Tag: appellate jurisdiction

Collateral Attack on Order Nixing Attempt to Enforce $700K Settlement Offer Fails – IL 1st Dist.

The First District appeals court recently examined the collateral attack doctrine – which immunizes a court’s judgment from challenge in a separate judicial proceeding – in a case flowing from failed settlement talks.

The defendants in Tielke v. Auto Owners Insurance Company, 2019 IL App(1st) 181756, four years after a 2013 personal injury suit was filed, made an eve-of-trial verbal offer to settle for $700,000.

The plaintiff’s counsel verbally accepted the offer the next day before trial started.  Defendants’ counsel responded by saying “offer withdrawn.”

After plaintiff’s motion to enforce the settlement offer was denied by the personal injury case trial judge, the case proceeded to trial. Plaintiff was awarded less than half of the withdrawn $700,000 offer.  The trial judge told the plaintiff’s counsel he should file a breach of contract action at a later date.

A few weeks later, plaintiff did just that: it filed a separate breach of contract action to recover the difference between the withdrawn offer and the personal injury case judgment (about $400,000). The theory was that defendant breached an enforceable agreement to settle the personal injury suit.

The trial court dismissed the breach of contract action on defendant’s Section 2-619 motion.  The basis for the motion was that the breach of contract suit was an improper collateral attack on an order (the one denying the motion to enforce settlement) entered in the 2013 personal injury suit.

Affirming, the First District held that under the collateral attack doctrine, a court’s final judgment can only be attacked through direct appeal or a post-judgment motion to reconsider or to vacate the judgment.  735 ILCS 5/2-1203, 2-1301, 2-1401, etc.

The collateral attack rule bars later lawsuits that would effectively modify a former adjudication in another lawsuit. Both final and interlocutory (non-final) orders are immune from collateral attack. [¶31]

The appeals court found that by filing a separate breach of contract action, the plaintiff was trying to end-run the order denying her motion to enforce the settlement agreement in the 2013 personal injury suit.  Plaintiff failed to either move to reconsider the denial of her motion to enforce the settlement (which she could have done under Code Section 2-1203) or file a notice of appeal (pursuant to Rule 303).

By failing to file a motion to vacate the personal injury case court’s order denying the settlement motion or to appeal from the order, plaintiff failed to preserve the issue (whether the motion to enforce was properly denied) for review.  This precluded a later challenge to the order in subsequent litigation.

The court also rejected plaintiff’s argument premised on the personal injury case judge’s erroneous advice: that the plaintiff should proceed with the trial and later file a breach of contract action. The appeals court cited Illinois Supreme Court precedent that held “a party should not be excused from following rules intended to preserve issues for review by relying on a trial court’s erroneous belief.” [¶ 43], citing to Bonhomme v. St. James, 2012 IL 112393, 26 (2012).

Afterwords:

Tielke illustrates in sharp relief how crucial it is for litigants to properly preserve issues for review and to exhaust all avenues to challenge a trial court’s order.  Here, the plaintiff should have either moved to reconsider the personal injury judge’s denial of the motion to enforce the oral settlement agreement or directly appealed the order. In the same case.

Instead, by following the trial court’s flawed advice and filing a subsequent lawsuit, the plaintiff’s claim was barred by the collateral attack doctrine.

 

 

Fee Petition Doesn’t Extend Time to Appeal Trial Verdict In Commercial Lease Spat

In Naperville South Commons, LLC v. Nguyen, 2013 IL App (3d) 120382-U, a Will County shopping center landlord filed its notice of appeal too late and so a money judgment for the tenant stands.

The case involves a multi-year shopping center lease for tenant’s operation of nail salon. Several months into the lease’s fourth year, the landlord unilaterally increased the tenant’s rent by over $1,200 per month.  Tenant balked and landlord filed joint action for rent and possession.

At trial, the court entered judgment for the tenant on landlord’s rent claim because the landlord failed to prove that the tenant owed rents or other monies at the time landlord served its 5-day notice.  The court also awarded the tenant some $54,000 in attorneys’ fees based on fee-shifting language in the lease.  Landlord appealed.

The appeals court held it lacked jurisdiction over landlord’s appeal and affirmed trial court’s award of attorneys’ fees.

The trial court entered judgment in November 2011 and the landlord didn’t file its appeal until nearly six months later in May 2012 – the day after the court ruled on tenant’s attorneys’ fee petition (which the tenant filed within 30 days of the trial court judgment). 

In Illinois, a notice of appeal must be filed within 30 days of a final judgment or within 30 days of the order which disposes of the “last pending postjudgment motion.”  Ill. Sup.Ct. R. 303.  Here, contrary to landlord’s position, the tenant’s attorneys’ fee petition was not a postjudgment motion since it didn’t directly challenge any of the trial court’s findings but was instead “collateral to” the trial court’s judgment.  ¶ 15.

The Court held that since tenant’s fee petition was not a post-judgment motion, the landlord did not have additional time – beyond the 30 days – to file its notice of appeal.  Because the landlord didn’t file its notice of appeal within 30 days of the underlying judgment, the court lacked jurisdiction to consider the landlord’s appeal.

The Third District did accept landlord’s appeal of the trial court’s fee award for the prevailing tenant.  The Court first held that the tenant was in fact the prevailing party.  The landlord argued that since it obtained possession of the premises, it won the case, since the primary purpose of the case was to dispossess the tenant.

In Illinois, “a party can be considered a prevailing party for the purposes of awarding fees when he is successful on any significant issue in the action and achieves some benefit in bringing suit, receives a judgment in his favor, or obtains some affirmative recovery.” ¶ 17.

The Court held that the landlord didn’t prevail on the possession issue since the tenant voluntarily left the premises: there was no adjudication of possession in landlord’s favor.  ¶ 18.

On the rent issue, the tenant clearly won since the trial court ruled that the tenant owed nothing based on landlord failing to carry its burden of proof that the tenant owed monies at the time landlord served its 5-day notice.

The Court affirmed the fee award to the tenant, noting that the tenant properly supported its fee petition with competent evidence that quantified its fees in defending the landlord’s eviction suit. ¶ 20.

Take-aways:

– When in doubt, file a Notice of Appeal within 30 days of the trial date order, regardless of what motions are filed by other parties after the judgment.  If the notice turns out to be premature, it will take effect automatically when the post – judgment motion is disposed of.

– A fee petition filed by a prevailing party is not a Rule 303 post-judgment motion that extends the 30-day period to file a notice of appeal;

– to be considered a prevailing party for purposes of an attorneys’ fees petition, the party must obtain an on-the-merits adjudication in its favor on a particular issue.