Zeman v. Diaz

• Decision Date: 30 April 2021
• Docket Number: 1-20-0797
• Citation: 2021 IL App (1st) 200797,195 N.E.3d 1211,457 Ill.Dec. 795
• Parties: Terry ZEMAN, Plaintiff-Appellant, v. Francisco ALVAREZ DIAZ and Braddock Investment Group, Inc., Defendants-Appellees.
• Court: United States Appellate Court of Illinois

2021 IL App (1st) 200797

195 N.E.3d 1211

457 Ill.Dec. 795

Terry ZEMAN, Plaintiff-Appellant,

v.Francisco ALVAREZ DIAZ and Braddock Investment Group, Inc., Defendants-Appellees.

No. 1-20-0797

Appellate Court of Illinois, First District, SIXTH DIVISION.

Filed April 30, 2021

Julianne M. Dailey, of Horwood Marcus & Berk Chtrd., of Chicago, for appellant.

Nathan I. Neff, of Neff Law Group PC, of Chicago, for appellee Francisco Alvarez Diaz.

Robert E. Haney, of Noonan & Lieberman, Ltd., of Chicago, for other appellee.

JUSTICE HARRIS delivered the judgment of the court, with opinion.

¶ 1 Plaintiff, Terry Zeman, filed a petition pursuant to section 2-1401 of the Code of Civil Procedure (Code) ( 735 ILCS 5/2-1401 (West 2018) ), seeking to vacate the dismissal of his complaint for specific performance of a land sales contract. The trial court denied the petition, finding no meritorious defense and no diligence in filing the petition. On appeal, Zeman contends that the court should have granted his petition where (1) his attorney had no express or apparent authority to sign the settlement agreement on his behalf; (2) he did not ratify his attorney's execution of the settlement agreement; and (3) he was diligent in filing his petition. For the following reasons, we affirm.

¶ 2 I. JURISDICTION

¶ 3 On June 5, 2020, the trial court entered its order denying Zeman's section 2-1401 petition. Zeman filed his notice of appeal on July 1, 2020. Accordingly, this court has jurisdiction pursuant to Illinois Supreme Court Rule 304(b)(3) (eff. Mar. 8, 2016), governing appeals from a judgment granting or denying a petition for relief under section 2-1401 of the Code.

¶ 4 II. BACKGROUND

¶ 5 On March 11, 2014, Zeman filed a complaint for specific performance of a contract to purchase real property commonly known as 1810 W. Erie Street in Chicago, Illinois. Zeman was the buyer, having received an assignment of defendant Braddock Investment Group, Inc.’s (Braddock), rights under the contract, and defendant, Francisco Alvarez Diaz, was the seller. Braddock subsequently filed a counterclaim for breach of contract against Zeman for failing to abide by the terms of the assignment. Attorney Peter Faraci filed an appearance on behalf of Zeman on July 26, 2018.

¶ 6 According to Zeman, the parties began negotiations for a settlement of all their claims in late 2018. Faraci was authorized to settle for "$372,000 all in" as indicated in an e-mail dated February 25, 2019. On March 5, 2019, Faraci sent Zeman an e-mail with the latest counteroffer from Braddock and Alvarez Diaz. In response, Zeman asked Faraci about his own counteroffer whereby Zeman would pay $372,000 to Alvarez Diaz and $15,000 to Braddock. At the final pretrial conference on April 15, 2019, attorneys for Braddock and Alvarez Diaz informed the court that the claims of all parties have been settled. The trial court entered the following order:

"[B]oth attorneys [for Alvarez Diaz and Braddock] reporting to the court that the claims of all parties have been settled, plaintiff's counsel present by conference call and confirming the case's resolution and agreement for the entry of an order dismissing all claims, it is hereby ordered that: all claims and counterclaims are dismissed. The trial dates of April 22, 2019 thru April 26, 2019 are hereby stricken."

¶ 7 Following the dismissal, the parties communicated through e-mail to finalize the details of their agreement. On April 17, 2019, Faraci sent the following to Nathan Neff, Alvarez Diaz's attorney: "Please review the dismissal order I had prepared and let me know if we can convert it to a settlement agreement ASAP. Also need the contract that was being executed today by the sellers." On April 18, 2019, Faraci sent an e-mail to Zeman and to another attorney who worked with Zeman, Leonard Litwin, stating "Attached please find the new contract along with the Addenda that I would like to attach when we return. This new clean contract gives me a second means of enforcement of the contract as we can simply record it if their [sic ] is a default, in addition to the court's enforcement as well." Faraci asked Zeman and Litwin to "[p]lease review the documents and advise."

¶ 8 Later that day, Neff e-mailed Faraci: "I've take [sic ] a run at a settlement agreement. Please let me know what you think." Neff also contacted attorney Mila Novak, who was conducting the closing of the purchase. He informed her that

"the essential terms are $372,000—notably NOT the $372,500 that [Alvarez Diaz] had been insisted on in a year 2014 settlement proposal. Zeman's payment of the $372,000 to [Alvarez Diaz] and the $15,000 to Braddock is to made [sic ] at or before the May 17, 2019 Closing. Given this specific time and location—the Settlement Agreement supersedes one paragraph of the Rider #8 which had permitted the parties to Close on a non-descript mutually convenient date and time. That's not the case here. *** I'm told that the Closing is set to proceed on May 17th *** however I don't know whether you and [Faraci] have agreed on a specific time for that. Please keep me posted on any developments."

A couple of hours later, Faraci informed Novak that "I am waiting for [Zeman's] review of the contract, but we can set the closing for any time 12 or after."

¶ 9 Faraci and Robert Haney, attorney for Braddock, reviewed Neff's draft of the settlement agreement and each made some changes. After Haney submitted his changes, Faraci e-mailed Haney and Neff: "Acceptable to Zeman. Let us know Nate." On April 19, 2019, Neff told Faraci:

"I believe that the Settlement Agreement can be executed by the parties, perhaps in short order. *** I think you have or are confirming that the Settlement Agreement and Mutual Release document that I forwarded yesterday is acceptable to Mr. Zeman. Braddock has confirmed it. I'll forward to [Alvarez Diaz] for his review and signature."

Neff also "attached an updated version of the settlement agreement, after edits by all counsel."

¶ 10 On May 2, 2019, Neff e-mailed Faraci:

"I appreciate that we're settled. We've exchanged a written agreement that you and Mr. Haney have both confirmed as acceptable to your clients. My client has signed it and I have provided you with a copy of same. Another copy is attached. You've confirmed the case as settled to Judge Cohen, who then dismissed the case pursuant to same. And then Mila Novak and [Alvarez Diaz] have moved forward in reliance of all of it—with the preparation of a land sales contract—that has been signed by Mr. Zeman—and the scheduling of a Closing for May 17th, the date set in the written settlement agreement exchanged. For whatever reasons, however, I have not yet received a copy of the settlement agreement signed by Mr. Zeman. Your e-mail below expressed some confidence that we'd have it last week."

Faraci responded, "I have signed a copy as the authorized agent. It took forever to get the contract signed and I will get his signature, but this should suffice for now." Haney informed Neff that he "spoke with Peter Faraci just now and advised him that his signature is not sufficient and that Braddock may have to take further action if we do not promptly receive the settlement agreement executed by Zeman." Neff, however, assured Haney that "Mr. Faraci is counsel for Mr. Zeman, and authorized by Mr. Zeman to act in his stead."

¶ 11 On May 6, 2019, Novak sent the following e-mail to Faraci:

"Please let this email also serve as notice that the City of Chicago just posted the attached violation notice of lead hazards found in the property. Attached is also the revised lead disclosure form updated accordingly. Paragraph 22a) of the Contract shall also be deemed modified to reflect that the parties have received actual notice of this violation notice of lead hazards found in the property that has not been corrected. Since Mr. Zeman is taking this property in as-is condition, I presume this will not impact the scheduled closing on 5/17/19."

¶ 12 On May 16, 2019, one day before the scheduled closing date, Faraci e-mailed Zeman: "I'm hoping to get some direction from you by the end of the business day. If I do not hear from you I will send a letter formally requesting an extension of the due diligence and closing dates for at minimum one week unless I hear otherwise from you." Zeman responded, "As you know this all was discovered Tuesday at the walk through." He asked for "14-30 days" in order "to review the docs" and "investigate the lead remediation & lead poisoning to the little girl." His e-mail continued:

"Where are the docs that you referred to;

Where is the mutual release?

Where is the assignment of the lease and hold harmless doc?

***

Furthermore, I NEVER asked/pushed to settle & not go to trial. Where did you get this understanding from?

Where is the settlement agreement that you speak of? Please forward I've never seen a copy.

***

PLEASE send me everything you have ASAP and cc Leonard [Litwin]."

On May 16, 2019, Faraci responded: "Here are the docs that I have in my possession." There were five attachments to the e-mail, including the settlement agreement.

¶ 13 Later that day, Faraci e-mailed Zeman and Litwin:

"Per [Zeman's] text now, I will request an extension of time to close for a few days. I fully expect their response to be the same as it was with [Litwin], which is that we are in breach as of 1 o'clock tomorrow for failure to show up, and they will declare the contract null and void. ***

Upon their assertion, I will record the contract on Monday. At that point, I will compile a final bill for submission and will await your direction as to who will be moving forward to represent you in future litigation/negotiation."

The next morning, Zeman responded, "My text never said that. *** I suggest we schedule closing for the week of June 3. I'm unavailable next week due to being out of town for the long Memorial Day weekend." In another e-mail, he wrote: "Also, where is the settlement agreement. I don't believe that I've ever...