Venzor v. Carmen's Pizza Corp., 2-92-0031

• Decision Date: 14 October 1992
• Docket Number: No. 2-92-0031,2-92-0031
• Citation: 176 Ill.Dec. 774,602 N.E.2d 81,235 Ill.App.3d 1053
• Parties: , 176 Ill.Dec. 774 Salvador VENZOR, Plaintiff, v. CARMEN'S PIZZA CORPORATION, Indiv. and d/b/a Carmen's of Evanston Plaza, Defendant and Third-Party Plaintiff-Appellee (Manuel Teijeiro, Indiv. and d/b/a Rios Casa Iberia and Santos Enterprises, Third-Party Defendants-Appellants).
• Court: United States Appellate Court of Illinois

Page 81

602 N.E.2d 81

235 Ill.App.3d 1053, 176 Ill.Dec. 774

Salvador VENZOR, Plaintiff, v. CARMEN'S PIZZA CORPORATION, Indiv. and d/b/a Carmen's of Evanston Plaza, Defendant and Third-Party Plaintiff-Appellee (Manuel Teijeiro, Indiv. and d/b/a Rios Casa Iberia and Santos Enterprises, Third-Party Defendants-Appellants).

No. 2-92-0031.

Appellate Court of Illinois Second District.

Oct. 14, 1992.

Timothy J. Young, Edward F. Ruberry, and Richard H. Nicolaides, Jr., Bollinger, Ruberry & Garvey, Chicago, Charles W. Smith, Rosing, Applehans, Smith, Ericksen & Zeit, Ltd., Waukegan, for Manuel Teijeiro.

Robert Schey, Robert Schey & Associates, Chicago, for Carmen's Pizza Corp.

Philip J. Ryan, Ryan and Ryan, Waukegan, for Salvador Venzor.

Justice McLAREN delivered the opinion of the court:

Plaintiff, Salvador Venzor, filed a complaint against defendant, Carmen's Pizza Corporation (Carmen's) for personal injuries. Carmen's filed a third-party complaint against third-party defendant, Manuel Teijeiro, for contribution. Carmen's subsequently settled with plaintiff and then moved to default Teijeiro for failing to appear and plead. The court entered an order granting Carmen's motion for default judgment and entered judgment in favor of Carmen's and against Teijeiro in the amount of $100,000 plus costs. Teijeiro moved to vacate this default judgment within 30 days of its issuance pursuant to section 2-1301(e) of the Code of Civil Procedure (Ill.Rev.Stat.1991, ch. 110, par. 2-1301(e)). The trial court denied both Teijeiro's motion to vacate and Teijeiro's motion for reconsideration. Teijeiro appeals the trial court's denial of his section 2-1301(e) motion. We reverse and remand for a trial on the merits.

On May 15, 1989, plaintiff, Salvador Venzor, filed a two-count complaint in which he alleged that he sustained injuries on July 3, 1988, when he fell from a refrigerated trailer, at the Taste of Chicago Fair. Plaintiff alleged that the trailer from which he fell was owned by defendant Carmichael Leasing Company (Carmichael) and was in an unreasonably dangerous condition at the time of plaintiff's alleged injury. Additionally, plaintiff alleged that the trailer he fell from had been leased by Carmen's and that Carmen's was negligent in failing to maintain, repair, illuminate and inspect the trailer and in failing to warn plaintiff of the dangerous condition.

On June 5, 1991, Carmen's filed a third-party action for contribution against the third-party defendant, Manuel Teijeiro. Carmen's alleged that Teijeiro also had possession and control over the trailer and had a duty to properly maintain it. Substitute service of the summons and third-party complaint was allegedly completed on June 10, 1991.

On September 24, 1991, Teijeiro was mailed, via certified mail, a notice of motion for default hearing. This default hearing took place on October 28, 1991, the same date on which the trial of the matter had been set. At that time, the court was advised that plaintiff Venzor had settled with defendants Carmichael and Carmen's for $100,000. Counsel also appeared on behalf of Teijeiro and sought leave to file an appearance, time to file an answer on behalf of the third-party defendant and a continuance of the trial as to the third-party action. The third-party defense counsel explained that the third-party defendant was unaware of the significance of the summons he had been served. The trial court denied the request of Teijeiro's counsel and ordered that Carmen's motion to default be granted. Additionally, the trial court ordered that judgment be entered against Teijeiro in the amount of $100,000.

On November 18, 1991, Teijeiro filed a motion to vacate judgment pursuant to section 2-1301(e) of the Code of Civil Procedure (Ill.Rev.Stat.1991, ch. 110, par. 2-1301(e)). In this motion, counsel argued that service of the summons was improper and ineffective and that Teijeiro was unaware of the legal significance of the motion seeking judgment against him and that he does not believe that the third-party plaintiff has a valid cause of action.

On December 9, 1991, the court denied Teijeiro's motion to quash service finding that a general appearance had been filed previously on his behalf. The court also denied the motion to vacate the default judgment pursuant to section 2-1301(e), finding that the motion had not been timely filed. Teijeiro's motion for reconsideration was denied on January 8, 1992.

In order to vacate a default judgment within 30 days of its issuance, a party must make a motion pursuant to section 2-1301(e) of the Code of Civil Procedure. This section provides as follows:

"The 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." Ill.Rev.Stat.1991, ch. 110, par. 2-1301(e)

Our analysis of relevant case law reveals that three standards of review have been used by courts of appeal reviewing trial court rulings under section 2-1301(e). The first group of cases asserts that vacation of a default judgment lies within the sound discretion of the trial court and the question on review is whether that discretion has been abused. Foutch v. O'Bryant (1984), 99 Ill.2d 389, 392, 76 Ill.Dec. 823, 459 N.E.2d 958; Day v. Curtin (1989), 192 Ill.App.3d 251, 254, 139 Ill.Dec. 285, 548 N.E.2d 670; Salvati v. Pekin Lincoln Mercury, Inc. (1976), 37 Ill.App.3d 78, 80, 345 N.E.2d 216.

A second body of cases asserts that the question on appeal is not whether the trial court committed an abuse of discretion but whether substantial justice has been done between the parties under the circumstances of the case. Patrick v. Burgess-Norton Manufacturing Co. (1976), 63 Ill.2d 524, 531, 349 N.E.2d 52; Campbell v. White (1989), 187 Ill.App.3d 492, 503, 135 Ill.Dec. 224, 543 N.E.2d 607; Meeker v. Gray (1986), 142 Ill.App.3d 717, 728, 97 Ill.Dec. 72, 492 N.E.2d 508; Satcher v. Inland Real Estate Corp. (1983), 116 Ill.App.3d 685, 687, 72 Ill.Dec. 194, 452 N.E.2d 126; Francone v. Weigel Broadcasting Co. (1979), 79 Ill.App.3d 991, 996, 35 Ill.Dec. 164, 398 N.E.2d 1114; Lettvin v. Suson (1978), 62 Ill.App.3d 215, 217, 19 Ill.Dec. 534, 379 N.E.2d 49.

The third body of cases outlines a standard of review which incorporates both of the standards cited above. Essentially, this standard proposes that a trial court has abused its discretion if its ruling on a section 2-1301(e) motion fails to promote substantial justice between the parties. People ex rel. Reid v. Adkins (1971), 48 Ill.2d 402, 270 N.E.2d 841 (where the supreme court identifies the overriding consideration in setting aside the default judgment as one which seeks to promote substantial justice and then remands the case because the trial court abused its discretion in this regard); Espedido v. St. Joseph Hospital (1988), 172 Ill.App.3d 460, 467, 122 Ill.Dec. 405, 526 N.E.2d 664 (where the discretion of a trial court to vacate the final judgment will not be regarded as an abuse if vacation of that judgment promotes substantial justice); Zanzig v. H.P.M. Corp. (1985), 134 Ill.App.3d 617, 625, 89 Ill.Dec. 461, 480 N.E.2d 1204 (where the court states that a denial of a motion to vacate will not be reversed absent an abuse of discretion the test of which asks whether a party's fundamental right to justice has been affected); Baltz v. McCormack (1978), 66 Ill.App.3d 76, 77, 22 Ill.Dec. 835, 383 N.E.2d 643 (where the court identified the ultimate question of a denied motion to vacate as one which asks whether the trial court properly exercised its discretion in an attempt to serve justice); Widicus v. Southwestern Electric Cooperative, Inc. (1960), 26 Ill.App.2d 102, 108, 167 N.E.2d 799 (where the court expresses a belief that discretion to vacate a default judgment is properly invoked if it is exercised in the furtherance of justice).

The three supreme court cases cited above, Foutch, Patrick and Adkins, serve as the most compelling authority for our decision. In Foutch, the court determined that the absence of a hearing transcript prevented it from determining whether the trial court had abused its discretion in ruling on a motion to vacate a judgment. However, Patrick implies that an abuse of discretion is not a prerequisite to an appellate court's reversal of a denial to vacate a default judgment. The Patrick court cites the following language in Adkins in support of this proposition:

"As we said in People ex rel. Reid v. Adkins, 48 Ill.2d 402 [270 N.E.2d 841], 'The overriding consideration now is whether or not substantial [justice] is being done between the litigants and whether it is reasonable, under the circumstances, to compel the other party to go to trial on the merits.' (48 Ill.2d 402, 406 [270 N.E.2d 841].)" (Patrick, 63 Ill.2d at 531-32, 349 N.E.2d 52.)

We do not dispute the precedential value of Patrick. However, in our view, the Adkins case indicates that, while the denial of substantial justice is an important factor to consider, the actual standard of review is defined as an exercise of discretion. Our reasoning for this interpretation is based upon the unambiguous language in Adkins that "the trial court abused its discretion in failing to set aside its order." Adkins, 48 Ill.2d at 407, 270 N.E.2d 841.

In light of these cases, we conclude that a trial court's refusal to vacate a default judgment may be reversed because of a denial of substantial justice or because of an abuse of discretion.

In the present case, we hold that the court failed in both of these respects. First, the court's ruling failed to promote substantial justice. Factors to consider in determining whether substantial justice has been served include the severity of the penalty to defendant as a result of the default judgment, and the attendant hardship on plaintiff if plaintiff is required to proceed to a trial on...