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S. C. Vaughan Oil Co. v. Caldwell

July 27, 1998

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



The opinion of the court was delivered by: Justice Maag delivered the opinion of the court:

IN THE APPELLATE COURT OF ILLINOIS FIFTH DISTRICT

Appeal from the Circuit Court of Marion County.

No. 86-L-96

Honorable David L. Sauer, Judge, presiding.

The plaintiffs, S. C. 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 March 31, 1993, Kathleen Ignowski, an associate in the law firm representing plaintiffs, contacted the clerk of the circuit court to inquire as to whether any docket entries had been made in case number 86-L-96. An employee at the circuit clerk's office informed her that the court, on its own motion, had dismissed the case for want of prosecution in April of 1991, without notice to the parties. 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, that the only way of obtaining reinstatement was through a petition under section 2-1401 of the Code of Civil Procedure (the Code) (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 its 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 (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' motion 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' attorney and defendant's representatives. On that same date, the circuit court vacated the order granting the section 2-1401 petition. On April 19, 1995, the circuit court reconsidered the motion to reinstate and granted it for the 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 an appeal to the appellate court from a judgment on a petition brought under section 2-1401. Defendant claimed that the circuit court abused its discretion when it refused 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.

On direct appeal, this court did not address the merits of defendant's appeal. Instead, we dismissed the appeal. S.C. Vaughan Oil Co. v. Caldwell, Troutt, & Alexander, 285 Ill. App. 3d 77, 673 N.E.2d 1156 (1996). We determined that, based upon the Illinois Supreme Court's reasoning in Flores v. Dugan, 91 Ill. 2d 108, 435 N.E.2d 480 (1982), the dismissal for want of prosecution order entered April 22, 1991, was not a final judgment and, thus, was not subject to attack pursuant to a section 2-1401 petition. Hence, this court determined that the circuit court committed error by treating the plaintiff's motion to reinstate their case as a petition to vacate a final judgment under section 2-1401.

The Illinois Supreme Court granted leave to appeal. S.C. Vaughan Oil Co. v. Caldwell, Troutt & Alexander, 172 Ill. 2d 567, 679 N.E.2d 386 (1997). Defendant raised 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. Since the Illinois Supreme Court's resolution of the first issue was dispositive, it refused to address the second and third issues and ordered this court to do so.

The Illinois Supreme Court determined that this court had jurisdiction of this case and acknowledged that 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. Hence, the question of whether the order dismissing plaintiffs' case for want of prosecution constituted a final order within the meaning of section 2-1401 was a key consideration in determining whether the trial court acted properly in granting relief under that statute.

If a plaintiff's action is dismissed for want of prosecution, that plaintiff has the option, pursuant to section 13-217 of the Code, to refile the action within one year of the entry of the DWP order or within the remaining period of limitations, whichever is greater. 735 ILCS 5/13-217 (West 1992). Section 13-217 is a savings statute, and its purpose is to facilitate the Disposition of the litigation on the merits and to avoid its frustration upon grounds unrelated to the merits. S.C. Vaughan Oil Co. v. Caldwell, Troutt & Alexander, 181 Ill. 2d 489, 693 N.E.2d 338, 342, (1998).

In Vaughan, the Illinois Supreme Court determined that the date upon which an order for dismissal for want of prosecution becomes final is the date upon which a plaintiff's right to refile the cause of action under section 13-217 expires. The court stated that two years after that date, a plaintiffs' right to file a motion to vacate the DWP pursuant to section 2-1401 will expire. 181 Ill. 2d 489, 693 N.E.2d at 344.

In our view, this case is analogous to the situation presented to the Illinois Supreme Court in Doyle v. Rhodes, 101 Ill. 2d 1, 461 N.E.2d 382 (1984). In Doyle, the Illinois Supreme Court was faced with the task of construing and applying the Illinois Contribution Among Joint Tortfeasors Act (Ill. Rev. Stat. 1981, ch. 70, par. 301 et seq.), which was enacted following the decision in Skinner v. Reed-Prentice Division Package Machinery Co., 70 Ill. 2d 1, 374 N.E.2d 437 (1977). The question that the Doyle court was called upon to decide was whether the immunity of an employer from an action at law by an injured employee provided by sections 5(a) and 11 of the Workers' Compensation Act (Ill. Rev. Stat. 1981, ch. 48, pars. 138.5(a), 138.11) also bars an action for contribution against the employer by a third party who was partially responsible for the employee's injury. The Doyle court determined that the Workers' Compensation Act provides employers with a defense against any action that may be asserted against them in tort, but that defense is an affirmative one whose elements--the employment relationship and the nexus between the employment and the injury--must be established by the employer, and which is waived if not asserted by him in the trial court. Hence, the plaintiff may recover a tort judgment against his employer for a work-related injury if the employer ...


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