Dayan v. McDonald's Corp.

466 N.E.2d 945, 126 Ill. App. 3d 11, 81 Ill. Dec. 143, 1984 Ill. App. LEXIS 2093
CourtAppellate Court of Illinois
DecidedApril 16, 1984
Docket82—3023, 83—674 cons.
StatusPublished
Cited by46 cases

This text of 466 N.E.2d 945 (Dayan v. McDonald's Corp.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dayan v. McDonald's Corp., 466 N.E.2d 945, 126 Ill. App. 3d 11, 81 Ill. Dec. 143, 1984 Ill. App. LEXIS 2093 (Ill. Ct. App. 1984).

Opinion

PRESIDING JUSTICE BUCKLEY

delivered the opinion of the court:

Plaintiff Raymond Dayan 1 appeals from two separate orders entered by the trial court — one awarding $1,842,905.38 in attorney fees and expenses to defendant McDonald’s Corporation pursuant to section 2 — 611 of the Code of Civil Procedure (Ill. Rev. Stat. 1981, ch. 110, par. 2 — 611) and another awarding the defendant corporation $30,891.55 in costs. These fees and costs were taxed against plaintiff in connection with plaintiff’s suit to enjoin McDonald’s from terminating his restaurant franchise in Paris, France. After a lengthy trial, the circuit court denied Dayan’s request for a permanent injunction and dissolved an existing preliminary injunction, holding Dayan’s Paris operations breached the franchise agreement by failing to adhere to McDonald’s quality, service, and cleanliness standards (QSC). Subsequently, the trial court entered orders taxing costs, fees and expenses against plaintiff, which resulted in the filing of two separate appeals. These appeals have been consolidated for review in the present case. A separate opinion has been issued in connection with plaintiff’s appeal from the trial court’s judgment denying the requested injunctive relief. (Dayan v. McDonald’s Corp. (1984), 125 Ill. App. 3d 972.) In affirming the trial court’s judgment with respect to plaintiff’s petition for a permanent injunction, we reviewed the history, background, and much of the evidence produced during 65 days of trial and will not repeat that analysis here.

Plaintiff raises the following issues for review: (1) whether the circuit court erroneously awarded fees and expenses pursuant to section 2 — 611, finding certain allegations of plaintiff’s amended petition untrue and made without reasonable cause; (2) whether the trial court erroneously included certain items in its calculation of the section 2— 611 award; (3) whether the circuit court erroneously retained jurisdiction to supplement the award of fees and expenses for amounts expended by McDonald’s in defense of the appeals before this court; and (4) whether the trial court erred in allowing witness and trial interpreter fees as costs.

I

Section 2 — 611, formerly section 41 of the Civil Practice Act (Ill. Rev. Stat. 1979, ch. 110, par. 41), permits the taxing of attorney fees and reasonable expenses against a party that pleads untrue statements without reasonable cause, providing in relevant part:

“Allegations and denials, made without reasonable cause and found to be untrue, shall subject the party pleading them to the payment of reasonable expenses, actually incurred by the other party by reason of the untrue pleading, together with a reasonable attorney’s fee, to be summarily taxed by the court upon motion made within 30 days of the judgment or dismissal.” (Ill. Rev. Stat. 1981, ch. 110, par. 2 — 611.)

The assessment of attorney fees against a litigant for making false allegations without reasonable cause represents an important and longstanding exception to the general rule that a prevailing party is not ordinarily entitled to recover his litigation expenses. Similar provisions have been part of the statutory law of this State since 1933. However, prior to 1961 the failure of our courts to apply these sanctions was almost complete. See, e.g., Adams v. Silfen (1951), 342 Ill. App. 415, 96 N.E.2d 628; Palmer v. Gillarde (1941), 312 Ill. App. 230, 38 N.E.2d 352.

The seminal case of Ready v. Ready (1961), 33 Ill. App. 2d 145, 178 N.E.2d 650, marked a turning point in the willingness of Illinois appellate courts to uphold awards of attorney fees and expenses when taxed against a party pleading false statements without reasonable cause. In Ready, the court scrutinized an award of attorney fees against a plaintiff made pursuant to section 41 of the Civil Practice Act (Ill. Rev. Stat. 1959, ch. 110, par. 41). The case was not tried to verdict but was disposed of on defendant’s motion to dismiss. On appeal, the plaintiff argued that section 41 should be strictly construed and that since there was no trial an award of attorney fees was improper. The court rejected this argument, specifically holding that any judicial examination of the issues between the parties, whether they be of law or fact, was sufficient to support a section 41 award where the pleadings were later found to be untrue and not filed in good faith. (Ready v. Ready (1961), 33 Ill. App. 2d 145, 159-61.) The court further articulated the policy underlying section 41, noting:

“Section 41 is an attempt of the legislative to penalize the litigant who pleads frivolous or false matters or brings a suit without any basis in law and thereby puts the burden upon his opponent to expend money for an attorney to make a defense against an untenable suit. The failure of the courts to apply the sanction provided in this section of the Practice Act has been frequently criticized by writers in the various law reviews.” (33 Ill. App. 2d 145, 161-62.)

The court went on to state:

“One of the purposes of section 41 is to prevent litigants being subjected to harassment by the bringing of actions against them which in their nature are vexatious, based upon false statements, or brought without any legal foundation. If the court should hold that such suits could be brought one after the other and if the plaintiff dismissed his suit or suffered an involuntary nonsuit before trial the sanction of section 41 would not apply, it would nullify the purpose of the statute.” 33 Ill. App. 2d 145, 162.

Subsequent cases have frequently quoted the above passages, reiterating and enlarging the holdings in Ready. Thus, many cases have stressed the penal nature of section 41 and the requirement that the application of this section be limited to cases falling strictly within its terms. (Johnson v. La Grange State Bank (1978), 73 Ill. 2d 342, 383 N.E.2d 185; Schnack v. Crumley (1982), 103 Ill. App. 3d 1000, 431 N.E.2d 1364.) Other cases have noted the remedial aspects of section 41 stated in Ready of protecting a litigant from baseless lawsuits. (Thomas v. Thomas (1974), 23 Ill. App. 3d 936, 321 N.E.2d 159; Grandys v. Spring Soft Water Conditioning Co. (1968), 101 Ill. App. 2d 225, 242 N.E.2d 454.) It has also been held that section 41 sanctions are appropriate even though the case has been disposed of on motion (Pole Realty Co. v. Sorrells (1981), 84 Ill. 2d 178, 417 N.E.2d 1297 (motion to dismiss); Sarelas v. Law Bulletin Publishing Co. (1969), 115 Ill. App. 2d 205, 253 N.E.2d 168 (motion for summary judgment)), that the burden is on the movant to show he is entitled to recover under section 41 (Thorsen v. City of Chicago (1979), 74 Ill. App. 3d 98, 392 N.E.2d 716), that a separate hearing is dictated where one is necessary to determine whether the section 41 requirements have been met (Grover v.

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Bluebook (online)
466 N.E.2d 945, 126 Ill. App. 3d 11, 81 Ill. Dec. 143, 1984 Ill. App. LEXIS 2093, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dayan-v-mcdonalds-corp-illappct-1984.