Court Always Has Jurisdiction To Enforce Discovery Order

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Sharp  Thinking

No. 161          Perspectives on Developments in the Law from Sharp-Hundley, P.C.       December 2018

Court Always Has Jurisdiction To Enforce Discovery Order

A circuit court has jurisdiction to enforce its discovery orders despite the case having been closed and the usual 30-day jurisdictional period having passed, a panel of the Appellate Court’s Second District ruled recently.

            Ruling in Mehalko v. Doe, 2018 IL App (2d) 170788, the panel dealt with the situation where a party was sued as “Jane Doe” and her identity disclosed on a confidential basis to the plaintiff and her counsel pursuant to a trial court protective order during discovery.  Later, the trial court granted Doe’s motion to dismiss Mehalko’s case.  Mehalko promptly moved to vacate the confidentiality order, which the trial court denied. 

More than 30 days after that decision, Doe petitioned the court for a rule to show cause why Mehalko should not be held in contempt of court because Mehalko had disclosed Doe’s identity publicly in the interim notwithstanding the judge’s ruling.  The trial court imposed sanctions on Mehalko under Supreme Court Rule 219 dealing with discovery, and Mehalko appealed.

            Mehalko first argued that the sanctions were erroneous because discovery sanctions are supposed to be crafted to ensure a fair trial on the merits, which would not occur in this case.  Agreeing that that is generally the case, the panel rejected “Mehalko’s argument that Rule 219(c) sanctions must always be crafted to ensure a trial on the merits.”

            Mehalko also argued that the trial court lacked jurisdiction because more than 30 days had passed after its ruling on the last post-judgment motion before Doe brought her petition.  The panel ruled that a court has inherent authority to enforce its orders notwithstanding passage of the 30 days, and that Rule 219’s provision for contempt proceedings as a discovery sanction “is simply an explicit incorporation of a trial court’s inherent authority to enforce all of its orders by way of contempt.”   

            However, the panel remanded the case to the trial court so that a purge opportunity could be incorporated into the contempt sanctions.

            For another recent opinion in accord on a court’s inherent power to enforce its orders even after passage of the 30-day period, see JP Morgan Chase Bank, N.A. v. Talaganov, 2018 IL App (1st) 180578, ¶14.

High Court Adopts Transaction Test For Single Refiling Rule

            To determine whether two lawsuits assert the same cause of action for purposes of Illinois’ single refiling rule, courts should apply the test for “identity of cause of action”, also known as the “transactional test,” used for purposes of res judicata.

            So held the Illinois Supreme Court last month.  Ruling in First Midwest Bank v. Cobo, 2018 IL 123038, the court said that that test treats two claims as identical “if they arise from a single group of operative facts, regardless of whether they assert different theories of relief.”

            In Cobo, the plaintiff’s predecessor in interest had filed to foreclose on a mortgage, also seeking a deficiency judgment, before voluntary dismissing that action without prejudice.  Later, plaintiff filed suit on the note and voluntarily dismissed it.  Later still, it filed the instant suit on the note and was met with a defense that the filing violated the single re-filing rule.  

The court held that a lawsuit for breach of a promissory note asserted the same cause of action as a prior foreclosure complaint when that foreclosure complaint specifically requested a deficiency judgment based on the same default of the same note.  “A lender may not assert a claim under the mortgage and note concurrently by seeking a foreclosure and a deficiency judgment and then assert a claim under the note consecutively twice more,” the court said.

Service Upon Debtor Didn’t Violate FDCPA

          Service of a court paper upon a debtor whose attorney had not filed an appearance or other pleading in court violated neither Illinois Supreme Court Rules nor § 1692c(a)(2) of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692c(a)(2) (FDCPA).

So held the Seventh U.S. Circuit Court of Appeals recently.  Holcomb v. Freedman Anselmo Lindberg, LLC, 900 F.3d 990 (7th Cir. 2018).

In a case that demonstrates the hypertechnical and illogical approach which some FDCPA plaintiffs take, the non-appearing lawyer pressed an FDCPA case even though the defendant law firm had in fact served both the client and him.

Finding for the law firm, the Seventh Circuit said Illinois precedent is “clear that an attorney becomes a party’s ‘attorney of record’ for [Supreme Court] Rule 11 purposes only by filing a written appearance or other pleading with the court” (court’s emphasis).  It said the fact that the non-appearing lawyer improperly had participated in two court hearings did not require a different result. 

Because, under these circumstances, the Supreme Court rule required service of the allegedly offending court paper upon the client, that service was with “express permission” of a court of competent jurisdiction and excepted from the FDCPA section’s ban on communications with debtors who are represented by counsel.

                                                                                                       – John T. Hundley

 

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