Shipley v. Hoke
2014 IL App (4th) 130810
Ill. App. Ct.2014Background
- Shipley obtained a $3 million default judgment against C.P. Hall in asbestos claims and issued a December 2010 citation with a restraining provision.
- C.P. Hall’s officers Shine and Hoke and the Cooney law firm were involved; Shine was president/owner, Hoke a former attorney, and Cooney a major plaintiff’s firm.
- Integrity Insurance proceeds (~$16 million) were assigned to Cooney plaintiffs and later reassigned to Global for lump-sum payout, with distribution to Cooney plaintiffs.
- A June 2011 turnover order directed C.P. Hall to turn over assets; supplementary proceedings terminated six months after first appearance (June 17, 2011) under Rule 277(f).
- C.P. Hall filed for bankruptcy on June 24, 2011; enforcement motions against Hoke, Shine, and Cooney were filed in November 2011 and July 2012; the case was remanded from bankruptcy court and then contested in the trial court.
- The trial court ultimately dismissed enforcement motions against Hoke and Shine on Rule 277(f) grounds and denied personal jurisdiction over Cooney for lack of proper service, leading to consolidated appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court had subject-matter jurisdiction over enforcement motions after termination | Mootness does not strip jurisdiction; enforcement motions present justiciable matters. | Automatic termination (six months) deprives court of authority to grant relief under 2-1402(f)(1). | Subject-matter jurisdiction exists; mootness does not bar the claims. |
| Whether Hoke had personal jurisdiction over enforcement motions | Actual notice and participation suffice to confer jurisdiction. | Waiver? improper to confer jurisdiction by nonparty actions. | Hoke waived personal-jurisdiction objections by filing a quash/notice; personal jurisdiction established. |
| Whether Shine had personal jurisdiction over enforcement motions | Shine acted as CP Hall’s officer and participated in proceedings. | No formal service on Shine; cannot bind as a third party. | Shine had personal jurisdiction due to appearance and role in proceedings. |
| Whether Cooney had personal jurisdiction over enforcement motions | Actual notice suffices to bind third parties under 2-1402. | No separate citation to Cooney; no service under Rule 277(c). | No personal jurisdiction over Cooney; separate citation required; quash affirmed. |
| Whether Rule 277(f) affirmative defense barred relief | Termination does not bar the enforcement of 2-1402(f)(1). | Rule 277(f) is a defense that terminates the remedy after six months. | Affirmative defense valid; relief under 2-1402(f)(1) barred post-termination. |
Key Cases Cited
- Bank of Aspen v. Fox Cartage, Inc., 126 Ill. 2d 307 (Ill. 1989) (citation provisions and motor of restraints; mootness not jurisdictional)
- Podvinec v. Popov, 168 Ill. 2d 130 (Ill. 1995) (lien spread of record; distinction from restraint provisions; due notice required)
- Chicago Title & Trust Co. v. Czubak, 53 Ill. App. 3d 193 (Ill. App. 1977) (contempt when underlying proceedings terminated; collateral consequences)
- O’Connell v. Pharmaco, Inc., 143 Ill. App. 3d 1061 (Ill. App. 1986) (corporate-officer personal jurisdiction via notice/participation)
- Kirchheimer Brothers Co. v. Jewelry Mine, Ltd., 100 Ill. App. 3d 360 (Ill. App. 1981) (purpose of Rule 277(f) to prevent harassment; extensions allowed)
- Belleville Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc., 199 Ill. 2d 325 (Ill. 2002) (subject-matter jurisdiction and justiciable matters; non-abstract disputes)
- Podvinec v. Popov, 168 Ill. 2d 130 (Ill. 1995) (as above)