Campuzano v. Pertiz

FIRST DIVISION
September 28, 2007
No. 1-06-0119
LYDA CAMPUZANO, ) Appeal from
) the Circuit Court
Plaintiff-Appellee, ) of Cook County
)
v. ) No. 04 M 1301797
)
HOWARD PERITZ and REVELIE PERITZ, ) Honorable
) Moira S. Johnson,
Defendants-Appellants. ) Judge Presiding.
PRESIDING JUSTICE CAHILL delivered the opinion of the court:
Defendants Howard and Revelie Peritz appeal a circuit court order barring them under
Supreme Court Rule 91(b) (145 Ill. 2d R. 91(b)) from rejecting an arbitration award in favor of
plaintiff Lyda Campuzano. Defendants challenge the appropriateness of the sanction and the
constitutionality of Rule 91(b). We affirm.
The parties were involved in a car accident. Plaintiff filed a negligence action alleging
defendants were at fault. The case was assigned to mandatory arbitration and a discovery
deadline was set for November 29, 2004. Plaintiff filed written discovery requests and notices to
take defendants' depositions. Defendants did not respond to the discovery requests, prompting
plaintiff to file a motion to compel. On October 25, 2004, the trial court entered a written order
granting plaintiff's motion to compel and ordering defendants to appear for depositions by
November 15, 2004, and answer plaintiff's interrogatories by November 8, 2004 (discovery
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order). The trial court wrote that failure to comply with discovery would result in an order
barring defendants from testifying or presenting evidence at the arbitration and at trial. Defendant
Howard, who was driving the car that hit plaintiff, appeared for his deposition on November 11,
2004. Defendant Revelie did not appear at her deposition. Both defendants failed to answer
plaintiff's interrogatories.
An arbitration hearing was held on April 5, 2005. Both defendants were present and
admitted negligence. The arbitrators noted the defendants were prevented from presenting
evidence for failure to comply with discovery but concluded that all parties participated in the
arbitration in good faith. An award was entered for plaintiff and against Howard.
On June 22, 2005, defendants moved in the trial court to vacate the discovery order
sanctioning their failure to comply with plaintiff's discovery requests. Plaintiff responded by
arguing the sanction was appropriate and moving to bar defendants' rejection of the arbitration
award under Rule 91(b). Plaintiff argued defendants failed to participate at the arbitration in a
meaningful manner due to the discovery order, which barred them from presenting evidence at the
arbitration. The trial court denied defendants' motion to vacate, granted plaintiff's motion to bar
rejection of the award and entered judgment on the award. Defendants appeal.
A trial court's decision to bar a party from rejecting an arbitration award is generally
reviewed for an abuse of discretion. Zietara v. DaimlerChrysler Corp., 361 Ill. App. 3d 819, 822,
838 N.E.2d 76 (2005). Where the decision turns solely on a question of law, de novo review will
apply. Zietara, 361 Ill. App. 3d at 822.
Rule 91(b) reads:
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"Good-Faith Participation. All parties to the arbitration hearing must
participate in the hearing in good faith and in a meaningful manner. If a panel of
arbitrators unanimously finds that a party has failed to participate in the hearing in
good faith and in a meaningful manner, the panel's finding and factual basis
therefor shall be stated on the award. Such award shall be prima facie evidence
that the party failed to participate in the arbitration hearing in good faith and in a
meaningful manner and a court, when presented with a petition for sanctions or
remedy therefor, may order sanctions as provided in Rule 219(c), including, but
not limited to, an order debarring that party from rejecting the award, and costs
and attorney fees incurred for the arbitration hearing and in the prosecution of the
petition for sanctions, against that party." 145 Ill. 2d R. 91(b).
The rule requires that parties participate in an arbitration hearing in good faith by subjecting the
case to the type of adversarial testing that would be expected at a trial. Walker v. Lewis, 352 Ill.
App. 3d 952, 956, 817 N.E.2d 928 (2004). A party fails to participate in good faith where its
actions amount to a deliberate disregard for the court and the rules. Walker, 352 Ill. App. 3d at
956.
Defendants first argue debarment is inappropriate here because the arbitrators expressly
found that the parties acted in good faith and there is no transcript of the arbitration hearing for
the trial court to conclude otherwise. Defendants cite West Bend Mutual Insurance Co. v.
Herrera, 292 Ill. App. 3d 669, 674, 686 N.E.2d 645 (1997) (discouraging trial courts from finding
bad faith where there has been no such finding by the arbitrators and where the trial court does
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not have the benefit of a transcript from the arbitration hearing); see also Walker, 352 Ill. App. 3d
at 959 (citing West Bend for the same proposition); Ruback v. Doss, 347 Ill. App. 3d 808, 815,
807 N.E.2d 1019 (2004) (same). Plaintiff responds that those cases are distinguishable on the
ground that defendants here failed to comply with the trial court's discovery order and were
barred from testifying or presenting other evidence at the arbitration hearing as a result. Plaintiff
cites Lopez v. Miller, 363 Ill. App. 3d 773, 844 N.E.2d 1017 (2006).
The defendant in Lopez was barred from testifying or presenting other evidence at the
arbitration hearing for failing to comply with discovery. Lopez, 363 Ill. App. 3d at 775. Both
parties appeared at the arbitration, and although the defendant was barred from presenting
evidence, the arbitrators found he participated in good faith. Lopez, 363 Ill. App. 3d at 776. An
award was entered for the plaintiff and the defendant moved to reject the award. Lopez, 363 Ill.
App. 3d at 776. The plaintiff moved to bar rejection under Rule 91(b) on the ground the
defendant failed to comply with the trial court's order compelling him to be deposed. Lopez, 363
Ill. App. 3d at 776. The trial court granted the plaintiff's motion and barred the defendant from
rejecting the award. Lopez, 363 Ill. App. 3d at 776-77. The appellate court affirmed, saying the
"[d]efendant's failure to rectify his deficient discovery participation during the four months
between the trial court's sanction order and the arbitration hearing resulted in his debarment of
rejecting the arbitration award." Lopez, 363 Ill. App. 3d at 779. The court concluded the
"defendant created his own problems by failing to comply with discovery and then further added
to those problems by failing to take any action to correct the sanctions imposed against him."
Lopez, 363 Ill. App. 3d at 779. See also Anderson v. Pineda, 354 Ill. App. 3d 85, 89, 819 N.E.2d
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1157 (2004) ("a litigant who fails to modify, vacate, or comply with sanctions imposed due to a
discovery violation that occurs outside of the arbitration hearing may be incapable of participating
in the arbitration in a meaningful manner"); Glover v. Barbosa, 344 Ill. App. 3d 58, 800 N.E.2d
519 (2003) (the defendant's failure to comply with prearbitration discovery order and to move to
modify or vacate the trial court order preventing her from testifying or presenting evidence at
arbitration hearing were sufficient grounds to bar the defendants' later rejection of the award).
Defendants argue Lopez is distinguishable because defendant Howard was deposed before
the arbitration hearing. Defendants also maintain that plaintiff could have obtained answers to
written discovery through other means. Defendants overlook the rationale for debarment. They
failed to comply with the trial court's discovery order. As a result, they were barred from
testifying or presenting other evidence at the arbitration hearing and could not participate in a
meaningful manner. The duty was on defendants to comply with all, not part, of the trial court's
order.
Defendants argue their failure to comply with the trial court's discovery order did not
prejudice plaintiff and should not have resulted in debarment. Again, the rule is not concerned
with the prejudice to one party caused by another party's failure to comply with discovery. The
point of Rule 91(b) is to "prevent the abuse of the arbitration process and to uphold the integrity
of the arbitration process." State Farm Insurance Co. v. Kazakova, 299 Ill. App. 3d 1028, 1033,
702 N.E.2d 254 (1998), citing 145 Ill. 2d R. 91(b), Committee Comments, at 1xx. The
appropriate inquiry is whether defendants participated in arbitration in good faith and in a
meaningful manner. 145 Ill. 2d R. 91(b).
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Defendants next argue debarment was inappropriate because their failure to comply with
discovery occurred outside of arbitration. This argument was addressed in Anderson. The court
held that "[i]n determining whether Rule 91(b) sanctions are appropriate, failing to consider
violations that occurred outside of, but directly impacted, the hearing 'undermine[s] the spirit and
purpose of Rule 91(b) and the mandatory arbitration system as a whole' " Anderson, 354 Ill. App.
3d at 89, quoting Glover, 344 Ill. App. 3d at 62. We agree with this reasoning.
We also agree with the Lopez court that a party may be barred from rejecting an
arbitration award if that party fails to comply with discovery and, as a result, is barred from
presenting evidence at the arbitration. This is the precise evil Rule 91(b) is intended to curtail. A
party does not participate in an arbitration in good faith and in a meaningful manner when he fails
to comply with prearbitration discovery.
Defendants next argue debarment is an unreasonably harsh sanction under these facts.
"We will not disturb sanctions imposed by a trial court under Rule 91(b) absent a showing of an
abuse of discretion. [Citation.] A trial court abuses its discretion by acting in an arbitrary manner
or exceeding the bounds of reason in imposing sanctions." Anderson, 354 Ill. App. 3d at 89. We
believe the trial court acted within its discretion by barring defendants from rejecting the award in
light of defendants' failure to comply with the discovery order. See Anderson, 354 Ill. App. 3d at
89.
Defendants next argue they were denied their right to a jury trial by the imposition of Rule
91(b) sanctions. This argument was addressed in Williams v. Dorsey, 273 Ill. App. 3d 893, 904,
652 N.E.2d 1286 (1995). The court there said:
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"[T]he rules governing mandatory arbitration do not foreclose a litigant's access to
court and to a jury trial. *** [A] party may reject an arbitration award for any
reason. However, in the context of an arbitration proceeding, just as at trial, a
party may lose the right to proceed with a jury trial as a sanction for violating
certain rules." Williams, 273 Ill. App. 3d at 904.
We agree and reject defendants' argument on this ground. See also Government Employees
Insurance Co. v. Buford, 338 Ill. App. 3d 448, 788 N.E.2d 90 (2003).
Defendants' final argument is a challenge to the constitutionality of Rule 91(b).
Defendants contend Rule 91(b) is unconstitutionally vague because it does not define the type of
conduct that will warrant sanctions. "Supreme court rules are to be construed in the same manner
as statutes." People v. Guttendorf, 309 Ill. App. 3d 1044, 1047, 723 N.E.2d 838 (2000); see also
134 Ill. 2d R. 2. Statutes are presumed constitutional and the party challenging a statute has the
burden of clearly rebutting that presumption. Unzicker v. Kraft Food Ingredients Corp., 203 Ill.
2d 64, 85, 783 N.E.2d 1024 (2002). The constitutionality of a statute presents a question of law
and is reviewed de novo. Unzicker, 203 Ill. 2d at 85-86.
"A legislative act that is so vague, indefinite and uncertain that the courts are unable, by
accepted rules of construction, to determine with any reasonable degree of certainty what the
legislature intended will be declared to be void." Unzicker, 203 Ill. 2d at 94. When faced with a
vagueness challenge, a court may consider the language of the statute and the legislative objective
or evil the statute is designed to remedy. Unzicker, 203 Ill. 2d at 94. A statute is
unconstitutionally vague when people of ordinary intelligence must guess at its meaning. See
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Unzicker, 203 Ill. 2d at 94.
Defendants cite appellate court decision interpreting Rule 91(b) differently. Compare
Amro v. Bellamy, 337 Ill. App. 3d 369, 372, 785 N.E.2d 939 (2003) (holding a party's
prearbitration conduct cannot be considered when deciding whether to impose Rule 91(b)
sanctions), with Anderson, 354 Ill. App. 3d at 89 (disagreeing with Amro), and Lopez, 363 Ill.
App. 3d at 778-79 (same). The fact that various courts interpret a statute differently does not
mean that the statute is unconstitutionally vague. Unzicker, 203 Ill. 2d at 95. "If that were the
test, few statutes would remain on the books." Unzicker, 203 Ill. 2d at 95.
We believe Rule 91(b) is sufficient in definiteness that people of ordinary intelligence may
discern its meaning. The rule requires 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). As this court
observed in Anderson and Glover, "failing to consider violations that occurred outside of, but
directly impacted, the hearing 'undermine[s] the spirit and purpose of Rule 91(b) and the
mandatory arbitration system as a whole.' " Anderson, 354 Ill. App. 3d at 89, quoting Glover,
344 Ill. App. 3d at 62.
The dissent cites Amro, which stands for the proposition that the defiance of a court order
to compel discovery in anticipation of an arbitration hearing cannot serve as the ground for a
subsequent order debarring rejection of an arbitration award. Amro, 337 Ill. App. 3d at 372.
The rationale offered in Amro was that a debarment order must be based on behavior at the
arbitration hearing, not conduct outside the hearing. Amro, 337 Ill. App. 3d at 372. The court
cited Webber v. Bednarczyk, 287 Ill. App. 3d 458, 463, 678 N.E.2d 701 (1997), and Knight v.
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Guzman, 291 Ill. App. 3d 378, 381, 684 N.E.2d 152 (1997), for support. Amro, 337 Ill. App. 3d
at 372. Neither Webber nor Knight involved defiance of a court order entered to compel
discovery in anticipation of an arbitration hearing. The debarment orders in both Webber and
Knight were based on behavior before the arbitration hearing that could be characterized as less
than enthusiastic, and on a history of rejection. In holding that open defiance of a court order
entered to compel discovery in anticipation of an arbitration hearing cannot form the predicate for
a debarment order, Amro stands alone. The rationale in Amro was anticipated and rejected in
Eichler v. Record Copy Services, 318 Ill. App. 3d 790, 742 N.E.2d 1245 (2000), and later in
Anderson, 354 Ill. App. 3d at 89, and Lopez, 363 Ill. App. 3d at 778-79, and Glover, 344 Ill.
App. 3d 58.
The dissent’s argument that prehearing discovery is less important when liability is
admitted may well be valid. But the proper forum for that argument is the courtroom of the judge
about to enter the order. There are procedural steps available to an attorney aggrieved by the
entry of a nonappealable discovery order. Defiance should not be condoned as one of them.
The judgment of the circuit court is affirmed.
Affirmed.
GARCIA, J., concurs.
R.E. GORDON, J., dissents.
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JUSTICE ROBERT E. GORDON, dissenting:
I respectfully disagree with the majority in this case in affirming the barring of defendant
Howard’s rejection of the arbitration award. The facts in this case illustrate that the defendants
admitted negligence in a personal injury action at arbitration, and as a result, the only issues that
remained were causation and damages. The trier of fact had to decide what injuries and damages,
if any, were proximately caused by defendants' admitted negligence. Defendant Revelie, the
owner of the auto involved in the collision, failed to answer plaintiff’s interrogatories or appear
for a discovery deposition. Defendant Howard, the driver, appeared for his deposition, but failed
to answer plaintiff’s interrogatories. The trial court ordered a discovery schedule with a self-
executing order that stated that defendants’ failure to comply with discovery would bar
defendants from testifying or presenting evidence at arbitration or trial. At arbitration, both
defendants were present and Howard admitted negligence. An award was entered for plaintiff
against defendant Howard, only. The arbitrators noted that the defendants were prevented from
presenting evidence for their failure to comply with discovery, but found that all parties
participated in good faith.
Defendants filed a timely rejection of the award. Defendants then moved in the trial court
to vacate the discovery order sanction, and plaintiff moved to bar defendants’ rejection under
Supreme Court Rule 91(b).
Supreme Court Rule 91(b) provides that all parties to the arbitration hearing must
participate in the hearing in good faith and in a meaningful manner. The failure to do so permits a
court to impose sanctions, including debarring the offending party from rejecting the award.
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Amro v. Bellamy, 337 Ill. App. 3d 369, 785 N.E.2d 939 (2003). The majority concludes that
Amro "stands for the proposition that the defiance of a court order to compel discovery in
anticipation of an arbitration hearing cannot serve as the ground for a subsequent order debarring
rejection of an arbitration award." (Emphasis added.) Slip op. at 8. However, the court in Amro
never used the word "defiance"; what it did say was, "There is no evidence in the record
demonstrating that any conduct of defendant during the arbitration hearing served as an
appropriate basis for debarring rejection." Amro, 337 Ill. App. 3d at 372. There was no defiance
in Amro and certainly none in the case at bar.
In fact, in the Amro case, this court reversed the trial court for debarring rejection by a
defendant for discovery violations, finding that the defendant participated in the proceedings in
good faith and in a meaningful manner by presenting opening statements, cross-examining the
plaintiff, and making closing arguments even though the defendant was barred from testifying or
presenting evidence. Amro, 337 Ill. App. 3d at 372.
The majority relies on Lopez v. Miller, 363 Ill. App. 3d 773, 844 N.E.2d 1017 (2006),
where this court affirmed a barring of the rejection of an arbitration award after a defendant was
barred from presenting evidence for failure to comply with discovery. The Lopez decision is
distinguishable from the case at bar. In Lopez, negligence was at issue and the defendant failed to
comply with written discovery as well as provide a discovery deposition. The failure to provide
necessary discovery in a case where negligence is at issue is an important difference between the
Lopez case and the case at bar.
In this case, defendant Howard provided his discovery deposition and during that process
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plaintiff had the opportunity to ask him all of the questions that defendant failed to answer in the
written interrogatories. Generally, discovery as to a defendant is not necessary for arbitration or
trial by the plaintiff when negligence is admitted.
The point of Rule 91(b) that the majority is greatly concerned with, and rightfully so, is to
"prevent the abuse of the arbitration process and to uphold the integrity of the arbitration
process." State Farm Insurance Co. v. Kazakova, 299 Ill. App. 3d 1028, 1033, 702 N.E.2d 254
(1998). Mandatory arbitration was created, amongst other reasons, for judicial economy and to
decrease the cost of litigation for the parties. The facts in this case do not indicate that defendant
Howard’s conduct in not answering plaintiff’s written interrogatories was an abuse of the
arbitration process, or that it affected the integrity of that process. The mere failure of not
answering interrogatories without a showing as to why they are needed in an admitted negligence
personal injury case by itself is not enough to illustrate that defendant Howard was not acting in
good faith. As a result, the trial court abused its discretion in barring defendant Howard’s
rejection of the arbitration award.
In sum, there is an abuse of the circuit court’s discretion in determining that defendant
Howard participated in the arbitration hearing in bad faith.
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