Bank of Ravenswood v. Domino's Pizza, Inc.

• Decision Date: 24 January 1995
• Docket Number: No. 1-93-3507,No. 25-6453,25-6453,1-93-3507
• Citation: 269 Ill.App.3d 714,646 N.E.2d 1252
• Parties: , 207 Ill.Dec. 165 The BANK OF RAVENSWOOD, as trustee under Trust, by Sam Borek, duly authorized agent thereof, and CBS Development Corporation, Plaintiffs-Appellees, v. DOMINO'S PIZZA, INC., Defendant-Appellant (Glen A. Spicer, and Oak Park Pizza One, Inc., Defendants).
• Court: United States Appellate Court of Illinois

Page 1252

646 N.E.2d 1252

269 Ill.App.3d 714, 207 Ill.Dec. 165

The BANK OF RAVENSWOOD, as trustee under Trust No. 25-6453 by Sam Borek, duly authorized agent thereof, and CBS Development Corporation, Plaintiffs-Appellees, v. DOMINO'S PIZZA, INC., Defendant-Appellant (Glen A. Spicer and Oak Park Pizza One, Inc., Defendants).

No. 1-93-3507.

Appellate Court of Illinois,

First District, Second Division.

Jan. 24, 1995.

Rehearing Denied Feb. 16, 1995.

Cassiday, Schade & Gloor, Chicago (Bruce M. Wall, Beth A. Landau, Sandra E. Kupelian, of counsel), for defendant-appellant.

Clark & DeGrand, Chicago (Luke DeGrand, Stephen A. Kolodziej, of counsel), for plaintiffs-appellees.

Presiding Justice SCARIANO delivered the opinion of the court:

In 1984, plaintiffs filed a complaint in the chancery division of the circuit court seeking specific performance of a lease agreement and injunctive relief, and naming Glen Spicer (Spicer) and Domino's Pizza, Inc. (Domino's) as defendants. Spicer had entered a 10-year lease agreement with plaintiffs in which he agreed to operate as a Domino's franchisee in plaintiffs' Oak Park, Illinois shopping center.

On October 13, 1984, defendant Spicer filed a motion to dismiss and mailed a notice of the motion to Domino's at 8600 Bryn Mawr in Chicago. On November 13, 1984, Spicer's attorney, V.L. Milos, entered an appearance on behalf of Domino's as well and, on March 22, 1985, Patrick Moore, Ltd. (Moore) entered an additional appearance on behalf of Spicer and Domino's.

Domino's moved to dismiss the complaint in December 1984, asserting that Spicer was an independent contractor, rather than a Domino's employee, and that Domino's was not a party to the lease at issue. Prior to ruling on that motion, the court allowed plaintiffs to file an amended complaint.

Plaintiffs' four-count amended complaint, which was filed in February 1985, alleged breach of contract, sought an injunction prohibiting defendants from operating a Domino's franchise at any other location, and alleged that Domino's had interfered with its contractual relations with Spicer. Thereafter, the trial court granted Domino's motion to dismiss as to the injunction and breach of contract counts, but allowed the interference with contractual relations count to stand. On July 30, 1985, Domino's filed its answer, denying plaintiffs' allegations and asserting that since plaintiffs "previously breached the contract," it was impossible for Domino's to have interfered with their contractual relations.

In October 1985, plaintiffs filed their second amended complaint, naming Spicer's corporation, Oak Park Pizza One, Inc., (Oak Park Pizza) as an additional defendant and adding a count alleging breach of contract by Domino's as an undisclosed principal. ¹ After Spicer filed a counterclaim, alleging breach of lease and breach of warranty, Domino's moved to dismiss the counts against it. On January 23, 1986, the trial court granted Domino's motion on the injunction count, which had been reasserted in the second amended complaint, and denied it on the other counts. Domino's filed its answer and joined in the affirmative defenses of the other defendants on January 30, 1986.

In June 1987, the trial court granted plaintiffs' motion for summary judgment against Spicer on the issue of breach of the lease agreement as well as on Spicer's counterclaim, but denied their motion for summary judgment on the issue of damages against Spicer.

On October 5, 1989, plaintiffs moved for an order of default against defendants, alleging that they had failed to produce certain documents as required by a June 10, 1988 court order. On December 12, 1989, the trial court declared Domino's and Oak Park Pizza in default for failing to appear for a pre-trial conference. The record contains no order vacating the default. On March 15, 1990, however, the trial court entered an order continuing a hearing on "motion of Plaintiff to default certain defendants, and oral motion of defendants to vacate default." Two weeks later, the trial court again granted a continuance until April 20 for a hearing on, inter alia, "plaintiffs' motion for sanctions and for order of default", the court indicating in the order that the parties were engaged in settlement negotiations. The trial court entered two more orders continuing the proceedings, first until May 1, 1990 and then until May 18, 1990.

The record does not contain a report of proceedings regarding the May 18 hearing, nor does it reflect what occurred between the May 1 continuance order and December 14, 1990, when Domino's attorneys moved to withdraw as defendants' counsel, citing irreconcilable differences with defendants. ² Domino's was served with notice of the motion by certified mail at the Bryn Mawr address, but it denies receiving notice of that motion, noting that one month before counsel filed their motion to withdraw, mail sent from Moore to Domino's at the Bryn Mawr address had been returned, marked F.O.E. (forwarding order expired).

The trial court granted defense counsel's motion, ordering them to serve a copy of the order within three days and granting defendants until January 4, 1991 to file substitute counsel's appearance or to appear pro se.

On March 16, 1991, plaintiffs filed another motion seeking an order of default against defendants, re-alleging their failure to comply with the court's discovery order and asserting that they had failed to obtain substitute counsel. Plaintiffs served notice of the motion and of the hearing on the motion on Domino's at the Bryn Mawr address. In the meantime, on March 12, 1991, the case was dismissed for want of prosecution after plaintiffs failed to appear when the case was called for trial. Plaintiffs later successfully moved to vacate that dismissal.

On April 9, 1991, the court entered an order holding defendants in default and, on May 1, 1991, it entered judgment for plaintiffs in the amount of "$128,487.25, plus costs." On June 28, 1993, more than two years after entry of the default order and the money judgment, plaintiffs had a citation to discover assets issue against Domino's and served notice thereof on its registered agent, C.T. Corporation, in Chicago.

On July 28, 1993, Domino's newly retained counsel, Cassiday, Schade & Gloor (Cassiday), filed a special and limited appearance on Domino's behalf, ³ and on September 2, 1993, Domino's filed an "Emergency Motion to Vacate Order and to Stay Citation Proceedings" pursuant to section 2-1401. See 735 ILCS 5/2-1401 (West 1992).

Domino's asserted that it had no notice that its original attorneys had withdrawn from the case, or that a default judgment had been entered against it. It claimed that the delay in enforcing their judgment "cast a cloud over the plaintiffs." Domino's asserted that plaintiff Sam Borek had had "a long series of communications and contacts" with Domino's through its corporate headquarters in Ann Arbor, Michigan, and had served process on Domino's regarding other litigation through its registered agent in Chicago, C.T. Corporation. Finally, Domino's asserted that during the time between entry of the default judgment and plaintiffs' attempt to enforce it, plaintiff Sam Borek had been engaged in settlement negotiations with Domino's regarding other cases. Domino's attached to its motion copies of the judgment, the order allowing Domino's original counsel to withdraw, and a copy of an envelope addressed to Domino's at 8600 Bryn Mawr and returned in November 1990 to Moore marked F.O.E.

On September 8, 1993, the trial court denied Domino's motion, explaining that "judgment was entered more than 2 years ago and therefore the § 2-1401 motion was not brought within the required 2 years and * * * that the negligence of defendant's previous attorneys is not a basis for vacating the judgment order."

On September 22, 1993, Domino's filed a motion to reconsider, and attached thereto was the affidavit of attorney Bruce M. Wall of Cassiday, averring that in late 1992, during the course of settlement negotiations with plaintiff Sam Borek on another matter involving Domino's, he sent Borek a general release. Borek refused to sign the release, stating that it was too broad. He explained to Wall that he had other pending litigation involving Domino's, but he refused to discuss the specifics of that litigation and made no mention of the May 1991 judgment.

Plaintiffs filed a response to Domino's motion to reconsider and a cross-motion seeking sanctions against Domino's pursuant to Supreme Court Rule 137 (134 Ill.2d R. 137), asserting that Domino's motion to reconsider was baseless and "amount[ed] to little more than an effort to harass Borek, delay the resolution of this matter, and falsely intimate wrongdoing on the part of Borek."

The trial court denied both Domino's motion to reconsider and plaintiffs' cross-motion for sanctions. Domino's now appeals.

Domino's first contention is that the April 9, 1991 default order and subsequent damages award are void because they were entered ex parte. Plaintiffs correctly counter that those orders were not ex parte even if Domino's never actually received notice of them.

Supreme Court Rule 11 requires that service of papers be made upon the opposing party's attorney of record or upon the party. ⁴ (134 Ill.2d R. 11.) Section 2-1302 of the Code of Civil Procedure provides that the moving party's attorney must provide notice of the entry of a default judgment to each party who has appeared and against whom the order was entered, or to the party's attorney of record. Section 2-1302 goes on to state that "the failure of the attorney to give the notice does not impair the force, validity or effect of the order." 735 ILCS 5/2-1302 (West 1992).

In the instant case, plaintiffs provided notice of their motion for default to Domino's at its Bryn Mawr address. Such notice was in conformity with Rule 11 since, at the time, Domino's did not have an attorney of...