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S.C. Vaughan Oil Co. v. Caldwell

March 19, 1998

S.C. VAUGHAN OIL COMPANY ET AL., APPELLEES,
v.
CALDWELL, TROUTT & ALEXANDER ET AL. (CALDWELL, TROUTT & ALEXANDER, APPELLANT



The opinion of the court was delivered by: Justice McMORROW

At issue in this appeal is whether a trial court's order dismissing plaintiffs' case for want of prosecution constitutes a final and appealable order upon expiration of plaintiffs' opportunity to refile the case pursuant to section 13-217 of the Code of Civil Procedure (735 ILCS 5/13-217 (West 1992)). For the reasons that follow, we conclude that upon expiration of the section 13-217 period for refiling, the dismissal for want of prosecution constitutes a final and appealable order.

BACKGROUND

On August 4, 1986, plaintiffs, S.C. Vaughan Oil Company and Charles A. Vaughan, filed a complaint in the circuit court of Marion County naming Paul Caldwell and the law firm of Caldwell, Troutt & Alexander as defendants in an action seeking damages for legal malpractice and conflict of interest. On August 6, 1990, proof that Paul Caldwell had filed a petition for relief under the United States Bankruptcy Code was filed with the circuit court. Pursuant to this bankruptcy petition, an automatic stay of the continuation of the state proceedings as to defendant Paul Caldwell was imposed pursuant to 11 U.S.C. §362 (1994).

No entries regarding this matter were made on the docket sheet maintained by the clerk of the circuit court of Marion County from the date of the filing of Paul Caldwell's bankruptcy petition on August 6, 1990, until April 22, 1991. After this 8½-month period of inactivity, the record reveals an April 22, 1991, docket entry stating "cause DWP-close file." Both parties agree that the circuit court, on its own motion, entered an order dismissing plaintiffs' cause of action for want of prosecution (DWP).

On April 12, 1993, nearly two years after the entry of the DWP, plaintiffs filed a "motion to reinstate" their case. The motion was supported by an affidavit from one of plaintiffs' attorneys, who averred that notice of the DWP to the parties was neither recorded on the docket sheet nor filed with the court pursuant to local rule.

After entering a special and limited appearance, the defendants on May 7, 1993, filed a motion to strike plaintiffs' motion to reinstate, arguing that the trial court lost jurisdiction of the matter 30 days after the DWP order was entered. Accordingly, defendants maintained that plaintiffs' sole avenue to obtain reinstatement was through the filing of a petition to vacate the DWP pursuant to section 2-1401 of the Code of Civil Procedure (735 ILCS 405/2-1401 (West 1992)). Section 2-1401 provides a comprehensive statutory procedure whereby final orders and judgments may be vacated more than 30 days following their entry. Defendants contended that since plaintiffs had neither cited to section 2-1401, nor alleged the elements of a section 2-1401 petition, the "motion to reinstate" was ineffective and did not vest the circuit court with jurisdiction. On September 3, 1993, an order was entered by the circuit court upholding the special and limited appearance as to Paul Caldwell, but denying it as to Caldwell, Troutt, and Alexander.

Subsequent to the trial court's denial of the law firm's special and limited appearance, the defendant law firm moved to dismiss plaintiffs' motion to reinstate, citing plaintiffs' failure to plead factual allegations of due diligence in filing the petition and the existence of a meritorious claim. On March 30, 1994, plaintiffs filed an amended motion to reinstate, specifically citing section 2-1401, and stating three reasons 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) uncertainty as to the types of damages recoverable in legal malpractice actions, which plaintiffs allege occurred as a result of the appellate court's decision in Collins v. Reynard, 195 Ill. App. 3d 1067 (1990), rev'd, 154 Ill. 2d 48 (1992); and (3) the existence of ongoing settlement Discussions between plaintiffs' counsel and representatives of defendants and their insurers. Plaintiffs additionally reiterated their claim that they were provided no notice of the entry of the DWP by the circuit court, in violation of local court rules.

On April 20, 1994, defendant moved to dismiss the plaintiffs' amended motion to reinstate. The circuit court, on December 30, 1994, entered an order allowing plaintiffs' motion to reinstate, treating it as a petition to vacate the DWP order pursuant to section 2-1401 of the Code of Civil Procedure (735 ILCS 5/2-1401 (West 1992)). Although the circuit court stated in its docket entry that the plaintiffs "should have properly referred to the motion as a [2-]1401" petition which should have contained factual allegations regarding the meritorious claim, the court went on to observe that the motion was "squarely a section [2-]1401 motion and the focus has been, largely at the court's direction, upon the diligence in presenting the claim and in presenting the motion." The circuit court also noted that it was "not inclined to further delay this proceeding with evidentiary hearings not anticipated by section [2-]1401." In granting plaintiffs' March 30, 1994, motion to reinstate and denying defendant's motion to dismiss, the trial court found the following to be "especially compelling": (1) the DWP was entered in April 1991 and contrary to local rule no notice of its entry was provided to the parties, which led the trial court to hold that "the diligence required in presenting this motion should be relaxed," and (2) the notice of Paul Caldwell's bankruptcy meant "plaintiff would have reasonably relied on the bankruptcy stay as protecting his state court action from a DWP."

On January 13, 1995, defendant Caldwell, Troutt, and Alexander filed a motion to rehear and reconsider the trial court's December 30, 1994, ruling. In its motion, defendant contended that the circuit court had not allowed defendant an opportunity to present evidence either by way of affidavit or live testimony to controvert the allegations of plaintiffs' motion to reinstate. On March 2, 1995, defendant filed the affidavits of an insurance adjustor employed by CNA Insurance Company and defendant's former attorney. Both affidavits contradicted plaintiffs' attorney's affidavit concerning the amount and significance of telephone contact between plaintiffs' attorney and defendant's representative in regard to settlement negotiations. On that same date, the circuit court vacated the December 30, 1994, order granting the plaintiffs' motion to reinstate. However, on April 19, 1995, the trial court again reconsidered plaintiffs' motion to reinstate and granted it for the identical reasons set forth in its December 30, 1994, docket entry.

Defendant appealed pursuant to Supreme Court Rule 304(b)(3) (155 Ill. 2d R. 304(b)(3)), which allows appeal to the appellate court from a judgment on a petition brought under section 2-1401. Defendant asserted that the trial court abused its discretion in refusing to resolve factual disputes arising from the section 2-1401 petition filed by the plaintiffs and that the plaintiffs failed to establish due diligence as a matter of law.

The appellate court, Fifth District, did not address the merits of defendant's appeal. Instead, the court dismissed the appeal for want of jurisdiction. 285 Ill. App. 3d 77. The appellate court determined, based upon this court's decision in Flores v. Dugan, 91 Ill. 2d 108 (1982), that the DWP order entered April 22, 1991, was not a final Judgement and, accordingly, was not subject to attack pursuant to a section 2-1401 petition. Therefore, the appellate court found that the trial court had committed error by treating the plaintiffs' motion to reinstate their case as a petition to vacate a final Judgement under section 2-1401. 285 Ill. App. 3d at 81. In arriving at its Conclusion, the appellate court disagreed with the interpretation of the Flores opinion in three decisions rendered by the First District of the appellate court: Robinson v. Commonwealth Edison Co., 238 Ill. App. 3d 436 (1992); Howard Ecker & Co. v. Terracom Development Group, Inc., 116 Ill. App. 3d 918 (1983); and Yorke v. Stineway Drug Co., 110 Ill. App. 3d 1009 (1982).

We granted leave to appeal. 166 Ill. 2d R. 315. Before this court, defendant raises three issues for consideration: (1) whether the appellate court had jurisdiction to hear defendant's appeal from the order reinstating the case; (2) if so, whether plaintiffs exercised due diligence as a matter of law; and (3) whether the trial court abused its discretion by concluding that an evidentiary hearing was not appropriate for the section 2-1401 petition. Because our resolution of the first issue is dispositive, and because the appellate court should resolve the second and third issues raised by the defendant, we do not consider them herein.

ANALYSIS

The threshold question to be resolved in this matter is whether the appellate court erred in dismissing this appeal for lack of jurisdiction. The appellate court determined that "because dismissal for want of prosecution was not a final and appealable order, plaintiff's motion to reinstate can only be treated as a motion attacking an interlocutory order." 285 Ill. App. 3d at 81. The appellate court concluded that "this appeal is dismissed for lack of jurisdiction for want of a final order under Supreme Court Rule 301 (155 Ill. 2d R. 301)." 285 Ill. App. 3d at 81-82. Plaintiffs, relying upon the reasoning given by the appellate court, urge affirmance of that court's dismissal order on the basis that both the DWP and reinstatement orders entered by the trial court were interlocutory and nonappealable. Defendants argue, inter alia, that the appellate court should have held that it had jurisdiction to entertain this appeal under Supreme Court Rule 304(b)(3) (155 Ill. 2d R. 304(b)(3)) as an appeal from an order granting relief from the Judgement pursuant to section 2-1401 of the Code of Civil Procedure (735 ILCS 5/2-1401 (West 1992)).

For purposes of jurisdiction, the focus in this matter upon the character of the DWP order is misplaced. Defendant's appeal in the instant case is not based upon the trial court's entry of the DWP order. Instead, this appeal arises from the trial court's subsequent order vacating the DWP and reinstating plaintiff's cause of action pursuant to section 2-1401 of the Code of Civil Procedure.

Section 2-1401 of the Code of Civil Procedure outlines a procedure by which final orders and judgments may be vacated by the trial court more than 30 days following their entry, if the petition to vacate is not filed later than two years after entry of the judgment. 735 ILCS 5/2-1401 (West 1996); Smith v. Airoom, Inc., 114 Ill. 2d 209, 220 (1986). To be entitled to relief under section 2-1401, a petitioner must set forth allegations supporting: (1) the existence of a meritorious claim or defense; (2) due diligence in presenting the claim or defense to the circuit court in the original action; and (3) due diligence in filing the section 2-1401 petition for relief. Smith, 114 Ill. 2d at 220-21. Supreme Court Rule 304(b)(3) provides that a "judgment or order granting or denying any of the relief prayed in a petition under section 2-1401" is final and appealable. 155 Ill. 2d R. 304(b)(3).

Therefore, when a circuit court grants relief on a section 2-1401 petition, as the trial court did here, the appellate court has jurisdiction to review that decision under Rule 304(b)(3). A Judgement or order granting or denying relief on the section 2-1401 petition as provided in Rule 304(b)(3) vests jurisdiction in the appellate court. Because the trial court entered an order granting relief pursuant to section 2-1401 in the instant matter, we determine that under the plain language of Supreme Court Rule 304(b)(3), the appellate court was in error to dismiss the defendant's appeal on jurisdictional grounds.

Although the question of the finality of the underlying DWP order is not determinative of jurisdiction, it is pivotal to the issue of whether the trial court properly entertained plaintiffs' motion to vacate the DWP order pursuant to section 2-1401, because relief under section 2-1401 is available only from final orders and judgments. If an order is not final, section 2-1401 is inapplicable and cannot be the basis for vacating that order. Accordingly, the question of whether an order dismissing plaintiffs' case for want of prosecution constitutes a final order within ...


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