APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE JOHN N. HOURIHANE, JUDGE PRESIDING.
Released for Publication January 13, 1995.
The opinion of the court was delivered by: Murray
PRESIDING JUSTICE MURRAY delivered the opinion of the court:
Plaintiffs filed an action seeking an accounting, an injunction, and other relief. The cause of action was dismissed pursuant to the entry of a settlement agreement. Defendants, Jonathan (Jon) and Cheryl Taffer, appeal from the trial court's order that denied their motion to vacate the dismissal order and declare the settlement void, which their attorney, Ira Moltz (Moltz) entered into allegedly without their authority. The relevant facts are as follows:
On February 21, 1992, an agreed order was entered which reset the matter pursuant to settlement negotiations. On March 20th, April 29th and June 2, 1992, agreed orders were entered, each stating "the parties have negotiated a resolution of this cause" and resetting the cause for status. On July 9, 1992, an order was entered ordering the defendant to appear in person or through counsel, and stating "defendants shall execute the settlement contract if the indemnifications relating to the Internal Revenue Service are eliminated." The order further reset the cause for status for entry of a settlement contract. On July 24, 1992, an agreed order was entered which reset the cause for status and entry of a settlement agreement. On August13th and August 27, 1992, agreed orders were entered which stated that the "parties have negotiated a resolution of this cause", resetting the cause for status. On September 10, 1992, an order was entered which stated that the parties have agreed to the proposed settlement with changes only to paragraphs 7(a)(2)(3) and shall execute the settlement for entry on September 24, 1992. On September 24, 1992, an order was entered which stated that the parties agreed to the proposed settlement with changes only to paragraphs 7(a)(2)(3) and settlement shall be executed and tendered to plaintiff's counsel on or before October 5, 1992. On November 30, 1992, an order entered by agreement indicated that the parties had agreed to the proposed settlement with changes only to paragraphs 7(a) and 8, however, if the settlement was not executed by defendants prior to December 4, 1992, it would be void. The record does not contain transcripts from any of the aforementioned dates, nor does the record contain any information as whether or not defendants were present in court on any of those dates.
On January 5, 1993, the trial court entered an agreed order which ordered that "pursuant to the settlement agreement appended hereto, this cause is dismissed." Attached to the order was a document entitled "Settlement Agreement." *fn1 The agreement had two signature pages; the first signed by each of the plaintiffs and their attorney, the second, purportedly signed by the defendants.
On January 29, 1993, the plaintiffs filed an emergency motion for a rule to show cause to be entered against the defendants as to why they should not be held in contempt for failure to comply with certain terms of the settlement agreement. The trial court set the case for status on February 22, 1993.
On February 22, 1993, the court held the defendants in contempt of court for their failure to comply with orders of the court. Defendants were further ordered to appear on March 15, 1993, on which date the trial court ordered a body attachment to issue against defendants. The parties were ordered to appear on April 5, 1993.
On April 15, 1993, the trial court entered an order which provided; (1) Moltz was to be served with the present order and the previous order, (2) Moltz was to provide the current address of the defendants, (3) vacated the prior order of body attachment, and (4) issued an alias rule to show cause against defendants returnable on May 13, 1993. On May 13, 1993, the court ordered Moltz to be served with a copy of the order and compelled him to appear on May 19, 1993. Neither Moltz nor the defendants appeared at any of the court dates between January 1993 and May 1993.
On May 19, 1993, Cheryl appeared in court. The court ordered Moltz to appear on June 2, 1993. On May 26, 1993, the lawfirm of Schiff, Hardin & Waite filed an additional appearance on behalf of the defendants. On June 2, 1993, the trial court entered an order granting the defendants leave to file a motion to vacate the settlement agreement. The body attachment against Cheryl was vacated, but was continued against Jon. The defendants were also granted an additional 14 days to answer the petition for rule to show cause and the plaintiffs were granted 10 days thereafter to reply.
On June 15, 1993, the defendants filed a petition to vacate the judgment order dated January 5, 1993, and to declare the settlement agreement void. *fn2 Defendants alleged that they did not authorize settlement of the matter and were not aware of the same. In support of their petition, the defendants attached their own affidavits, the affidavit of Moltz and two letters from defendants to Moltz.
Both Jon's and Cheryl's affidavits stated that they were represented by Moltz and that during late 1992, they were aware that Moltz was engaged in settlement negotiations on their behalf. Jon stated that he saw drafts of proposed settlement agreements and discussed some of those drafts with Moltz by telephone. Cheryl's affidavit indicated that during late 1992 she was aware that Moltz was discussing the possibility of settlement of this action with one of the attorneys for plaintiffs and that during late 1992 and early 1993 she received and reviewed a number of draft settlement agreements, and communicated to Moltz comments on them. Both affidavits indicated that neither Jon nor Cheryl authorized Moltz to sign "the form of" settlement agreement on their behalf, nor did either defendant see that form of settlement agreement until February 1993. Cheryl's affidavit stated that on February 3, 1993, she faxed to Moltz her comments on what she believed to be a proposed settlement agreement, indicating in detail various aspects of the agreement that were not acceptable. *fn3 Jon and Cheryl did not learn that the agreement had been signed by Moltz until May 1993.
The affidavit of Ira Moltz stated:
"2. During 1992 and 1993 I have been counsel of record for defendants Jon and Cheryl Taffer in this proceeding. During late 1992 and early 1993, I conducted settlement negotiations on behalf of the Taffers with the attorney for the plaintiffs, Eric P. Ferleger.
3. I agreed to and signed on behalf of the Taffers the Settlement Agreement that was presented to this Court on January 5, 1993. I did so because of an erroneous belief that the form of Settlement Agreement I signed was acceptable to the Taffers. At the time I signed the Settlement Agreement, I did not have authority from the Taffers to agree to or sign that Agreement on their behalf.
4. The Settlement Agreement was not transmitted to the Taffers until sometime after this Court's order of January 5, 1993. Only then did I learn that the form of the Settlement Agreement was, in fact, not acceptable to the Taffers, and that it would ...