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Krilich v. Plencer

June 29, 1999

ROBERT R. KRILICH, SR., PLAINTIFF-APPELLEE,
v.
KEN M. PLENCER AND AMERICAN HOMES CORPORATION, DEFENDANTS (VINCENT GRAMAROSSA AND MARY GRAMAROSSA, DEFENDANTS-APPELLANTS).



Appeal from the Circuit Court of Du Page County. No. 97--L--439 Honorable Edward R. Duncan, Judge, Presiding.

The opinion of the court was delivered by: Justice McLAREN

JUSTICE McLAREN delivered the opinion of the court:

Plaintiff, Robert R. Krilich, Sr., and defendants Vincent and Mary Gramarossa entered into an agreement whereby all defendants, as guarantors, agreed to pay plaintiff for certain real estate. Plaintiff sought the entry of a default judgment against all defendants when they failed to pay under the agreement. At the time the default was sought, plaintiff learned that defendant Vincent Gramarossa had filed for bankruptcy. Plaintiff informed the trial court of the bankruptcy proceedings, and the trial court entered a default judgment against defendants Ken Plencer, American Homes Corporation (American Homes), and Vincent Gramarossa. Plaintiff then filed a motion to amend the earlier default judgment nunc pro tunc. The trial court granted the motion. Defendants Vincent and Mary Gramarossa now appeal and argue that the trial court could not amend the order nunc pro tunc. We agree.

On January 10, 1989, plaintiff, defendant Plencer, and defendant American Homes executed a promissory note whereby Plencer and American Homes agreed to pay $68,500 and 10% interest per annum to plaintiff in exchange for certain real estate. The promissory note was guaranteed on May 25, 1989, in a guarantee agreement executed between defendant Plencer and defendants Vincent and Mary Gramarossa. This guarantee agreement provided that defendant Plencer and defendants Vincent and Mary Gramarossa would be jointly and severally liable for the amount left to be paid under the January 10, 1989, note. Soon afterwards, defendant Plencer and defendant American Homes defaulted and failed to pay on the note as agreed. Neither defendant Plencer nor defendant American Homes is a party to this appeal.

On August 29, 1997, plaintiff filed a motion entitled "Motion for Default Judgment and for Finding that Plaintiff's Action is neither stayed nor discharged under the United States Bankruptcy Code." Plaintiff indicated in the motion that defendants Vincent and Mary Gramarossa's attorney notified plaintiff and that plaintiff was told that defendant Vincent Gramarossa filed for bankruptcy in 1993. Defendants Vincent and Mary Gramarossa's attorney claimed that any action taken by plaintiff was stayed or discharged due to the bankruptcy proceedings. After learning of defendant Vincent Gramarossa's bankruptcy proceedings, plaintiff discovered that he was not listed as a creditor in the bankruptcy case and that a plan of reorganization was confirmed on April 17, 1997.

A hearing on plaintiff's motion for a default judgment was held on September 10, 1997. At this hearing, the trial court entered a default judgment against defendants Plencer, American Homes, and Vincent Gramarossa, but the trial court refused to enter a finding that the bankruptcy proceedings stayed or discharged the guarantee agreement proceedings.

Specifically, the trial court stated:

"THE COURT: Mr. Wanca [plaintiff's attorney], your motion for default is granted.

THE COURT: "I think the appropriate thing to do would be we'll prove this up, if they [,presumably, Vincent Gramarossa] want to vacate [the default judgment,] it would have to be something raised affirmatively; namely, for protection of the Bankruptcy Code. So I don't think that I'd be in an appropriate position today to have in effect a default declaratory action indicating the effect of the bankruptcy."

The court then entered a default judgment order against defendants Plencer, American Homes, and Vincent Gramarossa.

Soon after the default judgment was entered, defendant Vincent Gramarossa filed a motion in bankruptcy court for damages against plaintiff and to hold him in contempt. Plaintiff responded that the bankruptcy court did not have jurisdiction over the matter because the trial court had already assumed jurisdiction over the cause and entered a default judgment against defendants Plencer, American Homes, and Vincent Gramarossa. The bankruptcy court took the matter under advisement and decided that an evidentiary hearing would be necessary to determine plaintiff's and plaintiff's counsel's intent when seeking the default judgment in the trial court. The bankruptcy court also pointed out that the trial court never made a finding concerning the discharging of the debt or the staying of the proceedings in the trial court.

On February 19, 1998, plaintiff filed a motion to amend the September 10, 1997, default judgment order. Plaintiff asked that the trial court amend the order to read that plaintiff was not listed as a creditor in the bankruptcy proceedings, that plaintiff was not included in the plan of reorganization, that the automatic stay would not bar the proceedings in the trial court, and that the discharge order entered pursuant to the bankruptcy proceedings had no effect on plaintiff's proceedings in the trial court.

On February 25, 1998, a hearing was held on plaintiff's motion to amend the September ...


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