Appeal from the Circuit Court of Cook County No. 90 CH 7362 (Transferred to Law Division) The Honorable Sophia H. Hall, Judge Presiding.
The opinion of the court was delivered by: Presiding Justice Cousins
The plaintiffs are a family that lived in an apartment on North Avenue in Chicago. The apartment had peeling and crumbling lead paint which poisoned seven of the children. The family filed suit, naming Herbert A. Beigel, Kenway Investments, Inc., and Sidney D. Missner, Jr., as defendants, seeking damages and injunctive relief.
Count I of the complaint sought an injunction requiring the defendants to remove the lead paint. Count II was for breach of the warranty of habitability. Count III was based on negligence. Count IV alleged wilful and wanton misconduct and sought $1 million in punitive damages. By leave of the court, the plaintiffs added the Sydney D. Missner Trust, No. 244858, as a defendant. The court dismissed count I and granted summary judgment in favor of Kenway Investments.
A special process server was appointed and allegedly served Beigel. Beigel did not respond and was found in default. At the prove up a jury granted damages of $1,750,000. Almost two years later, the plaintiffs served Beigel with a citation to discover assets. When he again failed to appear, the court entered a rule to show cause. Twelve days later, Beigel, through his attorney, filed a motion to vacate the default judgment, alleging that he had not been served with process. After an evidentiary hearing, the trial court found that Beigel had been properly served and denied the motion.
The plaintiffs filed an emergency motion for contempt, alleging that Beigel, with the assistance of his attorney, was transferring real property into trusts in violation of the citation order. The court ordered Beigel to produce documents relating to the transfers. Then Beigel filed a section 2-1401 motion to vacate the default judgment, alleging lack of service and certain equitable factors. 735 ILCS 5/2-1401 (West 1996). The court stayed the citation proceedings pending resolution of the section 2-1401 motion. The court denied the motion on the basis that it was not timely, and the plaintiffs moved to lift the stay of citation proceedings. Beigel appealed from the denial of the section 2-1401 petition. Then, at the request of the plaintiffs, the court imposed sanctions on Beigel and his attorney, on the grounds that the 2-1401 motion had been filed for purposes of delay. Beigel then appealed the award of sanctions. We consolidated the cases and now review.
Beigel argues that the trial court erred in denying the section 2-1401 petition both on the merits and because it did not realize that it had the discretion to grant the petition based on equitable factors. Beigel and his attorney jointly argue that, as a result of the first error, the court erroneously found that the section 2-1401 petition was sanctionable for not having a good-faith basis in law, and that the court imposed excessive sanctions.
Deborah and Jessie Selvy lived with their 12 children at 2452 West North Avenue in Chicago from 1983 until 1990. Lead paint was peeling and crumbling from the walls and ceiling of their apartment, and water leaking through the ceiling carried tiny particles of paint around the apartment. The city had previously brought suit against the owners for failing to remove the lead-based paint, and the plaintiffs had informed Herbert Beigel, to whom they paid rent throughout their tenancy, of the problem repeatedly. Seven of the Selvys' children were hospitalized for lead poisoning.
The Selvys filed suit against Beigel, Kenway Investments (a business that had purchased the building at a tax sale) and Sidney Missner, who also had had an ownership interest in the building.
Count I of the complaint sought an injunction requiring the defendants to remove the lead paint. Count II was for breach of the warranty of habitability. Count III was based on negligence. Count IV alleged wilful and wanton misconduct and sought $1 million in punitive damages. By leave of the court the plaintiffs added the Sydney D. Missner Trust, No. 244858, as a defendant. The injunctive claim was adjudged moot, since the Selvy family no longer lived in the apartment, and it was no longer rented out as a residence. Accordingly, the case was transferred to the law division.
Shortly after the suit was filed, the trial court appointed Darryl Smith as a special process server to effect service on Beigel. Smith allegedly made several trips to the area of the apartment building along with Mr. and Mrs. Selvy. On two of those occasions the Selvys saw Beigel and pointed him out to Mr. Smith. On April 13, 1991, they made another trip. Mr. Selvy identified Beigel once again and then Smith approached him. Beigel was moving apartment fixtures with some other men. Smith said "Herbert, can I speak to you?" The other men pointed to Beigel and Smith handed him the summons. Beigel refused to take the papers, so Smith touched him with the summons and left. Smith then filed an affidavit of service with the court.
Beigel did not appear in court and a default judgment was entered against him on December 12, 1991. After much litigation, on June 1, 1995, the court granted summary judgment in favor of Kenway Investments, on the basis that there was no landlord-tenant relationship between it and the Selvys. This court affirmed the grant of summary judgment. Selvy v. Beigel, 283 Ill. App. 3d 532, 670 N.E.2d 784 (1996).
The prove up as to Beigel was initially set for June 19, 1995. The plaintiffs filed an emergency motion for a continuance and the prove up was moved to July 18, 1995. At the conclusion of the proceeding, a jury assessed damages of $150,000 for each of the poisoned Selvy children, as well as exemplary damages of $700,000, for a total of $1,750,000.
The plaintiffs filed a citation to discover assets on July 1, 1997, and served it on Beigel on July 16, 1997. Beigel did not appear before the court, so on August 1, 1997, the court entered a rule to show cause why Beigel should not be attached and punished for contempt of court. Beigel was personally served for the rule to show cause on August 5, 1997.
On August 13, 1997, Beigel entered a special appearance through his counsel, Alan Levin and the law firm of Wayne & Levine. He moved to quash service and to vacate the default judgment. The motion alleged that Beigel had never been served and that there was no proof of service in the court file. The plaintiffs responded, attaching Smith's affidavit of service from 1991, as well as sworn testimony of Smith and Mr. and Mrs. Selvy. A hearing was held on November 12, 1997. The parties waived the opportunity to present live testimony and the court decided, based on the affidavits, that Beigel had been ...