In re Marriage of Harnack
2014 IL App (1st) 121424
Ill. App. Ct.2015Background
- Pamela Harnack filed for dissolution of marriage against Steve Fanady; Fanady ceased meaningful participation, was defaulted, and a prove-up hearing produced a final dissolution judgment.
- The court found substantial marital assets, including CBOE Holdings stock derived from CBOE seats; it awarded Harnack 140,000 shares (handwritten to 120,000 to be delivered immediately) and ordered 40,000 shares placed in escrow pending resolution of a separate claim by Jerome Israelov.
- Israelov had sued Fanady/Alpha claiming a 50% interest (40,000 shares) in one exchanged CBOE seat (ISRFAN partnership); his chancery action was consolidated for convenience with the divorce but remained a separate case.
- After the dissolution judgment, CBOE Holdings and Computershare interpleaded, saying only 120,000 shares remained in custody because Fanady had already withdrawn/transferred other shares; they sought guidance on transfers.
- Eight months after entry of the final dissolution judgment, Fanady moved to vacate under 735 ILCS 5/2-1301(e) and alternatively under 2-1401(a); the trial court denied both motions, finding the 2-1301(e) motion untimely and the 2-1401 petition lacking due diligence and adequate supporting evidence.
- On appeal the court affirmed denial of both motions but remanded only to clarify which 40,000 shares were intended for escrow and how many shares should be transferred to comply with the judgment.
Issues
| Issue | Plaintiff's Argument (Harnack) | Defendant's Argument (Fanady) | Held |
|---|---|---|---|
| Whether relief under 735 ILCS 5/2-1301(e) was available to vacate the default judgment | 2-1301(e) relief inapplicable because judgment was final and Fanady’s motion was untimely | Motion should set aside default judgment; alleged procedural and fairness defects | Judgment was final; 2-1301(e) motion filed >30 days after entry and thus untimely; trial court correctly denied relief (affirmed) |
| Whether section 2-1301(e) should be applied even if timely (discretion to vacate) | Vacatur not appropriate because Fanady failed to participate and was at fault | Even if discretionary, vacatur required because judgment allegedly unfair and stock interests mischaracterized | Court would still have denied under 2-1301(e): Fanady’s prolonged nonparticipation and misconduct made him the architect of his predicament; denying relief did not abuse discretion (affirmed) |
| Whether Fanady’s 2-1401(a) petition established meritorious defense and due diligence to reopen final judgment | Judgment overstated marital assets and failed to account for partners’ interests in stock; merits and fairness require vacatur | No admissible evidence or affidavits supporting meritorious defense; no due diligence in presenting defenses or filing 2-1401 | Petition lacked required evidentiary support for meritorious defense and failed due-diligence requirement; no extraordinary circumstances to excuse diligence; denial affirmed |
| Whether the dissolution judgment’s stock-transfer/escrow provision is ambiguous and requires clarification | Harnack’s position shifted: either 40,000 escrowed from her awarded 120,000 (leaving her 80,000) or 40,000 escrowed from total shares leaving her 120,000 | Fanady and the share custodians interpret escrow to come from the total shares so Harnack receives 120,000 now and 40,000 into escrow (total 160,000 transfer) | Affirmed denial of vacatur but remanded for trial court to clarify which 40,000 shares were to be escrowed and the exact transfers required to effectuate the judgment |
Key Cases Cited
- Stotlar Drug Co. v. Marlow, 239 Ill. App. 3d 726 (discussion of 2-1301(e) timing)
- Jackson v. Hooker, 397 Ill. App. 3d 614 (interlocutory default orders vs. final judgments)
- In re Marriage of Leopando, 96 Ill. 2d 114 (dissolution petition as single claim; ancillary issues)
- In re Haley D., 2011 IL 110886 (finality standard for judgments)
- Mann v. Upjohn Co., 324 Ill. App. 3d 367 (factors in deciding vacatur under 2-1301(e))
- Jackson v. Bailey, 384 Ill. App. 3d 546 (factors: diligence, meritorious defense, hardship)
- Smith v. Airoom, Inc., 114 Ill. 2d 209 (elements required for relief under section 2-1401)
- People v. Vincent, 226 Ill. 2d 1 (limits on viewing 2-1401 as purely equitable)
- Blazyk v. Daman Express, Inc., 406 Ill. App. 3d 203 (post-30-day relief under 2-1401)
- Rockford Financial Systems v. Borgetti, 403 Ill. App. 3d 321 (equitable consideration in 2-1401 matters)