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FIRST DIVISION
November 15, 2004

No. 1-02-3505

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

Plaintiff filed a subrogation action against defendant Dorota Kogut for damages arisingout of a car accident involving defendant and plaintiff's insured, Irene Mika. The case wasassigned to mandatory arbitration. The hearing was not transcribed, but the record reveals thatcounsel for both parties, an agent for plaintiff, an interpreter for Mika (who does not speakEnglish) and defendant attended. Mika did not attend the hearing. The record reveals thatplaintiff presented testimony from its agent and defendant as an adverse witness. Plaintiff alsosubmitted evidence of damages through a Rule 90(c) package (Official Reports Advance SheetNo. 26 (December 24, 2003), R. 90(c), eff. January 1, 2004).

An award was entered for defendant. Plaintiff filed a timely notice of rejection of theaward. Defendant moved to bar plaintiff's rejection under Supreme Court Rule 91(b) (145 Ill. 2dR. 91(b)), arguing plaintiff failed to participate in the arbitration in good faith and in a meaningfulmanner because plaintiff did not produce Mika at the hearing. Plaintiff responded that it madereasonable but unsuccessful attempts to produce Mika. Plaintiff's attorney said in an affidavit thathe 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 aconference call to Mika and spoke with Mika's husband and son. Mika's son told plaintiff'sattorney that Mika would attend the arbitration. Plaintiff's attorney also said he paid a Polishinterpreter $140 to attend the hearing. Defendant did not respond to plaintiff's affidavit.

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

We consider plaintiff's arguments out of sequence and begin our analysis by addressing thecontention that the trial court committed reversible error by failing to put in writing the groundfor 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 tocomply with discovery. 166 Ill. 2d R. 219(c). The last paragraph of Rule 219(c) directs thatwhere a sanction is imposed under the rule, the court "shall set forth with specificity the reasonsand basis of any sanction so imposed either in the judgment order itself or in a separate writtenorder." 166 Ill. 2d R. 219(c). Rule 219(c) is made applicable to mandatory arbitrationproceedings through Rule 91(b), which authorizes a court to "order sanctions as provided in Rule219(c)" where a party fails to participate in the arbitration hearing in good faith and in ameaningful manner. 145 Ill. 2d R. 91(b).

Rule 91(b) does not limit the applicability of Rule 219(c) to the list of sanctions containedtherein. 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 thedrafters of Rule 91(b) intended to incorporate the procedure to be followed when imposing Rule219(c) sanctions, including the directive to the trial court that it set forth with specificity thegrounds for its decision.

This reading of Rule 91(b) is consistent with our treatment of sanction orders in othercontexts, 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 groundsfor 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 Rule219(c) discovery violation sanctions). Sanctions, in whatever context, are not available on thewave of a wand. If we are to maintain the deference granted the trial court under an abuse ofdiscretion standard of review, and to ensure the integrity of the standard, we must continue tourge the trial courts to draft sanction orders that are specific enough to allow us to defer to thediscretion of the trial court with confidence. See North Shore Sign Co., Inc. v. Signature DesignGroup, Inc., 237 Ill. App. 3d 782, 790-91, 604 N.E.2d 1157 (1992) (the considerable deferencegiven a trial court's decision whether to impose sanctions is predicated on the necessaryrequirement that the trial court make explicit factual findings on which a court of review maymake 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 barringplaintiff's 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 thecourt's decision: the failure to produce the insured. Although defendant argued plaintiff should bebarred from rejecting the arbitration award on more than one ground, the trial court granteddefendant's motion under Rule 91(b). The only ground for defendant's Rule 91(b) argument wasthat plaintiff failed to produce its insured at the arbitration hearing. Defendant did not attack thedegree of plaintiff's participation on any other ground. Nor do the parties contend on appeal thatthe court's finding was grounded on a reason other than plaintiff's failure to produce its insured.

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

A trial court's decision barring a party from rejecting an arbitration award is subject to anabuse of discretion standard of review. Ruback v. Doss, 347 Ill. App. 3d 808, 811, 807 N.E.2d1019 (2004). An abuse of discretion occurs where the trial court's decision is arbitrary or exceedsthe bounds of reason. Ruback, 347 Ill. App. 3d at 811-12.

A party participates in good faith and in a meaningful manner under Rule 91(b) bysubjecting the case to the type of adversarial testing that would be expected at trial. Ruback, 347Ill. App. 3d at 811. The standard to be applied when deciding whether to bar a party fromrejecting an arbitration award is whether its conduct amounted to a deliberate and pronounceddisregard for the rules and the court. Ruback, 347 Ill. App. 3d at 811.

We have also found authority for barring a party from rejecting an award where there is noevidence of a deliberate and pronounced disregard for the rules and the court. There is a line ofcases which holds that a party fails to participate in good faith and in a meaningful manner wherethe party's preparation for the arbitration is "inept." See Ruback, 347 Ill. App. 3d at 811; Givensv. Renteria, 347 Ill. App. 3d 934, 942, 808 N.E.2d 1009 (2003); Anderson v. Mercy, 338 Ill.App. 3d 685, 689, 788 N.E.2d 765 (2003); State Farm Mutual Insurance Co. v. Nasser, 337 Ill.App. 3d 362, 367, 785 N.E.2d 934 (2003); State Farm Insurance Co. v. Harmon, 335 Ill. App. 3d687, 690, 781 N.E.2d 335 (2002); State Farm Insurance Co. v. Rodrigues, 324 Ill. App. 3d 736,741, 756 N.E.2d 359 (2001); Saldana v. Newmann, 318 Ill. App. 3d 1096, 1100, 743 N.E.2d 663(2001); Schmidt v. Joseph, 315 Ill. App. 3d 77, 83, 733 N.E.2d 694 (2000). This line of casescan be traced to Employer's Consortium, Inc. v. Aaron, 298 Ill. App. 3d 187, 698 N.E.2d 189 (1998), where the court said:

"A trial court need not find intentional obstruction of the arbitration proceeding. The purposes of Rule 91(b) are defeated whether a party's conduct is the result ofinept preparation or intentional disregard for the process." (Emphasis added.) Employer's, 298 Ill. App. 3d at 191.

We find that the "inept preparation" language appears to have crept into the cases recently (1998)out of a characterization in a brief rather than a published opinion, and has no basis in Illinois law.

In support of its holding that "inept preparation" constitutes lack of good faith andmeaningful participation under Rule 91(b), the Employer's court cited Martinez v. Gaimari, 271Ill. App. 3d 879, 883, 649 N.E.2d 94 (1995). But Martinez did not hold, nor can it be construedas holding, that inept preparation constitutes a failure to participate in good faith and in ameaningful manner.

At issue in Martinez was whether a defendant's failure to present rebuttal evidenceamounted to a lack of good faith and meaningful participation. Martinez, 271 Ill. App. 3d at 883-84. The court held that although the defendant cross-examined the plaintiff and made legalarguments at the arbitration hearing, the defendant did not subject the case to the type ofadversarial testing expected at trial because she did not present a case in chief. Martinez, 271 Ill.App. 3d at 883-84. The phrase "inept preparation" does not appear in Martinez.

Nor can we find support for the "inept preparation" standard in Rule 91(b). Rule 91(b)was adopted in 1993 in response to complaints by arbitrators that parties were attending thearbitration hearings but refusing to participate. 145 Ill. 2d R. 91(b), Committee Comments, at1xix. The drafters sought to eliminate the perception of arbitration "as just another hurdle to becrossed in getting the case to trial." 145 Ill. 2d R. 91(b), Committee Comments, at 1xx. Theexpress purpose of Rule 91(b) was to "prevent the abuse of the arbitration process and to upholdthe integrity of the arbitration process." State Farm Insurance Co. v. Kazakova, 299 Ill. App. 3d1028, 1033, 702 N.E.2d 254 (1998), citing 145 Ill. 2d R. 91(b), Committee Comments, at 1xx. The drafters' concern was with parties' intentional disregard for the arbitration process. SeeCrouch v. First National Bank of Chicago, 156 Ill. 342, 357, 40 N.E. 974 (1895) (defining "goodfaith" as involving an element of intent); McConnel v. Street, 17 Ill. 253, 254 (1855) (defining"good faith" as the opposite of bad faith or fraud). While under certain circumstances the failureto properly prepare for arbitration may signal gross indifference and can be interpreted as anintentional disregard for the arbitration process, this cannot be true in all cases that may becharacterized as inept. Among the several meanings of "inept," the one most appropriate in thelegal context is "lacking in skill or aptitude for a particular role or task." Webster's Third NewInternational Dictionary 1156 (1993). A showing of some preparation for the hearing--whileperhaps inept--is not normally relevant to an analysis that requires intent. Whether a party'spreparation was so deficient as to amount to an intentional disregard for the arbitration processmust be decided on a case-by-case basis. See Johnson v. United Airlines, 203 Ill. 2d 121, 135,784 N.E.2d 812 (2003) (good-faith determination is a matter left to the discretion of the trialcourt based on the totality of the circumstances).

Defendant argues because liability was contested, plaintiff could not have subjected itscase to the type of adversarial testing expected at trial without calling its insured as a witness. Defendant cites Hinkle v. Womack, 303 Ill. App. 3d 105, 707 N.E.2d 705 (1999). But liabilitywas not at issue in Hinkle. Hinkle, 303 Ill. App. 3d at 108 (the defendants' counsel admittedliability on behalf of the defendants at the arbitration hearing). Hinkle is also factuallydistinguishable from this case. The court in Hinkle upheld a decision by the trial court barring thedefendants from rejecting an arbitration award on the ground that the defendants did not appear atthe arbitration hearing despite having been served with a Rule 237 notice (166 Ill. 2d R. 237) andfor failing to present evidence to rebut the plaintiff's case in chief. Hinkle, 303 Ill. App. 3d at112. The plaintiff here did not violate Rule 237 or fail to present evidence to support its case. Also, plaintiff's insured was not a party to the lawsuit.

Nor do we find State Farm Mutual Insurance Co. v. Koscelnik, 342 Ill. App. 3d 808, 795N.E.2d 1001 (2003), decided after the parties filed their briefs in this case, controlling under thesefacts. The plaintiff in Koscelnik filed a contested subrogation action for damages arising out of acar accident involving the defendant and the plaintiff's insured. Koscelnik, 342 Ill. App. 3d at 809. The case was assigned to mandatory arbitration and an award was entered for the defendant. Koscelnik, 342 Ill. App. 3d at 809. Neither the defendant nor the plaintiff's insured attended thearbitration hearing. Koscelnik, 342 Ill. App. 3d at 809. The plaintiff was later barred fromrejecting the award on the ground that it failed to produce its insured or an eyewitness to theaccident at the arbitration. Koscelnik, 342 Ill. App. 3d at 810, 814. We agreed that the plaintiff'sparticipation fell below the standard set forth in Rule 91(b) and affirmed the trial court order. Koscelnik, 342 Ill. App. 3d at 813. Our reasoning was based in part on the fact that the plaintiffhad no intention of producing its insured. Koscelnik, 342 Ill. App. 3d at 812. It is clear from therecord in this case that plaintiff did intend to produce its insured at the arbitration. Also, unlikeKoscelnik, plaintiff offered eyewitness testimony from defendant as an adverse witness.

There is nothing in the record before us that suggests plaintiff's failure to produce itsinsured amounted to an intentional disregard for the arbitration process. It is undisputed thatplaintiff appeared at the arbitration personally, both through its agent and by counsel. Plaintiffpresented testimony from its agent and defendant as an adverse witness. It also presentedevidence of damages through a Rule 90(c) package. It is uncontested that plaintiff attempted toproduce its insured at the hearing. Plaintiff contacted Mika's family, who told plaintiff that Mikawould attend the hearing. Plaintiff also hired a Polish interpreter to be present at the hearing. That Mika did not attend despite plaintiff's efforts to secure her as a witness is not sanctionableconduct. See Ruback, 347 Ill. App. 3d at 815 (a party's failure to ensure compliance with asubpoena and secure the attendance of an occurrence witness is not bad faith or sanctionableconduct).

We note that even if plaintiff's failure to produce its insured amounted to a failure toparticipate in good faith and in a meaningful manner, we would still reverse on the ground that thetrial court's sanction was unreasonably harsh and unjustified. Among the sanctions available to itunder Rule 219(c), the court could have stayed the arbitration proceedings until plaintiff was ableto produce its insured. 166 Ill. 2d R. 219(c)(I). The court also could have ordered attorney feesand costs associated with the hearing to defendant. 166 Ill. 2d R. 219(c)(vii). Dismissing anaction against a plaintiff or entering judgment against a defendant "is the most drastic of sanctionsand should be imposed reluctantly and only as a last resort when all other enforcement powers atthe court's disposal have failed to advance the litigation." Easter Seal Rehabilitation Center forWill-Grundy Counties, Inc. v. Current Development Corp., 307 Ill. App. 3d 48, 51, 716 N.E.2d809 (1999). These sanctions should be imposed only "where the actions of the party show adeliberate, contumacious and unwarranted disregard of the court's authority." Easter Seal, 307Ill. App. 3d at 51. There is no indication in this case that plaintiff's conduct amounted to adeliberate, contumacious or unwarranted disregard for the court's authority or the arbitrationprocess. The trial court's order barring plaintiff from rejecting the arbitration award and enteringjudgment on the award in favor of defendant was an abuse of discretion. We are aware that thetrial court is charged with maintaining the integrity of the arbitration mechanism and ensuring thatthe spirit, as well as the letter, of the law is followed. But this is not a case, on the record as awhole, where the arbitration mechanism was flouted.

The judgment of the circuit court is reversed and the cause is remanded for furtherproceedings consistent with this opinion.

Reversed and remanded.

GORDON and O'MALLEY, JJ., concurring.