text:
    JUTTA B. STONE, Plaintiff-Appellee, v. DANIEL F. McCARTHY, Defendant-Appellant.
    First District (5th Division)
    No. 1—88—3673
    Opinion filed November 30, 1990.

      Pedersen & Houpt, of Chicago (Arthur M. Holtzman and Gregory N. Kazarian, of counsel), for appellant.
    Martha A. Mills and Celeste E. Kralovec, both of Gottlieb and Schwartz, of Chicago, for appellee.
   PRESIDING JUSTICE COCCIA

delivered the opinion of the court:

I

This case is before us a second time. In our first opinion, we reversed an order of the circuit court, which granted defendant Daniel F. McCarthy’s motion to dismiss plaintiff Jutta B. Stone’s amended complaint. On remand Stone, claiming that McCarthy had agreed to settle the case, filed a motion to enforce settlement. The circuit court granted Stone’s motion, and McCarthy has appealed. We affirm for the reasons that follow.

II

The history of this case is set forth in Stone v. McCarthy (1987), 158 Ill. App. 3d 569, 511 N.E.2d 780 (Stone I), and we shall only revisit it as necessary for our present purposes. On July 7, 1986, Stone filed a verified amended complaint in chancery. She sought a constructive trust, injunctive relief, an accounting, and damages for breach of fiduciary duty. Stone alleged that McCarthy, as her agent, was to purchase an unimproved lot in Evanston for her, on which he had agreed to construct her a home. According to Stone, McCarthy announced that he intended not to convey title to her, but rather intended to keep the lot for his own personal use and benefit.

McCarthy filed a motion to dismiss Stone’s amended complaint on July 21, 1986. Pursuant to section .2 — 619(a)(9) of the Illinois Code of Civil Procedure (Ill. Rev. Stat. 1985, ch. 110, par. 2—619(a)(9)), he argued that her amended complaint was barred by other affirmative matter, including lack of a writing between the parties and the Statute of Frauds (Ill. Rev. Stat. 1985, ch. 59, par. 1 et seq.).

The hearing on McCarthy’s motion to dismiss was held before the Honorable Albert Green on August 18, 1986. Judge Green granted McCarthy’s motion, finding that Stone had failed to allege facts sufficient to establish an agency relationship which would give rise to fiduciary obligations on McCarthy’s part. And, even assuming that a fiduciary relationship existed, Judge Green ruled that agreements for the purchase of land had to be in writing.

Stone then appealed to this court. We rejected McCarthy’s theory that the Statute of Frauds bars enforcement of any oral agreement for the purchase or conveyance of real property, concluding instead that the statute is not violated by the imposition of a constructive trust upon realty. We went on to hold that Stone’s complaint contained sufficient allegations as to the existence of an agency relationship giving rise to fiduciary obligations on McCarthy’s part to state a cause of action for .breach thereof. Accordingly, we reversed the circuit court’s order dismissing Stone’s complaint and remanded the cause for further proceedings. See generally Stone, 158 Ill. App. 3d 569, 511 N.E.2d 780.

Back in the circuit court, Stone filed her motion to enforce settlement on August 3, 1988. Stone claimed that the parties entered into settlement discussions following the issuance of our opinion. During March of 1988, counsel for Stone (Celeste E. Kralovec) and counsel for McCarthy (Arthur M. Holtzman) agreed to settle the case for $9,000, assuming he received good title from the seller of the Evanston property. About March 21, 1988, Kralovec received from Holtzman a transmittal letter and draft settlement agreement. Shortly after receiving the draft, Kralovec spoke with Holtzman regarding the agreement. Kralovec wanted to change certain language, the motion continued, which Holtzman did not object to, as the revisions were not material. Kralovec desired to reduce the time within which McCarthy had to close from 90 to 60 days, and to give Stone the opportunity to step into his shoes if he did not close within that time. Kralovec also informed Holtzman that, because no lis pendens had been filed, language in the draft referring to the lis pendens should be removed. Before this conversation, the motion asserts, Holtzman did not know that no lis pendens had been filed. About April 13, 1988, Kralovec tendered to Holtzman a revised settlement agreement and requested his comments. Kralovec did not hear from Holtzman, and her partner (Martha A. Mills) wrote to him on May 25, 1988, submitting the revised settlement agreement executed by Stone. About- June 13, 1988, Holtzman returned the agreement with no explanation for McCarthy's failure to execute it. Since the settlement, the motion concluded, McCarthy had closed with the sellers of the Evanston property; thus, the issue of closing was irrelevant and the conditions of the settlement had been met, with the exception of payment to Stone. Consequently, Stone prayed that the circuit court enforce the settlement agreement and enter judgment in her favor and against McCarthy for $9,000.

The documents referred to in the motion to enforce were attached as exhibits to it. Exhibit A was Holtzman’s letter to Kralovec,. dated March 21, 1988, enclosing the draft settlement agreement and requesting her comments. Exhibit B was the draft settlement agreement, with Kralovec’s handwritten revisions upon it. Exhibit C was Kralovec’s letter of April 13, 1988, to Holtzman, informing him that pursuant to their conversation, she had made minor revisions to his draft. Kralovec concluded her letter by stating that she was prepared to tender Stone’s executed agreement in exchange for McCarthy’s executed agreement. Exhibit D was the revised draft, which accompanied Kralovec’s letter. It reflects that she deleted a clause in the original draft which stated that Stone filed a notice of lis pendens with the Cook County recorder’s office; similarly, Kralovec deleted a provision requiring Stone to terminate the lis pendens and record its termination. Paragraph 4 of the original draft read:

“If the Closing does not take place within 90 days of the execution of this Agreement, then the Escrow Agent shall return the Check to McCarthy, and this Agreement shall be null and void.”

As revised by Kralovec, paragraph 4 provided:

“Unless otherwise agreed by Stone, if the Closing does not take place within 60 days of the execution of this Agreement, then the Escrow Agent shall return the Check to McCarthy and this Agreement shall be null and void, and either the litigation referred to previously shall proceed or Stone shall step into McCarthy’s shoes as purchaser, at her option.”

Exhibit E was Mills’ letter to Holtzman, dated May 25, 1988, stating that she was sending him the executed revised draft, with the under-, standing that he would return it unless McCarthy agreed to and signed it. Lastly, exhibit F was Holtzman’s letter to Mills, of June 13, 1988, reciting that he and his client had reviewed the revised settlement agreement and could not agree to it with the changes.

On August 3, 1988, the circuit court entered a briefing schedule, giving McCarthy until August 31, 1988, to respond to Stone’s motion to enforce, her until September 14, 1988, to reply to his response, and setting the motion for hearing on September 20, 1988. On August 31, 1988, McCarthy filed his objection to her motion. McCarthy argued that the documents attached to Stone’s motion did not evidence a settlement, but rather reflected negotiations between the parties’ attorneys without a “meeting of the minds.” McCarthy also contended that, because Kralovec’s proposed revisions were material, the original offer had been rejected; in its place, Stone had submitted a counteroffer, which he was free not to accept.

On September 14, 1988, Stone filed a memorandum in support of her motion to enforce (reply). Stone retorted that when Holtzman and McCarthy learned that there was no lis pendens on the Evanston property, they proceeded to string her along, purchasing the property without paying the $9,000, contrary to their agreement. Therefore, they should be estopped from relying on any discrepancies between the original and revised agreements. Kralovec’s affidavit was attached as an exhibit to the reply. In her affidavit, Kralovec stated that after receiving a copy of Holtzman’s draft settlement agreement, she spoke with him regarding the provisions of paragraph 4 (quoted above). She expressed her concern that he could delay the closing 90 days from the date of execution, at which point the settlement would become null and void. Kralovec wanted some incentive for McCarthy to close within the agreed time period. According to her, Holtzman replied that the provision had been added for Stone’s protection, and that he had no objection to a revision of the language to achieve this purpose. The revisions she made to paragraph 4 were designed solely to achieve what they had agreed was a legitimate purpose. Holtzman made no objection to the revisions, and Kralovec requested that her partner forward the signed copy of the agreement to him to complete the settlement, which Mills did in her letter of May 25, 1988. On June 13, 1988, Holtzman sent Mills the letter objecting to the settlement agreement, which had been in his possession for two months, without explaining his reasons for objecting. Finally, Kralovec affirmed, she later learned that McCarthy purchased the Evanston property on June 10,1988.

The hearing on Stone’s motion to enforce was held on September 20, 1988, before Judge Green. In response to Judge Green’s questions, counsel for Stone and McCarthy agreed that they entered into settlement negotiations and that Holtzman drafted the original settlement agreement. Stone’s counsel repeated their theory that once Holtzman learned there was no lis pendens on the Evanston property, a decision was made to renege on the deal. Holtzman replied that Kralovec’s revisions to the agreement were not minor, and instead represented material changes. Holtzman also opined that this court erroneously reversed Judge Green in Stone I, because we misunderstood the case. But Judge Green ruled:

“THE COURT: The law of this case is that I was wrong.
MR. HOLTZMAN: In this instance—
THE COURT: I will tell you something. This Court is not going to sit here and rewrite contract forms. But I’ll tell you one thing: You drew the agreement and found no material changes were made. You had an oral agreement which you were trying to put down in writing; and you let the time go by and you didn’t answer.
I’m going to see that that settlement agreement is enforced. You had an agreement; nothing changed.
You had an agreement to settle for $9,000 if he acquired the property, correct?
MR. HOLTZMAN: If he acquired the property—
THE COURT: He did acquire the property.
MR. HOLTZMAN: —during that time period.
THE COURT: Counsel, most respectfully, lawyers should not be made party to lawsuits by aiding and abetting. You made the agreement; you wrote it; you will live by it. You had an oral agreement.
This Court finds that there was no material change made in what you propose or call a counter-offer. A fait accompli occurred, you got the property; pay her the $9,000.
The enforcement on the oral basis will be enforced. The settlement agreement will be enforced.”

On September 21, 1988, Judge Green entered „an amended judgment order, which corrected minor drafting errors in the judgment order entered the day before. The amended judgment order provides that the settlement agreement was proposed and drafted by Holtzman; that the revisions proposed by Kralovec did not materially affect the agréement as originally proposed and drafted; that Stone agreed to the settlement as originally proposed by McCarthy; that Stone and McCarthy entered into an enforceable agreement to settle the cause upon the payment of $9,000 by McCarthy to Stone after he purchased the Evanston property; and that McCarthy purchased the property. Accordingly, Judge Green entered judgment in Stone’s favor and against McCarthy for $9,000.

McCarthy moved to reconsider the amended judgment order on October 20, 1988. He argued, for the first time, that a settlement agreement may only be enforced after an evidentiary hearing and that no such hearing had been held in this case. McCarthy further contended, also for the first time, that as Kralovec’s affidavit was not submitted with Stone’s motion to enforce, but rather with her reply, he was unable to object to conclusory statements made in it or to provide a counteraffidavit. However, he did not submit a counteraffidavit with his motion. After Judge Green denied the motion to reconsider on November 16, 1988, McCarthy appealed to this court.

Ill

On appeal, McCarthy assigns three principal errors regarding the circuit court’s enforcement of the settlement. First, he argues, there was no basis for the court’s finding that an enforceable oral agreement existed. Second, McCarthy contends that the court improperly considered Kralovec’s affidavit which was submitted along with Stone’s reply. Third, he asserts that there was no written settlement agreement. McCarthy concludes that the circuit court punished his “good faith” effort to resolve this dispute by compelling him to accept the settlement.

We shall address McCarthy’s third objection first. In support of his theory that there was no written settlement agreement, McCarthy goes on to argue that Kralovec’s changes to Holtzman’s draft agreement represented a counterproposal, and that his offer, having been rejected, could not later be accepted by Stone. But Judge Green’s remarks at the hearing, set forth above, indicate that he found the settlement agreement to be oral, in the process of being reduced to writing, rather than written. Thus, we need not dwell upon McCarthy’s theory that there was no written settlement agreement.

We next consider McCarthy’s contention that the circuit.court erroneously considered Kralovec’s affidavit, submitted in support of Stone’s reply. Specifically, McCarthy contends that as her affidavit was conclusory, it violated Illinois Supreme Court Rule 191(a). (See 107 Ill. 2d R. 191(a).) In addition, he urges that if parties are permitted to file affidavits with reply memoranda, rather than with initial motions only, the scope of such memoranda will be unduly expanded, pleadings will never end, and judicial resources will be taxed.

Generally, an objection should be made at the time of the action complained of, or at the first opportunity thereafter. (See 2 Ill. L. & Prac. Appeal & Error §212, at 260 (1953).) It is settled law that a party may not attack the sufficiency of an affidavit, pursuant to Supreme Court Rule 191(a), for the first time on appeal. In Duffy v. Midlothian Country Club (1980), 92 Ill. App. 3d 193, 199, 415 N.E.2d 1099, 1104, this court stated that an affidavit’s sufficiency must be tested by a motion to strike it, or by a motion to strike the motion setting forth the objections to the affidavit. Here, Kralovec’s affidavit was submitted, with Stone’s reply, on September 14, 1988, before the hearing on her motion to enforce. At the hearing on the motion, held September 20, 1988, McCarthy had an opportunity to object to the allegedly conclusory affidavit, before the entry of judgment against him. Indeed, under section 2—1005(c) of the Illinois Code of Civil Procedure (Ill. Rev. Stat. 1987, ch. 110, par. 2—1005(c)), he was entitled to file a counteraffidavit at the hearing, yet he did not do so. However, McCarthy did not object in any fashion to the affidavit’s sufficiency until his motion to reconsider, which was filed on October 20, 1988, well after the entry of judgment. We conclude, then, that McCarthy waived his objection to the sufficiency of Kralovec’s affidavit.

• 4 Like his argument that Kralovec’s affidavit was conclusory, McCarthy did not argue that her affidavit was filed too late until his motion to reconsider, which he filed after the entry of judgment. He has identified no authority which forbids a movant from submitting an affidavit in support of a motion before the hearing thereon, in reply to the nonmovant’s response to the motion. And McCarthy’s argument — that if parties are not prohibited from filing affidavits with reply memoranda, the scope of such memoranda will be expanded, pleadings will never end, and judicial resources will be taxed — cuts both ways. Motion practice would never end if, as McCarthy maintains, nonmovants are permitted to withhold technical or procedural objections until after the entry of judgment against them; in fact, if McCarthy’s view prevailed, nonmovants would have an incentive to withhold such objections, and • save them for motions to reconsider, when the result of the hearing on the motion did not result in a ruling in their favor. Under McCarthy’s regime, no hearing would ever be final. In cases such as this, where the nonmovant elects not to raise technical or procedural objections until after the hearing on the motion, and where he had the opportunity to do so before or during the hearing, it is the waiver rule that promotes the conservation, instead of the depletion, of judicial resources. That is, the rulé does not put the motion judge in the position of having to reconsider previous rulings every time the losing party moves to reconsider based on matters not presented at the initial hearing. (Compare Schierer v. Ameritex Division, United Merchants & Manufacturers, Inc. (1980), 81 Ill. App. 3d 90, 95, 400 N.E.2d 1072, 1076 (rejecting losing party’s argument that she had right to submit affidavit after entry of summary judgment against her, on grounds that trial judge is entitled to have everything before him which parties intend in support of their position before he makes a decision).) Like his challenge to the sufficiency of Kralovec’s affidavit, therefore, we conclude that McCarthy waived his objection to the timeliness of her affidavit by not raising it until his motion for reconsideration.

Finally, we come to McCarthy’s contention that there was no basis for Judge Green’s finding that an enforceable oral settlement agreement existed. In particular, he contends that the settlement should not have been enforced because all questions of formation’ and terms were not resolved; that the parties’ correspondence shows the absence of an oral agreement; and that the finding of a settlement without an evidentiary hearing was improper.

Taking the last point first, the record reveals that McCarthy did not object to the alleged lack of an evidentiary hearing until his motion to reconsider the entry of judgment against him. In one of the cases he relies on, Janssen Brothers, Inc. v. Northbrook Trust & Savings Bank (1973), 12 Ill. App. 3d 840, 299 N.E.2d 431, the appellate court reversed the circuit court’s entry of judgment against the defendants pursuant to a settlement agreement. The Janssen defendants objected at the hearing, an informal procedure that did not include written pleadings or the taking of evidence. In our case, McCarthy made no such objection until after the hearing before Judge Green, at which written materials from both parties and Kralovec’s affidavit were submitted. He also cites Kwok v. St. Anthony De Padua Hospital (1977), 54 Ill. App. 3d 719, 369 N.E.2d 1346. In Kwak, this court rejected the plaintiff’s argument that the circuit court erred in not summarily dismissing her suit as having been settled, where she neither alleged that additional information would have been offered had a hearing been held, nor objected to the failure to hold a hearing. In addition to not requesting an evidentiary hearing in a timely fashion and not submitting any counteraffidavits or other evidence with his motion to reconsider, McCarthy has not indicated what sort of evidence he would introduce at such a hearing. We must hold, consequently, that McCarthy was not entitled to an evidentiary hearing.

Turning at last to the merits of Judge Green’s ruling on the oral agreement, we note initially that the settlement of claims is encouraged as a matter of public policy. (See Continental Illinois National Bank & Trust Co. v. Sax (1990), 199 Ill. App. 3d 685, 694, 557 N.E.2d 475, 480.) A settlement agreement need not be in writing. (See Knoll v. Swanson (1968), 92 Ill. App. 2d 398, 403, 234 N.E.2d 543, 546.) The plaintiffs in Knoll, for example, appealed from the circuit court’s ruling that they and the defendants settled a cause of action by oral agreement of the parties and counsel. The appellate court affirmed, observing that the plaintiffs — like McCarthy here — presented no contrary evidence and no counteraffidavits to the trial court; in contrast, the defendants — like Stone here — attached correspondence between the parties, including letters of plaintiffs’ attorney, to their motion to dismiss. The appellate court reasoned:

“In the absence of mistake or fraud, such a settlement, adequately established in the record, is conclusive on the parties as to all matters included in the settlement and will not lightly be disturbed or set aside. No mistake of law or facts, or lack of understanding of the settlement, is shown here which would justify this court in disturbing the settlement agreement.” (Knoll, 92 Ill. App. 2d at 404, 234 N.E.2d at 546.)

These considerations apply with equal force to our case.

In McCracken Contracting Co. v. DePrizio & Associates, Inc. (1984), 122 Ill. App. 3d 680, 462 N.E.2d 682, this court identified the equitable notions that govern interpretation of settlement agreements. The defendants in McCracken appealed from the circuit court’s order granting summary judgment in accordance with an oral settlement agreement. We rejected the argument that the. question of their diligence (in verifying an alleged balance due) was one of fact for the jury. In affirming the circuit court, we stated:

“To hold otherwise based on this record would undermine the binding effect of oral settlement agreements and permit parties to casually enter into agreements to compromise and settle, only to change their minds later ***. *** It would erode the very foundations of equitable jurisprudence to hold that mistake grounded in negligent business practices such as are evident in this case could create a valid defense, and, thus, a genuine issue of fact. [Citation.]” McCracken, 122 Ill. App. 3d at 687, 462 N.E.2d at 687.

In light of the foregoing principles, we cannot say that Judge Green erred in enforcing the settlement. McCarthy would have us believe that Kralovec’s revision, reducing the time within which he had to close from 90 to 60 days, was material. Yet in his brief he admits that he closed on the Evanston property on June 10, 1988, less than 60 days after the date of her letter (April 13, 1988), transmitting the revisions Holtzman previously agreed to. The other allegedly material change identified by McCarthy is that giving Stone the right to step into his shoes if he did not close within 60 days. Again, as he did close within that time, we fail to see how the change could have been material. Contrary to McCarthy’s assertion that the correspondence shows the lack of an oral agreement, it actually serves to bolster Stone’s theory: that when he learned there was no lis pendens on the property, he saw an opportunity to buy the property and save $9,000, notwithstanding his promise to her. Judge Green was familiar with the facts of the case, and his remarks at the hearing suggest that he accepted Stone’s version of the negotiations, in ruling that the parties were in the process of reducing an oral settlement agreement to writing. McCarthy’s claim that the circuit court punished his good-faith effort to resolve this case by compelling him to accept the settlement is spurious, given the facts of record. In fact, to overturn Judge Green’s ruling would have the effect of encouraging parties to act in bad faith, by casually entering into oral agreements to settle, secure in the knowledge that they could later change their minds and breach their promises. Such a result would be contrary to our reasoning in McCracken, for it would tend to undermine the foundations of equitable jurisprudence.

IV

Because we have concluded that the circuit court properly enforced the settlement Stone and McCarthy agreed to, the amended judgment order is affirmed.

Affirmed.

LORENZ and MURRAY, JJ., concur.

       Justice R Eugene Pincham participated in this case prior to his resignation. Since that time, Justice James C. Murray was designated the third member of the panel, and he has read the record and briefs and has listened to the oral argument tapes.


source: Caselaw Access Project

author: JUSTICE LORENZ

license: Public Domain

text:
    AMANDA ZAFEROPULOS, Plaintiff and Counterdefendant-Appellee, v. THE CITY OF CHICAGO et al., Defendants (Jerald I. Much, Defendant and Counterplaintiff-Appellant).
    First District (5th Division)
    No. 1—89—1066
    Opinion filed November 30, 1990.
    Rehearing denied January 9, 1991.
    Irving Slutzky, of Slutzky & Slutzky, of Chicago (Sidney Z. Karasik, of counsel), for appellant.
    Sidney R. Berger, of Chicago (George B. Collins, of counsel), for appellee.
   JUSTICE LORENZ

delivered the opinion of the court:

Defendant, Jerald I. Much, appeals from the entry of summary judgment pursuant to section 2 — 1005 of the Code of Civil Procedure (Ill. Rev. Stat. 1989, ch. 110, par. 2—1005) in favor of plaintiff, Amanda Zaferopulos. We consider whether a decree foreclosing a demolition lien on plaintiff’s alleged property was void for lack of subject matter jurisdiction. We reverse and remand.

Plaintiff filed a seven-count complaint, as amended, against defendant, City of Chicago (city), and Metromedia Company, Inc. (Metromedia). Neither the city nor Metromedia is involved in this appeal, and the case against them continues in the trial court. Counts I and II of plaintiff’s amended complaint were directed against defendant and sought to collaterally attack a decree foreclosing a demolition lien on her alleged property entered in a previous action. In count I, plaintiff sought to quiet title to the property, and in count II, plaintiff sought to vacate the foreclosure decree and subsequent sheriff’s sale as void for lack of subject matter jurisdiction. Defendant, the subsequent purchaser of the property, answered the complaint denying the material allegations. Plaintiff later moved for summary judgment, which was granted on counts I and II.

The property in question used the address of 7901 South Chicago Avenue, Chicago, Illinois, and its legal description was:

“Lots 75, 76, and 77 in the Subdivision of the West 1111 feet of the Northwest V4 lying Northeast of South Chicago Avenue in Section 36, Township 38 North, Range 14, East of the Third Principal Meridian, in Cook County, Illinois.”

From 1952 to 1960, plaintiff’s husband, Nick Zaferopulos, and her brother-in-law, Andrew Zaferopulos, owned the property, and in 1960, Nick Zaferopulos acquired sole interest. The property was improved with a D/a-story brick building.

The property next door to 7901 South Chicago used the address of 7909 South Chicago and its legal description was:

“Lots 78, 79, 80, 81, 82, 83, 84, and 85 in the Subdivision of the West 1111 feet of the Northwest xk of Section 36, Township 38 North, Range 14 East of the Third Principal Meridian, lying Northeast of South Chicago Avenue, in Cook County, Illinois.”

That property was held in a land trust for certain beneficial owners and was improved with a one-story frame building.

On November 14, 1973, the city filed an action under section 11—31—1 of the Illinois Municipal Code (Ill. Rev. Stat. 1973, ch. 24, par. 11—31—1) against Andrew and Nick Zaferopulos by which it sought a court order to demolish the building located at 7909 South Chicago. The complaint in that case described the property as being on lots 75, 76, and 77. Andrew and Nick Zaferopulos were served by substitute service on “Mrs. Nick Zaferopulos” and they were also served by publication. Neither Andrew nor Nick Zaferopulos filed an appearance, and they were found in default. On July 1, 1974, a decree was entered authorizing the city to demolish the building at 7909 South Chicago and listed the legal description as lots 75, 76, and 77. Demolition permit number 492210 dated August 5, 1974, was issued for a one-story frame building at 7909 South Chicago.

Following demolition, on September 9, 1974, the city filed a claim for a lien to recover costs incurred in the demolition against lots 75, 76, and 77 with the address of 7909 South Chicago.

On December 30, 1974, the city filed a complaint to foreclose the lien naming Andrew and Nick Zaferopulos as defendants and sought a judicial sale of the property. The complaint alleged that the city demolished a building at 7909 South Chicago and cited the legal description for lots 75, 76, and 77. The sheriff’s return of service in that case indicates that Andrew Zaferopulos was not served and Nick Zaferopulos was served by substitute service on “Mary Roe” who refused to identify herself. The city served them both by publication. They did not appear and were found in default. A decree of foreclosure was entered on August 26, 1975, and a judicial sale was authorized.

Ann Holly purchased the property at a sheriff’s sale and recorded a sheriff’s deed on April 9, 1976. The deed listed the legal description for lots 75, 76, and 77 and the address for 7909 South Chicago.

In 1976, at the direction of Nick Zaferopulos, the building at 7901 South Chicago was demolished by Daniel Wrecking Company, under permit number 518756. The permit, dated July 8, 1976, was issued for a one-story frame and brick building at 7901 South Chicago.

On August 17, 1979, Nick Zaferopulos conveyed the property at 7901 South Chicago to plaintiff. Plaintiff’s deed is not in the record. Plaintiff filed the present action on March 2, 1984, and a lis penden notice against lots 75, 76, and 77 on April 16,1984.

After several conveyances stemming from Holly, defendant received a quitclaim deed to the property on November 1, 1985, which stated it was subject to the claims in the present action.

Plaintiff’s motion for summary judgment relied on affidavits from herself, Phil Zaferopulos, Erwin Horwitz, and Miles Cunat.

In her affidavit, plaintiff stated that there was only one building on the property at 7901 South Chicago. A plat of survey for lots 75, 76, and 77, dated January 4, 1957, also showed that there was one building on the property. In 1976, Nick Zaferopulos hired a firm to demolish it. The building next door had the address of 7909 South Chicago and was demolished a few years earlier. Plaintiff stated that the city did not demolish a building on her property. She first became aware of an adverse claim to her property in the fall of 1983.

Phil Zaferopulos stated in his affidavit that he was plaintiff’s son and between 1952 and 1973, he was on his parents’ property innumerable times. There was only one building on the property and its address was 7901 South Chicago.

In his affidavit, Erwin Horwitz stated that he was one of the beneficial owners of a land trust for the property at 7909 South Chicago Avenue, which was next to the Zaferopulos property. However, a trust agreement dated in 1957 is part of the record, and it shows that the property’s address was 7917-7935 South Chicago and its legal description was for lots 78, 79, 80, 81, 82, 83, 84, and 85. Horwitz also stated in his affidavit that there were no buildings between the building on his property and the building on the Zaferopulos property.

Miles Cunat stated in his affidavit that he was the manager of the eminent domain section at Chicago Title and Trust Company (Chicago Title) from 1969 to 1974 and he has been qualified to testify as an expert witness on the interpretation of Chicago Title’s documents. Cunat relied on reports on possession for the properties in question dated September 9, 1970. The reports stated that 7901 South Chicago, which was owned by Nick Zaferopulos, was improved with a lVa-story brick building and 7909 South Chicago was improved with a one-story brick and frame building but the owners were unknown. In Cunat’s opinion, based on his review of the reports and Chicago Title’s file on the properties, the city demolished a building on lots 78, 79, 80, and 81 but foreclosed a lien on lots 75, 76, and 77.

Plaintiff also relied on a letter dated October 2, 1973, from Harris Trust & Savings Bank to the city’s Department of Buildings. The bank returned a notice of violations for 7909 South Chicago because it did not hold title to the property but held a land trust for the property at 7917-7935 South Chicago. The bank stated that the property at 7909 South Chicago was owned by Andrew and Nick Zaferopulos.

Defendant filed a response to plaintiff’s motion for summary judgment without supporting affidavits.

The record contains a document from the city’s Bureau of Maps and Plats certifying that 7901-7915 South Chicago had the legal description for lots 75, 76, and 77.

The trial judge found that the foreclosure decree was void for lack of subject matter jurisdiction. As a result, defendant’s deed, stemming from the sheriff’s sale, was also void. Summary judgment was granted in plaintiff’s favor on count I, to quiet title, and on count II, to vacate the decree foreclosing the demolition lien. The judge made a finding pursuant to Supreme Court Rule 304(a) (107 Ill. 2d R. 304(a)) that there was no just reason to delay enforcement or appeal of the order and defendant now appeals.

Opinion

Summary judgment should be granted if the pleadings, depositions, admissions, and affidavits show there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. (Ill. Rev. Stat. 1989, ch. 110, par. 2—1005(c).) Whether the trial court had subject matter jurisdiction is a question of law and properly decided on a motion for summary judgment. La Verne v. Jackman (1967), 84 Ill. App. 2d 445, 228 N.E.2d 249.

A judgment entered without subject matter jurisdiction is void and may be attacked at any time, either directly or collaterally. (In re Marriage of Verdung (1989), 126 Ill. 2d 542, 535 N.E.2d 818; City of Chicago v. Central National Bank (1985), 134 Ill. App. 3d 22, 479 N.E.2d 1040.) Subject matter jurisdiction is conferred on courts by the constitution or by legislative enactment (Fredman Brothers Furniture Co. v. Department of Revenue (1985), 109 Ill. 2d 202, 486 N.E.2d 893) and refers to the power of a court to hear the type of case presented (In re Marriage of Hostetler (1984), 124 Ill. App. 3d 31, 463 N.E.2d 955).

By this action, plaintiff collaterally attacks the decree foreclosing the city’s demolition lien on her alleged property. Plaintiff contends that the decree was void for lack of subject matter jurisdiction because it contained the wrong legal description for 7909 South Chicago and because the city did not demolish a building on her property.

The record reveals considerable disagreement concerning the addresses of the properties involved. Plaintiff contends that her property, on lots 75, 76, and 77, used the address of 7901 South Chicago. The property next door, on lots 78, 79, 80, 81, 82, 83, 84, and 85, used the address of 7909 South Chicago. Plaintiff’s contention is contradicted by other evidence that the address for lots 75, 76, and 77 was actually 7901-7915 South Chicago and the address for lots 78, 79, 80, 81, 82, 83, 84, and 85 was 7917-7935 South Chicago. Because of these conflicts, the city’s demolition of a building at 7909 South Chicago on lots 75, 76, and 77 raises a question of whether the building was on plaintiff’s property.

However, this question is not relevant to the issue on review, which is whether the court that entered the foreclosure decree had subject matter jurisdiction. Plaintiff does not challenge the trial court’s power to hear demolition cases. Rather, plaintiff’s challenge to subject matter jurisdiction centers on the merits of that court’s decision: whether in fact the city demolished a building on her property.

Jurisdiction does not depend on the correctness of the decision made and is not lost because of an erroneous decision. (People ex rel. Scott v. Janson (1974), 57 Ill. 2d 451, 312 N.E.2d 620; C & K Distributors, Inc. v. Hynes (1984), 122 Ill. App. 3d 525, 461 N.E.2d 560.) Jurisdiction of the subject matter does not depend on the sufficiency of the pleadings or on the validity of the demand, the regularity of the proceedings, or the correctness of the decision. (Lemons v. Lemons (1978), 57 Ill. App. 3d 473, 373 N.E.2d 544.) A jurisdictional defect must appear from the record, and to make that determination, the court must review the pleadings, return of process, and judgment. State Bank v. Thill (1986), 113 Ill. 2d 294, 497 N.E.2d 1156.

In this case, plaintiff’s claim that the city did not demolish a building on her property is outside the record of the previous foreclosure action. Based on the record presented, the trial court that entered the foreclosure decree had subject matter jurisdiction. Although plaintiff now contends that the court’s decision was incorrect, such an argument cannot be made on a collateral attack of a judgment.

For the foregoing reasons, summary judgment in plaintiff’s favor on counts I and II was improper.

Reversed and remanded for further proceedings consistent with this opinion.

COCCIA, RJ., and GORDON, J., concur.


author: JUSTICE MURRAY

text:
    LEONARD E. ZANNINI et al., Plaintiffs-Appellants, v. RELIANCE INSURANCE COMPANY OF ILLINOIS, INC., Defendant-Appellee.
    First District (5th Division)
    No. 1—89—2832
    Opinion filed November 30, 1990.
    Tribler & Orpett, PC., of Chicago (Mitchell A. Orpett and Michael J. Meyer, of counsel), for appellants.

      Judge & Knight, Ltd., of Park Ridge (Jay S. Judge, Colleen H. Considine, and Sarah Hansen Sotos, of counsel), for appellee.
    Sorling, Northrup, Hanna, Cullen & Cochran, Ltd., of Springfield (William S. Hanley and Alane A. Arbogast, of counsel), for amicus curiae The Independent Insurance Agents of America and The Independent Insurance Agents of Illinois.
   JUSTICE MURRAY

delivered the opinion of the court:

Plaintiffs Leonard Zannini (Zannini), subrogor, and Employers Reinsurance Corporation (Employers), subrogee, appeal from an order of the circuit court of Cook County, directing a verdict in favor of defendant Reliance Insurance Company of Illinois, Inc. (Reliance). The Independent Insurance Agents of America and The Independent Insurance Agents of Illinois have filed an amicus curiae brief supporting plaintiffs’ plea for reversal of the trial court’s order. We affirm.

The facts of the case are as follows.

In November 1983 Zannini contacted John Nesslar, an insurance representative through whom Zannini had previously obtained other insurance policies for his home and business. Zannini informed Nesslar that he was selling his home in Barrington, Illinois, and was moving into an apartment in Rolling Meadows. He wished to convert his homeowner’s insurance policy, which he had obtained from Nesslar and was written through Maryland Casualty Insurance Co., to a tenant’s policy to cover his personal property at his new residence and during the process of moving. Nesslar had in his possession a copy of Zannini’s current homeowner’s policy, and he knew that Zannini wanted to maintain the same level of coverage, including an additional endorsement for scheduled personal property and jewelry with a $25,315 total value, which had been part of the homeowner’s policy with Maryland Casualty.

Nesslar was an independent insurance agent and broker. He had nonexclusive agency contracts with at least two insurance carriers and was free to contact licensed agents of other carriers to obtain insurance policies that would meet the needs of his clients. Nesslar was authorized by the limited agency contract with Reliance to (1) solicit and submit applications for insurance, (2) issue and deliver policies, (3) execute fidelity and surety bonds, (4) collect and receive premiums, (5) cancel policies, as well as (6) bind coverage and execute insurance contracts in accordance with guidelines furnished by Reliance.

When Zannini contacted him, Nesslar agreed to provide Zannini with the insurance coverage he desired through Reliance. Zannini’s homeowner’s policy was cancelled effective November 15, 1983, and a new policy was issued by Reliance, through Nesslar, effective November 17, 1983. However, because Nesslar neglected to transmit to Reliance the additional schedule of personal property and jewelry which Zannini wanted covered, the policy issued to Zannini was a standard tenant’s policy, which only insured jewelry up to $500 in the event of theft. This omission was not noticed by either Nesslar or Zannini.

On or about November 13, 1983, Zannini packed his personal belongings, including certain items of jewelry, into cartons in preparation for the move from his Barrington home. Shortly thereafter, a moving company removed Zannini’s belongings from the Barrington home and placed them in storage for a five-week hiatus until Zannini’s new residence was ready for occupancy. It is unclear whether the carton containing the jewelry was placed in storage or whether it remained with Zannini at his interim residence. In any event, it was not until sometime after December 27, 1983, when Zannini’s belongings were delivered to his new residence, that he discovered that certain items of jewelry valued at $13,500 were missing. Zannini contacted Nesslar to report the loss and on January 20, 1984, notified the police concerning the missing jewelry.

On January 18, 1984, Nesslar sent a letter to Reliance informing the company of Zannini’s loss. Nesslar indicated in this letter that a separate schedule for jewelry and other personal property had been mistakenly omitted from Reliance insurance policy No. HC 2859403 — 1, which had been written in November 1983 for Zannini and which had become effective November 17, 1983. The letter also noted that it was unclear exactly when and in what manner the loss occurred.

Subsequently, Nesslar and Reliance engaged in several communications concerning the matter. On April 4, 1984, Reliance sent a letter to Nesslar informing him that the claim was being denied. Specifically, the letter noted the following:

“We received this homeowner application on December 13, 1983. There was no mention or request for a jewelry schedule. On December 30, 1983, you wrote to Nancy Morrow advising her the insured would be putting his household goods into storage for an indefinite period of time. On January 9, 1984, Nancy wrote advising you there was no coverage for indefinite storage on the policy; she further advised you the insured should obtain insurance from the storage facility. Again, there was no mention or request to add a jewelry schedule to the policy.
On January 18, 1984, after the loss occurred, you wrote to Shaun Morrison advising him you neglected to add the jewelry schedule to the homeowner application. You further advised me in two subsequent telephone conversations you bound the jewelry schedule with the insured.
Jack, your agency contract with this Company requires you to notify us within seven (7) days of all binders you issue. You would have had to notify us of this jewelry schedule binder within seven days of the policy inception date of 11/17/83. Obviously, from the various correspondence, you failed to do this.
*** We cannot honor your apparent verbal binder as you failed to adhere to the terms of your agency contract.
We still have further investigation to do before we even extend the $500 basic coverage for the jewelry.”

On May 10, 1984, Reliance sent a “reservation of rights” letter to Zannini, informing him of its position, which was that the policy did not contain any additional forms or schedules so that the limit of liability, under the policy, was $500 for loss by theft. Zannini was also informed that, due to several discrepancies in the facts and circumstances, it appeared possible that the loss was not covered by the policy. Therefore, further investigation was being undertaken.

At some point in time Nesslar submitted Zannini’s claim to his own errors and omissions insurance carrier, Employers, who satisfied the claim. Thereafter, on March 28, 1985, Zannini, as subrogor, and Employers, as subrogee, filed suit against Reliance to recover for the loss Zannini sustained. The complaint sought reformation of Zannini’s insurance contract with Reliance and alleged that Reliance was estopped from denying coverage for Zannini’s claim.

In a bench trial that commenced on May 31, 1989, Judge Curry granted Reliance’s motion for directed verdict at the close of plaintiffs’ evidence. The trial court concluded that, although there had been a meeting of the minds between Zannini and Nesslar concerning the additional coverage, Nesslar’s mistake in omitting the jewelry schedule in the application with Reliance was not attributable to Reliance because Nesslar had been acting as Zannini’s broker/agent, not Reliance’s agent, when he placed the insurance with Reliance. Consequently, Nesslar’s mistake was a unilateral one that could not be the basis for a reformation action.

Having concluded that the insurance contract could not be reformed, the trial court found that Reliance had no liability for Zannini’s loss. With respect to the $500 basic coverage, the trial court noted that Zannini never made a claim for $500 under the basic policy. Having failed to demand this compensation, there could be no vexatious delay in responding to the claim and no estoppel based upon a refusal to satisfy the claim.

After their motion for post-trial relief was denied, plaintiffs brought this appeal, making the following arguments:

(1) That Nesslar acted as Reliance’s agent, binding Reliance to provide insurance to Zannini for the additional schedule of personal property and jewelry, despite Nesslar’s failure to give Reliance timely and accurate notice of the risk he agreed to assume.

(2) Alternatively, that Zannini was entitled to reimbursement under the basic policy in the amount of $500, in addition to fees and penalties recoverable pursuant to Illinois insurance law, based upon Reliance’s unreasonable and vexatious delay in settling the claim (see Ill. Rev. Stat. 1989, ch. 73, par. 767) and that Reliance’s failure to respond to or satisfy this claim should estop it from raising any policy defenses at this time.

The Independent Insurance Agents, in their amicus brief, encourage this court to recognize the dual agency role of an independent insurance agent acting as Nesslar did in this case. They also suggest that public policy concerns would support the notion that a mistake made by an independent agent in obtaining the proper coverage requested by a purchaser should be the responsibility of the insurance company and not the purchaser. Reliance, of course, argues that the trial court properly decided that Nesslar was the broker/agent of Zannini and that this court should affirm the directed verdict granted by the trial court on all counts.

Initially, we note that when a defendant moves for a finding or judgment in his favor at the close of a plaintiff’s case in chief, the trial court is required to apply a bifurcated analysis to the evidence that has been presented. First, the trial court must determine whether the plaintiff has made out a prima facie case, i.e., whether the plaintiff has presented at least some evidence on every essential element to his cause of. action. If this has not been done, defendant is entitled to judgment as a matter of law. Secondly, if plaintiff has made out a prima facie case, the trial court must weigh the evidence, considering any evidence favorable to the defendant, assess the credibility of the witnesses, and draw any reasonable inferences from the testimony. If in this process some of the evidence serves to negate the evidence necessary to plaintiff’s prima facie case, then defendant is entitled to judgment in his favor. (Kokinis v. Kotrich (1980), 81 Ill. 2d 151, 407 N.E.2d 43.) Upon review the decision of the trial court should not be reversed unless it is contrary to the manifest weight of the evidence. City of Evanston v. Ridgeview House, Inc. (1976), 64 Ill. 2d 40, 349 N.E.2d 399.

In the present case the trial court recited the two-step process set forth in Kokinis and then strictly and carefully adhered to this standard. Based upon the facts before the court, we do not believe that the trial court’s conclusion was against the manifest weight of the evidence.

It is obvious from the arguments at trial and those presented on appeal that the resolution of this case turns upon a determination of the nature of the role that an independent insurance agent plays when he secures an insurance contract for his client. Stated more succinctly, the question, ultimately, is whether an independent insurance agent, such as Nesslar in this case, acts as the agent of the insured or the insurer or both. This question is of importance because under basic agency principles, any information known by the agent is deemed to be in the knowledge of the principal. Thus, in the present case, if Nesslar was the agent of Reliance at the time he was processing Zannini’s insurance request, his failure to obtain the proper coverage would be attributed to Reliance. However, the answer, admittedly, is not a clear-cut one and requires an understanding and clarification of agency law in the context of insurance law. For this reason we begin our discussion with an overview.

Historically, the issue of whether a party was the agent of the insurer or the insured has turned on a determination of whether that party was an “agent” or a “broker.” (Ross v. Thomas (1977), 45 Ill. App. 3d 705, 360 N.E.2d 126; Lynn v. Village of West City (1976), 36 Ill. App. 3d 561, 345 N.E.2d 172.) Generally speaking, a person who was directly employed by the insurance carrier and owed allegiance to that carrier alone was considered the agent of that carrier." A broker, on the other hand, having no allegiance to any one carrier, was generally held to represent the interests of the insured, not the insurer. Hence, a broker was typically not considered to be the agent of the insurer (see Ill. Rev. Stat. 1949, ch. 73, par. 1065.37 (now repealed)), although it was also recognized that a broker could act as an agent of the insurer for certain purposes or even be the agent of both parties in certain instances. (City of Chicago v. Barnett (1949), 404 Ill. 136, 88 N.E.2d 477; Lynn v. Village of West City, 36 Ill. App. 3d at 564-65.) The relationship between the alleged agent or broker and the insurer is a question of fact. Ross v. Thomas, 45 Ill. App. 3d at 708.

Certainly, the question of agency becomes more blurred in situations such as the one in this case, where the insurance representative who procures the insurance coverage is not clearly a broker or an agent, but a blend of both, i.e., an independent representative who has entered into nonexclusive, limited, agency contracts with various insurance carriers, which enables him to write policies for those companies, but also allows him to choose the carrier and go outside these agency contracts to broker an insurance policy when necessary to meet the needs of his client. As stated earlier, the Independent Insurance Agents of America and of Illinois, in their amicus brief, urge this court to recognize that these independent agents are representing the interests of both the insurer and the insured, simultaneously. We believe, however, that such a conclusion would lead to more confusion and, at times, absurd results. For instance, when a client approaches an independent insurance agent and asks that he procure certain insurance coverage for him without specifying the carrier, just as Zannini did here, and the independent agent, who has several agency contracts with various insurance carriers, is free to choose the carrier, then a question would be raised as to which one of the carriers we should attribute the independent agent’s failure to obtain the coverage requested. While it seems clear in the present case that Nesslar identified the proposed carrier to the client at the time of the request, we do not feel that this fact is of any significance.

We acknowledge that an independent agent possesses a certain duality which allows him to act as both an agent or a broker. However, it is unimportant what title we assign to him since it will be his conduct at the time of a specific transaction that will define his relationship and be determinative of the liability. (Krause v. Pekin Life Insurance Co. (1990), 194 Ill. App. 3d 798, 551 N.E.2d 395.) Thus, when an independent agent’s act of omission or commission results in a loss, certain factors should be examined to determine to whom he breached his duty and thus whether, in that particular instance, he was acting as the agent of the insured or the insurer. The factors to be considered are: (1) who first set the agent in motion, (2) who controlled the agent’s action, (3) who paid the agent, and (4) whose interests the agent was attempting to protect. Krause v. Pekin Life Insurance Co., 194 Ill. App. 3d at 804-05.

In this case Zannini set Nesslar in motion by requesting that he obtain a tenant’s policy. Nesslar was free to choose any insurance carrier and was not controlled by Reliance in making the selection. The evidence revealed that Zannini and Nesslar knew each other for years, that they were friends and that Zannini had purchased other insurance through Nesslar. Despite the fact that Nesslar had the capability of being Reliance’s agent, it seems clear that Nesslar was acting as Zannini’s agent and was protecting his interests when he sought to procure the insurance coverage Zannini requested. Consequently, the manifest weight of the evidence supports the conclusion that Nesslar breached the duty of care he owed to Zannini when he failed to obtain the proper coverage, making him, not Reliance, liable to Zannini for any loss. (Scarsdale Villas Associates, Ltd. v. Korman Associates Insurance Agency, Inc. (1988), 178 Ill. App. 3d 261, 533 N.E.2d 81; Omar v. St. Paul Fire & Marine Insurance Co. (1988), 175 Ill. App. 3d 77, 529 N.E.2d 686.) Having found that Nesslar was acting as Zannini’s agent, there was no mutual mistake which would allow for a reformation of the contract and estoppel does not apply since coverage was not denied based upon an unauthorized act of Reliance’s agent.

We now consider whether Reliance was obligated to compensate plaintiffs to the extent of the $500 basic policy coverage for a loss in the event of theft, whether Reliance’s failure to adjust the claim estops it from now raising any policy defenses, and whether Reliance’s behavior is an example of unreasonable and vexatious delay, entitling plaintiffs to fees and penalties pursuant to section 155 of the Illinois Insurance Code (Ill. Rev. Stat. 1989, ch. 73, par. 767). The trial court directed a verdict in favor of Reliance on this matter, having found that Zannini never filed a claim with Reliance asking to recover under the terms of the policy as it was written, i.e., for the $500 limited coverage. The trial court found that the demand had always been for full recovery pursuant to the disputed additional schedule of jewelry and personal property. We agree and find that the manifest weight of the evidence supports this conclusion.

At trial the testimony of both Zannini and Nesslar indicated that there had been little interest in pursuing the potential coverage under the Reliance policy that had been issued. In fact, Nesslar admitted that no request was ever made to Reliance for the $500 potential coverage. While it appears that Reliance contemplated a claim pursuant to the basic policy and attempted to address this matter with Zannini, it seems equally clear that this potential coverage was abandoned by Zannini and Nesslar. Consequently, no demand having been made or pursued, Reliance cannot be held liable for unreasonable and vexatious delay for a failure to adjust the claim.

For the reasons stated above, we affirm the order of the circuit court of Cook County granting a directed verdict in favor of defendant Reliance Insurance Company of Illinois as to both counts of plaintiffs’ complaint.

Affirmed.

COCCIA, P.J., and GORDON, J., concur.


text:
    SUPPRESSED, Plaintiff-Appellant, v. SUPPRESSED, Defendants-Appellees.
    First District (5th Division)
    No. 1—89—2950
    Opinion filed November 30, 1990.

      John S. Elson, of Northwestern University Legal Clinic, of Chicago, for appellant.

      Hinshaw, Culbertson, Moelmann, Hoban & Fuller, of Chicago (Stephen R. Swofford, Thomas P. McGarry, and Bruce L. Carmen, of counsel), for appellees.
   JUSTICE MURRAY

delivered the opinion of the court:

Plaintiff appeals the order of the circuit court of Cook County granting defendants’ section 2—619 motion (Ill. Rev. Stat. 1987, ch. 110, par. 2—619) and dismissing her cause of action with prejudice as barred by the statute of limitations. We affirm.

Prior to the filing of plaintiff’s complaint, defendants filed a suit in chancery to obtain an order requiring that the complaint in this case be filed without revealing the names of the parties and that the court record be impounded. Such an order was obtained ex parte on December 2, 1988. For this reason the case has proceeded under the above caption rather than the actual names of the parties.

On December 8, 1988, plaintiff, a 40-year-old woman and mother of three children, filed a three-count complaint against an attorney (herein referred to as defendant) whom she hired to represent her in a divorce action and his law firm (collectively referred to as the suppressed defendants). In count I, which purported to be a claim for breach of fiduciary duty, plaintiff alleged that defendant psychologically coerced or seduced her into having sexual relations with him at the same time that he was to be representing her in a divorce action. In count II, plaintiff sought to hold all of the shareholders of defendant’s law firm, a professional service corporation, jointly and severally liable for the injuries she sustained at the hands of the defendant. In count III, plaintiff sought to hold the law firm, itself, liable for the acts of defendant.

More specifically, plaintiff alleged that, because she was having marital difficulties, she telephoned the defendant law firm on November 2, 1983, in an attempt to engage the services of an attorney. She claimed that she contacted this particular law firm because of its purported expertise in the area of domestic relations law. She was given an appointment with defendant and, after meeting him and speaking with him on November 4, 1983, she paid him a $2,500 retainer upon his agreement to represent her in a divorce proceeding. After a brief attempt at reconciliation with her husband, plaintiff met with defendant on November 15, 1983, at which time they discussed, at length, her marital situation and her impending divorce litigation.

Plaintiff further avers that subsequently, on December 10, 1983, she went to defendant’s office, at his request, to discuss her case. On this occasion defendant locked his office door and then unzipped his pants. He then requested that plaintiff have oral sex with him. Plaintiff contended that she was “stunned and confused” but that she complied because she was “fearful that he [defendant] would not advocate for her and her children’s interests in her divorce case were she to refuse.”

Despite plaintiff’s purported aversion to defendant’s behavior, she agreed to meet defendant at his office again on December 14, 1983, at which time defendant “told her that they would be going someplace.” Defendant then instructed her to meet him in the building’s lobby and she complied. Defendant soon joined her and obtained a taxi, which transported them to a nearby apartment building. In an apartment inside this building, defendant “insisted that [plaintiff] inhale a liquid solution” from a brown bottle, which made her lightheaded and “tingling.” Plaintiff then “submitted” to sexual intercourse with defendant. Again, plaintiff contended that the only reason that she accompanied defendant and complied with his wishes was “because of her fear that her refusal to do so would jeopardize (defendant’s) willingness to adequately represent her and her children’s interests.”

Finally, plaintiff averred that on January 11, 1984, she again agreed to go with defendant to the same apartment. She again inhaled a substance from a brown bottle and complied with his desire to engage in sexual intercourse.

Apparently, sometime in February 1984, plaintiff decided to discharge defendant as her attorney and engage another attorney to represent her in her divorce action. Plaintiff’s stated reason for dismissing defendant was her “growing belief” that defendant’s sexual exploitation of her was not necessary to her divorce proceeding and that his actions were contrary to her interests. The divorce litigation proceeded with new counsel and plaintiff’s marriage was dissolved, apparently to plaintiff’s satisfaction, on May 30,1984.

In July 1987, plaintiff filed a complaint against defendant with the Illinois Attorney Registration and Disciplinary Commission, setting forth the same facts as alleged in the present action. After reviewing the matter, the Inquiry Board determined on August 19, 1988, that the investigation should be closed without any action taken. Then, in December 1988, nearly five years after the last alleged incident, plaintiff filed her complaint at law against defendant and his law firm. The defendants filed motions to dismiss under the provisions of sections 2—615 and 2—619 of the Illinois Code of Civil Procedure (Code) (Ill. Rev. Stat. 1987, ch. 110, pars. 2—615, 2—619). Without deciding on defendant’s section 2 — 615 motion, the trial court dismissed the complaint pursuant to section 2 — 619 of the Code, based upon its conclusion that the two-year statute of limitations on personal injury actions applied. (Ill. Rev. Stat. 1987, ch. 110, par. 13—202.) The trial court inserted into the order the language from Supreme Court Rule 304(a) (134 Ill. 2d R. 304(a)) making the decision final and appealable and plaintiff has filed this timely appeal.

On appeal plaintiff argues that the trial court erroneously applied the two-year statute of limitations for personal injury actions to the case. (Ill. Rev. Stat. 1987, ch. 110, par. 13—202.) She contends that her complaint states a cause of action for breach of the fiduciary duty owed by an attorney to his client, which is a breach of the unwritten contract for legal services, thereby invoking the five-year statute of limitations. (Ill. Rev. Stat. 1987, ch. 110, par. 13—205; see also Tucek v. Grant (1984), 129 Ill. App. 3d 236, 472 N.E.2d 563 (claim of legal malpractice falls within the ambit of five-year statute of limitations dealing with actions on unwritten contracts and other civil actions not otherwise provided for).) Alternatively, plaintiff attempts to convince this court that defendant fraudulently concealed from plaintiff the fact that his actions created a conflict of interest, giving rise to a cause of action. Thus, plaintiff argues that the statute of limitations to be applied is the one applicable to cases involving fraudulent concealment. Ill. Rev. Stat. 1987, ch. 110, par. 13—215.

This is a case of first impression despite the fact that the activity involved has been considered a wrong since biblical times. Also, surprisingly, there appears to be only one documented case that even touches upon the issue of sexual involvement in the context of an attorney-client relationship (see Barbara A. v. John G. (1983), 145 Cal. App. 3d 369, 193 Cal. Rptr. 422), although there have apparently been several law journal articles on the subject and various State bar and ethics committee opinions have addressed the matter.

Certainly this court is not so naive that it believes that the lack of case law is due to an absence of such activity within the legal community. However, our recognition that such activity exists, and our disapproval of it, is not what is at issue here. What is at issue is (1) whether plaintiff’s complaint sets forth facts that state a cause of action for breach of the fiduciary duty owed by an attorney to his client (legal malpractice), thereby invoking the five-year statute of limitations, or (2) whether plaintiffs cause of action, if a personal injury action, should still be viable because defendant fraudulently concealed the cause of action from plaintiff’s knowledge.

We first consider whether plaintiff has sufficiently pled a cause of action for breach of the attorney-client contract or legal malpractice. The trial court implicitly held that plaintiff did not state such a cause of action by finding that the two-year statute of limitations applied to the case. An action for legal malpractice is one sounding in tort, which arises out of a contract, express or implied, for legal services (Land v. Greenwood (1985), 133 Ill. App. 3d 537, 478 N.E.2d 1203) and, as such, falls within the ambit of the five-year statute of limitations dealing with actions on unwritten contracts or other civil actions not otherwise provided for. (Tucek v. Grant, 129 Ill. App. 3d at 240.) Consequently, in order to determine whether the trial court correctly dismissed the case, we must first decide whether plaintiff stated a cause of action based upon her alleged breach of a fiduciary duty created by the attorney-client contract, keeping in mind that a motion to strike or dismiss admits all well-pleaded facts and any reasonable inferences that may be drawn from those facts. (Sharps v. Stein (1980), 90 Ill. App. 3d 435, 413 N.E.2d 75.) Also, when deciding whether a complaint states a cause of action, this court must look to the legal sufficiency, not the factual sufficiency. Interway, Inc. v. Alagna (1980), 85 Ill. App. 3d 1094, 407 N.E.2d 615.

In an action for legal malpractice, a plaintiff must plead (1) that the attorney owed plaintiff a duty of care arising from an attorney-client relationship, (2) that the defendant breached that duty, and (3) that as a proximate result, the plaintiff suffered actual damages. (Sexton v. Smith (1986), 112 Ill. 2d 187, 193, 492 N.E.2d 1284; Albright v. Seyfarth, Fairweather, Shaw & Geraldson (1988), 176 Ill. App. 3d 921, 926, 531 N.E.2d 948.) We find that plaintiff’s complaint fails on two counts: (1) the duty of care allegedly breached by defendant is not one that arises from the attorney-client relationship, and (2) no actual damages were alleged.

Initially we note that if we were to accept plaintiff’s contention that defendant in this case breached a fiduciary duty arising from the attorney-client relationship, we would be creating a new species of legal malpractice action and we would necessarily be holding that inherent in every attorney-client contract there is a duty to refrain from intimate personal relationships. Plaintiff can cite no support for this proposition, nor do we believe that any exists. Even in Barbara A. v. John G., cited by plaintiff, the court only allowed the case to proceed on the counts alleging battery and deceit and not on the legal malpractice counts. That court hesitated to impose, as a matter of law, the highest fiduciary standard in all of an attorney’s relations with his client, social as well as legal. The court in Barbara A. also held that the question of whether it should be an actionable breach of ethics for an attorney, particularly a family law attorney, to induce a client to have sexual relations during the course of representation was a decision better left to its State bar. We agree with this reasoning.

It is true that a fiduciary relationship exists, as a matter of law, between an attorney and his client, which requires that the attorney exercise the utmost of good faith and fair dealing in any transaction arising out of the legal relationship with the client. (In re Marriage of Bennett (1985), 131 Ill. App. 3d 1050, 476 N.E.2d 1297.) However, we feel that, essentially, the high standard of care required of a fiduciary imposes upon an attorney a duty to provide competent legal representation. The fiduciary duty owed by an attorney differs from the fiduciary duty owed by a psychotherapist. (See Horak v. Biris (1985), 130 Ill. App. 3d 140, 474 N.E.2d 13 (duty of therapist is to engage in activity or conduct calculated to improve patient’s mental or emotional well-being); Corgan v. Muehling (1988), 167 Ill. App. 3d 1093, 522 N.E.2d 15.) Consequently, the cases cited by plaintiff involving breach of fiduciary duty based on sexual involvement between a therapist and his patient, while instructive, are distinguishable.

We feel that the breach of duty alleged in a legal malpractice action must be more clearly linked to the attorney’s legal representation. In the present case, the only charge against defendant that alleges a breach of his legal duty to his client is the allegation that defendant’s relationship with plaintiff created a “potential conflict of interest.” While this may be true, we also note that plaintiff did not charge that an actual conflict of interest existed or that she was harmed in her legal action by such a conflict.

An attorney is only required to exercise a reasonable degree of care and skill and may not always be accountable for errors in judgment. (Land v. Auler (1989), 186 Ill. App. 3d 382, 542 N.E.2d 509.) An attorney, just like the client, is at best and at worst a human being fraught with all the frailties that the status entails. For this reason we do not believe that the higher standard of care required of a fiduciary should extend to an attorney’s personal relationships with his clients, unless there is tangible evidence that the attorney actually made his professional services contingent upon the sexual involvement or that his legal representation of the client was, in fact, adversely affected.

We acknowledge that plaintiff alleged that she felt that it was necessary to accede to defendant’s desire to have a sexual relationship because of his status as her attorney. However, we find that this statement is too tenuous and falls short of an allegation that defendant made sexual favors a quid pro quo for his legal services. Consequently, we find that plaintiff failed to allege legally sufficient facts concerning the breach of a fiduciary duty owed to her by defendant. Although defendant’s behavior may have been unethical, we do not think that it equates to legal malpractice.

Secondly, even if we were to find that it was a breach of an attorney’s fiduciary duty to his client to engage in a sexual relationship simultaneous to the legal relationship, we would still be compelled to find that plaintiff failed to state a cause of action for legal malpractice in this case because plaintiff failed to allege actual damages directly attributable to the breach of duty. Actual damages have been interpreted to mean damages stemming from a loss suffered in the client’s underlying legal action or some evidence that the client’s legal position was somehow compromised by the breach of duty alleged. (Claire Associates v. Pontikes (1986), 151 Ill. App. 3d 116, 502 N.E.2d 1186.) Plaintiff here has not pled actual damages. Her marriage was later dissolved, and the divorce agreement was apparently satisfactory to her. Plaintiff did not claim that her legal position in the divorce proceedings was harmed.

We note that plaintiff alleges that the expense of hiring a new attorney to represent her after she discharged defendant was an element of damages. However, there is nothing to indicate that defendant failed to perform legal services for plaintiff so that he was not entitled to compensation in the form of retention of the retainer fee.

Finally, assuming, as we must, that the facts stated in plaintiff’s complaint are true and that she suffered emotional harm as a result of her relationship with defendant, these damages are insufficient to support an action of this type. If we were to recognize that emotional harm, absent any quantifiable injury stemming from an attorney’s legal representation of his client, was sufficient to support an action for breach of a lawyer’s fiduciary duty, we would be opening the door to any number of malpractice actions brought by clients who may have been less than satisfied with their legal representation but can point to no specific harm other than their own emotional distress. The potential for abuse would be too great.

We do not disagree with plaintiff’s suggestion that there should be a separate cause of action for a lawyer’s breach of the ethical duty to conduct himself in accordance with the rules of professional responsibility. However, we feel that it should be left to the legislature' to address this matter. Perhaps it would be appropriate for the legislature to create, statutorily, a new cause of action to specifically address this type of situation, similar to the cause of action recently created by statute to address the problem of sexual exploitation by psychotherapists. See Ill. Rev. Stat. 1989, ch. 70, par. 806.

In any event, however, we do not find that the facts stated in plaintiffs complaint could not have supported any .cause of action against defendant. It is possible that a legally sufficient complaint for battery or intentional infliction of emotional distress could have been crafted based upon the facts presented here. However, it is not necessary to decide that here, since any such cause of action would be a personal injury action barred by a two-year statute of limitations, making the trial court’s dismissal proper.

We now turn our attention to plaintiff’s second claim, that defendant fraudulently concealed the fact that a cause of action existed, making the claim susceptible to the five-year statute of limitations. Our review of the record reveals that this argument was not raised before the trial court. Consequently, we find that we need not address the merits of the argument since any matter raised for the first time on review need not be considered. (Sorenson v. Fio Rito (1980), 90 Ill. App. 3d 368, 413 N.E.2d 47.) We note, however, that if we were to consider the matter, it is highly improbable that we would find that a defendant could have fraudulently concealed a personal injury cause of action from a plaintiff, due the very nature of a personal injury action.

For the reasons stated above, we affirm the order of the trial court dismissing plaintiff’s complaint with prejudice.

Affirmed.

COCCIA, P.J., and LORENZ, J., concur.

      A petition concerning the suppression of the parties’ names was filed with the Illinois Supreme Court. The motion for supervisory order, entitled Elson v. Murray, docket No. 70020, was denied on June 26, 1990.

      It appears that, when imposing liability upon a psychotherapist for malpractice, courts have relied upon the fact that the psychological dependency of a patient undergoing therapy often results in a medically recognized phenomenon known as “transference,” whereby the patient transfers feelings to the therapist. The mishandling of this phenomenon by a trained therapist, resulting in sexual involvement with the patient, has been deemed malpractice.

      We believe that to allow an action for legal malpractice based upon the fact that an intimate relationship occurred between the attorney and his client during the course of the legal relationship, when supported only by damages such as mental anguish, shame, humiliation, injury to feelings, defamation or some unspecified injury to character, would be tantamount to allowing a claim for seduction, alienation of affections, or criminal conversation to proceed under less strict standards than required by statute for actions of this type, merely by virtue of the fact that the parties involved happened to have met in the context of a legal relationship. Additionally, we feel an obligation to proceed most cautiously because creation of such a new cause of action could have a serious chilling effect upon all attorney-client relationships and because our legislature has already recognized that actions seeking redress for intangible or indefinite damages in actions of this nature, as cited above, have a grave potential to be used for blackmail by unscrupulous persons seeking unjust enrichment. See Ill. Rev. Stat. 1989, ch. 40, pars. 1801 through 1810, 1901 through 1907, 1951 through 1957.