Inc., 85 Ill.App.3d 179, 40 Ill.Dec. 230, 405 N.E.2d 1322 (1980). The Trustee here relies on Ill.Rev.Stat. ch. 110A § 304 as support for his position that the judgment obtained by First State Bank is not a final judgment. Supreme Court Rule 304 provides that

  [i]f multiple parties or multiple claims for relief
  are involved in an action, an appeal may be taken
  from a final judgment as to one or more but fewer
  than all of the parties or claims only if the trial
  court has made an express written finding that there
  is no just reason for delaying enforcement or appeal.

The Trustee argues that since the question of fees was reserved by the Court, and because no such findings were made, the judgment clearly was not final.

However, Rule 304 applies where multiple parties or multiple claims for relief are involved. "It is not designed to permit appeals from orders that dispose of less than all the issues in an action involving a single party and a single claim." Coble v. Chicago Health Club, Inc., 53 Ill.App.3d 1019, 1021, 11 Ill.Dec. 734, 369 N.E.2d 188 (1977). The question of attorney's fees was merely one issue in an action involving a single party and a single claim. Thus, even a finding under Rule 304 would not have made this judgment appealable. See Coble, 53 Ill.App.3d at 1022, 11 Ill.Dec. 734, 369 N.E.2d 188.

In Wilson-Jump Co. v. McCarthy Hundrieser and Associates, Inc., 85 Ill.App.3d 179, 40 Ill.Dec. 230, 405 N.E.2d 1322 (1980), an indemnity contract provided that the indemnitor would reimburse the indemnitee for all loss, damages, expense and costs and attorney's fees incurred. The court stated that under such a contract, an indemnitee would be entitled to recover reasonable attorney's fees. Id. at 182, 40 Ill.Dec. 230, 405 N.E.2d 1322. The court held, though, that an indemnitee was still required to establish the reasonableness of the fees incurred, stating that an indemnitor is not necessarily liable for the amount the indemnitee unilaterally agreed to pay its attorney. Id. The court went on to state that "[i]n this cause reasonable fees had not been established. Accordingly, it is clear that the order was not a final one upon which execution could issue." Id.

In Songer v. State Farm Fire and Casualty Co., 91 Ill. App.3d 248, 46 Ill.Dec. 715, 414 N.E.2d 768 (1980), the trial court had determined that Country Mutual was responsible for a pro rata share of a loss resulting from a fire, but reserved the question of whether Country Mutual was liable for plaintiff's attorney's fees. When Country Mutual appealed the trial court's determination of liability, the appellate court dismissed the appeal without prejudice for lack of a final and appealable judgment and granted leave to Country Mutual to obtain a final judgment on the question of attorney's fees.

Similar to the indemnity case, in a confession of judgment case, a plaintiff has the burden of establishing his entitlement to a reasonable attorney's fee. Larkin Bank v. Ishak, 43 Ill. App.3d 918, 2 Ill.Dec. 620, 357 N.E.2d 840 (1976). Although the trial judge specifically reserved the issue of attorney's fees in the present case, First State Bank did not proceed with its proof on that matter. Accordingly, it did not obtain a final judgment upon which execution could issue. It follows, therefore, that a ...


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