Dog Bite Verdict Upheld

In the case captioned, Claffey v. Huntley, 2021 IL App (1st) 191938 the Illinois Appellate court upheld a verdict in favor of a home owner whose dog allegedly bit the plaintiff (a mail carrier) without provocation. At trial the jury ruled in favor of the homeowner defendant (and by extension the dog). Claffey moved for judgment notwithstanding the verdict. The motion was denied and the Appellate Court affirmed the denial.

Claffey testified that he inserted his hand in the mail slot and it was bitten. He argued that there was no evidence of provocation. The jury and the judge disagreed. The Appellate Court also disagreed, holding that there was evidence of provocation. The explanation:

“In this case the Huntleys secured their dog against contact with outsiders by keeping it insider their home. ‘Securing dogs…is what is expected of a dog owner – it protects the dogs and it protects the innocent public.'” The court further explained that by opening the mail slot, “Claffey encroached on the dog’s isolated environment and exposed himself to risk of harm.” ¶27.

Conclusion: don’t put your hand through the mail slot.

Plaintiff’s Attempt to Escape Divorce Court Sanctioned under Rule 137

The case is Davis v. Davis, 2019 IL App (3d) 170744. The parties were divorced in 2012. Husband believed that his wife had violated the postmarital agreement, but instead of filing a claim in the Divorce case he filed a breach of contract lawsuit. His case was dismissed. The dismissal was affirmed on appeal but the Appellate Court reversed the denial of Rule 137 sanctions. The court found that the filing of the breach of contract action violated Rule 137 and awarded wife her legal fees associated with defending the case:

¶18.  The court found that dismissal was warranted because affirmative matter defeated Michael’s claim. The court reasoned that the action was “a divorce court matter” and should have been brought in the dissolution action. We agree with the trial court. Dissolution proceedings are designed to dispose of all matters connected with the dissolution of a marriage, including the parties’ attorney fees. See 750 ILCS 5/508 (West 2016). The dissolution proceedings and the breach of contract action were intertwined asthey were both based on the postmarital agreement. Bringing this claim in the dissolution action would not result in the joining of distinct and independent matters or require separate briefs, defenses, or the joinder of claims against multiple defendants. Both the dissolution action and the breach of contract action relied on the postmarital agreement for resolution. Leann was the only defendant, and there was no one else to join. The doctrine of multifariousness is not applicable under these facts. The dissolution action, which was pending at the time Michael brought the breach of contract action, was the appropriate forum for Michael to seek attorney fees. We find the trial court’s dismissal on this alternative ground was also proper…..

¶25.              We determine that sanctions under both Rule 137 and Rule 375 are warranted. We find that Michael lacked a legal or factual basis to pursue his breach of contract action and to appeal it. He reasoned that his breach ofcontract action was independent of the dissolution proceedings. Nevertheless, he relies on the postmarital agreement to support both his dissolution claim and his breach of contract claim, indicating that he wasaware both causes of action were based on the same set of facts. Moreover, after contesting the validity of the postmarital agreement, Leann complied with its terms and provisions negating any basis for a breach. In essence, Michael attempted an end-around of his obligations under the postmarital agreement to be obligated for his own legal expenses. His filing the breach of contract action and the appeal of its dismissal unnecessarily extended proceedings between the parties. Because there was no basis for Michael’s breach of contract claim, his pursuit of the action can only be directed to harass Leann.

¶ 26                 We thus direct Michael to pay the cost to Leann of defending his action at both the trial and appellatecourts. See Ill. S. Ct. R. 366 (eff. Feb. 1, 1994) (this court may enter any judgment that should have been entered in the trial court). Leann’s attorney should present to this court an affidavit and billing records distinguishing between the trial and appellate work so we may enter proper sanctions amount under each rule. Amadeo v. Gaynor, 299 Ill. App. 3d 696, 706 (1998) (court determined sanctions amount based on attorney affidavit and billing records). Leann has offered to supply this court with the necessary financialinformation within seven days, and we request that she so submit the affidavit and billing records within seven days after issuance of this opinion. We will enter an order specifying the amount due and allow Michael 14 days to either pay Leann or challenge her accounting. We further direct Michael to pay Leann directly through her counsel.

Comment: Don’t try to avoid the divorce court or the divorce judge by filing a “contract” claim in another court.

 

Appellate Court Remands Sanctions Claim to Trial Court

Generally, a litigant has 30 days after final judgment to file a motion for Rule 137 sanctions. In Davis v. Davis, 2019 IL App (3d) 170744, husband filed a breach of contract claim against ex-wife. After his claim was dismissed, the husband appealed and one day later wife moved for Rule 137 sanctions. Because her sanctions motion was timely, the filing of the notice of appeal by the husband did not deprive the trial court of jurisdiction.

The explanation:

¶ 18 Having determined that the trial court did not err in dismissing Michael’s breach of contract action, we turn to Leann’s cross-appeal. She raises two issues: whether the trial court erred when it found it lacked jurisdiction to hear her request for sanctions and whether the court should have imposed Illinois Supreme Court Rule 137 (eff. Jan. 1, 2018) and Rule 375 (eff. Feb. 1, 1994) sanctions on Michael.

¶ 19 We begin with Leann’s challenge to the trial court’s determination that it lacked jurisdiction to hear her motion for sanctions. She argues that the trial court erroneously determined that it lacked jurisdiction. Michael agrees. They are correct.

¶ 20 A Rule 137 motion for sanctions must be filed within 30 days after the final judgment was entered. Pursuant to Illinois Supreme Court Rule 303(a)(1) (eff. July 1, 2017), a judgment or order does not become final and appealable while a Rule 137 claim remains pending. This is true even when a notice of appeal was filed in the same proceeding prior to the filing of the motion for sanctions. Yunker v. Farmers Automobile Management Corp., 404 Ill. App. 3d 816, 821 (2010). A timely postjudgment motion, such as a motion for sanctions, operates to stay an earlier filed notice of appeal. In re Estate of Hanley, 2013 IL App (3d) 110264, ¶ 43. The notice of appeal becomes effective when the final postjudgment motion is decided. Ill. S. Ct. R. 303(a)(2) (eff. July 1, 2017). We review questions of jurisdiction de novo. In re Marriage of Chrobak, 349 Ill. App. 3d 894, 897 (2004).

¶ 21 The trial court granted Leann’s motion to dismiss on October 3, 2017. Michael filed a notice of appeal on November 1, 2017, and Leann filed her motion for sanctions on November 2, 2017. The trial court dismissed Leann’s motion for sanctions on January 11, 2018, finding it lacked jurisdiction because a notice of appeal had already been filed. However, the motion for sanctions was a timely filed postjudgment motion that prevents an earlier filed notice of appeal from becoming effective until the trial court enters its ruling on the sanctions motion. The trial court retained jurisdiction to determine Leann’s sanctions motion. Thus, the trial court erred when it found it lacked jurisdiction to decide the motion for sanctions. We accordingly remand for the trial court to hear and determine Leann’s motion for sanctions.

Comment: thus, the filing of a notice of appeal by one party does not prevent the other party from seeking sanctions. The Clinton Law Firm

Illinois Appellate Court Rejects Appeal over Attorney’s Delay in Obtaining Service

If you file a case but neglect to serve the complaint, your case can be dismissed. Here a defendant tried to raise this issue in an interlocutory appeal. The court rejected the interlocutory appeal.

On February 5, 2019, in a Rule 23 opinion, the Appellate Court of Illinois, Fifth District denied leave for Defendant Emily Galloway to file an interlocutory appeal of the trial court’s denial of her motion to dismiss under Illinois Supreme Court Rule 103(b). Shirley Runyon v. Emily Galloway, 2019 IL App(5th) 180044-U.

Ms. Galloway’s counsel, in the motion to dismiss, argued that the matter should be dismissed with prejudice under Rule 103(b) because counsel for the Plaintiff Shirley Runyon failed to use reasonable diligence in obtaining service.  The matter, initially filed on August 28, 2008, sat dormant for over six years before service was finally obtained on December 21, 2016.

In concluding that the issue was not appealable under Illinois Supreme Court Rule 308, the Court states,

Illinois Supreme Court rule 103(b) states that ‘[i]f the failure to exercise reasonable diligence to obtain service on a defendant occurs after the expiration of the applicable statute of limitations, the dismissal shall be with prejudice as to that defendant ***.’ Our supreme court has held that Rule 103(b) is an objective standard that was adopted to prevent delays in service of summons and to promote expeditious handling of suits by giving circuit courts the ability to dismiss a cause when service is not affected by reasonable diligence. Segal v. Sacco, 136 Ill. 2d 282, 286 (1990). Because the rule does not provide a specific time by which a defendant must be served, a court must consider the amount of time that has passed in relation to all the other factors and circumstances of each individual case. Case v. Galseburg Cottage Hospital, 227 Ill. 2d 207, 213 (2007); see also Segal, 136 Ill. 2d at 287 (when determining whether a plaintiff lacked reasonable diligence in achieving service, a court may consider seven factors)…In the instant case, [Defendant] has requested this court to review and answer certified questions which would require us to provide an answer that is dependent on the specific underlying facts of this case. As such, this court’s answer would be improper. (emphasis added).

Notably, in a lengthy dissenting opinion, Justice Moore argues that the court should have reframed the question on appeal to answer, as a matter of law, whether “there is a per se violation of the reasonable diligence requirement…where no attempts are made for six years following the filing of a complaint and issuance of an original summons.” For now, at least, no such bright line rule will exist.

 

 

 

Pro Se Attorney May Obtain Rule 137 Sanctions in Illinois For His Own Legal Work – Updated

Illinois has long allowed a client to seek Rule 137 sanctions if the allegations brought against him are frivolous or without factual basis or both. Illinois also has a rule that provides that a lawyer who is sued and represents himself cannot obtain legal fees for his own work. (He can obtain fees if he hires counsel).

In McCarthy v. Reynolds, 2018 IL App (1st) 162478, Illinois Appellate Court, First District, those two rules collided. Unfortunately for the lawyer defendant, the court held that he cannot obtain legal fees under Rule 137 because he represented himself.

The procedural history of the case was not complex. McCarthy was a beneficiary of a trust. He sued the lawyer employed by the trust (Marvin Gray) for breach of fiduciary duty and tortious interference with his beneficiary interest.

Gray moved to dismiss the complaint and was successful. He then sought and obtained an award of Rule 137 sanctions from the trial court. The case was dismissed under the doctrine of res judicata on the ground that the same lawsuit had been filed previously by McCarthy in 2013 and had been dismissed.

On appeal, McCarthy argued that Gray could not recover Rule 137 sanctions for his own work. The Appellate Court held that sanctions were appropriate.  The explanation:

¶ 21 Here, in its August 4, 2016, corrected order, the circuit court held that plaintiff’s tortious interference claim was filed with no basis in law because it was barred by the doctrine of res judicata. The circuit court noted that plaintiff filed the 2013 lawsuit and litigated it to its final conclusion. The court further reasoned that plaintiff was “acutely aware of the proceedings because he verified the complaint in that case * * * and he is a lawyer himself.” Plaintiff additionally appealed the circuit court’s decision of the 2013 case and later listed himself as cocounsel on the petition for leave to appeal to the Illinois Supreme Court. Accordingly, plaintiff was “well-aware” of the allegations in the 2013 complaint and the proceedings that took place in relation thereto. The circuit court found there was “no basis in law” for plaintiff to file his tortious interference claim where, despite being aware of the final judgment in the 2013 case, he never set forth any good faith explanation regarding why he filed the subsequent claim that was a clear attempt to relitigate the findings of fact and credibility determinations made in the 2013 case.

¶ 22 We find the circuit court did not abuse its discretion in imposing Rule 137 sanctions against plaintiff for violating the Rule. As found by the circuit court, plaintiff, though represented by counsel in the 2013 case, expressly was involved and had knowledge of the allegations of that complaint and the resulting proceedings that occurred. Notwithstanding, plaintiff filed the instant action to challenge Gray’s credibility in the 2013 action, which is a claim that should have been raised in the 2013 case. We, therefore, conclude plaintiff’s tortious interference claim was not well-grounded in law because it was barred by res judicata. As a result, it was not unreasonable for the circuit court to find the tortious interference claim was filed for an improper purpose under Rule 137.

¶ 23 To the extent plaintiff argues he was sanctioned without a proper hearing, we disagree. Plaintiff alleges Gray failed to raise res judicata as a basis for the imposition of sanctions and, therefore, the circuit court erred in awarding sanctions on that basis without providing him with a hearing. Our review of the record demonstrates that the circuit court dismissed plaintiff’s tortious interference claim on February 27, 2015, based on res judicata and then granted Gray’s request for Rule 137 sanctions on March 30, 2016, where it found the tortious interference claim was frivolous. Accordingly, at the time the circuit court considered the Rule 137 sanctions, plaintiff was fully aware that his tortious interference claim had been dismissed based on res judicata. Moreover, Gray’s motion requesting Rule 137 sanctions alleged he was entitled to such sanctions “[d]ue to the plaintiff’s unfounded, fallacious and specious allegations and pleadings.” Notwithstanding, plaintiff never requested an evidentiary hearing on any basis.

Alas, the lawyer could not recover fees for his own legal time, so the sanctions award disappeared.

¶ 26 Plaintiff finally contends the circuit court abused its discretion in awarding excessive fees against him to an attorney that proceeded pro se. Plaintiff cites Hamer v. Lentz, 132 Ill. 2d 49 (1989), and its progeny to support his argument regarding the impropriety of awarding the fees to Gray.

¶ 27 We first address our standard of review. As stated, a circuit court’s decision to impose sanctions pursuant to Rule 137 is a matter of discretion and will not be overturned absent an abuse of that discretion. Nelson, 408 Ill. App. 3d at 67. However, whether a circuit court has the authority to grant attorney fees as an available remedy is a question of law that we review de novo. People ex rel. Schad, Diamond & Shedden, P.C. v. My Pillow, Inc., 2017 IL App (1st) 152668, ¶ 101. Because plaintiff challenges the circuit court’s authority to award attorney fees under Rule 137 to Gray, who appeared pro se, our review is de novo.

¶ 28 In Hamer, the supreme court held that an attorney appearing pro se in an action brought pursuant to the Freedom of Information Act (FOIA) (Ill. Rev. Stat. 1987, ch. 116, ¶ 201 et seq.) was not entitled to attorney fees. Hamer, 132 Ill. 2d at 63. The FOIA contains a standard fee-shifting provision that is silent on the issue of a pro se attorney recovering fees. The supreme court reasoned that fees were not appropriate under those circumstances because the fee-shifting provision of the FOIA was designed (1) to remove the burden of legal fees as a deterrent from litigants, which was not a barrier for a pro se attorney because a lawyer representing himself does not incur legal fees, (2) to reduce unnecessary litigation by encouraging citizens, even lawyers, to seek objective legal advice before filing suit, and (3) to avoid abusive fee generation by unscrupulous attorneys. Id. at 61-62. Subsequent appellate decisions have expanded the rule to other contexts. See, e.g., Kehoe v. Saltarelli, 337 Ill. App. 3d 669, 678 (2003) (holding an individual attorney was not entitled to recover fees for pro se representation in a malpractice action); In re Marriage of Pitulla, 202 Ill. App. 3d 103, 117-18 (1990)(finding the rule barring pro se attorneys from collecting attorney fees applied in the context of a divorce proceeding); Uptown People’s Law Center v. Department of Corrections, 2014 IL App (1st) 130161, ¶ 25 (denying fees under FOIA for work performed by in-house, salaried lawyers on behalf of its employee, an organization).

¶ 29 The parties have not cited, and our research has not uncovered, any case law applying the Hamer rule to a Rule 137 motion. We acknowledge the purpose of Rule 137 is, in relevant part, to curb the filing of frivolous pleadings. See Sanchez v. City of Chicago, 352 Ill. App. 3d 1015, 1020 (2004). We further acknowledge that plaintiff’s tortious interference claim was undoubtedly a frivolous cause of action. Rule 137, however, is silent on the recovery of attorney fees for all pro se litigants, whether an attorney or not. Without any support establishing that attorney fees are appropriate under the circumstances before us, we choose to follow the demonstrated law providing that pro se attorneys are not entitled to attorney fees, especially because Rule 137 is penal in nature and must be strictly construed. See Adler, 271 Ill. App. 3d at 476. We find the policy reasons provided in prior case law to be convincing; thus, we will not extend Rule 137 to provide attorney fees to pro se attorneys.

Mr. Gray deserves credit for his excellent legal work on his own behalf. The court, applying well-settled law, concluded that he could not recover for that work.

Update: The Illinois Supreme Court reversed the judgment of the Appellate Court.

¶ 28 We find that Hamer and its progeny are distinguishable because those cases did not involve Rule 137 sanctions to compensate a pro se attorney defending himself against frivolous claims. The essential underlying policy of Rule 137 of discouraging frivolous or harassing litigation is furthered by imposing sanctions in the form of an award of attorney fees in favor of a pro se attorney defending against meritless claims. See Sundance Homes, 195 Ill. 2d at 285-86; In re Estate of Wernick, 127 Ill. 2d at 77. Here, defendant did not initiate or otherwise invite the frivolous pleadings. Nevertheless, defendant was forced to defend against the frivolous claims filed by plaintiff, also an attorney. If the policy of Rule 137 sanctions is to deter frivolous pleading and litigation, it would be illogical to deny attorney fees to pro se attorneys defending themselves in such matters.

¶ 29 The policy considerations underlying our decisions in Hamer and My Pillowon fee-shifting provisions are not present when a court awards sanctions under Rule 137. Here, sanctions are intended as a punishment against the party who abuses the judicial process, not as a reward to a successful pro se attorney who is defending against a frivolous lawsuit. The concern articulated in Hamer and My Pillow on deterring abusive fee generation by lawyers who initiate litigation is not present when sanctions are imposed against a plaintiff who files frivolous pleadings. This case does not involve awarding attorney fees to an attorney bringing suit as a plaintiff in his own name. Rather, defendant was forced to expend his time defending a frivolous lawsuit, as well as pursuing sanctions clearly provided for by Rule 137.

…

¶ 31 We reiterate that “[t]he purpose of Rule 137 is to prevent abuse of the judicial process by penalizing claimants who bring vexatious and harassing actions.” Sundance Homes, 195 Ill. 2d at 286. To hold that an attorney cannot recover reasonable attorney fees in defending himself against frivolous litigation would clearly frustrate the purpose of Rule 137 and unfairly reward those who persist in maintaining frivolous litigation.

¶ 32 We hold that, under Rule 137, a court is authorized to impose sanctions in the form of attorney fees under Illinois Supreme Court Rule 137(a) (eff. July 1, 2013) against a plaintiff to compensate an attorney defending himself against a frivolous cause of action. Accordingly, we reverse that part of the appellate court decision holding to the contrary and remand with directions to reinstate Gray’s attorney fee award.

Comment: the Illinois Supreme Court, in my view, has made the correct ruling. Sanctions should be available even where a lawyer must defend himself pro se.

Ed Clinton, Jr.

The Clinton Law Firm

False Allegation In Complaint Triggers Rule 137 Sanctions

This is a case where the Illinois Appellate Court affirmed an award of sanctions to the Defendant.

In Fitzgerald v. O’Donnell, 2016 IL App (1st) 153112-U, the plaintiffs brought a defamation lawsuit against O’Donnell. They alleged that he had mailed a series of anonymous letters to “various public officials and members of the media in political retaliation,” for their decision to support a political opponent of the Defendant.

In their third amended complaint, the plaintiffs alleged that they had retained a handwriting expert who supported their allegation that O’Donnell had addressed the envelopes. The allegation stated: “Based upon handwriting analysis of the handwritten envelopes used to mail the November 2011 letters and the February 2012 letter, [O’Donnell] addressed the envelopes and mailed the letters to recipients described herein.”

During discovery, the deposition of Plaintiffs’ handwriting expert was taken. The expert did not provide a conclusive opinion that O’Donnell addressed the envelopes which contained the defamatory letters.

O’Donnell moved for summary judgment on that issue, but the court denied the motion. Two months later, however, the court granted O’Donnell’s sanctions motion on the ground that the allegations in Paragraph 46 were not well-grounded in fact or law. The court further noted that “[p]laintiffs made claims during the July 08, 2013 hearing, in the presence of this Court, that the [p]laintiffs had verifiable proof that [O’Donnell] addressed the letter.” ¶ 25. The court awarded $43,641.75 in legal fees and $9,303.50 in costs to O’Donnell. Paragraph 26.

The court, using an abuse of discretion standard, affirmed the sanctions award. The court reasoned that the plaintiffs failed to submit proof that they had consulted with a handwriting expert before they filed the case and that the handwriting expert had supported their claim.

An award of sanctions is reviewed under an abuse of discretion standard. Here, the court felt there was sufficient support in the record to affirm the sanctions award.

Edward X. Clinton, Jr.

Appellate Court Reverses Trial Court For Failure to Allow Amendment to Complaint

Illinois is a fact-pleading state, which generally means that the complaint must lay out the factual details of what happened between the two parties. By forcing the plaintiff to plead facts, the courts weed out some causes of action. The question arises often: how many attempts does the plaintiff get to state a claim?

In Masada v. Ciccone, 2016 IL App (1st) 152470-U, the Appellate Court reversed a decision of the trial court to dismiss a case. The reason was that the trial court should have accepted plaintiff’s first amended complaint which cured the defects in the pleading. The case featured ugly allegations that the defendants (who together with plaintiffs owned units in a condominium) destroyed religious symbols and subjected the plaintiffs to abuse and harassment. Plaintiff sought to plead a claim for intentional infliction of emotional distress. The court dismissed the claim finding that the complaint did not plead enough facts. Plaintiffs then sought reconsideration and tendered a new proposed second amended complaint. The court denied leave to file the proposed second amended complaint and denied the motion to reconsider.

The appellate court reversed. It held that the court abused its discretion in denying leave to file the second amended complaint because the proposed complaint cured the problems with the first amended complaint because it included detailed factual allegations.

The Appellate Court reversed and reinstated the case. Unfortunately, the Appellate Court decided not to publish the opinion, even though it should have been.

There is one more issue in the opinion that is worth discussing. The defendants argued on appeal that the case should be affirmed because plaintiff did not hire a court reporter and transcribe the hearing on the motion to dismiss the complaint. The Appellate Court disagreed with this analysis. “We need not address Ciccone’s arguments regarding the March 10, 2015, hearing and order because that order is not the subject of this appeal. It was not mentioned in plaintiffs’ notice of appeal or substantive arguments of their brief. Further, we do not find a lack of the July 15, 2015, hearing transcript, bystanders report, or agreed statement of facts to be fatal to our review regarding the sufficiency of the allegations of plaintiff’s complaint, as our review is de novo. See Gonnella Baking Co. v. Clara’s Pasta di Casa, Ltd. 337 Ill. App. 3d 385, 388 (2003).” Because the court reviews a decision to dismiss a complaint de novo, there is no requirement that appellant include the transcript in the record.

Edward X. Clinton, Jr.

You Cannot Appeal Until the Judgment Is Final

One issue that arises often in our great State of Illinois is that an appeal is dismissed because there was no final judgment. This case – see below – is one such case. National Life issued a citation to discover assets to International Bank. A citation to discover assets can be issued when a party has a judgment. The citation requires the responding party to certify whether or not it has any assets. The responding party must answer the citation under oath. If there are assets, those assets must be frozen until the court can determine what to do with them.

The facts are fairly straightforward. National Life obtained a judgment against Ronald Scarlato and two LLCs. National Life then served a citation upon IBC. IBC, believing that it had no assets of Scarlato, disbursed certain loan proceeds to third parties.

The court explains the procedural history as follows:

¶ 3 On either November 14, 2012 or November 28, 2012,[1] National Life obtained a judgment in the amount of $3,424,228.97 against Scarlato and two limited liability corporations, jointly and severally. Subsequently, National Life initiated supplementary proceedings. On April 12, 2013, National Life filed a third-party citation to discover assets directed to IBC. The citation was served via certified mail on April 13, 2013. The citation that was served upon IBC contained the following prohibitive provision:

“[You are prohibited] from making or allowing any transfer or other disposition of, or interfering with, any property not exempt from execution or garnishment belonging to the judgment debtor or to which the judgment debtor may be entitled or which may be acquired by or become due to the judgment debtor and from paying over or otherwise disposing of any money not so exempt, which is due or becomes due to the judgment debtor, until further order of court or termination of the proceedings. You are not required to withhold the payment of any money beyond double the amount of the judgment.”

¶ 4 On August 1, 2013, Scarlato, Bellwood Place, LLC (BP), and Scarlato Holdings Bellwood Place, LLC (SHBP) entered into a construction loan agreement and promissory note with IBC wherein IBC agreed to loan $3.5 million to Scarlato, BP, and SHBP. From August 2013 to March 2014, IBC disbursed $3.5 million in loan proceeds to various third-parties. None of the loan proceeds were disbursed to Scarlato.

¶ 5 On July 18, 2014, National Life filed a motion for entry of judgment against IBC for violating the third-party citation to discover assets that was served on April 13, 2013. The motion sought judgment pursuant to section 2-1402 of the Code (Id.) and argued that IBC violated the prohibitive provision of the citation and the lien created thereby when it transferred $3.5 million in assets that belonged to Scarlato. On July 30, 2014, IBC filed its response and asserted that it never violated the citation because the loan proceeds never amounted to Scarlato’s “property” as contemplated by the citation’s prohibitive provision. National Life filed its reply on August 19, 2014, and the court held an evidentiary hearing on December 16, 2014.

¶ 6 The court set forth its ruling in a written memorandum decision and order that was entered on April 15, 2015. The court’s order denied National Life’s motion for entry of judgment against IBC, finding that the loan proceeds were not Scarlato’s individually. Specifically, the court’s order read, “[T]he checks clearly show the amounts were delivered to entities and not Scarlato individually. The [c]ourt recognizes the frustration in this matter. However, the parties do have remedies remaining.”

¶ 7 National Life filed its timely notice of appeal on May 14, 2015.

The problem, of course, was that the appeal was dismissed because there was no final judgment. National Life could still proceed with its citation. There was thus no final resolution of the issue and no final judgment. Thus, the time spent on the appeal was wasted.

Edward  X. Clinton, Jr.

Source: NATIONAL LIFE REAL ESTATE HOLDINGS, LLC v. INTERNATIONAL BANK OF CHICAGO, Ill: Appellate Court, 1st Dist., 1st Div. 2016 – Google Scholar