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Dawson v. Duncan





Appeal from the Circuit Court of Champaign County; the Hon. Creed D. Tucker, Judge, presiding.


Rehearing denied July 17, 1986.

The plaintiffs filed a petition in the circuit court of Champaign County seeking to register a judgment against the defendants obtained in the Phillips County circuit court of Phillips County, Arkansas, under the provisions of the Uniform Enforcement of Foreign Judgments Act (Ill. Rev. Stat. 1983, ch. 110, pars. 12-601 through 12-617). Defendant Duncan, the sole appellant here, answered the petition and set up certain defenses: (1) that he had insufficient contacts with the State of Arkansas to cause him to be subject to its long-arm jurisdiction; (2) that his signature on the note which was the subject of the judgment was a forgery; (3) that the attorney who appeared for him in Arkansas was not authorized to do so by him or, alternatively, that the Arkansas attorney had been employed for him by one who had a conflict of interest; and (4) that improper service was made upon him at the time of the filing of the Arkansas complaint.

Thereafter, plaintiffs filed motions for summary judgment against defendants Eldon Fuchs, Marc Fuchs, Howard Lessman, and Duncan. In response Duncan filed a motion to continue the hearing on summary judgment as to him and to consolidate the registration action with another such action growing out of the same transactions and then pending in the circuit court of Champaign County. By appropriate orders the trial court registered the Arkansas judgment and entered summary judgment against Eldon Fuchs, Marc Fuchs, and Howard Lessman. No appeal has been taken from those orders by those defendants. Upon a suggestion as to bankruptcy of Lessman, the trial court vacated the orders as to him.

Still later, after a continued hearing, the trial court entered summary judgment as to Duncan, who then withdrew his motion to consolidate. After his motion to reconsider was denied, this appeal followed. On appeal Duncan raises two issues: (1) whether there were issues of material fact which precluded the entry of summary judgment as to him, and (2) whether it was an abuse of discretion for the trial court to enter summary judgment before he had completed his requested discovery.

A brief recapitulation of the facts is necessary to an understanding of the issues. Duncan is a Roman Catholic priest and serves as director of the Newman Foundation on the campus of the University of Illinois. He became acquainted with defendant Marc Fuchs (Marc) when Fuchs served as a counselor at Newman. Marc afterwards became a lawyer and practices with his father, defendant Eldon Fuchs, at Farmersville, Illinois. The friendship between Duncan and Marc has continued since Fuchs graduated. From time to time they would meet and have dinner together.

In the spring of 1981 Marc told Duncan about certain real estate investments that he and his father had made and Duncan indicated that he would be interested in becoming an investor in such ventures and sent to Marc a rough financial statement.

In July 1981 Marc received a proposed real estate purchase contract from David Johnson, a Memphis, Tennessee, attorney, who had participated in prior real estate ventures with Marc and his father. The contract concerned 4,088.3 acres of land in Marion County, Mississippi, to be sold for $4,292,715. It named Johnson, as trustee, as the seller. It was understood that Johnson would have a 20% interest. Marc executed the contract on behalf of the buyers who were to be himself, his father, Howard Lessman (a retired farmer and long-time friend, client, and business associate of Eldon and Marc Fuchs), Thanad Shay (Eldon Fuchs' son-in-law and a physician in Peoria), and Duncan.

In due course the Germantown Trust Savings & Loan Association of Germantown, Tennessee, made a loan commitment of $3,150,000, or $630,000 each to the five investors. These were to be separate loans but all were contained in one commitment letter, which was sent to Marc. The letter was executed by Eldon Fuchs, Marc Fuchs, and Howard Lessman; in addition, Marc signed for Shay and Duncan by signing their names "by Marc E. Fuchs, his attorney in fact." Marc had no written power of attorney.

The transaction was closed on March 10, 1982, in the office of Jimason Daggett, the plaintiffs' attorney, in Marianna, Arkansas. Three promissory notes were involved: (1) $3,150,000 to the order of Germantown Trust Savings & Loan Association, (2) $600,000 to the order of the Dawsons, plaintiff-vendors, and (3) $426,090 to the order of David Johnson. Duncan's signature appeared on all three notes, as well as on a deed of trust and security agreement and a closing statement. However, only two buyers were present at the closing, Eldon Fuchs and Howard Lessman. The other signatures, those of Marc, Shay, and Duncan, were placed on the instruments by Marc in his law office in Farmersville.

About six months later a modification of the loan agreement was made. Johnson sent the modification agreement to Marc; it required the signatures of the five investors. Eldon Fuchs, Marc, and Howard Lessman signed. Neither Shay nor Duncan signed although their signatures appear on the document. Duncan claimed that he did not authorize anyone to sign for him on either the original documents nor on the modification.

Efforts were made to sell the property, but they appeared unavailing. At one time Marc signed a contract for all five investors as sellers and Emil Verban of Lincoln, Illinois, as buyer, but no closing was ever held.

Other than approximately $160,000 paid at the time of the modification agreement, no payments were made on any of the notes. On April 7, 1983, Jimason Daggett, plaintiffs' attorney, sent to each of the five investors a demand letter, stating that the Dawson note was in default and if it was not paid within 10 days, collection proceedings would be commenced. The letter was sent via certified mail, return receipt requested. On April 11, 1983, Marc called Duncan's office and left a message that he would be receiving a certified letter. Marc stated that Duncan was not to be concerned about it and that he, Marc, would take care of it.

On May 16, 1983, plaintiffs filed suit on their $600,000 note in the circuit court of Phillips County, Arkansas. Duncan was served with summons, whereupon he consulted with Marc and told him that the signature on the attached note was not his. As with the Jimason letter, Marc ...

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