ARDC Brings A Negligence Case Arising Out of A Failure to Vacate A Default

BEFORE THE HEARING BOARD:

Under Illinois law, if a default judgment is entered against your client, you have 30 days to file a Section 1301 Petition to Vacate the Default. If you miss the 30-day deadline, it gets much more difficult to vacate the default judgment. In this case, a lawyer failed to appear and a default was entered. She then failed to file the correct motion to vacate the default which eventually led to a judgment against the client.

The ARDC complaint does not discuss whether or not the client had any real defense to the case. This is a negligence case, pure and simple. One wonders why the ARDC would take a case of negligence, perhaps an example of a lawyer who needs a mentor, and turn it into an ethics prosecution.

The facts, as alleged by the ARDC are as follows:

1. On or about March 28, 2012, G.T. Landscaping filed a breach of contract complaint against Lawrence Tucker (“Tucker”) in the Circuit Court of Lake County. The clerk of the court assigned the matter case number 12 AR 463 and Tucker was served with the complaint and summons on July 2, 2012. The summons directed Tucker to appear in court on July 16, 2012 and informed Tucker that failure to appear may result in a judgment by default.
2. On or about July 2, 2012, Tucker contacted Respondent, who had represented Tucker in prior litigation. Respondent and Tucker agreed that Respondent would represent Tucker in his defense in case number 12 AR 463 for an agreed upon on a fee. Respondent received a retainer from Tucker that included the fee for two separate matters, including this case.
3. On July 16, 2016, Respondent did not appear for the scheduled court hearing in case number 12 AR 463, and the court entered a default judgment order in the amount of $27,409.75 against Tucker.
4. On July 16, 2012, Tucker called Respondent and asked what had occurred in court that day. Respondent told Tucker that she mistakenly thought the summons served on him on July 2, 2012, was “a thirty-day summons” and therefore had not appeared in court that day, but would remedy the matter shortly by filing an appearance in the case and filing a motion to vacate the default judgment order.
5. On July 24, 2012, Respondent sent an e-mail to Tucker about the default judgment, in which she stated the following:
As for the Lake County lawsuit, I typically like to file motions to dismiss pursuant to an affirmative defense within the 30 day summons. However, since they are being such d*cks about the whole thing, let them waste the time of filing a motion to default you. The court has no subject matter jurisdiction, and the judge cannot waive that (meaning the court will have to grant our motion). Defendants must be sued in a court of competent jurisdiction, and you are not a domiciliary of Lake County. So I’ll whip up a motion to vacate pursuant to an affirmative defense and file when I return. Remember that since my appearance is not on file in that case (yet, since I’ll do that when we file our motion) anything that gets filed will be sent to you and not me.
6. Between July 16, 2012 and August 15, 2012, the thirty day period following the entry of the default judgment, Respondent did not file a motion to vacate default judgment as permitted by section 2-1301. Between July 24, 24 2012 and September 7, 2012, Respondent took no action on behalf of Tucker in case number 12 AR 463. On September 7, 2012, G.T. Landscaping filed a citation to discover assets against Tucker, which was served on Tucker on or about October 10, 2012, and required Tucker to appear on October 16, 2012.
7. On or about October 10, 2012, Tucker telephoned Respondent about the citation to discover assets. Respondent informed Tucker that there must have been some kind of mistake and that she would remedy the situation. Respondent advised Tucker not to appear in court in case number 12 AR 463 on October 16, 2012, because she would do so. Respondent asked Tucker to “be on call” on October 16, 2012, in case his presence was requested by the judge.
8. On October 16, 2012, Respondent did not appear in court on behalf of Tucker and the court issued an order and rule to show cause. On October 24, 2012, Tucker was served with the rule to show cause, requiring him to appear in court and show cause why he should not be held in contempt on November 27, 2012.
9. On November 27, 2012, neither Respondent nor Tucker appeared in case number 12 AR 463 and the court issued a body attachment order. Later that day, after counsel for G.T. Landscaping had left the courthouse, Respondent appeared before the court in 12 AR 463, orally moved to stay the body attachment order and answer or otherwise plead within 7 days. The court granted Respondent’s oral motions.
10. On December 4, 2012, Respondent filed her written appearance in case number 12 AR 463 along with a “motion to quash and vacate” and two other motions. In the motion to quash, Respondent argued that the Lake County Court did not have jurisdiction to enter judgment against Tucker because he was not a resident of Lake County.
11. On March 8, 2013, the court entered an order in case number 12 AR 463 denying Respondent’s December 4, 2012, “motion to quash and vacate” without prejudice, on the basis that it was an improper pleading by which to pursue a post-judgment challenge. The court directed Respondent to file a proper petition to vacate pursuant to section 2-1401 no later than April 5, 2013.
12. At no time between March 8, 2013 and May 15, 2013, did Respondent file a section 2-1401 petition in case number 12 AR 463. On April 17, 2013, G.T. Landscaping caused a garnishment summons to be issued against Tucker’s bank.
13. On April 19, 2013, Tucker retained new counsel at the Garbis Law Firm. Tucker’s new attorney left a message for Respondent asking Respondent to appear at the next court date of April 24, 2013.
14. Between April 19, 2013, and May 15, 2013, Tucker’s new attorney asked Respondent to provide him with Tucker’s client file. On May 15, 2013, Respondent contacted Tucker’s new attorney and acknowledged that she had not filed the section 2-1401 petition.
15. On May 16, 2013, Tucker’s new attorney appeared in court in case number 12 AR 463 and sought leave to file the 2-1401 petition, with affidavit, which the court allowed over the objection of G.T. Landscaping. In his petition for Relief from Judgment filed May 16, 2013 as well as the Agreed Statement of Facts filed on August 28, 2013, Tucker pleads: that Tucker was diligent “in light of the negligence of [Schmidt] in presenting the defense and delays in moving to vacate the judgment.”
16. On July 8, 2013, after briefing the matter, the court entered an order in case number 12 AR 463 granting Tucker’s May 16, 2013 petition for relief from judgment under section 2-1401.
17. On July 31, 2013, G.T. Landscaping filed an appeal arguing that the trial court did not have the discretion to vacate the $27,409.75 judgment in 12 AR 463. On May 28, 2014, in case 2014 IL App (2d) 130792-U No. 2-13-0792, the Appellate Court ruled in favor of G.T. Landscaping. Specifically, the court noted that Respondent defied court orders and that Tucker should not have been surprised at Respondent’s mishandling of his case. The court also made repeated references to a lack of diligence Respondent displayed in filing a proper section 2-1401 petition and, in part, relied on the ruling of Lucas, where the court held that “generally, however, a party is bound by the mistakes or negligence of his or her attorney. R.M. Lucas Co. v. Peoples Gas and Light and Coke Co., 2011 IL App (1st), 102955, ¶ 18. The court also noted that Tucker did not establish due diligence.
18. By reason of the conduct described above, Respondent has engaged in the following misconduct:
a. failure to act with reasonable diligence in representing a client, by conduct including failing to promptly file an appearance, failing to file responsive pleadings in a timely manner and failing to take action to vacate a default order including filing a 2-1301 motion, in violation of Rule 1.3 of the Illinois Rules of Professional Conduct (2010);
b. failure to act with reasonable competence in representing a client, by conduct including advising Tucker to take no responsive action to a pleading, failing to promptly file an appearance, failing to appear in court to respond to a citation to discover assets, failing to file responsive pleadings in a timely manner and failing to take timely action in filing a section 2-1301 motion to vacate a default order, in violation of Rule 1.1. of the Illinois Rules of Professional Conduct
c. failure to keep a client reasonably informed about the status of the client’s matter, by conduct including failing to inform Tucker of the consequences of a default judgment, failing to inform Tucker that pleadings were not filed in a timely manner and failing to inform Tucker that a motion to default was not filed in a timely manner, in violation of Rule 1.4(a)(3) of the Illinois Rules of Professional Conduct (2010);
d. conduct that is prejudicial to the administration of justice, by conduct including advising Tucker to ignore court summons to appear in court, failing to appear in court and file responsive pleadings including a citation to discover assets, failing to take timely action in filing a section 2-1301 motion to vacate a default order and failing to file a petition to vacate pursuant to section 2-1401 as directed by the court in case 12 AR 463, in violation of Rule 8.4(d) of the Illinois Rules of Professional Conduct (2010).

Conclusion: if true, this is negligence. But why is this a matter for an ARDC panel to hear? This is a matter for insurance. Also, its difficult to see how this monumental error became conduct prejudicial to the administration of justice.

Please note that this is a complaint. These allegations have not been proven. We are reporting on allegations that have been made, not facts that have been found by a finder of fact.

ARDC Hearing Board Recommends Six Month Suspension For Gross Negligence

Filed October 21:

This case is essentially a gross negligence case where an attorney failed to file the necessary paperwork to complete a personal bankruptcy for a client and then refused to return the client’s unearned legal fee. The lawyer was also accused of failing to diligently work on another bankruptcy matter.
“On March 9, 2007, CitiFinancial, Inc. obtained a judgment in the amount of $16,021.46 against Autumn Park-Fortney (formerly Autumn Clark) in the case of CitiFinancial v. Autumn Clark, Sangamon County, No. 07-LM-301. On March 20, 2007, CitiFinancial recorded the judgment with the Sangamon County Recorder as a lien on Autumn’s house.
In August 2007, Respondent began representing Autumn in a Chapter 13 bankruptcy proceeding to obtain a discharge of Autumn’s debts. Autumn paid Respondent the agreed upon flat fee of $2,200 for his representation. On September 10, 2007, Respondent filed a petition, schedules and related pleadings on behalf of Autumn in the U. S. Bankruptcy Court for the Central District of Illinois. (In re Autumn Clark, No. 07-71867). Respondent included the above described judgment of CitiFinancial in Schedule F of Autumn’s bankruptcy pleadings. CitiFinancial received notice of the bankruptcy proceeding and filed a claim in the amount of $15,183.32. On January 23, 2008, the Bankruptcy Court entered an order striking CitiFinancial’s claim on the basis that it had not filed its proof of claim in compliance with the court’s general order for electronic filing. CitiFinancial did not re-file its claim. On January 20, 2010, the Bankruptcy Court entered an order granting Autumn a discharge of her debts, including CitiFinancial’s judgment, following the successful completion of her Chapter 13 plan. As a result of the discharge, Autumn was entitled to an order avoiding CitiFinancial’s judgment lien.
In July 2013, Autumn sought to refinance the mortgage on her house with CEFCU to obtain a lower interest rate and reduce her monthly mortgage payments. On July 23, 2013, Lisa Brocksieck-Smith, a loan representative at CEFCU, notified Autumn by e-mail that CitiFinancial had a lien on her house, based upon the bankruptcy judgment discussed above. Brocksieck-Smith told Autumn to contact her bankruptcy attorney and obtain a “Release Deed from CitiFinancial Services which will remove the lien from your property.” Autumn forwarded that e-mail to Respondent. (Adm. Ex. 9). Later in July 2013, Respondent agreed to represent Autumn and to file a motion in the Bankruptcy Court for an order avoiding CitiFinancial’s lien. Respondent told her that CitiFinancial would have 30 days to respond to the motion, and that he would obtain the order promptly after the 30 days expired. Respondent requested a flat fee in the amount of $600 for his work regarding the release of the lien. Autumn agreed to the fee, and subsequently paid it.
On August 13, 2013, Autumn sent an e-mail to Respondent stating that she had “called a couple of times and emailed with no response.” She also asked in the e-mail if Respondent had “moved on this at all.” Respondent replied on August 15, 2013, stating “I am very sorry, but I am very far behind. I do have you on the list, though.” (Adm. Ex. 11). On August 22, 1013, Autumn sent another e-mail to Respondent asking him for an “update soon.” (Adm. Ex. 12). On August 30, 2013, Brocksieck-Smith sent Autumn an e-mail inquiring about what Respondent had done regarding the lien. She also said “documentation is date sensitive and will expire soon, so we want to make sure the release deed is taken [care] of soon.” On the same date, Autumn forwarded Brocksieck-Smith’s e-mail to Respondent and asked him to “let me know what kind of update I can give them.” (Adm. Ex. 13). On September 10, 2013, Autumn sent Respondent an e-mail asking Respondent if he had “any news for me.” (Adm. Ex. 14).
In October 2013, Autumn received notification that CEFCU withdrew Autumn’s loan approval and closed her refinancing file because too much time had passed since she applied. (Tr. 86). Consequently, Autumn was unable to refinance her mortgage at that time.
On January 10, 2014, and on March 5, 2014, Respondent met with Autumn at his office. At both meetings, he assured Autumn that he would file a motion for an order to avoid CitiFinancial’s judgment lien within 30 days. (Tr. 28-29). However, Respondent did not file the motion to reopen Autumn’s bankruptcy case until December 19, 2014, which was after the Complaint in this matter was filed. (Tr. 29; Adm. Ex. 3 at 10). An order granting the motion to avoid CitiFinancial’s lien was entered on March 30, 2015. (Adm. Ex. 12).
Respondent testified that the motion to reopen Autumn’s bankruptcy case was “not a complicated matter.” He explained that “there seemed to be something else screaming for my attention;” “I have a hard time concentrating when there is a lot of things to do;” and “I can only concentrate and really do one thing at a time.” He also testified that he “kind of put off calling [Autumn] until I had done what she wanted me to do.” (Tr. 101-102).”
The Hearing Board found a violation of Rule 1.3.
The Hearing Board summarized the facts of the second bankruptcy matter as follows:
“In July 2013, Respondent and Carl Tuttle agreed that Respondent would represent Tuttle in a Chapter 7 Bankruptcy proceeding to obtain a discharge of Tuttle’s debts. They also agreed that Respondent would receive a fee of $850 for complete representation in the bankruptcy proceeding,
plus $300 for the filing fee and $100 for other costs. (Adm. Ex. 18). Tuttle paid Respondent the $1,250.
In August 2013, Respondent filed a petition, schedules and relating pleadings for Tuttle in the U.S. bankruptcy Court for the Central District of Illinois. (In re Carl R. Tuttle, Debtor, No. 13-71685). In December 2013, the Chapter 7 Trustee filed a “no asset” report, stating that Tuttle’s bankruptcy estate had no assets available for distribution to the claimants and that the Trustee had completed her services. (Adm. Ex. 19 at 2-3). The Trustee’s report meant that Tuttle could be granted a discharge of his debts and the case could be closed, unless unforeseen circumstances arose.
On December 30, 2013, the Clerk of the Bankruptcy Court sent notice to Tuttle and Respondent, stating that Tuttle was required to file a certification that he had completed a personal financial management course as a perquisite to obtaining a discharge of debts. (Adm. Ex. 20). On January 10,
2014, Tuttle completed the foregoing course and provided the certificate of Tuttle’s completion of the course to Respondent. However, Respondent did not file the certificate by January 14, 2014.
On January 14, 2014, the Bankruptcy Judge entered an order stating that a certificate of Tuttle’s completion of a financial management course had not been filed. The order directed that Tuttle’s case be closed without a discharge being granted and without further notice if the certificate was not filed within seven days. (Adm. Ex. 22 at 1). Notice of the foregoing order was sent to Respondent. (Adm. Ex. 22 at 4). Respondent still did not file the certificate, and on January 22, 2014, the Clerk of the Bankruptcy Court filed notice that Tuttle’s bankruptcy case had been closed without a discharge
being granted. (Adm. Ex. 2 at 5).
On January 23, 2014, after the bankruptcy case was closed, Respondent filed the certificate of Tuttle’s completion of the financial management course. On the following day, the Clerk of the Bankruptcy Court issued a notice that no action would be taken on Respondent’s filing”unless the case is reopened.” (Adm. Ex. 22 at 8). Later in January 2014 and then again in February 2014, Respondent assured Tuttle that Respondent would file a motion to reopen the bankruptcy case. Respondent did not file a motion to reopen or take any other action on behalf of Tuttle.
During the five to seven months after February 2014, Tuttle telephoned Respondent’s office and heard the answering machine say “Dees Law Office.” Tuttle left messages along with his telephone number, but Respondent “never returned the calls.” Respondent finally answered a telephone call from Tuttle. Tuttle told Respondent that he would “like to have my money back and go somewhere else.” Respondent refunded the entire $1,200 that Tuttle had paid to him. (Tr. 115-16).”
The Hearing Board found that this conduct violated Rule 1.3 (Diligence).
In sum, this is a classic case of negligence prosecuted by the ARDC.