APPEAL from the Circuit Court of La Salle County; the Hon.
LEONARD HOFFMAN, Judge, presiding.
JUSTICE HEIPLE DELIVERED THE OPINION OF THE COURT:
Rehearing denied May 18, 1982.
Emmy Lou and Clifford E. Spiller, plaintiffs, filed a suit in La Salle County to recover on three promissory notes which defendant, Continental Tube Company (Continental), allegedly owes them. Defendant filed a counterclaim for breach of contract and sought indemnification. The trial judge dismissed the counterclaim for what he perceived was defendant's abuse of discovery. Then, plaintiffs obtained summary judgment. Defendant's appeal followed.
Spiller and Spiller Inc. (Spiller Inc.) is a small manufacturing concern. Prior to September 1, 1974, Emmy Lou and Clifford Spiller loaned that company $26,811 and $28,500, respectively. In exchange, they received two promissory notes, payable on demand, at 7% yearly interest. L.P. Industrial Corporation, wholly owned by Clifford Spiller, also loaned Spiller Inc. $37,322 on the same terms of repayment. As of September 1, 1974, these three notes were debts of Spiller Inc.
On the latter date, Spiller Inc. was sold to Continental. The purchase agreement provided that, as part of the purchase price, defendant would assume the outstanding liabilities of Spiller Inc. The contract contained a clause whereby Spiller Inc. warranted that its contractual representations were true. In another clause, Spiller Inc. stated the company was then in compliance with all Federal, State, and local laws concerning the operation of its manufacturing works.
On October 6, 1975, the Spillers obtained judgment by confession against Spiller Inc. in La Salle County on the three promissory notes. Continental was not named as a defendant in those proceedings. On February 11, 1976, Continental, as Spiller Inc.'s assignee, unsuccessfully sought to intervene and vacate such judgments, claiming it received untimely notice of such proceedings and that it had a good defense. Defendant was given three weeks to replead. Continental did not respond until September 15, 1976. Then it petitioned the court to file an amended answer wherein it claimed Spiller Inc. had breached the September 1, 1974, sales contract. Specifically, it alleged that Spiller Inc. was cited on May 1, 1974, by the Illinois Environmental Protection Agency for dumping industrial waste into the Illinois and Michigan Canal. On September 27, 1976, this petition was denied, thereby confirming the confessed judgments. No appeal(s) was taken.
The instant cause was filed November 23, 1976. Inexplicably, it lay dormant for almost four years. Originally, trial was set for June 30, 1980. It has yet to be tried.
Discovery began in March 1980. Plaintiffs filed 72 interrogatories, a request to produce, and asked the defendant to produce Richard Schreck, Bernard Hofmann, and Henry Hofmann, allegedly Continental employees, for depositions. Continental's response to these requests was deemed inadequate. Plaintiffs moved for sanctions on June 20, 1980. A hearing occurred. Some of defendant's objections to the interrogatories were sustained, most were not, and others required redrafting. At that hearing defendant stated Henry Hofmann was no longer in its employ, having retired to Florida in February 1976. Defendant was ordered by the trial judge to respond to the production request and interrogatories by September 2, 1980. Defendant finally answered on October 23, 1980. Additional compliance was directed by the court on November 18, 1980. That is, defendant was ordered to answer certain interrogatories, verify its answer to the production request, and make arrangements for plaintiffs to depose of Mr. Schreck, and Bernard and Henry Hofmann.
On February 2, 1981, plaintiffs filed another motion for sanctions, claiming noncompliance with the November court directive. Also, the Spillers filed more interrogatories. A hearing commenced on March 10, 1981. Allegedly, at this hearing, defendant's counsel stated it would produce Henry Hofmann and the other two men to be deposed by plaintiffs on March 21, 1981. Defendant disputes this. The hearing was not transcribed.
On March 16, by letter, defendant informed the Spillers that Henry Hofmann would not be produced for a deposition but the other men could be deposed between March 23 and March 25. On March 19, plaintiffs again sought sanctions for defendant's failure to comply with the court's prior order. The Spillers wanted defendant's counterclaim dismissed. The trial court agreed, and stated:
"This is the oldest case I have got on my docket. I have put up with your failure to supply information as long as I'm going to. You have had all the time you're going to have and I'm going to enter sanctions. And I will tell you what the sanctions are. Either these discovery depositions go forward as originally agreed on March 21, or your counterclaim will be dismissed."
The depositions did not go forward. On March 30, 1981, defendant's counterclaim was dismissed. The Spillers obtained summary judgment three days later.
This appeal presents two issues. Was dismissal of Continental's counterclaim a proper discovery sanction? Was entering summary judgment proper? On both questions the answer is no. We reverse.
This cause is earmarked by both parties' failure to comply with our supreme court's rules concerning discovery. (Ill. Rev. Stat. 1979, ch. 110A, pars. 201 through 219.) Neither party did anything in this lawsuit for four years. Defendant perpetually postponed responses to interrogatories and supplying documents pursuant to plaintiffs' production requests. Plaintiffs attempted to impose on Continental the obligation of producing a nonparty for a deposition. Finally, when defendant did not comply with plaintiffs' various discovery requests, the Spillers ...