Line Pilot Bungee, Inc., and Clifford D. Crispens (defendants) are two of sevendefendants in a mortgage foreclosure action filed by Bank and Trust Company (plaintiff). A default judgment was entered against all seven defendants. The trial court denieddefendants' motion to vacate the default judgment. Defendants contend that the trial courtapplied the wrong standard in determining the motion to vacate. We conclude thatdefendants are correct, and we reverse and remand for a rehearing on the motion.

The following is a timeline of the events that occurred in the foreclosure action. OnSeptember 10, 1999, plaintiff filed a complaint to foreclose two mortgages on commercialproperty. Seven defendants were named in the action, two of which are the defendantsinvolved in this appeal. On September 27, 1999, these two defendants were served withsummons. All other defendants in the foreclosure action were also served on or near thatdate. No one filed an answer or otherwise appeared before the court.

On December 22, 1999, the court entered an order finding all of the defendants in theforeclosure action in default. On December 23, 1999, plaintiff's counsel sent a notice ofentry of default order to each defendant in the foreclosure action. On January 21, 2000, thecourt entered a default judgment of foreclosure for a monetary judgment in excess of$500,000 and ordered the property sold if the judgment was not paid.

On January 25, 2000, defendants filed an answer and a motion for leave to file answerinstanter. Two days later plaintiff filed a motion to strike the answer. On January 31, 2000,10 days after the court entered the default judgment, defendants filed a motion to vacate it. Defendants sought an order vacating the default judgment, and they requested the court toallow them to file an answer to the pending complaint to raise meritorious defenses and toallow the case to go to trial on the merits. On February 4, 2000, plaintiff filed a responseto the motion to vacate.

On February 14, 2000, the trial court held a hearing on the motion to vacate, deniedthe motion, and held that defendants failed to establish the existence of a meritorious defenseand failed to provide a reasonable excuse for their delay in filing an answer. On April 17,2000, defendants filed a motion for leave to file a late notice of appeal, which was allowed.

The issue in this case is whether the trial court applied the correct standard indetermining whether to vacate a default judgment under section 2-1301(e) of the Code ofCivil Procedure (735 ILCS 5/2-1301(e) (West 2000)). We conclude that it did not apply thecorrect standard, and we reverse and remand for a rehearing on the motion.

More than one section of the Code of Civil Procedure applies to relief from a defaultjudgment. Which section applies to a specific situation depends on the time at which suchrelief is requested. Section 2-1301(e) applies if relief from a default is sought within 30 days(735 ILCS 5/2-1301(e) (West 2000)), and section 2-1401 applies to motions filed more than30 days after the entry of a final order or judgment (735 ILCS 5/2-1401 (West 2000)). Theother difference between the two sections lies in what is required to be shown to obtainrelief. In order to prevail on a motion to vacate under section 2-1401, the petitioner mustshow (1) the existence of a meritorious defense or claim, (2) due diligence in presenting thatclaim in the original action, and (3) due diligence in filing the petition to vacate. In reMarriage of McGlothlin, 312 Ill. App. 3d 1145, 1147, 729 N.E.2d 53, 55 (2000). However,satisfaction of these grounds is not mandatory under section 2-1301(e). Stotlar Drug Co.v. Marlow, 239 Ill. App. 3d 726, 728, 607 N.E.2d 346, 348 (1993). Defendants, in this case,filed their motion to vacate 10 days after the default judgment was entered by the trial court. Therefore, the motion falls under section 2-1301(e) of the Code of Civil Procedure, ratherthan section 2-1401.

A default judgment has been recognized as a drastic action, and it should be used onlyas a last resort. Widucus v. Southwestern Electric Cooperative, Inc., 26 Ill. App. 2d 102,109, 167 N.E.2d 799, 803 (1960). Illinois courts have a history of being liberal with respectto vacating default judgments under section 2-1301(e). Stotlar Drug Co., 239 Ill. App. 3dat 728, 607 N.E.2d at 348. The legislature specified that the Civil Practice Act, now entitledthe Code of Civil Procedure, should be liberally construed. Widucus, 26 Ill. App. 2d at 107,167 N.E.2d at 802; 735 ILCS 5/1-106 (West 2000).

In reviewing relevant case law, the court in Venzor v. Carmen's Pizza Corp.recognized that the appellate courts of Illinois have applied three different standards inreviewing section 2-1301(e) rulings. Venzor v. Carmen's Pizza Corp., 235 Ill. App. 3d1053, 1056-57, 602 N.E.2d 81, 83-84 (1992). First, some courts have looked only atwhether the court abused its discretion. Venzor, 235 Ill. App. 3d at 1056, 602 N.E.2d at 83. An abuse of discretion occurs when a trial court acts arbitrarily or when its decision exceedsthe bounds of reason and ignores principles of law such that substantial prejudice hasresulted. Venzor, 235 Ill. App. 3d at 1059, 602 N.E.2d at 85. Second, some courts havefocused solely on whether, under the circumstances of the case, substantial justice has beendone between the parties. Venzor, 235 Ill. App. 3d at 1056, 602 N.E.2d at 83. Specifically,this includes examining the severity of the penalty on the defendant and the hardship on theplaintiff if required to proceed on the merits. Venzor, 235 Ill. App. 3d at 1057-58, 602N.E.2d at 84. Third, some courts have combined these two standards, concluding that acourt has abused its discretion when its ruling fails to promote substantial justice betweenthe parties. Venzor, 235 Ill. App. 3d at 1056, 602 N.E.2d at 83-84.

The court in Venzor followed the earlier holding of People ex rel. Reid v. Adkins, 48Ill. 2d 402, 270 N.E.2d 841 (1971), which had changed the standard from only looking foran abuse of discretion. Venzor, 235 Ill. App. 3d at 1057, 602 N.E.2d at 84. The Adkinscourt stated, "[t]he overriding consideration now is whether or not substantial justice isbeing done ***," and the court concluded that the trial court had abused its discretion infailing to set aside its order. Adkins, 48 Ill. 2d at 406, 407, 270 N.E.2d at 843, 844. Weagree that, in this case, we must examine both whether substantial justice has been done andwhether the trial court abused its discretion. The docket sheet entry appears to examine onlywhether defendants presented a meritorious defense and offered a reasonable excuse for thedelay in filing the answer or the motion to vacate. This suggests that the trial court may havebeen considering the motion as one filed under section 2-1401, which of course it was not. Although the section 2-1401 factors may be useful in determining whether substantial justiceis being done, they are not the sole matters to consider in a section 2-1301(e) motion, as theyare in deciding a section 2-1401 motion. Widucus, 26 Ill. App. 2d at 109, 167 N.E.2d at803. Therefore, we must reverse and remand for a rehearing on the motion to vacate so thatthe court can apply the section 2-1301(e) standard and consider whether substantial justicehas been done between the parties.

Plaintiff argues that its rights must also be considered. See Farm Credit Bank of St.Louis v. Schwarm, 251 Ill. App. 3d 205, 622 N.E.2d 97 (1993). However, we conclude thatthe application of the correct standard satisfactorily considers plaintiff's rights by includingthe evaluation of the hardship imposed on plaintiff by proceeding to a trial on the merits. In addition, we note that section 2-1301(e) allows the trial court to establish whateverprovisions it deems reasonable in setting aside the default judgment. This includes theimposition on defendants of plaintiff's costs and attorney fees incurred in obtaining thedefault judgment. This should resolve part of plaintiff's burden if the trial court finds thatsubstantial justice can be had only if the case proceeds to a trial on the merits.

Defendants have raised the issue of a procedural defect in plaintiff's failure to followthe statutory procedure outlined in section 15-1506 of the Code of Civil Procedure (735ILCS 5/15-1506 (West 2000)). Specifically, plaintiff failed to file a written motion forjudgment and failed to give defendants notice of its intention to present the motion. Defendants contend that this "cloud" over the action is unfair. See Bird v. Kostbade, 52 Ill.App. 3d 741, 745, 367 N.E.2d 1058, 1061 (1977). Plaintiff argues that every required stepwas taken. We believe that it is unnecessary for us to decide this issue at the present time.On remand, the trial court can consider this issue in determining the section 2-1301(e)motion.

Plaintiff has also argued that defendants failed to provide a sufficient record forappeal, specifically citing to our decision in Schwarm (Schwarm, 251 Ill. App. 3d at 208,622 N.E.2d at 99). In Schwarm, we stated that where the defendant failed to provide atranscript of the hearing on the motion to vacate, the appellate court had to presume that thedenial of the motion was in conformity with the law. Schwarm, 251 Ill. App. 3d at 211, 622N.E.2d at 101. Here, as in Schwarm, defendants have not provided the court with atranscript of the hearing, but only the docket sheet. The docket sheet entry in Schwarmprovided very limited information-only that the court denied the motion to vacate and themotion to modify and that both the defendant and the plaintiff's counsel were present at thehearing. Schwarm, 251 Ill. App. 3d at 211, 622 N.E.2d at 101. In the present case,however, we have specific findings of the trial judge that clearly indicate which standardwas applied. The trial judge specified in the docket sheet entry that defendants showed noreasonable excuse and did not establish the existence of a meritorious defense. Therefore,we conclude that this is a satisfactory record on appeal.

For the foregoing reasons, we reverse the decision of the trial court and remand fora rehearing on the motion to vacate the default judgment.

Reversed; cause remanded.

HOPKINS and RARICK, JJ., concur.