FIRST DIVISION
February 10, 2003

No. 1-01-4526

JUSTICE O'MALLEY delivered the opinion of the court:

The plaintiff, State Farm Mutual Insurance Company filedthis action against defendant, Ibrahim Nasser, alleging that hisnegligent driving caused an accident with its insured, HarivadaAcharya. Following mandatory arbitration, an award was enteredin favor of plaintiff. Defendant filed a timely notice ofrejection of the award, which was allowed by the trial court. Defendant subsequently filed a motion to bar plaintiff frompresenting any evidence or testimony at trial as a sanction underSupreme Court Rule 91(b) (145 Ill. 2d R. 91(b)) for its failureto participate in good faith at the arbitration hearing. After ahearing, the trial court found a Rule 219(c) (166 Ill. 2d R.219(c)) sanction appropriate, and granted defendant's motion. Defendant subsequently filed a motion for summary judgment, whichwas also granted.

On appeal, plaintiff contends that the trial court abusedits discretion in finding that it failed to participate in goodfaith at the arbitration hearing. Plaintiff also contends thatthe trial court abused its discretion in barring it frompresenting evidence at trial. We agree and vacate the judgmentof the circuit court and remand the cause for furtherproceedings.

On December 7, 1998, plaintiff filed a subrogation actionseeking damages from defendant in connection with an automobileaccident which occurred on September 14, 1997, in Chicago. According to the complaint, plaintiff's insured, HarivadaAcharya, was "rear-ended" by defendant, and sustained injuries aswell as property damage. Plaintiff sought $7,492.53 plus costsas reimbursement for amounts paid to its insured for propertydamage and medical bills as a result of the accident. OnSeptember 1, 2000, defendant filed his appearance and, interalia, a notice to produce pursuant to Supreme Court Rule 237 (166Ill. 2d R. 237) notifying plaintiff to produce at the mandatoryarbitration hearing "Plaintiffs, Harivada Acharya, and Co-Defendant(s) at the commencement of the case in chief ofDefendant Ibrahim Nasser."

The case was subsequently assigned to mandatory arbitrationand the arbitration hearing was scheduled for June 26, 2001. OnJune 13, 2001, defendant moved to be excused from the arbitrationhearing under Supreme Court Rule 90(g) (166 Ill. 2d R. 90(g)),because he was admitting negligence. On June 18, 2001, the trialcourt entered an order excusing defendant's presence at thearbitration hearing because he had admitted negligence andproximate cause, but the order stated that plaintiff's insuredwas not excused from the arbitration hearing because testimonywas needed concerning medical payments.

On June 25, 2001, plaintiff filed an emergency motion forleave to take the telephone testimony of its insured at thearbitration hearing the next day because the insured had a heartcondition and his leg had been amputated. Attached to the motionwas an affidavit from the insured, dated August 8, 2000, averringto his medical condition. The trial court continued the motionuntil the next day for proof of the insured's medical condition. The trial court subsequently denied the motion.

On the same day, the arbitration hearing commenced asscheduled, and according to both parties, plaintiff's attorneywas present but its insured was not. The arbitrators entered anaward for plaintiff and against defendant in the amount of$5,699.12. Neither party was awarded costs and the award doesnot state that plaintiff acted in bad faith. The record does notcontain a transcript of the arbitration hearing. Defendant fileda timely notice of rejection of the award and requested a trial.

Defendant then filed a motion for sanctions pursuant to Supreme Court Rules 91(b) (145 Ill. 2d R. 91(b)) and 219(c) (166Ill. 2d R. 219(c)) seeking to bar plaintiff from presenting anyevidence at trial. The motion alleged that plaintiff failed toparticipate in the arbitration hearing in good faith, and forviolated Rule 237 (166 Ill. 2d R. 237) by not producing itsinsured or its adjuster at the arbitration hearing. Plaintiffdid not file a written response to defendant's motion.

A hearing was held on defendant's motion on September 26,2001, at which time plaintiff responded that "obviously [we]participated in a meaningful good faith manner because weprevailed at arbitration." Plaintiff also argued that nothing inthe award suggested that it failed to participate in a meaningfulmanner and defendant's Rule 237 notice to produce was legallyinsufficient because it did not designate any particularrepresentative of its company to appear. Plaintiff made noargument as to whether defendant's Rule 237 notice to produce wassufficient to compel the appearance of its insured at thearbitration hearing.

The trial court granted defendant's motion for sanctions,stating in part:

"The simple standard that has to applyis would you have tried a case in the sameway that you approached this arbitration. And I don't believe that you go to a trialwithout bringing in a witness who could atleast establish the basic elements of yourcase. I understand that there were certainadmissions, and I understand there werecertain stipulations based on otherconsiderations here, but I don't believe youtried the case. That's the outline standardof 91B [sic]. Good faith participationrequires you to do that.

* * *

[I]t's my understanding from everythingthat I've read that the parties belong thereand that the case should be tried on themerits through proper methods of cross-examination and introduction of evidence, notby shuffling papers because that's all thatwe're accomplishing here.

So in answer to your question under 219C[sic], I believe that the sanction isappropriate in that you did not provide anopportunity for this case to be tried on themerits at the arbitration hearing. This wasnot meaningful participation bringing inpaperwork, particularly on a total loss underthe circumstances as it was here."

Without any reference as to the nature of the case or anyreference to plaintiff's Supreme Court Rule 90(c) package (166Ill. 2d R. 90(c)), the trial court then entered a written orderbarring plaintiff from presenting any evidence at trial.

Defendant subsequently moved for summary judgment, which wasgranted, and plaintiff now appeals from that order.

On appeal, plaintiff contends that the trial court abusedits discretion in finding that it failed to participate in goodfaith at the arbitration hearing. It argues that the trial courtcould not make that finding because the arbitrators did not makesuch a finding at the hearing and that the appearance of both aparty and that party's attorney are not required at anarbitration hearing to avoid sanctions.

Plaintiff also contends that the trial court abused itsdiscretion in barring it from presenting evidence at trialbecause the sanctions "exceed the bounds of reason," and thesanctions deprive it of the right to have a jury or the courtdetermine its damages. Plaintiff argues that the appearance byboth the party and its counsel are not required to avoidsanctions. Plaintiff also argues that it fully participated inthe arbitration hearing and did not disregard the rules.

Defendant responds that plaintiff disobeyed two courtorders, that plaintiff failed to participate in the arbitrationhearing in good faith and that plaintiff did not arbitrate thecase as it would have tried it.

Supreme Court Rule 91(b) requires all parties to anarbitration hearing to participate in the hearing in good faithand in a meaningful manner. 145 Ill. 2d R. 91(b). Specifically,the rule provides, in part:

"(b) Good-Faith Participation. All partiesto the arbitration hearing must participatein the hearing in good faith and in ameaningful manner. If a panel of arbitratorsfinds that a party has failed to participatein the hearing in good faith and in ameaningful manner, the panel's finding andfactual basis therefor shall be stated on theaward. Such award shall be prima facieevidence that the party failed to participatein the arbitration hearing in good faith andin a meaningful manner and an court, whenpresented with a petition for sanctions orremedy therefor, may order sanctions asprovided in Rule 219(c), including, but notlimited to, an order debarring that partyfrom rejecting the award, and costs andattorney fees incurred for the arbitrationhearing and in the prosecution of thepetition for sanctions, against that party." 145 Ill. 2d R. 91(b).

A trial court has discretion to enforce supreme court rulesand impose sanctions on the parties as appropriate and necessaryto "promote the unimpeded flow of litigation and maintain theintegrity of our court system." Employer's Consortium, Inc. v.Aaron, 298 Ill. App. 3d 187, 191 (1998), citing Sander v. DowChemical Co., 166 Ill. 2d 48, 68 (1995). A trial court'simposition of sanctions under Rule 91 will be reversed only wherethe court's decision represents an abuse of discretion. Goldmanv. Dhillon, 307 Ill. App. 3d 169, 172 (1999).

A party is required to participate in an arbitration hearingin good faith by subjecting the case to the type of adversarialtesting expected at a trial. Martinez v. Gaimari, 271 Ill. App.3d 879, 883-84 (1995). A party has acted in bad faith where itsactions amount to a deliberate and pronounced disregard for therules and the court. State Farm Insurance Co. v. Jacquez, 322Ill. App. 3d at 655. Bad faith may consist of inept preparationor intentional disregard for the process. Schmidt v. Joseph, 315Ill. App. 3d 77, 83 (2000).

A party who appears at an arbitration hearing throughcounsel is still subject to sanctions for failure to appearpursuant to a Rule 237 notice. State Farm Insurance Co. v.Jacquez, 322 Ill. App. 3d 652, 655 (2001). Those sanctionsinclude the barring of testimony. Fantasia v. Wiesch, 273 Ill.App. 3d 102, 104 (1995).

Here, although the record does not contain any transcript ofthe arbitration proceedings, the record reveals the following. Plaintiff filed a subrogation action to recover medical andproperty damages paid to its insured allegedly sustained whendefendant "rear-ended" the insured's vehicle. Defendant filed aRule 237 notice to produce plaintiff, the insured and anycodefendants. Defendant subsequently admitted liability andproximate cause and was accordingly excused from attending thearbitration hearing. The trial court, however, did not excusethe insured's attendance and ordered him to be present at thehearing to testify concerning medical payments. Both partiesagree that they appeared through counsel at the arbitrationhearing, and that plaintiff's insured did not appear. It is alsoundisputed that plaintiff presented evidence of property damagein the form of a Rule 90(c) package. Apparently, the arbitratorsfound this evidence persuasive and awarded Plaintiff damages inthe amount of 85% of the property damages claimed. Thearbitrators did not make a finding that Plaintiff failed toparticipate in good faith, nor does the award indicatenoncompliance with a Rule 237 notice to produce.

Defendant rejected the arbitration award, then filed amotion for sanctions in which he alleged that Plaintiff'sadjuster and its insured were the subject of a notice to produce. Plaintiff did not file a written response to defendant's motion,but instead argued orally at the hearing on that motion. Following the hearing, the trial court found that plaintifffailed to participate in the arbitration in good faith becauseplaintiff did not provide an opportunity for the case to be triedon its merits. Consequently, the court barred plaintiff frompresenting any testimony or other evidence at trial. Based onthis sanction, the court later granted defendant's motion forsummary judgment.

Here, we conclude that the trial court abused its discretionin finding that plaintiff participated in the arbitration hearingin bad faith. Defendant had already admitted liability andproximate cause of the accident, leaving the amount of propertydamage and medical payments the only issues to be proven at thearbitration. It is undisputed that plaintiff's counsel waspresent and presented evidence of property damage through itsRule 90(c) package. It is also undisputed that there was noevidence presented concerning medical payments. Althoughplaintiff did not present any testimony of an adjuster or itsinsured, we find that defendant's notice to produce was defectivein that it only requested "plaintiff(s)" and did not designate aspecific employee to appear. Moreover, Rule 237(b) does notreach plaintiff's insured because the insured was not a party tothe lawsuit. See 166 Ill. 2d R. 237(b); State Farm Insurance Co.v. Harmon, No. 1-01-2838, slip op. at 10-11 (November 27, 2002). The proper means of securing plaintiff's insured as a witness wasthe service of a subpoena. See 166 Ill. 2d R. 237(a). Defendantbears the responsibility for any alleged insufficiency inadversarial testing because he failed to secure evidence in theappropriate fashion. See State Farm Insurance Co. v. Rodrigues,324 Ill. App. 3d 736, 742 (2001).

Since we have found that plaintiff did participate at thearbitration hearing in good faith, it follows then that the trialcourt's sanction that barred plaintiff from presenting anyevidence at trial was an abuse of discretion.

For the foregoing reasons, the judgment of the circuit courtis vacated and the cause is remanded for further proceedings.

Vacated and remanded.

McNULTY and SMITH, JJ., concur.