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FIFTH DIVISION
December 22, 2000

No. 1-00-0513

On August 23, 1999, petitioner Carolyn Buck filed a verified petition under section 2-1401 of the Illinois Code of CivilProcedure (735 ILCS 5/2-1401 (West 1998)) seeking reformation of the marital settlement agreement entered into withrespondent John Buck on June 30, 1987. On September 29, 1999, respondent filed a motion to dismiss the petition undersections 2-619(a)(5) and(a)(9) of the Illinois Code of Civil Procedure (735 ILCS 5/2-619(a)(5),(a)(9) (West 1998)). OnJanuary 31, 2000, the trial court granted respondent's motion to dismiss the section 2-1401 petition. Petitioner appeals thetrial court's order. We reverse.

Carolyn and John Buck were lawfully married on September 3, 1966, in Chicago, Illinois. On June 30, 1987, the partiesentered into a marital settlement agreement (the Agreement). The Agreement was incorporated into the final decree ofdissolution of marriage entered by the circuit court on July 2, 1987. In the Agreement, respondent stated that he "assignsand transfers to [petitioner] on and after July 1, 1987 fifty percent of [respondent's] economic interest in all partnershipinvestments [respondent] currently owns." Petitioner then released any claim to right, title and interest in the John BuckCompany, a company in which respondent owned 100% of the issued and outstanding stock. Both parties acknowledged inthe Agreement that they had "been fully informed of each other's wealth, property, estate and income, have had access toany information required by each of them from the other, and that they [were] fully advised as to their rights therein."

In the summer of 1998, in discovery related to petitioner's third amended petition for enforcement of the marital settlementagreement (the third amended petition), respondent produced a copy of a November 12, 1987, letter agreement between theJohn Buck Company and the partners of a limited partnership (Buck 123 LP) with ownership interests in a parcel of landknown as "Block 123." Block 123 is the block bounded by State Street, Illinois Street, Wabash Avenue and Grand Avenuein the City of Chicago. Petitioner asserted that she inferred from the letter agreement that respondent would have apersonal interest in two similar limited partnerships that were to be formed for the acquisition of two adjoining parcels ofland known as "Blocks 124 and 125." Petitioner believed that respondent's interest was derived from his share in Buck 123LP, a partnership in which petitioner had a 50% interest in respondent's portion.

In late August of 1998, petitioner took the deposition of the chief financial officer of the John Buck Company, JohnO'Donnell. O'Donnell testified that the John Buck Company acquired interests in Blocks 124 and 125 in 1986, at the sametime the company acquired its interest in Block 123. In respondent's deposition, taken the next day, he stated that thepurpose of the letter dated November 12, 1987, was to form two partnerships for the acquisition of Blocks 124 and 125. Respondent stated that he did not know if those partnerships were ever actually formed. Respondent testified that Blocks124 and 125 had been purchased in 1997 and that he could not recall when the negotiations for those properties began.

Petitioner then filed a second amendment to the third amended petition, which added count VII. Count VII was based onthe premise that respondent held a personal interest in Blocks 124 and 125, to which petitioner was entitled to a 50% share.

On June 14, 1999, the parties were before the circuit court for a Rule 218 pretrial conference. During that conference,counsel for respondent stated that petitioner could have no interest in Blocks 124 and 125 because respondent's interest inthose properties was held through the John Buck Company and petitioner had waived all claims to any interest in thatcompany in the Agreement. Petitioner alleges that this was the first notice she had that respondent's interest in Blocks 124and 125 was held by the John Buck Company and not respondent personally.

On June 29, 1999, petitioner ordered a title search on Blocks 124 and 125, which disclosed to petitioner the existence of acontract dated December 10, 1986, between a general partnership known as MKDG/Buck 124 Partnership and theAmerican Medical Association (the AMA), for the purchase of Block 124. The title search also revealed a similar contractbetween the AMA and a general partnership known as MKDG/Buck 125 Partnership, for the purchase of Block 125. Eachof those documents was signed for the purchasing general partnership by respondent, personally, on behalf of the JohnBuck Company. Petitioner alleges that this was the first notice she had that respondent had testified falsely as to when hehad acquired an interest in Blocks 124 and 125.

On July 7, 1999, petitioner amended count VII of the third amended petition. In count VII as amended, petitioner allegedthat she was entitled to 50% of respondent's economic interest in the partnership that held interest in Block 123 and,through her interest in that partnership, she also acquired an interest in Blocks 124 and 125. Petitioner further alleged thatrespondent owed her a fiduciary duty in the management of their shared economic interests.

On August 23, 1999, petitioner filed a verified petition for modification of the marital settlement agreement, pursuant tosection 2-1401 of the Code of Civil Procedure (735 ILCS 5/2-1401 (West 1998))(the section 2-1401 petition). Petitioneralleged that the Agreement assigned 50% of respondent's economic interests in all respondent's real estate partnershipinvestments to her. Petitioner emphasized that the Agreement listed 22 real estate partnerships by name, but omitted anyreference to the partnerships which held an interest in the parcels of land known as Blocks 124 and 125. Respondent'sinterest in Blocks 124 and 125 was held through his corporation, the John Buck Company, in which respondent owned100% of the shares. Petitioner alleged that she relied on respondent's representation that those shares had only minimalvalue and that respondent concealed the fact that the John Buck Company held interests in Blocks 124 and 125. Petitionerasserts that she detrimentally relied on these false representations when she waived and released any claim to the John BuckCompany. Thus, petitioner asked the trial court to reform the Agreement so she would be entitled to 50% of respondent'sinterest in any real estate partnership holding an interest in Blocks 124 and 125.

On September 29, 1999, respondent filed a motion to dismiss the section 2-1401 petition under section 2-619 of the Codeof Civil Procedure (735 ILCS 5/2-619(a)(5),(a)(9) (West 1998)). Respondent also filed a motion to dismiss the amendedversion of count VII of the third amended petition. On January 31, 2000, the trial court denied respondent's motion todismiss count VII of the third amended petition. However, on that same date, the trial court issued an order grantingrespondent's motion to dismiss the section 2-1401 petition. It is from the latter order that petitioner has sought to appeal.

For the reasons that follow, we reverse the trial court's order dismissing the section 2-1401 petition.

Although a section 2-1401 petition is filed in the same action in which the judgment it seeks to vacate was entered, it is nota continuation thereof. 735 ILCS 5/2-1401(b) (West 1998). The petition is in fact a new action and is subject to the usualrules of civil practice. See Ostendorf v. International Harvester Co., 89 Ill. 2d 273, 279, 433 N.E.2d 253 (1982). A section2-1401 petitioner bears the burden to allege and prove facts sufficient to justify relief. In re Marriage of Travlos, 218 Ill.App. 3d 1030, 1035, 578 N.E.2d 1267 (1991). Where a section 2-1401 petition fails to state a cause of action or shows onits face that the petitioner is not entitled to relief, the petition is subject to a motion to dismiss. See Ostendorf, 89 Ill. 2d at279-80. On a motion to dismiss, therefore, a section 2-1401 petition is to be considered in the same manner as a civilcomplaint. See Ostendorf, 89 Ill. 2d at 280.

A motion to dismiss admits all well-pleaded facts. Its purpose is to raise an issue of law as to the legal sufficiency of theallegations of the complaint. Ostendorf, 89 Ill. 2d at 280. The standard of review for a dismissal based on a section 2-619motion is de novo. Kedzie & 103rd Currency Exchange, Inc. v. Hodge, 156 Ill. 2d 112, 116, 619 N.E.2d 732 (1993). Amotion to dismiss should not be granted unless it clearly appears that no set of facts could ever be proved that would entitlethe plaintiff to recover. Ostendorf, 89 Ill. 2d at 280.

In order to be entitled to relief pursuant to section 2-1401, the petitioner is required to affirmatively plead specific factualallegations supporting each of the following elements: (1) the existence of a meritorious claim; (2) due diligence inpresenting that claim in the original action; and (3) due diligence in seeking relief under section 2-1401. In re Petition ofthe Village of Kildeer To Annex Certain Territory, 124 Ill. 2d 533, 544, 530 N.E.2d 491 (1988). Specifically, to set aside ajudgment based on newly discovered evidence, it is settled that the evidence must be such as could not reasonably havebeen discovered at the time of or prior to the entry of the judgment. Travlos, 218 Ill. App. 3d at 1035. Furthermore,eligibility for relief under section 2-1401 rests in part upon the requirement that a petitioner act with due diligence inavailing herself of the remedy. In re Marriage of Delk, 281 Ill. App. 3d 303, 308, 666 N.E.2d 683 (1996).

If the petition is filed more than two years after the initial judgment was entered, the petitioner must present evidence offraudulent concealment. To prove fraudulent concealment in a section 2-1401 petition, the petitioner must prove by clearand convincing evidence that the respondent intentionally misstated or concealed a material fact which the respondent had aduty to disclose and that the petitioner detrimentally relied on the respondent's statement or conduct. In re Marriage ofHimmel, 285 Ill. App. 3d 145, 148, 673 N.E.2d 1140 (1996).

From a reading of the allegations in the section 2-1401 petition and the attached exhibits, there is no dispute that petitionerwas aware of the existence of the John Buck Company at the time the parties entered into the Agreement. Petitioner alsoadmitted that respondent had spoken with her about a plan to acquire and develop property owned by the AmericanMedical Association, and she stated that such property was characterized in the Agreement as "State and Grand (AMADevelopment)." However, petitioner alleged that respondent affirmatively misrepresented to her that the John BuckCompany owned only office furniture and equipment and that the stock of the John Buck Company had little or no value. Petitioner also alleged that respondent concealed the fact that, at the same time he had acquired an interest in Block 123, hehad also acquired an interest in Blocks 124 and 125 through the John Buck Company. Petitioner further alleged that hadshe known of the interest held by the John Buck Company in Blocks 124 and 125, she would not have released her claimsto the company.

The section 2-1401 petition also alleged petitioner did not learn that respondent held a partnership interest in Blocks 124and 125 until she received the November 12, 1987, letter in the summer of 1998. In August of 1998, petitioner deposedrespondent and John O'Donnell. Based on the information learned through those depositions and the letter, petitioner tookimmediate action by adding count VII to her third amended petition for enforcement of the marital settlement agreement.

On June 14, 1999, during a pretrial conference, counsel for respondent revealed that respondent's interests in Blocks 124and 125 were held through the John Buck Company, not by respondent personally. Petitioner alleged that was the firstnotice she received that respondent did not hold a personal interest in Blocks 124 and 125. Approximately two weeks later,petitioner ordered a title search on Blocks 124 and 125, which revealed that contracts for the purchases of Blocks 124 and125 existed on December 10, 1986, and each document was signed by respondent on behalf of the John Buck Company. Petitioner then filed her section 2-1401 petition less than two months later.

Respondent filed a motion to dismiss the petition under section 2-619(a)(5) and (a)(9) of the Illinois Code of CivilProcedure. 735 ILCS 5/2-619(a)(5),(a)(9) (West 1998). The relevant portions of section 2-619 provide as follows:

"(a) Defendant may, within the time for pleading, file a motion for dismissal of the action or for other appropriate reliefupon any of the following grounds.

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(5) That the action was not commenced within the time limited by law.

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(9) That the claim asserted against defendant is barred by other affirmative matter avoiding the legal effect of or defeatingthe claim." 735 ILCS 5/2-619(a)(5),(a)(9) (West 1998).

Respondent also relies on In re Marriage of Himmel, 285 Ill. App. 3d 145, 148, 673 N.E.2d 1140 (1996), for theproposition that a settlement agreement will only be set aside if the misrepresentation of assets could not reasonably havebeen discovered at the time of, or prior to, the entry of judgment. A party to a divorce will not be relieved of theconsequences of her lack of diligence in failing to discover such information relevant to the divorce proceeding. Himmel,285 Ill. App. 3d at 148.

In Himmel, the appellate court upheld an order dismissing a section 2-1401 petition based on the trial court's finding thatthere was no fraudulent concealment. Himmel, 285 Ill. App. 3d at 149. However, in Himmel, an evidentiary hearing hadbeen held, wherein the court determined that the petitioner knew of the pension funds at issue, but took no action todiscover the value of the pension funds or to assert her claims to them. The court also found that there was no evidencethat the respondent intentionally misrepresented or concealed the pension. Himmel, 285 Ill. App. 3d at 148-49. In ourcase, petitioner has alleged that she was unaware of the existence of the two realty partnerships because respondentintentionally misrepresented his interests in them.

While respondent concedes that he did not reveal the interests he held in Blocks 124 and 125, he argues that forconcealment of information to be actionable, the silent party must intend to deceive the other party, citing In re Marriage ofBroday, 256 Ill. App. 3d 699, 703, 628 N.E.2d 790 (1993).

In Broday, the appellate court reversed the order of the circuit court vacating the property settlement provisions of thejudgment of dissolution of marriage. During the original proceeding, the petitioner was advised on several occasions toretain counsel for herself and she refused. Broday, 256 Ill. App. 3d at 701. The profit-sharing plan the respondentallegedly concealed was specifically mentioned in the separation agreement and the trial court found that the respondent didnot commit fraud in concealing the information. Broday, 256 Ill. App. 3d at 703. The appellate court found that thepetitioner could have discovered information about the respondent's financial status by simply hiring an attorney or byconducting her own investigation. Broday, 256 Ill. App. 3d at 704.

Similarly, respondent cites In re Marriage of Travlos, 218 Ill. App. 3d 1030, 578 N.E.2d 1267 (1991), as support for hisargument that his silence was not actionable. In Travlos, this court determined that mere silence or a failure tocommunicate information, absent a duty to do so, does not constitute fraud. Travlos, 218 Ill. App. 3d at 1038. There, inpretrial discovery, the respondent revealed that she did not know if she had an interest in the land at issue and told thepetitioner that her attorney had the information regarding that property. The appellate court found that, based on thatinformation, the petitioner reasonably should have been able to discover and present evidence regarding his claim to theproperty in the original proceeding. Travlos, 218 Ill. App. 3d at 1036-37.

Here, unlike the petitioner in Broday, petitioner sought to protect her interests through representation by counsel. Also, theinterests in the realty partnerships for Blocks 124 and 125 were not mentioned at all in the Agreement, unlike the profit-sharing plan in Broday. Further, petitioner sufficiently alleged that respondent actively and fraudulently concealedinformation that would have allowed her to discover the nature of his interests in Block 124 and 125; she does not merelyallege that he silently acquiesced to her assumptions, as did the petitioner in Travlos.

Respondent relies on In re Marriage of Delk, 281 Ill. App. 3d 303, 666 N.E.2d 683 (1996), to support his argument thatpetitioner did not practice due diligence in seeking relief under section 2-1401. Petitioner asserts that the trial court did notrule that it was granting the motion to dismiss based on this ground. As we may affirm a trial court's ruling if any basisexists in the record for so doing (Wayne Township Board of Auditors v. Ludwig, 154 Ill. App. 3d 899, 908, 507 N.E.2d199 (1987)), we choose to address this issue.

In Delk, this court upheld the trial court's dismissal of a section 2-1401 petition on the ground that the petitioner'sunexplained eight-month delay in filing the petition constituted a fatal lack of diligence in presenting the petition. Delk,281 Ill. App. 3d at 308. Unlike the petitioner in Delk, petitioner in this case had already asserted her rights by amendingher petition for enforcement of the marital settlement agreement and adding the original count VII. Petitioner filed asection 2-1401 petition less than two months from the time that she alleged that she discovered respondent's interest inBlocks 124 and 125 was held through the John Buck Company. Thus, petitioner did not sit on her rights for anunexplained length of time as did the petitioner in Delk. We reject respondent's argument that petitioner did not practicedue diligence in seeking relief under section 2-1401.

Petitioner's section 2-1401 petition pled specific factual allegations alleging the existence of a meritorious claim andalleged due diligence in presenting that claim in the original action. See Kildeer, 124 Ill. 2d at 544. Respondent's motion todismiss was premised on the argument that the existence of the John Buck Company's interest in the realty partnership forBlocks 124 and 125 reasonably could have been discovered at the time of the entry of the judgment in the divorce action. Petitioner argues that respondent's actions amounted to fraudulent concealment. The trial court correctly ruled that such aclaim in a section 2-1401 petition must be proven by clear and convincing evidence. Himmel, 285 Ill. App. 3d at 148. However, where the allegations in the section 2-1401 petition and the attached exhibits sufficiently state a claim forfraudulent concealment if true, the trial court must conduct an evidentiary hearing before granting a motion to dismissunder section 2-619.

Ultimately, whether petitioner's reliance on respondent's statements was reasonable is a question of fact and would bedeterminative of whether she practiced due diligence at the time of the original proceeding. This court has recentlyaddressed the necessity of conducting an evidentiary hearing to determine contested issues of fact before deciding a section2-619 motion.

In Nosbaum v. Martini, 312 Ill. App. 3d 108, 726 N.E.2d 84 (2000), this court reversed the circuit court's order dismissingthe complaint and urged that there be an evidentiary hearing on remand, despite the fact that no evidentiary hearing wasrequested, holding:

"'In determining [a section 2-619] motion on the merits *** the trial court may not simply resolve the motion on the basesof the affidavits and similar material submitted in the initial stage of the hearing on the motion. Rather[,] an evidentiaryhearing must be held, and the unresolved issue or issues of fact must be determined on the basis of a preponderance of theevidence.'" 312 Ill. App. 3d at 122-23 (quoting 4 R. Michael, Illinois Practice