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05/04/88 David Townsend, v. Magic Graphics

May 4, 1988

DAVID TOWNSEND, PLAINTIFF-APPELLEE

v.

MAGIC GRAPHICS, INC., DEFENDANT-APPELLANT



Before proceeding to discuss the dispositive issue raised on appeal, we first must rule on plaintiff's motion to strike defendant's statement of facts which was ordered taken with the case. Plaintiff alleges the statement of facts contained in defendant's brief is argumentative and inaccurate in violation of Supreme Court Rule 341(e)(6) (107 Ill. 2d R. 341(e)(6)). Our review of the 2 1/2-page statement of facts submitted by defendant reveals that plaintiff's contentions are to some extent well taken. We decline, however, to strike the statement of facts because the violations are of a minor nature and do not hinder our review. (See James v. Yasunaga (1987), 157 Ill. App. 3d 450, 452.) The inappropriate statements contained in defendant's statement of facts will be disregarded.

APPELLATE COURT OF ILLINOIS, SECOND DISTRICT

523 N.E.2d 208, 169 Ill. App. 3d 73, 119 Ill. Dec. 740 1988.IL.674

Appeal from the Circuit Court of Du Page County; the Hon. Fredrick Henzi, Judge, presiding.

APPELLATE Judges:

JUSTICE DUNN delivered the opinion of the court. WOODWARD and INGLIS, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE DUNN

Defendant, Magic Graphics, Inc., appeals the denial of its motion to vacate a default judgment entered in favor of plaintiff, David Townsend. On appeal, defendant argues the notice of the hearing on the plaintiff's motion for default judgment violated circuit court rules, and the default judgment should have been vacated as a nullity because it was entered subsequent to the filing of defendant's petition in bankruptcy. We agree with the defendant's second claim and, therefore, reverse.

Plaintiff was employed by defendant from September 1985 to August 1986 as a salesman. On September 9, 1986, plaintiff filed a two-count complaint seeking $5,939 for services performed and $5,000 for a camera that plaintiff had purchased and delivered to defendant but had not been compensated for. On October 14, an appearance was entered by defense counsel. On December 3, plaintiff filed a motion for default judgment. Two weeks later, defendant filed a motion to strike the complaint. The same day an order was entered denying the motion for default judgment and the motion to strike, and ordering plaintiff to file a bill of particulars. On January 5, 1987, the bill of particulars was filed. On February 25, plaintiff filed a second motion for default judgment. On the same day, defendant filed a motion to dismiss the complaint. On March 4, the court denied both motions and ordered defendant to file an answer by March 25.

On April 1, defendant filed a petition in bankruptcy in the Federal District Court for Northern Illinois. On April 3, plaintiff's third motion for default judgment was filed. Four days later, a hearing on the motion for default judgment was held. Neither defendant nor defense counsel was present. The court entered an order of default against defendant for failure to plead.

Defendant filed a timely motion to vacate the default judgment. The first provision of the motion stated: "On April 1, 1987, the Defendant filed a Petition to Relief Under Chapter 11 of the United States Bankruptcy Code, known as Case No. 87B04887 in the Northern District of Illinois; and an automatic stay became in force pursuant to 11 USC 362." The defendant's remaining allegations were directed toward the insufficiency of the notice of the hearing. Defendant requested the court to vacate the order of default, to note the bankruptcy for the record, and to continue the cause or place it on the bankruptcy calendar. Plaintiff filed objections to the defendant's motion. The court ordered the motion to vacate continued, noted the bankruptcy proceeding for the record, and stayed any supplementary proceedings.

On June 30, plaintiff motioned to advance the hearing date on the motion to vacate. Plaintiff alleged he had filed a motion in Federal court requesting a modification of the automatic stay, and on June 12, the bankruptcy court had entered an order modifying the stay for purposes of having the trial court rule on the motion to vacate. The pleadings filed by plaintiff in the bankruptcy court, the transcript of the hearing in bankruptcy court, and the order modifying the stay entered by the bankruptcy court are not included in the record on appeal. After a hearing, in which defendant limited its argument to the notice question, the court denied the motion to vacate the default judgment. This appeal followed.

Section 362(a) of the Bankruptcy Code provides in relevant part:

"petition filed [in bankruptcy] . . . operates as a stay, applicable to all entities, of --

(1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before ...


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