v.
Tri-Sate Restore, LLC.
2024 IL App (1st) 230287-U No. 1-23-0287 Second Division May 28, 2024
NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1). ____________________________________________________________________________
IN THE APPELLATE COURT OF ILLINOIS FIRST DISTRICT ____________________________________________________________________________
) Appeal from the AMANDA NADHIR, ) Circuit Court of ) Cook County. Plaintiff-Appellant, ) ) v. ) No. 21 CH 2205 ) TRI-STATE RESTORE, LLC, ) ) Honorable Defendant-Appellee. ) Thaddeus L. Wilson ) Judge, Presiding. ____________________________________________________________________________
JUSTICE COBBS delivered the judgment of the court. Justices McBride and Ellis concurred in the judgment.
ORDER
¶1 Held: The circuit court did not abuse its discretion in granting defendant-appellee’s petition to vacate a default judgment pursuant to section 2-1401 of the Code of Civil Procedure.
¶2 This case comes before us following the circuit court’s grant of defendant-appellee’s petition to vacate a default judgment pursuant to section 2-1401 of the Code of Civil Procedure
(735 ILCS 5/2-1401 (West 2020)). On May 5, 2020, plaintiff, Amanda Nadhir, filed a three-count
No. 1-23-0287 verified complaint for breach of contract, negligence, and detinue in the circuit court of Cook
County against defendant, Tristate Restore, LLC (Tristate). 1 The complaint alleged that, following a fire in plaintiff’s condominium building, plaintiff suffered extensive water damage to her property. Plaintiff subsequently retained Tristate to remove her remaining property for storage at a safe location in order to further salvage any property or help her submit claims to her insurance provider. However, according to plaintiff, Tristate mislocated a substantial amount of her property and has since returned only a small percentage of her items.
¶3 Following service of the summons and complaint, Tristate retained an attorney and filed an appearance. However, in October 2021, Tristate’s counsel withdrew from the case and Tristate was ordered to retain new representation by November 18, 2021. Tristate did not retain counsel and did not file a pro se appearance. About five months later, on April 25, 2022, plaintiff filed a
motion for default judgment and asserted compensatory damages in the amount of $431,868.42, as well as $132,967.08 in attorney fees and $706 in costs. On May 9, 2022, the circuit court granted the motion.
¶4 On July 27, 2022, Tristate, by new counsel, filed an appearance and a section 2-1401
petition to vacate the May 9 default judgment, arguing therein that it had meritorious defenses and it had diligently filed the petition and followed the underlying proceedings. Tristate further contended that equitable circumstances required vacating the judgment due to plaintiff’s failure to
provide Tristate with notice of the ongoing proceedings, the motion for default judgment, and the entered order. Following briefing and oral argument, the circuit court granted the petition.
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¶5 On appeal, plaintiff argues that the circuit court abused its discretion in vacating the default judgment because Tristate did not exercise due diligence in the underlying action and that there were no “extraordinary circumstances” that justified vacatur. For the following reasons, we affirm.
¶6 I. BACKGROUND
¶7 A. Factual Background
¶8 The facts as stated herein are derived from the record, namely the verified complaint, its exhibits, the case filings, and the parties’ briefing on the contested petition. We further note that the facts underlying the petition are fiercely contested.
¶9 Plaintiff is a resident of Chicago, Illinois, and owns a condominium unit located at 1133 S.
Wabash Avenue. Tristate is a registered corporation principally doing business in Chicago. On
July 4, 2020, a fire occurred at plaintiff’s condominium building, which resulted in water damage to many units in the building, including plaintiff’s. The condominium’s homeowner association
subsequently retained Tristate for “restoration, mitigation, content manipulation, and/or reconstruction services,” and further urged other individual unit owners to hire the company for the same services. In reliance on this advice, plaintiff hired Tristate to restore her unit to its pre-
loss condition through a “Restoration Agreement and Assignment of Insurance Proceeds” (the contract), which was signed by her on July 9, 2020.
¶ 10 Following the contract’s signing, Tristate began work on plaintiff’s unit, which included creating an estimate for the costs of restoration, which it estimated to be at $88,254.14. Tristate
also removed the contents of plaintiff’s home over the course of multiple days, and placed the items for storage at Tristate’s warehouse. Plaintiff took time off from her job to assist with such efforts. During the process of removing her items, plaintiff observed that Tristate did not take written inventory of her belongings.
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¶ 11 In November 2020, four months after the contract’s signing, Tristate informed plaintiff that
it could not locate all of her belongings. Tristate’s managing partner, Richard Greenwood, promised to schedule a call with plaintiff from the company’s warehouse to discuss the details of the situation. Tristate also requested that plaintiff provide the company with an inventory sheet of her belongings. Plaintiff asked the company to put this request in writing, which it did not do.
¶ 12 On November 12, 2020, plaintiff informed Tristate via e-mail that she was terminating the contract based on Tristate’s failure to perform. Plaintiff further demanded that Tristate immediately return her remaining belongings and refund the $23,693.91 of which her insurance
provider had already paid to Tristate. On November 18, 2020, a Tristate employee, Thomas Herbst, responded to plaintiff via text message, indicating that the company had “a lot to go through” and requested plaintiff to provide further information as to her belongings and her original estimate.
¶ 13 On November 24, 2020, Tristate provided plaintiff with a document purporting to serve as an inventory report for her locatable and salvageable property. According to plaintiff, the inventory sheet was inaccurate, and did not include a full accounting of property that had been removed from her unit. Tristate also told plaintiff that some of her items had gone “missing” and had possibly been stolen by a company employee, and that it had filed a police report to document the incident.
Subsequently, plaintiff also filed a police report based on this information.
¶ 14 On December 1, 2020, plaintiff e-mailed Tristate and requested a written release from the contract, return of her remaining belongings, and to transfer any orders that Tristate had placed on plaintiff’s behalf for materials, appliances, and work done on the unit. Plaintiff further indicated that Tristate had already been reimbursed for such purchases by her insurer.
¶ 15 On December 3, 2020, Tristate, through Richard Greenwood, responded to plaintiff’s request for outstanding items via e-mail. Greenwood acknowledged the parties’ joint interest to
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resolve the matter, but indicated that there were a “few critical items” that needed resolution, including a review of the payments made by plaintiff’s insurer to Tristate. With regard to plaintiff’s outstanding items, Tristate reiterated its request for plaintiff to confirm inventory of certain items.
¶ 16 On December 8, 2020, plaintiff’s insurer, Farmer’s Insurance Company, sent communications to Tristate concerning the estimate and reports originally submitted by Tristate
for work already completed. On December 9, 2020, counsel for plaintiff also e-mailed Tristate, seeking return of plaintiff’s remaining personal property, as well as Tristate’s release of plaintiff from the contract.
¶ 17 On December 15, 2020, Tristate responded to plaintiff’s request through Adella Deacon of Sable Law Group, who indicated that she represented the company. Deacon stated that Tristate had submitted an invoice to plaintiff’s insurer. Deacon further noted that plaintiff had failed to respond to Tristate’s request to confirm the items she claimed to be missing. Further emails were exchanged between the parties concerning these subjects throughout December 2021.
¶ 18 On January 12, 2021, plaintiff’s insurer sent Tristate a “revised mitigation estimate.” It
further indicated that Tristate had been overpaid for plaintiff’s claim. On January 27, 2021, plaintiff’s counsel emailed Tristate, also indicating that its insurer believed that Tristate had
“already received more in payments than it [was] entitled to receive and that no further payments
[were] warranted.” Plaintiff’s counsel sent another e-mail to that effect on February 1, 2021. On
February 2, 2021, Tristate, through Deacon, responded to plaintiff’s counsel via e-mail, and asserted that plaintiff’s insurer’s assessment of the claim was “incomplete and not consistent with the services provided,” and thus sought to further supplement the claim with more documentation.
¶ 19 Throughout February of 2021, plaintiff’s counsel sent multiple e-mails to Tristate’s counsel seeking return of plaintiff’s remaining items. Notably, in e-mails exchanged in early February, 230291
No. 1-23-0287 plaintiff’s counsel and Tristate’s counsel discussed whether Tristate still believed that plaintiff’s property had been stolen. Tristate’s counsel was adamant that it could not verify any inventory without plaintiff’s cooperation.
¶ 20 On April 5, 2021, Tristate delivered 35 boxes of plaintiff’s belongings to her, which plaintiff later claimed were still wet, unclean, and of little value. Plaintiff also claimed that approximately over $200,000 worth of property was still missing, and that Tristate had also failed to return any of the water-damaged belongings.
¶ 21 B. Procedural History
¶ 22 1. Complaint and Tristate’s First Attorney’s Withdrawal
¶ 23 On May 5, 2021, plaintiff filed her three-count verified complaint, which sought damages, attorney fees, costs, and interest. [2] Count I alleged breach of contract, count II alleged negligence, and count III alleged detinue for Tristate’s continued wrongful possession of plaintiff’s property and further sought the return and assembly of all remaining items. Plaintiff further alleged that her unit was still uninhabitable and that she was close to exhausting her insurance policy without having restored her home. Plaintiff estimated her damages to be “in excess of $200,000,” but also alleged it to exceed $335,000 in other parts of the complaint. In support of her claims, plaintiff attached, among other exhibits, her contract with Tristate, which included at least one contact name for the company, specifically “Ryan Gibbons”; an address for the business and at least two company e-mail addresses; various inventory lists; and emails to Richard Greenwood.
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¶ 24 On June 21, 2021, an appearance was filed on behalf of Tristate. The attorney of record was listed as “Cara Lindo” of the Sable Law Group. [3] However, on September 3, 2021, Adella
Deacon, also of the Sable Law Group, filed a motion to withdraw as counsel based on
“irreconcilable differences.” The motion indicated that Deacon had sent both electronic and written notice of its withdrawal to Tristate by certified mail to its last known address, and had specifically addressed the notice to Richard Greenwood, Tristate’s managing partner.
¶ 25 On October 21, 2021, the circuit court entered a written order granting the motion to
withdraw. Therein, the order stated that Deacon had provided proof of service of her motion, and that Tristate was to retain new counsel by November 18, 2021. The matter was set for status to
December 9, 2021, over Zoom.[4]
¶ 26 On December 14, 2021, a status was held and the court entered a written order. The order did not indicate whether Tristate had appeared. However, the order stated that if Tristate did not retain new counsel by January 13, 2022, plaintiff was granted leave to file a motion for default
judgment. The matter was continued to January 13 for status, and included instructions for the parties to appear over Zoom.[5]
¶ 27 On March 1, 2022, a status was held and the court entered a written order. Again, the order did not specify whether Tristate had appeared. The order stated that plaintiff was granted leave to
file a motion for summary judgment by April 4, 2022. The order also expressly provided that the motion was to be served on Tristate via regular and certified mail. Finally, the order stated that the 230293
No. 1-23-0287 case was continued to April 25, 2022, and again allowed for the parties to appear either in-person or over Zoom.
¶ 28 On April 5, 2022, plaintiff filed a “motion to set a hearing.” Therein, the plaintiff stated that at the previous March 1 court date, plaintiff’s counsel had mistakenly informed the court that
Tristate had filed an answer to the complaint, but that upon further review, it had not. Plaintiff’s counsel indicated that a motion for default judgment was now appropriate, and thus filed a motion to re-set a status based on the instructions of “Judge Wilson’s clerk” to determine “next steps.”
¶ 29 On April 11, 2022, the court entered a written order. There was again no indication as to whether Tristate attended the proceeding. Therein, the order stated that Tristate had been
“personally served and [had] filed an appearance, but [had] not answered” the complaint. It further
stated that Tristate had “not hired new counsel, despite having six months to do so[.]” As such, plaintiff was given leave to file a motion for default judgment by April 25, 2022, with a hearing to be held on May 9, 2022. Notably, in contrast to the order detailing the potential filing of a motion
for summary judgment, the April 11 order did not contain an express directive that the motion for default judgment also be served upon Tristate via regular or certified mail.
¶ 30 2. Motion for Default Judgment
¶ 31 On April 25, 2022, plaintiff filed a motion for default judgment against Tristate pursuant to section 2-1301(d) of the Code of Civil Procedure (735 ILCS 5/2-1301(d) (West 2020)). 6
Therein, plaintiff asserted that Tristate’s last attorney had withdrawn from the case in October
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2021 pursuant to Illinois Supreme Court Rule 13(c) (eff. Jan. [1], 2023), and had provided notice by mailing her motion to withdraw to the company. Plaintiff stated that the motion had been received by Tristate on September 22, 2021, and receipt was further confirmed by Richard Greenwood over e-mail to Deacon on October 20, 2021. Plaintiff asserted that Tristate had thereafter “violated two
court orders requiring” it to obtain new counsel, failed to appear at the last three status hearings, had not communicated with opposing counsel, and failed to file an appearance or a responsive pleading in the case for over 10 months.
¶ 32 3. Circuit Court Ruling
¶ 33 On May 9, 2022, the court entered a written ruling on plaintiff’s motion for default
judgment. Therein, the court granted judgment to plaintiff “on all counts” and relief requested in the verified complaint. The order further indicated that the court had conducted a prove-up hearing
that same day, and as such granted plaintiff damages and costs, including $431,868.42 in compensatory damages and $706 in costs, for a total of $432,574.42. The order further indicated
that there was “no just reason to delay the enforcement or appeal of this judgment order.” On or about June 2022, plaintiff submitted a claim with Berkeley Insurance, Tristate’s insurance provider. [7]
¶ 34 4. Tristate’s Section 2-1401 Petition
¶ 35 On July 27, 2022, Tristate filed an appearance and jury demand through new counsel, specifically the firm of Maron Marvel Bradley Anderson & Tardy LLC. Tristate also filed a
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No. 1-23-0287 petition to vacate the default judgment pursuant to section 2-1401, which was supported by numerous exhibits, including the affidavit of Richard Greenwood. [8]
¶ 36 First, Tristate argued that it had “extensive meritorious defenses” to both its liability and the damages award. Tristate pointed out that the default order failed to apportion damages between the three different causes of action outlined in the complaint, which all suffered from their own deficiencies. With regard to the breach of contract claim, Tristate argued that the parties’ contract provided for liquidated damages, and that the default order did not indicate that the damages were tied to that provision. As to the negligence claim, Tristate contended that plaintiff could not recover damages pursuant to the “Moorman” or “economic loss doctrine” as defined by the Illinois
Supreme Court in Moorman Manufacturing Co. v. National Tank Co., 91 Ill. 2d 69 (1982). Third, Tristate argued that the detinue claim was no longer actionable at law pursuant to L & LC Trucking
Co. v. Jack Freeman Trucking Co., 36 Ill. App. 3d 186 (1976). Even assuming that it was, Tristate
continued, damages could only be awarded based on the “rental value of the chattel during the period of wrongful detention,” which was not articulated in the damages award.
¶ 37 Tristate also challenged the overall amount of the damages in its brief and by Greenwood’s affidavit. Tristate admitted that, as a result of third-party criminal activity at one of its storage facilities, some of plaintiff’s belongings had been stolen and various authorities were still investigating the crime. In support of this contention, Tristate attached a copy of a police report
from the Melrose Park Police Department dated May 5, 2021. However, Tristate continued, plaintiff’s total damages were still “highly contested.” Tristate asserted that plaintiff’s insurer had