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Rapier v. First Bank and Trust Co. of Illinois

November 16, 1999

JAMES R. RAPIER, JR., AND BONNIE L. RAPIER, PLAINTIFFS-APPELLANTS,
v.
FIRST BANK AND TRUST COMPANY OF ILLINOIS, F/K/A FIRST BANK AND TRUST COMPANY OF PALATINE, DEFENDANT AND (TRANS UNION CREDIT INFORMATION COMPANY, A FOREIGN CORPORATION, DEFENDANT-APPELLEE).



The opinion of the court was delivered by: Justice McNULTY

Appeal from the Circuit Court of Cook County Honorable Willard Lassers, Judge Presiding

Plaintiffs, James R. Rapier, Jr., and Bonnie L. Rapier, appeal from an order of the trial court granting the motion of Trans Union Corporation (Trans Union) to quash service of process and vacate a default judgment entered against Trans Union Credit Information Company (Trans Union Credit) in May 1992. Plaintiffs also appeal from an order of the trial court denying their motion to reconsider. We affirm.

On December 18, 1987, plaintiffs filed an action for breach of contract and defamation in which they alleged that First Bank and Trust Company of Illinois (First Bank) filed an erroneous foreclosure lawsuit against them, and Trans Union Credit generated credit reports on them which reflected that the foreclosure lawsuit was pending, even though First Bank had voluntarily dismissed the lawsuit and had requested that Trans Union Credit correct its records to show that the lawsuit was improper. Plaintiffs caused a summons to be served upon United States Corporation Company (USCC), as registered agent for Trans Union Credit. Trans Union Credit, by its attorneys, Keck, Mahin & Cate, filed an appearance and an answer to the complaint in which it denied that First Bank had requested that it correct its records to reflect that the lawsuit was improper. In addition, Trans Union Credit asserted that it acted in a reasonable manner in publishing the information and plaintiffs' lawsuit was preempted by the Fair Credit Reporting Act (15 U.S.C. §1681 et seq. (West 1994)).

On February 28, 1989, Trans Union Credit filed a motion requesting that the trial court dismiss plaintiffs' action with prejudice because plaintiffs failed to appear at their scheduled depositions. The trial court twice ordered plaintiffs to appear at the depositions. Plaintiffs failed to comply with the trial court's orders, and on December 20, 1989, the court dismissed the action for want of prosecution.

On January 2, 1990, Trans Union Credit filed a certificate of amendment with the State of Delaware, changing its corporate title to Trans Union Corporation. Also on January 2, 1990, Trans Union sent an application for amended certificate of authority to the State of Illinois, office of the Secretary of State (Secretary of State). On January 5, 1990, the Secretary of State issued a certificate to Trans Union reflecting the change to the new corporate title, Trans Union Corporation.

On December 19, 1990, plaintiffs refiled their action, naming First Bank as a defendant in seven counts and adding Trans Union Credit as the defendant in the eighth count. The count of the complaint addressed to Trans Union Credit contains allegations virtually identical to those in plaintiffs' original complaint. On the day plaintiffs filed the new complaint, they caused a summons to issue to USCC as registered agent for Trans Union Credit. The return of service shows that the deputy sheriff left a copy of the summons and complaint with Sue Prevost, the branch manager of USCC, on December 26, 1990. Trans Union Credit did not file an appearance or respond in any way to plaintiffs' complaint.

First Bank filed an appearance and obtained dismissal of four of the seven counts of the complaint addressed to it. Subsequently, on July 16, 1991, the trial court dismissed plaintiffs' action for want of prosecution. Upon motion of the plaintiffs, the cause was reinstated on November 13, 1991.

On April 29, 1992, plaintiffs mailed a notice of motion to USCC, as registered agent for Trans Union Credit, purporting to notify Trans Union Credit that plaintiffs would appear before the trial court on May 6, 1992, to seek an order of default against Trans Union Credit for its failure to file an appearance and answer the complaint. On May 7, 1992, the trial court granted plaintiffs' motion and entered an order of default against Trans Union Credit. Upon prove-up on May 20, 1992, the trial court entered a default judgment against Trans Union Credit in the amount of $962,683.

On August 29, 1994, more than two years after entry of the default judgment, plaintiffs caused a citation to discover assets to issue to "Trans Union Credit Information Co., n/k/a Trans Union Corporation." Plaintiffs directed the sheriff's office to serve Trans Union Credit at Trans Union's principal office in Illinois. The return of service shows that the deputy sheriff left a copy of the citation with Marilynn Hadasdy, an agent of Trans Union, on August 30, 1994. Plaintiffs also mailed copies of the citation and citation notice to "Trans Union Credit Information Co., n/k/a Trans Union Corporation" at Trans Union's principal office.

On September 16, 1994, Trans Union, by its attorneys, Keck, Mahin & Cate, entered a special and limited appearance and filed a motion to quash service of the summons and vacate the default judgment. Trans Union acknowledged that USCC was its registered agent on December 26, 1990, the day summons was served upon Sue Prevost. However, Trans Union maintained that the service of process was ineffective because the sheriff served a copy of the summons and complaint on USCC as registered agent for Trans Union Credit Information Co., and no corporation bore that name after January 5, 1990. Trans Union alleged the first notice it received that plaintiffs had refiled their action was upon service of the citation to discover assets, which plaintiffs served at Trans Union's office, rather than at the office of its registered agent.

In support of its motion to quash the summons and vacate the default judgment, Trans Union filed the affidavit of Carol D'Ascenzo, whose duties included receiving all summonses forwarded by USCC and transmitting them to the general counsel's office at Trans Union. D'Ascenzo averred that she did not receive a summons in plaintiffs' cause. Trans Union also filed the affidavit of Denise A. Darcy, the associate attorney of Trans Union. Upon receipt of a summons, Darcy would open a file, record the pertinent information on a computer database, and forward the material to outside counsel at Keck, Mahin & Cate. Darcy averred that Trans Union had no record of receiving a summons and complaint in plaintiffs' cause or a notice of motion for entry of a default order.

Next, Trans Union submitted the affidavit of Bernadette Fahy, the regional manager of USCC and its sister corporation, Prentice-Hall Corporation System (PHCS). In the affidavit, Fahy stated that USCC currently served as the registered agent for 5,400 corporations. In December 1990, USCC acted as the registered agent for 4,219 corporations. Of the corporations it serviced currently, 670 had the name "Trans" or "Union" in their corporate titles. Fahy acknowledged that USCC once acted as the registered agent for Trans Union Credit. However, Trans Union Credit changed its name, and, as of December 26, 1990, USCC was not the registered agent for any company named Trans Union Credit Information Co.

Fahy admitted that the sheriff's office served a copy of the summons and complaint in plaintiffs' cause upon USCC, as registered agent for Trans Union Credit. According to USCC records, when USCC realized that it was not the registered agent for Trans Union Credit, USCC returned the summons and complaint to James F. Wisniewski, plaintiffs' attorney, on January 14, 1991. USCC informed Wisniewski that it was not the current registered agent for Trans Union Credit and advised him to contact the Secretary of State for information regarding Trans Union Credit. A copy of USCC's letter to Wisniewski was attached to Fahy's affidavit. On November 7, 1994, Trans Union submitted an additional affidavit from Fahy in which she averred that in December 1990 it was the practice of USCC to return the summons and complaint accompanied by a letter to counsel explaining why a summons could not be accepted. Further, copies of the complaint and summons would not be sent to any of the corporations serviced by USCC. Fahy stated that an exhaustive search of the records of USCC and its sister company PHCS failed to disclose a transmittal form sent to any corporation, including Trans Union Corporation, or to the New York office of PHCS in connection with service of process in plaintiffs' cause. Such a transmittal form was prepared whenever USCC accepted service of summons, with one copy of the form sent to the official designee of the corporation to whom service was directed, one copy sent to the New York office of PHCS, and one copy filed in USCC's Chicago office.

Lastly, Trans Union filed the affidavit of William Edgar, supervisor of the annual report franchise tax section of the business services department of the Secretary of State. Edgar stated that in 1990, the policy of the Secretary of State was to return any service of summons in which the name of the corporation being served did not match the name of a corporation on the books and records of the Secretary of State. Under this policy, an agent of the office could return process papers that attempted to serve a corporation using that corporation's former name. Edgar estimated that 40% of the summonses received by the Secretary of State were returned for failure to comply with section 5.25 of the Business Corporation Act of 1983 (805 ...


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