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R&J Construction Supply Co., Inc. v. Adamusik

Court of Appeals of Illinois, First District, Fourth Division

January 5, 2017

R&J CONSTRUCTION SUPPLY COMPANY, INC., n/k/a CCS Contractor Equipment & Supply Company, Plaintiff-Appellant,
GREGORY ADAMUSIK, d/b/a United Masonry & Tuckpointing, and EDMAR CORPORATION Defendants-Appellees.

         Appeal from the Circuit Court of Cook County. No. 08 MI 178352 Honorable Daniel Kubasiak, Judge Presiding.

          JUSTICE BURKE delivered the judgment of the court, with opinion. Presiding Justice Ellis and Justice McBride concurred in the judgment and opinion.



         ¶ 1 I. BACKGROUND

         ¶ 2 On October 1, 2008, plaintiff, R&J Construction Supply Company, Inc., filed a complaint against Gregory Adamusik, d/b/a United Masonry & Tuckpointing, alleging breach of contract. Plaintiff obtained a default judgment against Adamusik in the amount of $9395.84 plus costs.

         ¶ 3 At plaintiff's request, the circuit court revived the judgment on June 23, 2015. On June 26, 2015, plaintiff issued a third-party citation to discover assets (CDA) to appellee, Edmar Corporation, in order to recoup any funds owed to Adamusik/United Masonry from Edmar. The third-party citation was served on Edmar on July 2, 2015. Edmar did not answer the CDA or appear on or before the return date. The court entered a conditional judgment against Edmar on July 24, 2015.

         ¶ 4 On July 28, 2015, Plaintiff issued and served a summons to confirm the conditional judgment on Edmar. On August 25, 2015, following Edmar's failure to answer or appear again, the trial court confirmed the conditional judgment and entered a final judgment against Edmar in the amount of the Adamusik judgment of $9395.84 plus costs and interest. On September 30, 2015, plaintiff issued a direct citation to Edmar-no longer a third-party citation-to discover assets to satisfy the judgment.

         ¶ 5 On the citation return date of October 19, 2015, Edmar's counsel appeared and the court granted counsel's request for time to review the file. On November 23, 2015, Edmar filed a petition to vacate the judgment entered against it pursuant to section 2-1401 of the Code of Civil Procedure (Code) (735 ILCS 5/2-1401 (West 2010)) arguing that plaintiff failed to establish a basis to issue its initial third-party citation to Edmar and that Edmar had no relationship with plaintiff or Adamusik. Edmar argued that the citation was not properly filed and any judgment based on the improperly filed citation should be vacated. After a hearing, the trial court granted the section 2-1401 petition, vacated the conditional and final judgments, and dismissed the citation against Edmar. Plaintiff now appeals.

         ¶ 6 II. ANALYSIS

         ¶ 7 In Illinois, civil judgments are enforced through supplementary proceedings pursuant to section 2-1402 of the Code (735 ILCS 5/2-1402 (West 2014)). The statute authorizes plaintiff to attempt to find any assets of Adamusik that may be held by third parties. Section 2-1402(a) of the statute, authorizing the citation action, provides a mechanism by which a judgment creditor may initiate supplementary proceedings to discover the assets of a judgment debtor or third party, and apply those assets to satisfy the judgment. 735 ILCS 5/2-1402(a) (West 2014); Ericksen v. Rush-Presbyterian-St. Luke's Medical Center, 289 Ill.App.3d 159, 166 (1997), appeal denied, 174 Ill.2d 559 (1997) (table); Schak v. Blom, 334 Ill.App.3d 129, 132-33 (2002). The supplementary proceeding is initiated by the service of a citation to discover assets. 735 ILCS 5/2-1402(a) (West 2014).

         ¶ 8 The court may compel any person cited, other than the judgment debtor, to turn over any assets that the third party may be holding or in possession of that belong to the judgment debtor, such as wages or payments due. These assets can then be applied in satisfaction of the judgment, in whole or in part. 735 ILCS 5/2-1402(a), (c) (West 2014); 735 ILCS 5/12-706(a) (West 2010). If the third-party citation respondent fails to appear and answer, a court may enter a conditional judgment against the third party for the amount due from the judgment debtor. Once a conditional judgment has been entered against a third party, a summons to confirm the conditional judgment may issue against the third party, commanding the third party to show cause why the judgment should not be made final against it. If the third party again fails to respond after being served with a summons to confirm the conditional judgment, the court shall confirm the judgment in the amount owed to the plaintiff and award costs. 735 ILCS 5/2-1402 (West 2014).

         ¶ 9 If Edmar had immediately responded to any of the citations with a motion to quash or a response that they were not holding assets, the trial court could have had a hearing on that issue, or dismissed the citation. That is not what occurred in this case. Edmar did not file a response, an answer, or a motion to quash the citation. Edmar was served with the citation and ignored it. Edmar was then served with the conditional judgment for failure to respond to the citation, and ignored that as well. Edmar was served with the summons to confirm the conditional judgment and again ignored that, which resulted in a final judgment being entered against Edmar. Once the judgment was made final against Edmar, plaintiff served Edmar, no longer with the third-party citation, but with a direct citation. If Edmar had contested the citation at any point, any decision the trial court made to compel a judgment debtor to deliver up money or property in satisfaction of a judgment would be reviewed under an abuse of discretion standard, when the trial court conducted an evidentiary proceeding, heard testimony, and made findings of fact. Gonzalez v. Profile Sanding Equipment, Inc., 333 Ill.App.3d 680, 692-93 (2002); cf. Dowling v. Chicago Options Associates, Inc., 226 Ill.2d 277, 285 (2007) (de novo standard applies when the trial court heard no testimony and based its turnover decision on documentary evidence). But that did not happen in this case.

         ¶ 10 When plaintiff served Edmar with the direct citation, Edmar retained counsel by the return date of the citation, and counsel filed the section 2-1401 petition seeking to vacate both the citation and the conditional and final judgments. The hearing that the trial court conducted was on the propriety of the section 2-1401 petition, not the propriety of the issuance of the third-party citation. We review the circuit court's ruling on a 2-1401 petition de novo. People v. Vincent, 226 Ill.2d 1, 18 (2007) ("when a court enters either a judgment on the pleadings or a dismissal in a section 2-1401 proceeding, that order will be reviewed, on appeal, de novo").

         ¶ 11 The typical section 2-1401 analysis is two-tiered: both a meritorious defense and due diligence must be pleaded and demonstrated. The issue of a meritorious defense is a question of law, and it is properly subject to summary judgment and de novo review. If the petitioner fails to allege the existence of a meritorious defense, the petition is properly denied, and due diligence need not be addressed. However, if a meritorious defense probably exists, ...

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