Hurlbert v. Brewer ( 2008 )


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  • 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
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    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
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    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-
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    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
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    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
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    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.
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    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
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    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
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    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
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    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.
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    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
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    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
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    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.
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