It has been a long, hard struggle, but you have won your case and your client has been vindicated. Your client is happy about the victory, but you feel that the court may have made some errors and that your client is entitled to a greater award. Although you're beaming with pride over a job well done, you and your client are assessing whether you are going to move to modify, amend, seek reconsideration of, or appeal, the decision.
Making matters more interesting is the fact that defense counsel has advised you that his client would like to pay your client the full amount of the judgment. Defense counsel also advises you that his client has not made up its mind as to what, if anything, it intends to do with regard to modifying, clarifying, seeking reconsideration of, or appealing, the judgment.
Because the Defendant has offered to pay, your client thinks that he can gleefully and unconditionally take the Defendant's money and decide later on what he will do. Your client is tempted to take the money being offered by the Defendant, and move on with victory, cash, and a possible appeal, in hand.
But should you advise your client to take the money? Are there any adverse consequences? The answer, it seems, is not as simple as one would think, and the decision to take the money may have significant adverse consequences.
The potentially adverse consequences of accepting the money stem from the little known, and infrequently invoked, "release of errors" doctrine. Under that doctrine, "a litigant may not attack a decree if, by reason of his enjoying the benefits of the decree, the opposing party would be placed at a distinct disadvantage upon reversal." In re Marriage of Pitulla, 202 Ill. App. 3d 103, 110-11, 559 N.E.2d 819, 826 (1st Dist. 1990). [A majority of courts that have addressed the "release of errors" doctrine have done so in divorce proceedings. See In re Marriage of Kusper, 195 Ill. App. 3d 494, 552 N.E.2d 1023 (1st Dist. 1990); Sullivan v. Sullivan, 68 Ill. App. 3d 242, 385 N.E.2d 860 (5th Dist. 1979); Kissen v. Kissen, 29 Ill. App. 2d 126, 172 N.E.2d 635 (1st Dist. 1971).] It would seem that, under the release of errors doctrine, if your client accepts the benefit of the award and accepts payment from the Defendant, your client may not seek to challenge any errors in the underlying decision which was the basis of the award.
Apparently with an eye toward limiting the significant impact that the "release of errors" doctrine can have on litigants, Illinois courts have created two important exceptions / limitations to this doctrine; to wit, "distinct disadvantage" and "exchange of interests".
Under the "distinct disadvantage" limitation, the court attempts to make the determination as to whether the judgment debtor would be placed at a "distinct disadvantage" if the judgment, which she has paid, was appealed and reversed on appeal. Under this analysis, the key issue is whether the judgment debtor would be "disadvantaged" by the judgment creditor's acceptance of the monies arising out of the judgment.
The court in Ames v. Sayler, 267 Ill. App. 3d 672, 642 N.E.2d 1340 (1st Dist. 1994), engaged in an analysis of the "distinct disadvantage" limitation. In Ames, the defendants argued that the plaintiff's appeal should have been dismissed because the plaintiff accepted $4,600, which was the award in the underlying suit. The court rejected this argument and held that the "release of errors" doctrine did not apply because the defendant was not disadvantaged as a result of the defendant's payment of $4,600 to the plaintiff. Accordingly, the defendant's motion to dismiss the appeal was denied. [See also Gold v. Rader, 201 Ill. App. 3d 775, 781, 559 N.E.2d 210, 214 (1st Dist. 1990) ("[t]he general rule in Illinois is that a litigant cannot attack a decree after enjoying its benefits, if, were the judgment reversed on appeal, the opposing party would be at a disadvantage."); Mitchell v. Atwood Enterprises, 253 Ill. App. 3d 475, 624 N.E.2d 878 (2d Dist. 1993) (the court rejected the application of the "release of errors" doctrine because there was no "distinct disadvantage").]
In addition to the "distinct disadvantage" limitation discussed above, courts have also refused to apply the "release of errors" doctrine based on the "exchange of interest" exception. Under this exception, the "release of errors" doctrine will not apply if the judgment debtor received something in exchange (or in return) for the payment of the judgment. Typically, this "limitation" occurs in a proceeding involving payment in exchange for property (usually title to property).
For example, in In re Marriage of Hobbs, 110 Ill. App. 3d 451, 442 N.E.2d 629 (3d Dist. 1982), the appellate court refused to apply the "release of errors" doctrine. In Hobbs, the defendant received fee simple title after the plaintiff executed a quitclaim deed transferring the plaintiff's interest to the defendant in return for payment to the plaintiff by the defendant. The Hobbs court reasoned that the receipt of cash in exchange for an interest in property held by the party receiving the cash resulted in no benefit being conferred; rather, there was merely an exchange of interests and the release of errors doctrine would not be applied. Id. at 453, 442 N.E.2d at 630.
[The Hobbs court followed the reasoning of the court in Royster v. Hammel, 51 Ill. App. 3d 710, 9 Ill.Dec. 278, 366 N.E.2d 535 (5th Dist. 1977), where the court noted that the appellant's delivery of a quitclaim deed and acceptance of $12,500 represented a transfer of her joint interest in the property and the transaction rather than being of any disadvantage to the appellee was advantageous to him.]
Given the above analysis, you may have some trepidation about advising your client to accept he Defendant's offer to pay the judgment amount - especially if you have any ideas of, or interest in, modifying, amending, or appealing the court's decision.
One of the premises of the "release of errors" doctrine is that the judgment debtor is under compulsion to pay the judgment given the order of the court. However, typically, the court's order will not compel the judgment creditor to accept the payment of the judgment. One way to potentially avoid the impact and ramifications of the "release of errors" doctrine is the have the court "compel" you (the judgment creditor) to accept the judgment debtor's tender of payment. The judgment debtor may have an incentive to compel you to accept payment if, for no other reason, he is attempting to avoid the accrual of post-judgment interest. Arguably, if the judgment creditor is compelled to accept payment, he will be on the same ground as the judgment debtor who is compelled to tender payment.
Another possible advantage to this approach is that the judgment debtor's attempts to invoke the "release of errors" doctrine may not be very well taken if the judgment debtor had asked the court to compel the judgment creditor to accept payment of the judgment.
The full impact and the finer nuances of the "release of errors" doctrine simply cannot be addressed in this brief discussion. Nonetheless, the purpose of the discussion is to alert you to the existence of the doctrine and its potential impact on your case.
Historically, the courts and the Legislature have endeavored to reduce the volume of litigation in the courts. This has been done by encouraging parties to attempt to resolve their differences short of litigation, trial, and the appeal process. Notwithstanding this general and historical trend toward finding ways to streamline the process and reduce the litigation workload of the courts, the "release of errors" doctrine may have the opposite effect. Hopefully, this little-understood doctrine will be re-visited by the courts and the legislature with a scrutinizing eye to see exactly what impact the doctrine has on bringing to fruition the litigation and appeal processes.
| Contact: | William Howard |
