Commonwealth Edison Co v. Carlisle Utility Contractors, Inc

2020 IL App (1st) 200178-U

• Court: Appellate Court of Illinois
• Decided: September 18, 2020
• Docket: 1-20-0178
• Status: Unpublished

Opinion

2020 IL App (1st) 20-0178-U Order filed: September 18, 2020

FIRST DISTRICT FIFTH DIVISION

No. 1-20-0178

NOTICE: This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1). ______________________________________________________________________________

IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT ______________________________________________________________________________

COMMONWEALTH EDISON CO., ) Appeal from the ) Circuit Court of Plaintiff-Appellee, ) Cook County. ) v. ) No. 18 M 110976 ) CARLISLE UTILITY CONTRACTORS, INC., ) Honorable ) Mary Kathleen McHugh, Defendant-Appellant. ) Judge, presiding. ______________________________________________________________________________

JUSTICE ROCHFORD delivered the judgment of the court. Presiding Justice Delort and Justice Hoffman concurred in the judgment.

ORDER

¶1 Held: We affirmed the default judgment entered against defendant after finding that substitute service on the Illinois Secretary of State was properly effectuated under the Business Corporation Act.

¶2 Plaintiff-appellee, Commonwealth Edison Co. (ComEd) obtained an ex parte default

judgment against defendant-appellant, Carlisle Utility Contractors (Carlisle) in this suit for

property damages where Carlisle was served by substitute service on the Illinois Secretary of State

under the Business Corporation Act of 1983 (BCA), 805 ILCS 5/1.01 et seq. (West 2018). Carlisle

appeals from the orders of the circuit court denying its petition to vacate the default judgment and No. 1-20-0178

motion to reconsider that denial and argues that service on the Secretary of State was improper. We

find that service was proper and affirm the default judgment. 1

¶3 On February 14, 2018, ComEd, an Illinois public utility, filed a two-count complaint

against Carlisle which raised claims of negligence and a violation of the Illinois Underground

Utility Facilities Damage Prevention Act, 220 ILCS 50/11(a) (West 2016). ComEd alleged that in

July 2016, during an excavation, Carlisle damaged ComEd’s underground utility facilities in

Glenview, Illinois. ComEd sought recovery of the costs of the resulting repairs which totaled

$25,780.

¶4 Carlisle is an Indiana corporation with a principal place of business in Hobart, Indiana.

Michael Carlisle (Michael), the president and registered agent for Carlisle in Illinois, has a

registered office at 9960 Anderson Ave, Unit C, Chicago Ridge, Illinois (Chicago Ridge address).

¶5 In February of 2018, ComEd issued a summons which listed Carlisle’s address as 427 S.

Indiana Street, Hobart, Indiana (Indiana Street address); the summons was placed for service with

the sheriff of Cook County. A deputy sheriff attempted to serve Michael as the registered agent of

Carlisle at the Chicago Ridge address on March 26, 2018. According to the sheriff’s affidavit, the

attempt was unsuccessful as there was “no contact.”

¶6 On April 20, 2018, the circuit court granted ComEd’s motion to appoint Firefly Legal, Inc.

as special process server and for issuance of an alias summons. The alias summons showed

Michael as the registered agent of Carlisle at the Chicago Ridge address.

1 In adherence with the requirements of Illinois Supreme Court Rule 352(a) (eff. July 1, 2018), this appeal has been resolved without oral argument upon the entry of a separate written order stating with specificity why no substantial question is presented.

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¶7 As evidenced by two affidavits, the special process server attempted service upon Michael

at the Chicago Ridge address 13 times between April 25 and July 6, 2018 at different hours of the

day without success. Additionally, according to the affidavits, the special process server spoke to

an individual on two of these dates, April 25 and May 14; each time, that person told the process

server that Michael was not in the office. On the other occasions, no one came to the door or the

office appeared to be closed, but did not appear to be vacant.

¶8 On July 31, 2018, ComEd presented a motion for leave to accomplish service of summons

on Carlisle through the Illinois Secretary of State pursuant to section 5.25 of the BCA (805 ILCS

5/5.25 (West 2018)). In its motion, ComEd maintained that the website of the Secretary of State

lists Michael as Carlisle’s registered agent with the Chicago Ridge address and that service had

been attempted by the sheriff and a special process server at that address without success. ComEd

contended, therefore, Michael “cannot be found at the registered office through reasonable

diligence.” The court granted the motion on that date.

¶9 ComEd subsequently filed an affidavit of compliance for service on the Secretary of State

with the office of the Illinois Secretary of State on August 29, 2018 (compliance affidavit). The

compliance affidavit, stated that “[t]he corporation’s registered agent cannot with reasonable

diligence be found at the registered office of record in Illinois.” The compliance affidavit also

stated that ComEd would send a copy of the alias summons and complaint to Carlisle at the

Chicago Ridge address by certified or registered mail. Carlisle did not file an appearance or

answer.

¶ 10 The circuit court entered a default judgment against Carlisle for $25,780.08 on September

28, 2018.

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¶ 11 To enforce the judgment, on May 20, 2019, ComEd filed two citations to discover assets,

one directed at Carlisle which named Michael as registered agent of Carlisle and one against a

third party, Hecker and Company, Inc. (Hecker). The Carlisle citation listed the Chicago Ridge

address. On June 10, 2019, the return date for the citations, ComEd was granted leave to serve the

citation on Carlisle by special process server and to issue an alias summons.

¶ 12 On June 18, 2019, counsel appeared for Carlisle.

¶ 13 According to the affidavit of the special process server, the alias summons and citation

were served on the “office manager” at the Indiana Street address on July 18, 2019. The office

manager informed the process server that Michael was not there and she did “not know when he’ll

be in.”

¶ 14 On that date, Carlisle filed a petition to vacate the default judgment (petition) under section

2-1401(f) of the Code of Civil Procedure (the Code) (735 ILCS 5/2-1401(f) (West 2018)) and

argued the default judgment was void for lack of personal jurisdiction over Carlisle. Carlisle

contended that ComEd failed to comply with the requirements of section 5/5.25(c)(2) of the BCA

when effecting substitute service upon Carlisle because it did not send a copy of the process to an

address which it knew was most likely to result in actual notice. More specifically, Carlisle

contended that ComEd should have mailed the process to both the Indiana Street address, the

location of its principal place of business, and the Chicago Ridge address, the location of its

registered agent.

¶ 15 In support of the petition, Carlisle submitted Michael’s affidavit. Michael stated that he

was the registered agent for Carlisle, with a registered office at the Chicago Ridge address, and

that neither he nor any other officer or employee of Carlisle had been served with the complaint.

The first knowledge that he or anyone at Carlisle had of this action was when an officer of Hecker

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notified Carlisle of the judgment after Hecker was served with the third-party citation. Michael

further stated that he had been “routinely present” at the registered office, “typically in the early

morning and late afternoon, throughout the time period during which [ComEd] *** [was] trying

to serve [Carlisle].” Michael asserted that neither he nor any officer or employee of Carlisle had

“ever received notice of the service on the Secretary of State or a copy of the process, notice, or

demand and any accompanying papers at either its registered address in Illinois or at the address

of its principal place of business in Hobart, Indiana.”

¶ 16 ComEd’s written response to the petition included evidence in support of its contentions.

ComEd maintained that, before the excavation began, Carlisle made a written request that ComEd

locate its underground utilities at the excavation site. The request listed Carlisle’s business address

as 249 Court Street, Hobart, Indiana. Prior to suit, ComEd sent a bill for the repairs to that address

which was returned to ComEd. Carlisle then told ComEd to mail correspondence to a post office

box in Hobart. ComEd received no written response from Carlisle to documents mailed to the post

office box. ComEd had some communications with Michael in an attempt to settle the claim

without litigation. ComEd argued based on these facts, “it reasonably believed that mailing the

process to Carlisle’s registered office at the Chicago Ridge address would result in actual notice.”

In reply, Carlisle argued that ComEd was aware of the Indiana Street address when it filed this suit

as it was listed on the original summons. Carlisle did not dispute that at the time of service, the

Secretary of State’s records showed the Chicago Ridge address for Michael, its registered agent.

The circuit court denied the petition on October 11, 2019, a date on which a hearing on the petition

had been set.

¶ 17 Carlisle filed a timely motion to reconsider that denial and again argued that ComEd had

not complied with the BCA when effectuating service. The court set the motion for hearing.

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Additionally, subsequent to the denial of the petition, the circuit court, on December 20, 2019,

entered an order pursuant to the third party citation directing Heckler to turn over funds which it

held belonging to Carlisle in the amount of $29,391.01 to ComEd. 2 On January 3, 2020, the circuit

court “after having read the briefs and [having] considered the arguments made” denied the motion

to reconsider. Carlisle has appealed.

¶ 18 On appeal, Carlisle argues that the circuit court erred in denying its section 2-1401 petition

and motion to reconsider because ComEd failed to comply with the service requirements of section

5.25 of the BCA and therefore there was no personal jurisdiction.

¶ 19 Section 2-1401 of the Code “authorizes a party to seek relief from a final judgment, such

as a default judgment, when brought more than 30 days after judgment has been entered.”

Sarkissian v. Chicago Board of Education, 201 Ill. 2d 95, 102 (2002). When a section 2-1401

petition is brought on voidness grounds, “the general rules pertaining to section 2-1401 petitions—

that they must be filed within two years of the order or judgment, that the petitioner must allege a

meritorious defense to the original action, and that the petitioner must show that the petition was

brought with due diligence—do not apply.” Id. at 104. An order entered by a court lacking

jurisdiction is void and may be attacked at any time, either directly or collaterally. BAC Home

Loans Servicing, LP v. Mitchell, 2014 IL 116311, ¶ 17. We review a denial of a petition pursuant

to section 2-1401 “that raises a purely legal challenge to a judgment by alleging that it is void” de

novo. Warren County Soil and Water Conservation District v. Walters, 2015 IL 117783, ¶ 47

(citing People v. Vincent, 226 Ill. 2d 1, 5 (2007)).

2 The turnover of funds appears to satisfy the judgment. However, the appeal is not moot as the payment was compulsory in nature. See Northbrook Bank & Trust Co. v. Abbas, 2018 IL App (1st) 162972, ¶ 28.

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¶ 20 In order to enter a valid judgment, the circuit court must possess both subject-matter

jurisdiction and personal jurisdiction over the parties. State Bank of Lake Zurich v. Thill, 113 Ill.

2d 294, 308 (1986); Mitchell, 2014 IL 116311, ¶ 17. The circuit court acquires personal jurisdiction

over a defendant either through the filing of an appearance or by service of process as directed by

statute. State Bank of Lake Zurich v. Thill, 113 Ill. 2d 294, 308 (1986); Mitchell, 2014 IL 116311,

¶ 17.

¶ 21 A corporation is served “by leaving a copy of the process with its registered agent or any

officer or agent of the corporation found anywhere in the State” or by any manner permitted by

law. 735 ILCS 5/2-204 (West 2018). Under the BCA, service of process may be made upon a

corporation’s registered agent or the Secretary of State. 805 ILCS 5/5.25(a) (West 2018). The

Secretary of State “shall be irrevocably appointed” as the corporation’s agent “[w]henever the

corporation’s registered agent cannot with reasonable diligence be found at the registered office in

this State.” Id. § (b)(2). Where the Secretary of State is irrevocably appointed, “the complainant

must provide the Secretary of State with a copy of the process, the notice or demand and any other

required documents, along with an affidavit of compliance, and send the same by registered or

certified mail to the corporation being served at both the last registered address on file with the

Secretary of State and ‘[a]t such address the use of which the person instituting the action ***

knows or, on the basis of reasonable inquiry, has reason to believe, is most likely to result in actual

notice.’ ” (Emphasis in original). 3M Co. v. John Moroney and Co., 374 Ill. App. 3d 109, 111-12

(2007) (quoting 805 ILCS 5/5.25(c)(2)(ii) (West 2004)).

¶ 22 Here, Carlisle does not challenge that the Secretary of State was irrevocably appointed as

Carlisle’s registered agent under section 5.25(b) of the BCA because ComEd could not serve

Carlisle at its registered agent’s address with reasonable diligence. There is no dispute that, at the

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relevant time, Michael was the registered agent of Carlisle with an office located at the Chicago

Ridge address and that ComEd filed the compliance affidavit with the Secretary of State, which

asserted that it would mail process to the Chicago Ridge address.

¶ 23 Instead, Carlisle argues that section 5.25(c) of the BCA required ComEd to mail process

to both the Chicago Ridge address, the location of the registered agent, and the Indiana Street

address. Carlisle maintains that the Indiana Street address is the one which ComEd knew or should

have known with reasonable inquiry was most likely to result in actual notice. According to

Carlisle, ComEd’s failure to also mail the process to the Indiana Street address deprived the circuit

court of personal jurisdiction over it. ComEd disagrees and asserts that the Chicago Ridge address

was the address that satisfied both prongs of section 5.25(c).

¶ 24 We take note that the record on appeal does not include transcripts, bystander’s reports, or

agreed statements of facts for the court dates on which hearings were set on the petition or motion

to reconsider. We are without a record of any issues that may have been addressed, or the

arguments and evidence that may have been presented or considered by the circuit court in

deciding these matters. As the appellant, Carlisle had “the burden of presenting a sufficiently

complete record of the proceedings to support a claim of error.” Midstate Siding and Window Co,

Inc. v. Rogers, 204 Ill. 2d 314, 319 (2003) (citing Foutch v. O’Bryant, 99 Ill. 2d 389, 391-92

(1984)). When the record is incomplete, we presume the orders of the circuit court in denying the

petition and the motion to reconsider were in conformity with the law and had a sufficient factual

basis. Foutch, 99 Ill. 2d at 392. Moreover, we find no error by the circuit court on the basis of the

existing record.

¶ 25 At the time ComEd attempted service on Carlisle and filed the compliance affidavit, the

records of the Illinois Secretary of State listed Michael as Carlisle’s registered agent at the Chicago

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Ridge address. Michael was also the president of Carlisle and the individual with whom Carlisle

had communicated about the damages prior to bringing this action. The affidavits of the special

process server indicated that there was an existing office at the Chicago Ridge address, and on two

occasions the process server was informed that Michael was not there at that time. It was not

unreasonable for ComEd to conclude that Carlisle would most likely receive actual notice if

process was mailed to Carlisle’s registered office at the Chicago Ridge address. The

reasonableness of this conclusion is borne out by Michael’s affidavit in which he stated that he

was routinely present at the office.

¶ 26 Carlisle cites 3M, 374 Ill. App. 3d 109 in support of its argument that ComEd was required

to mail process to the Indiana Street address in addition to the Chicago Ridge address. In 3M, the

sheriff attempted to serve the complaint on the defendant’s registered agent at the address

designated with the Secretary of State, but he was unable to do so because the defendant had

moved. Id. at 110. The sheriff, in the return of service, which was filed with the clerk, stated that

the defendant had moved and listed the defendant’s new address. Id. After receiving leave of court

to serve process on the Secretary of State pursuant to section 5.25 of the BCA, the plaintiff filed

an affidavit of compliance, a copy of the alias summons and a copy of the complaint with the

Secretary of State and mailed the same to the old address of the registered agent. Id. at 111. The

court entered an ex parte default judgment in favor of the plaintiff but subsequently vacated it. Id.

On appeal, we affirmed, noting that the plaintiff “was notified that defendant’s office moved when

the sheriff initially returned service with a notation acknowledging defendant’s new address. As a

result, the plaintiff knew or with reasonable inquiry, i.e., reviewing the sheriff’s return service,

should have been aware of the address where the defendant could likely be notified of the

underlying lawsuit.” Id. at 112. Accordingly, we held that plaintiff failed to comply with the

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service requirements of section 5.25 when it mailed notice of the underlying lawsuit only to the

old address of the defendant’s registered agent. Id. at 113.

¶ 27 3M is inapposite. Carlisle and its registered agent, Michael, never moved from the Chicago

Ridge address, nor was ComEd notified by the deputy sheriff or the special process server of a

new address at which to serve Carlisle. Rather, the affidavits of the special process server revealed

that Carlisle’s registered office at the Chicago Ridge address was not vacant and twice the process

servers were told not that Michael did not work there, but that he was not in the office, during

those times. As we discussed, in his affidavit, Michael confirmed that he was Carlisle’s registered

agent and that Carlisle had an office at the Chicago Ridge address at which he was “routinely

present” throughout the time period during which ComEd attempted to effectuate service.

¶ 28 Further, it is not enough that ComEd may have had some knowledge of the Indiana Street

address at the time it filed suit. The evidence as to this knowledge at that time is that the Indiana

Street address was listed on the original summons. However, the Indiana Street address was not

used by the sheriff’s office or the special process server in their attempts to serve the complaint.

At the time of suit, ComEd was also aware of other addresses associated with Carlisle in Indiana.

Prior to suit, Carlisle had provided ComEd with two different addresses in Hobart, Indiana, neither

of which was the Indiana Street address. And mail sent to Carlisle at one of the addresses was

returned to ComEd; the other was a post office box. The record supports the circuit court’s

conclusion that ComEd reasonably believed that the Chicago Ridge address was the one where

Carlisle would receive actual notice.

¶ 29 For the reasons discussed, the circuit court did not err in finding that ComEd complied with

the service requirements of section 5.25(c) of the BCA by mailing process to Carlisle’s registered

office at the Chicago Ridge address, which was also the address that ComEd had reason to believe

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was most likely to result in Carlisle receiving actual notice of the lawsuit. The circuit court properly

denied Carlisle’s section 2-1401 petition and motion to reconsider that denial; we affirm the default

judgment.

¶ 30 Affirmed.

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