R. W. Sawant & Co. v. Allied Programs Corp.

489 N.E.2d 1360, 111 Ill. 2d 304, 95 Ill. Dec. 496, 1986 Ill. LEXIS 200
CourtIllinois Supreme Court
DecidedFebruary 21, 1986
Docket61403
StatusPublished
Cited by118 cases

This text of 489 N.E.2d 1360 (R. W. Sawant & Co. v. Allied Programs Corp.) is published on Counsel Stack Legal Research, covering Illinois Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
R. W. Sawant & Co. v. Allied Programs Corp., 489 N.E.2d 1360, 111 Ill. 2d 304, 95 Ill. Dec. 496, 1986 Ill. LEXIS 200 (Ill. 1986).

Opinion

CHIEF JUSTICE CLARK

delivered the opinion of the court:

R. W. Sawant & Company (Sawant) brought an action in the circuit court of Cook County alleging breach of contract and fraudulent misrepresentation against a number of defendants, including Ben Kozloff, Inc. (Kozloff), and Allied Programs Corporation (Allied), a New York corporation. Kozloff then filed a third-party complaint against a number of parties, including Allied. Sawant and Kozloff separately served Allied with service of process in New York. After an order of default and a default judgment were entered against Allied and in favor of Sawant and an order of default was entered against Allied and in favor of Kozloff, Allied filed a special and limited appearance and a motion to quash the service of summons.

The circuit court found that Allied had used improper procedure and had sufficient contacts with Illinois to justify jurisdiction. Therefore, the court struck the defendant’s special and limited appearance and denied its motion to quash. Allied appealed and the appellate court reversed (130 Ill. App. 3d 71). We granted Sawant and Kozloff’s petition for leave to appeal (94 Ill. 2d R. 315).

Sawant is a company headquartered in Bombay, India, which exports seafood; whereas, Kozloff is an Illinois corporation which imports seafood. Sawant and Kozloff entered into an agreement whereby Sawant would supply Kozloff with a large quantity of its goods. Because such imports must be inspected by the Federal Food and Drug Administration (FDA) and pass FDA standards before they are allowed into this country, Sawant and Kozloff discussed obtaining a rejection-risk insurance policy to insure against losses if the FDA would reject any or all of the shipments of seafood that were contemplated.

Pursuant to these discussions Kozloff contacted the Chicago office of Bayly, Martin and Fay, Inc. (BMF), an insurance broker, in an attempt to obtain the insurance. BMF was unable to arrange for the insurance through domestic insurers so BMF’s New York office contacted Allied, a New York corporation licensed as an excess line broker. Allied subsequently arranged for about 15 European insurers to underwrite the risk.

After the • insurance was obtained, Allied sent a binder confirmation to BMF’s New York office listing Kozloff as the assured. BMF’s New York office subsequently sent a cover letter and the binder confirmation to its Chicago office. The cover letter stated:

“Enclosed is Allied Program’s Binder Confirmation on Ocean and Rejection Insurance for Ben Kozloff, Inc. which may be presented. If you wish you can prepare a BMF Binder statement indication [sic] the same conditions.
Also enclosed is our invoice [number] in the amount of $9,162.00 representing the deposit premium as calculated ***.”

As stated in the cover letter quoted above, BMF sent a premium statement to Kozloff on a BMF invoice. Kozloff subsequently wrote a check for this amount to BMF’s New York office. BMF’s New York office then issued a check to Allied.

The FDA refused to allow several of Sawant’s shipments of seafood to enter the country. Kozloff filed claims for these shipments with BMF’s New York office, which then notified Allied, and Allied drew checks on its account payable to Kozloff. Allied sent these checks to BMF’s New York office, and that office forwarded the checks to BMF’s Chicago office, which in turn forwarded the checks to Kozloff.

When several claims were not paid, Sawant, as a third-party beneficiary of the insurance agreement, sued Kozloff, BMF and the European insurers. On December 21, 1981, Sawant amended its complaint and named Allied as a defendant. After being served with summons in New York in June 1982, Allied took no action, and an order of default was entered against it on August 11, 1982. A default judgment was later entered on October 13,1982.

Kozloff filed a third-party complaint against Allied and several other parties on July 9, 1982, and served Allied in New York. Allied took no action, and on October 12, 1982, an order of default was entered against Allied and in favor of Kozloff.

On December 1, 1982, Allied filed a special and limited appearance and a motion to quash the service of summons of Sawant and Kozloff. The circuit court struck Allied’s special and limited appearance and denied its motion to quash, finding that Allied had not used proper procedure, had not diligently presented its defense, and that Allied was subject to jurisdiction in Illinois.

The appellate court reversed, holding that Allied had used proper procedure, that a defendant’s diligence in presenting a defense is not required when jurisdiction is contested, and that Allied was not subject to personal jurisdiction in Illinois. 130 Ill. App. 3d 71.

Two issues are presented for our review, namely, (1) whether the appellate court was correct in holding that the defendant used proper procedure in contesting jurisdiction, and (2) whether the defendant is subject to jurisdiction in Illinois.

We note initially that “[a] judgment, order or decree entered by a court which lacks jurisdiction of the parties or of the subject matter, or which lacks the inherent power to make or enter the particular order involved, is void, and may be attacked at any time or in any court, either directly or collaterally.” (Emphasis added.) (Barnard v. Michael (1945), 392 Ill. 130, 135; City of Chicago v. Fair Employment Practices Com. (1976), 65 Ill. 2d 108, 112. See Dorr-Wood, Ltd. v. Department of Public Health (1981), 99 Ill. App. 3d 170, 173.) A defendant, therefore, can properly challenge a court’s jurisdiction after a default judgment or order is entered.

Sawant and Kozloff argue Allied’s filing of a special and limited appearance after the default judgment and order of default had been entered amounted to a collateral attack on the circuit court’s judgment and orders under section 2 — 1401 of the Code of Civil Procedure (Ill. Rev. Stat. 1983, ch. 110, par. 2 — 1401). They concluded, however, that section 2 — 1401 does not provide relief in this instance since Allied was not diligent in its own defense. However, their argument fails. A defendant who is contesting personal jurisdiction is not “strictured by either the time limitations [citation] or the requirement of due diligence to which petitions relying on” section 2 — 1401 must conform. Home State Savings Association v. Powell (1979), 73 Ill. App. 3d 915, 917. (Home State Savings cited section 72 of the Civil Practice Act (Ill. Rev. Stat. 1977, ch. 110, par. 72); this section became section 2 — 1401 of the Code of Civil Procedure (Ill. Rev. Stat. 1983, ch. 110, par. 2-1401).)

As the appellate court correctly pointed out in this case, “section 2 — 1401, which provides relief from default judgments, *** does not affect a party’s right to seek relief from a void order or judgment by any other method. See Ill. Rev. Stat. 1983, ch. 110, par. 2— 1401(f).” 130 Ill. App. 3d 71, 74.

Allied chose one method of attacking the personal jurisdiction of the Illinois courts. Although the method Allied chose may not be the most used or the one most favored, it was nonetheless permissible and proper.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

People v. Powell
2020 IL App (1st) 180623-U (Appellate Court of Illinois, 2020)
In re N.G.
2018 IL 121939 (Illinois Supreme Court, 2019)
City of Joliet v. Szayna
2016 IL App (3d) 150092 (Appellate Court of Illinois, 2017)
In re Detention of Duke
2013 IL App (1st) 121722 (Appellate Court of Illinois, 2014)
In Re Marriage of Rolseth
907 N.E.2d 897 (Appellate Court of Illinois, 2009)
Capital One Bank v. Czekala
Appellate Court of Illinois, 2008
Capital One Bank, N.A. v. Czekala
884 N.E.2d 1205 (Appellate Court of Illinois, 2008)
Merriman v. Crompton Corp.
146 P.3d 162 (Supreme Court of Kansas, 2006)
Kostal v. Pinkus Dermatopathology Laboratory, P.C.
827 N.E.2d 1031 (Appellate Court of Illinois, 2005)
People v. Lott
760 N.E.2d 115 (Appellate Court of Illinois, 2001)
Sarkissian v. Chicago Board of Education
Illinois Supreme Court, 2001
People v. Madej
739 N.E.2d 423 (Illinois Supreme Court, 2000)
In Re Adoption of E.L.
733 N.E.2d 846 (Appellate Court of Illinois, 2000)
Kalata v. Healy
Appellate Court of Illinois, 2000
Beveridge v. Mid-West Management, Inc.
78 F. Supp. 2d 739 (N.D. Illinois, 1999)
People v. Land
710 N.E.2d 471 (Appellate Court of Illinois, 1999)
Norwest Mortgage, Inc. v. Ozuna
Appellate Court of Illinois, 1998
TCA International, Inc. v. B & B Custom Auto, Inc.
701 N.E.2d 105 (Appellate Court of Illinois, 1998)
Stein v. Rio Parismina Lodge
695 N.E.2d 518 (Appellate Court of Illinois, 1998)

Cite This Page — Counsel Stack

Bluebook (online)
489 N.E.2d 1360, 111 Ill. 2d 304, 95 Ill. Dec. 496, 1986 Ill. LEXIS 200, Counsel Stack Legal Research, https://law.counselstack.com/opinion/r-w-sawant-co-v-allied-programs-corp-ill-1986.