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SECOND DIVISION
FEBRUARY 08, 2005
(Nunc pro tunc
January 11, 2005)

No. 1-03-2438

JUSTICE GARCIA delivered the opinion of the court.

On February 18, 2002, the plaintiff, Government EmployeesInsurance Company (GEICO), filed a subrogation action against thedefendant, David Smith, for property damage related to a trafficaccident with Rosalyn Walton, GEICO's subroger.

On August 19, 2002, a mandatory arbitration hearing tookplace and the arbitrators entered an award in favor of GEICO. However, the arbitrators' order noted "bad faith participation by[GEICO] in that [GEICO] failed to produce, pursuant to [a] Rule237 Notice To Produce [166 Ill. 2d R. 237(b)] 'GEICO estimatorJohn Ciullo' as to the issue of amount of damages."

Both parties rejected the arbitration award. Smithsubsequently filed a motion to bar GEICO from presenting evidenceat trial for failure to comply with Rule 237. 166 Ill. 2d R.237. On October 10, 2002, Judge Frank J. Dolan granted Smith'smotion. Subsequently, Smith filed a motion for summary judgmentwhich was also granted.

GEICO appeals arguing that the trial court abused itsdiscretion in (1) barring GEICO from presenting evidence attrial, and (2) entering summary judgment.

BACKGROUND

In its subrogation action against Smith, GEICO sought torecover damages in the amount of $3,867.33 for property damage toits insured's vehicle, rental expenses incurred by its insured,and its insured's deductible.

On April 16, 2002, Smith served GEICO with a notice toproduce, pursuant to Rule 237 (166 Ill. 2d R. 237(b)) and section2-1102 of the Illinois Code of Civil Procedure (735 ILCS 5/2-1102(West 2000)), demanding that, inter alia, GEICO produce

"11. *** the claim's [sic] adjusternamed on the [sic] estimate of plaintiff'svehicle with the entire claims filed [sic]and with the NADA⁽¹⁾ book or any other sourceused to evaluate the value of the vehicle onthe date of loss."

On June 24, 2002, Smith served GEICO with a supplementalnotice to produce, again pursuant to Rule 237 and section 2-1102. The supplemental notice to produce demanded GEICO produce:

"11. *** the claim's [sic] adjusternamed on the [sic] estimate of plaintiff'svehicle with the entire claims filed [sic]and with the NADA book or any other sourceused to evaluate the value of the vehicle onthe date of loss.

12. JOHN CIULLO - GEICO ESTIMATOR."

On August 19, 2002, a mandatory arbitration hearing tookplace. At the arbitration hearing GEICO produced neither itsclaims adjuster nor John Ciullo. The arbitrators' unanimouswritten order was entered in favor of GEICO. However, thearbitrators also indicated that GEICO had acted in "bad faith." The arbitrators' order specifically stated as follows:

"Award in favor of [GEICO] *** in the amountof $2,489.29, plus costs of $138.73 based ona copy of clerk's receipt for same, the panelfinding bad faith participation by plaintiffin that plaintiff failed to produce, pursuantto a Rule 237 notice to produce 'GEICOestimator John Ciullo' as to the issue of[the] amount of damages."

The record on appeal does not contain a transcript of thearbitration proceeding. Each party filed a notice rejecting thearbitration award.

On September 5, 2002, Smith filed a motion to bar GEICO fromproducing evidence at trial on the grounds that (1) GEICO failedto produce its employee to testify at the arbitration hearingpursuant to Smith's Rule 237 notice to produce, and (2) thearbitrators found GEICO's failure to produce John Ciullo,misidentified as GEICO's estimator, indicated that GEICO did notparticipate in good faith during the arbitration proceedings.

On September 19, 2002, GEICO filed a response to Smith'smotion to bar. GEICO stated that "[t]he initial repair estimatewas written by John Ciullo, an employee of C.D.E. Body Shop II,Inc., located at 5710 S. Western Avenue, in Chicago, Illinois." GEICO further stated that "Mr. [John] Ciullo was employed by thatcompany on all relevant dates, not GEICO." GEICO further arguedthat because John Ciullo was not its employee, Rule 237 could notbe used to compel his appearance. Instead of a Rule 237 noticeto appear, GEICO argued, Smith should have issued a subpoenadirectly to John Ciullo.

On October 10, 2002, Judge Frank J. Dolan granted Smith'smotion to bar GEICO from presenting evidence at trial. Therecord does not contain a transcript of the hearing on thematter, nor does Judge Dolan's order contain his reasoning.

In October 2002, GEICO filed a petition for rehearing. Judge James P. McCarthy struck that petition.

In March 2003, GEICO filed a motion to vacate Judge Dolan'sbarring order of October 10, 2002. In April 2003, Judge ShelliD. Williams-Hayes struck GEICO's motion to vacate following oralargument by both parties. The record does not contain atranscript of this argument. However, Judge Williams-Hayes'order states, "Plaintiff's [GEICO's] motion is stricken by thecourt. The court heard oral argument from both parties' counseland instructed plaintiff's counsel to bring the motion beforeJudge Dolan."

In May 2003, GEICO filed a motion with Judge Dolan toreconsider the order he entered on October 10, 2002. GEICO fileda written argument, the arbitrators' award, Judge Dolan's October10, 2002, order, a repair bill from C.D.E. Body Shop II, Inc.,and an affidavit from John Ciullo. The repair bill from C.D.E.Body Shop II, Inc., was entitled "ESTIMATE OF RECORD," denotedthat it was "Written by: John Ciullo #01/09/2001 12:19 PM," andlisted the "Adjuster: FRANK CIRILLO."⁽²⁾ John Ciullo's affidavit,dated April 15, 2003, stated that he was employed by C.D.E. BodyShop II, Inc. John Ciullo's affidavit also stated that althoughhe created an estimate of damages for GEICO on January 9, 2001,he was not an employee of GEICO.

On June 24, 2003, Judge Dolan began the hearing on GEICO'smotion to reconsider by clarifying GEICO's position:

"THE COURT: Do I understand that yourargument is that there was a mistake in the237 because they named somebody who wasn't anemployee?

[GEICO's Attorney]: That's correct, YourHonor.

THE COURT: Is that the thrust of wherewe're going?

[GEICO's Attorney]: The mistake was thatthe arbitrators assumed that a person was anemployee of GEICO, when the document, namelythe paid repair bill, clearly stated that theperson was an employee of an independent bodyshop. CDE Body Shop II, Inc."

Smith's attorney argued that he sent GEICO two Rule 237notices to produce. Smith's attorney contended that both noticesto produce contained language seeking "the claim's [sic] adjusternamed on the [sic] estimate of plaintiff's vehicle." Additionally, the June 21, 2002, notice to produce asked that"JOHN CIULLO - GEICO ESTIMATOR" be produced. Smith's attorneyargued that at no time did GEICO object to either of the noticesto produce or alert Smith that John Ciullo was not a GEICOemployee. Smith's attorney stated that, instead, GEICO took partin the arbitration without producing anyone, either GEICO'sclaims adjuster, Frank Cirillo, or John Ciullo.

GEICO acknowledged receiving Smith's supplemental notice toproduce but argued that the repair bill clearly indicated thatJohn Ciullo was an employee of C.D.E. Body Shop II, INC. GEICOargued that Smith's attorney assumed that John Ciullo was anemployee of GEICO. GEICO also argued that if Smith truly neededJohn Ciullo to testify, Smith needed to subpoena him. Moreover,GEICO's attorney admitted before Judge Dolan that Frank Cirillo,listed on the repair bill from C.D.E. Body Shop II, Inc., as aclaims adjuster, was an employee of GEICO.

The following discussion then took place:

"THE COURT: Well, what about theobligation of counsel when he receives anotice to produce where there is clear erroron its face, to advise defense counsel inthis case of that error so that there can bea full and complete hearing of the matter?

[GEICO's Attorney]: That's -

THE COURT: I mean otherwise, what we'vedone is we get out of the sunlight where we -where I think discovery rules are meant toput us, and we are back to gamesmenship andwe are in shadows, and we are in places thatI don't believe the Supreme Court wants us togo.

[GEICO's Attorney]: There's nogamesmanship going on here.

THE COURT: Well, then why didn't youtell them that they had made a mistake?

[GEICO's Attorney]: Because, Your Honor,we tendered a copy of the paid repair billwhich made it clear on its face, which wasincluded in the 90(c) packet [166 Ill. 2d R.90(c)] they had long before this hearing wasconducted.

* * *

[Smith's Attorney]: If the order hadsaid - let's say that [GEICO's] Counsel hadadvised us that it was actually - I assumethat they are relying that it's Frank[Cirillo] is actually the real employee ofGEICO.

THE COURT: I don't know. Are you?

[GEICO's Attorney]: Your Honor, the -

THE COURT: [How] did they err?

[GEICO's Attorney]: I mean the error wasnaming John Ciullo, GEICO estimator, becauseJohn Ciullo has never been a GEICO estimator,or worked in any capacity for GEICO.

[Smith's Attorney]: I'm just askingCounsel. Is Frank [Cirillo] the employeethat they - because you keep saying that it'sclear on its face of who the GEICO employeeis, and I don't see that.

[GEICO's Attorney]: Frank [Cirillo] wasnever named in the 237 notice. He is -

THE COURT: Is he the employee?

[GEICO's Attorney]: He is an employee ofthe company. He was never named in the 237notice.

[Smith's Attorney]: Judge, I would askthat - the Court could just as easilyinterpret this award to say they didn't bringanybody pursuant to 237. It doesn't matterwho we put - does it matter if we would haveput John Ciullo or Frank [Cirillo]? Itdoesn't matter, because at the end as to theissue of amount of damages, that's the issuethere. They didn't bring a person, that'sbad faith participation. That's what [thearbitrators] found.* * *

THE COURT: Thank you. Now then, I amloath to put myself in the position of secondguessing the arbitrators who had the benefitof the hearing, and I don't. I have theiraward, but it seems to me on my understandingof 237 as well as any of the other discoveryrules, is that the accommodation is to theeffective and efficient administration ofjustice. And it seems to me we can only havethat when we - when we have the kind ofpractice where if somebody asks for a certain- in this case a certain individual or acertain proof, here an estimator, based uponthe estimate, and that's what it is, estimateof record, who it's written by, and adjuster,there's two different names, there's nothingreally clear on [the repair bill's] face asto the employment that those two peopleenjoyed, but I think that the - I think thatthe rules are meant to go beyond the surfaceon this to the understanding of the partiesas to what the other side is requesting, sothat we can have purposeful hearings, be theyarbitration hearings, be they full blownhearings here before a jury, and so I havelistened to your arguments, I have had thebenefit of reviewing your motion toreconsider here, but I'm not persuaded ***either that the award of the arbitratorsshould be set aside, or that my order of the10th of October, 2002, should be vacated."

On June 24, 2003, following Judge Dolan's denial of GEICO'smotion to reconsider, Smith filed a motion for summary judgment. Summary judgment was granted over GEICO's objection and thisappeal followed.

ANALYSIS

GEICO argues in its reply brief that "[t]he main issue inthis appeal is whether or not the trial court improperly expandedRule 237(b) to apply to a witness who is not a party nor anofficer, director, or employee of a party." GEICO's argumentrelates to its noncompliance with Smith's Rule 237 request forGEICO to produce John Ciullo. GEICO contends it could not becompelled to produce John Ciullo as he was not "an officer,director, or employee" of GEICO. 166 Ill. 2d R. 237(b). Weemphasize that although Smith's supplemental Rule 237 notice toproduce asked that "John Ciullo - GEICO estimator" be produced atthe arbitration hearing, both Smith's Rule 237 notice andsupplemental notice to produce also sought GEICO's "claim's [sic]adjuster."

The record clearly establishes that John Ciullo created arepair estimate for GEICO but was not a GEICO employee. However,and more importantly to our resolution of this case, the recordalso demonstrates, as admitted by GEICO's attorney, that FrankCirillo, GEICO's "claim's [sic] adjuster," was a GEICO employee,was listed in paragraph 11 of each of Smith's Rule 237 notices,and was not produced by GEICO at the arbitration hearing. Inlight of the foregoing facts, we find the issue to be whetherJudge Dolan's October 10, 2002, sanction, which barred GEICO frompresenting evidence at trial due to GEICO's failure to complywith Rule 237, was an abuse of discretion, where Smith hadrequested GEICO produce its "claim's [sic] adjuster," an admittedGEICO employee, and GEICO failed to do so.

We begin by noting that Judge Dolan did not specificallydesignate under which supreme court rule he was granting Smith'smotion to bar GEICO from presenting any evidence or witnesses attrial. However, Smith's motion to bar GEICO from presentingevidence makes only one allegation: GEICO failed to comply withSmith's Rule 237 notice and supplemental notice to produce. SeeGovernment Employees Insurance Co. v. Campbell, 335 Ill. App. 3d930, 936, 781 N.E.2d 639 (2002). Therefore, Judge Dolan grantedSmith's motion as a sanction for GEICO's violation of Rule 237. See Campbell, 335 Ill. App. 3d at 936.

Supreme Court Rule 237(b) states in pertinent part:

"The appearance at the trial of a partyor a person who at the time of trial is anofficer, director, or employee of a party maybe required by serving the party with anotice designating the person who is requiredto appear. *** Upon a failure to comply withthe notice, the court may enter any orderthat is just, including any order providedfor in Rule 219(c) that may be appropriate." 166 Ill. 2d R. 237(b).

Supreme Court Rule 90(g) provides that Rule 237 is equallyapplicable to arbitration hearings and trials. 166 Ill. 2d R.90(g); Campbell, 335 Ill. App. 3d at 933. "The supreme courtrules regarding mandatory arbitration are designed to preventabuse in, and to uphold the integrity of, the arbitrationprocess." State Farm Mutual Insurance Co. v. Koscelnik, 342 Ill.App. 3d 808, 810, 795 N.E.2d 1001 (2003). "Rule 91(b) providesthat parties to an arbitration must participate in theproceedings in good faith and in a meaningful manner." StateFarm Mutual Insurance Co. v. Santiago, 344 Ill. App. 3d 1010,1013, 801 N.E.2d 142 (2003), citing 145 Ill. 2d R. 91(b). Supreme Court Rule 219(c) states that failure to comply with aRule 237(b) notice may include an order barring the offendingparty from presenting any evidence or witnesses. 166 Ill. 2d R.219(c); Santiago, 344 Ill. App. 3d at 1013.

We note that the parties do not agree upon our standard ofreview. GEICO contends that "this appeal presents a question oflaw, not a question of fact, and concerns the construction of aSupreme Court Rule." GEICO also argues that we should reviewthis matter de novo as "Smith presented no evidence to the trialcourt to rebut the evidence tendered by the plaintiff, GEICO,which showed that John Ciullo was not a GEICO employee." Inopposition, Smith contends that the trial court's decision toimpose sanctions due to GEICO's conduct during the arbitrationhearing should not be reversed absent an abuse of discretion. Weagree with Smith.

"Sanctions for failing to comply with a Rule 237 notice areto be imposed when failure to comply is determined to beunreasonable." Campbell, 335 Ill. App. 3d at 933. "A circuitcourt's decision barring a party from presenting evidence attrial and imposing sanctions is subject to an abuse of discretionstandard of review." Santiago, 344 Ill. App. 3d at 1013. "Anabuse of discretion occurs when the court's ruling is arbitraryor exceeds the bounds of reason." Santiago, 344 Ill. App. 3d at1013. "[T]he burden is on the offending party to show that itsnoncompliance with a Rule 237 notice was reasonable or the resultof extenuating circumstances." Campbell, 335 Ill. App. 3d at933.

In the instant case, Smith's Rule 237 supplemental notice toproduce requested that GEICO produce two individuals, GEICO'sclaims adjuster, as listed in paragraph 11, and John Ciullo, asnamed in paragraph 12 as GEICO's estimator. The arbitrators madea unanimous finding that GEICO failed to participate in thearbitration hearing in good faith due to GEICO's failure toproduce John Ciullo as requested by Smith's Rule 237 supplementalnotice to produce. However, before Judge Dolan, GEICO arguedthat it could not be compelled by Rule 237 to produce John Ciulloas he was not employed by GEICO but was instead employed byC.D.E. Body Shop II, Inc. Also at the hearing before JudgeDolan, GEICO admitted that the "claim's [sic] adjuster" named onthe C.D.E. Body Shop II, Inc., repair bill, Frank Cirillo, was aGEICO employee. Although Smith requested GEICO produce its"claim's [sic] adjuster," GEICO failed to present Frank Cirilloat the arbitration hearing.

"Parties to an arbitration must subject the case to the sametype of adversarial testing expected at trial." Santiago, 344Ill. App. 3d at 1013. Bad-faith participation in an arbitrationhearing "'may consist of "inept preparation or intentionaldisregard for the process"'". Givens v. Renteria, 347 Ill. App.3d 934, 942, 808 N.E.2d 1009 (2003) quoting Anderson v. Mercy,338 Ill. App. 3d 685, 689, 788 N.E.2d 765 (2003), quoting Schmidtv. Joseph, 315 Ill. App. 3d 77, 83, 733 N.E.2d 694 (2000).

In this case, although the arbitrators unanimously foundthat GEICO acted in bad faith by failing to produce John Ciullo,it is clear that John Ciullo was not an employee of GEICO. Assuch, Smith's Rule 237 notice to produce John Ciullo, and GEICO'snoncompliance with the Rule 237 notice concerning John Ciullo,could not be subject to a bad-faith finding by the arbitratorsunder Rule 91(b). 145 Ill. 2d R. 91(b). However, the absence ofa basis for a bad-faith finding by the arbitrators regardingGEICO's failure to produce its claims adjuster, Frank Cirillo,does not support GEICO's position on appeal. State FarmInsurance Co. v. Jacquez, 322 Ill. App. 3d 652, 656, 749 N.E.2d462 (2001).

Implicit in the arbitrators' unanimous award is its findingthat GEICO failed to participate in the arbitration proceedings"in good faith and in a meaningful manner" (145 Ill. 2d R.91(b)), because GEICO violated Smith's Rule 237 notice toproduce. As Smith's Rule 237 notice and supplemental notice toproduce both requested GEICO's "claim's [sic] adjuster named onthe [sic] estimate," and the claims adjuster was an employee ofGEICO, and GEICO failed to produce its claims adjuster, a findingthat GEICO violated Rule 237 has been established. See Campbell,335 Ill. App. 3d at 934 (proper Rule 237 notice where plaintiffrequested to bring the "'adjuster with the entire claim file'"). The trial court has the discretion to impose sanctions when itfinds that a party has failed to participate in arbitrationhearings in good faith and in a meaningful manner. Smith v.Gleash, 325 Ill. App. 3d 79, 83, 757 N.E.2d 101 (2001).

In this case, Judge Dolan specifically commented:

"If somebody asks for a certain - in thiscase a certain individual or a certain proof,here an estimator, based upon the estimate,and that's what it is, estimate of record,who it's written by, and adjuster, there'stwo different names, there's nothing reallyclear on [the repair bill's] face as to theemployment that those two people enjoyed, butI think that the - I think that the rules aremeant to go beyond the surface on this to theunderstanding of the parties as to what theother side is requesting."

Smith specifically issued a Rule 237 notice to produce and asupplemental notice to produce, requesting GEICO produce bothJohn Ciullo and the "claim's [sic] adjuster," now identified asFrank Cirillo. GEICO produced neither. Even though Smith shouldhave subpoenaed John Ciullo, as he was not an employee of GEICO,the claims adjuster, Frank Cirillo, was admittedly an employee ofGEICO and should have been produced pursuant to Smith's Rule 237notices to produce. Clearly, the burden was on GEICO todemonstrate why its noncompliance with Smith's Rule 237 notice toproduce its "claim's [sic] adjuster," Frank Cirillo, was"reasonable or the result of extenuating circumstances"(Campbell,335 Ill App 3d at 933). Indeed, GEICO produced noevidence with regard to its noncompliance in producing FrankCirillo either before Judge Dolan, or before this court.

That Smith's Rule 237 notice to produce requested "theclaim's [sic] adjuster named on the estimate of plaintiff'svehicle," and that the claims adjuster, Frank Cirillo, wasadmittedly an employee of GEICO, make this case distinguishablefrom State Farm Mutual Insurance Co. v. Nasser, 337 Ill. App. 3d362, 785 N.E.2d 934 (2003). In Nasser, the defendant's notice toproduce "was defective in that it only requested 'plaintiff(s)'and did not designate a specific employee to appear." Nasser,337 Ill. App. 3d at 368. Moreover, the fact that Smith requestedthe claims adjuster in a Rule 237 notice to produce, and the factthat Judge Dolan's denial of GEICO's motion for reconsiderationwas based on GEICO's noncompliance, also makes the case at bardistinguishable from State Farm Insurance Co. v. Harmon, 335 Ill.App. 3d 687, 781 N.E.2d 335 (2002). In Harmon, "[t]he [trial]court did not base the imposition of sanctions on Rule 237(b)." Harmon, 335 Ill. App. 3d at 689.

Instead, we find the case sub judice similar to Campbell. In Campbell, the "defendant filed a proper Rule 237 notice thatincluded, among other things, that plaintiff bring the 'adjusterwith the entire claim file' to the arbitration hearing." Campbell, 335 Ill. App. 3d at 934. The plaintiff did not do soand attempted to make light of its noncompliance by referring toit as a "mere failure" and characterizing it as "an oversight." Campbell, 335 Ill. App. 3d at 934.

Similarly, in this case, Smith issued two, Rule 237 noticesto GEICO. In paragraph 11 of Smith's notice to produce, herequested GEICO produce its "claim's [sic] adjuster." Further,in paragraph 11 of Smith's supplemental notice to produce, heagain requested GEICO produce its "claim's [sic] adjuster." Inits argument before Judge Dolan, GEICO admitted receiving Smith'ssupplemental notice to produce and admitted that the claimsadjuster named on its insured's repair bill, Frank Cirillo, was aGEICO employee. As Smith sent GEICO a Rule 237 notice andsupplemental notice to produce requesting its "claim's [sic]adjuster," and as that individual, Frank Cirillo, was a GEICOemployee, GEICO had an obligation to produce him before thearbitration panel. Judge Dolan found GEICO's argument that itwas unnecessary for it to produce anyone other than its insuredwas without merit because "there was a notice to produce put uponyou."

We note that we can affirm Judge Dolan on any ground. Although GEICO could not be compelled by Rule 237 to produce JohnCiullo, GEICO had an obligation to produce Frank Cirillo as Smithissued GEICO two notices to produce requesting, in paragraph 11,the "claim's [sic] adjuster." See Campbell, 335 Ill. App. 3d at934. Therefore, we find no abuse of discretion in Judge Dolan'sorder barring GEICO from presenting testimony or evidence attrial.

We also find no error in the circuit court's grant ofsummary judgment. Based on our own findings, GEICO violatedSupreme Court Rule 237 by not producing its "claim's [sic]adjuster," Frank Cirillo. As GEICO violated Rule 237, thesanction debarring GEICO from presenting any testimony orevidence at trial was within the trial court's discretion and agrant of summary judgment necessarily followed.

CONCLUSION

Based on the foregoing, we find that Judge Dolan did notabuse his discretion in barring GEICO from presenting evidence orwitnesses at trial. Hence, the trial court's award of summaryjudgment is affirmed.

Affirmed.

BURKE, P.J., and WOLFSON, J., concur.

1. NADA is an acronym for the "National Automobile DealersAssociation." "The National Automobile Dealers Association,founded in 1917, represents more than 20,000 new car and truckdealers, with more than 43,000 franchises nationwide, bothdomestic and international." NADA online at http://www.nada.org

2. We note that although the repair bill from C.D.E. BodyShop II, Inc., names the "Adjuster: FRANK CIRILLO," thetranscript repeatedly refers to "Frank Ciullo."