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1-00-0097

JUSTICE REID delivered the opinion of the court:

This is not the first time these parties have been before this court. A previous appeal,filed pursuant to Illinois Supreme Court Rule 304(a) (134 Ill. 2d R. 304(a)) was decided by thiscourt on June 30, 1997. Yugoslav-American Cultural Center, Inc. v. Parkway Bank & TrustCo., 289 Ill. App. 3d 728 (1997). That opinion contains a lengthy and detailed discussion of thehistory of the parties. The result in the previous appeal was that the warranty deed in trustchallenged by plaintiff was deemed void and the deed was ordered canceled of record. Yugoslav-American, 289 Ill. App. 3d at 740.

Subsequent to this court's ruling and following a stipulation of facts and the entry oforders of the trial court denying the right to file a third-party complaint, denying claims for areduction of the restitution amount previously entered by the trial court and denying requests forcertain discovery, the trial court entered judgment against Branko Tupanjac in the amount of$216,535.95 plus costs. It is from those orders and judgment that Tupanjac now appeals. Wereverse and remand for the following reasons.

This case previously proceeded to trial on the merits of counts I and IV of the Yugoslav-American Cultural Center's (YACC) amended complaint. The YACC claimed that PetarPavlovic, YACC president, and Vucko Barjactarevic, YACC secretary, fraudulently sold abuilding to a corporation controlled by Barjactarevic and Branko Tupanjac. The amendedcomplaint contained four counts, (1) to quiet title against Parkway Bank, as trustee under trustNo. 10066, Parkway Bank, as mortgagee, and Tupanjac, (2) for breach of fiduciary duty againstdefendants Barjactarevic and Pavlovic, (3) fraud against defendants Barjactarevic and Pavlovic,and (4) conspiracy to defraud against Tupanjac, Barjactarevic, Pavlovic and Parkway Bank, astrustee.

During the pendency of the contested warranty deed in trust, Tupanjac received sums ofmoney or other consideration as rents, tax escrow payments, and option or earnest moneypayments for the purchase of the property, commonly known as 3936 North Lincoln Avenue,Chicago, Illinois. Tupanjac received $277,283 and paid $60,747.05 in real estate taxes on theproperty. On October 10, 1991, Parkway Bank and Trust, as trustee under trust No. 10066, at thedirection of Barjactarevic and Tupanjac, executed a $200,000 mortgage in favor of ParkwayBank. This mortgage was secured by real estate commonly known as 3936 N. Lincoln Avenue,Chicago, Illinois. The underlying mortgage was evidenced by a promissory note executed byBarjactarevic and Tupanjac, with the net proceeds of the loan being disbursed to the parties. Theinitial promissory note matured on March 12, 1995, and was replaced by a new promissory notewith a maturity date of March 12, 1998, executed by Tupanjac. Of the $277,283 paid by thelessee/purchaser, $174,380.24 was disbursed at the sale of the property in 1996. Thatdisbursement was made at Tupanjac's direction in repayment of a loan previously made to him byParkway Bank to discharge the indebtedness represented by the promissory notes. Tupanjacsought a release of the recorded mortgage. The YACC claimed that the warranty deed in trustwas void and sought restitution.

Following a trial, judgment was entered against plaintiff and in favor of Parkway Bank, astrustee and mortgagee, and Tupanjac. The trial court found the deed valid. The plaintiff appealedthe judgment. The appellate court reversed the judgment, declaring the warranty deed in trustnull and void and cancelling it of record. Yugoslav-American, 289 Ill. App. 3d at 740. The trialcourt was reversed on the legal issue of lack of membership approval or ratification. Though thecase was reversed, it was not remanded.

While the case was still on appeal, on March 26, 1997, the circuit court dismissed theremainder of the case for want of prosecution (DWP). Said dismissal was made as part of thetrial court's call of the calendar because no party responded when the case was called. Shortlythereafter, on May 27, 1997, counsel for the YACC moved to vacate the DWP. They argued thatthe trial court should not have entered the order because part of the case was before the appellatecourt. The trial court vacated the previous order as having been entered in error, therebyreinstating the case.

Also, during the original appeal, shortly before this court issued its prior opinion, thebuilding was sold to Chicago Title and Trust Company, as trustee under trust No. 1102416. Thissale was made pursuant to a purchase option in the lease agreement. Because the corporate veilhas been lifted to reveal that Tupanjac is the real party in interest, the trial court orderedrestitution from him for all the rent received and the gross sale price, less the real estate taxes hepaid.

By their stipulation, the parties agree that YACC, as rightful owner of the propertyconveyed, is entitled to restitution and that Tupanjac will have to pay. At this stage, the disputerevolves around the correct amount of restitution. Tupanjac now seeks a greater setoff. He baseshis claim on the amount he spent in improving the property and, as he characterizes it, the factthat the YACC would have lost the property and a lot of money but for his participation in theevents previously described.

The trial court granted YACC's motion to dismiss with prejudice count I of Tupanjac'scounterclaim pursuant to section 2-615 of the Illinois Code of Civil Procedure (735 ILCS 5/2-615)(West 1998)). That count sought equitable subrogation for the monies Tupanjac spent inimproving the building and facilitating the YACC keeping the building. As to count II of thecounterclaim, the trial court allowed the equitable reimbursement claim to stand only as to thepayment of real estate taxes.

Tupanjac now argues that the trial court lacked jurisdiction to further hear the case afterthe reversal by this court. He claims the reversal by this court without a remand prevents the trialcourt from conducting further proceedings. Tupanjac also claims that, since the case wasdismissed and not reinstated within 30 days, the trial court had no authority to proceed.

Tupanjac now seeks to offset the money he spent for the purchase and improvement ofthe property. He argues that the decision of the trial court to limit his setoff to the amount of realestate taxes he paid fails to take into account that the purchase price of the building wassignificantly higher as a direct result of the expenditures he made. He argues that the trial courtshould have endeavored to restore him to his prior position as part of a proper restitution. Hebelieves that, in light of the stipulation, he should be allowed to present evidence as to how hedisbursed his money and how YACC benefitted from the payments.

YACC argues that the trial court had either continuing or revested jurisdiction to enterjudgment on its complaint. YACC argues that the reversal by this court in the prior appeal waslimited to less than all of the issues in this case. YACC claims that, since the prior appeal wasfiled pursuant to Supreme Court Rule 304(a), there were always issues before the trial courtwaiting to be litigated.

YACC next argues that the issue of whether it was proper for the trial court to vacate theDWP order after the expiration of the 30-day period during which parties ordinarily are permittedto bring such motions is being made for the first time on appeal. YACC argues that Tupanjacand all parties to the litigation proceeded as though the DWP had never been entered. Byparticipating in the proceedings, YACC argues, Tupanjac should be barred from objecting tojurisdiction.

Finally, YACC contends the trial court was correct in dismissing Tupanjac's equitablesubrogation claim. It claims that Tupanjac had no reasonable basis for his claim since YACCwas always in opposition to Tupanjac's claim of good title to the property. YACC argues that themonies spent should be treated as officiously or gratuitously conferred benefits. It concludes thatsince there existed no contractual relationship between the parties authorizing the expenditures,no good-faith belief of ownership and no voluntary acceptance of benefits, Tupanjac is notentitled to the relief he seeks.

In a case that solely presents issues of law, such as this one where the facts weredetermined by stipulation and not by evidentiary hearing, this court reviews the matter de novo.See In Re D.S., No. 88460 (June 21, 2001); City of Belvidere v. Illinois State Labor RelationsBoard, 181 Ill. 2d 191, 205 (1998); Gaidar v. Tippecanoe Distribution Service Inc., 299 Ill. App.3d 1034 (1998).

The first consideration we must address is jurisdiction. In the original appeal, this courtdefined its jurisdiction as follows:

"Following a bench trial on count I (action to quiet title) and countIV (conspiracy to defraud), the trial court found in favor ofdefendants and confirmed the sale based upon apparent authorityprinciples. Only count I is currently on appeal pursuant toSupreme Court Rule 304(a) (134 Ill.2d 304(a))." (Emphasisadded.) Yugoslav-American Cultural Center, Inc. v. ParkwayBank and Trust Co., 289 Ill. App. 3d 728, 729 (1997)

"Supreme Court Rule 304(a) allows an appeal from a final order that disposes of fewer than all ofthe parties or claims if an express written finding is made that there is no just reason to delayenforcement or appeal." American National Bank & Trust Co. v. Bentley Builders, Inc., 308 Ill.App. 3d 246, 253-54 (1999). The purpose of Supreme Court Rule 304(a) is to "'discouragepiecemeal appeals in the absence of just reason, and to remove the uncertainty which exists whena final judgment is entered on less than all matters in the controversy.'" Mares v. Metzler, 87 Ill.App. 3d 881, 835 (1980); quoting Petersen Brothers Plastics, Inc. v. Ullo, 57 Ill. App. 3d 625,630 (1978), Blanchette v. Martell, 52 Ill. App. 3d 1029 (1977). By definition, when YACC tookthe first appeal under Rule 304(a), that preserved the remaining issues for future consideration bythe trial court. When this court previously ruled, on June 30, 1997, reversing the decision of thetrial court, it was done without a remand because no remand was required. The issues disposedof by this court at that time were complete, with nothing left for the trial court to do.

Since the trial court did not lose jurisdiction over the remaining issues because of thefiling of the first appeal, this court next addresses what happened to that jurisdiction and thoseissues. During the pendency of the first appeal, the parties were called to appear before the trialcourt. On March 26, 1997, the parties failed to appear before the trial court. At that time, thetrial court was holding its call of the calendar, an annual event held for purposes of dismissingold, inactive cases. Failure to appear in the trial court for a call of the calendar results in theentry of a DWP. By that order, the remaining issues were dismissed. This order never should have been entered, owing to the pendency of the original appeal. On May 22, 1997, some timeafter the expiration of the 30-day period during which motions to vacate DWP orders arecustomarily brought, the trial court vacated the DWP order. The order contained the followinglanguage:

"This cause coming on to be hearing [sic] regarding the dismissalorder entered March 26, 1997 as a matter of course, said orderentered in error by reason that the cause was and is pending in theFirst Division of the Appellate Court (and the matters not thereinpending having been transferred to the Law Division) and theCourt being so advised;

It is ordered that the order of dismissal entered 03/26/97 is vacatedand the action is reinstated. Court ordered fee waived to vacate."(Emphasis added.)

The concept that a court can correct its records is an ancient one. "'This power, thereforedoes not depend on statute - it is inherent. It rests partly upon the right and duty of the courts todo entire justice to every suitor, and partly upon their control over their own records andauthority to make them speak the truth.'" Knefel v. People, 187 Ill. 212, 215 (1900); quoting 1H. C. Black, Black On Judgments