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In Re Estate of Williams

OPINION FILED OCTOBER 19, 1982.

IN RE ESTATE OF KENNETH J. WILLIAMS, DECEASED. — (BETTY P. WILLIAMS, EX'X OF THE ESTATE OF KENNETH J. WILLIAMS, PETITIONER-APPELLANT,

v.

ILLINOIS TRUST AND SAVINGS BANK, RESPONDENT-APPELLEE.)



Appeal from the Circuit Court of La Salle County; the Hon. John David Zwanzig, Judge, presiding.

JUSTICE SCOTT DELIVERED THE OPINION OF THE COURT:

On December 14, 1979, Kenneth J. Williams and Thomas E. Bowers signed a note payable to the Illinois Trust and Savings Bank (ITS) in the amount of $5,000 due on or before March 22, 1980. The note was signed by Bowers individually and in his capacity as owner of the Bowers Excavating Company. No designation was given of the capacity in which Williams signed. Williams' signature appeared in the column for addresses on the note. A second note, in the amount of $22,000, was similarly executed by Bowers and Williams on January 2, 1980. The second note was due on or before April 1, 1980.

Kenneth J. Williams died on March 23, 1980. One day before his death, a renewal note for the remainder of the $4,500 indebtedness, to-wit, $3,626.37, was signed by Thomas Bowers individually and in his capacity as owner of the Bowers Excavating Company. A second renewal note for the remainder of the $22,000 indebtedness, to-wit, $17,902.74, was executed by Bowers on April 1, 1980.

Each of the subsequent notes, as well as the original notes, was secured by certain accounts receivable and by several pieces of personal property owned by Bowers Excavating Company. Assignments of the accounts receivable were executed, and ITS placed liens on and took possession of documents of title to certain vehicles owned by Bowers Excavating. Other loans made by ITS to Bowers Excavating were also secured by the same collateral.

Following Williams' death, ITS filed a claim against his estate for $21,529.11, the total amount due on the notes signed by Williams. The claim was routinely allowed, without notice, by the probate court on July 9, 1980, since no adverse pleadings had been filed by the Williams estate within 30 days of the date of the filing of the claim. Ill. Rev. Stat. 1981, ch. 110 1/2, par. 18-5.

According to an affidavit signed by Stephen C. Myers, attorney for the Williams estate, Myers contacted Frederick W. Irion, counsel for ITS, within 30 days of receipt of a copy of the bank's claim to request data relevant to the evaluation and defense of the claim. On July 17, 1980, attorney Myers mailed a letter to attorney Irion confirming his request for information upon which to evaluate and defend the claim. A second affidavit in the record, this one signed by attorney Irion, refutes attorney Myers' contention that he requested six specific types of information regarding the claim. Attorney Irion's affidavit also indicates that he was not requested by Myers to delay action on the claim; nor was any representation whatsoever made to him by attorney Myers regarding the presentation or manner of handling the claim. On July 25, 1980, attorney Irion referred attorney Myers to a vice-president of ITS for information regarding the claim. No mention of the allowance of the claim was made in attorney Irion's July 25 letter.

A letter from attorney Irion received by attorney Myers on January 7, 1981, was the first notice received by Myers that the ITS claim had been allowed. Slightly more than three weeks later, on January 23, 1981, the executrix of the Williams estate filed an Illinois inheritance tax return claiming a deduction for the $21,529.11 claim allowed by the probate court on July 9, 1980.

The Williams estate filed a motion to open up and vacate the claim allowance on September 15, 1981, some eight months after first learning of the claim's allowance. The trial court authorized discovery, following which an amended motion to open up and vacate the claim allowance was filed by the estate on December 23, 1981. Arguments of counsel were heard by the trial court on January 13, 1982. In a written order dated March 8, 1982, the trial court denied the estate's motion. The rationale for the trial court's decision was the estate's failure to demonstrate reasonable diligence in presenting any defense to the claim and, alternatively, the failure to raise any substantial defense which would justify the vacation of the claim allowance in the interest of justice and fairness.

The present appeal is taken by the Williams estate from the March 8, 1982, order. Our review of the lower court's decision is limited to the question of whether that decision demonstrates an abuse of the discretion accorded to trial courts> in ruling on such motions. (Beverly Bank v. Pentagon Investment Co. (1981), 100 Ill. App.3d 1074, 427 N.E.2d 835.) We find no abuse of discretion in the case at bar.

As a point of reference, we note that section 72 of the Illinois Civil Practice Act, under which the Williams estate filed its motion to open up and vacate the claim allowance, has been recodified as section 2-1401 of the Illinois Code of Civil Procedure. (Ill. Rev. Stat. 1979, ch. 110, par. 72; Ill. Rev. Stat. 1981, ch. 110, par. 2-1401.) The language of former section 72 and new section 2-1401 is identical. Because the court decisions in the case at bar were rendered prior to July 1, 1982, the effective date of the new code, we will refer to the motion at issue as a section 72 petition.

To succeed in vacating the allowance of the claim via a section 72 petition, the Williams estate must affirmatively set forth facts showing both the exercise of due diligence on the part of the estate in presenting a defense to the ITS claim and in presenting the section 72 petition to the trial court. (American Reserve Corp. v. Holland (1980), 80 Ill. App.3d 638, 400 N.E.2d 102.) This the estate has failed to do.

Why the estate did not file objections to the claim within 30 days of the May 3, 1980, filing date of the claim pursuant to section 18-5 of the Probate Act of 1975 (Ill. Rev. Stat. 1981, ch. 110 1/2, par. 18-5) is not apparent. Attorney Myers' affidavit reveals that he was aware of the claim and spoke to counsel for ITS concerning it within the 30-day period. We also question the propriety of the probate court's allowance of the claim, without notice, when only the face of each note was attached to the claim. These questions are not now before us, however.

• 1 Despite the estate's attempt to mask its lack of diligence in filing the section 72 petition by focusing attention on the efforts made by the estate during the summer of 1980 to secure information from ITS relevant to the claim, we find no reasonable explanation given for the eight-month delay (from January 7, 1981, to September 15, 1981) in filing the petition once the estate learned that the claim had been allowed. Furthermore, we believe that attorney Irion's letter of July 25, 1980, to attorney Myers supplied sufficient information to enable the estate to evaluate any possible defenses to the claim and thus to act at a much earlier date to vacate the claim allowance. We must also wonder why attorney Myers did not discover the claim allowance through periodic review of the status of the Williams estate filed, particularly where, as attorney Myers indicated, the estate was somewhat complex and subject to numerous potential claims.

Clearly, the estate failed to exercise due diligence in the presentation of its section 72 petition. We turn now to an examination of the alleged defenses available to the estate. This examination is necessary since the estate's lack of due diligence in presenting its motion to ...


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