Penn v. Gerig

Case Date: 10/04/2002
Court: 4th District Appellate
Docket No: 4-01-0196 Rel

NO. 4-01-0196

IN THE APPELLATE COURT

OF ILLINOIS

FOURTH DISTRICT

DONALD PENN and NORMA PENN, 
                         Plaintiffs-Appellants,
                         v.
BECKY GERIG; HUNDMAN REALTY, INC.; and
THOMAS MALONEY, d/b/a COLDWELL BANKER
HEART OF AMERICA REALTY, 
                         Defendants,
                         and
ROGER A. HEERDT and DENISE HEERDT,
                         Defendants-Appellees.
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Appeal from
Circuit Court of
McLean County
No. 00L92


Honorable
John P. Freese,
Elizabeth A. Robb,
Judges Presiding.

JUSTICE KNECHT delivered the opinion of the court:

After discovering certain defects in their recentlypurchased home, plaintiff home buyers filed a cause of actionagainst defendant home sellers. Count III of plaintiffs' complaint alleged noncompliance with the Residential Real PropertyDisclosure Act (Act) (765 ILCS 77/1 through 99 (West 1996)) andcount X alleged common-law fraud. The trial court dismissedcount III with prejudice, due to the running of the one-yearstatute of limitations. 765 ILCS 77/60 (West 1996). On plaintiffs' motion, the trial court also dismissed count X withoutprejudice. The trial court then granted defendants' motion forsanctions and ordered plaintiffs to reimburse defendants $4,330for attorney fees. Plaintiffs appeal the trial court's orderdismissing count III with prejudice and the order grantingdefendants' motion for sanctions. We affirm.

I. BACKGROUND

In the fall of 1997, defendants, Roger and DeniseHeerdt, listed their Bloomington, Illinois, home for sale with alocal realtor. On September 8, 1997, defendants completed aresidential real property disclosure report in accordance withthe Act. 765 ILCS 77/35 (West 1996). Defendants disclosed theywere aware of "material defects in the basement or foundation(including cracks or bulges)." Defendants further explainedtheir answer in the appropriate blank on the disclosure form andstated: "crack in foundation on south side of house" and "smallsettling cracks on walls throughout."

Around October 17, 1997, plaintiffs, Donald and NormaPenn, entered into negotiations with defendants for the purchaseof defendants' home. On October 18, 1997, plaintiffs signed apurchase agreement and they also signed the disclosure report inwhich defendants disclosed the forementioned defects. On November 28, 1997, defendants delivered possession of the residence toplaintiffs. The instrument of conveyance of the residential realproperty was recorded on December 4, 1997.

On May 16, 2000, plaintiffs filed a nine-count complaint against five parties: Becky Gerig, Hundman Realty, Inc.,Thomas Maloney (doing business as Coldwell Banker Heart ofAmerica Realty), Roger A. Heerdt, and Denise Heerdt. This appealinvolves only those counts of the complaint directed toward theHeerdts. In count III, plaintiffs alleged defendants violatedthe Act because they "falsely and intentionally filled out the[r]esidential [r]eal [p]roperty [r]eport in an incorrect mannerso as to deceive and mislead the [plaintiffs] and others as tothe true condition of the home." Plaintiffs complained ofundisclosed defects in the home's sewer system, roof, and foundation, which cost them $17,900 to correct.

On June 12, 2000, defendants filed a motion to dismisscount III, alleging it was barred by the applicable one-yearstatute of limitations. 765 ILCS 77/60 (West 1996). Defendantsargued the complaint was filed nearly 2 1/2 years after theaccrual of the cause of action as set forth in the Act. Defendants also argue they disclosed all known defects in the disclosure report prior to plaintiffs' purchase of the home, so even ifthe discovery rule applied to the Act, it would not toll therunning of the limitations period in this case. On June 16, thetrial court granted plaintiffs' motion for leave to file count Xagainst defendants, alleging common-law fraud. On August 9,2000, a hearing was held on defendants' motion to dismiss countIII. The trial court granted the motion and dismissed count IIIwith prejudice due to the expiration of the statute of limitations.

On August 21, 2000, defendants filed a motion todismiss count X. On November 16, 2000, plaintiffs filed a motionfor voluntary dismissal of count III. On November 22, 2000, thetrial court granted defendants' motion to dismiss count X and,noting its earlier dismissal of count III with prejudice, deniedplaintiffs' motion for voluntary dismissal of count III. OnDecember 11, the trial court entered an order dismissing, withoutprejudice, all other counts of plaintiffs' complaint (againstother defendants) and withdrawing all pending discovery requests.

On December 21, 2000, plaintiffs filed a notice ofappeal of the trial court's order dismissing count III withprejudice. On January 8, 2001, defendants filed a motion forsanctions against plaintiffs and their attorney, Jack Vieley. OnFebruary 2, 2001, defendants filed a motion to dismiss plaintiffs' appeal, which was granted by this court on February 16,2001. The trial court heard defendants' motion for sanctions onFebruary 28, 2001, and took the matter under advisement. OnMarch 6, 2001, the trial court entered an order granting defendants' motion for sanctions, and on March 7, 2001, plaintiffsfiled a notice of appeal. On March 20, 2001, the mandate fromthis court dismissing plaintiffs' December 21, 2000, appeal (Pennv. Gerig, No. 4-00-1081 (February 16, 2001) (unpublished order ofdismissal)) was filed with the circuit clerk of McLean County. On March 21, 2001, plaintiffs filed a second-amended notice ofappeal. We note defendants have filed with this court a motionfor sanctions pursuant to Supreme Court Rule 375 (155 Ill. 2d R.375(b)), which we will consider as part of this case.

II. ANALYSIS

On review we consider three issues: (1) whether thediscovery rule should be applied to the Residential Real PropertyDisclosure Act to toll the running of the one-year statute oflimitations period until a time the plaintiffs knew or reasonablyshould have known of their injury; (2) whether the trial courterred in granting defendants' motion for sanctions; and (3)whether this court should grant defendants' motion for sanctionspursuant to Supreme Court Rule 375 (155 Ill. 2d R. 375(b)).

A. Statute of Limitations

Whether the discovery rule is applicable to the Act isan issue of first impression in Illinois. The limitations periodset forth in the Act states: "No action for violation of thisAct may be commenced later than one year from the earlier of thedate of possession, date of occupancy, or date of recording of aninstrument of conveyance of the residential real property." 765ILCS 77/60 (West 1996). The primary rule of statutory construction is to ascertain and give effect to the true intent of thestatute. If the statutory language is clear, the language shouldbe given effect without further aids of construction. Miller v.Bizzell, 311 Ill. App. 3d 971, 974, 726 N.E.2d 175, 177 (2000).

The discovery rule has been applied in many situationsto alleviate the sometimes "harsh results" of a literal application of statutes of limitation. In effect, the discovery ruledelays the commencement of the relevant statute of limitationsuntil the plaintiff "'knows or reasonably should know that he hasbeen injured and that his injury was wrongfully caused.'" Hermitage Corp. v. Contractors Adjustment Co., 166 Ill. 2d 72,77, 651 N.E.2d 1132, 1135 (1995), quoting Jackson Jordan, Inc. v.Leydig, Voit & Mayer, 158 Ill. 2d 240, 249, 633 N.E.2d 627, 630-31 (1994). The discovery rule will not be applied given acontrary indication of legislative intent. Hermitage, 166 Ill.2d at 78, 651 N.E.2d at 1135.

In this case, the legislature has spoken in clear andunambiguous terms. Only three very specific events will triggerthe running of the one-year statute of limitations for causes ofaction brought under the Act: the date of possession, the dateof occupancy, or the date of the recording of an instrument ofconveyance. 765 ILCS 77/60 (West 1996). None of these eventsare related to the discovery of potential defects in the home. In fact, we conclude the clear and unambiguous language chosen bythe legislature contravenes the application of the discovery ruleto the limitations period of the Act. First, the legislaturechose a very short, one-year statute of limitations. Thisperiod, albeit short, gives the home buyer some protections notpreviously enjoyed under the somewhat harsh, common-law doctrineof caveat emptor, while protecting sellers against potentialunlimited liability under the Act if a buyer discovers a defectmany years after the purchase of a home. The application of thediscovery rule would render meaningless the legislature's choiceof the three specific triggering events as well as the short,one-year limitations period.

If we examine the statute further, we also find thelegislature not only chose three specific triggering events, itspecifies the limitations period will begin "from the earlier ofthe date of possession, date of occupancy, or date of recording." (Emphasis added.) 765 ILCS 77/60 (West 1996). According to thisclear and unambiguous language, the limitations period may beginto run even before the home buyer occupies a residential propertyand has the chance to discover undisclosed defects in the home. For example, if a home buyer delays occupancy of a residence forwhatever reason, but the deed is recorded prior to occupancy, thestatute of limitations begins to run when the deed is recorded. Because the legislature has chosen three specific triggers thatprovide a bright-line test for determining the exact date of thebeginning of the limitations period and because these triggershave nothing to do with the home buyer's actual discovery ofdefects in the home, we find the application of the discoveryrule to the Act would be contrary to legislative intent.

The running of the short, one-year limitations periodof the Act does not, however, leave a home buyer without a remedyif she feels she has been deceived by a home seller who hasfraudulently concealed latent defects. Section 45 of the Actstates: "This Act is not intended to limit or modify any obligation to disclose created by any other statute or that may existin common law in order to avoid fraud, misrepresentation, ordeceit in the transaction." 765 ILCS 77/45 (West 1996). Therefore, because an aggrieved home buyer has remedies available inaddition to those created by the Act, a strict application of theone-year limitations period set forth in the Act does not lead tothe "harsh results" that initially prompted courts to create thediscovery rule and prompted the legislature to codify the discovery rule in certain statutory causes of action.

Accordingly, we affirm the trial court's December 11,2000, order dismissing with prejudice count III of plaintiffs'complaint.

B. Rule 137 Sanctions

To fully understand the issues as they relate to thetrial court's order granting defendants' motion for sanctions anddefendants' motion for sanctions on appeal, we provide thefollowing time line of the somewhat confusing procedural facts inthis case:

June 12, 2000: Defendants filed a motion to dismisscount III of plaintiffs' complaint, alleging the suit was time-barred due to the expiration of the statute of limitations. Inthis motion, defendants also alleged they were entitled toattorney fees pursuant to Supreme Court Rule 137 (155 Ill. 2d R.137) and Bizzell, 311 Ill. App. 3d, at 974-75, 726 N.E.2d at 177-78.

August 9, 2000: After a hearing on defendant's motionto dismiss, Judge Freese entered an order dismissing count III ofplaintiffs' complaint with prejudice "as a result of the expiration of statute of limitations." Judge Freese also grantedplaintiffs' motion for leave to file count X against defendants,alleging common-law fraud. Plaintiffs filed count X on this day,and, without leave of court, requested $300,000 punitive damages. The trial court did not make a ruling as to defendants' requestfor attorney fees and, according to defendants, the trial courtnever heard any argument pertaining to "sanctions" at thishearing.

August 21, 2000: Defendants filed a motion to dismisscount X of plaintiffs' complaint, in which they again request thetrial court grant them "costs and attorney's fees."

November 22, 2000: After a hearing on defendants'motion to dismiss count X, Judge Freese entered an order grantingdefendants' motion. The trial court granted plaintiffs leave toreplead count X within 35 days. Again, presumably because thetrial court granted plaintiffs leave to replead count X and thelitigation remained ongoing, the court did not yet consider orrule on the issue of attorney fees or sanctions.

November 16, 2000: Plaintiffs filed a motion tovoluntarily dismiss count III of their complaint.

December 11, 2000: Judge Freese denied plaintiffs'request to voluntarily dismiss count III of their complaintbecause the court had previously dismissed count III with prejudice. The trial court granted leave for plaintiffs to file anamended complaint on or before December 27, 2000. Again, thetrial court did not enter a ruling as to attorney fees, nor isthere any evidence the issue was discussed before Judge Freese.

December 21, 2000: Plaintiffs filed a notice of appealof the trial court's dismissal of count III with prejudice due tothe running of the statute of limitations, docketed No. 4-00-1081.

January 8, 2001: Defendants filed a motion for sanctions, citing numerous instances of alleged sanctionable conductby plaintiffs and their attorney, Jack Vieley. Defendants againcite Supreme Court Rule 137 (155 Ill. 2d R. 137) and Bizzell, 311Ill. App. 3d at 974-75, 726 N.E.2d at 177-78, in support of theirargument and request sanctions of $7,465 for reasonable attorneyfees. This motion was assigned to Judge G. Michael Prall.

January 10, 2001: Defendants filed a motion to dismissplaintiffs' appeal in No. 4-00-1081, alleging the appeal waspremature because the trial court never addressed the issue ofRule 137 sanctions. Defendants also alleged plaintiffs failed tofile a docketing statement pursuant to Supreme Court Rule 312(155 Ill. 2d R. 312).

January 29, 2001: Plaintiffs filed a motion forsubstitution of judge on defendants' motion for sanctions,requesting the reassignment of Judge Freese to hear the motionbecause he had ruled on all previous material issues in the case. Because Judge Freese was no longer presiding over civil cases inMcLean County in January 2001, the case was finally assigned toJudge Elizabeth Robb.

February 16, 2001: This court granted defendants'motion to dismiss plaintiffs' December 21, 2000, appeal. Penn v.Gerig, No. 4-00-1081 (February 16, 2001) (unpublished order ofdismissal).

February 28, 2001: Hearing on defendants' motion forsanctions is held and Judge Robb takes the case under advisement.

March 6, 2001: Judge Robb entered an order grantingdefendants' motion for sanctions.

March 7, 2001: Plaintiffs filed a timely notice ofappeal herein of Judge Robb's order granting defendants' motionfor sanctions and also of the December 11, 2000, order dismissingcount III with prejudice, docketed No. 4-01-0196.

March 20, 2001: Mandate from this court in No. 4-00-1081 dismissing plaintiffs' December 21, 2000, appeal is filedwith the circuit clerk of McLean County.

On appeal, plaintiffs first argue Judge Robb waswithout authority to enter an order as to sanctions because JudgeFreese previously "had failed to allow the [defendants'] threeprevious written requests for sanctions and awarded no sanctions." Plaintiffs contend Judge Freese's "refusal" to grantsanctions became the law of the case for all subsequent stages ofthe suit. We disagree.

The law-of-the-case doctrine provides "where an issuehas been litigated and decided, a court's unreversed decision ona question of law or fact settles that question for all subsequent stages of the suit." Norton v. City of Chicago, 293 Ill.App. 3d 620, 624, 690 N.E.2d 119, 123 (1997). Our review of therecord shows the trial court never entered an order granting ordenying Rule 137 sanctions or fees at any stage of the proceedings prior to Judge Robb's March 6, 2001, order. Further, therecord fails to show the issue was even discussed prior to theFebruary 28, 2001, hearing on defendants' motion for sanctions. The issue was never litigated or ruled upon and a final andappealable order was never entered pursuant to Supreme Court Rule304(a) (155 Ill. 2d R. 304(a)). Therefore, plaintiffs' argumentis without merit.

Plaintiffs next contend even if defendants' finalrequest for sanctions is not barred by the law-of-the-casedoctrine, Judge Robb's March 6, 2001, order granting defendants'motion for sanctions "was void as a matter of law for lack ofjurisdiction" because the mandate dismissing plaintiffs' appealwas not filed in the circuit court until March 20, 2001. Weagain disagree.

According to Supreme Court Rules 301 and 304(a) (155Ill. 2d Rs. 301, 304(a)), appeals may ordinarily be taken onlyfrom final orders that dispose of every "claim" raised in anaction. John. G. Phillips & Associates v. Brown, 197 Ill. 2d337, 339, 757 N.E.2d 875, 877 (2001), citing Marsh v. EvangelicalCovenant Church, 138 Ill. 2d 458, 465, 563 N.E.2d 459, 463(1990). The Illinois Supreme Court has held motions for sanctions under Supreme Court Rule 137 (155 Ill. 2d R. 137) are"claims" in the cause of action with which they are connected andthey "'shall be considered a claim within the same civil action.' (Emphasis added.)" (Emphasis omitted.) John G. Phillips, 197Ill. 2d at 339-40, 757 N.E.2d at 877, quoting 155 Ill. 2d R. 137. The supreme court has also found the circuit court has jurisdiction to act on a timely filed motion for Rule 137 sanctions evenif such motion is filed after a notice of appeal. John. G.Phillips, 197 Ill. 2d at 340, 757 N.E.2d at 878. Filing of atimely motion for Rule 137 sanctions renders the prior notice ofappeal ineffective as premature. Cashmore v. Builders Square,Inc., 207 Ill. App. 3d 267, 273-74, 565 N.E.2d 703, 707 (1990);see Niccum v. Botti, Marinaccio, DeSalvo & Tameling, Ltd., 182Ill. 2d 6, 8, 694 N.E.2d 562, 564 (1998).

In applying these rules to the present case, it isapparent the circuit court never lost jurisdiction over defendants' timely filed motion for sanctions even though it was filedafter plaintiffs' notice of appeal. Therefore, Judge Robb hadjurisdiction to consider and rule upon defendants' motion forsanctions prior to both this court's February 16, 2001, dismissalof the appeal and the March 20, 2001, filing of the mandate inthe McLean County circuit clerk's office.

Having disposed of these ancillary matters, we nowreach the merits of this issue: whether the trial court abusedits discretion in granting defendants' motion for sanctions. Inher order, Judge Robb made the following pertinent findings: (1)defendants were entitled to recover their attorney fees pursuantto Supreme Court Rule 137 and Bizzell, 311 Ill. App. at 974-75,726 N.E.2d at 177-78; (2) the filing of count III was not "wellgrounded in fact and was not warranted by existing law or a good-faith argument for the extension, modification[,] or reversal ofexisting law" and, therefore, defendants were entitled to recoverattorney fees incurred in defense of count III; (3) defendantswere also entitled to recover attorney fees incurred in defenseof count X because plaintiffs sought to recover compensatory andpunitive damages, a request that was stricken on December 11,2000, because punitive damages are not allowed in cases where acomplaint is based, even in part, on a theory of negligence; (4)the actions of plaintiffs in filing count III and in seekingpunitive damages without leave of court in count X "appear to befor purposes of harassment or to needlessly increase the cost oflitigation [for] [d]efendants."

In Bizzell, 311 Ill. App. 3d at 976, 726 N.E.2d at 179,this court found an award of attorney fees pursuant to the Act iswithin the discretion of the trial court and in determiningwhether to award attorney fees, the trial court should considerfactors consistent with Rule 137. We stated:

"Under Rule 137, sanctions may begranted (1) if either party files a pleadingor motion that to the best of the attorney's'knowledge, information, and belief' is not'well grounded in fact' and is not 'warrantedby existing law or a good-faith argument forthe extension, modification, or reversal ofexisting law,' or (2) if the pleading ormotion is interposed to 'harass or to causeunnecessary delay or needless increase in thecost of litigation.'" (Emphasis in original.) Bizzell, 311 Ill. App. 3d at 976, 726N.E.2d at 179, quoting 155 Ill. 2d R. 137.

The "additional factors" consistent with Rule 137 thetrial court must consider include the following: (1) the degreeof bad faith by the opposing party; (2) whether an award of feescould deter others from acting under similar circumstances; and(3) the relative merits of the parties' positions. Bizzell, 311Ill. App. 3d at 976-77, 726 N.E.2d at 179, citing Haskell v.Blumthal, 204 Ill. App. 3d 596, 601, 561 N.E.2d 1315, 1318(1990).

Our review of Judge Robb's order granting sanctionsshows she correctly noted the law and applied the relevantfactors in determining whether to award sanctions. While we donot necessarily agree with the trial court that plaintiffs'argument regarding the issue of whether the discovery ruleapplies to extend the one-year statute of limitations in the Actwas not warranted by existing law or a good-faith argument forthe extension of existing law, we do agree that for plaintiffs toargue for the application of the discovery rule in this case wasentirely contradicted by the facts.

Most, if not all, of the "defects" plaintiffs listed intheir complaint related to "structural defects" caused by thehome's alleged "moving" and "settling." Defendants disclosedmaterial defects in the basement or foundation and provided thefollowing written explanation: "crack in foundation on southside of house" and "small settling cracks on walls throughout." We need not cite legal authority to recognize these defects areindicative of a house that is "moving" and "settling."

The disclosure statement was signed by plaintiffs onOctober 18, 1997. Therefore, even if we were to find the discovery rule applied to the Act, plaintiffs had sufficient notice onthis date that structural problems existed in this home andperhaps a closer examination was necessary. See Regas v. Associated Radiologists, Ltd., 230 Ill. App. 3d 959, 964, 595 N.E.2d1223, 1227 (1992) (purchaser of property cannot "'shut his eyesto available information and then charge that he has been deceived' [Citations.]"). The discovery rule is of no help toplaintiffs under the facts of this case because, due to defendants' disclosure of known structural defects, plaintiffs wereaware of such defects prior to the statutory triggering of theone-year statute of limitations set forth in the Act. Theearliest triggering date of the one-year statute of limitationsunder the Act was November 28, 1997, the date plaintiffs receivedpossession of the premises, and presumably the date of occupancy(the record or plaintiffs' brief does not dictate otherwise). Thus, the Act provided plaintiffs with a longer period in whichto file a claim than would the application of the discovery rule. Plaintiffs also contend they may not be sanctioned fortheir inclusion of a prayer for punitive damages in count X,because punitive damages are allowed in cases involving common-law fraud. In support of this argument, plaintiffs cite HomeSavings & Loan Ass'n of Joliet v. Schneider, 108 Ill. 2d 277,284, 483 N.E.2d 1225, 1228 (1985), which states punitive damagesare proper in a fraud action "'where the false representationsare wantonly and designedly made.' [Citation.]" The complaint atissue in Home Savings alleged counts of fraud and negligentmisrepresentation in the sale of property and the Supreme Courtof Illinois found the issue of punitive damages was properlybefore the jury. However, the court reversed the award ofpunitive damages based on a faulty jury instruction. HomeSavings, 108 Ill. 2d at 285-86, 483 N.E.2d at 1228-29.

Plaintiffs overlook the fact Home Savings was decidedprior to the effective date of section 2-604.1 of the Code ofCivil Procedure, which, as of November 25, 1986, requires a partyto file a pretrial motion and seek leave of court to include aprayer for relief seeking punitive damages in all actions "basedon negligence." 735 ILCS 5/2-604.1 (West 1996). Section 2-604.1has been interpreted by this court, in a case in which JackVieley was the attorney for the appellant, as applying to anentire action and thereby prohibiting a prayer for punitivedamages in any complaint, based even in part, on a theory ofnegligence. McCann v. Presswood, 308 Ill. App. 3d 1068, 1071-72,721 N.E.2d 811, 814 (1999).

The first two counts of plaintiffs' complaint in thepresent case are allegations of negligent misrepresentation. Therefore, in keeping with the well-known principle that punitivedamages are disfavored by Illinois courts (McCann, 308 Ill. App.3d at 1071, 721 N.E.2d at 814), section 2-604.1 of the Coderequiring a party to seek leave of court prior to adding a prayerfor punitive damages, and our decision in McCann, we find thetrial court did not abuse its discretion when it awarded sanctions based, in part, on plaintiffs' conduct in seeking $300,000in punitive damages in count X of their complaint.

III. Rule 375 Sanctions

On appeal, defendants have filed a motion for sanctionspursuant Supreme Court Rule 375 (155 Ill. 2d R. 375(b)), andrequest that this court order plaintiffs to pay defendants'reasonable costs associated with defending the appeal, includingreasonable attorney fees. Defendants briefly cite the facts andthe reasoning leading to the trial court's order granting sanctions against plaintiffs and they also allege two further instances of plaintiffs' misconduct and disregard for court rules: (1) plaintiffs' failure to file a timely docketing statement asrequired by Supreme Court Rule 312 (155 Ill. 2d R. 312); and (2)plaintiffs' providing a statement of facts in their appellatebrief which is "argumentative" and "inaccurate," which necessitated preparation of another statement of facts in defendants'brief. Based on plaintiffs' conduct and failure at every stageof the proceedings below, defendants argue their bringing of thelawsuit was "without any basis and in bad faith" and the appealis a "needless extension of a baseless lawsuit." This appeal,defendants contend, shows "Vieley and [p]laintiffs have remainedstubbornly litigious and caused defendants unnecessary expense." We agree.

Supreme Court Rule 375 states if an appeal is frivolous, not taken in good faith, or taken for a improper purposesuch as to harass or to cause unnecessary delay or needlessincrease in the costs of litigation, an appropriate sanction maybe imposed upon any party or the attorney of the party. Rule 375also states an appeal will be deemed frivolous "where it is notreasonably well grounded in fact and not warranted by existinglaw or a good-faith argument for the extension, modification, orreversal of existing law." 155 Ill. 2d R. 375(b). Finally, therule states an appeal "will be deemed to have been taken *** foran improper purpose where the primary purpose of the appeal orother action is to delay, harass, or cause needless expense." 155 Ill. 2d R. 375(b). In determining whether an appeal isfrivolous, we use an objective standard: the appeal is frivolous"if it would not have been brought in good faith by a reasonable,prudent attorney." Dreisilker Electric Motors, Inc. v. RainbowElectric Co., 203 Ill. App. 3d 304, 312, 562 N.E.2d 970, 974(1990).

As to plaintiffs' appeal of the trial court's dismissalof count III with prejudice due to the running of the statute oflimitations, we agree with defendants and find the appeal isfrivolous. As we discussed earlier, the legal issue of whetherthe discovery rule is applicable to the Act is weak, but it isnot entirely without merit. However, no factual basis warrantedthe application of the discovery rule in this case even if wewere to find it applied to the Act. Defendants disclosed theexistence of structural defects and plaintiffs were aware of suchdefects prior to the statutory triggering of the limitationsperiod. Count III of plaintiffs' complaint was not reasonablywell grounded in fact, nor is plaintiffs' appeal of the trialcourt's dismissal of count III. Therefore, we find a reasonable,prudent attorney acting in good faith would not have sought toextend the lawsuit by pursuing this issue on appeal.

We also find plaintiffs' appeal of the trial court'sorder granting defendants' motion for sanctions to be frivolous. The trial court's order was based predominantly on the fact thatcount III was not well grounded in fact and the prayer forpunitive damages in count X was filed without leave of court. Wehave discussed both of these issues at length and have determinedplaintiffs' arguments are without merit. Although a party neednot be correct in his view of the law (Shea, Rogal & Associates,Ltd. v. Leslie Volkswagen, Inc., 250 Ill. App. 3d 149, 154, 621N.E.2d 77, 80 (1993)), plaintiffs' arguments on appeal are notobjectively reasonable given the lack of a factual basis forcount III of the lawsuit and Jack Vieley's involvement in andpresumed knowledge of a Fourth District case that was entirelydispositive of the punitive damages issue at the trial level andon appeal.

Accordingly, we grant defendants' motion for sanctionsand direct defendants to file a statement of reasonable expensesand attorney fees incurred as a result of this appeal within 14days. Plaintiffs and their attorneys shall then have seven daysto file a response. This court will then file a supplementalopinion determining the amount of the sanctions.

III. CONCLUSION

We affirm the trial court's judgment.

Affirmed.

McCULLOUGH, P.J., and STEIGMANN, J., concur.