FOURTH DIVI SION

March 29, 2007

No. 1-06-1813 CHARLES ROBI

NSON, ) ) Appeal from Plaintiff-Appellee, ) the Circuit Court ) of Cook County. ) v. ) ) PATRICK J. RYAN, Individually and as agent of Cohn, ) Lamb ert, Ry

an, Schne ider and

Gray , Ltd. , an I llinois ) Corpora tion, COHN , LAMBERT, RYA N, SCHNEI

DER ) AND GRAY, LTD., an I

llinois Corporation, ) Honorab le ) Jennifer Duncan-Brice, Defend ants ) Judge Presi ding. ) (North American Elite Insur ance Company, ) ) Intervenor-Appe llant). )

PRESID ING

JUSTICE

QUI NN delive

red the o pinion of t

he court : North American Elite Insura nce Company (N orth American) appeals from an order of the circuit court of Cook County deny ing its petition seeking relief from a judgme nt entered in favor of plaintiff Charles Robinson, pursuant to section 2-1401 of the Code of Civil Procedure (Code) (735 IL CS 5/2-1401 (West 2002)). On appeal, North American contends that the circ uit court abused its discretion by deny ing its petition where North American asserted a meritorious defense to the validity of

the judgment and exercised due diligence in pre senting its defense. For the following reasons, we reverse

.1-06-1813

-2- I. Backg round On February

6, 2003, plaintiff filed a complaint against defendants Patrick J. Ry an, and the law firm of Cohn, Lambert, Ry an Schneider & Gray, Ltd (Cohn La mbert). According to the complaint, on June 14, 1996, plaintiff sustained injuries while performing work as a plumber. Plaintiff retained defendants to represent him in a worker ’s compensation claim for the injuries he sustained. The complaint alleged that defenda nts failed to file a complaint for damages against third parties, other than plaintiff’s employ er, within the applicable statute of limitations period a nd faile d to advise

plaintiff that he ha

d a claim a

gainst t hird par ties. Def endants answered plaintiff’s complaint and denied neg ligence and injury to plaintiff. On July 7, 2005, Circuit Court Judge Richard J. Elrod held a pretrial confer ence. At the conclusion of the pretrial conference , R. Connor Heist, attorney for de fendants, drafted an order that w as ent ered by Ju dge Elr od di smis sing p laint iff’s claim s wit h prej udice and ref lecti ng a commitmen

t by defenda nts to settl e the ca se for $8 25,000. The order stated tha

t “[d]efen dants agree to a settlement offer of $825,000 and [p]laintiff agrees to accept a settlement pay ment of $825,000 upon resolution of an internal accounting issue with the insurance company.” The order also provided that the court would retain jurisdiction and directed the parties to appear on July 26, 2005, to “execute settlement documents and resolve lien issues.” On July 26, 2005, the parties appear ed and the circuit court entered an orde r finding that “all liens have been resolved” and that the cour t’s July 7, 2005, order remained in ef fect. The

court or dered de fendant s to pay

the agr eed-upo n settleme

nt amount o f $825,00 0, as ref lected in the July 7, 2005, order, on or befor e August 9, 2005. This order was entered ove r plaintiff’s1-06-1813

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objectio n, as sett

lement do cuments a

nd pay ment wer e due on July

26, 2005. T

he court also retained jurisdiction to enforce pay ment. On August 5, 2005, defendants retained new c ounsel, who filed a motion to appear as additiona l counsel and a ve rified pe tition to va

cate the orders e ntered on July

7, 2005, a

nd July 26, 2005. In the motion to vacate, defe ndants asserted that they

had learned that their insurance company, North Ame

rican, had refused to settle the claim with plaintiff and had dire cted defendants’ previous attorney R. Connor Heist not to enter into a settlement agreement. Defendants maintained that they did not execute any settlement documents in this case and

wo ul d n ot ha ve ag re ed to an y se tt le me nt wi th ou t t he pr io r a pp ro va l o f t he ir in su ra nc e c om pa ny, North American. On August 10, 2005, plaintiff filed a motion for judg ment requesting that the court enter judgment against def endants in the amount of $825,000. On August 12, 2005, Judge Elrod conducted a hearing to address these motions. At that hearing , R. Connor

Heist wa s grant

ed leave to withdra

w as coun sel for d

efenda nts. Domini c Saviano a nd the law

firm of Cla

usen Mille

r, P.C., we

re gra nted lea ve to appe ar as sub stitute counsel retained for defendants by North American. Jerome Crotty of the law firm Rieck and Crotty , P.C., was

permitte d to appea

r as addi tional co unsel, re tained independe

ntly by d efenda nts due to potential conflicts that could arise between defenda nts and North American. Judge Elrod gave both counsels representing defendants leave to file a single ame nded motion to reconsider vacating the previous orders. Judge Elrod a lso ordered that judgment be entered in favor of plaintiff and against defendants in the amount of $825,000, but that the execution of judg ment be stay ed for 60 day s.1-06-1813

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On Septem

ber 8, 20 05, North

America n filed a motion for

leave to interve ne, seek ing to intervene in order to protect the insurance c ompany’s rig hts with respect to whether the judgment should be vacated. On the same date, North Americ an also filed its petition to vacate the orders entered on July 7, 2005, July 26, 2005, and August 12, 2005, pursuant to section 2-1401 of the Code (735 IL CS 5/2-1401 (West 2002)). In its section 2-1401 petition, North American stated that defendants Cohen Lamber t and Ryan made a

claim under the professional liability insura nce policy issued by

North American regarding the suit filed by plaintiff. North Amer ican provided defense counsel, Heist, to defendants. L es Czerepak, a senior claims manager a t NAS Insurance Group, which includes North American, was the re presentative for the oversight of the handling of the sui t filed by plaintiff . Aon Tec

hnical I nsuranc e Servic es (ATI S) serve d as a thir d-party administrator and handled certain legal malpra ctice claims for NAS Insura nce Group. ATIS had limited authority to settle claims up to an amount of $25,000. Pay ment of any settlement a

bove $25,000 was required to be approved in advance by NAS I

nsurance Group. In its petition, North American also asserte d that at the conclusion of the July 7, 2005, pretrial conference, Heist dra fted an order that was entered by the circuit court dismissing plaintiff’s claims with prejudice and reflecting a commitment by defendants to settle the c ase for $825,000 “

upon reso lution of a

n interna l accoun ting issue with the

insuranc e compan

y.” North American stated that Grace L eppin of ATIS attended the pre trial conference but was no longe r present when Heist drafted the order a nd Leppin did not see the order until after the July 26, 2005, hearing. On July 26, 2005, the c ircuit court ordered defendants to pay $825,000 to plaintiff on or b efore A ugust 9, 200 5. Nor th Am erican assert ed tha t foll owing t he Ju ly 26, 20 05, he aring,1-06-1813

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Czerepak receiv ed a lette

r that He ist wrote

to Le ppin, with b oth circ

uit court orders a

ttached , in which He ist stated

that he f elt compe lled to re sign as c ounsel for Cohen Lambert. North American stated that Czerepak immediately informed the Cohen Lambert firm’ s new counsel that NAS had not authorized settlement by pay ment of $825,000. North American attached to its petition the affidavit of L es Czerepak, who attested that he was a senior claims manager for NAS Insurance Gr

oup, which includes North American. Czerepak stated that he was responsible for the oversig ht of the handling of the suit filed by plaintiff. Czerepak attested that ATIS serve s as a third-party administrator for NAS Insuranc e Group handling certain lega l malpractice claims. ATIS had limited authority to settle claims up to an amount of $25,000, and settlement above that amount was to be approved in adva nce by NAS I nsuranc e Group. Czerepak attested that L eppin fr

om ATI S informe d him that she would attend the July 7, 2005, pretrial hear ing in this matter as the third-party administrator for NAS with limited settlement authority. Czerepak was also aware that Heist would attend the July 7, 2005, hea ring, a s the attor

ney hired to r eprese nt defen dant. Czerepak attested that during the July 7, 2005, he aring, he received a te lephone call from Heist, who stated that he wa s with L eppin and defenda nt Ryan. Heis t informe d Czerepa k that in the course of the pretrial hearing , the circuit court had recommended settlement for $825,000. Czerepak attested that he to ld Heist th at NAS wou ld not ag ree to se ttle for t hat amoun

t becaus e $825,000 was significantly more than NAS was prepared to pay based on information it had receiv ed about t

he case . Czerepa

k also inf ormed He ist that the

$825,000 a

mount exce eded his personal authority to settle c laims for NAS, and that Czerepak’s supervisor would have to review1-06-1813

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the claim and join him in approving a settlement of that size. Czerepak attested that he instructed Heist to ask the circuit court for time for North American to re view the claim information again, and requested that Heist send him a report of the discussion and deve lopments at the pretrial hearing . Czerepa

k stated that during

the telep hone ca ll, he expr

essly told Heist

that Nort h American did not agree to the proposed se ttlement and did not authorize settlement for $825,000. Czerepak also state d that he d

id not spea

k direct ly to Lepp in and nev er gav e her au thority to settle the claim for $825,000. Czerepak attested that after the July 7, 2005, hearing, he continued to have discussions and corr esponde nce with H eist reg arding

the rec ommended

settleme nt and disc

ussed with

Lepp in whether NAS should agree to the rec ommendation. Czerepak stated that he never saw a copy of the July 7, 2005, order until after the July 26, 2005 hearing and was not aware of any ver

bal or written s tatement

that coul d be cons trued as an agr eement by N

AS to pay $825,000 t

o settle th is case. A fter the

July 2 6, 2005, he aring, Czerepak receiv ed a copy of

a letter that Heis t wrote to Leppin, attaching both cir cuit court orders and stating that Heist felt compelled to resig n as counsel for the Cohn Lambert fir m. Czerepak attested that as soon as he understood that someone might have believed that Heist had authority from NAS to settle this claim for $825,000, he informed the new counsel for Cohn L ambert that NAS had not authorized settlement by pay

ment of $825,000. North American also attached to its section 2-1401 petition the affidavit of Gr ace Leppin, who attested that she was an employ ee of ATIS. North Amer ican retained ATI S to provide claims handling services rega rding this lawsuit. On July 7, 2005, L eppin attended a pretrial1-06-1813

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hearing on this case before Judge Elrod, during which the parties discussed the potential settlement of the case. During the pretria l hearing, Judge Elrod asked the parties whe ther the sum of $825,000 would be an agreeable a mount to settle this case. Leppin attested that she advised the judge that she did not have settlement authority in that amount and that the insurer did not hav e reser

ves high enough to cover such an a mount. L eppin sta

ted that b ecause

she did not have authority to settle the c ase for the amount suggested by the judge, Heist called a repres entative

from Nor th Americ an during

the pret rial hea ring. Leppin att

ested tha t at no time has any repres entative

of North A

merican extended a

uthority to her or consente d to settle

this case for $825,000. At Judge Elrod’s request, L eppin agreed that after the pr etrial hearing she would recommend to the insurer that the case be settled for $825,000. Leppin attested that at no time durin

g or af ter the pretrial

hearing on July 7, 2005, di d she ag

ree on be half of N orth Ameri can to settl e the ca se for $ 825,0 00, an d at no time did an yone in he r prese nce adv ise J udge Elrod or plaintiff’s counsel that North American consented to settling this suit for $825,000. Leppin also attested that she was not pre sent when the order of July 7, 2005, wa s prepared or signed and she did not receive a copy of that order or see it until sometime after the circuit court hearing on July 26, 2005. On September 8, 2005, Judge Elrod granted North Amer ican leave to intervene instanter

. On November 8, 2005, plaintiff filed a motion for entry of judgment against North American a nd a motion to strike North American’s petition to vacate judgment pursuant to section 2-1401 of the Code.1-06-1813

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On December 2, 2005, Judge Elrod entered a n order finding that an evidentiary hearing would be necessa

ry to resolv e plaintif

f’s motion s and Nor

th Americ an’s pet

ition and that this might require testimony f rom Judge Elrod. As a result, Judge Elrod recused himself and transferred this case for rea ssignment. The order also directed that enfor cement of the judgment entered against defendants on Aug ust 12, 2005, was stayed until the pending motions were resolved. On December 9, 2005, this case was transfe rred to Judge Jennifer Duncan-Brice. On January 13, 2006, Judge Dunca n-Brice set a hearing

for February

3, 2006, on plaintiff’s motion to strike North American’s petition pursuant to section 2-1401 of the Code and on plaintiff’s motion for entry of judg

ment against North American. On February

3, 2006, Judge Duncan-Brice entere d an order in which the court, inter alia , denied plaintiff’s motion to enter judgment against North Amer ican where the order of dismissal and settle ment had previousl

y be en enter

ed aga inst defe ndants. T he court also deni ed North America n’s petiti on pursua

nt to secti on 2-1401 of the Cod e to vaca te the or ders ent ered on Jul

y 7, 2005, July 26, 2005, and August 12, 2005. I n making this determination, the court found that North American failed to present any evidence that it had a meritorious defense to the underly ing legal malpractice claim ag ainst defendants or that the amount of the settlement was unreasonable ; North America presented no evidence regarding when it dec ided it was not going to settle the case for $825,00 0 or when that dec ision was c ommunica ted to the ir attorney ; and Nor th American failed to establish that it moved to vacate the dismissal order in a timely and diligent manner. On April 26, 2006, the circuit court denied North Americ an’s motion to reconsider the1-06-1813

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denial of its petition

to vacat e judgme nt. North A

merican now appe als. II . Analy sis A. Standard of Review "Section 2-1401 o f the Code (735 I LCS 5/2 -1401 (We st 2002))establishes a comprehensive procedure by which final orders and judgments may be vacated or modified more than 30 days after thei r entry." Paul v. Gerald Adelman & Associates, L td. , 223 Ill. 2d 85, 94 (2006). "Although a section 2-1401 petition is ordinarily used to bring facts to the attention of the trial court which, if known at the time of judgment, would have pre cluded its entry [citation] a section 2-1401 petition may a lso be used to challenge a purportedly defective judgment for legal reasons [ citation] ." Paul , 223 Ill. 2d at 94. "In order t o recei ve reli ef und er sect ion 2 -1401 , a pet itio n mus t affi rmati vely alle ge specific facts to support each of the following elements: (1) the existence of a meritorious defense or claim; (2) due diligence presenting this defense or claim to the circuit cour t in the original acti on; and (3) d ue diligence i n filing the s ection 2-14 01 petiti on seeking reli ef." Prenam No. 2, Inc. v. Village

of Schiller Park , 367 I ll. App. 3d 62, 65 (20 06); Paul , 223 Ill. 2d at 94. The petition must also be “supported by aff idavit or other appropriate showing as to matters not of record .” 735 I

LCS 5/2 -1401(b)

(West 2002 ); Prenam No. 2, Inc. , 367 Ill. App. 3d at 65. Whether a section 2-1401 petition should be granted lies within the sound discretion of the circ uit court, dependin

g upon th e facts

and equit ies pres ented, a

nd a revi ewing c ourt will o nly reverse the circuit court upon abuse of that discr etion. Paul , 223 I ll. 2d at 95 ; Prenam No. 2, Inc. , 367 I ll. App. 3d

at 65. I n review ing discretiona

ry rulings by t he trial c ourt, an a

ppeals c ourt1-06-1813

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“ ‘ "must look to the criteria on which the trial court should rely to determine if the trial court abused its discretion." ’ ” Paul , 223 Ill . 2d at 99, qu otin g Peopl e v. Ort ega , 209 Ill. 2d 354, 360 (2004 ), quo ting Boatmen ’s National Bank of Belle ville v. Ma

rtin , 155 Ill. 2d 305, 314 (1993). “‘[A] trial court abuses its discretion if it fails to apply the prope r criteria when it weighs the facts,’ and a reviewing c ourt ‘must consider both the legal adequacy of [the] way the trial court reached its result as well as whether the re sult is within the bounds of reason.’” Paul , 223 Ill. 2d at 99, quot ing Ortega , 209 Ill. 2d at 360. B. Meritorious Defense North American contends that the circuit court err ed in denying

its section 2-1401 petition w

here North Amer

ican met t he requi rements o f section

2-1401. N orth Amer

ican first

ar gu es th at it se t f

or th a m er it or io us de fe ns e t o t he en tr y of th e c ir cu it co ur t’ s o rd er s o n J ul y 7 and July 26, 2005 and the entry of judgment against defendants, whe re defense counsel lacked the authority to enter into a se ttlement agreement for $825,000. North America n asserts that the the circuit court’s finding that North American f ailed to set out a meritorious defense to the underlying

case was an improper interpretation of sec tion 2-1401. Our supreme court recently addressed the section 2-1401 requirement that a petitioner se t forth a meritorious defense or claim, in Paul v. Gerald Adelman & Associates, L td. , 223 Ill. 2d 85 (2006). In Paul , the plai ntiff, as joint trust

ee for a pension f und, file d petitions

in the cir cuit court of Cook County seeking relief from judgment pursuant to section 2-1401 of the Code. The plaintiff sought to vacate two orders dismissing her ca uses of action for want of prosecution (DWP) against several defendants who provide d administrative, actuarial, insurance, and other1-06-1813

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services to the joint pension plan. The circuit court grante d plaintiff’s petitions, thus reinstating her cases. This court affirmed and our supr eme court affirmed in part and vaca ted in part the judgmen t of this co

urt. In Paul , our supreme court determined that plaintiff’s petitions and supporting documents, which outlined the history of the litig ation, her efforts to advance the case s, the delays attributable to the truste e in her bankruptcy proceeding, the difficulty in obtaining her litigation files, and related matters, adequately established her “meritorious claim” for relief fr om the dismiss al orders. In

so finding , the cour

t noted tha

t issues re lating to

plaintiff ’s ability to establish standing to sue defendants, the existence of damag es, the existence of a contract and fiducia ry duty with defe ndants, a nd an exce

ption to fe deral pr

eemption under ERI SA all

concer ned the me

rits of the underly ing cas es. The c ourt held as follow s: “In ruling on plaintiff’s se ction 2-1401 petitions, however, it was not the trial court’s responsibility to determine the me rits of the underlying

causes of action. [Citation.] The centr

al facts which pla

intiff wa s requir

ed to plea d and pro ve in connection with her petitions are not those facts which would establish her entitleme nt to dama

ges in th e underl

yin g actions, but thos e facts

which wou

ld establish her entitlement to have the DWP orders vacated.” Paul , 223 Ill. 2d at 107. Accordingly , our supreme court vacated the portion of this court’s orde r addressing defendant’s arguments regarding

federal preemption under ERI SA and damages. The court also determined that the p laintiff

acted with due dili gence

in petition

ing for relief f rom the DWP orders a

nd in1-06-1813

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prosecuting her claims aga inst defendants. Paul , 223 Ill. 2d at 99-106. In this case, the circuit cour t found that “North American has not presented any evidence in its attached affidavits that it has any meritorious defense to the underly ing legal malpractice claim ag ainst def

endants or that the

amount of

the settle ment was u

nreasonable.” B ased on th is finding , the cir

cuit cour t conclud ed that North Amer

ican fa iled to set forth a me

ritorious defense pursuant to section 2-1401. Pursuant to our supreme court’s holding in Paul , we find that these issues were not germane to the section 2-1401 pr oceeding and should not have been consider ed by t he circ uit court. Since a tr

ial cour t abuses i ts discre tion if it fa

ils to apply

the prope r criter ia when it we ighs the

facts (Paul , 223 Ill. 2d at 99), we rever se the circuit court’s determination that North American failed to set forth a meritorious defe nse pursuant to section 2-1401. This court has previously a ddressed the section 2-1401 requirement that a petitioner set for th a “m eri to rio us d efe nse ” in th e co nt ex t o f se eki ng t o va cat e an ord er o f se tt lem ent . In Blutcher v. EHS Trinity H ospital , 321 Ill. App. 3d 131 (2001), the plaintiff filed a sec tion 2-1401 petition to vacate a settlement order that had dismissed one of the defe ndants in a medical malpractice suit. The plaintiff submitted an affidavit stating that he was c ompletely unawar e of his attorney’s negotiations to settle the medical malpractice claim against the defe ndant hospital and that he was unaware of the consummated a greement. The plaintiff also submitted a transcript of his attorney ’s telephone messages to plaintiff, in which the attorney admitted that he lacked the authority

to settle the case. Under these circumstance s, this court found that the plaintiff established that his attorney la cked the express authority to settle the c ase and, therefore, pursuant to section 2-1401, established a meritorious defense to the dismissal under the1-06-1813

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settlement agreement. This court explained “[s]ince plaintiff has established a meritorious defense (by

his affidavit and the transcript of the telephone messag es) that his attorney did not have authority to settle this case , that he did not consent to nor was aware of the settlement, and that he did not sign the release, the burden of proof shifted to [the defendant hospital] to show the validity of these documents.” Blutcher , 321 Ill. App. 3d at 140. This court engaged i n a sim ilar a nalysis of the merit oriou s defen se elem ent fo r vacat ing a settlement agreement and dismissal, under section 2-1401 of the Code , in Hopkins v. Holt , 194 Ill. App. 3d 788 (1990). I n Hopkins , the plai

ntiff ag reed to s ettle his m edical ma lpractic e claim against the defendant doctor who had be en defended by his insurance company , conditioned upon the insurance company paying settlement funds to the plaintiff. After the plaintiff was informed that the doctor’s insurance company was insolvent and would not pay the se ttlement funds, the plaintiff filed a section 2-1401 petition to vacate the order dismissing the ma lpractice action pursuant to the settlement agreement betwe en the parties. The plaintiff alleged that he was entitled to relief where the insurance company filed for bankruptcy

and the settlement agreement was breached. Two of the defe ndants argued that the plaintiff failed to alleg e or prove that he had a mer itorious c laim ag ainst them . This cou rt disag reed wit h the def endants’ argume

nt, noting that “[t]he facts which must be alleged in a section 2-1401 petition are not those which form the basis for the original action but those which alleg edly entitle petitioner to the re lief.” Hopkins , 194 Ill. App. 3d at 795. This court concluded that whe re the plaintiff alleged sufficient facts relating to the breach of the settlement agreement that entitled him to relief from the dismissal, the plaintiff properly set for th a meritorious claim pursuant to section 2-1401.1-06-1813

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Hopkins , 194 Ill. App. 3d at 795. In this case, North America n’s section 2-1401 petition and supporting affidavits, which outlined the settlement neg otiations b efore t he circ uit court i n this cas e and set

forth fa cts to show that North American did not grant defense counsel the authority to settle the c ase by payment of $825,000, also e stablished its entitlement to relief from the dismissal and settlement orders. In his affidavit, Czerepa k stated that during the July 7, 2005, hear ing, he received a telephone call from Heist, who informed him that the circuit court had re commended settlement for $825,000. Czerepak attested that he instructed Heist to ask the circuit court f or time for North Ame

rican to review t he claim i nformati on aga

in, and re quested t

hat Heist send him a report of the discussion and developments at the pretrial hear ing. Czerepak stated that during the telephone call, he expressly told Heist that North American did not agree to the proposed settlement and did not authorize settlement for $825,000. Czerepak also attested that after the July 7, 2005, hearing, he c ontinued to have discussions and correspondence with Heist reg arding the recommended settlement and discussed with L eppin whether NAS should agree to the

recomme ndation. I

n her af fidavit, L eppin sta ted that after the

pretria l hearin g she a greed to recommend to the insurer that the case be settled for $825,000. However, Leppin a ttested that at no time dur

ing or after the

pretria l hearin g on July 7, 2005, di d she ag

ree on be half of N orth America n to settle the case for $825, 000. L eppin fur ther atte sted that a

t no time did

any one in her presence advise Judge Elrod or plaintiff’ s counsel that North American consented to settling this suit for $825,000. We next cons ider whe

ther Nor th Americ an demons trated d ue dilig ence in presentin

g its1-06-1813

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petition, as required by se ction 2-1401 of the Code. C. Due Diligence No bright-line rule exists for judging whether a petitioner has acted diligently

. Paul , 223 Ill. 2d at 99. Rather, due diligenc e is judged by the reasonableness of the petitioner’s conduct under all of the circumstances. Paul , 223 Ill . 2d at 99-10 0, cit ing Smith v. Airoom, Inc. , 114 I ll. 2d 209, 222 (1986). In judging the reasonableness of a petitioner’s excuse for not ac ting sooner, “ ‘all of the circumstances attendant upon entry of the judgment must be considered, including the conduct of the litigants and their attorney s.’ ” Paul , 223 Ill . 2d at 101, q uoti ng Airoom , 114 Ill. 2d at 222. In Paul , our supreme court addressed the diligenc e requirement and determined that the plaintiff acted with due diligence in petitioning for re lief six months after learning of the dismissals of her cases. Plaintiff’s cases had been place d on the circuit court’s bankruptcy calendar after plaintiff filed for ba nkruptcy protec

tion and plaintiff assumed no action would take place w hile the c ases we

re on tha t calend ar. Plain tiff’s a ttorney also had t

o negot iate for releas e of plainti ff’s fil es from the attorn ey ’s forme r law fir m. The co

urt state d that it “c annot fa ult plaintiff or her counsel for seeking to re view the history of the litiga tion prior to filing her petitions and having at their disposal all that would be necessary to support and defend the petitions.” Paul , 223 Ill. 2d at 104. Here, we find that North American also ac ted in a diligent manner where it petitioned for relief less than two months after learning of the July 7 and July 26, 2005, orders, and within 30 day s of the Au

gust 12, 2005, judg

ment orde

r agai nst defe ndants.1-06-1813

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North Ame

rican’ s section

2-1401 pe

tition and t

he affi davits of

Czerepak

and L eppin sufficiently established that Nor th American moved to vacate the dismissal and judgment orders in a diligent manner. In its petition, North Americ an outlined the settlement proceedings before the circuit court. At the conclusion of the July 7, 2005, pr etrial conference, Heist draf ted an order that was entered by the circuit court dismissing plaintiff’s claims with prejudice and reflecting a commitment by defendants to settle the case for $825,000 “upon resolution of an internal accounting issue with the insurance company .” In his affidavit, Czerepak a ttested that he spoke with

Heist dur ing the Jul

y 7, 2005, pre

trial conferenc e and inf

ormed He ist that No rth American did not agree to the proposed se ttlement for $825,000. In her aff idavit, Leppin attested that she attended the pretrial conferenc e but was no longer present when He ist drafted the order and she d id not see the orde r until af ter the July

26, 2005 he aring. On July 26, 2005, t

he circ uit court ordered defendants to pay $825,000 to plaintiff. Cezerepak attested that after the July 26, 2005, hearing, he received a letter that Heist wrote to Leppin, with both circuit cour t orders attached, in which Heist stated that he felt compelled to resig n as counsel for the Cohen La mbert firm. Cezereak specifically stated that he “never saw a copy of the July 7, 2005 order until after the July 26, 2005 hearing.” Cezereak further attested that as soon as he understood that anyone might have believed that attorney Heist had authority fr

om NAS to settle this claim for $825,000, he informed defendant’s new counsel that NAS had not a uthorized settlement by pay ment of $825,000. The record shows that on August 5, 2005, defenda nts retained new counsel who filed a motion to ap

pear as additiona l counsel and a ve rified pe tition to va

cate the orders e ntered on July1-06-1813

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7, 2005, and July 26, 2005. On August 12, 2005, Dominic Saviano and the la w firm of Clausen Miller, P.C ., were

grante d leave t

o appea r as subst itute cou nsel reta ined for defenda nts by North American. Jerome Crotty of the law firm Rieck and Crotty, P.C., was per mitted to appear as additiona l counsel , retain ed indepe ndently by d efenda nts due to p otential c onflicts t hat could arise between defendants and North Ame rican. Judge Elrod gave both counsels repr esenting defendants leave to file a single ame nded motion to reconsider vacating the previous orde rs. Judge Elr od also or dered that judgment be en tered in favor of plaintiff and ag ainst def

endants i n the amount of $825,000. Within 30 days, on September 8, 2005, North Amer ican filed a motion for leave to intervene and its section 2-1401 petition to vacate the or ders entered on July 7, 2005, July 2 6, 2005, a

nd the judg

ment ente red on Au

gust 12, 2005. Consi dering these ci rcumstan ces, we conclude that North American established that it exercised due diligence in filing its section 2-1401 petition. III. Conclusion For the a bove stat ed reas ons, we r

everse the circ uit court’ s judgme

nt deny ing Nor th America n’s sect ion 2-1401 petition a

nd reman d this cas e for fu

rther pr oceedin gs. Reversed and remanded. CAMPBELL

and MURPHY, JJ., concur.