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12/05/89 Conrad S. Berkin Et Al., v. Orland Park Plaza Bank

December 5, 1989

CONRAD S. BERKIN ET AL., PLAINTIFFS-APPELLANTS

v.

ORLAND PARK PLAZA BANK, DEFENDANT-APPELLEE

FORMER SECTION 2-611 (ILL. RE

v.

STAT. 1985, CH. 110, PAR. 2-611) PROVIDED AS FOLLOWS:



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, SECOND DIVISION

548 N.E.2d 534, 191 Ill. App. 3d 1056, 139 Ill. Dec. 149 1989.IL.1873

Appeal from the Circuit Court of Cook County; the Hon. Myron Gomberg, Judge, presiding.

APPELLATE Judges:

JUSTICE SCARIANO delivered the opinion of the court. BILANDIC, P.J., and DiVITO, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE SCARIANO

Plaintiffs appeal from a December 18, 1987, order granting defendant's section 2-611 motion (Ill. Rev. Stat. 1987, ch. 110, par. 2-611) against the plaintiffs and their attorneys and from a September 15, 1988, order dismissing the attorneys and assessing $4,533.60 in attorney fees and costs solely against plaintiffs. Plaintiffs complain that the section 2-611 motion was not timely filed, and even if it were, the sanction award was improperly assessed against them and included improperly assessed fees.

On December 10, 1984, plaintiffs, by their attorneys, Carl L. Klein and John B. Petrulis, filed suit against Orland Park Plaza Bank (Bank) and other defendants who are not parties to this appeal. Among the 10 named plaintiffs were George E. Burzloff and Eileen Burzloff, who, unbeknown to the Bank, had been dead for over a year at the time of filing. On November 8, 1985, the Bank filed a motion to dismiss the complaint pursuant to section 2-615 of the Code of Civil Procedure (Ill. Rev. Stat. 1985, ch. 110, par. 2-615) for failure to state a cause of action. On June 16, 1986, plaintiffs filed an amended complaint, and on September 26, 1986, a second amended complaint, to each of which the Bank responded with motions brought under section 2-615. All three complaints named the Burzloffs as plaintiffs, and paragraph 1 in each stated: "That plaintiffs and the defendants are located in the County of Cook and State of Illinois." On January 8, 1987, the circuit court granted the plaintiffs' motion to voluntarily dismiss the Bank as a party defendant.

On February 6, 1987, within 30 days after its dismissal from the action, the Bank filed a motion for sanctions under amended section 2-611 of the Code of Civil Procedure (Ill. Rev. Stat. 1987, ch. 110, par. 2-611), effective November 25, 1986, which provides:

"§ 2-611. Signing of Pleadings, Motions and Other Papers; Sanctions. Every pleading, motion and other paper of a party represented by an attorney shall be signed by at least one attorney of record in his individual name, whose address shall be stated. . . . The signature of an attorney . . . constitutes a certificate by him that he has read the pleading, motion or other paper; that to the best of his knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. . . . If a pleading, motion, or other paper is signed in violation of this Section, the court, upon motion or upon its own initiative, shall impose upon the person who signed it, a represented party, or both, an appropriate sanction, which may include an order to pay to the other party or parties the amount of the reasonable expenses incurred because of the filing of the pleading, motion or other paper, including a reasonable attorney's fee. . . . All proceedings under this Section shall be within, and part of the civil action in which the pleading, motion or other paper referred to herein has been filed, and no violation or alleged violation of this Section shall give rise to a separate cause of action, or another cause of action within the civil action in question, by, on behalf of or against any party to the civil action in question, and by, on behalf of or against any attorney . . . involved in the civil action in question." (Emphasis added.) (Ill. Rev. Stat. 1987, ch. 110, par. 2-611.)

In its motion the Bank complained that plaintiffs and their attorneys willfully filed successive meritless complaints and that the plaintiffs' voluntary dismissal of the action as to the Bank "evidences subjective bad faith and harassment." On May 21, 1987, the plaintiffs filed their response to the motion for sanctions in which they set forth three reasons for dismissing the Bank; namely, that (a) one defendant had removed himself from the jurisdiction, (b) another defendant had died and (c) "[p]laintiffs George Burzloff and Eileen Burzloff who had extensive knowledge of the happenings herein have also died and their testimony was not perpetuated." Prompted to investigate, the Bank discovered that George Burzloff had died on November 26, 1982, and Eileen Burzloff had died on May 23, 1983, well before the filing of the original complaint. In its reply filed on June 2, 1987, more than 30 days after its dismissal, the Bank apprised the court of this new information, presenting it as an additional basis for section 2 -- 611 sanctions.

At a hearing held on December 18, 1987, the circuit court ruled that although plaintiffs' failure to state a cause of action could not be the basis for section 2 -- 611 sanctions, the untrue statements contained in the plaintiffs' complaint relating to the presence of the Burzloffs in Cook County constituted a blatant violation of the statute. Accordingly, the court sustained the Bank's motion under both the former and amended versions of section 2 -- 611 against the plaintiffs and their attorneys, Messrs. Klein and Petrulis. Contrary to this ruling, however, the court later awarded the Bank fees and costs associated not only with investigating the deaths and prosecuting the section 2 -- 611 motion, but also with preparing the motions to dismiss on the ground of insufficiency of the complaint to state a claim.

On September 15, 1988, upon denying plaintiffs' motion to reconsider, the court assessed sanctions in the amount of $4,533.60 against "all plaintiffs," but dismissed attorney Klein on the basis of the holding in Prevendar v. Thonn (1988), 166 Ill. App. 3d 30, 518 N.E.2d 1374, that amended section 2 -- 611 may not be applied retroactively against attorneys, although the court's dismissal of attorney Petrulis from the motion for sanctions was on the basis of its finding that he had not participated in the drafting of the offending complaints.

Since the court had previously granted plaintiffs' motion to substitute the Burzloffs with Eileen Burzloff's heir, Alan H. Sibigtroth, as party plaintiff, in the court's first order the term "all plaintiffs" included the deceased Burzloffs, whereas in the second order it included Eileen Burzloff's successor.

"ยง 2 -- 611. Untrue statements. Allegations and denials, made without reasonable cause and found to be untrue, shall subject the party pleading them to the payment of reasonable expenses, actually incurred by the other party by reason of the untrue pleading, together with a reasonable attorney's fee, to be summarily taxed by the ...


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