# Petition for Writ of Certiorari — Green v. Merrill Lynch, Pierce, Fenner & Smith Inc.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2001
- **Citation:** 533 U.S. 951

## Text

Supreme Court of the United States

GERTRUDE GREEN, as Administratrix of the
Estate of Sol Green and Individually,

Petitioner,
v.

MERRILL LYNCH, PIERCE, FENNER & SMITH,
a Delaware Corporation, and CANTWELL & CANTWELL,

Respondents.

On PETITION FOR A WRIT OF CERTIORARI
TO THE ILLINOIS APPELLATE Court, First DistRICT

PETITION FOR A WRIT OF CERTIORARI

CLINTON A. KRISLOV
Counsel of Record
MICHAEL R. KARNUTH
KrisLov & AssociaATEs, LTD.
Attorneys for Petitioner
Civic Opera Building
20 North Wacker Drive
Suite 1350
Chicago, Illinois 60606
(312) 606-0500

166797 cel

COUNSEL PRESS
(800) 274-3321 + (800) 359-6859

i

QUESTIONS PRESENTED FOR REVIEW

Whether an Illinois resident consumer may collaterally
challenge the enforcement in Illinois of a default California
judgment which patently violated BMW v. Gore, by its
awarding $50,000 punitive damages on $4,000 alleged actual
damages on a consumer credit card debt, obtained by default
by a nationwide financial services company in a California
state court and registered by default in Illinois, where the
Illinois resident consumer, who was elderly and poor, lacked
the resources to defend in the distant forum the alleged debt
asserted on forged documents against her deceased husband.

\

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RULE 14(b) LIST OF ALL PARTIES TO THE
PROCEEDINGS IN THE COURT BELOW

Plaintiff: Gertrude Green, as Administratrix of the Estate
of Sol Green and Individually

Defendants: Merrill Lynch, Pierce Fenner & Smith, Inc. and
Cantwell & Cantwell

il

TABLE OF CONTENTS

Page
Questions Presented for Review ............... i

Rule 14(b) List of all Parties to the Proceedings in
LR aeerear nenetn eo Pe 5 il
a oes wg oa dab-a d Cee Cas ill
Table of Cited Authorities .................... \
Table of Appendices ......................... Vil
CE ee l
Statement of Jurisdiction ..................... l
Constitutional Provisions and Statutes Involved .. 2
Statement of the Case ........................ 2
I. The Califormia Suit .................... 2

I]. Registration in Illinois of the California
Default Judgment ..................... 5

III. Enforcement of the Illinois Default Judgment
EP ASS Eee a ee ee 9
Reasons for Granting the Writ ................. 10

I. The Invalidity of the California Default
TE tc 0. GaN id hice Gereatane ees 12

lv

Contents
Page
II. The Unconstitutionality of the California
SPE GUI no ccs odnasceecunes 15
REN ac cee au cnwhsanee eee ee cae 17

Poy

TABLE OF CITED AUTHORITIES

Page
Cases:
BMW of North America, Inc. v. Gore, 517 U.S. 559
GRP as nc nud soa kveweee 1, 10, 11, 12, 13, 15, 16
Cates Construction, Inc. v. Talbot Partners, 980 P.2d
0 re re i ie Te 16
Evans v. Corporate Services, 207 Ill.App.3d 297,
565 N.E.2d 724 (2d Dist. 1990) .............. 13
Green Tree Financial Corp. v. Randolph, 531 U.S.
79 (December 11, 2000) ... 2... 0. ccc cc ccc cece Ei, 89
In re Marriage of Verdung, 162 Il.App.3d 374, 515
eee 8 PPT eee ere eres 13
Kalb v. Feurstein, et ux., 308 U.S. 433 (1940) .... 13
Miller v. Balfour, 303 Ill.App.3d 209, 707 N.E.2d
Fae GREE PED once khan hae 13
Pink v. A.A.A. Highway Express, 191 Ga. 502, 13
S.E.2d 337, (1941), affirmed, 314 U.S. 201 (1941),
rth. dem., 314 U.S. TiG CIDEZ) «ooo cen cccanne 1]

Pyshos v. Heart-Land Development Company, 258
Ill.App.3d 618, 630 N.E.2d 1054 (1st Dist. 1994)

vi

Cited Authorities

Page
State Bank of Piper City v. A-Way, Inc., 135
lll. App.3d 1010, 482 N.E.2d 620 (3d Dist. 1985)
<n ens bubadeneuseeaeenee ne 14
United States Constitution:
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Posen PUMINONR soc doce dc ntévieas esas 2
Statutes:
oe USA... © SRS Fe 66 ciace da suneeseaceeee I
Ace ce PPS Pree 14
SB yee 8) FS) rere eee 14
Rule:
Illinois Supreme Court Rule 277 ............... 14

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TABLE OF APPENDICES

Appendix A — Order Of The Illinois Appellate
Coust Dated AGS BO, BOGO ccccescvccccacecs

Appendix B — Order Of The Circuit Court Of Cook
County, Illinois Dated January 26, 1998 .......

Appendix C — Letter Of The Illinois Supreme Court
Denying Petition For Leave To Appeal Dated
SURG Bic PEE scccccdcesnacvacnsescccasne

Appendix D — Order Of The Circuit Court Of
Cook County, Illinois, County Department, Law
Division Registering By Default The California
Default Judgment Dated September 21, 1989

Appendix E — Default Judgment Of The Superior
Court Of California, County Of San Diego Dated
And Filed November 14, 1988 And Entered
November 15, 1988; And Request For Entry Of
DEE -s dnanabkuascn cdedeeeestaaekceneese

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OPINIONS BELOW

On January 26, 1998, the Cook County Circuit Court of
Illinois granted Defendants-Respondent’s, Merrill Lynch,
Pierce Fenner & Smith (“Merrill Lynch”) and Cantwell
& Cantwell (“Cantwell”) (collectively, “Defendants”
or “Respondents”), Motion to Dismiss. (App. B). Mrs. Green
filed a motion for reconsideration, which the Circuit Court
denied on September 8, 1998.

On October 6, 1998, Mrs. Green filed a Notice of Appeal
with the Illinois Appellate Court, First District. On April
20, 2000, the Appellate Court issued its Order and
Memorandum Opinion (App. A) which affirmed the final
judgment of the Circuit Court. On May 11, 2000, Mrs. Green,
acting pro se, filed a petition for rehearing with the Appellate
Court, which was thereafter denied on June 8, 2000.

Petitioner’s timely petition to the Illinois Supreme Court
for Leave to Appeal was denied on January 29, 2001. (App. C).

STATEMENT OF JURISDICTION

Jurisdiction for review by this court is based on 28 U.S.C.
§ 1257(a) to review a final judgment by the highest court of
a State in which a decision could be had, where a right (here,
due process) is claimed under the Constitution of the United
States.

2

CONSTITUTIONAL PROVISIONS AND
STATUTES INVOLVED

United States Constitution; Article 45 Section 1:

Full faith and credit shall be given in each state
to the. . . judicial proceedings of every other state.

United States Constitution, Fifth Amendment:

No person shall . . . be deprived of . . . property,
without due process of law... .

STATEMENT OF THE CASE

Petitioner’s case arises from Merrill Lynch’s initiation
and prosecution of claims against Sol Green in California,
obtaining a default judgment against him for $4,000
(four thousand doilars) for alleged actual damages plus
$50,000 (fifty thousand dollars) punitive damages, followed
by Merrill’s subsequent registration and enforcement of that
judgment in Illinois, also by default, and successfully
asserting res judicata and full faith & credit to preclude
Green’s widow from collaterally challenging the judgment
being enforced.

I. The California Suit

On December 3, 1987, Robert Green, Sol Green’s
nephew, president of a corporation doing business in
California known as Moving Up International Corp.
(“Moving Up”), and an unidentified person, applied to open
money market accounts for Moving Up with a Merrill Lynch

3

office in San Diego. (Complaint 912, RC.5).' Each account
agreement provided for the issuance of VISA cards, and upon
the request of Robert Green, without Sol Green’s knowledge,
VISA cards were issued in the names of Robert Green and
Sol Green (Complaint §912-13, RC.5-6). At that time, the
unidentified individual was allowed, also without Sol
' Green’s knowledge, to sign the name of Sol Green on the
application form (Complaint 413, RC. 5).

As the money market accounts be overdrawn in
early 1988, Robert Green, Alison J. Boyd, another officer of
Moving Up, and others, not including Sol Green, had several
conversations with Merrill Lynch regarding those accounts.
(Complaint 414, RC.6). During those conversations, Merrill
Lynch was expressly informed that Sol Green had resigned
from Moving Up over a year earlier, in October of 1986,
that his signature had been forged on the account agreements,
that he had no knowledge that the accounts existed, and,
further, that he never used the accounts or the VISA cards.
(Complaint 414, RC.6). Nevertheless, Merrill Lynch
commenced an action in California against Moving Up,
Robert Green, Alison Boyd, Sol Green and two other
individuals, alleging that the Merrill Lynch accounts were
overdrawn by $20,450 and that the VISA cards had an
outstanding balance of $4,233.89 (the “California Suit”)
(Complaint 9917-18, RC.7 and 23). The California Suit
allegations of Sol Green’s involvement in Moving Up and
the overdrawn accounts were made on information and belief
and not supported by any evidentiary material. In fact,
throughout this period of time Sol Green was battling severe

1. Petitioner’s Verified Complaint is cited herein as “Complaint
{| __”. The record on appeal to the Illinois Appellate Court is cited
herein as “RC. __”.

4

_ illness and was spending a great deal of time in hospitals
and visiting doctors. (RC. 701-710).

Nonetheless, Merrill Lynch still attempted to
effect service on Sol Green by directing a process server to
an apartment in San Diego, although, Merrill Lynch knew
that Sol Green never resided at that address. (Complaint 419,
RC.8-9). In fact, at the time Merrill Lynch filed the California
Suit it had in its possession the Articles of Incorporation
and By-Laws of Moving Up indicating that Sol Green’s
address was 1322 Seward Street, Evanston, Illinois
(Complaint 420, RC.8). Having failed to effect personal
service upon Sol Green, Merrill Lynch attempted service at
Sol Green’s “usual place of business” by directing a process
server to the office of Moving Up despite possessing the
specific knowledge that Sol Green had resigned from Moving
Up over a year earlier and that the office was closed almost
one month before Merrill Lynch claimed to have effected
service (Complaint 921, RC.8).

On November 14, 1988, Merrill Lynch nonetheless
sought and obtained a California court default judgment
entitling Merrill Lynch to collect $84,955.19 from Moving
Up, Robert Green, Sol Green, Alison Boyd and others, on
the alleged $20,450 overdrawn money market account and
the $4,233.89 credit card debt (the “California Default
Judgment”). (App. E). The California default judgment
included an award of $50,000 in punitive damages and
approximately $10,000 in attorneys’ fees and costs
(Complaint 922, RC. 8 and 47). (App. E at 23a and 25a).
Despite Sol Green’s sole specific act of involvement, as
alleged in Defendant’s California Suit, being merely
providing his signature on the account agreements, which
Alison Boyd and Mrs. Green contend in sworn affidavits

5

were forged, the full amount of the default judgment was
eventually only enforced against Sol Green (RC.162).

Moreover, the allegations contained in the California
Suit on their face showed Sol Green to be liable only for the
$4,233.89 credit card debt. (RC.526-546). The money market
accounts overdrawn by $20,450 were strictly a corporate
obligation and the California Suit did not contain allegations
to show why the corporate veil should be pierced in order to
hold Sol Green personally liable. In fact, the trial court below
acknowledged that the only claim Sol Green may have been
liable for was the $4,000 credit card claim. (RC.43-44, 58).

II. Registration in Illinois of the California Default
Judgment

After obtaining the default judgment in the California
Suit, Merrill Lynch then contacted Respondent Cantwell to
register the judgment in Illinois. On August 3, 1989,
Cantwell, on behalf of Merrill Lynch, filed a Citation to
Discover Assets on Sol Green. (Complaint 426, RC.10). The
Citation to Discover Assets notice commanded Sol Green to
appear before Judge Irwin Cohen on September 1, 1989 to
discover assets not exempt from the enforcement of a
judgment purportedly entered on August 2, 1989. Importantly
for this petition, no judgment had been registered or entered
in Illinois against Sol Green either on or prior to August 2,
1989. In fact, the Petition to Register the default judgment
in the California Suit was not filed in Illinois until August 3,
1989, the same day the Citation to Discover Assets was filed.
Moreover, under Illinois law, it was improper for
Respondents to pursue a Citation to Discover Assets, a
supplemental proceeding, before entry of an enforceable
judgment.

6

At this time, Sol Green was seriously ill and mentally
infirm (he died five months later, on January 12, 1990).
Consequently, Sol Green’s family was in some measure of
disarray. On August 8, 1989, both the Petition to Register
Foreign Judgment and the Citation to Discover Assets were
served by substitute service of process. (Complaint (24,
RC.9).

Because Sol Green was bedridden and seriously
ill, Claire Fischer, Sol Green’s sister-in-law, appeared
on September 1, 1989, and checked in with the clerk
(RC.680-1). It has since been determined that the September
1, 1989, hearing related only to the improperly scheduled
Citation to Discover Assets, not the Petition to Register the
Foreign Judgment. At that hearing, a new hearing date of
October 3, 1989, was set (RC.681). At no time was Claire
informed that a Rule to Show Cause relating to the Citation
to Discover Assets was to issue (RC.681). Indeed, Claire
was never provided with a copy of the Order entered at that
hearing. Mrs. Green later discovered that the Merrill Lynch
attorney wrote the following on that Order: “Defendant
having been served by substitute service on August 8, 1989,
and not appearing [. . .]” (RC.681). The Order also indicated
that a Rule to Show Cause should issue against Sol although
Claire was not advised that a Rule to Show Cause would be
issued.

Claire left the September 1, 1989 hearing having been
led to believe that no action would be taken regarding the
registration of the California Default Judgment until October
3, 1989. In the interim, on September 11, 1989, Merrill Lynch
filed a “Special Motion for Entry of Default Judgment” with
a hearing scheduled for September 18, 1989. While Cantwell
signed a Notice of Motion indicating that this motion had

iY id.

7

been served on Sol Green by mail at his Evanston home, no
member of the Green family ever saw that motion in advance
of the hearing. (RC. 681).

On September 18, 1989, no member of the Green family
appeared at the Special Motion for Entry of Default Judgment
because they had not received notice. Moreover, no order
was entered on that date and no order was served on Sol nor
appears in the court file. Furthermore, the Green family was
led to believe that the October 3, 1989 hearing was scheduled
to address the issues of the judgment and the citation to
discover assets. A default judgment (the “Illinois Default
Judgment”) was entered on September 21, 1989, by Judge
Thomas P. Quinn against Sol Green in the amount of
$84,955.19, with post-judgment interest in the amount of
$7,420.08 for a total judgment amount of $95,195.27, plus
costs of suit (RC.49). (App. D at 21a).

Neither Sol, Claire Fischer or any other member of the
Green family was ever served with a copy of the Illinois
Default Judgment (RC. 681). Claire, not knowing what had
transpired on September 21, 1989, appeared at the October
3, 1989, hearing on the Citation to Discover Assets which
had previously been scheduled. (RC. 681). At the October
3, 1989 hearing, the lawyer from Cantwell advised the court
that the Rule to Show Cause had not been served upon
Sol Green and he asked for a continuance (RC. 681). The
Court ordered that an alias rule to show cause should issue
and continued the matter until November 7, 1989.
By November 7, 1989, the thirty-day clock for vacating the
Illinois Default Judgment would have run.

Claire Fischer also appeared at the November 7, 1989
hearing on behalf of Sol Green. At that time, the court, at

8

the request of Cantwell, continued the matter until December
8, 1989. When the Cantwell attorney drafted the Order
relating to this hearing, he indicated that Sol Green’s attorney
had requested the continuance; however, Sol Green had never
retained an attorney during this period. (RC. 682).

On November 7, 1989, Merrill Lynch issued a Citation
to Discover Assets directed at Mrs. Green. (RC. 682).
The citation examination of Mrs. Green was held on
March 8, 1990. During that proceeding, Mrs. Green was
shown a document on which the purported signature of
Sol Green appeared and was asked if that was his signature.
Mrs. Green stated that the signature was definitely not Sol's
signature; and, despite her requests, Merrill Lynch refused
to produce any receipts indicating that Sol Green ever used
the subject credit card. (RC. 10). Mrs. Green also informed
counsel for Merrill Lynch that Sol Green had never lived in
California, had never worked in California, and was never
indebted to Merrill Lynch. In response, an attorney from
Cantwell told Mrs. Green not to worry because Sol Green
was dead (RC. 10).

At the conclusion of that proceeding, the court entered
an order dismissing the proceeding on the condition that
Mrs. Green produce a copy of the 1987 and 1988 federal
and state tax returns, which she and Sol had filed, as well as
other financial documentation. These tax returns were
subsequently tendered to Defendants and the action was
dismissed.

9
Ill. Enforcement of the Illinois Default Judgment

On January 9, 1992, more than two years after entry of
default in Illinois, Cantwell, on behalf of Merrill Lynch, filed
a Motion to Set Aside a purported fraudulent conveyance of
the Green residence from Sol Green to Mrs. Green and grant
turnover of the Green residence. (Complaint 433, RC. 11)
During these proceedings, Judge Irwin Cohen did not permit
Mrs. Green, though she tried, to challenge the validity of
the California Default Judgment or its registration in Illinois:

I judicially noticed the fact the entry was in
California, the fact it was registered there, the fact
it was filed here, or challenged here, those are
not issues. They are all gone. The only thing of
any matter now that is new and the only thing I
am going to consider in reference to this is two
items, and whether it is a red herring or not, I am
not concerned about it.

(RC. 712). On April 13, 1993, Judge Cohen entered an order
granting Merrill Lynch’s motion (Complaint 4933 and 36,
RC. 12 and 75).

In the interim, on January 8, 1993, Robert Fischer, as
administrator of the Estate of Sol Green, filed a complaint
in California to set aside the underlying default judgment
(RC. 214-220). That action was dismissed by Judge Haden
on purely procedural grounds (for failure to attend a case
management conference) on August 13, 1993 (RC. 223).
The Green family was unable to continue with that California
action due to their inability to afford to retain counsel and
litigate that action thousands of miles away.

10

On October 5, 1993, the beneficial interest held by
Mrs. Green in the Green residence was sold in accordance with
a court ordered judicial sale to Merrill Lynch for $90,000
(Complaint 937; RC. 12 and 56). On November 5, 1993, an
order was entered confirming the sale of the Green residence.
(RC. 853).

In April 1997, Mrs. Green filed her three-count Complaint.
On April 20, 2000, the Appellate Court affirmed the trial court’s
dismissal of the Complaint on grounds of res judicata, collateral
estoppel and statute of limitations. On January 29, 2001, the
Illinois Supreme Court denied petitioner’s timely petition for
leave to appeal.’

REASONS FOR GRANTING THE WRIT

This case presents an important question as to whether the
three-prong due process standard for challenging the
constitutionality of punitive damage awards, as expressed in
BMW v. Gore, 517 U.S. 559 (1996), may be asserted to
collaterally challenge the enforcement of a facially invalid
$50,000 punitive award on $4,000 of alleged actual damages,
where such judgment was obtained by default on forged
documents in California state court against an elderly and poor
resident of Illinois by the judgment creditor, a global financial
services firm, which then enforced that default judgment against
the Illinois resident by taking her home and asserting that res
judicata and full faith and credit precludes the person’s collateral
challenge to the underlying judgment, ignoring that she lacked
the financial resources to defend in California.

2. Given the lower courts’ failure to address the invalidity and
unconstitutionality of the California default judgment, the lower
courts’ grounds for dismissal are not valid or a bar to the relief
Petitioner seeks here.

11

This case thus starkly presents the factual record missing
from Green Tree Financial Corp. v. Randolph, 531 U.S. 79
(December 11, 2000), in which this court recently declined
to permit a consumer’s collateral challenge to an agreement
to arbitrate, because the record there failed to meet the burden
of showing that arbitration there was prohibitively expensive,
effectively constituting a denial of due process. 121 U.S.
at 522-523.

Here, in contrast, the distant California state court
proceedings in which Merrill Lynch sought and obtained a
default judgment against the Illinois resident not only for
the alieged $4,000 actual damages on the credit card, but,
additionally by default, $50,000 in punitive damages, in
violation of Gore as well as California law, because the
Illinois resident defendant lacked the resources to defend
the distant case, is precisely the denial of due process which
should support an exception to Art. 4, § 1’s full faith and
credit obligation on the state courts.

The law in this area is basic hornbook. Before the full
faith and credit clause can become operative, one must have
had his day in court, since it is the essence of “due process
of law” that one must be given an opportunity to be heard.
Pink v. A.A.A. Highway Express, 191 Ga. 502, 13 S.E.2d
337, (1941), affirmed, 314 U.S. 201 (1941), reh. den., 314
U.S. 716 (1942). In BMW v. Gore, 517 U.S. 559 (1996) this
court held that due process precludes punitive damages which
do not meet a 3-prong test, evaluating the punitive damage
award based on: 1-the degree of defendant’s reprehensibility,
2-the ratio of the punitive award to actual/compensatory
damages (generally permitting no more than 3 or 4-times
actual damages), and 3-a comparison to civil and criminal
penalties otherwise imposed on such conduct. Here, the
punitive damages on their face violated Gore (petitioner, the

12

defaulting alleged signer for a credit card had no culpability
for any of the charges and could not afford to appear in
California, the award was 12.5 times the $4,000 alleged
actual damages, and there are no “penalties” imposable on a
consumer debtor under the law of the forum, California,
beyond his obligation to make good for the principal), and
were exacerbated by the fact that they were entered by
default.

Thus, this case is the factual situation appropriate for
this Court to weigh in with the holding that a punitive damage
award obtained in a far-away jurisdiction which on its face
violates Gore, can be challenged collaterally over assertions
of res judicata and full faith and credit. |

In affording the California Default Judgment full faith
and credit the Illinois Appellate Courts blindly accepted the
two default rulings rendered in the prior proceedings and |
ignored their duty to void judgments which are invalid or
unconstitutional on their face.

I. The Invalidity of the California Default Judgment

The use of distantly obtained judgments with inadequate
process and registration, and facially invalid punitive damage
awards are not entitled to full faith and credit or res judicata
effect against Illinois consumers. Mrs. Green, an 82 year
old widow, is faced with losing her house of almost 50 years
as well as her right to have her case heard on the merits.
Given these dire consequences, it is imperative that this Court
do what the lower courts have thus far failed to do — allow
an evidentiary determination of the validity of the California
Default Judgment and its registration, also by default, in
Illinois.

13

The Illinois Courts gave the California Default Judgment
full, faith and credit as if there was no other option available
to them. However, it is well known in Illinois that
“void judgments are always subject to collateral attack for
lack of jurisdiction or fraud.” Miller v. Balfour, 303
Ill.App.3d 209, 215, 707 N.E.2d 759, 764 (2d Dist. 1999)
(citing, In re Marriage of Verdung, 162 Ill.App.3d 374,
389-90, 515 N.E.2d 454 (1987)). Furthermore, void ©
judgments “may be attacked at any time or in any court, either
directly or collaterally”. Evans v. Corporate Services,
207 Ill.App.3d 297, 302, 565 N.E.2d 724 (2d Dist. 1990).
This Court also allows collateral attacks on invalid state court
judgments or those that violate due process rights. See Gore,
517 U.S. 559 (1996); and Kalb v. Feurstein, et ux., 308 U.S.
433 (1940) (allowing collateral attack on state court
foreclosure proceeding; reversing dismissal of action seeking
restoration of possession of farm lost in a state court
foreclosure proceeding because the state action did not
comport with federal law).

The record here shows that at the time the California
Default Judgment was entered Merrill Lynch had knowledge
that Sol Green was not a resident of California (Complaint
420, RC.8), had resigned from Moving Up approximately
one year prior to the subject accounts being open (Complaint
921, RC.8) and that the purported signature of Sol Green
written on the account agreements was placed there without
Sol Green’s knowledge or authorization. (Complaint 414,
RC.6).

Additionally, Defendants’ registration of the California
Default Judgment was also improper and could even be
characterized as fraudulent. Under Illinois law, pursuit of a
Citation to Discover Assets, a supplemental proceeding,
before a judgment has been entered is now, and was then in

14

1989, not allowed. 735 ILCS § 5/2-1402 (formerly, IL ST
CH 110 P 2-1402) (“procedure for conducting supplementary
proceedings shall be prescribed by rules”). Supreme Court
Rule 277 states: “a supplementary proceeding . . . may be
commenced . . . [when] a judgment is . . . subject to
enforcement”; see also Pyshos v. Heart-Land Development
Company, 258 Hll.App.3d 618, 622, 630 N.E.2d 1054, 1057
(1st Dist. 1994) (“[s]upplementary proceedings may only be
initiated after a judgment has been entered”); and State Bank
of Piper City v. A-Way, Inc., 135 Ill.App.3d 1010, 1015, 482
N.E.2d 620, 624 (3d Dist. 1985) (section 2-1402 proceedings
are unavailable to creditors, secured or otherwise, until after
judgment capable of enforcement has first been entered in
their favor”). Here, Defendants initiated the Citation
to Discover Assets proceeding almost two months prior
to the entry of the California Default Judgment. Not only
did Defendants violate Illinois Supreme Court Rule 277
in 1989, but they intentionally misled the lower court into
believing that such a process was appropriate. (RC. 64-65).
Defendant’s violation of, among other things, the rule against
filing supplemental proceedings before entry of the Illinois
judgment, and their subsequent misstatement to the lower
court covering up their violation, had a devastating impact
on Petitioner, resulting in the sale of her home, which is
deserving of a remedy.

The lower courts’ refusal to review the underlying facts
in this case should not deter this Court from doing so now.
The record here shows that service on Sol Green in California
was not proper (Complaint 9919-21, RC.8-9) and, thus, the
California court did not have jurisdiction over him.
Moreover, Defendants’ improper registration of the
California Default Judgment in IIlinois, also by default, and
the Illinois courts’ reliance on that judgment being valid,

15

calls into question its validity in that forum also. And, unlike
the facts presented in Green Tree, the record here supports
rendering the California Default Judgment invalid because
the costs associated with being forced to litigate in a far-
away forum precluded Petitioner from vindicating her legal
rights.

II. The Unconstitutionality of the California Default
Judgment

The Illinois courts also completely ignored the fact that
the California Default Judgment contained an award of
$50,000 in punitive damages, $20,000 of a purely corporate
_ debt and some $10,000 in attorney fees and costs, on
essentially a $4,000 credit card claim. In blindly affording
the California Default Judgment full, faith and credit, the
lower courts failed to make any due process analysis required
by BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996),
nor did they inquire at all into the basis for such an excessive
punitive damage award relative to the underlying obligation.
Ignoring the “degree of reprehensibility” prong, the Illinois
court never permitted any assertion that Sol Green’s conduct,
even as alleged in the California suit, could support a punitive
damage award. Even if the validity of Mr. Green’s alleged
signature was not challenged, it is difficult to envision how
a mere obligation to pay on a credit card default could ever
constitute “reprehensible” conduct permitting a punitive
damage award. Nor are there any penalties for such conduct-
failing Gore’s third prong. Most troubling is the obvious
disproportionality of the punitive damages at 12.5-times-
alleged actual damages. The excessive award of punitive
damages assessed against Petitioner, which has resulted in
the judicial sale of her home of almost 50 years to Merrill
Lynch, grossly violates her right to due process.

16

As stated in Gore, punitive damages may be imposed
to “punish unlawful conduct and deter its repetition”.
Id. at 568. But here, the complaint filed against Sol Green in
California did not allege any allegation of improper conduct.
All assertions against Sol Green, except for his purported
signature on the account agreement, were alleged on
information and belief.

As recognized by Judge Hogan below, Merrill Lynch’s
claim against Sol Green was only for $4,000 arising
essentially from a breach of a credit card agreement.
To award $50,000 in punitive damages against a breach of
contract claim and to tack on the $20,450 corporate claim,
without even considering the additional approximately
$10,000 in attorney fees and other costs, is not only a
violation of Petitioner’s due process rights under the
holding in Gore, but is also a violation of California law,
the jurisdiction that rendered the default judgment.
Cates Construction, Inc. v. Talbot Partners, 980 P.2d 407,
427 (“absent an independent tort, punitive damages are not
recoverable for breach of contract”). Therefore the Petitioner
should have been afforded the opportunity to challenge the
validity of the default judgment being enforced.

In order to provide fundamental due process protection
for consumers nationwide against such creditor abuses, the
Court should grant the petition and declare the appropriate
due process limitations on full faith and credit.

17

CONCLUSION

For all of the foregoing reasons, Petitioner respectfully
requests that this Court issue a writ of certiorari to the Illinois
Appellate Court, so that the judgment of the appellate court
may be reviewed and reversed with instructions to vacate
the judicial sale of petitioner’s home to respondent Merrill
Lynch Pierce Fenner and Smith.

Respectfully submitted,

CLINTON A. KRISLOV

Counsel of Record

MICHAEL R. KARNUTH
KrisLov & AssociaTEs, LTD.
Attorneys for Petitioner
Civic Opera Building

20 North Wacker Drive
Suite 1350

Chicago, Illinois 60606
(312) 606-0500

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386014_1761%3A1. Public record. Not legal advice.