Niemerg v. Bonelli

Case Date: 10/29/2003
Court: 5th District Appellate
Docket No: 5-02-0034 Rel

NOTICE
Decision filed 10/29/03.  The text of this decision may be changed or corrected prior to the filing of a Petition for Rehearing or the disposition of the same.


NO. 5-02-0034

IN THE

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT

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ALBERT NIEMERG, In His Own Right and 
On Behalf of the Working-Interest Owners of
 the Logue Heirs Well, and NIEMERG 
GAS COMPANY,

               Plaintiffs-Appellees,
 v.

GREGG W. BONELLI, THOMAS FALESE, 
and FALESE OIL COMPANY,

                Defendants,

and 

GARY BILLINGSLEY and QUESTAR 
PETROLEUM, INC.,

               Defendants-Appellants. 

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Appeal from the
Circuit Court of
Fayette County.

 


No. 99-CH-30

 

 

 


Honorable
William J. Becker,
Judge, presiding

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JUSTICE WELCH delivered the opinion of the court:

This appeal arises out of a cause of action filed in the circuit court of Fayette Countyby Albert Niemerg, in his own right and on behalf of the working-interest owners of theLogue Heirs Well (the Well), and Niemerg Gas Company (the plaintiffs) against Gregg W.Bonelli, Gary Billingsley, Questar Petroleum, Inc., Thomas Falese, and Falese Oil Company(the defendants). Shortly after a settlement agreement had been reached among all theparties and a consent judgment had been entered against all the defendants by the circuitcourt of Fayette County, Gary Billingsley and Questar Petroleum, Inc. (Questar), filed amotion pursuant to section 2-1401 of the Illinois Code of Civil Procedure (735 ILCS 5/2-1401 (West 2000)). The motion sought to vacate the consent judgment, based on allegationsof newly discovered evidence and the trial court's mistake of law. Billingsley and Questaralso filed a motion for substitution of judge and a motion to stay all the enforcementproceedings on the consent judgment. All these motions were denied by the circuit court ofFayette County by an order entered August 15, 2001. Billingsley and Questar, of whichBillingsley is president, appeal. The other defendants are not parties to this appeal.

The facts underlying this case are quite complicated and convoluted. We set forththose facts herein as simplistically as possible and only to the extent necessary for ourdisposition of the issues raised on this appeal. We recognize the risk of an oversimplificationand the omission of facts from this disposition but assure the reader that we have carefullyconsidered all the facts contained in the record on appeal. We also point out that, becausethis case was not tried but was settled by a consent judgment, many of the factual disputeshave not been resolved.

The plaintiffs filed their amended complaint against the defendants on January 26,2000. The complaint centers on a dispute over the ownership of a subsidiary gas pipelineused to carry natural gas from the Well to the pipeline of Natural Gas Pipeline Company ofAmerica, the main transporter of the gas from the Well. The complaint alleges that, pursuantto an agreement with the plaintiffs, Bonelli became the operator of the Well on April 21,1997. Bonelli represented to the plaintiffs that he had acquired the subsidiary gas pipelineat a cost to himself of $161,002.17. The operating agreement between the plaintiffs andBonelli provided that when Bonelli recouped these costs out of the production from the Well,he would transfer the ownership of the pipeline to the plaintiffs.

For a fee, Bonelli allowed Billingsley and Questar to use the pipeline to transport gasfrom neighboring wells that Billingsley and Questar owned and operated. Bonelli, anattorney, subsequently entered into an attorney/client relationship with Billingsley andQuestar.

The complaint alleges that the Well produced sufficient revenue from the sale of gasto reimburse Bonelli for his costs in acquiring the pipeline. The plaintiffs repeatedlyrequested Bonelli to transfer the ownership of the pipeline to the plaintiffs but Bonellirefused. Accordingly, legal and equitable title to the pipeline passed to the plaintiffs byoperation of law pursuant to the operating agreement entered into between the plaintiffs andBonelli.

The complaint further alleges that Bonelli eventually resigned as the operator of theWell and that the plaintiffs replaced him with a new operator. Upon learning that the Wellwas being operated and gas therefrom was being sold by the new operator, Billingsley wentto the well site and turned a valve on the gas pipeline, shutting off the flow of the gas fromthe Well. Apparently, Billingsley and Questar asserted their ownership of the gas pipelineand sought their appointment as the operator of the Well. Bonelli, Billingsley, and Questarthen engaged in a scheme to interfere with the plaintiffs' ownership of the gas pipeline andto prevent the appointment of an operator of the Well. As a result, the plaintiffs have beenunable to produce and sell any gas from the Well.

The complaint sought an injunction prohibiting the defendants from interfering in theoperation of the Well, a declaratory judgment that the plaintiffs are the lawful owners of thegas pipeline, thereby quieting title to the property, an accounting, and compensatory andpunitive damages.

The issues were joined and the case was set for a trial. Just before the trial, on August10, 2001, the trial court granted the plaintiffs' motion in limine to estop Billingsley andQuestar from asserting that they owned the pipeline, because in a deposition in a previouslawsuit, Billingsley had denied his ownership of the pipeline. On August 13, 2001, the trialcourt granted a partial summary judgment in favor of the plaintiffs and against the defendantson certain issues. The defendants were enjoined from interfering with the operation of theWell, and the title to the property was quieted in the plaintiffs. A judgment was entered infavor of the plaintiffs and against the defendants on the issue of liability regarding theallegations of interference with property rights. The case was set to proceed to a trial on theissues of compensatory and punitive damages for interference with property rights and onother remaining issues.

On the second day of the trial, August 15, 2001, the parties reached a settlementagreement, and a consent judgment order was entered. A judgment was entered in favor ofthe plaintiffs and against the defendants on the claim of interference with property rights. The judgment is quite detailed and requires numerous undertakings on the part of thedefendants on behalf of the plaintiffs. Among other things, the defendants were ordered topay to the plaintiffs the sum of $550,000, with $50,000 being due on or before September15, 2001, and the remainder to be paid by December 1, 2001, with interest at the rate of 9%. The defendants further agreed to provide a blanket lien on, and collateral assignment of, alltheir assets, in order to secure the money judgment, and to refrain from transferring anyproperty without the plaintiffs' consent. The plaintiffs agreed to refrain from executing onthe judgment so long as the defendants remained in compliance therewith. The judgmentorder also provides, "Judge William J. Becker shall continue to exercise jurisdiction over thiscase and all matters pertaining to this case and in enforcing the terms of this judgment."

After the entry of this consent judgment, Bonelli hired an accountant to do anaccounting of the proceeds of the Well to determine whether the $161,002.17 threshold setforth in the operating agreement requiring a transfer of ownership of the pipeline fromBonelli to the plaintiffs had been met. This accountant determined that it had not been met. The results of this accounting were provided to all the parties, including Billingsley andQuestar.

On December 4, 2001, Billingsley and Questar (the appellants) filed a motionpursuant to section 2-1401 of the Code of Civil Procedure (Code) (735 ILCS 5/2-1401 (West2000)), seeking to vacate the consent judgment of August 15, 2001. The appellants claimedthat because the Well had not produced sufficient revenue to reimburse Bonelli for hisexpenses in the amount of $161,002.17, the ownership of the pipeline had never passed tothe plaintiffs, Bonelli had at all times owned the pipeline, and the appellants therefore couldnot be guilty of interfering with the plaintiffs' property rights in the pipeline. The appellantsargued that the accounting constitutes newly discovered evidence sufficient to justifyvacating the judgment and reopening the case pursuant to section 2-1401 of the Code. Theyalso argued that even if the plaintiffs' allegations of liability are true, there is no evidence ofany damages suffered by the plaintiffs and that any finding to the contrary is against themanifest weight of the evidence. They further claimed that vacating the judgment andreopening the case would prevent an unjust result in that the evidence does not support afinding of liability against the appellants. The appellants asserted that they settled only underundue pressure. They argued that vacating the consent judgment and setting the matter fora trial would result in no prejudice to the plaintiffs but would ensure a just result.

On the same date, the appellants filed a motion for substitution of judge as a matterof right pursuant to section 2-1001(a)(2) of the Code (735 ILCS 5/2-1001(a)(2) (West2000)). They argued that a section 2-1401 petition is a new action and that they are entitledto a substitution of judge as a matter of right.

The appellants also filed a motion to stay further proceedings in the cause pending aruling on the section 2-1401 petition to vacate. Because the plaintiffs believed that thedefendants were in default of the consent judgment, they had started enforcementproceedings thereon.

These motions were heard and decided on December 14, 2001. The trial court deniedthe appellants' motion for substitution of judge, on the ground that they had waived any suchright by virtue of the provision of the consent judgment which provides that Judge Beckershall retain jurisdiction over all matters pertaining to the case. The trial court also denied theappellants' section 2-1401 motion and their motion to stay.

The appellants' first argument on appeal is that the trial court erred in denying theirmotion for substitution of judge, which had been filed pursuant to section 2-1001(a)(2) ofthe Code. That section provides that a party is entitled to a substitution of judge as of rightwhen the application is made before the trial or hearing begins and before the judge to whomit is presented has ruled on any substantial issue in the case. 735 ILCS 5/2-1001(a)(2) (West2000). A trial court has no discretion to deny a proper motion for substitution of judge asof right. Rodisch v. Commacho-Esparza, 309 Ill. App. 3d 346, 350 (1999). The issue ofwhether there had been a ruling on a substantial issue in the case is a question of law towhich the appellate court applies a de novo standard of review. Rodisch, 309 Ill. App. 3dat 350. The policy behind the rule requiring a motion for substitution to be presented beforethe judge has ruled on any substantial issue in the case is to preclude litigants from "judge-shopping" after having formed an opinion that the judge may be unfavorably disposed towardthe litigant's cause. In re Daniel R., 291 Ill. App. 3d 1003, 1014 (1997).

The question presented in the instant appeal is whether, by virtue of having heard anddecided the underlying case that the appellants sought to reopen, Judge Becker can bedeemed to have ruled on a substantial issue in the section 2-1401 proceeding. The answerto this question hinges on whether, for purposes of a section 2-1001(a)(2) motion forsubstitution of judge, the section 2-1401 petition is a continuation of the underlying causeor a new proceeding to which the right of substitution applies.

The appellants correctly argue that although a section 2-1401 petition must be filedin the same proceeding in which the judgment sought to be vacated was entered, it is not acontinuation thereof but is a new proceeding subject to the usual rules of civil procedure. 735 ILCS 5/2-1401(b) (West 2000); Klein v. La Salle National Bank, 155 Ill. 2d 201, 204(1993). As explained in Childers v. Kruse, 297 Ill. App. 3d 70, 77 (1998), although a section2-1401 petition arises out of the same proceeding in which the judgment to which it isdirected was entered, it is a collateral attack on the judgment. The appellants conclude thatsince a section 2-1401 motion to vacate is a new action to which the usual rules of civilprocedure apply and since section 2-1001(a)(2) allows a substitution of judge as a matter ofright in a new action in which the trial judge has not yet ruled on any substantial issue, itfollows that a party filing a section 2-1401 motion to vacate must be granted a substitutionof judge upon request, provided that the trial judge has not ruled upon any substantial issuein the section 2-1401 proceeding.

While the appellants' argument appears logical, it is clear to us that to allow asubstitution of judge in a section 2-1401 proceeding would defeat the policy behind the rulerequiring a motion for substitution to be presented before the judge has ruled on anysubstantial issue in the case: to preclude litigants from "judge-shopping" after having formedan opinion that the judge may be unfavorably disposed toward the litigant's cause. See Inre Daniel R., 291 Ill. App. 3d 1003, 1014 (1997). Furthermore, it is equally clear to us that,in the interest of judicial economy, it is practical that the same judge who heard theunderlying case should hear the section 2-1401 petition. Therefore, we reject the appellants'argument that they were entitled to a substitution of judge as a matter of right in their section2-1401 proceeding. Although a section 2-1401 proceeding may be a "new action" for somepurposes, such as pleading sufficiency and service of process, it is not a new case forpurposes of section 2-1001(a)(2).

We find In re Marriage of Kozloff, 101 Ill. 2d 526 (1984), instructive on this issue. In that case, a divorce proceeding, the husband filed a postdecree petition to modify themaintenance provisions of the decree. When the petition was assigned to a judge who hadpreviously ruled against the husband in the divorce proceeding, the husband filed a motionfor substitution of judge. The motion was denied and the husband appealed. The appellatecourt ruled that each postdecree petition constituted a new proceeding and that the husbandwas therefore entitled to a substitution of judge so long as the judge had not ruled on asubstantial issue in that postdecree proceeding. In re Marriage of Kozloff, 113 Ill. App. 3d1161, 457 N.E.2d 168 (1983) (unpublished order under Supreme Court Rule 23 (87 Ill. 2dR. 23)). The Illinois Supreme Court reversed, stating:

"We cannot accept the appellate court position, because in our judgment itwould lead to a serious abuse of the venue act. This court has long condemned alitigant's attempt to seek a change of venue after he has formed an opinion, basedupon the court's adverse rulings, that the judge may be unfavorably disposed towardshis cause. [Citations.] Under the appellate court rule, however, a change of venuecan be sought on any post[]decree petition if the litigant is dissatisfied with the judge'sprior rulings on other, related petitions despite the fact that all of the petitionsemanate from the same dissolution proceedings. *** Taken to its logical extreme,a resourceful litigant could repeat the process until he found a judge he consideredsympathetic to his cause. Obviously, such maneuvering is anathematical to theefficient use of judicial resources." In re Marriage of Kozloff, 101 Ill. 2d at 530-31.

The reasoning of In re Marriage of Kozloff is just as compelling in the case at bar. Like postdecree divorce proceedings, a section 2-1401 proceeding will always involve thesame parties as the underlying case and will always relate back to the original judgment inthe underlying case. See In re Daniel R., 291 Ill. App. 3d 1003, 1016 (1997) (distinguishingproceedings under the Juvenile Court Act of 1987). It is filed in the same case in which thejudgment was entered, and the pleading bears the same docket number. We conclude thata section 2-1401 petition is not a new cause of action for purposes of section 2-1001(a)(2). The trial court did not err in denying the appellants' motion for substitution of judge.

The appellants' remaining arguments are considered and rejected in an unpublishedportion of this decision

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[The following text is nonpublishable under Supreme Court Rule 23 (166 Ill. 2d R.
23).]

[The preceding text is nonpublishable under Supreme Court Rule 23.]

For the foregoing reasons, the judgment of the circuit court of Fayette County ishereby affirmed, and the plaintiffs' motion for sanctions is denied.

Judgment affirmed; motion for sanctions denied.

DONOVAN and CHAPMAN, JJ., concur.