Vacating Order of Default and Judgment
In West Bend Mutual Insurance Company v. 3RC Mechanical and Contracting Services, LLC, West Bend Mutual Insurance Company (“West”) filed a two-count complaint against 3RC Mechanical and Contracting Services, LLC (“3RC”), alleging negligence and breach of contract. Specifically, West contended that ACS Rental Properties, LLC (“ACS”) entered into an oral agreement in which 3RC agreed to lift a house owned by ACS to allow construction of new concrete foundation in exchange for $15,000. The house allegedly fell during the lifting project causing extensive damage. West learned of 3RC’s bankruptcy proceeding and filed and served upon 3RC a motion requesting the bankruptcy court to lift the automatic stay. The bankruptcy court lifted the automatic stay. Under the bankruptcy, Frank Cassano was named as the debtor’s contact. Cassano replaced defendant’s former registered agent and attorney, Brian Kocis. 3RC failed to appear at the hearing and default judgment was entered against them. 3RC’s insurer retained counsel and thereafter filed a petition to vacate the default order. Throughout the lawsuit, plaintiff continuously served notices and motions on defendant in the care of Kocis at the Naperville address rather than to Cassano, who was the contact.
West contends that the trial court erred in vacating the judgment because defendant had sufficient notice of the lawsuit and the negligence of defendant’s registered agent, attorneys, and/or insurer did not excuse defendant’s inaction.
The court reviewed when it is appropriate to vacate the order of default and judgment.
Illinois Code Section 2-1401 establishes a comprehensive, statutory procedure that allows for the vacature of a final judgment older than 30 days. 735 ILCS 5/2-1401(a) (West 2010). The statute requires that its petitioner support its petition with affidavits or other appropriate showing as to matters not of record. 735 ILCS 5/2-1401(b) (West 2010). To be entitled to relief under Section 2-1401, the petitioner must affirmatively set forth specific factual allegations supporting each of the following elements: “(1) the existence of a meritorious defense or claim; (2) due diligence in presenting this defense or claim to the circuit court in the original action; and (3) due diligence in filing the Section 2-1401 petition for relief.” The court’s review of a Section 2-1401 petition is two-tiered: (1) the issue of a meritorious defense is a question of law and subject to de novo review; and (2) if a meritorious defense exists, then the issue of due diligence is subject to abuse of discretion review.
The court determined that there was an essential question of fact in this case as to whether a valid contract existed between ACS and defendant. Cassano’s affidavits dispute plaintiff’s claim that ACS and defendant entered into an oral agreement to lift the home in question for the construction of a new foundation. Cassano clearly stated that defendant did not enter into a contract with ACS and that he never authorized any construction project where the home was located. Moreover, plaintiff has provided no written instrument in the record on appeal or facts to support the existence of any contract. This suggests the existence of a meritorious defense. Furthermore, the court found that because of a collection of mistakes, defendant was understandably unaware of the Cook County action and therefore find no abuse of discretion in its findings.
W. Bend Mut. Ins. Co. v. 3RC Mech. & Contracting Servs., LLC, 2014 IL App (1st) 123213.
