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02/10/94 MERCANTILE HOLDINGS v. DAVID E. FELDMAN

February 10, 1994

MERCANTILE HOLDINGS, INC., PLAINTIFF-APPELLANT,
v.
DAVID E. FELDMAN, DEFENDANT-APPELLEE.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE MICHAEL J. GALLAGHER, JUDGE PRESIDING.

Rehearing Denied March 14, 1994. Released for Publication April 19, 1994.

Murray, Gordon, Cousins, Jr.

The opinion of the court was delivered by: Murray

PRESIDING JUSTICE MURRAY delivered the opinion of the court:

Plaintiff, Mercantile Holding, Inc. (Mercantile), appeals from an order of the circuit court dismissing its second-amended complaint against defendant, David E. Feldman (Feldman), with prejudice. For reasons we will discuss, we affirm the dismissal with prejudice entered in this case.

In 1980 the American National Bank and Trust Company (American National), predecessor in interest to Mercantile, filed suit against Feldman (Cir. Ct. No. 80 L 27085), based upon his guarantee of a commercial loan which Feldman executed in 1978. Eleven years later in 1991, the matter came before the trial court when American National moved to set the case for trial. At a hearing on this motion, defendant advised the trial court that no action had taken place in the case since February 1982, when a default judgment was entered against a codefendant. Plaintiff did not dispute these statements and gave no reason for the delay in prosecuting the case. Consequently, in June 1991 upon defendant's motion, the original complaint was dismissed for want of prosecution (DWP'd).

At the time the case was DWP'd, Feldman's counsel further advised the court that Feldman had served a notice to produce upon plaintiff's then-attorneys in December 1981, which was never complied with. Counsel also indicated to the court that, based upon certain representations made by those attorneys, Feldman *fn1 was led to believe that no further action would be taken against him and, for this reason, he closed his file on the case. Nevertheless, Feldman's counsel did not request a dismissal with prejudice for failure to comply with the discovery request, nor did he assert that laches should be applied to this case to dismiss the cause of action with prejudice.

On May 8, 1992, 11 months after the DWP, Mercantile, as successor in interest to American National, filed a new cause of action against Feldman. Feldman moved to dismiss the action, alleging that it was barred by the 10-year statute of limitations. Mercantile responded to the motion by amending the complaint to note that it was a refiling pursuant to section 13-217 of the Code of Civil Procedure. (Ill. Rev. Stat. 1991, ch. 110, par. 13-217.) Feldman then moved to dismiss the amended complaint on the basis of laches.

In his motion, Feldman maintained that he had been advised by prior counsel for American National that they did not intend to proceed against him and that, in reliance upon such representations, he had disposed of any evidence he had that could be useful in his defense. For that reason, he argued, he was prejudiced by the delay in bringing this action against him. On October 15, 1992, the trial court granted Feldman's motion and dismissed Mercantile's complaint with prejudice.

Mercantile filed a motion to reconsider with the trial court, asking that the order of dismissal be vacated. In this motion Mercantile argued that the complaint should not have been dismissed because the complaint was timely filed pursuant to section 13-217 of the Code of Civil Procedure and because Feldman's claim of laches, unsupported by any affidavits or other evidence, failed to show any special prejudice other than the passage of time. Mercantile also provided the court with the affidavits of two attorneys who had represented American National in the earlier case. These affidavits denied Feldman's allegations that he had been made promises that he would not be pursued in this matter.

In response to this motion Feldman filed, for the first time, his own affidavit, indicating that prior counsel for American National had led him to believe that they did not intend to take any action against him in this matter and that, in reliance upon such representations, he disposed of his records pertaining to this matter.

The trial court denied Mercantile's motion to vacate the dismissal order and Mercantile then filed this timely appeal.

The only issue raised by Mercantile on appeal is whether the trial court erred in granting Feldman's motion to dismiss the cause of action with prejudice. Mercantile argues that, as a matter of law, the complaint was timely filed, having been filed within one year of the DWP order. Furthermore, Mercantile contends that Feldman's claim of laches must fail. Mercantile argues that Feldman failed to carry his burden of proof as to actual prejudice, which would entitle him to the equitable relief requested. It is Mercantile's position that, at the very least, Feldman's claim of laches, unsupported by any evidence until Mercantile presented the affidavits of former counsel, created a factual dispute that should not have been decided in a motion to dismiss.

In his brief, Feldman does not dispute that the new complaint was timely filed within one year of the order dismissing the original complaint. Nevertheless, Feldman asserts that the trial court properly dismissed the newly-filed complaint on the basis of laches. Feldman argues that there was an unreasonable delay in prosecuting the case and that actual prejudice was shown because ...


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