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12/04/96 S. C. VAUGHAN OIL COMPANY AND CHARLES A.

December 4, 1996

S. C. VAUGHAN OIL COMPANY AND CHARLES A. VAUGHAN, PLAINTIFFS-APPELLEES,
v.
CALDWELL, TROUTT, AND ALEXANDER, DEFENDANT-APPELLANT, AND PAUL CALDWELL, DEFENDANT.



Appeal from the Circuit Court of Marion County. No. 86-L-96. Honorable David L. Sauer, Judge, presiding.

The Honorable Justice Maag delivered the opinion of the court. Chapman and Welch, JJ., concur.

The opinion of the court was delivered by: Maag

ORDER

This cause has been considered on the defendant-appellant's petition for rehearing, and the court being fully advised finds:

That this court previously filed a Rule 23 order in this cause on July 1, 1996;

That subsequently defendant-appellant filed a petition for rehearing; and

That this court now desires to vacate its previous decision and substitute a new decision in its stead.

IT IS THEREFORE ORDERED that the Rule 23 order previously filed in this cause on July 1, 1996, shall be, and the same is hereby, VACATED AND HELD FOR NAUGHT.

IT IS FURTHER ORDERED that the opinion being filed on this date shall stand as the decision of the court.

IT IS FURTHER ORDERED that defendant-appellant's petition for rehearing shall be, and the same is hereby, DENIED.

The Honorable Justice MAAG delivered the opinion of the court:

The plaintiffs, Vaughan Oil Company and Charles A. Vaughan, filed a complaint against the defendants, Paul Caldwell and the law firm of Caldwell, Troutt, and Alexander, on August 4, 1986, alleging legal malpractice and conflict of interest. On August 6, 1990, proof that Paul Caldwell had filed a petition for relief under Chapter 7 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Middle District of Florida was filed with the circuit court of Marion County. A review of the docket sheet maintained by the clerk of the circuit court of Marion County reveals no entries respecting this case from the date of the filing of the bankruptcy petition on August 6, 1990, until April 22, 1991. On April 22, 1991, the record reveals a docket entry stating "cause DWP-close file." Both of the parties apparently agree that "DWP" means dismissed for want of prosecution. On April 12, 1993, plaintiffs filed a motion to reinstate their action for attorney malpractice. The defendants entered a special and limited appearance and on May 7, 1993, filed a motion to strike plaintiffs' motion to reinstate. The defendants argued that the trial court lost jurisdiction of the case 30 days after dismissal, and that the only way of obtaining reinstatement was through a petition under section 2-1401 of the Code of Civil Procedure (735 ILCS 5/2-1401 (West 1992)), and that plaintiffs did not petition the court pursuant to section 2-1401. The defendants argued that because the plaintiffs had not alleged the elements of a section 2-1401 petition, the motion was inappropriate and did not invoke the circuit court's jurisdiction. On September 3, 1993, the circuit court entered an order upholding the special and limited appearance as to Paul Caldwell but denied it as to Caldwell, Troutt, and Alexander.

On September 27, 1993, subsequent to the court's denial of their special and limited appearance, Caldwell, Troutt, and Alexander moved to dismiss the motion to reinstate, citing the lack of factual allegations of due diligence in filing the section 2-1401 petition and the existence of a meritorious claim. On March 30, 1994, the plaintiffs filed an amended motion to reinstate, specifically citing section 2-1401. In their motion, the plaintiffs stated the following three reasons as to why they had not pursued the case from April 1991 through March 1993: (1) the claim against Paul Caldwell could not be pursued due to the bankruptcy stay; (2) the decision in Collins v. Reynard, 154 Ill. 2d 48, 607 N.E.2d 1185, 180 Ill. Dec. 672 (1992), was good law from March 28, 1990, through December of 1992, and plaintiffs believed they no longer had a viable attorney malpractice suit against the defendants because Collins barred the recovery of economic damages for attorney malpractice actions sounding in tort; and (3) there were ongoing settlement discussions between plaintiffs' counsel and representatives of defendants and their insurers.

On April 20, 1994, defendants again moved to dismiss the amended motion to reinstate. The circuit court entered an order on December 30, 1994, allowing plaintiffs' petition to reinstate. Specifically, the court stated that the plaintiffs should have properly referred to the motion to reinstate as a section 2-1401 petition, and that they should have also made factual allegations regarding the meritorious claim. The court went on to note, however, that the motion was "squarely a section [2-]1401 motion" because the focus had been upon the diligence in presenting the claim and the motion. The court also noted that it was "not inclined to further delay this proceeding with evidentiary hearings not anticipated by section [2-]1401." On January 13, 1995, the defendant, Caldwell, Troutt, and Alexander, filed a motion to rehear and reconsider. In its motion, the defendant claimed that the circuit court had not allowed the defendant, Caldwell, Troutt, and Alexander, an opportunity to present evidence either by way of affidavit or by live testimony to controvert the allegations of plaintiffs' section 2-1401 petition. On March 2, 1995, the defendant, Caldwell, Troutt, and Alexander, filed the affidavits of M. Patrice Wilson, insurance adjuster for CNA Insurance Companies, and Thomas L. Browne, defendant's former attorney. Both affidavits contradicted plaintiffs' attorney's affidavit with regard to the amount and significance of telephone contact between plaintiffs' ...


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