Chicago Business Litigation Lawyer Blog
You learn about the lawsuit when the bank freezes the account. Or the summons went to a registered agent nobody has updated in years, or the insurer was supposed to respond and did not. Now there is a judgment against your company, for a number nobody tested, in a case you never defended.
A default judgment is serious, but it is often not the end. Illinois gives a defendant one route within 30 days of a final judgment and a harder route for up to two years after it, and a judgment entered without valid service stands on different footing altogether. The question that decides which route applies is how much time has passed, so the calendar comes first.
What can be done within 30 days?
This is the most forgiving window. Section 2-1301(e) of the Code of Civil Procedure says the court “may in its discretion, before final order or judgment, set aside any default, and may on motion filed within 30 days after entry thereof set aside any final order or judgment upon any terms and conditions that shall be reasonable.” 735 ILCS 5/2-1301(e). The relief is discretionary, and the court may attach conditions. But the statute does not list the elements that later petitions must prove. A prompt motion, with a real explanation and a real defense, is the strongest position a defaulted company will ever have. Do not spend this period negotiating without protecting the deadline.
What if more than 30 days have passed?
The vehicle then is a petition under section 2-1401. It is filed in the same case, but it is not a continuation of that case, and it must be supported by an affidavit or other appropriate showing as to matters outside the record. 735 ILCS 5/2-1401(a), (b). It generally must be filed not later than two years after the judgment, excluding time during which the person seeking relief is under legal disability or duress or the ground for relief is fraudulently concealed. 735 ILCS 5/2-1401(c).
The petition is also harder to win. When it presents a fact-dependent challenge, the petitioner must set forth specific factual allegations supporting “(1) the existence of a meritorious defense; (2) due diligence in presenting this defense; and (3) due diligence in filing the section 2-1401 petition for relief,” and must carry those points by a preponderance of the evidence. Warren County Soil & Water Conservation District v. Walters, 2015 IL 117783, ¶ 51. Whether to grant relief is resolved by considering “the particular facts, circumstances, and equities of the underlying case.” Id. ¶ 50.
Notice the two different diligence requirements. A company must explain what it did in the original case and what it did after it learned of the judgment. A forgotten summons is a difficult story under the first element. Months of silence after discovering the judgment can sink the second, however good the defense.
Does filing the petition stop collection?
No, not by itself. The statute says the filing of a petition “does not affect the order or judgment, or suspend its operation.” 735 ILCS 5/2-1401(d). A creditor may keep collecting while the petition is pending, so a defendant facing a citation or a frozen account may need to ask the court separately for relief from enforcement.
What if the company was never properly served?
That is a different argument, and often the most powerful one. A judgment entered by a court without personal jurisdiction over the defendant is void, and section 2-1401(f) preserves any existing right to relief from a void judgment. The Illinois Supreme Court addressed this in Sarkissian v. Chicago Board of Education, 201 Ill. 2d 95 (2002), where a defendant challenged a default judgment on service grounds more than seven years after it was entered. Id. at 102-03. The court explained that the usual rules do not apply: “Petitions brought on voidness grounds need not be brought within the two-year time limitation,” and “the allegation that the judgment or order is void substitutes for and negates the need to allege a meritorious defense and due diligence.” Id. at 104.
That language should not lull anyone. Whether service was actually defective is a question of facts and of the service rules, and a return of service on file is not something to dismiss casually. Delay also makes the evidence harder to find, and the money may be gone by the time the argument is heard. Pull the return of service and the summons immediately and compare them with what actually happened.
What counts as a meritorious defense?
It has to be a defense to the claim, stated in facts and not conclusions. It might be that the contract was never signed by the company, that the debt was paid, or that the plaintiff’s damages figure has no support. An affidavit saying only that the company disputes the debt will not carry the point. If the amount of the judgment is what is wrong, say so, and show why with documents.
Three steps matter on the day you learn of a default. First, get the full court file, including the summons, the return of service, the motion for default, and the judgment, and write down the date of entry, because that date sets every deadline. Second, preserve what explains what happened, such as registered agent records, mail logs, and communications with your insurer or prior lawyer. Third, do not ignore a citation or other collection paper while you sort this out, because those papers carry their own consequences and their own dates.
A default judgment is built on one side’s story alone. Illinois law gives a defendant a way to be heard, but it rewards the one who moves quickly and explains itself honestly. The company that waits, hoping the problem goes away, gives up its easiest remedy first.
If a default judgment has been entered against you or your company, the time that has passed may decide which options remain. Call DiTommaso Lubin, P.C. at 630-333-0333 for a free consultation, or contact us online.
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Peter S. Lubin and James V. DiTommaso are Chicago business litigation lawyers who try cases throughout Illinois. Peter is a graduate of the University of Chicago Law School, where he has taught trial practice for decades, and he has been recognized as an Illinois Super Lawyer. He has served as lead counsel in more than one hundred class actions and has handled more than one hundred shareholder, LLC, derivative, breach of fiduciary duty, and fraud matters, on both the plaintiff and the defense side. Crain’s Chicago Business credited him with the largest class action settlement of the year for a $40 million recovery in Erikson v. Ameritech, and the firm has been named DuPage County Law Firm of the Year. The firm and its lawyers have represented clients such as McDonald’s, Motorola, and Experian, and have litigated against companies including AT&T and General Motors. James DiTommaso, a graduate of Chicago-Kent College of Law with a certificate in business law, has served with the Illinois Appellate Court and has argued a case before the Illinois Supreme Court. He litigates these disputes in the Illinois trial and appellate courts and in the federal courts. When you hire this firm, the lawyers whose names are on the door are the ones who handle your case.
This post is for general information and is not legal advice.