THIRD DIVISION March 30, 2007
No. 1-05-4138
UNIVERSAL UNDERWRITERS INSURANCE ) Appeal from COMPANY, ) the Circuit Court ) of Cook County. Plaintiff-Appellant, ) ) v. ) No. 02 L 966 ) JUDGE & JAMES, LTD. and JAY S. JUDGE, ) Honorable ) Robert Lopez Cepero, Defendants-Appellees. ) Judge Presiding.
PRESIDING JUSTICE THEIS delivered the opinion of the court:
Plaintiff Universal Underwriters Insurance Company (Universal) appeals from the trial
court’s grant of summary judgment to defendants Judge & James, Ltd., and Jay S. Judge (Judge)
(collectively, defendants) in this legal malpractice action. Universal argues that the trial court
erred in: (1) determining that defendants committed no legal malpractice when they failed to
appeal the circuit court’s 1995 order because that order was not final and appealable; (2) finding
that defendants did not commit malpractice when they failed to appeal either the 1998 order
directing Universal to arbitrate or the 2000 judgment confirming the arbitration award; and (3)
failing to enter summary judgment in Universal’s favor on defendants’ statute of limitations and
statute of repose defenses. For the following reasons, we reverse and remand for further
proceedings.
Universal, a Kansas corporation, issued an insurance policy to Carriage Chevrolet, Inc., a 1-05-4138
car dealership in St. Louis, Missouri, effective from April 1, 1990 to April 1, 1991. The policy
included, inter alia, premises liability, property damage, and automobile insurance.
Additionally, Universal issued an umbrella policy with a $1 million limit to Carriage Chevrolet.
On January 29, 1991, Michele Heflin, a Carriage Chevrolet salesperson, was driving a car
owned by Carriage Chevrolet with its permission in Alton, Illinois. While Heflin was rendering
assistance to a disabled vehicle, another car struck Heflin, injuring her. Heflin filed suit against
that driver and received $25,000, the limit of the driver’s policy. Heflin then sought recovery
under the Universal umbrella policy issued to Carriage Chevrolet, arguing that it provided
underinsured motorist coverage. When Universal denied her claim, Heflin filed a declaratory
judgment action in 1993 in Madison County, Illinois. Heflin asked the court to determine and
adjudicate the rights and liabilities of the parties with respect to the umbrella policy. She sought
a declaratory judgment determining that the umbrella coverage applied to the underinsured
motorist coverage of Carriage Chevrolet, for which Heflin was a third-party beneficiary, and that
Universal was obligated to negotiate that claim with Heflin, pursuant to its policy provisions.
Universal hired defendants Jay Judge and his law firm, Judge & James, to defend it in this action.
In May 1995, Universal filed a motion to strike and dismiss Heflin’s suit. Heflin then
filed a motion for summary judgment, arguing that she was insured under the Universal umbrella
policy and that Universal wrongfully refused to arbitrate her claim. She sought a judgment
finding that she was insured under this policy. On June 5, 1995, the trial court entered an order
finding that Heflin was an insured under the umbrella policy, which provided $1 million in
coverage, based on a finding that the contract so provided, that an ambiguity existed therein
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which was construed in Heflin’s favor, and that Heflin had complied with all provisions as
required by that policy. The court denied Universal’s motion to strike and dismiss. However,
Universal’s response to Heflin’s motion for summary judgment was not due until June 16, 1995.
Universal then filed a motion for reconsideration and rehearing, asking the court to reconsider its
grant of summary judgment to Heflin in light of Universal’s response. Universal also argued that
Heflin was not an insured under the umbrella policy, the umbrella policy did not include any
underinsured motorist coverage, and that even if Heflin was covered under that policy, the
umbrella policy only covered an insured’s liability to another party and did not cover any injury
to the insured herself.
On July 31, 1995, the Madison County circuit court denied Universal’s motion to
reconsider, but, on its own motion, vacated its June 5, 1995 order granting Heflin’s motion for
summary judgment so that it could consider Universal’s response. Having considered the
response, the trial court ordered that it “still agrees with the reasoning of the plaintiff and grants
plaintiff’s summary judgment motion against Universal.” Defendants, as counsel for Universal,
did not take an appeal from this order. On October 31, 1996, Universal filed, in the 1993
declaratory judgment action, an emergency motion for a protective order to quash or continue the
evidence deposition of one of Helfin’s experts. In a January 7, 1997 order, the trial court found
that the July 31, 1995 order was final and appealable as it disposed of all issues before the court
and, thus, the court no longer had jurisdiction to rule on Universal’s motion.
Heflin filed a second suit against Universal in 1998 to enforce the arbitration clause.
Universal responded, inter alia, that Heflin was not covered under the policy and that the policy
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did not contain an arbitration clause for underinsured motorist coverage. In an order dated
October 9, 1998, the trial court found that this was a separate and distinct lawsuit from the
declaratory judgment action. It held that the previous case had determined that Heflin was
covered under Universal’s umbrella policy and that Universal did not appeal that decision.
Although Universal sought to relitigate coverage issues, the court held that those issues had
already been decided, denied Universal’s motion for summary judgment, and granted Heflin’s
motion to strike Universal’s affirmative defenses. The court found that the policy contained an
arbitration clause and ordered the parties to arbitrate Heflin’s claim. Defendants, as Universal’s
counsel, did not appeal this order.
On January 13, 2000, Universal and Heflin proceeded to arbitration and the arbitrators
awarded her $2,975,000 in damages. On March 2, 2000, Heflin filed an action in the circuit
court of Madison County to confirm the arbitration award under section 11 of the Uniform
Arbitration Act (710 ILCS 5/11 (West 2000)). Universal then filed a motion to reject the award.
On October 26, 2000, the trial court denied Universal’s request to reject the arbitration award and
confirmed the award. Defendants, as counsel for Universal, did not appeal this judgment.
On January 5, 2001, Heflin issued a citation to discover assets against Universal to
enforce the judgment. On March 30, 2001, Heflin filed a motion to order payment of the
judgment in the trial court. On April 4, 2001, Universal, through defendants, filed an emergency
motion for leave to file a complaint seeking a writ of mandamus or a supervisory order in the
Illinois Supreme Court. The motion stated that Heflin had filed three lawsuits against Universal
concerning underinsured motorist coverage, none of which contained a final and appealable
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order. It argued that the July 31, 1995 order was not final and, thus, the subsequent two lawsuits
must be dismissed because another action remained pending. Alternatively, Universal argued
that if that order was final, the other two suits were barred by res judicata. Universal asked the
supreme court to vacate the October 26, 2000 order, dismiss the newest lawsuit, reduce the
arbitration award to the umbrella policy’s $1 million limit, determine whether the proceedings in
the latest two lawsuits were void, and stay payment of the judgment. The supreme court denied
the writ on May 3, 2001.
On May 7, 2001, the trial court entered an order requiring Universal to pay the judgment
of $2,975,000 plus interest to date of $141,577.08. On May 17, 2001, Universal, through new
counsel, settled Heflin’s claim for $3 million, representing the judgment amount plus a portion of
the interest due.
On January 23, 2002, Universal filed this legal malpractice case against defendants. In its
amended complaint, Universal contended that defendants owed Universal a duty of care, which
included the obligation to take timely appeals and to timely seek other remedies in the event of
adverse and erroneous judgments. Defendants breached their duties by neglecting or otherwise
failing to timely appeal the July 31, 1995 order and the October 26, 2000 order.1 Universal also
alleged that defendants breached their duties by failing to raise the $1 million umbrella policy
limit as a defense or limitation on damages in the arbitration proceeding, failing to file a timely
1 Additionally, as Universal clarified in its response to defendants’ summary judgment motion, Universal alleged that if, and only if, the July 31, 1995 order was not final and appealable, Universal would argue that defendants committed malpractice by failing to take an interlocutory appeal from the October 9, 1998 order compelling arbitration and attacking the underlying issue of coverage.
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motion to reconsider the arbitration award or file a timely petition to vacate or modify the award,
and failing to address the merits of the arbitration award or argue that the arbitrators exceeded
their powers by entering an award in excess of the policy limits. Universal alleged that but for
these breaches, it would have prevailed in challenging the declaratory judgment finding Heflin to
be an insured under the umbrella policy and in the alternative, Universal would have successfully
had the $2,975,000 arbitration award vacated as exceeding the policy limits. Universal sought $3
million in damages.
On May 31, 2005, defendants filed their third affirmative defense of the statute of
limitations and the statute of repose. In response, Universal argued that these defenses did not
apply to this case and that, if they did, defendants should be estopped from raising them.
On July 7, 2005, defendants filed a motion for summary judgment on Universal’s legal
malpractice complaint, arguing that they committed no malpractice because Universal voluntarily
paid a void judgment by settling Heflin’s case, foregoing any collateral attack to set aside such
void judgment. They contended that the trial court’s October 26, 2000 order was void because
the umbrella policy contained no agreement to arbitrate and that the trial court exceeded “its
specific subject matter jurisdiction” to order arbitration and enter judgment on the arbitration
award where there was no arbitration agreement. Defendants also contended that the earlier
orders entered in the Heflin cases, including the July 31, 1995 order, were not final and
appealable. In its response, Universal argued that the July 31, 1995 order was final and
appealable and that the October 26, 2000 order was not void. Both parties attached the umbrella
policy, various pleadings from the Heflin cases, e-mail and letter correspondence, and the
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depositions of Judge and several experts.
Universal also included an e-mail from Judge to Universal, dated May 10, 2001, wherein
Judge stated that he believed he should have reacted to the trial court’s October 26, 2000 order.
He stated that he should not have filed a notice of appeal, but should have filed a motion to
vacate that judgment, stating that “[t]he reason we did not was because the Order of 10/26/00
never came to my attention.” Judge stated that although the order was received in his office in
November, he did not learn of it until he fired the attorney involved in his office who never
informed Judge of the order.
On September 21, 2005, Universal filed a motion for a summary determination on
defendants’ statute of limitations and statute of repose defenses, arguing that these defenses did
not apply to this case and that, if they did, defendants should be estopped from raising them. On
December 14, 2005, the trial court granted defendants’ motion for summary judgment and, thus,
found Universal’s motion for summary determination on defendants’ statute of limitations and
repose defenses moot. Universal then filed this timely appeal.
In an action for legal malpractice, a plaintiff must plead and prove that: the defendant
attorney owed the plaintiff a duty of due care arising from the attorney-client relationship; that
the defendant breached that duty; and that as a proximate result, the plaintiff suffered actual
damages. Governmental Interinsurance Exchange v. Judge, 221 Ill. 2d 195, 199, 850 N.E.2d
183, 186-87 (2006). The burden of pleading and proving actual damages requires establishing
that “but for” the attorney’s negligence, the plaintiff would have been successful in the
underlying suit, and thus, a legal malpractice plaintiff must litigate “a case within a case.”
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Governmental Interinsurance Exchange, 221 Ill. 2d at 200, 850 N.E.2d at 187. In an action
alleging that an attorney failed to perfect an appeal, the plaintiff must prove that he or she would
have been successful on appeal if the appeal had properly been perfected. Governmental
Interinsurance Exchange, 221 Ill. 2d at 200, 850 N.E.2d at 187.
Summary judgment should be granted “without delay if the pleadings, depositions, and
admissions on file, together with the affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to a judgment as a matter of law.” 735
ILCS 5/2-1005(c) (West 2004). Although summary judgment can aid in the expeditious
disposition of a lawsuit, it remains a drastic means of disposing of litigation and, therefore,
should be allowed only where the right of the moving party is clear and free from doubt. Bagent
v. Blessing Care Corp., No. 102430 (Ill. Jan. 19, 2007). The movant bears the initial burden of
production in a motion for summary judgment. Bourgonje v. Machev, 362 Ill. App. 3d 984, 994,
841 N.E.2d 96, 106 (2005). A defendant moving for summary judgment may meet its burden of
production either by presenting evidence that, left unrebutted, would entitle it to judgment as a
matter of law or by demonstrating that the plaintiff will be unable to prove an element of his
cause of action. Bourgonje, 362 Ill. App. 3d at 994, 841 N.E.2d at 106. If a defendant presents
facts that would demonstrate its entitlement to judgment as a matter of law, the burden then shifts
to the plaintiff to present some evidence allowing the imposition of liability on the defendant and
supporting each element of his cause of action, thereby defining a material issue of fact to be
determined at trial. Bourgonje, 362 Ill. App. 3d at 994-95, 841 N.E.2d at 106. Our standard of
review is de novo. State Automobile Mutual Insurance Co. v. Kingsport Development, LLC, 364
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Ill. App. 3d 946, 951, 846 N.E.2d 974, 979 (2006).
Universal argues that the trial court erred in granting summary judgment to defendants on
its legal malpractice complaint. First, Universal contends that the July 31, 1995 order in the
Heflin declaratory judgment action, which found that Heflin was an insured under Universal’s
umbrella policy and entitled to underinsured motorist coverage, was final and appealable.
Because this order was final and appealable, Universal contends, defendants breached their duties
to Universal by failing to perfect an appeal from this order. Defendants respond that the July 31,
1995 order was not final because it did not adjudicate all underinsured motorist coverage issues.
Specifically, defendants contend that the July 31, 1995 order was not final because it did not
award Heflin money damages, did not state that the umbrella policy provided underinsured
motorist coverage with an arbitration clause requiring either a three-person arbitration or
arbitration under the American Arbitration Association, and did not order the parties to proceed
to arbitration. Although defendants never specify which of the four elements of a legal
malpractice claim Universal failed to prove, we assume that this argument challenges the element
of breach.
Defendants misunderstand the nature of declaratory judgments. Under section 2-701 of
the Code of Civil Procedure (the Code) (735 ILCS 5/2-701 (West 2004)), “[t]he court may, in
cases of actual controversy, make binding declarations of rights, having the force of final
judgments, whether or not any consequential relief is or could be claimed, including the
determination * * * of the construction of * * * any deed, will, contract or other written
instrument, and a declaration of the rights of the parties interested.” 735 ILCS 5/2-701(a) (West
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2004). Further, the statute provides that “if a declaration of rights is the only relief asked, the
case may be set for early hearing as in the case of a motion.” 735 ILCS 5/2-701(b) (West 2004).
The central purpose of declaratory relief is to allow the court to address a controversy one
step sooner than normal after a dispute has arisen, but before the parties take steps that would
give rise to a claim for damages or other relief. Beahringer v. Page, 204 Ill. 2d 363, 372-73, 789
N.E.2d 1216, 1223 (2003). “The remedy of declaratory judgment is to be liberally applied to
provide a method by which a binding declaration of rights may be rendered before the parties
make an irrevocable change in position that might jeopardize those rights.” Illinois State Toll
Highway Authority v. Amoco Oil Co., 336 Ill. App. 3d 300, 305, 783 N.E.2d 658, 662 (2003).
Further, in deciding issues of insurance coverage, the court should limit its rulings to the issues
set out in the pleadings, should not decide issues which go beyond coverage, and must not
determine disputed factual issues that are crucial to an insured’s liability in the underlying
lawsuit. 16 Ill. L. & Prac. Declaratory Judgments §56, at 208 (2004). Further, unlike other
causes of action that refer specifically to the availability of relief, such as a negligence claim
which requires an allegation of damages, the declaratory judgment statute requires only that the
judgment terminate a part of the controversy. In re Marriage of Best, 369 Ill. App. 3d 254, 259,
859 N.E.2d 173, 180 (2006).
Moreover, Supreme Court Rule 301 provides that every final judgment of a circuit court
in a civil case is appealable as of right. 155 Ill. 2d R. 301. Rule 303(a)(1) provides, in relevant
part, that the notice of appeal from final judgments in civil cases “must be filed with the clerk of
the circuit court within 30 days after the entry of the final judgment appealed from.” 155 Ill. 2d
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R. 303(a)(1). “A final judgment is a determination by the court on the issues presented by the
pleadings which ascertains and fixes absolutely and finally the rights of the parties in the
lawsuit.” Big Sky Excavating, Inc. v. Illinois Bell Telephone Co., 217 Ill. 2d 221, 232-33, 840
N.E.2d 1174, 1182 (2005). A judgment is final if it determines the litigation on the merits so
that, if affirmed, the only thing remaining is to proceed with execution of the judgment. In re
Marriage of Ehgartner-Shachter, 366 Ill. App. 3d 278, 283, 851 N.E.2d 237, 243 (2006). “‘An
order granting summary judgment is a final order.’ ” Shutkas Electric, Inc. v. Ford Motor Co.,
366 Ill. App. 3d 76, 80, 851 N.E.2d 66, 69 (2006), quoting Diggs v. Suburban Medical Center,
191 Ill. App. 3d 828, 836, 548 N.E.2d 373, 378 (1989).
Further, a declaratory judgment has the force of a final judgment with respect to the rights
of the parties subject to that judgment. Board of Trustees of Addison Fire Protection District No.
1 Pension Fund v. Stamp, 241 Ill. App. 3d 873, 881, 608 N.E.2d 1274, 1282 (1993). Finality
attaches to a declaratory judgment on the date judgment is entered. Djikas v. Grafft, 344 Ill.
App. 3d 1, 10, 799 N.E.2d 887, 895 (2003). Additionally, an order granting summary judgment
in a declaratory judgment action is final under Supreme Court Rule 301 such that a notice of
appeal must be filed within 30 days of the entry of the order. See Pappas v. Waldron, 323 Ill.
App. 3d 330, 334-36, 751 N.E.2d 1276, 1279-80 (2001). See, e.g., Illinois Farmers Insurance
Co. v. Marchwiany, 222 Ill. 2d 472, 856 N.E.2d 439 (2006); State Farm Mutual Automobile
Insurance Co. v. Coe, 367 Ill. App. 3d 604, 855 N.E.2d 173 (2006); Mercury Indemnity Co. of
Illinois v. Kim, 358 Ill. App. 3d 1, 830 N.E.2d 603 (2005); Parish v. Country Mutual Insurance
Co., 351 Ill. App. 3d 693, 814 N.E.2d 166 (2004) (declaratory judgment actions construing
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underinsured motorist coverage).
In this case, the July 31, 1995 order was final and appealable. In her complaint for a
declaratory judgment, brought pursuant to section 2-701 of the Code, Heflin asked the court to
determine and adjudicate the rights and liabilities of the parties with respect to Universal’s
umbrella policy and to enter a declaratory judgment construing that policy. She asked the court
to determine that the umbrella coverage applied to the underinsured motorist coverage of its
insured, Carriage Chevrolet, and that Universal was obligated to negotiate that claim with Heflin,
pursuant to its policy provisions. She did not request money damages.
In the June 5, 1995 order, the Madison County circuit court found that Heflin was “in fact
an insured included under the Umbrella Section of the policy in question based upon a finding
that the contract so provides and that an ambiguity exists therein which is construed in plaintiff’s
favor” and that Heflin complied with all provisions as required in that policy. The court then
entered summary judgment for Heflin, finding that she was an insured under the umbrella policy
in question which provided $1 million in coverage. Although the court vacated this order to
consider Universal’s response to the motion for summary judgment, the court again entered
summary judgment in Heflin’s favor on July 31, 1995 because it continued to agree with Heflin’s
reasoning. Accordingly, the trial court’s July 31, 1995 order granted Heflin all of the relief she
sought in her declaratory judgment action. The order fixed absolutely the rights of the parties on
the issues raised in Heflin’s complaint concerning the issue of coverage and left no issues
remaining. Therefore, the judgment was final and appealable as of the date of its entry.
Defendants argue that the July 31, 1995 order was not final because it did not order the
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parties to proceed to arbitration and did not specify which form of arbitration was required.
However, as stated above, section 2-701(a) provides that a declaration of rights has the force of a
final judgment whether or not consequential relief is or could be claimed. 735 ILCS 5/2-701(a)
(West 2004). Section 2-701(c) then provides that “[i]f further relief based upon a declaration of
right becomes necessary or proper after the declaration has been made, application may be made
by petition to any court having jurisdiction for an order directed to any party or parties whose
rights have been determined by the declaration to show cause why the further relief should not be
granted forthwith.” 735 ILCS 5/2-701(c) (West 2004).
Read together, these provisions indicate that consequential or incidental relief, not
previously requested, but based on the rights previously determined in the initial declaration, may
be claimed and obtained following the entry of a final and appealable declaratory judgment order.
Djikas, 344 Ill. App. 3d at 11-12, 799 N.E.2d at 896. However, a motion requesting such relief is
not a posttrial motion within the meaning of Rule 303(a)(1) because it is not directed against the
original judgment, but is incidental to that judgment. Djikas, 344 Ill. App. 3d at 12, 799 N.E.2d
at 896. “Therefore, while it appears from section 2-701 that the court will retain jurisdiction to
entertain a request for further relief after the initial declaration without any time limitation, that
retention of jurisdiction does not delay or postpone the finality of the issues originally decided so
as to render the original decision nonfinal and nonappealable.” Djikas, 344 Ill. App. 3d at 12,
799 N.E.2d at 896.
Accordingly, in this case, the parties could have filed motions subsequent to the entry of
the July 31, 1995 order concerning arbitration and other issues incidental to the declaratory
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judgment order, but these motions would not make the July 31, 1995 order not final or
appealable. Further, based on section 2-701, we reject defendants’ contention that the two
subsequent lawsuits filed by Heflin were barred by res judicata. Rather, the issue of whether
Heflin was covered under the umbrella policy was barred by res judicata because it was decided
in the original declaratory judgment action and, thus, could not be raised again by either party.
Defendants cite Pekin Insurance Co. v. Benson, 306 Ill. App. 3d 367, 714 N.E.2d 559
(1999), and claim that it stands for the proposition that the trial court’s order finding
underinsured motorist coverage was not final because it did not terminate all matters in
controversy, including arbitration, determination of liability, and damages. Defendants
misrepresent the holding of that case. In Pekin Insurance Co., the insurer filed a declaratory
judgment action to determine whether it owed Tammy Benson underinsured motorist benefits.
On cross-motions for summary judgment, the court interpreted the policy and ruled in favor of
Benson, finding her vehicle to be covered under the policy. Pekin Insurance Co., 306 Ill. App. 3d
at 371, 714 N.E.2d at 563. The insurer filed a notice of appeal from this coverage order. Benson
then requested arbitration of her claim in the trial court and the insurer moved to stay the
arbitration pending the appeal from the declaratory judgment action. The trial court granted the
stay, but ordered that the insurer pay interest on any subsequent arbitration award as a condition
of the stay. The insurer then filed an amended notice of appeal asking this court to reverse the
condition of an interest payment in the stay order. Pekin Insurance Co., 306 Ill. App. 3d at 370,
714 N.E.2d at 562.
On appeal, the Pekin Insurance Co. court addressed the merits of the insurer’s appeal
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from the declaratory judgment action, affirming the trial court’s finding that the policy did afford
Benson underinsured motorist coverage. There was no dispute that this court had jurisdiction
over the trial court’s order finding coverage in the declaratory judgment action. However, the
appellate court found that it lacked jurisdiction over the trial court’s order staying the arbitration
hearing because that order did not resolve all issues concerning the arbitration, and thus, the
order was not final. Pekin Insurance Co., 306 Ill. App. 3d at 375, 714 N.E.2d at 565. That court
did not hold that the underinsured motorist coverage finding in the declaratory judgment action
was not final and appealable, as defendants in the present case contend. Rather, Pekin Insurance
Co. supports Universal’s argument that the July 31, 1995 order resolving the declaratory
judgment action was final and appealable.
Therefore, defendants’ argument that they did not breach their duties to Universal
because the July 31, 1995 order was not final and appealable is without merit. Defendants failed
to meet their burden of production in these summary judgment proceedings because they failed to
present evidence that entitles them to judgment as a matter of law or evidence that Universal
would be unable to prove an element of its cause of action. Therefore, the trial court erred in
granting summary judgment to defendants on this issue.
Next, defendants contend that they committed no legal malpractice by not appealing the
October 26, 2000 order confirming the arbitration award because that order was void and it could
be collaterally attacked at any time. They claim that Universal foreclosed any such collateral
attack by settling the case in May 2001. Again, although defendants’ argument is not structured
in terms of the elements of a legal malpractice action, we assume that defendants are challenging
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the element of breach. They argue that the October 26, 2000 order was void because the
declaratory judgment action remained pending, the petition to confirm the arbitration award
failed to state a cause of action, and absent proof of an agreement to arbitrate up to $2,975,000,
the trial court lacked “specific subject matter jurisdiction” to confirm the arbitration award.
Defendants’ arguments are without merit, mainly because they misunderstand the nature of void
judgments.
Whether a judgment is void or voidable depends on whether the court entering the
challenged order possessed jurisdiction over the parties and the subject matter. In re Marriage of
Mitchell, 181 Ill. 2d 169, 174, 692 N.E.2d 281, 284 (1998). Judgments may be collaterally
attacked as void only where there is a complete want of jurisdiction in the court that entered the
judgment, regarding either the subject matter or the parties. Smith v. Bartley, 364 Ill. App. 3d
725, 728, 847 N.E.2d 642, 645 (2006). “A voidable judgment, however, is one entered
erroneously by a court having jurisdiction and is not subject to collateral attack.” Marriage of
Mitchell, 181 Ill. 2d at 174, 692 N.E.2d at 284. Once a court has obtained jurisdiction, an order
will not be rendered void nor will the court lose jurisdiction merely because of an error or
impropriety in the court’s determination of the facts or law. Smith, 364 Ill. App. 3d at 728, 847
N.E.2d at 645; In re Custody of Ayala, 344 Ill. App. 3d 574, 584, 800 N.E.2d 524, 534 (2003).
Additionally, although a void order may be attacked at any time, either directly or
collaterally, the issue of voidness must be raised in the context of a proceeding that is properly
pending in the courts. People v. Flowers, 208 Ill. 2d 291, 308, 802 N.E.2d 1174, 1184 (2003).
See also Marriage of Ehgartner-Shachter, 366 Ill. App. 3d at 289, 851 N.E.2d at 247. “ ‘If a
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court lacks jurisdiction, it cannot confer any relief, even from prior judgments that are void. The
reason is obvious. Absent jurisdiction, an order directed at the void judgment would itself be
void and of no effect.’ ” Marriage of Ehgartner-Shachter, 366 Ill. App. 3d at 289, 851 N.E.2d at
247, quoting Flowers, 208 Ill. 2d at 308, 802 N.E.2d at 1184. Compliance with the rules
governing appeals is necessary before a reviewing court may properly consider an appeal from a
judgment or order that is, or is asserted to be, void. Revolution Portfolio, LLC v. Beale, 341 Ill.
App. 3d 1021, 1025, 793 N.E.2d 900, 904 (2003). Thus, the appellate court is not vested with
authority to consider the merits of a case merely because the dispute involves an allegedly void
order or judgment. Flowers, 208 Ill. 2d at 308, 802 N.E.2d at 1184.
First, defendants contend that the October 26, 2000 order was void because the July 31,
1995 order was not final and appealable and, thus, the declaratory judgment action remained
pending. However, as discussed above, the July 31, 1995 order was final and appealable, and
thus, the declaratory judgment action was over long before the October 26, 2000 order was
entered. Additionally, as mentioned above, the October 26, 2000 order would be void only if the
trial court lacked subject matter jurisdiction over the case or personal jurisdiction over the
parties. The fact that a previous case was pending between the parties would not render the
court’s order void. Accordingly, we reject defendants’ argument.
Second, defendants argue that the October 26, 2000 order was void because Heflin’s
application to confirm the arbitration award “totally failed to state a cause of action.” They
contend that the application did not contain any facts showing the existence of an agreement
between Universal and Heflin to arbitrate up to $2,975,000 and, thus, the complaint failed to
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state a cause of action. Defendants assert that a complaint which fails to state a cause of action is
void and a judgment entered on such a complaint is also void and can be attacked at any time.
However, defendants’ cited case, Adcock v. Brakegate, Ltd., 164 Ill. 2d 54, 645 N.E.2d 888
(1994), demonstrates the fallacy in their argument.
A defendant may raise at any time a claim that the complaint fails to state a cause of
action. Adcock v. Brakegate Ltd., 164 Ill. 2d 54, 61, 645 N.E.2d 888, 893 (1994). However, this
exception to the waiver doctrine applies only when a complaint fails to state a recognized cause
of action and does not apply where the complaint states a recognized cause of action, but
contains an incomplete or otherwise insufficient statement of that cause of action. Adcock, 164
Ill. 2d at 61-62, 645 N.E.2d at 893. See also City of Quincy v. Weinberg, 363 Ill. App. 3d 654,
660, 844 N.E.2d 59, 64 (2006). Courts draw a distinction between a complaint that alleges no
cause of action, which may be challenged at any time, and one which defectively or imperfectly
alleges a cause of action. Adcock, 164 Ill. 2d at 62, 645 N.E.2d at 893.
In the present case, Heflin filed an application to confirm an arbitration award, which is a
recognized cause of action in Illinois. See 710 ILCS 5/11 (West 2004). Any alleged deficiencies
in this complaint did not render it void. Therefore, the complaint was not void and defendants
could not challenge it at any time. Accordingly, the October 26, 2000 order confirming the
arbitration award on that complaint was not void and defendants’ argument is without merit.
Third, defendants contend that the October 26, 2000 order was void because it was
beyond the subject matter jurisdiction of the court where Heflin never proved that a policy
provision or agreement to arbitrate up to $2,975,000 existed. They claim that Universal never
18 1-05-4138
agreed to arbitrate and had no arbitration clause for underinsured motorist coverage. Defendants
further argue that the trial court exceeded its authority in confirming a $2,975,000 judgment
outside the confines of the $1 million limits on the umbrella policy, which provided no
underinsured motorist coverage, making the court’s order void.
Under section 16 of the Uniform Arbitration Act, the making of an arbitration agreement
providing for arbitration in this state confers jurisdiction on any circuit court of this state to
enforce the agreement under this Act and to enter judgment on an award thereunder. 710 ILCS
5/16 (West 2004). Here, the trial court found that the umbrella policy contained underinsured
motorist coverage and that Heflin was insured under that policy in the July 31, 1995 order
resolving the declaratory judgment action. The court further found that the arbitration clause in
Universal’s insurance policy applied to Heflin’s underinsured motorist claim in the 1998 action
to compel arbitration. Defendants, as counsel for Universal, never timely appealed these orders
and these issues were then barred by res judicata during the proceeding to confirm the arbitration
award. Thus, the circuit court of Madison County had jurisdiction to confirm this arbitration
award where the trial court found that the arbitration clause in the umbrella policy allowed for
arbitration in Illinois.
Defendants rely on CPM Productions, Inc. v. Mobb Deep, Inc., 318 Ill. App. 3d 369, 742
N.E.2d 393 (2000), which, they claim, holds that a judgment entered outside the agreement of the
parties is a void judgment beyond the subject matter jurisdiction of the trial court. CPM
Productions, Inc., contains no such holding. Rather, in that case, the court held that section 16 of
the Uniform Arbitration Act was a “prerequisite to the circuit court’s exercise of jurisdiction over
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an application seeking judgment on an award specifically conditioning the court’s jurisdiction on
the particular locale of the arbitration proceedings as provided for in the parties’ agreement.”
CPM Productions, Inc., 318 Ill. App. 3d at 378, 742 N.E.2d at 400. Because the arbitration
clause in the parties’ contract provided for arbitration in New York and not Illinois, the CPM
Productions, Inc. court held that the Illinois trial court lacked subject matter jurisdiction to enter
judgment on the Illinois arbitrator’s award. CPM Productions, Inc., 318 Ill. App. 3d at 373, 742
N.E.2d at 397.
Here, as discussed above and consistent with the holding of CPM Productions, Inc.,
Illinois circuit courts had subject matter jurisdiction over this arbitration award because the trial
court in the Heflin cases found that this arbitration clause allowed for arbitration in Illinois. The
fact that the trial court’s decision to confirm this arbitration award in the amount of $2,975,000
may have been erroneous does not mean that the trial court lacked subject matter jurisdiction
over the award such that the order is void. Rather, if Universal wished to challenge this ruling as
erroneous or voidable, it had to do so in a timely filed appeal from the October 26, 2000 order.
Accordingly, we reject defendants’ arguments and hold that the October 26, 2000 order
confirming the arbitration award was not void. Thus, defendants’ claim that they did not breach
any duty to Universal by failing to appeal this order is without merit.
Defendants also seem to argue that they did not breach their duties to Universal by failing
to appeal the October 26, 2000 order because, at the time Universal settled the Heflin matter,
Universal had two available options to attack that order. Specifically, defendants contend that
they could have appealed the May 7, 2001 turnover order ordering Universal to pay the
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$2,975,000 judgment plus interest and, within that appeal, collaterally attacked the October 26,
2000 judgment as void. However, as we explained above, the October 26, 2000 order was not
void, and thus, it could not be attacked at any time, as defendants argue. Accordingly,
defendants’ argument fails.
Additionally, defendants assert that they could have filed a section 2-1401 motion to
attack the October 26, 2000 order as void. We note that defendants did not raise this argument in
their motion for summary judgment. Issues not raised in the trial court are deemed waived and
may not be raised for the first time on appeal. L.A. Connection v. Penn-America Insurance Co.,
363 Ill. App. 3d 259, 266, 843 N.E.2d 427, 433 (2006). However, because the record reflects
that the trial court raised this theory sua sponte during the summary judgment hearing, we will
address it.
Section 2-1401(f) provides: “Nothing contained in this Section affects any existing right
to relief from a void order or judgment, or to employ any existing method to procure that relief.”
735 ILCS 5/2-1401(f) (West 2004). In a petition to vacate a void judgment brought pursuant to
section 2-1401(f), 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. Ford Motor Credit Co. v. Sperry, 214 Ill. 2d 371, 379, 827 N.E.2d 422,
427-28 (2005). “Rather, ‘[t]he allegation that the judgment or order is void substitutes for and
negates the need to allege a meritorious defense and due diligence.’ ” Ford Motor Credit Co.,
214 Ill. 2d at 379, 827 N.E.2d at 428, quoting Sarkissian v. Chicago Board of Education, 201 Ill.
21 1-05-4138
2d 95, 104, 776 N.E.2d 195, 202 (2002). In the present case, even if defendants had filed a
section 2-1401(f) motion in the circuit court of Madison County challenging the October 26,
2000 judgment as void, it would have failed because that order was not void for all of the reasons
set forth above. Accordingly, we reject defendants’ arguments.
Defendants include one sentence in their brief that the October 26, 2000 order was not
final and appealable “for the same reasons the 7/31/95 Order” was not final and appealable. This
sentence was included in support of defendants’ section 2-1401 argument. In oral argument
before this court, defendants argued that the October 26, 2000 order was not final because the
trial court did not rule on Universal’s pending motion to dismiss the complaint before entering its
judgment. However, defendants never made this argument in their summary judgment motion
before the trial court. Defendants’ motion for summary judgment contained only one sentence
referencing the fact that defendants had filed the motion to dismiss in an effort to attack the
arbitration award. Defendants never argued that the October 26, 2000 order was not final
because this motion remained pending. As discussed above, an issue not presented to or
considered by the trial court cannot be raised for the first time on appeal. L.A. Connection, 363
Ill. App. 3d at 266, 843 N.E.2d at 433. Accordingly, this argument is waived.
Therefore, we find that defendants failed to meet their burden of production on their
motion for summary judgment because they did not present evidence that, left unrebutted, would
entitle them to judgment as a matter of law or demonstrate that Universal would be unable to
prove any element of its cause of action. Accordingly, the trial court erred in granting summary
judgment to defendants and we must reverse that order and remand this case for further
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proceedings. By this opinion, we are not entering judgment in favor of Universal nor are we
making any comment on Universal’s ability to ultimately prevail at trial. Rather, we simply hold
that defendants are not entitled to summary judgment at this stage of the litigation based on these
facts and law.
Lastly, Universal contends that the trial court should have entered summary judgment in
its favor on defendants’ statute of limitations and statute of repose defenses. The record reflects
that the trial court never addressed the merits of Universal’s motion for summary determination,
finding it moot because of its ruling that defendants were entitled to summary judgment on
Universal’s legal malpractice complaint. Therefore, we decline to address this issue for the first
time on appeal.
Accordingly, we reverse the trial court’s order granting summary judgment to defendants
and remand this case for further proceedings.
Reversed and remanded.
GREIMAN and CUNNINGHAM, JJ., concur.
23 REPORTER OF DECISIONS - ILLINOIS APPELLATE COURT _________________________________________________________________
UNIVERSAL UNDERWRITERS INSURANCE COMPANY,
Plaintiff-Appellant,
v.
JUDGE & JAMES, LTD., and JAY S. JUDGE,
Defendants-Appellants,
________________________________________________________________
Appellate Court of Illinois First District, Third Division
Filed: March 30, 2007 _________________________________________________________________
PRESIDING JUSTICE THEIS delivered the opinion of the court.
Greiman and Cunningham, JJ., concur. _________________________________________________________________
Appeal from the Circuit Court of Cook County Honorable Robert Lopez Cepero, Judge Presiding _________________________________________________________________
For PLAINTIFF - Bonita L. Stone APPELLANT James W. Hutchinson Paula S. Kim Katten Muchin Rosenman LLP 525 W. Monroe St. Chicago, IL 60661
For DEFENDANTS - Stephen P. Carponelli APPELLEES Raymond M. Rudnick 230 W. Monroe St., Suite 250 Chicago, IL 60606
Jay S. Judge Judge, James & Kujawa, LLC 422 N. Northwest Highway, Suite 200 Park Ridge, IL 60068