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Doctor's Associates, Inc. v. Duree

Case Date: 03/14/2001
Court: 1st District Appellate
Docket No: 1-00-0163 Rel

THIRD DIVISION
MARCH 14, 2001

 

 

No. 1-00-0163

DOCTOR'S ASSOCIATES, INC., and
SUBWAY RESTAURANTS, INC.,

     Plaintiffs-Appellees,

          v.

DAVID M. DUREE,

     Defendants-Appellees.

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)		 Appeal from the
Circuit Court of
Cook County.




Honorable
Sophia H. Hall,
Judge Presiding.


JUSTICE CERDA delivered the opinion of the court:

In this case, defendant, David Duree, appeals the order of the circuit courtrefusing to set aside and vacate a Kansas state court judgment domesticated byplaintiffs, Doctor's Associates, Inc. and Subway Restaurants, Inc. (collectivelyreferred to herein as "DAI/SRI"), under the Illinois version of theUniform Enforcement of Foreign Judgment Act (Act) (735 ILCS 5.12-640 et seq.(West 1998)). The Kansas judgment represented an award of sanctions in favor ofDAI and against Duree personally for costs incurred by DAI in defending acounterclaim determined to have been filed in bad faith by Duree as attorney forthird-parties sued by DAI in Kansas state court. On appeal, Duree argues thecircuit court erred in giving the Kansas judgment full faith and credit underthe Act because: (1) the Kansas state court lacked subject matter jurisdiction;(2) the sanctions award was procured by extrinsic fraud; (3) he has beenreleased by DAI from any obligation to pay the amount of the sanctions judgment;and (4) he was denied due process of law in the Kansas proceedings. Dureeadditionally contends he was entitled to relief from the Kansas judgmentpursuant to section 2-1401 of the Code of Civil Procedure (Code) (735 ILCS5/2-1401 (West 1998)). For the following reasons, we affirm.

BACKGROUND

A review of the pertinent facts on appeal reveals that DAI, a nationalfranchiser of Subway sandwich shops, instituted litigation in 1990 in the statedistrict court of Kansas against two of its franchise owners, Nancy Kessler andDane Banks, to recover unpaid franchise royalties and arrearages on real estateand equipment leases. Duree, who was not licensed to practice law in Kansas, wasadmitted by the trial judge, Judge Janice Russell, pro hac vice onbehalf of Kessler and Banks. Duree assumed the role of lead counsel for hisclients and, during the course of litigation, he filed a series ofcounterclaims, culminating in a fifth-amended pleading, against DAI for itsalleged fraudulent inducement of Kessler and Banks to purchase their Subwayfranchise.

Before filing the fifth-amended counterclaim, Duree decided as a matter of"trial strategy" to have an amended 1989 tax return prepared for theKessler/Banks Subway shop. The original 1989 tax return for the store filed withthe Internal Revenue Service reflected gross receipts of $139,369 and a profitof $20,143 during the first 8