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04/25/88 Peter E. Konicki, v. Ray Wirta Et Al.

April 25, 1988

PETER E. KONICKI, PLAINTIFF-APPELLANT AND CROSS-APPELLEE

v.

RAY WIRTA ET AL., DEFENDANTS-APPELLEES AND CROSS-APPELLANTS



APPELLATE COURT OF ILLINOIS, SECOND DISTRICT

523 N.E.2d 160, 169 Ill. App. 3d 21, 119 Ill. Dec. 692 1988.IL.589

Appeal from the Circuit Court of Du Page County; the Hon. Richard A. Lucas, Judge, presiding.

APPELLATE Judges:

JUSTICE REINHARD delivered the opinion of the court. NASH and INGLIS, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE REINHARD

Plaintiff, Peter E. Konicki, holder of a note for $10,875, brought suit in the circuit court of Du Page County to recover the unpaid balance, interest, costs, and attorney fees against the drawers, defendants Ray Wirta and Lucy Wirta, California residents. Following the denial of defendants' special and limited appearance and motion objecting to the jurisdiction of the court over their persons, the circuit court granted summary judgment for plaintiff on the complaint and on a counterclaim by defendants and, subsequently, awarded plaintiff $17,928.08 in principal, interest, liquidated damages, and filing fees, but denied other costs and attorney fees incurred by plaintiff.

In his appeal, plaintiff contends that the trial court abused its discretion in denying attorney fees which defendants were obligated to pay under the terms of the note and in failing to award attorney fees as a sanction for defendants' repeated and willful failure to comply with court orders regarding discovery. Defendants' cross-appeal raises the following issues: that the trial court erred in denying their motion to dismiss for lack of personal jurisdiction; that the trial court erred in denying their motion to dismiss based on a provision of the California Code of Civil Procedure; that the trial court erred in granting summary judgment against them on their counterclaim based on usury; and that the trial court erred in granting summary judgment to plaintiff on his complaint because questions of material fact exist.

The common law record, consisting of pleadings, interrogatories, motions and responses, memoranda of the parties, documents, orders, and other materials, is over 1,000 pages. We, therefore, summarize only the matters pertinent to resolving the appeals. Defendants are residents of California and were the purchasers of a condominium in Pacific Palisades, California, owned by John P. Ridge and Kathleen P. Konicki, husband and wife. The contract for sale of the condominium was executed in California on August 15, 1980, and closed in California on October 3, 1980. The purchase price was $217,500. Shortly after the contract was signed, Ridge and Konicki moved from California to Illinois. The closing was handled in California by their agents, the Barrington Escrow Company. Before moving to Illinois, Ridge and Konicki entered negotiations with defendants to lend defendants approximately $10,750, following the closing, to be used to decorate the condominium. In Konicki's deposition, she stated that the loan would make defendants want to go through with the purchase of the condominium.

On September 29, 1980, one of the defendants, Lucy Wirta, signed a note for $10,875 in California and mailed it to Ridge and Konicki in Illinois. The note was not accepted because Ray Wirta's signature was not on it. Konicki, a lawyer, also made changes to the note and sent it to Barrington Escrow, where an agent retyped the note, after some additional changes and correspondence between the escrow agent, defendants, and Konicki. The note for $10,875, which is the subject of this lawsuit, was signed by defendants on October 3, 1980, in Los Angeles, California, and mailed to Konicki and Ridge in Illinois. The money was paid to defendants by Konicki and Ridge's agent in California on October 24, 1980. The note was secured by a deed of trust on the condominium executed by defendants on October 3, 1980, which was a second mortgage on the property. Pursuant to the note, defendants were to make monthly interest payments of $108.75 per month until October 3, 1983, when the entire amount was due. The note was assigned to Konicki's father, the plaintiff, on October 3, 1980. Defendants made all payments until July 1983, after which they made no additional payments. Defendants also defaulted on their first mortgage to another party and, following foreclosure proceedings, the condominium was sold on November 9, 1983, for less than the value of the first mortgage. Plaintiff commenced this suit on April 23, 1985.

Defendants filed a special and limited appearance and motion to dismiss objecting to the jurisdiction of the circuit court of Du Page County over their persons pursuant to section 2-301 of the Illinois Code of Civil Procedure (Ill. Rev. Stat. 1985, ch. 110, par. 2-301). The objection was supported by the affidavits of both defendants which stated, inter alia, that they were residents of California, that all negotiations of the terms of the note were conducted in California, that the note was signed and delivered in California, and that the deed of trust securing the note was executed in California. Plaintiff responded by filing the affidavit of Kathleen Konicki which stated, in pertinent part, that she drafted the note in Illinois, that the terms of the note were bargained for in Illinois, that the note provided that performance would be in Illinois, that she was a resident of Illinois, that while in Illinois she received numerous telephone calls and mailings from defendant to negotiate and solicit a loan, and that she disagreed with defendants' statements that all the negotiations of the terms of the note took place in California. Defendants' motion to dismiss objecting to jurisdiction was denied. Several additional motions to dismiss based on jurisdiction made during the proceedings below were also denied.

In our view, because the lack of in personam jurisdiction over defendants is the dispositive issue, we need not detail further the proceedings below as they relate to the other issues.

Defendants contest jurisdiction over their persons, contending that they are California residents and that they are not subject to jurisdiction in Illinois under the provisions of the long-arm statute (Ill. Rev. Stat. 1985, ch. 110, par. 2-209). The burden of proving a valid basis for the assertion of jurisdiction over a nonresident defendant rests with the party seeking to impose jurisdiction. (R. W. Sawant & Co. v. Allied Programs Corp. (1986), 111 Ill. 2d 304, 310, 489 N.E.2d 1360.) We, therefore, address plaintiff's contentions in support of jurisdiction.

Initially, we examine plaintiff's argument that because defendants answered the complaint, filed a counterclaim, and otherwise challenged the merits of the proceeding against them after the trial court denied their objection to jurisdiction raised in their special and limited appearance and motion, they have made a general appearance thereby waiving any objection to jurisdiction and submitting themselves to personal jurisdiction. This argument is meritless. Section 2-301 of the Code of Civil Procedure (Ill. Rev. Stat. 1985, ch. 110, par. 2-301) provides, in subsection (c), as follows:

"(c) If the court sustains the objection, an appropriate order shall be entered. Error in ruling against the defendant on the objection is waived by the defendant's taking part in further proceedings in the case, unless the objection is on the ground that the defendant is not amenable to process ...


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