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Central Nat'l Bank v. Baime





Appeal from the Circuit Court of Cook County; the Hon. Thomas R. Rakowski, Judge, presiding.


Rehearing denied March 7, 1983.

This action was brought by plaintiff Central National Bank in Chicago (Central) to recover on defendant's unpaid note. Defendant's answer and counterclaim were stricken and a default entered against him for failure to comply with discovery rules and rulings. Central's damages were heard by a jury which was directed to return a verdict for Central upon which judgment was entered. Defendant's post-trial motions were denied and he appeals, raising as issues the propriety of the imposed sanctions and the sufficiency of damage evidence.

For the reasons set forth below, we reverse.

The odyssey of this lawsuit through pretrial proceedings is prolix, but essential. In February 1978 Central filed its complaint alleging that: defendant, a citizen of California, executed a promissory note in favor of Central for the principal amount of $93,000, plus interest, to be repaid within 91 days; Central advanced $78,250 at defendant's direction; the amount due Central was not repaid on the date due nor upon demand; after Central's liquidation of certain collateral, which had been applied to the amount due on the note, a $7,853.36 balance remained, plus interest. Defendant's motion to dismiss was denied on October 31, 1978.

Defendant, then represented by counsel, filed his answer on December 20, 1978, admitting that the face amount of the note has not been paid but stating, "[p]laintiff failed * * * to live up to the terms of the agreement and to advance the face amount of the said note thereby breaching the terms of said agreement * * *." Defendant also asserted that when executed it was understood that the note would not be called at the due date.

Central's motion for summary judgment was denied on March 2, 1979. On that same date, defendant, upon leave of court, filed a counterclaim seeking damages for Central's alleged breach of an oral agreement to loan him $93,000, for alleged conversion of Baime's securities given as collateral, and for fraud, all denied by Central.

On October 25, 1978, Central noticed defendant's deposition for December 4, 1978. He did not appear. On December 20, 1978, the circuit court ordered that defendant's deposition be concluded before February 8, 1979. On February 2, 1979, Central requested defendant's production of documents on March 9, 1979. On February 22, 1979, Central renoticed defendant's deposition to be taken March 20, 1979, and requested that certain documents be produced on that date. *fn1 Defendant appeared for deposition on March 20, 1979. He brought some documents with him, but did not produce certain others specifically requested, including income tax returns for Da-Mar, Inc., whose stock Baime had pledged as collateral for the subject loan, and still other documents which had been specifically requested, such as income statements from Da-Mar, documentation for brokerage houses, profit and loss sheets, and receipts for sales of personal property. Defense counsel stated that the tax returns were not relevant and would not be produced absent a court order. Defendant gave 104 pages of testimony and remained in Chicago for two additional days; however, the deposition was adjourned because of Central's scheduling problems, and in order that defendant might produce requested documents.

On June 5, 1980, Central moved to compel defendant's attendance at a deposition, alleging that: Baime had developed severe medical problems which had prevented him from resuming his deposition; and Baime's attorney had informed Central that he did not intend to return to Chicago prior to trial, then scheduled for June 18, 1980. The circuit court granted the motion and ordered defendant to appear for his deposition, or produce a medical affidavit excusing his appearance, by July 7, 1980. The trial was continued until September 15, 1980.

On August 22, 1980, Central moved for sanctions for defendant's failure to comply with the June 5, 1980, order. That motion was granted on August 22, 1980. Defendant's answer and counterclaim were stricken; judgment was entered for Central; Central was awarded attorney fees; and it was ordered to prove up damages, costs, interest and attorney fees.

Defendant's motion to vacate the August 22, 1980, order, asserting that defendant was available for deposition at any time in California and relating that a letter from defendant's attending physician set forth reasons for Baime's absence, was denied on September 12, 1980. On September 15, 1980, defendant's renewed motion was now supported by a medical affidavit signed by defendant's doctor which stated that: Baime was under affiant's care for arteriosclerotic heart disease; he sustained myocardial infarctions in April and again in May 1979, for which he was hospitalized; he had recurrent chest pains; and it was medically inadvisable for Baime to travel to Chicago except in midspring or late fall. The motion was granted and he was ordered to appear in Chicago at his own expense to give his deposition on October 7, 1980.

On October 7 and 8, 1980, defendant appeared for deposition and was asked to produce further documents. For the most part he produced documents previously requested. He was also asked to produce documents which opened new avenues of investigation. He refused, as noted heretofore, to produce his income tax returns.

Central moved to compel defendant to produce certain documents on October 14, 1980, and to appear in Chicago to be questioned regarding said documents. Defendant had agreed during the deposition to send the documents by October 17, but did not want to return to Chicago to testify. Central also moved for attorney fees incurred in enforcing the June 5, 1980, order. On October 29, 1980, the circuit court orally directed counsel to prepare a draft order requiring defendant: to appear at his deposition prior to November 14, 1980, for questioning regarding documents; to produce certain documents; and to produce his 1977 and 1978 Federal income tax returns in camera before November 7, 1980, or file an affidavit explaining his inability to do so. The written order reflecting this October 29, 1980, ruling was not entered, however, until November 10, 1980. Trial was continued to November 24, 1980.

On November 11, 1980, defendant's attorney served a notice of motion to withdraw. On November 14, 1980, Central filed another motion for sanctions alleging that defendant had failed to comply with the October 29, 1980, order. On November 24, 1980, Central's motion for attorney fees was granted, defendant's answer and counterclaim were stricken and a default entered against him on the complaint. A ...

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