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09/14/89 Safeway Insurance Company, v. Errett O. Graham

September 14, 1989

SAFEWAY INSURANCE COMPANY, PLAINTIFF-APPELLANT

v.

ERRETT O. GRAHAM, DEFENDANT-APPELLEE (ROBERT PARRILLO ET AL., RESPONDENTS-APPELLANTS)



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FOURTH DIVISION

544 N.E.2d 1117, 188 Ill. App. 3d 608, 136 Ill. Dec. 342 1989.IL.1417

Appeal from the Circuit Court of Cook County; the Hon. Edward R. Burr, Judge, presiding.

APPELLATE Judges:

JUSTICE McMORROW delivered the opinion of the court. JIGANTI, P.J., and JOHNSON, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE MCMORROW

Plaintiff, Safeway Insurance Company (Safeway), and its counsel, Robert Parrillo and the law firm of Parrillo, Weiss & Moss (Parrillo), appeal from the order of the trial court requiring each of them to pay one-half of a $2,000 fine imposed by the trial court as a sanction under section 2-611 of the Code of Civil Procedure (Ill. Rev. Stat. 1987, ch. 110, par. 2-611).

We limit our recitation of the facts to those necessary for an understanding of the issue presented. In November 1981, Errett O. Graham (Graham) *fn1 was appointed by the circuit court to act as arbitrator in an action against Safeway. The matter was settled without arbitration in February 1982 and formally dismissed by agreement of the parties on December 8, 1982. In May 1982, the trial court granted Graham leave to file a petition for fees for services he performed in preparation for the arbitration. Safeway objected to Graham's motion, asserting that since Graham was neither a party to nor an attorney in the suit against Safeway, he lacked standing to bring and the court lacked jurisdiction to entertain his motion for arbitrator's fees. The matter was continued to December 7, 1982, on which date Safeway renewed its objections on the grounds of standing and jurisdiction and further stated that Graham had failed to serve the petition for fees in accordance with the rules relative to service of process. Following a hearing, the court ordered Safeway to pay Graham a fee of $450 and granted Graham leave to file an application for additional fees to be paid by Safeway for "dilatory and obstructionist tactics making it necessary for the petition for fees to be filed by the Arbitrator."

On May 11, 1983, the trial court entered a rule to show cause why William Parrillo, the president of Safeway and one of the partners of the law firm, should not be held in contempt for failing to pay Graham's fees as ordered. The trial court continued the hearing on the rule to show cause but allowed Graham leave to file a petition for additional fees in connection with the enforcement proceedings. Prior to the next designated court date, Safeway paid Graham the sum of $487, and on November 10, 1983, the matter was dismissed. Safeway thereafter filed a notice of appeal but did not pursue its prosecution of that appeal. On July 6, 1984, however, Safeway filed a complaint against Graham alleging abuse of process. The trial court granted Graham's motions to dismiss the original complaint as well as Safeway's first and second amended complaints. Safeway's third-amended complaint was filed on April 22, 1986, and Graham's motion to strike and dismiss it was denied by Judge McCormick on May 21, 1986. On June 27, 1986, Graham filed a motion for summary judgment, and on October 8, 1986, Safeway filed its response thereto. On April 6, 1987, the parties appeared before Judge Burr for a hearing on the motion for summary judgment.

At that hearing, the trial Judge stated that Safeway's complaint was frivolous in that it wholly failed to state a cause of action and indicated an absolute and total lack of investigation of the facts and law prior to institution of the suit, and that Safeway's conduct in filing the action was "reprehensible" and "vindictive" and constituted "extortion and blackmail." Stating that section 2--611 mandates sanctions for court filings made without a reasonable inquiry as to the facts and law, the trial court announced its intention to grant Graham's motion for summary judgment and to also impose a sanction against Safeway under section 2--611 unless Safeway produced authority to support the propriety of its filing of the cause of action within 28 days. The court also directed Graham to prepare a petition for attorney fees and costs and Safeway to file a response thereto.

On May 5, 1987, Safeway filed a memorandum in opposition to the granting of summary judgment in Graham's favor, arguing, inter alia, that the trial court's "finding . . . that the lawsuit does not state a cause of action is directly contrary to Judge McCormick's ruling of May 21, 1986," denying Graham's motion to strike and dismiss. Shortly thereafter, Safeway also filed a petition that Judge Burr recuse himself from the matter on the ground that his prejudice against Safeway was evidenced by his comments at the hearing of April 6, 1987. The recusal motion was denied by Judge Burr on May 14, 1987.

On August 10, 1987, Judge Burr entered a "Memorandum Decision and Opinion" (1) granting Graham's motion for summary judgment; (2) ordering Safeway to pay Graham's costs and reasonable attorney fees; and (3) imposing a $2,000 fine to be paid to the circuit court by Safeway and Parrillo equally. On August 21, Safeway filed a motion to dismiss the action on the basis of a stipulation that all matters in the controversy had been compromised and settled. On August 26, Judge Lichtenstein entered an order granting Safeway's motion and dismissing the action by agreement of the parties. Later that day, however, Judge Lichtenstein sua sponte vacated that order and transferred the motion to Judge Burr.

On August 27, Safeway presented its second petition for the recusal of Judge Burr, alleging as additional grounds that ex parte communications had occurred between the Judge and Graham's counsel. Following a hearing, the trial court denied the recusal petition; denied Safeway's motion for leave to file a special and limited appearance; approved the agreement of the parties for the payment by Safeway to Graham of $2,000 for costs and fees; upheld its order imposing the fine of $2,000 against Safeway and Parrillo; and required proof of payment of one-half of that fine by Safeway and Parrillo, respectively, on or before September 10, 1987. This appeal followed.

Opinion

Initially, we note that the notice of appeal filed on September 8, 1987, states that Safeway and Parrillo appeal from the May 14, 1987, order denying Safeway's petition that Judge Burr recuse himself; the memorandum order and decision of August 10, 1987; the order of August 12, 1987, granting defendant's motion for summary judgment and assessing the $2,000 fine; the order of August 26, 1987, vacating the earlier order of that same date dismissing the action by agreement of the parties; and the order of August 27, 1987, in its entirety. In ...


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