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Heckinger v. Welsh
State: Illinois
Court: 2nd District Appellate
Docket No: 2-02-0190 Rel
Case Date: 05/27/2003

No. 2--02--0190


IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT


J.F. HECKINGER,

          Plaintiff-Appellee,

v.

MICHAEL WELSH, d/b/a Welsh
Industries, Ltd., and WELSH
INDUSTRIES, LTD.,

          Defendants-Appellants.

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Appeal from the Circuit Court
of Winnebago County.

No. 99--L--199

Honorable
Edward J. Prochaska,
Judge, Presiding.



JUSTICE O'MALLEY delivered the opinion of the court:

Defendants, Michael Welsh, d/b/a Welsh Industries, Ltd., and Welsh Industries, Ltd., appeal from an order striking their amendedmotion for sanctions under Supreme Court Rule 137 (155 Ill. 2d R.137). We reverse and remand.

On June 28, 1999, plaintiff, J.F. Heckinger, sued defendants,contending in seven counts that defendants had not paid him onnotes for purchases of Boy Scout patches, flaps, and othermemorabilia. A default judgment for over $118,000 was entered onNovember 24, 1999. Plaintiff then began proceedings to discoverdefendants' assets. On October 30, 2000, after plaintiff began agarnishment action, defendants moved to vacate the default judgmentpursuant to section 2--1401 of the Code of Civil Procedure (theCode) (735 ILCS 5/2--1401 (West 2000)), alleging that, after theywere served with the complaint, they contacted plaintiff, paid offsome of the notes, and understood that the complaint was to bedismissed. The motion was granted on May 1, 2001.

On May 31, 2001, plaintiff moved to voluntarily dismiss hiscomplaint pursuant to section 2--1009(a) of the Code (735 ILCS 5/2--1009(a) (West 2000)). The court granted plaintiff's motion anddismissed the complaint on June 8, 2001.

On July 9, 2001, defendants moved for sanctions, contendingthat plaintiff's complaint and other papers were unwarranted andfiled for improper purposes in violation of Rule 137. Morespecifically, defendants' motion alleged that plaintiff obtained adefault judgment on notes that he knew had been fully or partiallypaid. Defendants also sought their attorney fees, costs, andexpenses.

Plaintiff moved to strike defendants' motion for sanctions. He argued that defendants' motion was deficient for failing tospecify which statements or documents were allegedly false and whatamount of fees was incurred as a result of the untrue allegations. On November 15, 2001, the court granted plaintiff's motion tostrike but also granted defendants leave to file an amended motion. Defendants filed an amended motion for sanctions on December 11,2001.

Plaintiff then moved to strike defendants' amended motion forsanctions. Again, he contended that defendants' motion lacked therequisite specificity, but he also argued that defendants failed toallege that they incurred any expenses in responding to thecomplaint because the only expenses they incurred were in seekingrelief from the default judgment. After a hearing, the courtgranted plaintiff's motion to strike, concluding that defendantsdid not have a viable cause under Rule 137 because they neverresponded to the complaint. Defendants appeal.

Generally, the decision to grant or deny sanctions under Rule137 is left to the trial court's discretion. Technology InnovationCenter, Inc. v. Advanced Multiuser Technologies Corp., 315 Ill.App. 3d 238, 244 (2000). In this case, defendants argue that weshould apply a de novo review because the court summarily dismissedtheir motion without an evidentiary hearing. We agree. Here, thecourt determined that, as a matter of law, there was no viablecause for sanctions under Rule 137 if the movant did not respond tothe offensive pleading. The court's interpretation of the rule wasa legal one, and therefore we review that determination de novo. In re Estate of Rennick, 181 Ill. 2d 395, 401 (1998).

Rule 137 is designed to penalize the litigant who pleads falseor frivolous matters or who brings a lawsuit without any basis inthe law. Swanson v. Carter, 258 Ill. App. 3d 157, 162 (1994). Therule mandates that, by signing a pleading, motion, or other paper,the attorney certifies that "to the best of his [or her] knowledge,information, and belief formed after reasonable inquiry [thepleading] is well grounded in fact and is warranted by existing lawor a good-faith argument for the extension, modification, orreversal of existing law, and that it is not interposed for anyimproper purpose." 155 Ill. 2d R. 137. For sanctions to beimposed, the movant must show that the opponent made falseallegations without reasonable cause. Technology Innovation, 315Ill. App. 3d at 243.

Here, we must resolve whether the trial court erred bygranting plaintiff's motion to strike defendants' amended motionfor sanctions for not stating a viable cause under Rule 137. Defendants disagree with the court's conclusion that, to maintaina cause for Rule 137 sanctions, they were required to file aresponsive pleading to the complaint. For the reasons that follow,we agree with defendants.

Rule 137 sanctions are inapplicable, plaintiff insists, because defendants did not respond to the initial complaint andthus did not incur any damages from the offensive pleading. Therule's plain language, however, does not require that a partyseeking sanctions incur any damages at all. Regarding the award ofsanctions, the rule states:

"If a pleading, motion, or other paper is signed in violationof this rule, the court, upon motion or upon its owninitiative, may impose upon the person who signed it, arepresented party, or both, an appropriate sanction, which mayinclude an order to pay to the other party or parties theamount of reasonable expenses incurred because of the filingof the pleading, motion or other paper, including a reasonableattorney fee." 155 Ill. 2d R. 137.

Plaintiff's contention focuses on defendants' response (or lackthereof) to the filing of the offensive pleading. Conversely, therule's focus is exclusively on the party's action of filing theunreasonable pleading. We find no language in the rule suggestingthat parties are required to file responsive papers before seekingsanctions.

Plaintiff also objects to defendants' request for attorneyfees, costs, and expenses as the sanction. He points out thatthese fees were incurred when defendants sought relief from thedefault judgment; therefore, they were not damages directly relatedto the complaint. In their motion for sanctions, defendantsrequested attorney fees, but, as Rule 137 states, the court had thediscretion to determine the appropriate sanction for thecircumstances. When imposing sanctions, a court has severaloptions, including "a warm friendly discussion on the record, ahard-nosed reprimand in open court, compulsory legal education,monetary sanctions, or other measures appropriate to thecircumstances." Thomas v. Capital Security Services, Inc., 836F.2d 866, 878 (5th Cir. 1988) (construing Fed. R. Civ. P. 11); seeEdward Yavitz Eye Center, Ltd. v. Allen, 241 Ill. App. 3d 562, 569(1993) (Rule 137 is almost identical to Rule 11 of the FederalRules of Civil Procedure, and we may seek guidance from the federalcourts' interpretation of that rule). Simply put, the plainlanguage of Rule 137 does not require that the moving party incurdamages related to the offensive pleading to maintain a cause forsanctions.

In addition, our courts have consistently held that attorneyfees awarded as a sanction do not have to be directly related tothe offensive pleading. For example, in Ashley v. Scott, 266 Ill.App. 3d 302, 306 (1994), the court determined that the trial courterred by reducing the sanction of attorney fees where some of thefees were for the benefit of a coparty. It noted that Rule 137permits as a sanction "the amount of reasonable expenses incurredby the other party because of the filing of the pleading." (Emphasis added.) Ashley, 266 Ill. App. 3d at 306. It alsodisagreed with the trial court's conclusion that all the awardedfees had to directly benefit the moving party, stating, "[a]ll ofthe father's legal expenses in this matter were actually incurredas a result of the untrue pleading, because but for that pleading,the father would not have been involved in the lawsuit." Ashley,266 Ill. App. 3d at 307.

Likewise, in Dayan v. McDonald's Corp., 126 Ill. App. 3d 11,23 (1984) (discussing section 2--611 of the Code (Ill. Rev. Stat.1981, ch. 110, par. 2--611), the predecessor to Rule 137), thecourt considered whether, when the trial court awarded attorneyfees as a sanction, those fees had to relate only to the untruecounts of the complaint. The Dayan court held that such anisolated focus was unnecessary because the false allegations in thecomplaint were "the cornerstone of the entire baseless lawsuit." Dayan, 126 Ill. App. 3d at 23-24. Without the falsities in thecomplaint, there would not have been a dispute, the courtconcluded, and thus the party's expenses and fees in defending thesuit would not have been incurred. Dayan, 126 Ill. App. 3d at 24.

As Ashley and Dayan indicate, defendants would not haveincurred the attorney fees and expenses in vacating the defaultjudgment had plaintiff not filed the complaint. Rule 137 permitsthe moving party to seek such expenses. As a result, we concludethat the trial court erred by striking defendants' amended motionfor sanctions and determining that they failed to allege a causeunder Rule 137. Defendants were entitled to an evidentiary hearingon the merits of their motion.

Additionally, the parties disagree about whether, afterplaintiff voluntarily withdrew it, the complaint was still a properbasis for sanctions. On this point, the law is clear. Even if aparty withdraws the offensive pleading, he or she is stillaccountable for the damage done by violating Rule 137. Yavitz, 241Ill. App. 3d at 571. "[A] baseless complaint needlessly burdensboth the court and individuals, even where the plaintiff soondismisses the action." Yavitz, 241 Ill. App. 3d at 572. "If alitigant could purge his violation of Rule 11 merely by taking adismissal, he would lose all incentive to 'stop, think andinvestigate more carefully before serving and filing papers.'[Citation.]" Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 398,110 L. Ed. 2d 359, 377, 110 S. Ct. 2447, 2457 (1990).

For the foregoing reasons, the judgment of the circuit courtof Winnebago County is reversed, and the cause is remanded forfurther proceedings.

Reversed and remanded.

HUTCHINSON, P.J., and McLAREN, J., concur.



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