Appeal from the Circuit Court of Cook County. Honorable Dorothy Kirie Kinnaird, Judge Presiding.
The opinion of the court was delivered by: Justice Quinn
Defendant Andrew J. Kontrick appeals the order of the trial court granting plaintiff Robert A. Ryan's motion to reinstate in connection to this court's opinion in Ryan v. Kontrick, 304 Ill. App. 3d 852 (1999) (Ryan I). Ryan's motion was filed 290 days after a stay was lifted in a bankruptcy proceeding initiated by Kontrick. On appeal, Kontrick contends that the trial court erred in granting plaintiff's motion to reinstate because Ryan failed to exercise due diligence in filing the motion, as required by Supreme Court Rule 369(c). 134 Ill. 2d R. 369(c).
In Ryan I, Kontrick appealed the trial court's confirmation of a December 1996 arbitration award of $519,324.42 against him in favor of Ryan, which had resulted from a contract dispute between the two men, both of whom are medical doctors. This amount consisted of compensatory and punitive damages and attorney fees and costs. The trial court also awarded prejudgement interest on that sum. In our March 26, 1999, opinion in Ryan I, we affirmed the arbitrator's awards of compensatory damages and attorney fees, but vacated the punitive damages award. The case was remanded for entry of an order requiring Kontrick to pay interest at the required statutory rate. This court's mandate in Ryan I was issued on November 17, 1999.
In April 1997, during the pendency of the appeal in Ryan I, Kontrick filed with the bankruptcy court a petition for relief under chapter 7 of the United States Bankruptcy Code (11 U.S.C. § 701 et seq. (1994)). In response, Ryan filed a complaint seeking to deny Kontrick a discharge of the amount owed on the arbitration award. As a result of Kontrick's bankruptcy proceeding, an automatic stay was imposed prohibiting any further proceedings against Kontrick. In addition to the Ryan I appeal, this stay affected two other suits, one in Lake County and one in Cook County, that Ryan had pending against Kontrick. The stay was later modified to allow Kontrick to proceed with his appeal in Ryan I.
On June 13, 2000, the bankruptcy court entered its order denying Kontrick a discharge, which was the subject of a motion to amend. On July 10, 2000, the bankruptcy court entered its amended order, which also denied Kontrick a discharge. On July 20, 2000, the automatic stay was lifted by operation of law. Kontrick then appealed the bankruptcy court's order denying discharge, and the Court of Appeals for the Seventh Circuit affirmed the bankruptcy court's order while the instant case was under advisement. In re Kontrick, 295 F.3d 724 (7th Cir. 2002). On February 7, 2001, Ryan, through his attorney, filed a wage garnishment and citation to discover assets to enforce the December 1996 arbitration award, which had been reversed in part in Ryan I. Kontrick moved to quash on the ground that the trial court lacked jurisdiction to enforce the reversed judgment and that Ryan had failed to reinstate the case as required by Supreme Court Rule 369(c). The trial court granted Kontrick's motion to quash, and Ryan's attorney, who had filed the garnishment and citation, was sanctioned.
On March 30, 2001, Ryan filed his motion to reinstate under Supreme Court Rule 369(c). In the memorandum in support of his motion, Ryan argued that he did not have a duty to reinstate because Kontrick was the prevailing party for purposes of Rule 369(c). In the alternative, Ryan noted that since the date the automatic stay was dissolved, he and Kontrick had been involved in other proceedings relating to Ryan's collection of the arbitration award. Based upon Kontrick's acquiescence to repeated deferrals in a case involving the allegedly fraudulent transfer of funds from Kontrick to his wife, Ryan argued that Kontrick had acquiesced to the delay in filing for reinstatement. Ryan also argued that the parties had been "actively preoccupied" with proceedings relating to sanctions brought against Ryan and his attorney in bankruptcy court.
Ryan further argued that to grant reinstatement would undermine neither the orderly disposition of the case nor the policy considerations behind Rule 369(c) and asserted that he had delayed seeking reinstatement because if Kontrick were to win his appeal of the bankruptcy court's denial of discharge, Ryan would be required to return the funds he had collected. Ryan asserted that he would be "inequitably and grievously harmed" and that Kontrick would receive an undeserved windfall if reinstatement were denied.
After hearing arguments, the trial court granted Ryan's motion to reinstate, noting that the litigation between Ryan and Kontrick, which included both the State court proceedings involving the arbitration award and the federal bankruptcy proceedings, had been "vigorously fought." Reinstatement aside, the trial court questioned whether collection of the arbitration award could occur prior to a conclusion of the appeal relating to Kontrick's discharge proceedings. The trial court distinguished the cases involving Rule 369(c) from the instant case by stating that only the "ministerial task of computation" was necessary in the instant case, which was different from other cases, where there was "a lot to be done" after remand. After the parties filed competing memoranda regarding the manner in which post-judgment interest should be calculated, the trial court entered its amended judgment in favor of Ryan for $422,414.53. This appeal followed.
Kontrick contends that the trial court erred in granting Ryan's motion to reinstate. He argues that as the prevailing party in Ryan I, Ryan has failed to establish due diligence under Supreme Court Rule 369(c).
Supreme Court Rule 369(c) provides that, "When the reviewing court remands the case for a new trial or hearing and the mandate is filed in the circuit court, the case shall be reinstated therein upon 10 days' notice to the adverse party." 134 Ill. 2d R. 369(c). The parties seem to agree that to be timely under the circumstances of this case, the motion to reinstate should have been filed within 10 days of July 20, 2000, the date the automatic stay was lifted following the denial of Kontrick's discharge petition.
When determining whether a party has reinstated a case within a reasonable period of time, it is proper for a court to consider the totality of the circumstances, particularly any reasons offered for an undue delay. People v. NL Industries, Inc., 297 Ill. App. 3d 297, 300-01 (1998). The reasonableness requirement is considered in terms of whether a petitioner has exercised due diligence in filing the petition. National Underground Construction, Co. v. E.A. Cox Co., 273 Ill. App. 3d 830, 837 (1995). When considering cases under Rule 369(c), this court may consider cases brought under section 2-1401 of the Illinois Code of Civil Procedure (735 ILCS 5/2-1401 (West 2000)), addressing the issue of due diligence. See National Underground, 273 Ill. App. 3d at 836-37. Thus, due diligence in filing a reinstatement petition requires the petitioner to have a "reasonable excuse" for failing to timely file the ...