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Peoples Gas v. Chicago Black Imp. Ass'n

OPINION FILED OCTOBER 14, 1986.

PEOPLES GAS, LIGHT & COKE COMPANY, PLAINTIFF-APPELLEE,

v.

CHICAGO BLACK IMPROVEMENT ASSOCIATION, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Cook County; the Hon. Thomas Rakowski, Judge, presiding.

JUSTICE BUCKLEY DELIVERED THE OPINION OF THE COURT:

The subject of this appeal is a default judgment in the amount of $38,158 entered by the circuit court of Cook County in behalf of plaintiff, which had filed an action against defendant to recover that sum for unauthorized use of natural-gas services. Defendant contends that the trial court abused its discretion in entering the default judgment, that defendant's refusal to comply with plaintiff's notice to produce documents was not unreasonable, that the default judgment was improperly entered because the defendant had filed a verified answer denying liability which had never been stricken, and that the entry of the default judgment was unjust.

On August 21, 1984, plaintiff filed a two-count complaint which alleged that upon inspection of the property located at 1509-11 East 69th Place in Chicago, plaintiff discovered that defendant converted natural gas owned by plaintiff for defendant's use. On September 19, 1984, defendant filed an appearance and an answer which denied plaintiff's allegations. Two days later plaintiff filed a notice to produce which requested, inter alia:

"1. All deeds, contracts, leases, insurance policies, trust documents, beneficial interests, assignments and letters of direction, concerning the property in question.

2. All corporate books, records, resolutions, minutes, stock certificates, subscription agreements, income tax returns concerning the corporate entity during the period of time in question.

3. All books of account, ledgers, rent receipt books, checkbooks, cancelled checks pertaining to the operation of the corporate entity and/or the property in question.

4. All gas bills and/or other fuel bills, and all cancelled checks, cash receipts, etc., reflecting payment of same, pertaining to the property in question during the period of time as set forth in the complaint.

5. All correspondence by and between the parties, Illinois Commerce Commission, or other persons pertaining to the gas service furnished to the property in question."

Plaintiff also requested Arthur Sloan, the secretary of defendant, and Reverend Eugene Gray to appear for a deposition.

On October 1, 1984, Arthur Sloan appeared for the deposition and brought certain deeds and other documents requested by plaintiff. In the deposition, Arthur Sloan testified that he was the secretary of defendant, the Community Redemption Corporation (CRC), and the First Church of Deliverance (church), Sloan added that although the church, through defense counsel, Bernard Allen Fried, established the CRC in 1970 to develop and maintain real estate holdings for the church, defense counsel established defendant in 1979 for purposes similar to the CRC. Defense counsel was treasurer and comptroller for both corporations. No one in the church supervised defense counsel, who had represented the church since 1969. According to Sloan, defense counsel issued annual financial reports to the board of directors of the church and approved the reports in Sloan's name since he had Sloan's power of attorney. Sloan added that he was unfamiliar with the property located at 1509-11 East 69th Place, that it was not purchased by the church, and that defense counsel may have purchased it in behalf of the church.

On October 10, 1984, defense counsel sent plaintiff a letter which indicated that counsel would not comply with plaintiff's request to produce because the information sought was "overbroad and irrelevant" to the litigation and would not be available to plaintiff until a judgment had been entered against defendant.

Apparently, thereafter plaintiff filed a motion to compel defendant to produce all documents previously requested and for the entry of sanctions in accordance with Supreme Court Rule 201(k) (87 Ill.2d R. 201(k)). The motion alleged that although defendant provided certain deeds and other documents it failed "to produce any corporate books and records, or corporate financial records" and that the parties had conferred but had been unable to resolve their differences.

On January 7, 1985, an order was entered compelling defendant to comply with plaintiff's request for the production of documents by January 24, 1985, and permitting plaintiff to file its motion for sanctions pursuant to Supreme Court Rule 201(k).

On February 1, 1985, defendant filed a response to plaintiff's motion for sanctions which alleged that it could not comply with plaintiff's request for documents because plaintiff had failed to identify the period of ...


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