Hurlbert v. Brewer ( 2008 )

Filed 12/11/08 NO. 4-08-0225
IN THE APPELLATE COURT
OF ILLINOIS
FOURTH DISTRICT
WILBERN F. HURLBERT and SHARI ) Appeal from
HARRINGTON, as Co-Special ) Circuit Court of
Administrators of the Estate of HELEN ) Champaign County
I. HURLBERT, Deceased, ) No. 06L121
Plaintiffs-Appellees, )
v. )
SCOT E. BREWER, D.D.S., d/b/a C-U )
DENTURE SERVICE; and AMERICAN )
INTERNATIONAL GROUP, )
Defendants, )
and )
NATIONAL UNION FIRE INSURANCE COMPANY ) Honorable
of PITTSBURGH, PENNSYLVANIA, ) Jeffrey B. Ford,
Defendant-Appellant. ) Judge Presiding.
_________________________________________________________________
JUSTICE TURNER delivered the opinion of the court:
In June 2004, Helen I. Hurlbert died after having 16
teeth removed in one setting by defendant, Scot E. Brewer,
D.D.S., who was doing business as C-U Denture Service. In June
2006, plaintiffs, Wilbern F. Hurlbert and Shari Harrington, as
co-special administrators of Helen's estate, filed a four-count
complaint against Brewer. In August 2006, plaintiffs filed an
amendment to their complaint, seeking a declaratory judgment
against defendants, National Union Fire Insurance Company of
Pittsburgh, Pennsylvania (National Union), and American Interna-
tional Group (AIG), regarding insurance coverage of Brewer. In
November 2006, plaintiffs filed a motion for entry of judgment
based on a stipulation with Brewer. On December 7, 2006, the
trial court approved the stipulation and entered a $100,000
judgment in plaintiffs' favor and against Brewer.
In April 2007, National Union entered an appearance in
this case. That same month, plaintiffs filed a motion for
dismissal without prejudice of the claim asserted against Na-
tional Union and AIG, which the trial court granted in May 2007.
In July 2007, plaintiffs and Brewer filed a petition to amend the
December 7, 2006, judgment under section 2-1401 of the Code of
Civil Procedure (Procedure Code) (735 ILCS 5/2-1401 (West 2006)),
seeking to increase the judgment to $500,000 based on their
mutual mistake as to the insurance policy limits. That same
month, the court granted plaintiffs and Brewer's petition and
amended the December 7, 2006, as requested. In October 2007,
National Union filed a petition to vacate the July 2007 order
under section 2-1401 of the Procedure Code (735 ILCS 5/2-1401
(West Supp. 2007)). The next month, plaintiffs filed a motion to
dismiss National Union's petition to vacate. After a February
2008 hearing, the court granted plaintiffs' motion to dismiss,
finding National Union lacked standing to file its petition to
vacate.
National Union appeals, contending the trial court
erred by dismissing its petition to vacate because it does have
standing to challenge the court's July 2007 order. National
Union also asserts we should grant its petition to vacate, but we
decline to address that issue since it is premature. We reverse
and remand.
I. BACKGROUND
The June 8, 2006, complaint named only Brewer as a
- 2 -
defendant. On July 3, 2006, attorneys from the law firm of
Querry & Harrow, Ltd., entered Brewer's appearance. In August
2006, Querry & Harrow filed a motion to withdraw as Brewer's
counsel. The motion indicated AIG hired Querry & Harrow to
represent Brewer in this litigation. Shortly, after Querry &
Harrow filed an appearance on Brewer's behalf, the firm received
notice AIG was denying coverage of Brewer for this lawsuit.
Additionally, the motion stated AIG reserved the right to file a
declaratory-relief action. Plaintiffs filed an answer to the
motion, requesting the trial court deny the motion and enter a
declaratory judgment that AIG provide insurance for Brewer as to
plaintiffs' claim.
In response to the motion to withdraw, plaintiffs also
filed a motion for leave to file an amendment to their complaint.
The proposed amendment was a declaratory-judgment action against
National Union and AIG, seeking a judgment as to the nature,
extent, and amount of insurance coverage that AIG and National
Union had to provide Brewer for plaintiffs' claim. The amendment
also requested the trial court to reserve ruling on Querry &
Harrow's motion for leave to withdraw until the declaratory-
judgment action was decided. Plaintiffs served their motion and
proposed amendment on Querry & Harrow.
On August 24, 2006, the trial court first held a
hearing on the motion for leave to withdraw as counsel and
granted it. The court then held a hearing on the motion for
leave to file an amendment to the complaint and granted it
- 3 -
without objection. The proposed amendment was filed instanter.
A report of proceedings for those hearings is not included in the
record on appeal. Moreover, the record on appeal does not
contain any evidence the amendment to the complaint was served on
National Union and AIG after the amendment was filed.
On November 30, 2006, plaintiffs filed a motion for
entry of judgment based on a stipulation. Plaintiffs and Brewer
agreed Brewer would waive a jury trial and stipulate to the entry
of a judgment against him in the amount of National Union's
policy limit as to this claim, specifically, $100,000 plus costs
of the suit. They also agreed Brewer would assign his bad-faith
claim against National Union to the plaintiffs and plaintiffs
would solely look to National Union to satisfy the judgment. On
December 7, 2006, the trial court entered a judgment in favor of
plaintiffs and against Brewer for $100,000 plus costs of the
suit. The judgment also approved Brewer's assignment of his
potential bad-faith claim against National Union. On January 29,
2007, Brewer executed an assignment document.
In February 2007, plaintiffs filed a new and separate
complaint for declaratory judgment against National Union,
asserting National Union's refusal to defend and indemnify Brewer
up to the amount of the insurance coverage was in bad faith.
Hurlbert v. National Union Fire Insurance Company of Pittsburgh,
Pennsylvania, No. 07-L-34 (Cir. Ct. Champaign Co.) (hereinafter
case No. 34). Plaintiffs prayed for a judgment against National
Union in the amount of $100,000, their attorney fees, an addi-
- 4 -
tional sum of $25,000, and costs of the suit.
On April 26, 2007, the law firm of Purcell & Wardrope,
CHTD., filed an appearance on behalf of National Union in this
case. National Union also filed a motion to consolidate this
case with case No. 34, asserting the cases addressed the same
issue of insurance coverage for Brewer as to plaintiffs' claim.
The next day, plaintiffs filed a motion for the voluntary dis-
missal without prejudice of their declaratory-judgment action
against National Union and AIG in this case, which the trial
court granted on May 18, 2007.
On July 11, 2007, plaintiffs and Brewer filed a joint
petition to amend the judgment under section 2-1401 of the
Procedure Code (735 ILCS 5/2-1401 (West 2006)), seeking to
increase the judgment from $100,000 to $500,000. The petition
asserted that, at the time of the stipulation, plaintiffs and
Brewer mistakenly believed the insurance coverage was limited to
$100,000 per person. On May 10, 2007, plaintiffs received
discovery in case No. 34 that indicated the insurance coverage
was actually $500,000 per person. On July 19, 2007, the trial
court entered an order, amending the December 7, 2006, judgment
to the amount of $500,000 plus costs of the suit.
On October 29, 2007, National Union filed a petition to
vacate the July 19, 2007, order under section 2-1401 of the
Procedure Code (735 ILCS 5/2-1401 (West Supp. 2007)), asserting
plaintiffs and Brewer's mutual mistake was not a sufficient basis
for granting their petition to amend the judgment. The petition
- 5 -
also noted Brewer had been informed of his policy limits about
six months before the December 7, 2006, judgment. On November
15, 2007, plaintiffs filed a motion to dismiss National Union's
petition to vacate. The motion to dismiss asserted National
Union lacked standing to file its petition to vacate because it
was no longer a party to the case and did not file a petition to
intervene. Plaintiffs and National Union then exchanged various
memoranda, affidavits, and authority regarding the motion to
dismiss and the petition to vacate.
In December 2007, plaintiffs filed a motion to consoli-
date this case with case No. 34. The record on appeal contains
no evidence the trial court addressed this motion. Moreover,
plaintiffs filed a supplemental motion to dismiss, asserting
National Union breached its insurance contract with Brewer and
thus was estopped from challenging the judgment against Brewer.
Plaintiffs and National Union then filed responsive memoranda on
the supplemental motion to dismiss.
On February 21, 2008, the trial court held a hearing on
plaintiffs' motion to dismiss the petition to vacate and National
Union's petition to vacate. The court found the initial matter
that needed to be determined was National Union's standing to
file the petition to vacate. After hearing the parties' argu-
ments, the court granted the motion to dismiss, finding National
Union lacked standing to file the petition. The court addressed
neither plaintiffs' supplemental motion to dismiss nor the merits
of National Union's petition to vacate. Moreover, the court
- 6 -
believed the dismissal order disposed of the entire case but made
a finding of appealability under Supreme Court Rule 304(a) (210
Ill. 2d R. 304(a)). On February 29, 2008, the court entered a
written order consistent with its oral ruling at the hearing.
Since this case was never consolidated with case No.
34, the trial court's dismissal of the petition to vacate based
on standing disposed of the entire controversy between National
Union and all of the parties in this case and was an adjudication
on the merits (see 134 Ill. 2d R. 273). Thus, the order was a
final and appealable order under Supreme Court Rules 301 and 303
(155 Ill. 2d R. 301; 210 Ill. 2d R. 303). See People for Use of
Howarth v. Gulf, Mobile, & Ohio R.R. Co., 125 Ill. App. 2d 473,
475-76, 261 N.E.2d 221, 222 (1970) (finding a court's dismissal
based on lack of standing was an adjudication on the merits and
an appealable judgment under Rule 301). On March 20, 2008,
National Union filed a notice of appeal from the February 29,
2008, order in substantial compliance with Rule 303 (210 Ill. 2d
R. 303).
II. ANALYSIS
A. Plaintiffs' Appellee Brief
National Union points out plaintiffs failed to provide
citation to the record on appeal in both the supplemental state-
ment of facts and the argument section of their brief in viola-
tion of Supreme Court Rules 341(h)(6) and 341(h)(7) (210 Ill. 2d
Rs. 341(h)(6), (h)(7)). National Union requests we strike
plaintiffs' appellee brief or disregard the offending sections.
- 7 -
While an appellee is not required to submit a statement of facts
(see 210 Ill. 2d R. 341(i)), if he elects to do so, he must also
comply with Rule 341(h)(6). See Merrifield v. Illinois State
Police Merit Board, 294 Ill. App. 3d 520, 527, 691 N.E.2d 191,
197 (1997). Here, plaintiffs' appellee brief does fail to comply
with Rules 341(h)(6) and 341(h)(7).
"Where violations of supreme court rules are not so
flagrant as to hinder or preclude review, the striking of a brief
in whole or in part may be unwarranted." Merrifield, 294 Ill.
App. 3d at 527, 691 N.E.2d at 197. We conclude plaintiffs'
violations of the supreme court rules do not hinder our review of
the case since we reviewed the record as a whole in addressing
National Union's arguments. However, a reviewing court will not
consider any facts dehors the record and any claims based on such
facts. See People v. Newbolds, 364 Ill. App. 3d 672, 676, 847
N.E.2d 614, 618 (2006). Accordingly, we will not strike plain-
tiffs' brief but will disregard any fact or claim not supported
by the record.
B. Standard of Review
National Union asserts the appropriate standard of
review of the trial court's February 2008 judgment is de novo
because the court dismissed its petition to vacate due to a lack
of standing. See In re Estate of Schlenker, 209 Ill. 2d 456,
461, 808 N.E.2d 995, 998 (2004). Plaintiffs contend the appro-
priate standard of review is abuse of discretion because the
court denied National Union's petition to vacate the July 2007
- 8 -
order, "which the court treated as the antecedent requisite of a
petition to intervene." See Regnery v. Meyers, 345 Ill. App. 3d
678, 683, 803 N.E.2d 504, 509 (2003) (petition to intervene);
Paul v. Gerald Adelman & Associates, Ltd., 223 Ill. 2d 85, 95,
858 N.E.2d 1, 7 (2006) (petition to vacate).
In both its written and oral orders, the trial court
indicated it was granting plaintiffs' motion to dismiss National
Union's motion to vacate based on National Union's lack of
standing. Further, the trial court never addressed the merits of
a request to intervene and the petition to vacate. Accordingly,
we agree with National Union the proper standard of review is de
novo.
C. Standing
National Union asserts it has standing to file a
petition to vacate the July 19, 2007, order because (1) it is a
party to this case, and (2) if not a party, it will be injured by
the increased judgment and will derive a benefit from the July
19, 2007, order being vacated.
National Union notes "'[a] party is one who is named as
such in the record and has been properly served with summons or
has entered an appearance.'" St. Paul Fire & Marine Insurance
Co. v. Downs, 247 Ill. App. 3d 382, 388-89, 617 N.E.2d 338, 342
(1993), quoting Collins v. St. Jude Temple No. 1, 157 Ill. App.
3d 708, 711, 510 N.E.2d 979, 981 (1987). While National Union
was named as a defendant in August 2006, it did not enter its
appearance until April 26, 2007. Then, on May 18, 2007, the
- 9 -
trial court dismissed without prejudice plaintiffs' sole claim
against National Union, and National Union was no longer a party
to this litigation (see Nestle USA, Inc. v. Dunlap, 365 Ill. App.
3d 727, 731, 852 N.E.2d 282, 285 (2006)). Thus, National Union
was not a party when (1) the original December 7, 2006, judgment
was entered; (2) Brewer and plaintiffs filed their section 2-1401
petition; and (3) the trial court granted Brewer and plaintiffs'
section 2-1401 petition on July 19, 2007. Accordingly, we find
National Union was not a party to the litigation with respect to
the July 19, 2007, order that it sought to vacate.
We note that, in its reply brief, National Union argues
for the first time it is also a party to the July 19, 2007,
judgment because it had a stake in that judgment. We decline to
address that contention because National Union forfeited it by
failing to raise it in its initial brief. See 210 Ill. 2d R.
341(h)(7); Peltier v. Collins, 382 Ill. App. 3d 773, 780, 888
N.E.2d 1224, 1230 (2008).
National Union contends it still had standing to file
the section 2-1401 petition as a nonparty because it will be
injured by the increased judgment and will derive a benefit from
the July 19, 2007, order being vacated. In In re J.D., 317 Ill.
App. 3d 445, 449-50, 739 N.E.2d 1043, 1047-48 (2000), this court
stated the following with regard to section 2-1401 petitions
brought by nonparties:
"A nonparty to a judgment has no standing to
seek relief from that judgment by filing a
- 10 -
section 2-1401 petition. See Gay v. Open
Kitchens, Inc., 100 Ill. App. 3d 968, 972,
427 N.E.2d 338, 342 (1981). Section 2-1401
was never intended to permit a person not a
party to the action to intervene after final
judgment and reopen the suit so as to permit
a new claim to be filed. In re Estate of
Reilly, 68 Ill. App. 3d 906, 910, 386 N.E.2d
462, 465 (1979)."
As to standing, this court's broad statement in J.D. is
generally true. See Restatement (Second) of Judgments §64,
Comment d, at 149 (1982). However, a few narrow exceptions have
been recognized. See Restatement (Second) of Judgments §64(d)
and Comment d, at 149 (1982). Under Illinois case law, a
nonparty may seek relief under section 2-1401 of the Procedure
Code (735 ILCS 5/2-1401 (West Supp. 2007)) if the person is (1)
privy to the record, (2) injured by the judgment and will derive
benefit from its reversal, or (3) competent to release error.
See Reilly, 68 Ill. App. 3d at 910, 386 N.E.2d at 465; see also
Clayton v. Mimms & Co., 68 Ill. App. 3d 443, 445, 386 N.E.2d 452,
454 (1979); Frandsen v. Anderson, 108 Ill. App. 2d 194, 201, 247
N.E.2d 183, 187 (1969). Additionally, we note that, while the
case of Browning, Ektelon Division v. Williams, 256 Ill. App. 3d
299, 301-02, 628 N.E.2d 878, 881 (1993), uses the term "party"
before setting forth the aforementioned exceptions, it cites to
Reilly, which referred to nonparties.
- 11 -
In case No. 34, plaintiffs sought to hold National
Union liable for the $100,000 judgment against Brewer, which was
entered on December 7, 2006. The trial court's July 19, 2007,
order increased the judgment against Brewer to $500,000. Thus,
National Union was injured by the July 19, 2007, order, from
which it seeks relief, because the order increased National
Union's potential liability to plaintiffs in case No. 34 by
$400,000.
This case is similar to Browning, 256 Ill. App. 3d at
302, 628 N.E.2d at 881, where the First District found Browning
had standing to file a section 2-1401 petition after considering
the three exceptions contained in Reilly. We note whether
Browning was or was not a party is irrelevant because the First
District addressed Reilly's nonparty exceptions. In Browning,
256 Ill. App. 3d at 299-301, 628 N.E.2d at 879-80, the parties in
the original suit were a former sales representative and Brown-
ing's Ektelon division, which was a wholly owned subsidiary of
Browning. During the litigation, Browning sold Ektelon to
another company. Browning, 256 Ill. App. 3d at 301, 628 N.E.2d
at 880. The former sales representative obtained a judgment
against Ektelon and sought to satisfy his judgment by citing the
assets of Browning. Browning, 256 Ill. App. 3d at 301-02, 628
N.E.2d at 880-81. The First District concluded Browning satis-
fied both the privy and injury exceptions. Browning, 256 Ill.
App. 3d at 302, 628 N.E.2d at 881.
As to the intervention statement in J.D., this court
- 12 -
cited Reilly in support of it. J.D., 317 Ill. App. 3d at 450,
739 N.E.2d at 1047-48. The Reilly court noted the general rule
in Illinois that "a person cannot intervene after the rights of
the original parties have been determined and a final decree
entered." Reilly, 68 Ill. App. 3d at 910, 386 N.E.2d at 466.
The Reilly court also stated it was unaware of any case law
allowing a nonparty to open a judgment for "the purpose of
raising a new claim against one of the original parties to the
judgment." Reilly, 68 Ill. App. 3d at 910, 386 N.E.2d at 465-66.
Such a purpose was inconsistent with the purpose of section 72 of
the Civil Practice Act (Ill. Rev. Stat. 1977, ch. 110, par. 72
(now 735 ILCS 5/2-1401 (West Supp. 2007))), which was "to present
to the trial court new matters of fact not appearing in the
record which if known to the court when the judgment was rendered
would have prevented its rendition." Reilly, 68 Ill. App. 3d at
910, 386 N.E.2d at 466.
Here, the July 19, 2007, judgment was the result of
plaintiffs and Brewer's section 2-1401 petition that alleged
mutual mistake as to Brewer's insurance policy limits. In its
section 2-1401 petition, National Union seeks, inter alia, to
present facts regarding Brewer's knowledge of his policy limits
prior to the December 7, 2006, order. Such facts could have
shown no mistake on Brewer's part and thus prevented the trial
court from granting plaintiffs and Brewer's section 2-1401
petition based on mutual mistake. Thus, unlike the petitions at
issue in Reilly and J.D., National Union's petition is consistent
- 13 -
with the purpose of section 2-1401.
Accordingly, we find National Union had standing to
intervene and file its petition to vacate under section 2-1401 of
the Procedure Code.
Last, we note this case is on appeal from the grant of
a motion to dismiss, and thus we also decline to address the
merits of National Union's petition to vacate.
III. CONCLUSION
For the reasons stated, we reverse the trial court's
grant of plaintiffs' motion to dismiss and remand for further
proceedings.
Reversed and remanded.
MYERSCOUGH and STEIGMANN, JJ., concur.
- 14 -