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09/19/89 John T. Cunningham, Sr., v. Miller's General Insurance

September 19, 1989

JOHN T. CUNNINGHAM, SR., ET AL., PLAINTIFFS-APPELLANTS

v.

MILLER'S GENERAL INSURANCE COMPANY, DEFENDANT-APPELLEE



APPELLATE COURT OF ILLINOIS, FOURTH DISTRICT

544 N.E.2d 441, 188 Ill. App. 3d 689, 135 Ill. Dec. 945 1989.IL.1442

Appeal from the Circuit Court of Macon County; the Hon. John L. Davis, Judge, presiding.

APPELLATE Judges:

JUSTICE LUND delivered the opinion of the court. KNECHT and GREEN, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE LUND

On December 19, 1988, the circuit court of Macon County vacated a default judgment entered against defendant Miller's General Insurance Company. Plaintiffs John and Cora Cunningham appeal this determination.

On March 2, 1987, plaintiffs' home suffered severe fire damage. Their home insurance carrier was defendant. After an extensive exchange of information, defendant denied coverage. Accordingly, on February 9, 1988, plaintiffs filed suit against defendant. Summons was served on defendant on February 23. No answer was filed, and on April 8, 1988, plaintiffs moved for and received a default judgment. On May 10, a hearing was conducted on damages, and defendant was not given notice. The court set the judgment at $65,478 plus attorney fees of $600.

On June 14, a nonwage garnishment summons was issued on defendant's bank account. On June 23, upon being advised of the garnishment, defendant filed a motion to stay execution of the judgment. This stay was entered. On June 28, defendant filed a petition to vacate the default judgment, pursuant to section 2-1401 of the Code of Civil Procedure (Code) (Ill. Rev. Stat. 1987, ch. 110, par. 2-1401).

Defendant's petition alleged it acted with due diligence in that upon being served with plaintiffs' complaint, the matter was forwarded to counsel in Chicago. This counsel, after reviewing the matter, prepared an answer and arranged for a Decatur law firm to serve as local counsel. On March 23, 1988, the answer was placed with an overnight delivery service for delivery to the Decatur law firm. It never arrived. The first anyone knew of the problem was when plaintiffs garnisheed defendant's bank account. This history was supported by numerous affidavits, including one by the delivery service that stated they turned the envelope over to Federal Express, and Federal Express records show it was not delivered.

The petition also alleged defendant had meritorious defenses of fraud and arson. Again, these allegations were supported by numerous affidavits. These affidavits establish that a trail of a combination of a petroleum naphtha and kerosene, which are combustibles, was found running between the bedrooms where the fire was located, and that the opinion of several experts who viewed the scene was that the fire was intentionally set. The petition also alleged plaintiffs were having financial problems and had a suspicious fire at the same residence several years earlier.

Plaintiffs' answer to the petition averred that defendant was negligent and not diligent by failing to follow up on the filing of the original answer. It further alleged, and supported with plaintiffs' affidavit, that plaintiffs did not set the fire, had received threats from disgruntled ex-tenants, and some unknown person had gained forced entry on the night of the fire.

After hearing arguments, the circuit court concluded:

"An attorney who undertakes the representation of a client has the obligation to the client, to the court, to the rules of practice and to the Supreme Court Rules to assure the timely filing of pleadings. These rules are there for a reason and they are to assure the orderly flow of cases through the system. At the same time Justice requires that matters such as this be heard on their merits. While I feel very strongly that the defendant's counsel here was, as counsel has put it, mistaken as to their follow up to assure the timely filing of its answer, that nonetheless this court has long held the belief that matters should be heard on their merits unless there has been a flagrant violation of the laws of practice which in this case there is not. . . . I am going to vacate this judgment because, as I said, it's my belief that matters should be heard on their merits, but at the same time, I hope if you undertake to represent clients in other counties outside your own county in the future, that you take a little bit of time to learn what their rules of practice are."

Section 2--1401 of the Code provides a comprehensive statutory procedure for which judgments can be challenged more than 30 days after their rendition. To be entitled to relief under this section, the petitioner must affirmatively set forth specific factual allegations supporting each of the following elements: (1) the existence of a meritorious defense or claim; (2) due diligence in presenting this defense or claim to the court in the original action; and (3) due diligence in filing the section 2--1401 petition for relief. (Smith v. Airoom, Inc. (1986), 114 Ill. 2d 209, 221, 499 N.E.2d 1381, 1386; First National Bank v. Mattoon Federal Savings & Loan Association (1988), 175 Ill. App. 3d 956, 959, 530 N.E.2d 666, 668.) The quantum of proof necessary to sustain a section 2--1401 petition is a preponderance of the evidence. (Airoom, 114 Ill. 2d at 221, 499 N.E.2d at 1386.) Whether such a petition should be granted lies within the sound discretion of the circuit court, depending on the facts and equities presented. (Airoom, 114 Ill. 2d at 221, 499 N.E.2d at 1386; Beno v. DeBoer Asphalt Paving Co. (1983), 114 Ill. App. 3d 871, ...


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