Court Opinion

ID: 4385966
Source: CourtListenerOpinion
Date Created: 2019-04-10 21:03:24.13508+00
Date Added: 2024-06-11T14:29:38.683435
License: Public Domain

2019 IL App (5th) 170473
            NOTICE
 Decision filed 04/10/19. The
 text of this decision may be              NO. 5-17-0473
 changed or corrected prior to
 the filing of a Peti ion for
                                              IN THE
 Rehearing or the disposition of
 the same.
                                   APPELLATE COURT OF ILLINOIS

                               FIFTH DISTRICT
________________________________________________________________________

GODFREY HEALTHCARE AND                          )     Appeal from the
REHABILITATON CENTER, LLC,                      )     Circuit Court of
                                                )     Madison County.
      Plaintiff-Appellee,                       )
                                                )
v.                                              )     No. 16-L-1775
                                                )
JOHN TOIGO,                                     )     Honorable
                                                )     A.A. Matoesian,
      Defendant-Appellant.                      )     Judge, presiding.
________________________________________________________________________

         JUSTICE CATES delivered the judgment of the court, with opinion.
         Justices Moore * and Barberis concurred in the judgment and opinion.

                                           OPINION

¶1       Plaintiff, Godfrey Healthcare and Rehabilitation Center, LLC filed a three-count

complaint against defendant, John Toigo, for services provided to Toigo while he was a resident

in a nursing care facility. Plaintiff alleged a breach of contract and, in the alternative, equitable

theories of recovery. Defendant Toigo—through his son and next friend, Michael Toigo

(Michael)—filed an answer to plaintiff’s amended complaint and included affirmative defenses

related to plaintiff’s lack of standing to file the contractual and equitable claims. The circuit court

of Madison County entered a default judgment in favor of plaintiff and against defendant.

Defendant appeals from the circuit court’s order, granting plaintiff’s oral motion for a default

         *
          Justice Goldenhersh was originally assigned to participate in this case. Justice Moore was
substituted on the panel subsequent to Justice Goldenhersh’s retirement and has read the briefs and
listened to the recording of oral argument.
                                                  1
judgment, and the subsequent order denying his pro se motion to vacate the default judgment

pursuant to section 2-1301(e) of the Code of Civil Procedure (Code) (735 ILCS 5/2-1301(e)

(West 2014)). We reverse and remand.

¶2                                      I. BACKGROUND

¶3     On June 1, 2011, defendant Toigo was admitted to a nursing home facility operated by

SA-ENC-Blu Fountain, LLC d/b/a Blu Fountain Manor (BFM) located in Godfrey, Illinois. At

the time of his admission, defendant Toigo was suffering from myriad medical conditions related

to a stroke. His spouse, Kathleen Toigo, signed multiple medical-related forms, including a

document entitled, “Admission Agreement—Illinois” (Agreement). The Agreement identified

BFM as the “Health Care Center,” and John Toigo as the “Resident.” The Agreement did not

identify a responsible party for defendant Toigo, although Kathleen Toigo was the signatory as

“wife” on several of the documents. The Agreement contained certain provisions wherein the

Health Care Center would provide defendant Toigo personal care services, including room,

board, laundry, medicines, and treatment.

¶4     On December 21, 2016, plaintiff filed an unverified, three-count complaint against

defendant Toigo, alleging that he owed certain monies to plaintiff for the services provided to

him under the original Agreement with BFM. Count I alleged breach of contract and claimed that

defendant Toigo owed plaintiff $121,250.14. In support of this count, plaintiff attached an

invoice dated 12/1/2016, from an entity identified as Integrity. Although not pled in the

alternative, count II was based upon a theory of quantum meruit, and count III alleged unjust

enrichment. The following notice, in bold type, was set forth immediately following the

signature line for the attorney filing the complaint:

                                      “NOTICE TO DEBTOR

                                                  2
              If the Fair Debt Collection Practices Act applies you have the right to

       dispute all or any part of the debt. Additionally, you have the right to receive a

       verification of the debt if you request it within the above stated time limitations.

       Further, you have the right to receive information relative to the name and address

       of the original creditor if not the same as the current creditor.

              If you are entitled to protection under the Soldiers and Sailors Civil Relief

       Act of 1944, as amended, please provide us with a copy of the notice of benefits

       you received pursuant to 50 U.S.C. Appx. § 515.”

¶5     In its complaint, plaintiff alleged that on January 14, 2011, an entity known as Godfrey

Rehabilitation and Nursing Center, LLC had acquired all contracts, rights, title, and interests

from Blu Fountain Manor. Plaintiff further alleged that on that same date, Blu Fountain Manor

had also transferred all existing agreements with “residents and any guarantors thereof” to the

Godfrey Rehabilitation and Nursing Center, LLC. Plaintiff asserted that on January 31, 2014,

Godfrey Rehabilitation and Nursing Center, LLC “assigned all of its contracts, rights, title and

interests, including the assignment of resident agreements acquired from Blue Fountain Manor to

Plaintiff Godfrey Healthcare and Rehabilitation Center, LLC.”

¶6     Plaintiff alleged that it had continued to provide personal care services to defendant

Toigo under the Agreement, but that defendant Toigo had failed to pay for those services. In

each count of the complaint, plaintiff claimed that the outstanding balance on defendant’s

account was $121,250.14, and it sought a judgment in that amount, plus interest and attorney

fees. A copy of the original Agreement signed by defendant, Kathleen Toigo, and Blu Fountain

Manor was appended to the complaint. A billing statement with the name “Integrity,” dated

                                                  3
December 1, 2016, showing an outstanding balance of $121,250.14 for defendant Toigo, was

also appended to the complaint.

¶7     On December 27, 2016, plaintiff filed an affidavit of damages, executed by Kara Buttry,

an administrator for Godfrey Healthcare and Rehabilitation Center, LLC. According to the

affiant, as of the date of the execution of the affidavit, defendant Toigo owed plaintiff a total of

$143,964.74. This sum included $536 for costs and service fees, $7151.50 for attorney fees,

$121,250.14 in principal, and $15,027.10 in interest.

¶8     On December 30, 2016, plaintiff’s counsel mailed a “Notice of Discovery Deposition” of

defendant Toigo to an attorney who had not yet entered her appearance in the litigation. On

January 6, 2017, plaintiff’s counsel mailed a “Notice of Discovery Deposition” for defendant’s

son, Michael Toigo. This notice was, again, sent to an attorney who had not yet filed her entry of

appearance on behalf of defendant Toigo. Both notices indicated that the witnesses were to be

deposed on January 25, 2017, less than 30 days after the filing of the original complaint.

¶9     On January 12, 2017, defendant’s counsel filed her entry of appearance and a petition for

the appointment of defendant’s son, Michael Toigo, as next friend of John Toigo. The petitioner,

Michael, asserted that he was the natural son and duly appointed Power of Attorney of John

Toigo. Michael further asserted that defendant Toigo resided in a nursing home, suffered from

multiple infirmities, and was unable to represent himself in the action.

¶ 10   On January 23, 2017, plaintiff filed a response in opposition to the petition. Plaintiff’s

pleading in opposition argued, among other things, that Michael had failed to attach an affidavit

in support of his contentions that defendant Toigo was infirm and unable to represent himself.

Plaintiff also alleged that the petition failed to attach an exhibit evidencing the fact that Michael

was the duly appointed Power of Attorney for John Toigo. According to plaintiff’s pleading, the

                                                 4
trial court was incapable of determining “whether any conflicts of interests exist with respect to

the appointment of Michael Toigo, or if there are any other sufficient reasons to disqualify

Michael Toigo from being appointed as next friend.” Therefore, plaintiff requested that the court

deny the petition for the appointment of Michael as next friend of defendant Toigo.

¶ 11   On January 24, 2017, the parties appeared before the trial court for a hearing on all

pending motions. On that day, counsel for defendant Toigo filed an emergency motion for a

protective order and asked the court to quash defendant Toigo’s deposition and delay the

deposition of Michael Toigo. Counsel argued that plaintiff had served deposition notices prior to

the time defendant was required to enter an appearance, without leave of court, in violation of

Illinois Supreme Court Rule 201(d) (eff. July 1, 2014). Counsel further argued that defendant

Toigo’s deposition should be quashed because defendant Toigo was not competent to testify,

given that he was 92 years old, deaf, did not use sign language, and had been diagnosed with

multiple infirmities, including Alzheimer’s disease and dementia. As for the deposition of

Michael Toigo, counsel requested that the deposition be set on a mutually agreeable date when

timely notice has been served. Counsel also filed a motion for extension of time pursuant to

Illinois Supreme Court Rule 183 (eff. Feb. 16, 2011), asking for additional time in which to

respond to plaintiff’s discovery requests. Counsel indicated that she was working diligently to

complete the answers to the discovery propounded by defendant, but the “Interrogatories,

Request For Production and Request for Admissions” asked for some information that went back

five years, and perhaps even longer.

¶ 12   There is no transcript of proceedings and no bystander’s report from the hearing held

January 24, 2017. The record does reveal, however, that two court orders were entered that day.

The court appointed Michael Toigo as “Next Friend of John Toigo.” The court also entered an

                                                5
order giving defendant Toigo until March 2, 2017, to answer written discovery, and directed that

the depositions of Michael Toigo and John Toigo be taken on February 15, 2017. In a subsequent

order entered January 31, 2017, defendant Toigo was given an additional extension to respond to

discovery by March 19, 2017.

¶ 13    On March 31, 2016, Michael Toigo, as Next Friend of the defendant, John Toigo, filed a

motion to dismiss plaintiff’s complaint. In that motion, defendant 1 argued the complaint should

be dismissed because plaintiff lacked standing to bring the cause of action. Specifically,

defendant pointed out that the action was based upon an alleged agreement, wherein BFM was

the party to the Agreement, not Godfrey Healthcare. Defendant pointed out that plaintiff had not

attached any documents demonstrating that defendant’s Agreement with Blu Fountain Manor

had been assigned to plaintiff. Without such documentation, as required by section 2-606 of the

Code (735 ILCS 5/2-606 (West 2014)), defendant claimed that plaintiff had no standing to bring

the litigation. Defendant also argued that count II and count III of the complaint failed to state a

cause of action because the count set forth equitable theories of recovery based upon the absence

of an enforceable contract. These theories were inapposite to plaintiff’s arguments in count I that

alleged an enforceable contract. Additionally, the counts brought in equity alleged the existence

of a contract.

¶ 14    In its response filed February 3, 2017, plaintiff Healthcare characterized defendant’s

motion to dismiss for lack of standing as “preposterous” and asserted that the motion to dismiss

was a tactic employed to avoid answering the complaint. Plaintiff argued that the assignment of

the Agreement was clearly alleged in count I. Plaintiff also attached to its response various

documents intended to reflect the alleged transfer of interest from BFM to Godfrey

        1
        The term “defendant,” as used hereafter, includes John Toigo, as well as Michael Toigo, as the
Next Friend of John Toigo.
                                                  6
Rehabilitation and Nursing Center, LLC, to Godfrey Healthcare. With regard to counts II and III,

plaintiff sought leave to amend by interlineations in order to remove those allegations claiming

the existence of a valid contract.

¶ 15   Following a hearing on February 24, 2017, the court dismissed the complaint, without

prejudice, and granted plaintiff leave to file an amended complaint within 30 days. Defendant

was given 30 days to file a responsive pleading from the date plaintiff filed its amended

complaint.

¶ 16   On February 27, 2017, defendant filed an emergency motion to stay all discovery until 30

days after the amended complaint was served. Defendant argued that the lawsuit had been

dismissed and that defendant had been granted 30 days after the filing of the amended complaint

to file a responsive pleading. Defendant wanted the opportunity to review plaintiff’s amended

complaint prior to responding to discovery. Defendant Toigo claimed he would be “severely

prejudiced and suffer unreasonable annoyance, expense, embarrassment, disadvantage, or

oppression by being deposed on February 28, 2017,” as well as by having to answer written

discovery that included responding to a request for admission due March 16, 2017.

¶ 17   Again, there is no report of proceedings or bystander report for the hearing held February

24, 2017, on defendant’s emergency motion. There is, however, a written order from the trial

court, entered February 27, 2017, which indicated plaintiff was granted leave to amend its

complaint to cure certain defects in its pleading. The court specifically indicated that the purpose

of its ruling was

       “to allow Plaintiff to cure certain defects in its Complaint—specifically: 1) to attach to its

       Complaint not only the contract upon which its claim was based, which was between

       Defendant and a third party, but also the documents which demonstrate Plaintiff had

                                                 7
       acquired the third party’s rights under the original agreement; and 2) to clarify the extent

       to which certain of Plaintiff’s causes of action are asserted in the alternative and the

       specific facts upon which each such claim is based.”

¶ 18   The February 27, 2017, order also reveals that plaintiff represented it was filing its

amended complaint that same day. Therefore, the court denied defendant’s motion to stay all

written discovery. The trial court did, however, grant a limited protective order continuing the

depositions of John Toigo and Michael Toigo in order to allow defendant the opportunity to

consider any additional facts or issues raised by plaintiff’s amended complaint.

¶ 19   On February 27, 2017, as represented to the court, plaintiff filed its first amended

complaint, as it had represented would be done. The complaint contained three counts. Count I

was again based on breach of contract and alleged that defendant had refused to pay the amounts

defendant Toigo owed for the services rendered to him pursuant to the original Agreement.

Plaintiff now alleged that the current balance owed was $143,964.74, including $536 in costs and

service fees, $7151.50 for attorney fees, $121,250.14 in principal, and $15,027.10 in interest.

Counts II and III were pleaded in the alternative to count I and sought the same money damages

under the respective theories of quantum meruit and an account stated. The amended complaint

contained the same bold-faced “Notice To Debtor” language as contained in the original

complaint. There is no certificate of service in the record indicating that the first amended

complaint was ever served on defendant Toigo or his counsel.

¶ 20   In accordance with the prior orders of the court, defendant served plaintiff with answers

to plaintiff’s requests for admission on March 1, 2017. The next day, March 2, 2017, defendant

responded to plaintiff’s answers to interrogatories and request for production.

                                                 8
¶ 21   On March 10, 2017, plaintiff filed a motion to compel defendant Toigo and “third party

fact witness, Mike Toigo,” to appear for depositions on or before March 31, 2017. Plaintiff

argued that defendant repeatedly sought to continue the depositions and that defense counsel

“refused to make Deponents available on the Court Ordered date” of February 15, 2017. Plaintiff

also claimed that it was apparent defense counsel would not agree to make the deponents

available for deposition without a court order. In a written response, dated March 27, 2017,

defendant reminded the court that it had ordered the depositions to be delayed until defendant

had an opportunity to review the amended complaint and that plaintiff filed an amended

complaint on February 27, 2017, but did not serve it on defendant. Defendant also submitted

copies of letters between counsel for both parties wherein the attorneys for the respective parties

attempted to schedule mutually agreeable deposition dates for John Toigo and Michael Toigo.

Defendant asked the court to deny plaintiff’s motion to compel.

¶ 22   On March 22, 2017, defendant filed a motion for extension of time to file a response or

an answer to the first amended complaint. Defendant noted that plaintiff filed its first amended

complaint on February 27, 2017, but did not serve defendant with a copy of the amended

complaint until March 14, 2017. Defendant requested leave to file a response on or before April

21, 2017. The motion was granted, without objection.

¶ 23   On March 27, 2017, defendant filed a motion to dismiss the amended complaint. As

before, defendant alleged that plaintiff lacked standing to pursue the claim pursuant to the

original Agreement. The motion to dismiss count I referred back to the court’s order of February

27, 2017, wherein the trial court indicated that plaintiff had failed to attach sufficient

documentation to show that it had acquired the third-party rights to bring the claim pursuant to

the original Agreement between BFM and defendant Toigo. Defendant also raised section 2-606

                                                9
of the Code (735 ILCS 5/2-606 (West 2014)), which required plaintiff to attach the written

instrument, or in lieu thereof, an affidavit that showed plaintiff’s right to pursue the claim against

defendant Toigo.

¶ 24   Subsequent to defendant filing its second motion to dismiss, the parties engaged in filing

a flurry of pleadings. To recount each pleading would unnecessarily lengthen this already

extensive disposition. It is sufficient to note that the parties continued to battle over the

sufficiency of the first amended complaint, especially the issue of standing as it related to

plaintiff’s ability to bring the claim pursuant to the Agreement. The parties also again involved

the court in the scheduling of depositions of defendant Toigo and Michael.

¶ 25   On May 3, 2017, defendant’s counsel filed a motion to withdraw as defendant’s attorney

of record, along with a motion to stay the proceedings for 60 days to allow defendant to secure

substitute counsel. The motions indicated that defendant’s answer to plaintiff’s amended

complaint and answers to discovery were due May 7, 2017, and that the depositions of John

Toigo and Michael Toigo were set for May 17, 2017. The certificate of service shows the

motions were mailed to plaintiff on May 2, 2017.

¶ 26   In an order entered May 3, 2017, the trial court granted defense counsel’s motion to

withdraw. The record does not reveal whether the trial court held a hearing on these motions.

With regard to the motion to withdraw as attorney for defendant Toigo, the court noted that

defendant Toigo had been sent a copy of the motion by certified mail, in compliance with Illinois

Supreme Court Rule 13 (eff. July 1, 2013), and granted defense counsel’s motion to withdraw.

The court order identified, specifically, defendant Toigo’s last known address in Godfrey,

Illinois, and ordered that “service of further notice or other papers should be made on Defendant

at the aforesaid last known address unless supplementary appearance is made by him.” The court

                                                 10
advised that defendant should retain other counsel or “file with the Clerk of the Court, within 21

days after entry of the Order of Withdrawal[,] your supplemental appearance stating therein an

address at which service of Notices and other papers may be had on you.” The court also ordered

withdrawing counsel to send a copy of the order to defendant Toigo. In a separate order, also

dated May 3, 2017, the court granted the motion for a 60-day stay of proceedings.

¶ 27   On May 5, 2017, Michael Toigo filed a verified answer to plaintiff’s first amended

complaint. As a part of his answer, Michael also filed a verified denial of plaintiff’s contention

regarding the claimed assignment of the Agreement, alleging that plaintiff had failed to attach

any documentation evidencing its right to bring the claim. Defendant also raised affirmative

defenses. These included plaintiff’s lack of standing, as well as a claim pursuant to the Fair Debt

Collections Practices Act (15 U.S.C. § 1692(g) (2002)) for “verification of the debt, and a strict

accounting of all interest and fees charged by Plaintiff expressed in an effective annual

percentage rate, so that he [(defendant)] can determine whether Plaintiff is charging usurious and

unenforceable amounts of interest and fees.” In addition to Michael’s signed verifications,

defense counsel also signed the pleadings. The certificate of service indicated that defendant’s

answer and verified denial were sent after May 3, 2017, the date upon which the trial court had

granted defense counsel’s motion to withdraw.

¶ 28   On May 9, 2017, defense counsel sent her client a notice of withdrawal as counsel. This

notice was mailed in compliance with the trial court’s order of May 3, 2017, and after the filing

of defendant’s responsive pleadings to plaintiff’s amended complaint. The record is devoid of

any information that would explain why defense counsel filed responsive pleadings after the

court had granted counsel’s motion to withdraw.

                                                11
¶ 29   On May 18, 2017, plaintiff filed a motion to reconsider the order allowing defendant’s

attorney to withdraw and the order granting a 60-day stay of proceedings, along with a notice of

hearing for June 2, 2017. In support of its motion, plaintiff argued that defense counsel had not

complied with the mandates of Rule 13, and therefore, the court should vacate its order allowing

defense counsel to withdraw. Plaintiff also asked the court to set aside its order granting a stay of

discovery and to require that defendant respond “within seven (7) days” to all outstanding

discovery requests. Finally, plaintiff asked that the court require defendant Toigo and Michael to

appear for their depositions, or be subject to indirect contempt proceedings.

¶ 30   Plaintiff’s motion to reconsider and notice of hearing for June 2, 2017, were not sent to

defendant Toigo or Michael at the address identified in the May 3, 2017, order, even though the

order specifically directed that all notices and motions should be served on defendant at his last

known address. 2 Instead, plaintiff served the motion and notice of hearing on defendant’s

counsel of record as of the date prior to May 3, 2017.

¶ 31   At the hearing on June 2, 2017, only plaintiff appeared. There is no transcript of

proceedings or bystander’s report in the record. The following order was entered that day:

       “Above Matter comes before the Court for hearing on Plaintiff’s Motion to Reconsider

       this Court’s May 3, 2017[,] Order staying proceedings herein. For Good Cause Shown,

       the Motion to Reconsider is hereby granted and the May 3, 2017[,] Stay order is hereby

       vacated. On oral Motion of Plaintiff[,] the Defendant is found and held to be in Default

       for failing to enter substitute appearance herein, and Default Judgment is entered in favor

       of Plaintiff Godfrey Healthcare and Rehabilitation Center, LLC and against Defendant

       John Toigo on all Counts of Plaintiff’s Complaint. Plaintiff to file within 14 days an

       2
        As noted previously, the address was set forth in the May 3, 2017, order.
                                                  12
       updated affidavit of damages which shall be deemed incorporated by reference into this

       Judgment.”

There is nothing in the record indicating this order was ever served on defendant Toigo, Michael,

or defendant’s former counsel. Notably, the trial court did not rule on that portion of plaintiff’s

motion that complained of defense counsel’s noncompliance with Rule 13.

¶ 32   Plaintiff filed an updated affidavit of damages on June 14, 2017. This affidavit indicated

that the amount owed to plaintiff was $170,465.97. The sum included $536 in costs and service

fees, $24,166.50 in attorney fees, $121,250.14 in principal, and $24,513.33 in interest. The

certificate of service indicated that the affidavit of damages was mailed to defendant’s former

attorney on June 9, 2017. There is no indication that the affidavit was served on defendant.

¶ 33   On July 3, 2017, defendant Toigo and Michael filed a joint, pro se motion to vacate the

default judgment entered by the court on June 2, 2017. The motion was filled out on a form

supplied by the circuit clerk’s office and contained the verification found in section 1-109 of the

Code (735 ILCS 5/1-109 (West 2014)). Michael filed a separate affidavit in support of the

motion. Defendant Toigo and Michael both attested that defendant Toigo was held in default

because he failed to appear for a hearing on June 2, 2017. They further averred that defendant

Toigo did not appear for the hearing because he “never received any Motion to Reconsider the

60 day stay,” and he did not receive “prior notice that any such Motion had been filed or that a

hearing had been scheduled for June 2, 2017.” Defendant mailed his motion to vacate the default

judgment to plaintiff that same day. The court set the motion to vacate the default judgment for

hearing on November 3, 2017.

                                                13
¶ 34   On November 3, 2017, plaintiff, through its counsel, and Michael appeared for the

hearing on defendant’s motion to vacate the default judgment. There is no transcript of the

proceedings or bystander’s report in the record. The following order was entered:

       “Above matter coming before the Court for hearing on Defendant’s Motion to Vacate this

       court’s June 2, 2017[,] Default Judgment. Plaintiff appears by counsel of record and John

       Toigo appears by Mike Toigo. The Court having reviewed the pleadings, evidence and

       arguments raised, hereby finds the Motion to Vacate fails to meet the requirements of

       Supreme Court Rules and the Illinois Code of Civil Procedure, and no good faith basis

       exists to vacate this Court’s prior Judgment, and the Defendant’s Motion is hereby

       denied.”

¶ 35                                     II. ANALYSIS

¶ 36   On appeal, defendant contends that the trial court erred in vacating the May 3, 2017,

order granting the 60-day stay and that the trial court’s order of June 2, 2017, granting a default

judgment in favor of plaintiff and against defendant Toigo on all counts of the complaint, was in

error. Defendant also claims that the court abused its discretion on November 3, 2017, when it

denied defendant’s motion to vacate the default judgment. In response, plaintiff argues that the

default judgment was properly granted because defendant was in default for “want of an

appearance,” following the withdrawal of his attorney. Plaintiff further argues that the motion to

vacate the default judgment was properly denied because defendant failed to offer adequate

reasons for his failure to appear at the hearing on June 2, 2017, and failed to exercise due

diligence in following the progress of his case.

¶ 37   Defendant’s pro se motion to vacate the default judgment did not specify the statutory

basis upon which defendant relied. As previously noted, defendant used a form provided by the

                                                   14
clerk of the court. Nevertheless, defendant’s motion to vacate the default judgment was governed

by section 2-1301(e) of the Code (735 ILCS 5/2-1301(e) (West 2014)). Section 2-1301(e)

provides that “[t]he court may in its discretion, before final order or judgment, set aside any

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

judgment upon any terms and conditions that shall be reasonable.” 735 ILCS 5/2-1301(e) (West

2014).

¶ 38     Our review of the trial court’s denial of a motion to vacate filed pursuant to section 2-

1301 is for an abuse of discretion. Aurora Loan Services, LLC v. Kmiecik, 2013 IL App (1st)

121700, ¶ 26, 992 N.E.2d 125. A trial court abuses its discretion when it “ ‘acts arbitrarily

without the employment of conscientious judgment or if its decision exceeds the bounds of

reason and ignores principles of law such that substantial prejudice has resulted.’ ” Aurora Loan

Services, LLC, 2013 IL App (1st) 121700, ¶ 26 (quoting Marren Builders, Inc. v. Lampert, 307

Ill. App. 3d 937, 941, 719 N.E.2d 117, 121 (1999)). Additionally, the reviewing court must

determine whether the trial court’s decision “ ‘was a fair and just result, which did not deny [the

moving party] substantial justice.’ ” (Internal quotation marks omitted.) Aurora Loan Services,

LLC, 2013 IL App (1st) 121700, ¶ 26 (quoting Deutsche Bank National v. Burtley, 371 Ill. App.

3d 1, 5, 861 N.E.2d 1075, 1080 (2006)).

¶ 39     In exercising its discretion, the trial court must be mindful that a default judgment is a

drastic remedy that should be used only as a last resort. In re Haley D., 2011 IL 110886, ¶ 69,

959 N.E.2d 1108. The law prefers that controversies be determined according to the substantive

rights of the parties; the provisions of the Code governing relief from a default judgment are to

be liberally construed toward that end. See In re Haley D., 2011 IL 110886, ¶ 69. A party

seeking to vacate a default judgment under section 2-1301(e) need not allege the existence of a

                                                15
meritorious defense or a reasonable excuse for not having asserted the defense. In re Haley D.,

2011 IL 110886, ¶ 69. The overriding consideration is whether substantial justice is being done

between the litigants, and whether it is reasonable, under the circumstances, to compel the parties

to go to trial on the merits. In re Haley D., 2011 IL 110886, ¶ 69. In making its determination,

“[t]he court should consider all of the events leading up to judgment and should decide what is

just and proper based on the facts of the case.” Larson v. Pedersen, 349 Ill. App. 3d 203, 208,

811 N.E.2d 1204, 1208 (2004).

¶ 40   Having considered the record before us, we find that the trial court erred when it entered

its June 2, 2017, order, granting plaintiff’s motion to vacate the May 3, 2017, stay order, and

granting plaintiff’s oral motion for default judgment against defendant Toigo “on all counts.”

The record shows that plaintiff’s motion to reconsider the 60-day stay and notice of hearing were

filed after defendant’s counsel had withdrawn and prior to the time defendant was required to file

a supplemental appearance. In their pro se motion to vacate the default judgment, defendant

Toigo and Michael both attested that they did not appear for the hearing on June 2, 2017,

because plaintiff did not give defendant Toigo notice that any motion had been filed or that a

hearing had been set for June 2, 2017. Plaintiff admits that it did not give notice to defendant

Toigo at the address specified in the May 3, 2017, order because it believed that defendant’s

attorney had not properly withdrawn. Therefore, plaintiff served its motion to reconsider and

notice of hearing on defendant’s former counsel, rather than on the defendant, as required in the

May 3, 2017, order.

¶ 41   That plaintiff decided to ignore the language in the May 3, 2017, order—and instead

serve defendant’s former attorney of record—was a significant legal risk. In its order of May 3,

2017, the court granted defense counsel’s motion for leave to withdraw after finding that

                                                16
defendant’s counsel had complied with the requirements set forth in Rule 13(c). In failing to

serve its motion and notice of hearing on defendant, plaintiff ignored the clear directive of the

trial court, that all further notices be sent to the defendant Toigo at the address identified in the

court order.

¶ 42   Plaintiff argues, however, that it was not obligated to follow the directive in the May 3,

2017, order because defendant had not filed a supplemental appearance. This argument is

without merit. First, the 21-day time period for defendant to obtain new counsel, as allowed by

the May 3, 2017, order, had not expired when plaintiff filed its motion to reconsider on May 18,

2017. Second, plaintiff ignores the plain language of Illinois Supreme Court Rule 13(c)(5) (eff.

July 1, 2013), which provides that “[i]n case of [a party’s] failure to file such supplementary

appearance, notice *** shall be directed to him at his last known business or residence address.”

Therefore, plaintiff failed to comply with the service requirements set forth in Rule 13(c)(5) and

Illinois Supreme Court Rule 104(b) (eff. Jan. 4, 2013). As a result of plaintiff’s disregard of the

plain language of the May 3, 2017, order, directing where service of pleadings was to occur,

defendant had no notice of the June 2, 2017, hearing and no opportunity to defend against

plaintiff’s motion to vacate the 60-day stay.

¶ 43   Plaintiff next argues that even if it was obligated to send notice to defendant pursuant to

the order of May 3, 2017, the lack of notice does not void the order. In support of its argument,

plaintiff relies on Bank of Ravenswood v. Domino’s Pizza, Inc., 269 Ill. App. 3d 714, 646 N.E.2d

1252 (1995). Plaintiff’s argument, however, misconstrues the facts of Ravenswood as applied to

the record herein. In Ravenswood, there was a written motion for default judgment that had been

filed. The attorney seeking the judgment sent the notice of hearing to the only address of record

in the court file. That address, however, had not been updated since defendant had moved.

                                                 17
Therefore, the notice was returned for lack of a forwarding address. Ravenswood, 269 Ill. App.

3d at 716-17. In the case before us, plaintiff made no attempt to notify defendant of plaintiff’s

intention to seek a default judgment. The only pleading before the court was plaintiff’s motion to

reconsider the 60-day stay order and set aside the order allowing defense counsel to withdraw.

Unlike Ravenswood, the record before us does not indicate that plaintiff had ever filed a motion

for default judgment against defendant. Moreover, even if such a pleading had been filed,

plaintiff admits that it never gave notice to the address set forth in the May 3, 2017, order.

Therefore, we find the circumstances in Ravenswood inapposite to the facts in this case.

¶ 44   The order of June 2, 2017, clearly indicated that plaintiff made an oral motion for default

judgment. Despite the fact that defendant had an answer on file, with affirmative defenses, the

trial court granted the oral motion for default judgment “for failing to enter a substitute

appearance.” Further, the default judgment was entered “on all counts,” despite the fact that the

equitable counts were pled in the alternative. The trial court went on to allow plaintiff the

opportunity to file an “updated affidavit of damages,” which was to be automatically

incorporated, without further hearing or notice to defendant, into the judgment. In our view, the

trial court erred in granting the oral motion for default judgment, as defendant was denied the

opportunity to defend on the merits of his responsive pleading and was denied the opportunity to

challenge plaintiff’s affidavit regarding damages.

¶ 45   Prior to the entry of default, defendant had been actively engaged in his defense.

Defendant had filed an answer to plaintiff’s amended complaint, and affirmative defenses

challenging plaintiff’s standing to bring the claim. As previously noted, under section 2-1301(e),

defendant need not show that he had a meritorious defense. Nevertheless, in this case, defendant

                                                18
had raised an affirmative defense, which was the basis for dismissal of plaintiff’s original

complaint on February 24, 2017.

¶ 46    Contrary to plaintiff’s assertion, plaintiff was obligated by court rules and common

courtesy to notify defendant that plaintiff intended to present an oral motion for default

judgment. See Ill. S. Ct. R. 104(b) (eff. Jan. 4, 2013). “It is when the failure to serve notice

prevents a party from appearing and denies the party an opportunity to be heard or to respond,

thereby denying a party’s procedural due process rights, that an ex parte order entered without

notice may be deemed null and void.” Savage v. Pho, 312 Ill. App. 3d 553, 557, 727 N.E.2d

1052, 1055 (2000) (citing People ex rel. Hamer v. Jones, 39 Ill. 2d 360, 235 N.E.2d 589 (1968)).

“The determining factor is not the absence of notice but whether there was any harm or prejudice

to the nonmoving party.” (Internal quotation marks omitted.) Savage, 312 Ill. App. 3d at 557. In

this case, defendant had appeared and answered the amended complaint and was entitled to

notice before plaintiff moved for ex parte judgment. Substantial justice therefore requires that the

June 2, 2017, order be vacated in its entirety, as well as the order of November 3, 2017.

¶ 47    Finally, we note that a majority of plaintiff’s argument was spent berating defense

counsel for her alleged failure to abide by the strict mandates of Rule 13. From the beginning of

this litigation, plaintiff’s pleadings were denigrating toward opposing counsel and fraught with

inaccuracies. A prime example, which is expressed throughout plaintiff’s pleadings and

arguments, is plaintiff’s repeated allegation that defendant Toigo failed to respond to discovery

in a timely manner. First, we note that plaintiff served discovery along with the filing of its

complaint. This was contrary to Illinois Supreme Court Rule 201(d) (eff. July 1, 2014), which

clearly states:

                                                19
               “(d) Time Discovery May Be Initiated. Prior to the time all defendants have

       appeared or are required to appear, no discovery procedure shall be noticed or otherwise

       initiated without leave of court granted upon good cause shown.”

¶ 48   The record does not reveal that plaintiff ever received a court order to commence

discovery, as required by Rule 201(d). Yet throughout plaintiff’s pleadings, there are claims that

defendant refused to respond to discovery for purposes of delay, that defendant’s dilatory tactics

demonstrated a deliberate and pronounced disregard for the court’s authority, or that defendant’s

conduct amounted to a “deliberate or contumacious flouting of judicial authority.” We reference

this issue because this cause is being remanded, and it is important to remind counsel for both

parties that in this State, the courts frown upon any activity that would detract from the purpose

of our judicial system, which is to promote a culture of civility in a manner best suited to

promote the administration of justice. On remand, the parties should refrain from unnecessary

allegations that are unsupported by the record, as any attempt by either counsel to use calculated

misinformation “corrupts the truth-seeking process and must be sternly rebuked.” Fine Arts

Distributors v. Hilton Hotel Corp., 89 Ill. App. 3d 881, 884, 412 N.E.2d 608, 610 (1980).

¶ 49   Next, we address defendant’s motion to strike the supplementary appendix to the

appellee’s brief, and plaintiff’s opposition to the motion. The supplementary appendix contains

an order of the Nevada Supreme Court regarding an unrelated disciplinary proceeding against

Michael Toigo. Plaintiff included the order in a supplementary appendix to its brief and

requested that we take judicial notice of the order. Generally, attachments to briefs not included

in the record on appeal are not properly before the reviewing court and cannot be used to

supplement the record. An appellate court may take judicial notice of readily verifiable facts if

doing so will aid in the efficient disposition of a case, even if the parties did not seek judicial

                                                20
notice in the trial court. People v. Davis, 65 Ill. 2d 157, 165, 357 N.E.2d 792, 796 (1976). We

fail to see why plaintiff attempted to bring this matter to the attention of this court, as it is neither

relevant nor germane to any issue before the court and will not aid in the disposition of the

appeal. The request to take judicial notice of the document is denied, and the supplementary

appendix is ordered stricken from the appellee’s brief.

¶ 50                                     III. CONCLUSION

¶ 51    After considering the record, including the facts and circumstances leading up to the

entry of the default judgment, we find that the trial court erred in denying defendant’s motion to

vacate the default judgment and that substantial justice requires that all orders entered June 2,

2017, including the order vacating the 60-day stay and the order granting plaintiff’s oral motion

for default judgment, be vacated. Accordingly, the November 3, 2017, order of the circuit court,

denying defendant’s motion to vacate the default judgment, is reversed; the default judgment and

all other orders entered June 2, 2017, are vacated; and the cause is remanded for further

proceedings.

¶ 52    Reversed and remanded.

                                                   21
                                2019 IL App (5th) 170473

                                      NO. 5-17-0473

                                         IN THE

                          APPELLATE COURT OF ILLINOIS

                                    FIFTH DISTRICT

GODFREY HEALTHCARE AND                          )     Appeal from the
REHABILITATON CENTER, LLC,                      )     Circuit Court of
                                                )     Madison County.
      Plaintiff-Appellee,                       )
                                                )
v.                                              )     No. 16-L-1775
                                                )
JOHN TOIGO,                                     )     Honorable
                                                )     A.A. Matoesian,
      Defendant-Appellant.                      )     Judge, presiding.
______________________________________________________________________________

Opinion Filed:         April 10, 2019
______________________________________________________________________________

Justices:           Honorable Judy L. Cates, J.

                  Honorable James R. Moore, J.
                  Honorable John B. Barberis, J., and
                  Concur
______________________________________________________________________________

Attorney          Jana Yocom Rine, Yocom Rine Law Office, 2150 South Central
for               Expressway, Suite 200, McKinney, Texas 75070
Appellant
______________________________________________________________________________

Attorneys         Philip J. Lading, Sandberg, Phoenix & von Gontard P.C., 101 W.
for               Vandalia, Suite 300, Edwardsville, IL 62025; Casey F. Wong, Sandberg,
Appellee          Phoenix & von Gontard P.C., 784 Wall Street, Suite 100, O’Fallon, IL
                  62269
______________________________________________________________________________