Appeals court upholds $1.2 million default judgment, says parties can't assume lawyers doing job

By Dan Churney | Aug 12, 2016

A Chicago appeals panel has affirmed a lower court's ruling litigants can’t rely on their attorney to keep them abreast of their case, but must instead keep tabs themselves or face the consequences – potentially including costly default judgments. 

The Aug. 9 ruling was authored by Justice Michael Hyman of the Illinois First District Appellate Court, with concurrence from justices Daniel Pierce and P. Scott Neville. The ruling upheld a decision by Cook County Circuit Judge Kathleen Pantle. 

In 2008, David James sued his former employer, Building Maintenance Systems, of northwest suburban Barrington, alleging the company committed wage violations and converted property. Building Maintenance Systems countered with a suit against James, his wife and two of his companies, alleging he left BMS, formed competing companies that took business from BMS and misused BMS employees and property for his own use. 

Discovery proceedings began, with James and his co-defendants repeatedly missing deadlines to turn over material to BMS. When James did respond, the court found he and the other defendants fell short for several reasons, including that they failed to provide "substantive" information and materials were wrongly labeled. 

The court ordered the defendants to try again within three weeks. Several days after the new deadline, defendants again furnished inadequate materials, according to the suit. BMS then asked the court to sanction defendants by tossing their suit against BMS and commanding defendants to pay BMS' legal costs. At this point, defendants’ attorney withdrew and new counsel came aboard. 

The court gave defendants more time to satisfy the discovery request, but also ordered defendants to cover BMS' costs, warning that further delays would result in full sanctions. However, defendants again failed to comply, prompting BMS to again ask for the dismissal of defendants' case and for defendants to cover BMS' additional legal bills. 

The court gave defendants one last chance to comply with discovery, but to no avail. Circuit Judge Kathleen Pantle then found defendants in default, because they did not exercise due diligence, and told them to pick up the rest of BMS' legal tab. A hearing was held in April 2012, at which BMS argued for damages, with neither defendants nor their counsel showing. Pantle directed defendants to cough up $1.2 million in damages and BMS began proceedings to determine defendants’ assets.

Defendants reacted a month later by filing a motion to vacate the default judgment, but without following proper procedure. As a consequence, the motion was not heard. Defendants did not return to court to proceed properly until April 2014. They blamed their attorneys for their problems, saying despite their effort to monitor the case, they allegedly had not been kept informed of discovery proceedings and later, did not know they were found in default. 

BMS objected, and Judge Pantle dismissed the motion. Defendants appealed. 

Appellate Justice Hyman had no sympathy for defendants, noting they repeatedly failed to fulfill discovery requirements, then, after learning of the default judgment, waited almost two more years before taking action. 

"According to an ancient maxim, the law helps those who are watchful and not those that are sleepy, negligent, or (we add) derelict in regard to discovery," Hyman observed. 

"Even if, as defendants contend, their attorney kept them uninformed, it was incumbent on them to be aware of what was happening in their case and they cannot rely on any neglect by their attorney as an excuse for failing to exercise due diligence,” Hyman pointed out. “Generally, litigants are bound by the mistakes or negligence of their counsel.”

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