Knight v. Guzman

684 N.E.2d 152, 291 Ill. App. 3d 378, 225 Ill. Dec. 677, 1997 Ill. App. LEXIS 546
CourtAppellate Court of Illinois
DecidedAugust 5, 1997
Docket1-96-1817
StatusPublished
Cited by13 cases

This text of 684 N.E.2d 152 (Knight v. Guzman) 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
Knight v. Guzman, 684 N.E.2d 152, 291 Ill. App. 3d 378, 225 Ill. Dec. 677, 1997 Ill. App. LEXIS 546 (Ill. Ct. App. 1997).

Opinion

JUSTICE RAKOWSKI

delivered the opinion of the court:

Defendant Hector Guzman appeals from an order of the circuit court of Cook County striking his rejection of an arbitration award and entering judgment on the arbitration award in favor of plaintiff Toby Knight. We reverse and remand.

FACTS

Plaintiff brought a negligence action against defendant to recover for injuries and damages sustained during a motor vehicle collision. The case was assigned to mandatory arbitration. The arbitration hearing took place on September 26, 1995. All parties were present. The panel of arbitrators found in favor of plaintiff and against defendant in the amount of $2,100. There was no finding that defendant’s participation in the arbitration hearing was in bad faith. -

On October 17, 1995, defendant filed a notice of rejection of the arbitration award. Plaintiff moved to strike defendant’s rejection and both parties filed briefs in support of their positions. On January 18, 1996, the court struck defendant’s rejection and entered judgment in favor of plaintiff and against defendant in the amount of $2,100. Defendant contends the trial court erred in barring him from rejecting the arbitration award. He also contends the court erred in failing to award sanctions under Supreme Court Rule 137 (155 Ill. 2d R. 137).

ANALYSIS

A. Right of Rejection

"Under Illinois’ rules, parties have the right of rejection— unless they are subjected to a sanction debarring rejection.” Williams v. Dorsey, 273 Ill. App. 3d 893, 905 (1995). Supreme Court Rule 93 (145 Ill. 2d R. 93) governs the procedure for rejecting an arbitration award. The rule states in part that "any party who was present at the arbitration hearing, either in person or by counsel, may file with the clerk a written notice of rejection of the award.” 145 Ill. 2d R. 93(a). However, "ttjhe filing of a notice of rejection shall not be effective as to any party who is debarred from rejecting an award.” 145 Ill. 2d R. 93(a). Accordingly, it has been held that a trial court may debar a party from rejecting an award as a sanction even if the party or his attorney was present at the arbitration hearing. See State Farm Insurance Co. v. Gebbie, 288 Ill. App. 3d 640, 643 (1997); Smith v. Johnson, 278 Ill. App. 3d 387, 391-92 (1996); Williams, 273 Ill. App. 3d at 900-01.

Supreme Court Rule 91 (145 Ill. 2d R. 91) governs the absence and participation of a party at the arbitration hearing. Rule 91(a) provides that "[t]he failure of a party to be present, either in person or by counsel, at an arbitration hearing shall constitute a waiver of the right to reject the award and a consent to the entry by the court of a judgment on the award.” 145 Ill. 2d R. 91(a). Rule 91(b) states that "[a]ll parties to the arbitration hearing must participate in the hearing in good faith and in a meaningful manner.” 145 Ill. 2d R. 91(b). If a party fails to participate in the hearing in good faith and in a meaningful manner, a court may order sanctions, including an order debarring that party from rejecting the award. 145 Ill. 2d R. 91(b).

The arbitrators’ award in this case is devoid of any reference to defendant’s failure to participate in the hearing in good faith and in a meaningful manner. Further, a review of the record gives no indication that defendant failed to participate in good faith. To be sure, the record shows that defendant was present at the hearing, represented by counsel, and presented a defense. Even plaintiff acknowledged that defendant’s alleged bad faith was not at the arbitration hearing but, rather, that defense counsel’s customary rejection of other arbitration awards is indicative of bad-faith participation in the arbitration process. The trial court agreed, finding that Rule 91 requires good-faith participation in the entire arbitration process, not just the hearing, so as not to abuse the arbitration process or make it meaningless.

The trial court went on to find that the rejection filed pursuant to Rule 93 was not filed by defendant or his counsel who was present at the arbitration hearing, but by an associate of defense counsel’s firm. The court held that this was not a meaningful rejection because the associate had no contact with the arbitration process and that "[i]f the [Supreme] Court meant the rejection could be signed by an associate attorney, the Supreme Court would have said so.” Thus, adopting plaintiffs argument, the trial court held defendant was debarred from rejecting the award.

1. Rule 91(b)

Initially, we observe that Rule 91(b) specifically governs good-faith participation in the arbitration hearing, not the entire arbitration process. What a party does outside the hearing with regard to rejection of the award is beyond the scope of Rule 91 sanctions.

Recently, in Webber v. Bednarczyk, 287 Ill. App. 3d 458 (1997), the court held that, under Rule 91(b), there was no basis for the trial court to debar the defendant from rejecting the arbitration award. In Webber, as in this case, there was no finding by the arbitrators that the defendant failed to participate in the hearing in good faith. The plaintiff argued that the defendant’s conduct prior to the hearing was a basis to debar the defendant from rejecting the award. The trial court agreed and debarred the defendant from rejecting the arbitration award as a sanction under Rule 91(b). The appellate court reversed and remanded, holding:

"Supreme Court Rule 91(b) does not provide for sanctions for what the parties do or do not do prior to an arbitration hearing. The rule only concerns itself with what occurs during a hearing. The rule attempts to ensure that all parties participate in a meaningful manner in an arbitration hearing. The rule does not attempt to do anything more.” Webber, 287 Ill. App. 3d at 463.

In addition, like plaintiff here, the plaintiff in Webber argued that because the law firm representing the defendant had a high rate of prior rejections, it was more probable than not that the rejection of the instant award was not in good faith. The appellate court rejected this argument, noting that a law firm’s rejection of numerous arbitration awards is more appropriately the subject of attorney disciplinary proceedings.

"Supreme Court Rule 91(b) provides authority for sanctions only for bad-faith participation in the hearing and not for the party’s bad faith in rejecting an arbitration award. *** Certainly the integrity of the arbitration system is threatened by unjustified rejection of arbitration awards, but Rule 91(b) sanctions are not available to punish that conduct.” Webber, 287 Ill. App. 3d at 464.

In light of the holding in Webber, we conclude that Rule 91(b) does not provide for sanctions for a party’s rejection of an arbitration award or as punishment for his representative law firm’s track record in rejecting numerous awards.

2. Rule 93(a)

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Bluebook (online)
684 N.E.2d 152, 291 Ill. App. 3d 378, 225 Ill. Dec. 677, 1997 Ill. App. LEXIS 546, Counsel Stack Legal Research, https://law.counselstack.com/opinion/knight-v-guzman-illappct-1997.