No. 3-02-0718

APPELLATE COURT OF ILLINOIS

THIRD DISTRICT

A.D., 2003

PRESIDING JUSTICE McDADE delivered the opinion of the court:

FACTS

The record before us does not contain transcripts of thearbitration hearing but does, reveal the following facts.

On November 6, 2001, plaintiff filed a negligence action,alleging injuries, following a two-car accident in which she wasa passenger in a vehicle that was struck by defendant's vehicle. Because plaintiff sought less than $50,000 in damages, the matterwas submitted to mandatory arbitration.

Through a letter dated April 17, 2002, defendant's counselnotified plaintiff's attorney that:

"I anticipate admitting liability and trying the caseon the issue of proximate cause and damages. Unless youhave some objection, I do not intend to produce myclient at the arbitration hearing currently scheduledfor May 23, 2002. If you have an objection, pleaseinform me immediately and I will file the appropriatemotion with the court and request that his presence beexcused since he lives in Hawaii and liability isadmitted."

Plaintiff did not object to defendant's absence nor did sherequest his presence by a Rule 237 (166 Ill. 2d R. 237) notice.

The arbitration hearing was held on May 23, 2002.Defendant's counsel was present but defendant was not and thehearing proceeded without him. Defendant's counsel did notpresent either an arbitration package or any direct evidence atthe arbitration hearing. The arbitrators entered an award forplaintiff and against defendant in the amount of $15,000. Thisaward was less than the amount that plaintiff had sought. Thearbitration panel made no determination that defendant had or hadnot participated in good faith, nor was it asked by either partyto do so.

On June 3, 2002, defendant filed his notice of rejection ofthe arbitration award. In response, plaintiff filed a motion todebar rejection of the award, stating that defendant presented noevidence to the arbitration panel and failed to participate inthe hearing in good faith and in a meaningful manner. Defendant'sresponse was supported by the affidavit of his attorney, whoaverred that the defendant actively participated in thearbitration proceedings through counsel, who cross-examinedplaintiff and made a closing argument.

On August 21, 2002, the trial court found defendant hadfailed to participate in good faith in the arbitration hearingand was, therefore, barred from rejecting the arbitration award.The court entered judgment in plaintiff's favor, stating in itswritten order: "Defendant did not present any evidence at thearbitration hearing, not one witness, not one document. Defendantdeemed it too inconvenient to appear and also deemed itunnecessary to hire his own medical expert or submit any evidencevia Rule 90."

Defendant timely appealed.

ANALYSIS

The sole issue on appeal is whether the trial court erred inbarring rejection of the arbitration award. A court of reviewwill not reverse a circuit court's decision to debar a party fromrejecting an arbitration award unless the decision was an abuseof discretion, that is, arbitrary or exceeding the bounds ofreason. Schmidt v. Joseph, 315 Ill. App. 3d 77, 733 N.E.2d 694(2000).

Parties to an arbitration proceeding have a presumptiveright to reject the award unless they are subject to a sanctiondebarring rejection. Walikonis v. Halsor, 306 Ill. App. 3d 811,815, 715 N.E.2d 326 (1999). Pursuant to Illinois Supreme CourtRule 91 (145 Ill. 2d R. 91), there are two grounds for imposingthat sanction: unexcused absence (Rule 91(a)), and lack of goodfaith and meaningful participation (Rule 91(b)).

First, Rule 91(a) provides in part: "The failure of a partyto be present, either in person or by counsel, at an arbitrationhearing shall constitute a waiver of the right to reject theaward and a consent to the entry by the court of a judgment onthe reward." 145 Ill. 2d R. 91(a). In the present case,defendant's counsel attended the arbitration hearing. Defendant'spresence was not required under Rule 91(a) and was not mandatedby notice in the present case under Rule 237 (166 Ill. 2d R.237(b)). Therefore, the presence requirement mandated by Rule91(a) was satisfied by the attendance of defendant's counsel.Despite the court's comment that "[d]efendant deemed it tooinconvenient to appear" it is clear from the order that Rule91(a) did not provide any basis for the decision.

The circuit court may still bar rejection of the award basedon lack of good-faith participation. Rule 91(b) states inpertinent part: "All parties to the arbitration hearing mustparticipate in the hearing in good faith and in a meaningfulmanner." 145 Ill. 2d R. 91(b). The purpose of Rule 91(b) is todiscourage parties from merely attending the arbitration hearingand refusing to participate so as to render the arbitrationprocess meaningless. 145 Ill. 2d R. 91(b), Committee Comments. Atan arbitration hearing, a party is required to subject the caseto the type of adversarial testing expected at a trial. Schmidt,315 Ill. App. 3d at 84, 733 N.E.2d at 699-700. Bad faith mayconsist of "inept preparation or intentional disregard for theprocess." Schmidt, 315 Ill. App. 3d at 83, 733 N.E.2d at 699.

Plaintiff's claim of bad faith rests largely on herallegation that defendant did not present any evidence at thearbitration hearing. Defendant's trial attorney averred that heactively participated in the arbitration proceedings bycross-examining plaintiff and making a closing argument.

Although, as a general rule, cross-examination is limited tothe subject matter inquired into on direct examination, alitigant may properly develop on cross-examination circumstanceslying within the witness's knowledge, which explain, discredit ordestroy the witness's testimony on direct examination althoughthey may incidentally constitute new matter that aids thecross-examiner's case. People v. Williams, 66 Ill. 2d 478, 363N.E.2d 801 (1977). "For example, facts, data, and opinions whichform the basis of the expert's opinion but which are notdisclosed on direct examination may be developed oncross-examination." Neal v. Nimmagadda, 279 Ill. App. 3d 834,840, 665 N.E.2d 424 (1996), citing Piano v. Davison, 157 Ill.App. 3d 649, 670, 510 N.E.2d 1066 (1987). Cross-examination mayalso elicit, emphasize, or otherwise call the fact finder'sattention to facts or opinions avoided or minimized on directexamination. Absent a transcript, the trial court was in noposition to determine whether defendant had achieved any of thesebenefits of cross-examination.

In this case, plaintiff moved to debar defendant's rejectionof the arbitration award asserting his bad-faith participation.She, as the movant, was required to present the circuit courtwith a record adequate to permit a reasoned assessment ofdefendant's participation. She submitted neither a finding of badfaith by the arbitration panel nor a transcript from which thecourt could determine that defendant's cross-examination elicitedno meaningful evidence. In these circumstances, we cannotresponsibly countenance the circuit court's conclusion, whollyunsupported by the record, that defense counsel's cross-examination was not the presentation of evidence or agree thatthe only way to contest a doctor's expert testimony is by gettinga contrary expert.

We find the case of West Bend Mutual Insurance Co. v.Herrera, 292 Ill. App. 3d 669, 686 N.E.2d 645 (1997), to beinstructive in the present matter. The trial court barreddefendants from rejecting an arbitration award, although theyappeared with counsel and counsel made opening and closingstatements and cross-examined the plaintiff. The trial courtfound that they had failed to participate in good faith by nottestifying at the arbitration. The arbitrators in that case didnot make a finding of bad faith. The Appellate Court, FirstDistrict, reversed, holding that in the absence of either afinding by the arbitrators or a transcript of the proceedings,the trial court was not in a position to determine whether simplymaking an opening statement, cross-examining plaintiff, andmaking a closing argument constituted bad-faith participation.West Bend, 292 Ill. App. 3d at 676, 686 N.E.2d at 650.

Our conclusion is also consistent with our decision inEaster Seal Rehabilitation Center for Will-Grundy Counties, Inc.v. Current Development Corp., 307 Ill. App. 3d 48, 716 N.E.2d 809(1999). In Easter Seal, this court found that a trial courtabuses its discretion in finding bad faith where there was notranscript and no finding of bad faith by the panel. Easter Seal,307 Ill. App. 3d at 51, 716 N.E.2d at 811. The Easter Sealplaintiff argued that because the defendant's counsel appeared atthe hearing with no witness or representative for the defendant,a finding of bad faith was justified. In rejecting this argument,we reasoned:

"[t]he absence of any record of the arbitrationhearing, the absence of a specific finding of bad faithby the arbitration panel, and the fact that thearbitration panel did not award the plaintiff the fullamount sought in both counts of its complaint allstrongly support a conclusion that the defendantsubmitted the plaintiff's case to sufficientadversarial testing. The trial court's findingotherwise is not supported by the record and the trialcourt abused its discretion in so finding." EasterSeal, 307 Ill. App. 3d at 51, 716 N.E.2d at 811. Similarly here, the record before the trial court did notcontain a transcript of the arbitration hearing. Moreover, thearbitrators did not make a finding that defendant failed toparticipate in good faith, nor does the award indicatenoncompliance with a Rule 237 notice to produce. There is noclaim that plaintiff was prejudiced or even inconvenienced in anyway by defendant's failure to present evidence. Furthermore, thearbitration panel awarded damages to plaintiff in an amount lessthan that plaintiff had sought. Under these circumstances, webelieve that entering judgment against the defendant was an abuseof discretion.

Cases cited by plaintiff are distinguishable. In Hill v.Joseph Behr & Sons, Inc., 293 Ill. App. 3d 814, 688 N.E.2d 1226(1997), the reviewing court did not determine whether theplaintiffs participated in good faith, and moreover, it did notspecify what information would make it reasonable for the trialcourt to make a determination that a party participated in goodfaith and a meaningful manner. Hill, 293 Ill. App. 3d at 818, 688N.E.2d at 1229; see also Schmidt, 315 Ill. App. 3d at 85-86, 733N.E.2d at 700. In Martinez v. Gaimari, 271 Ill. App. 3d 879, 883,649 N.E.2d 94 (1995), the arbitrators had made a finding that thedefendant had failed to participate in good faith and in ameaningful manner because defendant was an eyewitness whoseparticipation in the arbitration hearing was probably essential,and defense counsel failed to present any evidence at thearbitration hearing. In Hinkle v. Womack, 303 Ill. App. 3d 105,707 N.E.2d 705 (1999), the defendants failed to appear at thearbitration hearing despite having been served with a sufficientRule 237 notice, and there was no excuse for their absence. Noneof these circumstances are before us.

To the extent that Hinkle can be read to hold that limitingone's participation in arbitration to cross-examining witnessesand making an opening statement and closing argument constitutesper se bad faith and meaningless participation, we respectfullydisagree and choose not to adopt that position.

CONCLUSION

For the foregoing reasons, we find that the trial courtabused its discretion in debarring defendant's rejection of theaward. The judgment of the circuit court is vacated and the causeis remanded for further proceedings consistent with this opinion.

SLATER and HOLDRIDGE, JJ., concur.