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12/29/89 Gluth Brothers v. Union National Bank

December 29, 1989

GLUTH BROTHERS CONSTRUCTION, INC., ET AL., PLAINTIFFS-APPELLEES

v.

UNION NATIONAL BANK, DEFENDANT-APPELLANT

THE FACTS IN THIS CASE WERE SET OUT IN A PREVIOUS OPINION ISSUED BY THIS COURT. (GLUTH BROTHERS CONSTRUCTION, INC

v.

UNION NATIONAL BANK (1988), 166 ILL. APP. 3D 18.) WE WILL ONLY SET OUT ADDITIONAL FACTS PERTINENT TO THE ISSUES PRESENT IN THIS APPEAL.



APPELLATE COURT OF ILLINOIS, SECOND DISTRICT

548 N.E.2d 1364, 192 Ill. App. 3d 649, 139 Ill. Dec. 650 1989.IL.2076

Appeal from the Circuit Court of McHenry County; the Hon. Ward S. Arnold, Judge, presiding.

APPELLATE Judges:

JUSTICE INGLIS delivered the opinion of the court. UNVERZAGT, P.J., and REINHARD, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE INGLIS

Defendant, Union National Bank, appeals from an order of the circuit court of McHenry County entering judgment in favor of plaintiffs, Gluth Brothers Construction, Inc., and Wayne E. Zimmerman, d/b/a Wayne E. Zimmerman Construction, in the sum of $195,609.56, plus interest and costs. Defendant also appeals from the circuit court's order denying its petition filed pursuant to section 2-1401 of the Code of Civil Procedure (Code) (Ill. Rev. Stat. 1987, ch. 110, par. 2-1401). On appeal, defendant contends that: (1) the trial Judge acted improperly in not recusing himself from the case given that plaintiffs' attorney was the chairman, and the attorney's wife, the treasurer, of the Judge's lawyers committee (a campaign committee); and (2) it is entitled to a setoff on the judgment entered for the amounts plaintiffs received as creditors in a bankruptcy proceeding. We affirm in part, reverse in part, and remand.

On August 19, 1982, plaintiffs filed a two-count complaint in the circuit court of McHenry County alleging that defendant, Union National Bank, improperly set off $195,609.56 in funds deposited by Valley Engineering Company (Valley). Plaintiffs alleged that the funds were the proceeds of a joint venture comprised of plaintiffs and Valley and, as such, constituted trust funds which were beyond defendant's reach. On October 27, 1982, plaintiffs filed a motion for a change of venue, which was subsequently granted. The case was thereafter assigned to the Honorable Roland A. Herrmann.

On May 21, 1985, plaintiffs were granted leave to file an amended complaint adding count III. In addition, plaintiffs requested leave to file a jury demand. On June 10, 1985, Judge Herrmann heard arguments on plaintiffs' jury demand and thereafter denied plaintiffs' request. The case proceeded to trial.

Following a bench trial, the trial court found in favor of plaintiffs and entered judgment against defendant in the amount of $334,380.86, plus $156,968.92 in interest, for a total award of $491,349.78. On appeal, this court affirmed the trial court as to liability but reversed as to damages. On remand, the trial court was instructed to enter judgment for plaintiff in the amount of $195,609.56, plus interest at the then current prime rate. Gluth Brothers, 166 Ill. App. 3d at 29-30.

On September 15, 1988, the appellate court mandate was filed in the circuit court of McHenry County. On October 6, 1988, defendant filed a motion for a setoff, alleging that a Federal Judge in Valley's bankruptcy proceeding distributed over $180,000 to plaintiffs as a creditor of Valley. On the same day, plaintiffs filed a motion objecting to the setoff, contending that the circuit court did not have jurisdiction to deviate from the appellate court mandate.

On October 14, 1988, defendant filed a motion for a change of venue, alleging that plaintiffs' attorney had a "long-standing" relationship with Judge Herrmann and, as a result, defendant was entitled to a new trial before a different Judge. On the same day, Judge Herrmann recused himself from the case, and the case was subsequently assigned to the Honorable Ward S. Arnold.

On November 29, 1988, plaintiffs filed a motion to enter judgment pursuant to the appellate court mandate. On December 2, 1988, defendant filed a petition pursuant to section 2-1401 of the Code (Ill. Rev. Stat. 1987, ch. 110, par. 2-1401) to "vacate and/or refuse to enter judgment." On December 19, 1988, a hearing was held, after which the trial court denied defendant's request for a setoff and awarded plaintiffs $195,609.56, plus interest and costs. The court also denied defendant's request for a new trial, finding that defendant had failed to establish any actual prejudice as a result of the relationship between Judge Herrmann and plaintiffs' attorney. Defendant's motion for reconsideration was denied, and this appeal followed.

Defendant's first contention on appeal is that it was entitled to a new trial due to the relationship between Judge Herrmann and plaintiffs' attorney. Defendant alleges that this relationship was not disclosed to defendant before trial and, consequently, made it impossible for defendant to receive a fair trial.

It is undisputed that plaintiffs' attorney served as the chairman of the Executive Committee Lawyers For Herrmann in 1976. In addition, the attorney's wife served as the treasurer of the same committee. At no time during the trial did Judge Herrmann advise defendant of this relationship. It is on these facts that defendant based its section 2 -- 1401 petition for a new trial.

The trial court denied defendant's petition, stating that Judge Herrmann was not required to recuse himself from the case. As such, the court held that "the motion is not well taken unless Union National Bank [defendant] can show something in conjunction with his [the trial Judge's] refusal or lack of disqualification which would bolster its ...


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