Nationwide Mutual Insurance Co. v. Kogut

819 N.E.2d 1127, 354 Ill. App. 3d 1, 289 Ill. Dec. 327, 2004 Ill. App. LEXIS 1375
CourtAppellate Court of Illinois
DecidedNovember 15, 2004
Docket1-02-3505 Rel
StatusPublished
Cited by9 cases

This text of 819 N.E.2d 1127 (Nationwide Mutual Insurance Co. v. Kogut) 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
Nationwide Mutual Insurance Co. v. Kogut, 819 N.E.2d 1127, 354 Ill. App. 3d 1, 289 Ill. Dec. 327, 2004 Ill. App. LEXIS 1375 (Ill. Ct. App. 2004).

Opinion

JUSTICE CAHILL

delivered the opinion of the court:

Plaintiff Nationwide Mutual Insurance Company appeals a trial court order that barred it from rejecting an arbitration award on the sole ground that it failed to produce its insured at arbitration. We believe the order barring plaintiff from rejecting the award was an abuse of discretion. We reverse and remand for further proceedings.

Plaintiff filed a subrogation action against defendant Dorota Kogut for damages arising out of a car accident involving defendant and plaintiffs insured, Irene Mika. The case was assigned to mandatory arbitration. The hearing was not transcribed, but the record reveals that counsel for both parties, an agent for plaintiff, an interpreter for Mika (who does not speak English) and defendant attended. Mika did not attend the hearing. The record reveals that plaintiff presented testimony from its agent and defendant as an adverse witness. Plaintiff also submitted evidence of damages through a Rule 90(c) package (210 Ill. 2d R. 90(c)).

An award was entered for defendant. Plaintiff filed a timely notice of rejection of the award. Defendant moved to bar plaintiffs rejection under Supreme Court Rule 91(b) (145 Ill. 2d R. 91(b)), arguing plaintiff failed to participate in the arbitration in good faith and in a meaningful manner because plaintiff did not produce Mika at the hearing. Plaintiff responded that it made reasonable but unsuccessful attempts to produce Mika. Plaintiffs attorney said in an affidavit that he asked Mika’s insurance agent, Isabel Karem, to contact Mika and confirm the arbitration date. Karem had acted as an interpreter for Mika in the past. Plaintiff’s attorney and Karem made a conference call to Mika and spoke with Mika’s husband and son. Mika’s son told plaintiffs attorney that Mika would attend the arbitration. Plaintiffs attorney also said he paid a Polish interpreter $140 to attend the hearing. Defendant did not respond to plaintiffs affidavit.

The trial court granted defendant’s motion to bar rejection and entered judgment on the award for defendant. Plaintiff appeals, arguing: (1) the trial court’s finding that plaintiff failed to participate in the arbitration in good faith and in a meaningful manner solely on the ground that plaintiff did not produce Mika at the hearing was an abuse of discretion; and (2) the trial court erred by failing to include in its written order the grounds for barring rejection of the award as required under Supreme Court Rule 219(c) (166 Ill. 2d R. 219(c)).

We consider plaintiffs arguments out of sequence and begin our analysis by addressing the contention that the trial court committed reversible error by failing to put in writing the ground for its finding that plaintiff failed to participate in good faith and in a meaningful manner.

Rule 219(c) provides a range of sanctions a court may impose where a party fails to comply with discovery. 166 Ill. 2d R. 219(c). The last paragraph of Rule 219(c) directs that where a sanction is imposed under the rule, the court “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.” 166 Ill. 2d R. 219(c). Rule 219(c) is made applicable to mandatory arbitration proceedings through Rule 91(b), which authorizes a court to “order sanctions as provided in Rule 219(c)” where a party fails to participate in the arbitration hearing in good faith and in a meaningful manner. 145 Ill. 2d R. 91(b).

Rule 91(b) does not limit the applicability of Rule 219(c) to the list of sanctions contained therein. Rather, it directs the trial court to “order sanctions as provided in Rule 219(c).” (Emphasis added.) 145 Ill. 2d R. 91(b). By using the language “as provided in,” we believe the drafters of Rule 91(b) intended to incorporate the procedure to be followed when imposing Rule 219(c) sanctions, including the directive to the trial court that it set forth with specificity the grounds for its decision.

This reading of Rule 91(b) is consistent with our treatment of sanction orders in other contexts, including proceedings for contempt and for sanctions under Rules 137 (155 Ill. 2d R. 137) and 219(c). See Twardowski v. Holiday Hospitality Franchising, Inc., 321 Ill. App. 3d 509, 514, 748 N.E.2d 222 (2001) (contempt order must state the specific acts on which it is based); Selvy v. Beigel, 309 Ill. App. 3d 768, 777, 723 N.E.2d 702 (1999) (trial court must state grounds for imposing Rule 137 sanctions); Chabowski v. Vacation Village Ass’n, 291 Ill. App. 3d 525, 528, 690 N.E.2d 115 (1997) (trial court is required to give specific reasons for imposing Rule 219(c) discovery violation sanctions). Sanctions, in whatever context, are not available on the wave of a wand. If we are to maintain the deference granted the trial court under an abuse of discretion standard of review, and to ensure the integrity of the standard, we must continue to urge the trial courts to draft sanction orders that are specific enough to allow us to defer to the discretion of the trial court with confidence. See North Shore Sign Co. v. Signature Design Group, Inc., 237 Ill. App. 3d 782, 790-91, 604 N.E.2d 1157 (1992) (the considerable deference given a trial court’s decision whether to impose sanctions is predicated on the necessary requirement that the trial court make explicit factual findings on which a court of review may make an informed decision).

While we find that courts must put in writing the grounds for issuing Rule 91(b) sanctions, we do not agree that the trial court’s failure in this case to put in writing the grounds for barring plaintiffs rejection of the arbitration award, standing alone, requires reversal. See Chabowski, 291 Ill. App. 3d at 528 (a court’s failure to set forth the grounds for sanctions under Rule 219(c) is not per se reversible error). In this case we are able to surmise from the record the basis for the court’s decision: the failure to produce the insured. Although defendant argued plaintiff should be barred from rejecting the arbitration award on more than one ground, the trial court granted defendant’s motion under Rule 91(b). The only ground for defendant’s Rule 91(b) argument was that plaintiff failed to produce its insured at the arbitration hearing. Defendant did not attack the degree of plaintiff’s participation on any other ground. Nor do the parties contend on appeal that the court’s finding was grounded on a reason other than plaintiffs failure to produce its insured.

So we address plaintiffs primary contention on appeal — that the trial court abused its discretion by barring plaintiff from rejecting the arbitration award on the sole ground that it failed to produce its insured at arbitration. Plaintiff argues it participated in good faith and in a meaningful manner because it appeared at the hearing, submitted a Rule 90(c) package and presented testimony from its agent and defendant as an adverse witness. Defendant argues plaintiff failed to subject the case to the type of adversarial testing that would be expected at trial because it did not produce Mika as a witness.

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Nationwide Mut. Ins. Co. v. Kogut
819 N.E.2d 1127 (Appellate Court of Illinois, 2004)

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Bluebook (online)
819 N.E.2d 1127, 354 Ill. App. 3d 1, 289 Ill. Dec. 327, 2004 Ill. App. LEXIS 1375, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nationwide-mutual-insurance-co-v-kogut-illappct-2004.