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1-00-3212 

First Division
August 27, 2001

Plaintiff State Farm Insurance Company (or State Farm MutualInsurance Company), filed a subrogation action against defendantArturo Rodrigues for allegedly damaging the vehicle of plaintiff'sinsured, Marya Pisarski. Plaintiff alleged that on June 19, 1996,defendant's motor vehicle struck and damaged Pisarski's parked andunoccupied vehicle on Pulaski Road in Chicago. Plaintiff sought$4,142.55 in damages, plus costs. Plaintiff's counsel was presentat an arbitration hearing on April 5, 2000. Pisarski was notpresent and the hearing proceeded without her. The arbitratorsentered an award for plaintiff and against defendant in the amountof $4,157.65. Defendant rejected the arbitration award pursuant toSupreme Court Rule 93. 166 Ill. 2d R. 93. At trial on September8, 2000, the circuit court entered judgment for defendant. TheSeptember 8 judgment order reflected that plaintiff had been barredfrom presenting any evidence at trial pursuant to a previous orderentered on June 26, 2000, in which the court found that plaintiffhad failed to arbitrate in good faith. The September 8, 2000,order was part of the record on appeal, but the June 26, 2000,order was not made a part of the record on appeal.⁽¹⁾ Plaintiffappeals from both orders, contending that the trial court abusedits discretion in finding that plaintiff failed to arbitrate ingood faith.

The record on appeal also lacks transcripts of the April 5,2000, arbitration hearing or any of the proceedings in the circuitcourt. The record does contain plaintiff's documentary evidencerelating to the alleged damages and repairs.

The arbitrators entered an award, file-stamped at 9:09 a.m. onApril 5, 2000, in favor of plaintiff which stated as follows:

"We find on behalf of the plaintiff,State Farm Mutual and against the defendantArturo Rodriguez [sic] in the amount of$4,157.65."

On April 21, 2000, defendant filed his notice of rejection ofthe arbitration award, and requested a trial.

On April 25, 2000, defendant filed a motion for sanctionspursuant to Illinois Supreme Court Rule 91, paragraphs (a) and (b). 145 Ill. 2d R. 91(a), (b). In the motion, defendant inexplicablysought to debar plaintiff from rejecting the arbitration award, anderroneously stated that "an [arbitration] award was entered infavor of the defendant." Defendant also sought to bar plaintifffrom testifying or producing any evidence at trial because theinsured had failed to appear at the arbitration hearing.

On April 28, 2000, plaintiff filed a response, arguing thatthe motion should be denied because the arbitration award favoredplaintiff, and because defendant, not plaintiff, had rejected thearbitration award. Plaintiff also argued that the motion should bedenied because plaintiff was present, through counsel, at thearbitration hearing. Plaintiff argued that defendant testified atthe arbitration hearing that defendant struck a parked andunoccupied vehicle that belonged to plaintiff's insured and thatthe collision caused the damage disclosed in plaintiff'sarbitration package, which was allowed into evidence.

On May 19, 2000, defendant filed a new motion for sanctions,in which defendant again sought to bar plaintiff from testifying orpresenting any evidence at trial. Defendant again erroneouslystated that "an [arbitration] award was entered in favor of thedefendant."

On June 1, 2000, plaintiff filed a response to defendant's May19 motion for sanctions, reaffirming its previous arguments, andarguing further that defendant's motion should be denied becausedefendant's Rule 237 (166 Ill. 2d R. 237) notice requestedproduction of someone named "Danielle Radtke," and did not requestproduction of either an officer, director, or employee ofplaintiff, or of plaintiff's insured, Marya Pisarski. Attached toplaintiff's response were copies of a September 14, 1999, motion bydefendant Arturo Rodrigues to vacate defaults. Also attached werethree documents filed on that same date, September 14, 1999, by adifferent defendant (Danielle Radtke) in a different case (StateFarm Mutual Insurance Company v. Danielle Radtke, 99 M1 10777),namely, an appearance and jury demand, a notice to produce, and atrial lawyer's appearance.

The record does not contain a copy of any order entered ondefendant's motions to bar plaintiff from presenting any testimonyor evidence at trial. On appeal, the parties do not dispute thatJudge John G. Laurie entered an order finding that plaintiff hadnot participated in the arbitration hearing in good faith, andbarring plaintiff from presenting testimony or evidence at trial.

On September 8, 2000, Judge Donald J. Suriano entered thefollowing order:

"This matter coming to be heard fortrial, the court being fully advised in thepremises and retaining jurisdiction, it ishereby ordered, the defendant having waivedthe jury and this matter being heard as abench trial, it is hereby ordered Judgment isentered in favor of the defendant, asplaintiff is barred from presenting anyevidence at trial pursuant to the previousorder of June 26, 2000. This order is finaland appealable."

On appeal, plaintiff contends that the circuit court abusedits discretion in preventing plaintiff from presenting evidence attrial. Plaintiff argues that it participated in good faith at thearbitration hearing by calling the only eyewitness to thecollision, namely, defendant. Plaintiff argues that itsparticipation was meaningful because it prevailed at thearbitration hearing. Plaintiff further argues that the presence ofits insured, Marya Pisarski, at the arbitration hearing would havebeen less significant in this case than in most vehicular collisioncases because Pikarski's vehicle was parked and unoccupied at thetime of the collision, defendant was the sole eyewitness, anddefendant admitted striking Pisarski's parked and unoccupiedvehicle. According to plaintiff, defendant admitted contact,proximate cause, and damages at the arbitration hearing. Plaintiffargues that its attorney was present, that the arbitration panelentered a finding in favor of plaintiff, that the arbitration paneldid not enter a finding that plaintiff had failed to participate ingood faith, and that the circuit court did not have a transcript ofthe arbitration hearing and therefore had no basis to make afinding of bad faith. Plaintiff argues that its case withstoodsufficient adversarial testing because it prevailed at thearbitration hearing. Finally, plaintiff argues that its conductdid not warrant the imposition of a sanction that terminated itscase.

Defendant responds that a finding of bad faith by thearbitrators was not a prerequisite to such a finding by the circuitcourt, that plaintiff failed to arbitrate in good faith and in ameaningful manner, that plaintiff failed to submit its case forsufficient adversarial testing, and that plaintiff's conduct was indeliberate disregard of the court. Defendant argues thatplaintiff's insured Pisarski was not present at the arbitrationhearing, and that Pisarski's testimony was needed to submitplaintiff's case to sufficient adversarial testing and to revealwhether she actually had an insurance policy with plaintiff andwhether there was preexisting damage to her vehicle. Defendantalso argues that plaintiff never filed an affidavit explainingPisarski's absence.

As we previously noted, the record on appeal does not containeither the order ostensibly entered on June 26 or June 28, 2000, ortranscripts of the arbitration hearing or of the proceedings in thecircuit court. If the nature and substance of the June 2000 orderwere in dispute, we would hold that plaintiff had failed to fulfillits duty to present a complete record on appeal, and we wouldpresume that the circuit court's decisions conformed to the law andwere supported by a sufficient factual basis. Webster v. Hartman,309 Ill. App. 3d 459, 460-62 (1999), aff'd, ___ Ill. 2d ___, No.89076, slip op. at 4-8 (April 19, 2001)); Foutch v. O'Bryant, 99Ill. 2d 389, 391-92 (1984). However, the parties do not disputethe nature or substance of the June order. Instead, the partiesagree that the June order found that plaintiff had failed toparticipate in the arbitration hearing in good faith because itsinsured, Marya Pisarski, was not present at the hearing. Theparties further agree, and the September 8, 2000, order confirms,that the June order barred plaintiff from presenting any evidenceat trial. Thus, the issues are whether plaintiff failed toparticipate in the arbitration hearing in good faith because itsinsured, Marya Pisarski, was not present at the arbitrationhearing, and, if so, whether the sanction (barring plaintiff frompresenting evidence at trial) was appropriate. Review of thoseissues is appropriate because the facts necessary to resolve thoseissues are undisputed. State Farm Insurance Co. v. Jacquez, ___Ill. App. 3d ___, No. 1-99-1713, slip op. at 5-6 (May 9, 2001); Mastandrea v. Chicago Park District, 259 Ill. App. 3d 897, 899-900,903-04 (1994).

A court of review will not reverse a circuit court'simposition of sanctions or decision to debar a party from rejectingan arbitration award unless the circuit court's decision was anabuse of discretion, that is, arbitrary or exceeding the bounds ofreason. Schmidt v. Joseph, 315 Ill. App. 3d 77, 81 (2000); Gorev. Martino, 312 Ill. App. 3d 701, 704 (2000); Johnson v. Saenz,311 Ill. App. 3d 693, 697 (2000); see also Hornburg v. Esparza,316 Ill. App. 3d 801, 804 (2000); Goldman v. Dhillon, 307 Ill.App. 3d 169, 172 (1999). "An abuse of discretion occurs when thetrial court rules arbitrarily." State Farm Insurance Co. v.Jacquez, ___ Ill. App. 3d ___, No. 1-99-1713, slip op. at 4 (May 9,2001). The supreme court rules regarding mandatory arbitration aredesigned to prevent abuse in, and to uphold the integrity of, thearbitration process. Johnson, 311 Ill. App. 3d at 697.

Pursuant to Illinois Supreme Court Rule 91 (145 Ill. 2d R.91), there are two grounds for debarring the rejection of anarbitration award, namely, unexcused absence (Rule 91(a)), and lackof good faith and meaningful participation (Rule 91(b)). Saldanav. Newmann, 318 Ill. App. 3d 1096, 1098 (2001). Rule 91(a) statesin part:

"The failure of a party to be present,either in person or by counsel, at anarbitration hearing shall constitute a waiverof the right to reject the award and a consentto the entry by the court of a judgment on theaward." 145 Ill. 2d R. 91(a).

Rule 91(b) states in part:

"All parties to the arbitration hearingmust participate in the hearing in good faithand in a meaningful manner." 145 Ill. 2d R.91(b).

Pursuant to Rule 91, either the party or the party's attorneyis required to appear at the arbitration hearing and to participatemeaningfully and in good faith. 145 Ill. 2d R. 91(a), (b); Goldman, 307 Ill. App. 3d at 172. Pursuant to Supreme Court Rule237(b) (166 Ill. 2d R. 237(b)), which is applicable to arbitrationhearings (166 Ill. 2d R. 90(g); State Farm Insurance Co. v.Kazakova, 299 Ill. App. 3d 1028, 1032 (1998)), the court may imposesanctions against a party for failure to appear, including thedebarment of a party from maintaining a claim pursuant to SupremeCourt Rule 219(c). 166 Ill. 2d Rule 219(c)(iii); 166 Ill. 2d R.90(g). A party who appears through counsel is still subject tosanctions for failure to appear pursuant to a Rule 237 notice. State Farm Insurance Co. v. Jacquez, ___ Ill. App. 3d ___, No. 1-99-1713, slip op. at 4 (May 9, 2001). Rule 91(b) (145 Ill. 2d R.91(b)) also provides for the imposition of sanctions, includingdebarment under Rule 219(c), for a violation of the rule. 145 Ill.2d R. 91(b); 166 Ill. 2d R. 219(c). At an arbitration hearing, aparty is required to subject the case to the type of adversarialtesting expected at a trial. Schmidt, 315 Ill. App. 3d at 84. Badfaith may consist of "inept preparation or intentional disregardfor the process." Schmidt, 315 Ill. App. 3d at 83. The circuitcourt may make a finding of bad faith in the absence of such afinding by the arbitration panel. Schmidt, 315 Ill. App. 3d at 85; Gore, 312 Ill. App. 3d at 704; Hill v. Joseph Behr & Sons, Inc.,293 Ill. App. 3d 814, 817 (1997); West Bend Mutual InsuranceCompany v. Herrera, 292 Ill. App. 3d 669, 674 (1997). The standardis whether the party's conduct amounts to a deliberate andpronounced disregard for the rules and the court. Gore, 312 Ill.App. 3d at 704; Kazakova, 299 Ill. App. 3d at 1034. The offendingparty has the burden to show that its noncompliance was reasonableor the result of extenuating circumstances. Eichler v. Record CopyServices, 318 Ill. App. 3d 790, 792-93 (2000); Schmidt, 315 Ill.App. 3d at 81.

The record on appeal does not contain a finding of bad faithby the arbitrators, but this would not preclude us from affirmingthe judgment of the circuit court. Goldman, 307 Ill. App. 3d at174. Our decision to vacate and remand is based instead upon theparticular facts of this case. In this case, plaintiff did notfail to participate in the arbitration hearing as an adverse party. It was undisputed that plaintiff's counsel appeared at thearbitration hearing and presented both the defendant's adversetestimony and an arbitration package of documentary evidencerelating to damages and repairs. It was also undisputed that thearbitrators did not make a finding that plaintiff had failed toparticipate in good faith. It was further undisputed that thecircuit court made such a finding without the benefit of atranscript of the arbitration hearing.

Furthermore, there is no indication in the record thatdefendant ever filed the necessary notice for plaintiff, pursuantto Supreme Court Rule 237, to produce either Pisarski or any ofplaintiff's representatives at the arbitration hearing. The recordreflects that defendant filed a notice to produce a party defendant(Danielle Radtke) from a different case. Despite that deficientnotice to produce, plaintiff did present an arbitration packagecontaining documentary evidence relating to damages and repairs. Plaintiff also presented defendant's adverse testimony. Althoughdefendant argues that Pisarski's absence meant that there wasinsufficient adversarial testing regarding damages -- that is,which damages were attributable to this collision, and whichdamages, if any, were preexisting -- defendant bears theresponsibility for any alleged insufficiency in the adversarialtesting because defendant filed a deficient notice to produce. Under the particular circumstances of this case, the record clearlydoes not reflect that plaintiff displayed a deliberate andpronounced disregard for the rules or the court. Johnson, 311 Ill.App. 3d at 698-99. We therefore find that the trial court abusedits discretion in debarring plaintiff from presenting evidence attrial.

Our conclusion is not inconsistent with the cases cited bydefendant. For example, in Hill, 293 Ill. App. 3d at 817, whichdefendant cites as "directly on point," the party whom the circuitcourt found to have failed to participate in good faith failed topresent either an arbitration package or any evidence at thearbitration hearing. In Martinez v. Gaimari, 271 Ill. App. 3d 879,883 (1995), the arbitrators found that the defendant had failed toparticipate in good faith and in a meaningful manner, the defendantwas an eyewitness whose participation in the arbitration hearingwas probably essential, and defense counsel failed to present anyevidence at the arbitration hearing. In Hinkle v. Womack, 303 Ill.App. 3d 105, 108, 114 (1999), the defendants failed to appear atthe arbitration hearing despite having been served with asufficient Rule 237 (166 Ill. 2d R. 237) notice, and there was noexcuse for their absence. None of these circumstances obtain inthe case before us.

The judgment of the circuit court is vacated, and the cause isremanded.

Vacated and remanded.

McNULTY, P.J., and TULLY, J., concur.

1. In plaintiff's brief, this order is alleged to have beenentered on June 28, 2000. The record on appeal does not containany orders entered on either June 26 or June 28, 2000.