Baniassiadi v. Hyder ( 2021 )

2021 IL App (1st) 191872-UFOURTH DIVISION
March 25, 2021
No. 1-19-1872
NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the
limited circumstances allowed under Rule 23(e)(1).
______________________________________________________________________________
IN THE APPELLATE COURT
OF ILLINOIS
FIRST JUDICIAL DISTRICT
______________________________________________________________________________
) Appeal from the
REZA BANIASSIADI, ) Circuit Court of
) Cook County
Plaintiff-Appellee, )
)
v. )
) No. 18 L 12872
MAHRUHK HYDER, MUHAMMAD HYDER, and )
FARAH HYDER, )
)
Defendants-Appellants. ) Honorables
) Moira S. Johnson and
) Sandra G. Ramos,
) Judges Presiding.
______________________________________________________________________________
JUSTICE REYES delivered the judgment of the court.
Justices Lampkin and Martin concurred in the judgment.
ORDER
¶1 Held: Reversing the judgment of the circuit court of Cook County denying defendants’
motions to vacate the default judgments.
¶2 Defendants, Mahruhk Hyder, Muhammad Hyder, and Farah Hyder, appeal from an order
of the circuit court of Cook County denying their motions to vacate a default judgment and the
final judgment order in favor of plaintiff Reza Baniassiadi. On appeal, defendants contend that
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the circuit court erred in denying their motions to vacate where the court misapprehended the
law, and the record demonstrates that they were diligent in participating in the matter. For the
reasons which follow, we reverse the judgment of the circuit court of Cook County, vacate the
default judgment orders, and remand the matter for further proceedings consistent with this
order.
¶3 BACKGROUND
¶4 Plaintiff filed his complaint against defendants on November 29, 2018, alleging that
Mahruhk, his former law office manager, and her parents (Muhammad and Farah), embezzled
over $50,000. The complaint included counts for embezzlement, fraud, breach of fiduciary duty,
conversion, and unjust enrichment. Attached to the complaint were exhibits, including a demand
letter sent by plaintiff to attorney Salim John Sheikh on November 23, 2018. Plaintiff’s demand
letter referenced the fact that attorney Sheikh had been representing defendants since July 6,
2017.
¶5 Thereafter, on January 8, 2019, plaintiff obtained personal service on Mahruhk and
substitute service of the complaint on Muhammad and Farah at their collective residence. The
matter was scheduled for a case management conference on March 20, 2019, and was continued
to April 17, 2019.
¶6 On March 21, 2019, plaintiff mailed a request to admit facts to defendants at their
residence. On April 17, 2019, attorney Sheikh filed a response to the request to admit facts;
however, the notice of service of this filing was blank. Also filed was a blank appearance form.
The electronic docket of the circuit court of Cook County, however, indicates that this
appearance was filed, and the fee was paid. 1 It also lists attorney Sheikh’s contact information,
1
We may take judicial notice of the electronic docket of the Clerk of the Circuit Court of
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including his address and phone number.
¶7 A case management order was also entered on April 17, 2019. There is no indication,
however, on the order whether attorney Sheikh was present in court. Indeed, a vast majority of
the orders in this record do not indicate who was or was not present in court on the day the order
was entered. The April 17, 2019, case management order also stated that the matter was
continued to May 15, 2019, with “plaintiff to file a motion for default.” Plaintiff filed his motion
and set it for hearing on May 15 with notice provided only to defendants at their residence.
¶8 Even though the motion was set and noticed for hearing on May 15, plaintiff presented
the motion for default on May 10. There is no notice of motion in the record for this date. On
May 10, the circuit court found that defendants had failed to file an appearance or answer in the
matter and granted the motion for default. The case was continued to May 15 to set a prove-up
date. On May 15, the circuit court continued the matter to June 11 for prove-up.
¶9 On June 10, 2019, attorney Sheikh filed a motion to vacate the default judgment pursuant
to section 2-1301 of the Code of Civil Procedure (Code) (735 ILCS 5/2-1301 (West 2018)) on
defendants’ behalf. Defendants maintained—in contradiction to the May 10 order—that they
had filed an appearance and a response to the requests to admit in this matter. They also alleged
that attorney Sheikh did not receive notice of the hearing on the motion for default. The
electronic docket indicates that defendants’ motion was set for hearing on June 24, 2019.
¶ 10 On June 11, 2019, the circuit court entered a judgment against defendants in the amount
of $198,680 plus prejudgment interest, fees, and costs. The order did not indicate who was
present at the hearing.
¶ 11 On June 20, 2019, the Fish Law Group filed an appearance on behalf of defendants and
Cook County. TCF National Bank v. Richards, 2016 IL App (1st) 152083, ¶ 50.
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paid the appearance fee. The Fish Law Group also filed a motion to withdraw the appearance of
attorney Sheikh and substitute the Fish Law Group as counsel.
¶ 12 On June 24, 2019, both parties appeared, and defendants presented their motion to vacate
the default judgment as well as the motion to withdraw and substitute counsel. Defendants were
granted time to provide authority supporting their position that attorney Sheikh properly filed his
appearance. Thereafter, plaintiff was provided time to provide authority on his position as well.
¶ 13 Then, on July 11, 2019, defendants filed an “alternative motion to vacate the judgment
order pursuant to 735 ILCS 5/2-1301(e) and 735 ILCS 5/2-1401(A)” wherein defendants argued
that the lack of notice to attorney Sheikh regarding the motion for default prejudiced them and
that the failure of plaintiff to personally inform defendants regarding the date of the prove-up
warranted the vacatur of those orders. After conducting a full hearing, the circuit court denied
the motion to vacate the default judgment and the June 11 judgment order. In so ruling, the
circuit court found that attorney Sheikh “attempted” to file his appearance on April 17, 2019,
over 30 days after the complaint was filed. The circuit court further found that attorney Sheikh
violated Illinois Supreme Court Rule 13(c)(1) (eff. July 1, 2017) because he failed to request
leave of court to file his appearance.
¶ 14 On August 13, 2019, defendants filed a motion to reconsider, which the circuit court
denied without stating its reasoning on the record. This appeal followed.
¶ 15 ANALYSIS
¶ 16 Defendants argue on appeal that the circuit court incorrectly denied the motions to vacate
because defendants did not seek leave of court to file an appearance where their attempt to file an
appearance was made after the 30 days permitted by law. Defendants maintain that this ruling is
contrary to Illinois case law which allows a party to file a pleading without first filing an
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appearance. See Firkus v. Firkus, 200 Ill. App. 3d 982, 990 (1990). Defendants contend that, at
a minimum, the circuit court should have at least considered the merits of the motions to vacate
and the court committed reversible error when it failed to do so.
¶ 17 In response, plaintiff maintains that the circuit court correctly denied the motions to
vacate where Mahruhk was personally served and her parents, Muhammad and Farah, were
served by substitute service through Mahruhk, on January 8, 2019, and therefore defendants had
proper notice of the proceedings. Plaintiff further asserts that, despite this notice, defendants
failed to file an effective appearance or an answer or any other pleading and therefore the circuit
court correctly granted a default judgment.
¶ 18 We first address our standard of review. Two different sections of the Code were
implicated by the motions to vacate—section 2-1301(e) and section 2-1401(a). See 735 ILCS
5/2-1301(e) (West 2018); 735 ILCS 5/2-1401(a) (West 2018). Neither party acknowledges
under which section of the Code the circuit court analyzed the motions to vacate. The orders
entered in this cause were also devoid of any such reference. A defendant’s right to challenge a
judgment under both section 2-1301 and section 2-1401 is distinctive. Under section 2-1301(e),
the moving party need not necessarily demonstrate a meritorious defense and a reasonable
excuse for failing to timely assert such defense. In re Haley D., 2011 IL 110886, ¶ 57. In
contrast, under section 2-1401, a litigant faces a substantially greater burden—the litigant must
establish by a preponderance of the evidence not only that a meritorious claim or defense exists,
but also that they exercised “due diligence in pursuing the claim or defense in the circuit court,”
as well as “due diligence in pursuing in presenting the petition for relief.” Id. ¶ 58. Furthermore,
regarding an order granting or denying a motion to vacate a default judgment pursuant to section
2-1301(e) our review is that of abuse of discretion. Wells Fargo Bank, N.A., v. Hansen, 2016 IL
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App (1st) 143270, ¶ 14. As for an order granting a motion to vacate a judgment pursuant to
section 2-1401, when the motion raises a purely legal issue our review is de novo. Warren
County Soil and Water Conservation District v. Walters, 2015 IL 117783, ¶ 47. Conversely, an
order granting or denying a motion pursuant to section 2-1401 is reviewed for an abuse of
discretion when the motion does not raise a purely legal issue and presents a fact-dependent
challenge. Id. ¶¶ 51-52. Due to these differing standards, we must first determine which section
of the Code applies.
¶ 19 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.”
(Emphasis added.) 735 ILCS 5/2-1301(e) (West 2018). Section 2-1401(a) provides that “[r]elief
from final orders and judgments, after 30 days from the entry thereof, may be had upon petition
as provided in this Section.” (Emphasis added.) 735 ILCS 5/2-1401(a) (West 2018).
¶ 20 We observe that attorney Sheikh filed a motion to vacate the default judgment pursuant to
section 2-1301(e) on June 10. While at first glance it appears this motion was filed outside of the
30 days allowed by section 2-1301(e), June 9 (the 30th day) fell on a Sunday, and therefore the
filing of the motion on the following Monday was proper. See Mortgage Electronic Systems v.
Gipson, 379 Ill. App. 3d 622, 626 (2008) (quoting 5 ILCS 70/1.11 (West 2004)).
¶ 21 Thereafter, on June 11—the same day the final judgment order was entered—Fish Law
Group filed another motion to vacate seeking the vacatur of both the default judgment and the
judgment order under either section 2-1301(e) or section 2-1401(a) of the Code. As both
motions to vacate were filed within 30 days of the respective orders, we find that section 2-
1301(e) of the Code applies. See 735 ILCS 5/2-1301(e) (West 2018); Williamsburg Village
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Owners’ Ass’n, Inc. v. Lauder Associates, 181 Ill. App. 3d 931, 935 (1989) (characterizing the
defendant’s motion to vacate as a section 2-1301 motion based on the timing of the filing of the
motion).
¶ 22 The decision whether to grant or deny a motion to vacate under section 2-1301 is within
the circuit court’s sound discretion, and we will not reverse a court’s ruling unless it has abused
its discretion. 735 ILCS 5/2-1301(e) (West 2018); Godfrey Healthcare & Rehabilitation Center,
LLC v. Toigo, 2019 IL App (5th) 170473, ¶ 38. An abuse of discretion occurs when “the ruling
is arbitrary, fanciful, or unreasonable, or when no reasonable person would take the same view.”
CitiMortgage, Inc. v. Moran, 2014 IL App (1st) 132430, ¶ 24.
¶ 23 Furthermore, there is a liberal policy regarding vacating default judgments under section
2-1301(e). Wells Fargo Bank, N.A. v. McCluskey, 2013 IL 115469, ¶ 16. The overriding
consideration in ruling on such a motion is whether substantial justice has been done between the
litigants and whether it is reasonable to compel the other party to go to trial on the merits. Id. In
determining whether substantial justice will be achieved, considerations can include a party’s
diligence or lack thereof, whether the party has a meritorious defense, the severity of the
resulting penalty, and the relative hardships on the parties. Draper & Kramer, Inc., v. King,
2014 IL App (1st) 132073, ¶ 23. Thus, the appropriate considerations depend on the facts of
each case. Id.¶ 24 In this instance, our review of the record reveals that the circuit court abused its discretion
when it denied defendants’ motions to vacate. As is well established, “courts of Illinois have
been liberal in setting aside defaults entered,” and our legislature has also directed that the Civil
Practice Act of the Code be “liberally construed so that controversies may be speedily and finally
determined according to the substantive rights of the parties.” Widucus v. Southwestern Electric
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Co-op., Inc., 26 Ill. App. 2d 102, 107 (1960). Under the liberal policy of vacating default
judgments, the circumstances of this case indicate that—despite the allegedly defective
appearance—plaintiff was aware defendants were represented by counsel, presented the motion
for default on May 10, 2019, without providing notice to defendants, and obtained a ruling in his
favor. See Toigo, 2019 IL App (5th) 170473, ¶¶ 40-42 (finding the circuit court should have
vacated the default judgment when plaintiff failed to give proper notice of its intent to present an
oral motion for default judgment); John Isfan Construction, Inc., vs. Longwood Towers, LLC.,
2016 IL App (1st) 143211, ¶ 47 (finding the trial court should have vacated a judgment where
the plaintiff never sent proper notice of the default); In re Haley D., 2011 IL 110886, ¶ 69 (“In
making this assessment [under section 2-1301], a court should consider all events leading up to
the judgment. ‘What is just and proper must be determined by the facts of each case, not by a
hard and fast rule applicable to all situations regardless of the outcome. [Citation.]’ ”); Passalino
v. City of Zion, 237 Ill. 2d 118, 124 (2010) (due process requires that interested parties receive
notice of legal proceedings and be provided an opportunity to be heard at those proceedings).
¶ 25 While defendants did timely file a motion to vacate this judgment, they were then
prejudiced when the circuit court entered a significant monetary judgment against them while
their motion to vacate was pending. Under these circumstances, it is evident that substantial
justice was not achieved and therefore it was unreasonable for a circuit court to deny defendants’
motions to vacate the default judgment. See Draper & Kramer, Inc., 2014 IL App (1st) 132073,
¶ 25 (observing it is well recognized that motions to vacate under section 2-1301 are routinely
granted to achieve substantial justice).
¶ 26 In reaching this conclusion, we acknowledge that the circuit court relied upon the fact
that attorney Sheikh failed to file a proper appearance when it denied the motions to vacate.
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Specifically, the circuit referenced Illinois Supreme Court Rule 13(c)(1) (eff. July 1, 2017),
which provides that, “[a]n attorney shall file a written appearance or other pleading before
addressing the court unless the attorney is presenting a motion for leave to appear by intervention
or otherwise” and our court’s interpretation of that rule as stated in J.P. Morgan Mortgage
Acquisition Corp. v. Straus, 2012 IL App (1st) 112401, ¶ 15. While we agree with the circuit
court that Straus states that “leave of court must be sought prior to filing an appearance after 30
days” (id.), we note that, under the facts of this case, another motion to vacate filed by Fish Law
Group did seek leave of court to enter its appearance. Thus, even if attorney Sheikh’s motion to
vacate was improperly filed and presented to the court, the circuit court had the opportunity to
correct this error by granting Fish Law Group’s motion to withdraw and substitute counsel and
proceeding on consideration of their motion to vacate. Such a result would have promoted the
interests of the efficient and proper administration of justice and, in turn, the circuit court would
have decided whether to vacate the default judgments on the merits. Indeed, entering a default
judgment is one of the most drastic actions a court may take, and a default judgment should only
be entered as a last resort. See Bank and Trust Co. v. Line Pilot Bungee, Inc., 323 Ill. App. 3d
412, 415 (2001). And, as in this case, it should be set aside when it will not cause hardship to the
plaintiff to proceed to trial on the merits. Widucus, 26 Ill. App. 2d at 108-09.
¶ 27 In sum, taking into consideration the entirety of the record in this case, we find that the
circuit court abused its discretion when it denied defendants’ motions to vacate. Accordingly,
we reverse the judgment of the circuit court of Cook County, vacate the default orders, and
remand the matter for the circuit court to provide defendants time to file their answer or other
pleading.
¶ 28 CONCLUSION
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¶ 29 For the reasons stated above, the judgment of the circuit court of Cook County is
reversed, the default judgment orders are vacated, and the matter is remanded for further
proceedings consistent with this order.
¶ 30 Reversed, vacated, and remanded.
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