Three Recent Court Decisions

This month we briefly examine three recent decisions, which address three intriguing questions:

(a)        In a combined bench and jury trial, if the judge and jury reach contrary conclusions on the main factual issue, does one control the other?

(b)        Must a court always honor the law of the case, even when it believes an earlier ruling was palpably wrong?

(c)        Are there any circumstances in which a petitioner seeking relief from a dismissal for want of prosecution can show the exercise of due diligence under Section 2-1401 of the Code of Civil Procedure, despite a six-month delay in requesting such relief?

First, consider the interesting controversy resulting from a concurrent bench and jury trial of statutory and common law fraud claims arising out of the sale of a mold- ridden house. In Werderman v. Liberty Ventures LLC, 2006 WL 3026015 (2d Dist. Oct. 19, 2006), the plaintiffs obtained a jury verdict for common law fraud, but the trial judge ruled for the defendants on the alleged violations of the Illinois Consumer Fraud and Deceptive Business Practices Act (on which there was no right to a jury trial).

Plaintiffs, no doubt hoping to transform their common law fraud verdict into something that would permit recovery of fees under the Consumer Fraud Act, argued that the jury verdict in their favor should likewise control the outcome of the bench trial.

Not so, says the Appellate Court for the Second District. Although acknowledging that Generally, proving a common-law fraud claim also results in proving a consumer fraud claim based on the same evidence, this does not necessarily foreclose the possibility of inconsistent results. The right to a jury trial under the Illinois Constitution is not guaranteed in any action nonexistent at common law and to permit the jury verdict to control here would be contrary to the General Assembly's intention in passing the Consumer Fraud Act.

Indeed, inconsistent results between the two independent finders of fact are expected in such a system. (Emphasis added.)

Thus, the plaintiffs' jury verdict stands, but so does the defendants' judgment following bench trial of the Consumer Fraud Act.

Second, consider the question whether a court must always honor the law of the case. In Norris v. National Union Fire Insurance Co., 2006 WL 2956339 (1st Dist. Oct. 17, 2006), a lawsuit had generated multiple appeals.

The law of the case requires that rulings in the first appeal are binding in the later appeal, and may not be revisited. There is, however, an exception where a prior ruling was palpably erroneous.

But what is palpably erroneous? Apparently, it is more than just erroneous.

In Norris, the Illinois Appellate Court for the First District was clearly troubled by the majority opinion in the first appeal, but not so much so that it could say the prior opinion was palpably erroneous.

On the second appeal, the court said, Had the judges on this panel decided the issue in the first instance, the result well might have been different. But this is the second instance, and good legal policy reasons and the factual record compel the result we reach.

The court acknowledged that no decision had explicitly defined the palpably erroneous standard, and resorted instead to the dictionary for guidance.

Referring to Black's Law Dictionary, the court said palpable was defined as easily perceptible, plain, obvious, readily visible, noticeable, patent, distinct, manifest. It went on to observe that, In A Dictionary of Modern Legal Usage, Second Edition, palpable is defined as ˜tangible, apparent."

Applying these somewhat nebulous tests to the case at hand, the court concluded that the earlier ruling was not so palpably erroneous that the later court could disregard the law of the case.

Finally, consider a dismissal for want of prosecution, followed by a six-month delay before a petition is filed seeking relief from the order under Section 2-1401 of the Code of Civil Procedure. Does this satisfy the requirement of exercising due diligence?

Conventional wisdom, and a large number of appellate decisions, lead to a conclusion that a six-month delay in requesting such relief under Section 2-1401 makes it virtually certain that the court will find the petitioner failed to exercise due diligence.

Despite the long list of cases to that effect, the Illinois Supreme Court held in Paul v. Gerald Adelman & Associates, Ltd, 2006 WL 2975592 (Ill. Oct 19, 2006), that the petitioner was diligent despite a six-month delay in presenting the petition. Rejecting a per se rule, the court explained that such a delay is not automatically too long; while it might have been too long in other cases, the circumstances of this case make it an exception.

Dr. Paul had filed two lawsuits in Cook County concerning her pension plan in 1995. She filed for bankruptcy in 1996 and the bankruptcy trustee apparently declined to pursue or abandon those cases. Her attorney stopped representing her in May 2001, when she could no longer pay attorney fees. Then, in October 2001, the Cook County cases were set for a status hearing and dismissed for want of prosecution. In March 2003, 15 months later, the bankruptcy court held that the state court suits are properly claimed as exempt and are abandoned back to the debtor. 

Meanwhile, Dr. Paul's law firm had gone out of business and its Dissolution Committee was holding the case file, claiming a lien for unpaid services. Dr. Paul's new lawyer didn't get the file from the former law firm until September 2003, six months after the claims were abandoned by the bankruptcy trustee.

The affidavit in support of the petition explained that it took six months to get the file, and the Cook County cases could not be pursued until they were abandoned by the bankruptcy trustee.

Section 2-1401 contains 30-day and 2-year deadlines, and a petitioner is required to exercise due diligence which is rarely if ever found beyond six months.

But the Supreme Court, recognizing that there is no bright-line rule for judging whether a petitioner has acted diligently, held that it must be judged by the reasonableness of petitioner's conduct.

Thus, even a long line of cases concluding six months is too long doesn't preclude the court from reaching the right result under all of the circumstances in this case.