In re Marriage of Harnack

2014 IL App (1st) 121424, 22 N.E.3d 409

• Court: Appellate Court of Illinois
• Decided: November 21, 2014
• Docket: 1-12-1424
• Status: Unpublished

Opinion

2014 IL App (1st) 121424

No. 1-12-1424

Opinion Filed November 21, 2014

FIFTH DIVISION

IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT

In re MARRIAGE OF ) Appeal from the ) Circuit Court PAMELA HARNACK, ) of Cook County ) Petitioner-Appellee, ) ) and ) ) Nos. 08 D 02844 STEVE FANADY, ) 11 CH 7166 ) 11 CH 35656 Respondent-Appellant ) ) (Jerome Israelov, CBEO Holdings, Inc., and ) Computershare Shareowner Services LLC, Plaintiffs; Steve ) Fanady, Alpha Industries LLC, Pamela Harnack, Jerome ) Honorable Israelov, Michelle Marme, Fanmare and Grund & Leavitt, ) David E. Haracz, P.C., Defendants). ) Judge Presiding.

PRESIDING JUSTICE PALMER delivered the judgment of the court, with opinion. Justices McBride and Gordon concurred in the judgment and opinion.

OPINION

¶1 Petitioner Pamela Harnack filed a petition for dissolution of her marriage to

respondent Steve Fanady. Fanady stopped participating in the proceedings and was 1-12-1424

found to be in default by the court. While the dissolution action was pending, Jerome

Israelov filed an action in chancery court against Fanady and Alpha Industries LLC

(Alpha), a firm owned by Fanady. Israelov claimed that he and Fanady, through Alpha,

had entered into a partnership agreement to purchase a membership (seat) on the

Chicago Board of Options Exchange (CBOE) through a partnership named ISRFAN.

The seat had subsequently been exchanged for 80,000 shares of CBOE Holdings, Inc.,

stock, Fanady/Alpha had withdrawn its 50% interest in the partnership (40,000 shares)

and Israelov sought distribution by Alpha of his 50% interest in the seat (40,000 shares).

The court consolidated Israelov's action with the dissolution action.

¶2 The court entered a default judgment dissolving the marriage and apportioning

the parties' assets. Finding all shares of CBOE Holdings, Inc., stock held by Fanady,

Alpha or any of Fanady's other enterprises were marital property, the court awarded

Harnack 140,000 shares of the 280,000 total shares owned by Fanady as her marital

portion. Recognizing that Israelov's claim to 40,000 shares remained pending, the court

ordered CBOE Holdings, Inc. (CBOE Holdings), and Computershare Shareowner

Services LLC (Computershare), the entities holding the shares, to transfer 120,000

shares to Harnack and to transfer 40,000 shares into escrow pending the outcome of

the Israelov action. CBOE Holdings and Computershare filed an interpleader action

informing the court that they could not comply with the judgment for dissolution of

marriage because Fanady had already withdrawn 120,000 shares and only 120,000

shares remained in the accounts. They requested a judicial determination of who owned

the remaining 120,000 shares. 1

1 The interpleader action was filed in the names of CBOE Holdings, Inc., and 2 1-12-1424

¶3 Eight months after entry of the judgment of dissolution, Fanady moved to set

aside the judgment pursuant to sections 2-1301(e) and 2-1401(a) of the Illinois Code of

Civil Procedure Code (735 ILCS 5/2-1301(e), 2-1401(a) (West 2012)). The court denied

both the section 2-1301(e) motion and section 2-1401(a) petition. Fanady appeals,

arguing (1) the court erred in finding section 2-1301(e) did not apply; and (2) the court

erred in denying his section 2-1401(a) petition. In a motion taken with the case, he also

argues that portions of Harnack's brief on appeal should be stricken. We deny Fanady's

motion to strike Harnack's brief and affirm the trial court's order denying the section 2-

1301 motion and section 2-1401 petition to set aside the judgment for dissolution of

marriage. However, we remand with directions.

¶4 BACKGROUND

¶5 Harnack and Fanady married in October 2003. The parties had no children

together. In March 2008, Harnack filed for dissolution of marriage. Fanady initially

participated in the dissolution proceedings and was represented by various counsel. At

some point in 2010, Grund & Leavitt, P.C. (Grund & Leavitt), one of the law firms that

had represented Fanady in the dissolution action, filed a petition against him for unpaid

legal fees. On September 17, 2010, the court granted Fanady's latest counsel leave to

withdraw and allowed Fanady 21 days in which to retain new counsel or file a pro se

appearance. Fanady did neither. On November 1, 2010, on Harnack's motion, the court

found Fanady in default "based on his failure to file an appearance" within 21 days and

"Mellon Investor Services LLC d/b/a BNY Mellon Shareowner Services." When Mellon Investor Services LLC, d/b/a BNY Mellon Shareowner Services, subsequently changed its name to Computershare Shareowner Services LLC, the court granted it permission to amend the caption in the interpleader action to reflect the new name. We will refer to this entity as Computershare.

3 1-12-1424

set the case for a hearing. In December 2010, Grund & Leavitt obtained a default

judgment against Fanady for its attorney fees.

¶6 In February 2011, Harnack moved for a temporary restraining order (TRO) and

preliminary injunction seeking to bar Fanady or any of his agents or enterprises from

transferring any assets, especially any CBOE Holdings shares. She asserted Fanady

had held 280,000 shares of CBOE Holdings stock, he had transferred 80,000 of the

shares to a broker for sale as of January 4, 2011, and there remained only 80,000

unrestricted shares that could be sold immediately and 120,000 shares restricted until

June 2011, or a total of 200,000 shares. She sought to prevent him from transferring

any more shares.

¶7 As shown by the record, Harnack's information regarding the number of shares

held by Fanady was outdated. Fanady acquired four CBOE seats during the marriage.

In November 2009, while the dissolution proceeding was pending and without Harnack's

knowledge, Fanady sold one seat for $2.775 million and transferred the funds to a bank

account in Switzerland. On June 14, 2010, CBOE Holdings went public and exchanged

each CBOE seat for 80,000 shares of CBOE Holdings stock, all restricted. On that date,

Fanady held only three of his original four seats: two seats in an account under the

name of Alpha and one seat in an account under the name of Fanmare, a partnership

he had entered into with Michelle Marme. On June 14, 2010, after the three seats were

exchanged for shares, Fanady held a total of 240,000 shares as follows:

Alpha: 80,000 A-1 restricted shares

Alpha: 80,000 A-2 restricted shares

Fanmare: 40,000 A-1 restricted shares

4 1-12-1424

Fanmare: 40,000 A-2 restricted shares

If he had not already sold the fourth seat, he would have received a total of 320,000

shares.

¶8 The A-1 shares became unrestricted and freely transferable on December 15,

2010. As Harnack asserted in her motion for a TRO and injunctive relief, Fanady

transferred 80,000 shares, the unrestricted A-1 shares, out of the Alpha account on

January 4, 2011. Harnack was unaware that, on February 8, 2011, the day before she

filed her request for TRO, Fanady had also transferred the 40,000 unrestricted A-1

shares from the Fanmare account. As a result, by the time Harnack filed her motion, all

that remained of the original 240,000 shares was 80,000 shares of restricted A-2 stock

in the Alpha account and 40,000 shares of restricted A-2 stock in the Fanmare account,

for a total of 120,000 shares.

¶9 In late February 2011, Israelov filed an action in chancery court against Fanady

and Alpha alleging breach of contract, breach of fiduciary duty and conversion under a

partnership agreement he had with Fanady through Alpha, an entity Fanady purported

to manage but the existence of which Israelov was later unable to confirm. Israelov

alleged that on January 26, 2010, he and Fanady, "purportedly through Alpha," entered

into a partnership agreement establishing the ISRFAN partnership in order to jointly

purchase a seat on the CBOE. Israelov paid $1,312,5000 to CBOE Holdings on January

27, 2010, for his 50% interest in the partnership's seat. Fanady prepared the application

to purchase the seat. The application lists ISRFAN as the "organization" purchasing the

seat and Fanady, Pantheon, LLC, one of Fanady's enterprises, and a trust as owners of

the seat. Fanady did not list Israelov as an owner. On June 14, 2010, when CBOE

5 1-12-1424

Holdings converted to a public company, it issued 80,000 shares of its common stock in

exchange for the seat. The shares were subject to a "lock up," preventing the owners

from trading them for a six-month period. Under the terms of the ISRFAN agreement,

within five days of the shares being released, Alpha/Fanady was to deliver the released

shares to the partnership in order that each partner could receive his 50% portion, or

20,000 shares. On December 15, 2010, 40,000 of the 80,000 shares were released

from lock-up. Israelov claimed that Fanady/Alpha took possession of the 40,000

released shares but, despite numerous requests by him, refused to distribute to Israelov

the 20,000 shares he was due from the initial distribution. The remaining ISRFAN

40,000 shares held in the Alpha account were scheduled to be released for transfer in

June 2011. Concerned that Fanady/Alpha would also take these shares, Israelov

sought enforcement of his partnership agreement with Alpha/Fanady and to enjoin

Fanady and/or Alpha from appropriating the remaining shares scheduled to be released

on June 13, 2011.

¶ 10 In May 2011, on Harnack's motion, the court consolidated Israelov's chancery

action with the dissolution case pending in the domestic relations division. It granted the

motions for TRO and subsequently, on motions by Harnack, Israelov and Grund &

Leavitt, issued TROs, preliminary injunctions and ultimately permanent injunctions

barring Fanady, his agents, enterprises or anyone acting on his behalf from transferring

any assets, including any shares or related dividends held in the name of Fanady or any

of his enterprises.

¶ 11 In June 2011, Israelov and ISRFAN entered into a settlement agreement with

Alpha pursuant to which Alpha agreed that it had received its pro rata 40,000 shares

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(half of the total 80,000 shares exchanged for the ISRFAN seat). Alpha agreed that

40,000 shares remained due and owing to Israelov and that it would place 40,000

shares in an account in the name of ISRFAN when the A-2 shares became unrestricted

on June 13, 2011. Once the transfer was made, Israelov was to dismiss his suit. Fanady

allegedly having resigned as manager of Alpha in March 2011, Alpha's new manager

executed the agreement on behalf of Alpha.

¶ 12 Israelov moved for limited dissolution and/or modification of the injunctive orders

in order to allow "the transfer of the certain undisputed non-marital assets" to him from

Alpha pursuant to the settlement agreement, specifically the 40,000 shares he was due

as his 50% interest in the former CBOE seat 300124. Grund & Leavitt moved to deny

the motion. That motion remains undecided.

¶ 13 The court held a prove-up hearing on the dissolution action on August 3, 2011,

during which it heard testimony from Harnack. The record shows Fanady was served

with notice of the hearing. 2 He did not appear at the hearing, although counsel for

Harnack informed the court that he had seen Fanady in the courtroom a half hour

before the hearing. The court entered the judgment for dissolution of marriage on the

same day.

¶ 14 In the judgment for dissolution of marriage, the court found that Fanady was

worth approximately $7.3 million as of March 2010 while Harnack had minimal income,

was unable to support herself and had recently been diagnosed with an autoimmune

disorder. The court ordered Fanady to pay Harnack $6,175 in maintenance per month

for 48 months following entry of the judgment. The court noted that it had already

2 In fact, the record shows that Fanady was served with notice of all of Harnack's and Israelov's assorted motions and petitions and any orders thereon. 7 1-12-1424

ordered payment of maintenance in September 2010 and that Fanady had failed to

comply with the order and was $67,925 in arrears for 11 months of maintenance

payments by July 2011. The court ordered that the total amount due and owing for 59

months of past and future maintenance was $364,325,325. It ordered that the sum

should be paid to Harnack as a "lump sum" in lieu of periodic payments, "said amount to

be paid from the ultimate amount of distribution as herein below indicated."

¶ 15 The court found that, during the marriage, the parties had acquired assorted

marital property, including "the equivalent of 320,000 *** shares of [CBOE Holdings]

stock (Steve Fanady being 100% owner of at least 280,000)." 3 The court found that the

CBOE Holdings stock owned in the names of Fanady, Alpha, Fanmare, ISRFAN and

Pantheon, LLC, another Fanady enterprise, was property acquired during the marriage

and awarded Harnack 140,000 shares of the stock. It initially ordered CBOE Holdings

and Computershare to transfer 140,000 shares of CBOE Holdings stock to Harnack

within 10 days of the judgment. However, the typed "140,000" is struck through and

"120,000" is handwritten above the original number, thus resulting in an order requiring

CBOE Holdings and Computershare to transfer 120,000 shares to Harnack within 10

days. Also handwritten at the end of the same provision is the following: "Forty thousand

3 The unrebutted evidence before the court was that Fanady had acquired four CBOE seats during the marriage and, when CBOE Holdings went public in June 2010, each of the seats would have been exchanged for 80,000 shares. Therefore, the parties had acquired "the equivalent of" 320,000 shares of CBOE Holdings stock (4 @ 80,000 shares) during the marriage. However, only three of the four seats were ultimately exchanged for shares because in 2009, without Harnack's knowledge and while the dissolution action was pending, Fanady sold one seat for $2.775 million and transferred the money to a Swiss bank account. Thus, only three seats were exchanged, for a total of 240,000 shares. By the time the judgment for dissolution of marriage was entered, Fanady had already withdrawn 120,000 of those shares from the Alpha and Fanmare accounts, leaving only 120,000 shares in the accounts. 8 1-12-1424

shares currently registered to Alpha LLC and so held shall be placed in an escrow

account pending resolution of Israelov's claim." The court awarded Fanady "the balance

of the shares of CBOE stocks (not awarded to [Harnack])."

¶ 16 In addition to distributing the shares, awarding maintenance and allocating the

parties' numerous other assets, the court awarded Harnack the marital home, which

was encumbered by a $690,460 lien imposed by the Internal Revenue Service (IRS) for

Fanady's unpaid personal income taxes. The court noted that the house was held in a

trust, the ATG Trust, for Alpha's benefit. It ordered Fanady to execute a deed and

transfer all right and title to the property from the trust to Harnack within 14 days of the

judgment. If Fanady failed to do so, the court or another court acting in its stead would

"execute a Judge's deed transferring all said rights, title and interest therein" to

Harnack. 4 In a separate provision, the court "requested" the IRS to release any liens on

the property.

¶ 17 The court also awarded Harnack $220,000 for attorney fees to be paid to her

past and then-current counsel, including an award of $50,000 to her then-current

counsel for "prospective fees and the enforcement of the judgment." 5 The court stated

that "said fees are awarded to *** Harnack for obstructive actions taken by *** Fanady,

i.e., failing to comply with this court's orders, being previously held in contempt, failure

to participate in the process and generating false pleadings as indicated in other

4 Fanady had purchased the house in October 2006, during the marriage, and placed the title in a trust managed by ATG Company of which he was the sole beneficial owner. Execution of the judge's deed was subsequently stayed. 5 The order states that it awards $200,000 to Harnack for attorney fees but adding the individual amounts together, the total is actually $220,000.

9 1-12-1424

documents currently pending in this matter." (Emphasis in original.) It ordered that the

attorney fees "should be reimbursed to [Harnack] from the proceeds of the sale of the

140,000 120,000 shares *** awarded to her pursuant to this Judgment." At the end of

the judgment for dissolution of marriage, the court added the handwritten notation that

"any prior injunction entered in the matter shall survive this judgment and remain in full

force and effect except for the purpose of compliance herewith."

¶ 18 After the judgment for dissolution of marriage was entered, Harnack learned that

Fanady had sold one of the four CBOE seats acquired during the marriage for $2.775

million in November 2009, 20 months after Harnack filed for dissolution and 6 months

before the CBOE went public, and had transferred the funds to a bank account in

Switzerland.

¶ 19 On October 13, 2011, CBOE Holdings and Computershare filed an interpleader

action against Harnack, Fanady, Israelov, Marme, Alpha, Fanmare and Grund & Leavitt

asserting that, although the court had ordered them to transfer a total of 160,000 shares

within 10 days of the judgment (40,000 transferred to escrow and 120,000 transferred to

Harnack), they would be unable to comply with the judgment for dissolution of marriage

because the Alpha and Fanmare accounts only held a total of 120,000 shares. They

requested a determination regarding which of the seven defendants were the lawful

owners of the 80,000 shares remaining in the Alpha account and 40,000 shares

remaining in the Fanmare accounts and to whom it should pay the related past and

future dividends. Based on exhibits attached to the interpleader, the following chart

illustrates how, although Fanady held three seats worth 240,000 shares in the Alpha

and Fanmare accounts during the marriage, there came to be only 120,000 shares in

10 1-12-1424

the Alpha and Fanmare accounts by the time the judgment for dissolution of marriage

was entered:

Account Holdings 6/14/10 12/15/10 Account Holdings Initial 80,000 Shares A-1 Shares become Current exchanged per seat unrestricted (not including (Shares restricted dividends) for 6 months)

Alpha: 2 seats 80,000 A-1 shares 1/4/11 80,000 A-2 shares Fanady orders the (one held solely by 80,000 A-2 shares 80,000 A-1 shares (Israelov claims Fanady and the transferred out; 40,000 shares) other either held whereabouts solely by Fanady or unknown held by ISRFAN, a 50/50 partnership between Fanady & Israelov)

Fanmare: 1 seat 40,000 A-1 shares 2/8/11 40,000 A-2 shares Fanady orders the (Either held solely 40,000 A-2 shares 40,000 A-1 shares (Fanmare claims by Fanady or by transferred out; 40,000 shares) Fanmare, a 50/50 whereabouts partnership unknown between Fanady and Marme)

The court consolidated the interpleader action filed by CBOE Holdings and

Computershare with the already consolidated dissolution and Israelov actions in

January 2012.

¶ 20 On December 19, 2011, the court granted counsel for Fanady leave to appear.

On January 5, 2012, Fanady moved for change of judge and venue under section 2-

1001.5 of the Code (735 ILCS 5/2-1001.5 (West 2010)), asserting assorted claims of

impropriety against the judge presiding over the consolidated dissolution and Israelov

11 1-12-1424

actions as well as against Harnack's counsel. In the face of Harnack's motion to strike,

Fanady's counsel filed his appearance on January 13, 2012. The court denied the

motion to transfer venue.

¶ 21 On April 3, 2012, nine months after the judgment for dissolution of marriage had

been granted, Fanady filed a four-page "motion to set aside" the judgment for

dissolution of marriage pursuant to section 2-1301 or "in the alternative" under section

2-1401. He set forth a disparate litany of unsupported assertions and legal conclusions,

including the assertion that he was under duress after his counsel withdrew on

September 17, 2010, and that he stopped participating in the proceedings because,

during a September 2010 pretrial conference before a different judge, that judge told

him there would not be a trial on the merits and he "needs to just write a seven figure

check" to Harnack. He claimed that the judgment was unconscionable, not final and

failed to address the elements of section 504 of the Illinois Marriage and Dissolution of

Marriage Act (750 ILCS 5/504 (West 2012)). He further asserted he was denied due

process, the court went beyond its jurisdiction by ordering the IRS to release liens on

the "marital" home and he had acquired the home in October 2006 "in exchange for" his

nonmarital property or property he acquired by gift, legacy or descent. Fanady attached

an affidavit in support of his motion but the affidavit consisted of only three sentences,

stating only that he was the respondent, over 21 years of age and the facts stated in the

petition were incorporated into the affidavit by reference.

¶ 22 On April 12, 2012, the court denied a motion to transfer venue filed by Alpha. On

May 11, 2012, the court entered an order denying Fanady's motion to vacate the

judgment for dissolution of marriage. As stated on the record, the court found section 2-

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1301 did not apply and the section 2-1401 petition failed for failure to show due

diligence.

¶ 23 As noted above, from September 21, 2010, when the court had granted Fanady's

counsel leave to withdraw and Fanady 21 days in which to retain new counsel or file a

pro se appearance, until January 13, 2012, when Fanady's new counsel filed an

appearance, Fanady did not participate in the dissolution proceedings. He had not,

however, been idle during those 15 months.

¶ 24 As shown by Harnack's February 2011 petition to hold Fanady in indirect civil

contempt "for his actions relative to the fabrication of a judgment for dissolution of

marriage," Fanady had obtained a religious divorce from Harnack in the Greek orthodox

church by presenting his priest with a circuit court of cook county "judgment for

dissolution of marriage" document dated July 21, 2010. Harnack asserted she had no

knowledge of the document. The "judgment" purported to dissolve Fanady's marriage to

Harnack and contained the signature stamp of Cook County Judge Nancy Katz and the

alleged signatures of Fanady's former counsel David Ainley and then-counsel John

D'Arco. Evidence attached to Harnack's petition shows that no such judgment for

dissolution of marriage had been filed with the clerk of the circuit court of cook county,

both Ainley and D'Arco denied participation in the creation of the judgment and knew

nothing about it, the church issued the ecclesiastical divorce to Fanady on August 2,

2010, and Fanady was to marry his girlfriend on November 28, 2010. 6 The court

granted the petition and ordered Fanady to turn over his American and Greek

passports. He did not comply with the order.

6 After the instant appeal was filed, Fanady was arrested and charged with three counts of felony forgery. The case was subsequently dismissed. 13 1-12-1424

¶ 25 Meanwhile, Fanady had also obtained an ex parte "final judgment of dissolution

of marriage with no property or dependent or minor children (uncontested)" in Clay

County, Florida, on March 24, 2011. This "uncontested" Florida judgment shows that

Fanady obtained the dissolution by falsely claiming he was a resident of Florida,

Harnack was "missing in action" with "address unknown," Harnack had a default

judgment entered against her and "[t]here is no marital property or marital debts to

divide, as the parties have previously divided all of their personal property." In

September 2011, Fanady sent a letter with a copy of the Florida dissolution judgment to

the Cook County judge presiding over the Illinois dissolution action, asserting the

Florida judgment dissolving his marriage to Harnack was binding in Illinois and the Cook

County court no longer had jurisdiction over the divorce proceedings. Ultimately, in

January 2012, by consent decree on Harnack's motions to dismiss, the Florida court

vacated the dissolution judgment.

¶ 26 A few days after entry of the dissolution judgment in this matter, in violation of the

court's order directing him to transfer title to the house from the trust to Harnack,

Fanady transferred the marital home from the ATG trust into a trust at West Suburban

Bank, naming his father and a friend as beneficial trustees. He subsequently, again in

violation of the judgment for dissolution of marriage and assorted injunctions, listed the

property for sale.

¶ 27 On October 11, 2011, Alpha moved to remove the consolidated case to the

United States District Court for the Northern District of Illinois, Eastern Division. The

district court dismissed the case for lack of jurisdiction, noting that Alpha's remedies

were in state court. Alpha appealed to the United States Court of Appeals for the

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Seventh Circuit, which upheld the district court's decision in December 2011. The case

was remanded to the Cook County circuit court. Meanwhile, in November 2011, Alpha

had filed a second action in federal district court challenging the judgment for dissolution

of marriage and naming Harnack, her attorney and the Cook County judge who issued

the judgment for dissolution of marriage as defendants. The district court again

dismissed the action for lack of jurisdiction. The court of appeals affirmed the dismissal

in March 2012, explaining that Alpha was a "state-court loser" when it was ordered to

relinquish its ownership of the CBOE shares and a federal district court has no

jurisdiction to overturn the state court judgment. Finding "the appeal was frivolous," the

court of appeals granted Harnack's motion for sanctions, awarding her attorney $15,000

in attorney fees and costs.

¶ 28 In late March 2010, Alpha filed in the Cook County circuit court's chancery

division the same action challenging the judgment for dissolution of marriage as it had

filed in Federal court, naming Harnack, her attorney and the judge who issued the

judgment for dissolution of marriage as defendants. The chancery division court granted

the defendants' motions to dismiss in December 2012. Finally, in January 2012,

Fanady's counsel filed an appearance in the dissolution action and, on April 3, 2012,

eight months after entry of the judgment for dissolution of marriage, Fanady filed his

motion to set aside the judgment for dissolution of marriage, which the court denied on

May 11, 2012.

¶ 29 Fanady filed a notice of appeal May 15, 2012, and an amended notice of appeal

on June 2, 2012, requesting that we vacate the May 11, 2012, order denying his section

2-1301(e) motion and section 2-1401(a) petition to set aside the judgment for

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dissolution of marriage. 7

¶ 30 ANALYSIS

¶ 31 Fanady raises two arguments on appeal: (1) the court erred in denying his

section 2-1301(e) motion to vacate on the basis that section 2-1301(e) did not apply and

(2) the court erred in denying his section 2-1401(a) petition to vacate based on his lack

of diligence. As set forth below, we affirm the trial court on both determinations but

remand with instructions.

¶ 32 Fanady also argues, in a motion taken with the case, that portions of Harnack's

brief on appeal should be stricken for failure to comply with the procedural requirements

of Illinois Supreme Court Rule 341 (eff. Feb. 6, 2013)). Rule 341 sets forth the format

and contents of appellate briefs and its requirements are mandatory. Voris v. Voris,

2011 IL App (1st) 103814, ¶ 8. We agree that Harnack's brief does not comply with

some of the requirements of Rule 341 and is, therefore, subject to dismissal. Id.

However, it is adequate for our review of the issues presented since we have the benefit

of the record before us as well as Fanady's, Israelov's and CBOE Holdings and

Computershare's proper citations to the record on appeal. We, therefore, deny the

motion to strike.

¶ 33 1. Section 2-1301(e) Motion to Vacate

¶ 34 We affirm the trial court's finding that section 2-1301(e) did not apply. Section 2-

1301(e) provides: "The court may in its discretion, before final order or judgment, set

aside any default, and may on motion filed within 30 days after entry thereof set aside

7 In his notice of appeal, Fanady also challenges the court's April 12, 2012, order denying the motion to change venue under section 2-1101.5. However, he does not raise this argument in his briefs on appeal and has, therefore, abandoned it. Ill. S. Ct. R. 341(h)(7) (eff. Feb. 6, 2013) ("Points not argued are waived ***."). 16 1-12-1424

any final order or judgment upon any terms and conditions that shall be reasonable."

735 ILCS 5/2-1301(e) (West 2012). "Section 2-1301(e) is available to seek relief from

any nonfinal order of default or from a final default judgment within 30 days of its entry."

(Emphases in original.) Stotlar Drug Co. v. Marlow, 239 Ill. App. 3d 726, 728 (1993).

¶ 35 The court's November 1, 2010, order finding Fanady in default is not a final order

because it does not dispose of the case and determine the rights of the parties. Jackson

v. Hooker, 397 Ill. App. 3d 614, 620 (2010). Instead, it "is simply an interlocutory order

that precludes the defaulting party from making any additional defenses to liability but in

itself determines no rights or remedies." (Internal quotation marks omitted.) Id. The

judgment for dissolution of marriage, however, is a final default judgment.

¶ 36 "A judgment *** is not final unless it determines the litigation on the merits so

that, if affirmed, the only thing remaining is to proceed with the execution of the

judgment." In re Marriage of Susman, 2012 IL App (1st) 112068, ¶ 12. "When an order

resolves less than all the claims brought by a party, the order is not final and

appealable." Id. The litigation at issue here concerned Harnack's petition for dissolution

of marriage. "A petition for dissolution advances a single claim; that is, a request for an

order dissolving the parties' marriage. The numerous other issues involved, such as

custody, property disposition, and support are merely questions which are ancillary to

the cause of action." (Emphasis in original.) In re Marriage of Leopando, 96 Ill. 2d 114,

119 (1983). "[U]ntil all of the ancillary issues are resolved, the petition for dissolution is

not fully adjudicated." Id. In other words, although there are some narrow exceptions,

"generally only a judgment that does not reserve any issues for later determination is

final and appealable." In re Marriage of Susman, 2012 IL App (1st) 112068, ¶ 13.

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¶ 37 The court entered the judgment following a prove-up hearing on August 3, 2011,

on Harnack's petition for dissolution of marriage. At issue in the dissolution action were,

inter alia, the allocation of the parties' substantial assets, maintenance and attorney

fees. The court resolved all of these issues by allocating all of the parties' marital and

nonmarital assets between the parties and awarding Harnack maintenance and attorney

fees. It did not reserve any of the issues involved in the petition for dissolution for later

determination. The judgment for dissolution of marriage terminated the litigation

between Harnack and Fanady, the parties to the dissolution action, and decided their

"dispute" entirely and is, therefore, a final judgment. Jackson, 397 Ill. App. 3d at 620.

¶ 38 Fanady argues that the judgment for dissolution of marriage was not final

because it did not resolve all matters between the parties related to the issue of the

distribution of property. Pointing out that ownership of the CBOE Holdings stock was at

the heart of the divorce dispute and that the court had consolidated Israelov's action

with the dissolution action, he asserts that, "by specifically reserving a determination on

Israelov's claim to 40,000 shares of the CBOE Holdings stock, the trial court expressly

left complete resolution of the issues related to the distribution of stock for a future

time." Fanady argues that, because the judgment awarded 140,000 shares to Harnack

but only provided for distribution of 120,000 shares to her, ownership of the remaining

20,000 shares "was tied up in Israelov's claim, and, hence, could not be resolved until

the Israelov case was resolved" and "[i]t strains credibility to suggest that a ruling that

leaves the issue of ownership of over $650,000 [worth of shares] in an unresolved state

is 'final.' "

¶ 39 The court did not reserve determining the allocation of the 40,000 shares. It

18 1-12-1424

completely allocated all of the parties' assets, including all of the shares, between the

parties, awarding Harnack 140,000 shares and Fanady the remainder. Then, in

recognition that 40,000 of the total shares might be nonmarital, it set those shares aside

pending the outcome of Israelov's action. Implicit in the court's judgment is its

recognition that (1) if Israelov's action succeeds, then the parties will not receive any of

the 40,000 shares because the shares, although presumptively marital, were shown to

be nonmarital and (2) if Israelov's action fails, then the parties will receive their marital

portion of the 40,000 shares as set forth in the judgment, i.e., 20,000 shares to Harnack,

and the remainder (20,000 shares) to Fanady. Either way, no matter the outcome of the

Israelov action, the court fully decided the disposition of the 40,000 shares between the

two parties to the petition for dissolution. 8 All that remained was the execution of the

judgment.

¶ 40 The fact that Israelov's action remained unresolved does not affect the finality of

the dissolution judgment. Israelov is not a party to the dissolution of marriage. The

8 The report of proceedings of the prove-up hearing supports this interpretation. The report of proceedings shows that the court heard argument from counsel for Harnack, Israelov, Katz & Stefani, LLC, a law firm seeking fees from Harnack in the dissolution action, and Grund & Leavitt regarding the proposed distribution of 140,000 shares to Harnack. Each asserted claims to the shares and/or against Fanady and/or Alpha. By agreement of all present, the court ordered that the judgment for dissolution of marriage be amended to reflect that, as suggested by counsel for Grund & Leavitt, Harnack would be awarded 140,000 shares as originally proposed but would receive only 120,000 of the shares until the court resolved the Israelov issue "because that is half of what [she] is seeking. If [the court] finds that Israelov isn't entitled to [40,000 shares], she gets 20,000 of that, Mr. Fanady gets 20,000." The court then heard testimony from Harnack, in which she stated she agreed that "the amount of shares pursuant to the judgment" would be reduced to 120,000 shares and that the balance would remain in escrow for distribution to Israelov as would be determined at a later date. Accordingly, the report of proceedings of the prove-up hearing shows that, given that the 40,000 shares claimed by Israelov might be non-marital, those shares should, as Harnack's counsel succinctly stated, come "off the top" of all marital shares rather than solely from Harnack's shares. 19 1-12-1424

court's consolidation of his contract action against Fanady and Alpha with Harnack's

dissolution action against Fanady does not make Israelov a party to the dissolution

action, let alone to the dissolution judgment. Section 2-1006 of the Code provides that

"actions pending in the same court may be consolidated, as an aid to convenience,

whenever it can be done without prejudice to a substantial right." 735 ILCS 5/2-1006

(West 2012). There are three types of consolidations:

"(1) where several actions are pending involving substantially the same

subject matter, the court may stay proceedings in all but one and see

whether the disposition of the one action may settle the others thereby

avoiding multiple trials on the same issue; (2) where several actions

involve an inquiry into the same event in its general aspects, the actions

may be tried together, but with separate docket entries, verdicts and

judgments, the consolidation being limited to a joint trial; and (3) where

several actions are pending which might have been brought as a single

action, the cases may be merged into one action, thereby losing their

individual identity, to be disposed of as one suit." Shannon v. Stookey, 59

Ill. App. 3d 573, 577 (1978).

¶ 41 Here, the second type of consolidation is at issue. Although Israelov's action to

enforce his agreement with Fanady/Alpha and Harnack's petition for dissolution involve

an inquiry into the same event in its general aspects, i.e., the purchase of a CBOE seat

and the disposition of the shares exchanged for that seat, it is clear that the

consolidation was only done for convenience. Separate case numbers were retained

and, as the judgment for dissolution of marriage shows, separate judgments would be

20 1-12-1424

entered in each case. The judgment for dissolution of marriage pertained solely to

Harnack's dissolution petition and, although it noted that Israelov's action remained

pending, made no determination regarding that action.

¶ 42 The consolidation did not merge the two causes into a single suit, change the

rights of the parties to each suit or make the parties in one suit parties in the other suit.

The two actions did not merge into a single suit and, thus, Harnack did not become a

party in the contract action between Israelov and Fanady/Alpha and Israelov did not

become a party in the dissolution action between Harnack and Fanady. Shannon, 59 Ill.

App. 3d at 577. The fact that Israelov's action remained unresolved thus had no impact

on the finality of the judgment for dissolution of marriage as to the rights between the

parties to the dissolution action, Harnack and Fanady. "To be final, an order or judgment

must terminate the litigation between the parties on the merits or dispose of the rights of

the parties, either on the entire controversy or a separate part thereof." In re Haley D.,

2011 IL 110886, ¶ 61. The August 3, 2011, judgment for dissolution of marriage meets

this test and is, therefore, a final judgment.

¶ 43 As the August 3, 2011, judgment for dissolution of marriage was a final default

judgment, Fanady had up to 30 days after August 3, 2011, to file his section 2-1301(e)

motion to set aside the judgment. Jackson, 397 Ill. App. 3d at 621; 735 ILCS 5/2-

1301(e) (West 2012). Fanady did not file his section 2-1301(e) motion to set aside the

judgment within 30 days. Instead, he filed it on April 3, 2012, eight months after the

judgment was entered. The trial court's jurisdiction to consider a section 2-1301(e)

motion lapses if the motion is filed more than 30 days following entry of final judgment.

Blazyk v. Daman Express, Inc., 406 Ill. App. 3d 203, 206 (2010). Therefore, the trial

21 1-12-1424

court correctly determined that Fanady's untimely section 2-1301(e) motion could not be

used to set aside the judgment for dissolution of marriage.

¶ 44 The trial court correctly determined that Fanady's section 2-1301(e) motion filed

more than 30 days after entry of the judgment was untimely and his challenge to the

judgment should be considered under section 2-1401(a) and not section 2-1301(e). We

affirm the court's denial of Fanady's section 2-1301(e) motion to set aside the judgment

for dissolution of marriage.

¶ 45 We would affirm the court's denial of Fanady's section 2-1301(e) motion to set

aside the judgment even if the motion had been timely filed and the court had evaluated

it under section 2-1301(e). The decision as to whether the default should be set aside

under section 2-1301(e) is discretionary. In re Haley D., 2011 IL 110886, ¶ 69 (citing

735 ILCS 5/2-1301(e) (West 2008)). "In exercising that discretion, courts must be

mindful that entry of default is a drastic remedy that should be used only as a last

resort" and that provisions governing relief from defaults "are to be liberally construed

toward that end." Id. The overriding consideration in deciding a section 2-1301(e)

motion to set aside a default judgment "is simply whether or not substantial justice is

being done between the litigants and whether it is reasonable, under the circumstances,

to compel the other party to go to trial on the merits." Id. However, "[i]n making this

assessment, a court should consider all events leading up to the judgment," as " '[w]hat

is just and proper must be determined by the facts of each case, not by a hard and fast

rule applicable to all situations regardless of the outcome. [Citation.]' " Id. (quoting Mann

v. Upjohn Co., 324 Ill. App. 3d 367, 377 (2001)).

"Whether substantial justice is being achieved by vacating a judgment or

22 1-12-1424

order is not subject to precise definition, but relevant considerations

include diligence or the lack thereof, the existence of a meritorious

defense, the severity of the penalty resulting from the order or judgment,

and the relative hardships on the parties from granting or denying

vacatur." Jackson v. Bailey, 384 Ill. App. 3d 546, 549 (2008) (citing Mann

¶ 46 Here, the record shows a lack of diligence by Fanady as a result of his complete

refusal to participate in the dissolution proceedings for more than 15 months, his

attempts to evade service of process and his refusal to comply with the court's orders

regarding payment of maintenance and with its restraining orders and injunctions

barring him from transfer of any assets held by him or his enterprises. It shows his

attempts to evade the jurisdiction of the court and to defraud this court and the Florida

court by obtaining a dissolution of marriage judgment under false pretenses in Florida

and by moving the action to federal court through Alpha's action. It shows his forgery of

a dissolution judgment in order to obtain a religious divorce and his attempts to hide

marital assets by selling one presumptively marital CBOE seat and hiding the money

received in Switzerland and by transferring 120,000 presumptively marital shares from

the Alpha and Fanmare accounts. To paraphrase the court in Mann, 324 Ill. App. 3d at

379, Fanady was the architect of his own predicament, and his complaint now that he

was denied substantial justice will not be heard by this court.

¶ 47 It would not be reasonable to vacate the judgment and force Harnack to proceed

to trial on her petition for dissolution of marriage a second time where any alleged errors

in the judgment or inequalities in the distribution of assets are solely due to Fanady's

23 1-12-1424

failure to participate in the dissolution proceedings. Any errors or injustices in the

judgment for dissolution of marriage of which Fanady now complains would not have

occurred absent his abandonment of the litigation. Fanady chose not to participate in

the litigation. He must now live with the consequences of that decision.

¶ 48 We also take note of the facts that one CBOE seat was sold and the proceeds

sent to Switzerland, 120,000 CBOE Holdings shares are missing and unaccounted for

and Fanady has failed to comply with the court's maintenance order. In light of these

considerations, Fanady has not shown that the judgment for dissolution of marriage

imposes a penalty or hardship on him.

¶ 49 We conclude that substantial justice was done and, even if the court had

considered Fanady's motion to set aside the judgment for dissolution of marriage under

section 2-1301(e), it did not abuse its discretion in denying the motion. We affirm the

order denying Fanady's section 2-1301(e) motion to set aside the judgment.

¶ 50 2. Section 2-1401(e) Petition to Vacate

¶ 51 We also affirm the trial court's denial of Fanady's section 2-1401(a) petition to

vacate based on his lack of diligence.

¶ 52 Once the court's jurisdiction to vacate a final judgment under section 2-1301(e)

lapses, section 2-1401 provides a means to reopen the judgment. Blazyk, 406 Ill. App.

3d at 206.

"Section 2-1401 establishes a comprehensive, statutory procedure

that allows for the vacatur of a final judgment older than 30 days. 735

ILCS 5/2-1401(a) (West 2002). While the remedy in the statute does have

its roots in common law equity, the General Assembly abolished the

24 1-12-1424

common law writ system and replaced it with the statutory postjudgment

petition. [Citations.] Section 2-1401 requires that the petition be filed in the

same proceeding in which the order or judgment was entered, but it is not

a continuation of the original action. 735 ILCS 5/2-1401(b) (West 2002).

The statute further requires that the petition be supported by affidavit or

other appropriate showing as to matters not of record. 735 ILCS 5/2-

1401(b) (West 2002)." People v. Vincent, 226 Ill. 2d 1, 7-8 (2007).

"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." Smith v. Airoom, Inc., 114 Ill. 2d 209, 220-21 (1986).

¶ 53 When a trial court dismisses a section 2-1401 petition, or enters judgment on the

pleadings of said petition without holding an evidentiary hearing, the standard of review

to be applied is de novo. Cavalry Portfolio Services v. Rocha, 2012 IL App (1st) 111690,

¶ 9 (citing Vincent, 226 Ill. 2d at 14 (which dealt with narrow issue in which a judgment

was being challenged for voidness under section 2-1401(f))). However, where, as here,

a typical section 2-1401 two-tiered analysis in involved, "(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."

Cavalry Portfolio Services, 2012 IL App (1st) 111690, ¶ 10 (following Rockford Financial

Systems, Inc. v. Borgetti, 403 Ill. App. 3d 321, 326-27 (2010), and Blazyk v. Daman

Express, Inc., 406 Ill. App. 3d 203, 206 (2010)).

25 1-12-1424

¶ 54 In his reply brief, Fanady asserts that he had the following meritorious defense:

"[T]he Judgment for Dissolution overstated the marital property by

including stock held by Fanady with partners, whose interests were not

taken into account and/or protected, resulting in property owned by others

who were not party to the divorce action being awarded to Harnack. This

error also caused the court to award a disproportionate share of stock to

Harnack."

First, Fanady has no standing to assert that the judgment should be vacated because

the interests of his partners were not protected. 9 It was for the negatively impacted

partners to mount such a challenge to the judgment, not Fanady.

¶ 55 Second, as to there being a disproportionate share awarded to Harnack, Fanady

presented no evidence to support his section 2-1401 petition. Section 2-1401(b)

requires that a section 2-1401 petition be supported by affidavit or other appropriate

showing as to matters not of record. 735 ILCS 5/2-1401(b) (West 2012). Although

Fanady submitted an affidavit in support of his petition, the affidavit merely states that

he is the respondent and over 21 years of age, nothing more. He submitted no evidence

to demonstrate matters not of record, such as the existence of the partnerships or the

number of shares he actually held.

¶ 56 Moreover, even if Fanady had shown a meritorious defense by a preponderance

of the evidence, his section 2-1401 petition fails to allege, let alone show by a

9 "[A] plaintiff has standing if he is able to show some injury in fact to a legally recognized interest. [Citation.] A proponent must assert his own legal rights and interests, rather than basing his claim for relief upon the rights of third parties." Helmig v. John F. Kennedy Community Consolidated School District No. 129, 241 Ill. App. 3d 653, 658 (1993). "Where the effect of the challenged action is generalized, speculative or de minimus, the complaining party will not have standing." Id. 26 1-12-1424

preponderance of the evidence, his due diligence. Fanady made no claim below that he

was diligent in discovering and presenting his defense to the trial court in the original

action or in filing his section 2-1401 petition, and given the record before us, it is clear

he could never make such a showing. On appeal, he again makes no claim that he

complied with the due diligence requirements of section 2-1401. Instead, he asserts that

"the requirement that substantial justice be achieved is more important than the due

diligence requirements" and "justice and good conscience" require that the judgment for

dissolution of marriage be vacated. Specifically, he argues that the judgment for

dissolution of marriage "is so absurdly uneven and unfair that justice and fairness

require it be set aside." Fanady asserts the judgment awarded Harnack "far in excess"

of a fair share of the marital assets given the short length of marriage and that it was

based on a "fundamental misunderstanding or misrepresentation" regarding the amount

of CBOE Holdings stock owned by Fanady and, given the ISRFAN and Fanmare

partnerships, the clear error that he was the 100% owner of 280,000 shares of stock.

¶ 57 Fanady is asking for equitable relief. In People v. Vincent, 226 Ill. 2d 1 (2007), in

finding that the de novo standard of review rather than the abuse of discretion standard

of review should be applied to dispositions under section 2-1401 entered without an

evidentiary hearing, our supreme court dispelled the "erroneous belief that a section 2-

1401 petition 'invokes the equitable powers of the court, as justice and fairness require.'

" Vincent, 226 Ill. 2d at 15 (quoting Elfman v. Evanston Bus Co., 27 Ill. 2d 609, 613

(1963)). It stated that this "observation" had been true when such relief was available

under common law writs but, when the legislature abolished the writs in favor of the

section 2-1401 statutory remedy, "it became inaccurate to continue to view the relief in

27 1-12-1424

strictly equitable terms" and "relief [under section 2-1401] is no longer purely

discretionary." Vincent, 226 Ill. 2d at 16.

¶ 58 The Vincent holding notwithstanding, courts have created equitable exceptions to

the due diligence requirement of section 2-1401. Fanady cites to Cavalry Portfolio

Services, 2012 IL App (1st) 111690, in which the court held: "a trial court ruling denying

section 2-1401 relief can be vacated even in the absence of diligence where the

defendant has a meritorious defense and actively seeks to vacate the judgment.

[Citation.] More important than the due diligence requirement is the requirement that

substantial justice be achieved." Cavalry Portfolio Services, 2012 IL App (1st) 111690,

¶ 18. The court explained:

" 'One of the guiding principles *** of section 2-1401 relief is that the

petition invokes the equitable powers of the circuit court, which should

prevent enforcement of a default judgment when it would be unfair, unjust,

or unconscionable. [Citations.] *** Because a section 2-1401 petition is

addressed to equitable powers, courts have not considered themselves

strictly bound by precedent, and where justice and good conscience may

require it a default judgment may be vacated even though the requirement

of due diligence has not been satisfied.' Smith v. Airoom, Inc., 114 Ill. 2d

209, 225 *** (1986) (citing American Consulting Association, Inc. v.

Spencer, 100 Ill. App. 3d 917 *** (1981), Manny Cab Co. v. McNeil

Teaming Co., 28 Ill. App. 3d 1014 *** (1975), and George F. Mueller &

Sons, Inc. v. Ostrowski, 19 Ill. App. 3d 973 *** (1974))." Cavalry Portfolio

Services, 2012 IL App (1st) 111690, ¶ 18.

28 1-12-1424

¶ 59 As Israelov asserts, the cases on which Cavalry Portfolio Services relied in

coming to the above conclusion all predate Vincent by more than 20 years and,

therefore, do not take into account the Vincent holding that section 2-1401 does not

"invoke[ ] the equitable powers of the court, as justice and fairness require." (Internal

quotation marks omitted.) Vincent, 226 Ill. 2d at 15. However, Vincent also stated that

relief under section 2-1401 should not continue to be viewed "in strictly equitable terms"

and "is no longer purely discretionary" (emphases added) (Vincent, 226 Ill. 2d at 16),

thus implying that, although no longer a strictly equitable remedy, relief under section 2-

1401 could have a discretionary component. As the court in Cavalry Portfolio Services

pointed out,

"many, more recent decisions of the appellate court have recognized that

the Vincent decision dealt with a narrow issue under section 2-1401(f) in

which a judgment was challenged for voidness. The Vincent decision did

not involve the due diligence, meritorious defense, and two-year limitation

requirements that apply to other actions brought under section 2-1401.

Rockford Financial Systems, Inc. v. Borgetti, 403 Ill. App. 3d 321, 326-27

*** (2010); see also [Blazyk, 406 Ill. App. 3d at 206.] The Borgetti court

found that the allegation of voidness in Vincent had nothing to do with

equitable principles. Borgetti, 403 Ill. App. 3d at 327 ***. The court found

that 'equitable principles and the exercise of discretion still apply in section

2-1401 proceedings not involving judgments alleged to be void.' Id. at 328,

***." Cavalry Portfolio Services, 2012 IL App (1st) 111690, ¶ 10.

In other words, the Vincent decision does not foreclose invocation by the trial court of its

29 1-12-1424

equitable powers to waive the due diligence requirements of section 2-1401 under

appropriate circumstances. Those circumstances do not exist here.

¶ 60 "Relaxation of the due diligence requirement thereby entitling a defendant to a

motion to vacate a judgment is justified only under extraordinary circumstances."

Ameritech Publishing of Illinois, Inc. v. Hadyeh, 362 Ill. App. 3d 56, 60 (2005). Such

circumstances exist, for example, "when it is clear from all the circumstances that a

party has procured an unconscionable advantage through the extraordinary use of court

processes" or where "some fraud or fundamental unfairness" has been shown.

American Consulting Ass'n v. Spencer, 100 Ill. App. 3d 917, 923 (1981). Extraordinary

circumstances may also exist where the failure to exercise due diligence was caused by

circumstances that occurred outside the record and that were beyond the petitioner's

control. Ameritech Publishing of Illinois, Inc., 362 Ill. App. 3d at 60.

¶ 61 Fanady presents no evidence to show that extraordinary circumstances exist to

excuse his lack of diligence. He presents no evidence to show that Harnack used court

processes to gain an unconscionable advantage or that her conduct suggests fraud or

fundamental unfairness. He presents no evidence to show that, as a result of

circumstances outside the record and beyond his control, i.e., through no fault or

negligence on his part, the existence of a valid defense was not made known to the trial

court and that he had a reasonable excuse for failing to take such action within the

applicable time limits. Essentially, his only assertion is that the judgment for dissolution

of marriage is "uneven and unfair" and based on a "fundamental misunderstanding or

misrepresentation" regarding the amount of CBOE Holdings stock he owned. On the

record before us, it is clear that any errors or one-sidedness in the judgment are solely

30 1-12-1424

due to Fanady's own conduct, the result of his refusal to participate in the dissolution

proceedings.

¶ 62 The court based the judgment for dissolution of marriage on Harnack's evidence

regarding the length of the marriage, the assets acquired by the parties during the

marriage, Harnack's limited earning capacity, Fanady's vastly greater earning capacity,

Harnack's recently diagnosed illness and Fanady's failure to comply with the court's

order awarding Harnack maintenance and the resultant arrearage, all of which are

factors to be considered in determining the allocation of marital assets under section

504 of the Illinois Marriage and Dissolution of Marriage Act. Rather than participate in

the action and present his own evidence to the court to rebut Harnack's evidence,

Fanady chose instead to make underhanded efforts to prevent Harnack from getting her

appropriate share of the marital assets and to avoid the trial court's jurisdiction. His

behavior in this case has been so egregious, so contemptuous of the law and the court,

that he cannot now complain that substantial justice requires that the judgment for

dissolution of marriage be set aside. No exceptional circumstances exist that warrant

relaxing the due diligence requirements of section 2-1401 for this individual. The court

did not err in denying Fanady's section 2-1401 petition.

¶ 63 3. Remand With Directions

¶ 64 The court did not err in denying Fanady's motion to vacate the judgment under

section 2-1301(e) or section 2-1401. Therefore, reversal and remand is not warranted

under either of Fanady's arguments. However, given that the parties disagree regarding

the source of the 40,000 shares that the court ordered transferred to escrow, we

remand for clarification of this transfer provision.

31 1-12-1424

¶ 65 In its dissolution of marriage judgment, the court found "the parties *** acquired

various marital properties, including *** [t]he equivalent of 320,000 *** shares of [CBOE 10 Holdings] stock (Steve Fanady being 100% owner of at 280,000)." It awarded

Harnack 140,000 shares as her marital portion. It then ordered that CBOE Holdings and

Computershare transfer 120,000 shares to Harnack and that 40,000 shares be

transferred into an escrow account pending resolution of Israelov's claims. The parties

do not agree in their interpretation of this transfer provision.

¶ 66 In her brief on appeal, Harnack asserts "it is clear that said 40,000 shares were

placed in escrow out of the 120,000 shares awarded to her." 11 However, during oral

argument before this court, represented by new counsel, Harnack asserted that the trial

10 The unrebutted evidence before the court was that Fanady acquired four CBOE seats during the marriage. These seats were the equivalent of 320,000 CBOE Holdings shares given that each seat was exchangeable for 80,000 shares when CBOE Holdings went public in June 2010 (4 @ 80,000 = 320,000). However, as a result of Fanady's selling of one seat, possible selling of half of one of his three remaining seats to Marme and removing 120,000 shares of the 240,000 shares actually received for the three seats in the Alpha and Fanmare accounts, by the time the judgment for dissolution of marriage was entered, "the equivalent of 320,000 [CBOE Holdings] shares" actually held was as follows: -$2.775 million in a Swiss bank account; -80,000 shares in the Alpha account, of which 40,000 are claimed by ISRFAN/Israelov; -40,000 shares in the Fanmare account, all of which are claimed by Fanmare/Marme; -120,000 shares, valued in excess of $4 million, transferred out of the Alpha and Fanmare accounts in early 2011 and disposition unknown; and -possibly another $700,000 received from Marme for her half seat, the disposition of which is unknown. 11 Israelov, although not a party to the judgment for dissolution of marriage, agreed with this interpretation during oral argument before this court, arguing that the trial court had intended that the 40,000 shares to be placed in escrow were to come from the 120,000 shares the court ordered CBOE Holdings and Computershare to transfer to Harnack, i.e., that Harnack was to receive only 80,000 shares.

32 1-12-1424

court intended that the 40,000 shares to be placed in escrow were to be taken from the

280,000 total shares and she be awarded 120,000 of the remaining 240,000 shares. 12

In his briefs on appeal, Fanady asserts the latter interpretation of the judgment and the

report of proceedings of the prove-up hearing arguably supports this interpretation.

Additionally, CBOE Holdings and Computershare interpret the judgment for dissolution

of marriage in the same manner as does Fanady and as did Harnack at oral argument,

so that CBOE Holdings and Computershare are obligated to transfer 120,000 shares to

Harnack immediately and transfer 40,000 shares to escrow, for a total transfer of

160,000 shares. However, as in their interpleader action, they point out that they cannot

comply with the judgment for dissolution of marriage as entered because they are in

possession of only 120,000 shares. Given that conflicting interpretations of the transfer

provision in the judgment for dissolution of marriage have arisen and that CBOE

Holdings and Computershare have informed the court that they are holding only

120,000 shares, we sua sponte remand to the trial court to amend the judgment for

dissolution of marriage to clarify this point.

¶ 67 We caution that, by this remand, we are not vacating the judgment for dissolution

of marriage and are not inviting further litigation regarding Fanady's attempts to vacate

the judgment. We hold here that, for the reasons set forth above, Fanady is not entitled

12 Harnack's calculation: 280,000 total shares - 40,000 arguably nonmarital shares to be transferred to escrow = 240,000 remaining marital shares X 50% marital allocation = 120,000 shares to Harnack immediately If Israelov fails to show that he was entitled to the 40,000 shares, i.e., that the shares are nonmarital, then Harnack would receive an additional 20,000 shares (50% of the 40,000 escrowed shares).

33 1-12-1424

to relief under either section 2-1301 or section 2-1401. Our remand is for the sole

purpose of clarifying the trial court's intent with regard to the 40,000 CBOE Holdings

shares to be transferred to escrow.

¶ 68 CONCLUSION

¶ 69 For the reasons stated above, we deny Fanady's motion to strike Harnack's brief,

affirm the trial court and remand with directions.

¶ 70 Affirmed and cause remanded with directions.