Hurlbert v. Brewer

• Decision Date: 11 December 2008
• Docket Number: No. 4-08-0225.,4-08-0225.
• Citation: 386 Ill. App. 3d 1096,899 N.E.2d 582
• Parties: Wilbern F. HURLBERT and Shari Harrington, as Co-Special Administrators of the Estate of Helen I. Hurlbert, Deceased, 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 of Pittsburgh, Pennsylvania, Defendant-Appellant.
• Court: United States Appellate Court of Illinois

899 N.E.2d 582

386 Ill. App. 3d 1096

Wilbern F. HURLBERT and Shari Harrington, as Co-Special Administrators of the Estate of Helen I. Hurlbert, Deceased, 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 of Pittsburgh, Pennsylvania, Defendant-Appellant.

No. 4-08-0225.

Appellate Court of Illinois, Fourth District.

December 11, 2008.

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 International 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 National 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 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 &amp 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 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 additional 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 dismissal 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 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 consolidate 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' arguments, 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 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...