                                        2016 IL App (1st) 160778

                                                                                FOURTH DIVISION
                                                                                   January 5, 2017

                                             No. 1-16-0778




                                             IN THE
                                  APPELLATE COURT OF ILLINOIS
                                    FIRST JUDICIAL DISTRICT


      R&J CONSTRUCTION SUPPLY COMPANY, INC.,                             )   Appeal from the
      n/k/a CCS Contractor Equipment & Supply Company,                   )   Circuit Court of
                                                                         )   Cook County.
                    Plaintiff-Appellant,                                 )
                                                                         )   No. 08 MI 178352
      v.                                                                 )
                                                                         )
      GREGORY ADAMUSIK, d/b/a United Masonry &                           )   Honorable
      Tuckpointing, and EDMAR CORPORATION                                )   Daniel Kubasiak,
                                                                         )   Judge Presiding.
      Defendants-Appellees.


            JUSTICE BURKE delivered the judgment of the court, with opinion.
            Presiding Justice Ellis and Justice McBride concurred in the judgment and opinion.

                                               OPINION

¶1                                         I. BACKGROUND

¶2          On October 1, 2008, plaintiff, R&J Construction Supply Company, Inc., filed a complaint

     against Gregory Adamusik, d/b/a United Masonry & Tuckpointing, alleging breach of contract.

     Plaintiff obtained a default judgment against Adamusik in the amount of $9395.84 plus costs.

¶3          At plaintiff’s request, the circuit court revived the judgment on June 23, 2015. On June

     26, 2015, plaintiff issued a third-party citation to discover assets (CDA) to appellee, Edmar

     Corporation, in order to recoup any funds owed to Adamusik/United Masonry from Edmar. The
     1-16-0778


     third-party citation was served on Edmar on July 2, 2015. Edmar did not answer the CDA or

     appear on or before the return date. The court entered a conditional judgment against Edmar on

     July 24, 2015.

¶4          On July 28, 2015, Plaintiff issued and served a summons to confirm the conditional

     judgment on Edmar. On August 25, 2015, following Edmar’s failure to answer or appear again,

     the trial court confirmed the conditional judgment and entered a final judgment against Edmar in

     the amount of the Adamusik judgment of $9395.84 plus costs and interest. On September 30,

     2015, plaintiff issued a direct citation to Edmar—no longer a third-party citation—to discover

     assets to satisfy the judgment.

¶5          On the citation return date of October 19, 2015, Edmar’s counsel appeared and the court

     granted counsel’s request for time to review the file. On November 23, 2015, Edmar filed a

     petition to vacate the judgment entered against it pursuant to section 2-1401 of the Code of Civil

     Procedure (Code) (735 ILCS 5/2-1401 (West 2010)) arguing that plaintiff failed to establish a

     basis to issue its initial third-party citation to Edmar and that Edmar had no relationship with

     plaintiff or Adamusik. Edmar argued that the citation was not properly filed and any judgment

     based on the improperly filed citation should be vacated. After a hearing, the trial court granted

     the section 2-1401 petition, vacated the conditional and final judgments, and dismissed the

     citation against Edmar. Plaintiff now appeals.

¶6                                           II. ANALYSIS

¶7          In Illinois, civil judgments are enforced through supplementary proceedings pursuant to

     section 2-1402 of the Code (735 ILCS 5/2-1402 (West 2014)). The statute authorizes plaintiff to

     attempt to find any assets of Adamusik that may be held by third parties. Section 2-1402(a) of

     the statute, authorizing the citation action, provides a mechanism by which a judgment creditor


                                                      -2-
     1-16-0778


     may initiate supplementary proceedings to discover the assets of a judgment debtor or third

     party, and apply those assets to satisfy the judgment. 735 ILCS 5/2-1402(a) (West 2014);

     Ericksen v. Rush-Presbyterian-St. Luke’s Medical Center, 289 Ill. App. 3d 159, 166 (1997),

     appeal denied, 174 Ill. 2d 559 (1997) (table); Schak v. Blom, 334 Ill. App. 3d 129, 132-33

     (2002). The supplementary proceeding is initiated by the service of a citation to discover assets.

     735 ILCS 5/2-1402(a) (West 2014).

¶8          The court may compel any person cited, other than the judgment debtor, to turn over any

     assets that the third party may be holding or in possession of that belong to the judgment debtor,

     such as wages or payments due. These assets can then be applied in satisfaction of the judgment,

     in whole or in part. 735 ILCS 5/2-1402(a), (c) (West 2014); 735 ILCS 5/12-706(a) (West 2010).

     If the third-party citation respondent fails to appear and answer, a court may enter a conditional

     judgment against the third party for the amount due from the judgment debtor. Once a

     conditional judgment has been entered against a third party, a summons to confirm the

     conditional judgment may issue against the third party, commanding the third party to show

     cause why the judgment should not be made final against it. If the third party again fails to

     respond after being served with a summons to confirm the conditional judgment, the court shall

     confirm the judgment in the amount owed to the plaintiff and award costs. 735 ILCS 5/2-1402

     (West 2014).

¶9          If Edmar had immediately responded to any of the citations with a motion to quash or a

     response that they were not holding assets, the trial court could have had a hearing on that issue,

     or dismissed the citation. That is not what occurred in this case. Edmar did not file a response, an

     answer, or a motion to quash the citation. Edmar was served with the citation and ignored it.

     Edmar was then served with the conditional judgment for failure to respond to the citation, and


                                                    -3-
       1-16-0778


       ignored that as well. Edmar was served with the summons to confirm the conditional judgment

       and again ignored that, which resulted in a final judgment being entered against Edmar. Once the

       judgment was made final against Edmar, plaintiff served Edmar, no longer with the third-party

       citation, but with a direct citation. If Edmar had contested the citation at any point, any decision

       the trial court made to compel a judgment debtor to deliver up money or property in satisfaction

       of a judgment would be reviewed under an abuse of discretion standard, when the trial court

       conducted an evidentiary proceeding, heard testimony, and made findings of fact. Gonzalez v.

       Profile Sanding Equipment, Inc., 333 Ill. App. 3d 680, 692-93 (2002); cf. Dowling v. Chicago

       Options Associates, Inc., 226 Ill. 2d 277, 285 (2007) (de novo standard applies when the trial

       court heard no testimony and based its turnover decision on documentary evidence). But that did

       not happen in this case.

¶ 10          When plaintiff served Edmar with the direct citation, Edmar retained counsel by the

       return date of the citation, and counsel filed the section 2-1401 petition seeking to vacate both

       the citation and the conditional and final judgments. The hearing that the trial court conducted

       was on the propriety of the section 2-1401 petition, not the propriety of the issuance of the third-

       party citation. We review the circuit court’s ruling on a 2-1401 petition de novo. People v.

       Vincent, 226 Ill. 2d 1, 18 (2007) (“when a court enters either a judgment on the pleadings or a

       dismissal in a section 2-1401 proceeding, that order will be reviewed, on appeal, de novo”).

¶ 11          The typical section 2-1401 analysis is two-tiered: both a meritorious defense and due

       diligence must be pleaded and demonstrated. The issue of a meritorious defense is a question of

       law, and it is properly subject to summary judgment and de novo review. If the petitioner fails to

       allege the existence of a meritorious defense, the petition is properly denied, and due diligence

       need not be addressed. However, if a meritorious defense probably exists, the court must address


                                                      -4-
       1-16-0778


       the issue of due diligence. Rockford Financial Systems, Inc. v. Borgetti, 403 Ill. App. 3d 321, 327

       (2010)

¶ 12            The supreme court set out the basic standards for the granting of a section 2-1401 petition

       in Smith v. Airoom, Inc., 114 Ill. 2d 209, 220-21 (1986):

                   “[In order to prevail] under section 2-1401, the petitioner must affirmatively

                   set forth specific factual allegations supporting each of the following

                   elements: (1) the existence of a meritorious defense or claim; (2) due diligence

                   in presenting this defense or claim to the circuit court in the original action;

                   and (3) due diligence in filing the section 2-1401 petition for relief.”

                   (Emphasis added.).

¶ 13            Edmar alleged several facts in the 2-1401 petition which sufficiently established a

       meritorious defense. The registered agent/officer of Edmar Corporation, Ed Marciszewski,

       testified in his affidavit that there was no basis to even issue a third-party citation to Edmar.

       Adamusik has never worked there; they never had any business dealing with him, had never even

       heard of Adamusik, and had never been in possession of, or held any assets of, Adamusik or his

       company.

¶ 14            The judgment creditor has the burden of showing that the citation respondent has assets

       of the judgment debtor. Pelczynski v. Dolatowski, 308 Ill. App. 3d 753, 758 (1999). Before a

       judgment creditor may proceed against a third party who is not the judgment debtor, the record

       must contain some evidence that the third party possesses assets of the judgment debtor. Schak,

       334 Ill. App. 3d at 133. “The provisions of section 2-1402 are to be liberally construed, and the

       burden lies with the petitioner to show that the citation respondent possesses assets belonging to

       the judgment creditor.” Id. at 133; Borgetti, 403 Ill. App. 3d at 329.


                                                       -5-
       1-16-0778


¶ 15          Plaintiff argues that he had a sufficient basis to issue the third-party citation based upon

       several factors. At the hearing in the trial court, when asked what the basis for seeking a citation

       to Edmar Corporation was, counsel replied that he had seen Edmar trucks with Adamusik’s

       name. Plaintiff presented no other evidence of this claim such as photographs or records from the

       Secretary of State. Plaintiff’s counsel also contended that both Adamusik and Edmar were Polish

       and both did masonry work. They were both on Angie’s list for masonry work. Finally, counsel

       stated that Adamusik used the website www.masonrytuckpointing.com for his business until his

       business was dissolved in 2012. Edmar began using that domain after they incorporated in 2013.

       There were no other links between the two companies. In response, Edmar asserted that it had

       never worked with Adamusik and did not know him. This is without question an insufficient

       basis to issue a third-party citation on Edmar. The trial court had a sufficient basis on these facts

       alone to grant the section 2-1401 petition to vacate.

¶ 16          Although unnecessary at this point, we will turn to the due-diligence prong. In

       postjudgment proceedings, it is common that a third-party respondent, who does not know the

       judgment debtor, disregards the third-party citation. Only when the citation becomes a final

       judgment against the third party do they realize the consequences of their failure to respond. This

       occurrence was noted by Ed Marciszewski in his affidavit. Within 30 days of receiving the

       citation against Edmar, counsel appeared and asked for time to review what had transpired.

¶ 17   In this case, plaintiff contributed to the confusion by serving a defective third-party citation, a

       defective conditional judgment, and a defective final judgment. The citation form contains a line

       which states that the third-party respondent is to disclose if they have any funds or assets due to

       the debtor; the form has a blank to enter the debtor’s name. However, in the citation to Edmar,

       where the plaintiff was supposed to put the debtor’s name, the plaintiff put Edmar Corporation.


                                                       -6-
       1-16-0778


       The form gave all the details of the Adamusik judgment, but asked for the assets of Edmar

       Corporation. Edmar did not answer the citation or appear on or before the return date. According

       to the affidavit of Ed Marciszewski, the officer and registered agent of Edmar, he did not answer

       the citation because he did not know who Adamusik or United Masonry & Tuckpointing was. A

       conditional judgment was then entered against Edmar on July 24, 2015.

¶ 18           On July 28, 2015, plaintiff issued and served a summons to confirm the conditional

       judgment on Edmar. The summons to confirm a conditional judgment again listed all of the case

       information regarding Adamusik, but on the line requesting information regarding assets of the

       debtor, the plaintiff again filled in the blank with Edmar Corporation. Again, asking Edmar to

       disclose its own assets.

¶ 19           The significant problems with the third-party citation cannot be overlooked. The citation

       was defective on its face, and the trial court correctly granted the section 2-1401 petition.

       Although neither party raised this issue, and the trial court did not cite this as a reason for its

       ruling, the appellate court can affirm the trial court on any basis in the record on de novo review.

       See Alpha School Bus Co. v. Wagner, 391 Ill. App. 3d 722, 734 (2009).

¶ 20           Even if plaintiff had a basis for the third-party citation, the defect on the face of any of

       the citations provides a basis to find the third-party citation defective. The glaring flaw on the

       face of the document is sufficient for us to find that they did not correctly issue a third-party

       citation. Nonetheless, we find that Edmar exercised due diligence in filing the section 2-1401

       petition. Within 30 days of the citation being served on Edmar, counsel was in court seeking time

       to find out what occurred in the litigation because Edmar was in the dark regarding the identity

       of the debtor. Once counsel was apprised of how a judgment came to be entered against Edmar,

       he filed the petition to vacate.


                                                       -7-
       1-16-0778


¶ 21          Even if Edmar had not sought to address this issue as quickly as they did, equitable

       powers may require that a judgment be set aside even in the absence of due diligence by a party

       seeking section 2-1401 relief. See Salazar v. Wiley Sanders Trucking Co., 216 Ill. App. 3d 863,

       874 (1991). One of the guiding principles in the administration of section 2-1401 relief is that the

       petition invokes the equitable powers of the court, which should prevent the enforcement of a

       judgment when it would be unfair, unjust, or unconscionable. Smith, 114 Ill. 2d at 225. Here,

       there is no basis in law or equity to allow a judgment to stand against a third party that held no

       assets of the debtor, had no relationship with the debtor, and further was in receipt of a deceptive

       and defective third-party citation. Thus, we find that the circuit court did not abuse its discretion

       in granting the motion to vacate the judgment against Edmar where plaintiff issued a defective

       citation and had no reasonable basis to believe that Edmar held any assets of the judgment debtor

       Adamusik.

¶ 22                                          III. CONCLUSION

¶ 23          For the reasons stated, we affirm the judgment of the circuit court of Cook County.

¶ 24          Affirmed.




                                                       -8-
