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11/23/88 C. Jere Albright, v. Seyfarth

November 23, 1988





531 N.E.2d 948, 176 Ill. App. 3d 921, 126 Ill. Dec. 321 1988.IL.1696

Appeal from the Circuit Court of Cook County; the Hon. Myron T. Gomberg, Judge, presiding.


JUSTICE McNAMARA delivered the opinion of the court. RIZZI and FREEMAN, JJ., concur.


Plaintiff C. Jere Albright appeals from a trial court order dismissing with prejudice a fourth amended complaint alleging legal malpractice and fraud against the law firm of Seyfarth, Fairweather, Shaw & Geraldson, and John Anderson, an attorney in that firm.

Albright's claims arose out of a lawsuit filed in the Federal District Court for the Central District of California, by Alan Neuman Productions, Inc., against Albright, alleging breach of contract, fraud, conspiracy to commit fraud, RICO violations, and conspiracy to violate RICO. The Neuman complaint alleged that Albright and others used a fraudulent letter of credit scheme to swindle Neuman and other members of the motion picture community out of money. Neuman sought compensatory damages up to $1 million, punitive damages of $10 million, and trebled RICO damages of $277,500. The pleadings in the present case reveal the following.

On December 26, 1983, Albright hired defendants to represent him and told Anderson that he believed an attempt had been made to serve him. Anderson responded that the California docket would be checked periodically for proof of service.

On January 3, 1984, a representative of defendants checked the docket and wrote to Anderson that there was no indication of any activity other than the filing of the complaint and the issuance of summons. The representative wrote:

"I will have our attorney service check the docket every two weeks or so to see if plaintiff [Neuman] attempts to enter a default. Alternatively, if we wish to avoid the default problem entirely, I could call plaintiff's counsel to confirm that he is not of the view that service can be effected."

On January 9, 1984, Neuman's counsel wrote to Albright advising him that they intended to obtain a default. Albright forwarded the letter to Anderson, who received it prior to the default. Albright instructed Anderson to "immediately contact the opposing counsel in California," and to "take whatever steps are necessary before the California court to avoid the possibility of default." Defendants did not contact Neuman's counsel, nor did they appear before the court in California.

On January 23, 1984, a return of service was filed. It stated that Albright was personally served on December 10, 1983. The process server stated in an affidavit:

"On December 10, 1983, I again went to the apartment . . .. I told him I knew he was Jere Albright from a physical description. He said, Jere Albright? He's out of town! At that point I handed, Mr. Albright, the summons and the complaint and told him this was a summons and complaint and that he was served. Mr. Albright refused to take the package. I told him I could not force him to take the package, but that he was served anyway and I placed the package on the floor."

On January 30, 1984, a default was entered against Albright in Neuman. Anderson assured Albright that it was routine to vacate such defaults. Anderson prepared, and Albright signed, an affidavit dated February 17, 1984, stating that Albright had never been personally served. On March 27, 1984, defendants filed the affidavit with a motion to quash the return of service and set aside the default.

Subsequently, defendants filed a second affidavit, unsigned by Albright, with the Federal district court. In it, Albright stated that he "was approached by a man who said something about some papers he had for me. I did not recognize the man and I did not accept any papers, nor did he hand me any." Albright was out of the country when this affidavit was prepared and filed.

On April 25, 1984, defendants gave Albright numerous papers to sign, including the second affidavit, which Albright signed "without reading it carefully."

On April 30, 1984, a hearing was held on Albright's motion to quash service and vacate the default in Neuman. Bruce Carroll, an attorney from defendants' California office represented Albright at the hearing. Carroll informed the court: "The very first time I talked with [Albright], I said, 'Look, get rid of this problem. Just accept service and defend on the merits,' and he agreed to that." The district court denied Albright's motion to vacate the default.

The district court then directed Neuman to establish a prima facie case and prove its entitlement to damages pursuant to Federal Rule of Civil Procedure 55(b) (Fed. R. Civ. P. 55(b)). The court stated that it would not go beyond the four corners of the complaint. In reference to evidence of an oral modification of the contract, the court said: "The default was entered on a complaint, not on oral modifications that were made. Those were matters that would have been put into controversy at [ sic ] issue had there been a trial, had there been a proper responsive pleading made. But those are not in issue."

After conducting a hearing on the prima facie case, and on damages, on May 28, 1986, the court in Neuman entered a default judgment against Albright in the amount of $692,405.31. Albright subsequently filed the present suit.

A motion to strike or dismiss admits all facts well pleaded in the complaint and reasonable inferences which can be drawn from those facts. (Sharps v. Stein (1980), 90 Ill. App. 3d 435, 413 N.E.2d 75; Matchett v. Rose (1976), 36 Ill. App. 3d 638, 344 N.E.2d 770.) A cause of action should not be dismissed upon the pleadings unless it clearly appears that no set of facts can be proved under pleadings which would entitle plaintiff to relief. (Fitzgerald v. Chicago Title & Trust Co. (1978), 72 Ill. 2d 179, 380 N.E.2d 790; Kraustrunk v. Chicago Housing Authority (1981), 95 Ill. App. 3d 529, 420 N.E.2d 429.) No pleading is bad in substance which reasonably informs the opposite party of the nature of the claim or defense which he or she is called upon to meet. (Ill. Rev. Stat. 1987, ch. 110, par. 2-612(b).) ...

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