Gromer, Wittenstrom & Meyer, P.C. v. Strom

489 N.E.2d 370, 140 Ill. App. 3d 349, 95 Ill. Dec. 149, 1986 Ill. App. LEXIS 1720
CourtAppellate Court of Illinois
DecidedJanuary 17, 1986
Docket2-84-1071
StatusPublished
Cited by6 cases

This text of 489 N.E.2d 370 (Gromer, Wittenstrom & Meyer, P.C. v. Strom) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gromer, Wittenstrom & Meyer, P.C. v. Strom, 489 N.E.2d 370, 140 Ill. App. 3d 349, 95 Ill. Dec. 149, 1986 Ill. App. LEXIS 1720 (Ill. Ct. App. 1986).

Opinion

JUSTICE HOPF

delivered the opinion of the court:

Defendant, Warren E. Strom, appeals from the trial court’s denial of his motions to open judgment and to vacate judgment. Plaintiff, Gromer, Wittenstrom & Meyer, P.C., obtained a judgment by confession against defendant in the amount of $15,084.49 on a note executed by defendant and his two law partners at the time, Clarence F. Wittenstrom, Jr., and H. Greg Meyer. The note was executed on May 5, 1983, and was due in the amount of $23,000 to the First National Bank of Elgin on May 5, 1984. The note made each of the makers jointly and severally liable. Before the note became due, defendant withdrew from the partnership and the remaining two partners terminated the partnership and formed a corporation in the name of Gromer, Wittenstrom & Meyer, P.C. The corporation was formed on Jan-nary 23, 1984, and Wittenstrom and Meyer were the sole shareholders. While defendant formally withdrew from the partnership on January 16, 1984, he suggested in his letter of withdrawal that the accounts from the partnership be settled by March 15, 1984, the date the partnership’s lease expired.

No payments were made on the note until August 30, 1984, when Wittenstrom and Meyer drew $2,300 from the old partnership account of Gromer, Wittenstrom and Strom and sent it to the First National Bank of Elgin. The money was used to pay interest in the amount of $1,038.19, and the remaining amount reduced the balance due on the note from $23,000 to $21,738.19. On August 31, 1984, defendant sent a letter to his two former partners suggesting that he would be willing to pay one-half of the $24,000 note in return for a release and indemnification.

On September 17, 1984, plaintiff corporation paid a total of $22,300 to the First National Bank of Elgin to cover the principal balance, interest, and legal fees associated with the note. The note was then assigned to Gromer, Wittenstrom & Meyer, EC. On September 18, 1984, plaintiff corporation confessed judgment against defendant in the amount of $15,084.49. This figure was calculated as the sum of $22,300 due on the note, $28.49 for interest from September 15, 1984, to September 18, 1984, and attorney fees in the amount of $160, reduced by the amount of $7,404, which was an amount of additional partnership funds collected after Strom left the firm. The note contained a clause authorizing a confession of judgment against any of the makers and in favor of the legal holder of the note.

Judgment against defendant in the amount of $15,084.49 was entered on September 19, 1984. Defendant sought to open the judgment or vacate the judgment. Both motions were denied. Defendant filed a timely notice of appeal.

Defendant first contends that the trial court improperly denied his motion to open the confession judgment which he brought pursuant to Supreme Court Rule 276 (87 Ill. 2d R. 276). Defendant bases his contention on two grounds, both of which required the trial court to disregard the corporate entity and treat plaintiff as its corporate shareholders, Wittenstrom and Meyer. First, defendant maintains that the court should have disregarded the corporate entity and opened the judgment by confession since Wittenstrom and Meyers were cosigners of the note, and cosigners of a note who have paid the note, or to whom the note has been assigned, cannot take a judgment by confession against another cosigner. (Rosenberg v. Ball (1975), 28 Ill. App. 3d 101, 102, 327 N.E.2d 603.) As a second basis on which the trial court should have opened judgment, the defendant argues that since Wittenstrom, Meyer, and he had not settled all of their partnership accounts, Wittenstrom and Meyer should not have been allowed to maintain a legal action against him. The law is clear that one partner may not maintain an action against another partner until there has been a settlement of partnership affairs. Schlossberg v. Corrington (1980), 80 Ill. App. 3d 860, 866, 400 N.E.2d 73.

In order to prevail on a motion to open judgment by confession, a prima facie defense must be pleaded and it should be supported by substantial facts. (Passanante v. Callier (1978), 61 Ill. App. 3d 360, 363, 377 N.E.2d 1304.) In determining whether a meritorious defense has been presented, the facts asserted in a defendant’s pleadings and affidavits must be considered to be true. (61 Ill. App. 3d 360, 362, 377 N.E.2d 1304.) When a prima facie defense is raised, the court -must open the judgment and proceed to trial. Kuh v. Williams (1973), 13 Ill. App. 3d 588, 593-94, 301 N.E.2d 151.

Complicating the determination of whether defendant showed a prima facie defense through his pleadings and affidavits is the fact that at various times the defendant filed motions and affidavits to open the judgment by confession, and at other times he filed motions and affidavits to vacate the confession judgment. It appears that defendant intended to pursue two different methods to obtain relief from the judgment. However, plaintiff argues that in substance defendant was actually trying to open the judgment by confession. Further, plaintiff maintains that the only proper relief available to a judgment by confession is afforded by a motion to -open judgment by confession pursuant to Supreme Court Rule 276 (87 Ill. 2d R. 276).

In Kankakee Concrete Products Corp. v. Mans (1980), 81 Ill. App. 3d 53, 55-56, 400 N.E.2d 637, the court considered the issue of whether a motion to vacate a confession judgment must be treated as a motion to open pursuant to Supreme Court Rule 276, and it determined that it was not necessary to do so unless the defendant presents the motion, regardless of its caption, as a motion to open under Rule 276. In the instant case, defendant not only captioned his motions differently, but also asked for relief both in the form of opening judgment and proceeding to trial and in the form of vacating the judgment. We believe, therefore, that defendant’s motions and affidavits seeking to open judgment by confession must be considered separately from his motions and affidavits seeking to vacate the judgment pursuant to section 2 — 1301 of the Illinois Code of Civil Procedure (Ill. Rev. Stat. 1983, ch. 110, par. 2 — 1301).

On September 27, 1984, defendant filed a motion to open judgment and an affidavit in support of his motion. In the motion, defendant alleged that the amount of the judgment was inconsistent with the amount due and owing on the note. He also alleged that the amount of the judgment was inconsistent with the partnership obligations, and that he was entitled to contribution from Clarence Wittenstrom, Jr., and H. Greg Meyer, shareholders of plaintiff corporation. In his affidavit, defendant averred that he was the 50% owner of the partnership which took out the note, and the other two partners, Clarence Wittenstrom, Jr., and H. Greg Meyer owed a contribution on the note.

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Bluebook (online)
489 N.E.2d 370, 140 Ill. App. 3d 349, 95 Ill. Dec. 149, 1986 Ill. App. LEXIS 1720, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gromer-wittenstrom-meyer-pc-v-strom-illappct-1986.