Trial Courts Must Explain Rule 137 Sanction Denials, Appellate Panel Holds

Sharp Thinking

No. 119    Perspectives on Developments in the Law from The Sharp Law Firm, P.C.     July 2014

Trial Courts Must Explain Rule 137 Sanction Denials, Appellate Panel Holds

            By Darren M. Taylor, dtaylor@lotsharp.com, 618-242-0246

            A trial judge must provide an explanation for a denial of a motion for sanctions brought pursuant to Illinois Supreme Court Rule 137, the Appellate Court’s Fifth District has held.

            Rule 137 requires an attorney of record, or a party who it not represented by an attorney to sign pleadings, motions and other documents of a party filed with the court.  The signature constitutes a certificate that: (1) the document has been read; (2) a reasonable inquiry established it is well grounded in fact and is warranted by existing law; and (3) it is not interposed for any improper purpose, such as to harass or cause unnecessary delay or needless increase in the cost of litigation (Illinois Supreme Court Rule 137).

If a document is signed in violation of Rule 137, the court may impose upon the person who signed it an appropriate sanction.  Further, the rule provides that “[w]here a sanction is imposed under this rule, the judge shall set forth with specificity the reasons and basis of any sanction so imposed either in the judgment order itself or in a separate written order” (emphasis added).     

Specificity Now Is Required Beyond “Where A Sanction Is Imposed”

            The specificity requirement no longer applies only in situations where the court actually imposes sanctions.  Even if the court chooses not to impose sanctions, specificity in its holding is now required, at least in the Appellate Court’s Fifth District. 

The court in Lake Environmental, Inc. v. Arnold, 2014 IL App (5th) 130109, held that a trial judge’s order that stated, in full, “Plaintiff’s request for sanctions pursuant to Rule 137 is denied” had to be reversed and remanded for further explanation.

Ad Hoc, I think Not…

            The decision in Lake Environmental was predicated on the heels of the Appellate Court’s Second and Third District’s decades of precedence against ad hoc and speculative review. 

The Appellate Court’s Second District recognized that when a trial judge rules on a motion for sanctions pursuant to Rule 137, that judge must provide specific reasons for his or her ruling, regardless of whether sanctions are granted or denied.  North Shore Sign Co. v. Signature Design Group, Inc., 237 Ill.App.3d 782 (2nd Dist. 1992).    A reviewing court should not be put in the position of making the trial court’s findings and should not be required to speculate as to which of the determinative facts and legal theories the trial court relied on in deciding whether to allow or deny sanctions, that court reasoned.

Subsequently, in O’Brien & Assoc., P.C. v. Tim Thompson, Inc., 274 Ill.App.3d 472 (2nd Dist. 1995), the court held that even when a hearing on a Rule 137 motion has been held, if the trial judge fails to make specific findings that articulate the reasons for his or her decision to deny sanctions, the judge’s order must be vacated and the cause remanded for further proceedings.

The Appellate Court’s Third District recognized that the decision to impose sanctions or not is within the sound discretion of the trial judge and will not be reversed on appeal without showing an abuse of discretion.  In re Estate of Smith, 201 Ill.App.3d 1005 (3rd Dist. 1990).  However, it acknowledged that the predicate to such deference is that the circuit court make an informed and reasoned decision that clearly sets forth the factual basis for the results reached.  

It all comes down to the function of the Appellate Court.  As articulated by the Smith court, an Appellate Court must be able to determine: (1) whether the circuit court’s decision was an informed one; (2) whether the decision was based on valid reasons that fit the case; and (3) whether the decision followed logically from the application of the reasons stated in the particular circumstances of the case.  

Without providing an explanation for approval or denial of sanctions under Rule 137, because the trial court was not obliged to do so, the foundation for valid appellate review would become an ad hoc affair.

Affidavit for Publication Service Must Be Current

            A 50-day gap between when an affidavit for service by publication was notarized and the filing of the motion for such service is excessive and voids the attempted service by publication, a panel in the Appellate Court’s First District has held. 

            Noting that a party defending notice by publication “must show a strict compliance with every requirement of the statute,” the court in Bank of N.Y. Mellon v. Karbowski, 2014 IL App  (1st) 130112, relied upon Campbell v. McCahan, 41 Ill. 45 (1866), where a 20-day delay was held to void the affidavit.  “If in 1866, when parties relied on mail or messenger delivery via horseback, a 20-day delay defeated the showing of due diligence required to justify service by publication, it would seem obvious that a 50-day delay nearly 150 years later in the age of instant information should suffer the same fate”, the court said.

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