Lyons Lumber & Building Center, Inc. v. 7722 North Ashland, LLC

2016 IL App (3d) 140487
Appellate Court of Illinois·Decided October 5, 2016·No. 3-14-0487·Published·Cited by 6 cases

Opinion

Digitally signed by Illinois Official Reports Reporter of Decisions Reason: I attest to the accuracy and integrity of this document Appellate Court Date: 2016.10.04 10:53:33 -05'00'

Lyons Lumber & Building Center, Inc. v. 7722 North Ashland, LLC, 2016 IL App (3d) 140487

Appellate Court LYONS LUMBER AND BUILDING CENTER, INC., Plaintiff- Caption Appellant, v. 7722 NORTH ASHLAND, LLC; ASHLAND JUNEWAY, LLC; and JAY JOHNSON, Individually, Defendants- Appellees.

District & No. Third District Docket No. 3-14-0487

Filed July 13, 2016

Decision Under Appeal from the Circuit Court of Will County, No. 11-L-277; the Hon. Review Barbara Petrungaro, Judge, presiding.

Judgment Reversed.

Counsel on Zane D. Smith (argued), of Zane D. Smith & Associates, Ltd., of Appeal Chicago, and Sheila A. Genson, of Schaumburg, for appellant.

John F. Argoudelis (argued), of Plainfield, for appellees.

Panel JUSTICE SCHMIDT delivered the judgment of the court, with opinion. Justice McDade concurred in the judgment and opinion. Justice Carter dissented, with opinion. OPINION

¶1 This appeal arises out of a breach of contract action filed by plaintiff, Lyons Lumber & Building Center, Inc., against defendants, 7722 North Ashland, LLC (Ashland), Ashland-Juneway, LLC (Juneway) (collectively, the defendant LLCs), and Jay Johnson, who personally guaranteed the two loans each of the defendant LLCs made with plaintiff. The trial court entered a default judgment against the defendant LLCs and granted plaintiff’s motion for summary judgment against Johnson, individually, with a resulting judgment of $165,806.84, jointly and severally, against all the defendants. More than 30 days following the judgment, defendants filed a motion to vacate the judgment pursuant to section 2-1401 of the Code of Civil Procedure (Code) (735 ILCS 5/2-1401 (West 2012)), which the trial court granted. On appeal, plaintiff argues the trial court erred in granting defendants’ motion to vacate. We agree and reverse.

¶2 FACTS ¶3 On April 8, 2011, plaintiff filed a two-count complaint against defendants for breach of contract. The complaint alleged that plaintiff was in the business of providing lumber services, the defendant LLCs were in the construction business, and Jay Johnson was the president of the defendant LLCs. In count I, plaintiff alleged that it had entered into an installment note with Ashland for $61,093 plus interest, under which Ashland defaulted. In count II, plaintiff alleged that it had entered into an installment note with Juneway for $14,908 plus interest, under which Juneway defaulted. Johnson personally guaranteed both notes. Plaintiff requested damages for the principle amount due, interest, costs, and attorney fees, as explicitly provided for in the installment notes. ¶4 After multiple unsuccessful attempts, on October 14, 2011, plaintiff served defendants with the summons and complaint. On December 21, 2011, plaintiff filed a motion for default judgment against defendants for their failure to appear before the trial court. At the hearing on December 29, 2011, Johnson appeared pro se and the trial court granted him 28 days to file an appearance and answer. ¶5 On February 9, 2012, Johnson filed a pro se appearance and verified answer to the complaint. In his answer, Johnson stated that the installment note spoke for itself but denied signing the note as guarantor. The parties engaged in written discovery. On June 11, 2012, attorney Joseph Casper filed a substitute appearance on behalf of all named defendants. The matter was continued for a status on settlement and discovery multiple times, with defendants’ attorney appearing at the majority of the status hearings. ¶6 On June 17, 2013, attorney Casper did not attend the scheduled court hearing. The trial court granted plaintiff’s counsel’s motion to withdraw and granted attorney S.A. Genson leave to file a substitute appearance on behalf of plaintiff. The trial court ordered the defendant LLCs to file their answers to the complaint by July 1, 2013, and to file their answers to plaintiff’s requests to admit and any outstanding discovery by July 15, 2013. The court continued the matter for a status hearing to August 8, 2013. Plaintiff’s counsel forwarded the order of June 17, 2013, to defendants’ counsel. ¶7 On July 24, 2013, plaintiff filed a motion for default, motion to have deemed admitted, and motion to bar against the defendant LLCs for their failure to answer the complaint. Plaintiff

-2- also requested that the court bar Johnson from presenting evidence and testimony for the defendant LLCs’ failure to comply with the court’s order that Johnson be deposed by July 15, 2013. ¶8 On August 8, 2013, attorney Casper sent an e-mail to plaintiff’s counsel indicating that he was delayed in Europe on business and was requesting an extension of time to respond to plaintiff’s discovery requests and to file responsive pleadings. At the status hearing on August 8, 2013, plaintiff’s counsel informed the court of Casper’s correspondence. The trial court granted plaintiff’s motion for default against the defendant LLCs, deemed the facts in requests to admit to be admitted, and barred Johnson from presenting any evidence or testimony. ¶9 On September 18, 2013, plaintiff filed a motion for summary judgment against defendants; the trial court allowed defendants until October 18, 2013, to respond. On October 25, 2013, the trial court reentered default judgment against the defendant LLCs and granted the motion for summary judgment against Johnson. The trial court also granted plaintiff’s petition for attorney fees and costs. The trial court awarded plaintiff a total judgment of $165,806.84. Plaintiff filed citations to discover the defendants’ assets. ¶ 10 On January 28, 2014, attorney John Argoudelis filed a motion for leave to file his appearance on behalf of defendants. Argoudelis also filed a motion to vacate the default judgment of October 25, 2013, pursuant to section 2-1401 of the Code, arguing that defendants, who were represented by attorney Casper, did not become aware of the default judgment until a citation to discover was served on a family friend. Defendants claimed that they had been attempting to contact Casper via e-mail since November 18, 2013, and Casper was not responsive. The last information defendants received from Casper was on August 14, 2013, when Casper informed them that the case was pending and he would provide an update upon his return to the country. Casper did not advise defendants that they were in default or that a motion for default was pending. In support of the motion to vacate, defendants argued that a meritorious defense to the complaint existed in that Johnson was not represented by an attorney when he signed the note, which was prepared by plaintiff’s attorney, and Johnson did not understand the nature of the personal guaranty. ¶ 11 In response, plaintiff argued that the judgment should stand because defendants failed to attach an affidavit supporting their claim of a meritorious defense and failed to show the entry of the judgment was not the result of defendants’ lack of due diligence. Additionally, plaintiff argued that defendants offered no meritorious defense. ¶ 12 In reply and in support of their motion to vacate the default judgment, defendants attached an affidavit from Johnson. In the affidavit, Johnson attested that defendants had been represented by Casper since June 11, 2013. Johnson also attested that defendants did not become aware of the default judgment entered until January 14, 2014, when a family friend was served with a citation to discover assets in the case. Johnson indicated that he had been unsuccessfully attempting to contact Casper since November 18, 2013.

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Lyons Lumber & Building Center, Inc. v. 7722 North Ashland, LLC, 2016 IL App (3d) 140487 (Ill. Ct. App. 2016).

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Lyons Lumber and Building Center, Inc. v. 7722 North Ashland, LLC
2016 IL App (3d) 140487 (Appellate Court of Illinois, 2016)