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07/12/96 LORRAINE C. PRITZKER v. DRAKE TOWER

July 12, 1996

LORRAINE C. PRITZKER, PLAINTIFF-COUNTERDEFENDANT,
v.
DRAKE TOWER APARTMENTS, INC., ET AL., DEFENDANTS/THIRD-PARTY PLAINTIFFS. DRAKE TOWER APARTMENTS, INC., ET AL., THIRD-PARTY PLAINTIFFS, V. ABRA PRENTICE WILKIN, THIRD-PARTY DEFENDANT AND FOURTH-PARTY PLAINTIFF/APPELLEE. ABRA PRENTICE WILKIN, FOURTH-PARTY PLAINTIFF/APPELLEE, V. FRANK H. STOWELL & SONS, INC., AND DUBIN, DUBIN & MOUTOUSSAMY, FOURTH-PARTY DEFENDANTS/APPELLANTS, AND HAMMOND BEEBY & BABKA, INC., FOURTH-PARTY DEFENDANT.



Appeal from the Circuit Court of Cook County. Honorable John V. Virgillio, Judge Presiding.

As Modified on Denial of Rehearing September 27, 1996. Rehearing Denied September 16, 1996. Released for Publication October 4, 1996.

Presiding Justice Zwick delivered the opinion of the court: Leavitt, J., concurs. *fn2 Rakowski, J., concurs in part and dissents in part.

The opinion of the court was delivered by: Zwick

MODIFIED ON DENIAL OF REHEARING

PRESIDING JUSTICE ZWICK delivered the opinion of the court:

We address in this case the single issue of whether the trial court abused its discretion in denying motions filed by appellants, Frank H. Stowell & Sons, Inc. (Stowell) and Dubin, Dubin & Moutoussamy (Dubin), in which Stowell and Dubin sought the imposition of Rule 137 sanctions against the fourth-party plaintiff, Abra Prentice Wilkin. After careful review, we reverse and remand the cause for further proceedings.

In 1989 plaintiff, Lorraine Pritzker, filed suit against Drake Tower Apartments, Inc., the owner of the apartment building in which Pritzker lived. Pritzker alleged that certain 1973 improvements to Wilkin's 30th-floor penthouse apartment were causing water to leak into and damage Pritzker's 29th-floor residence. Wilkin filed a separate action against Drake in 1990, seeking, inter alia, a declaratory judgment that Wilkin was not responsible for specified maintenance and repair costs under the 1973 construction agreement. Drake then brought Wilkin into the Pritzker litigation as a third-party defendant and Wilkin filed her own fourth-party complaints for contribution and indemnity against certain parties involved in the 1973 improvements. This complaint, filed August 29, 1990, named Stowell, the general contractor for the project, as well as Dubin, an architectural firm that had agreed to perform certain inspection services.

Stowell and Dubin promptly filed motions to dismiss Wilkin's complaints against them, each claiming in affidavits that the penthouse improvements had been completed in 1975 and that Wilkin's claims were therefore barred by the 10-year construction statute of repose. See 735 ILCS 5/13-214(b) (West 1994). This section of the Code of Civil Procedure requires that claims relating to the improvement of real property be brought within ten years after the act or omission underlying the claim. Stowell included with its motion the affidavit of Frank Stowell, one of Stowell's principals, stating that work in Wilkin's apartment was finished in 1975. Dubin's motion included construction lien waivers which had been delivered at the end of the work in 1975, as well as the affidavit of David Dubin, one of Dubin's principals. This affidavit also stated that the work in Wilkin's apartment had been completed by the end of 1975.

Wilkin contested the motions filed by both Stowell and Dubin. Wilkin ultimately avoided dismissal of her claims, in part, by filing counter-affidavits which stated that she had "personal knowledge" that the work in her apartment continued through 1980. She stated she was prepared to offer testimony to this fact if called as a witness. Wilkin subsequently filed pleadings and discovery responses also denying that the construction in her home was completed in 1975.

In 1993, after Stowell and Dubin had been involved in the case for almost three years, Wilkin was deposed by Stowell. Despite her prior affidavit and pleadings, Wilkin conceded that she had no personal knowledge to support her representations regarding the time of completion of the construction in the apartment. She stated that she had simply followed the advice of her attorneys *fn1 and business manager in claiming in her affidavit that construction had continued on her residence past 1975. The trial court granted summary judgment in favor of Stowell and Dubin, each of whom then moved for sanctions under Rule 137.

Both Stowell and Dubin argued in their petitions for sanctions that Wilkin had committed several Rule 137 violations, including (1) verifying and filing a time-barred complaint; (2) making an affidavit containing statements which were either knowingly untrue or not within her personal knowledge, as she had represented; and (3) tendering false responses to discovery. The petitions also detailed what Stowell and Dubin claimed to be Wilkin's improper purpose in filing her complaints against them, i.e., her desire to keep Stowell and Dubin in the litigation in hopes that they would agree to share the costs of the litigation.

The trial court denied the motions for sanctions. The court commented that, had Wilkin filed her action sooner, Stowell and Dubin would have been involved in the full litigation and that "inconsistencies" like the ones noted by Stowell and Dubin regularly occur in significant lawsuits. The court also found "everything to be the custom and practice and in good faith." Stowell and Dubin appeal only the trial court's decision denying sanctions.

Supreme Court Rule 137 allows a court to impose sanctions against a party or attorney who files a pleading which is not well grounded in fact, is not warranted by existing law or a good-faith argument for the extension, modification, or reversal of existing law, or is interposed for any improper purpose. 134 Ill. 2d R. 137. The Rule makes clear that the signature of a litigant or an attorney on a pleading is a certificate that the signing party has read the pleading and made "reasonable inquiry" into the facts alleged. Thus, the standard for evaluating a party's conduct under Rule 137 is one of reasonableness under the circumstances as they existed at the time of the filing. Bennett & Kahnweiler, Inc. v. American National Bank & Trust Co., 256 Ill. App. 3d 1002, 1007, 628 N.E.2d 426, 194 Ill. Dec. 929 (1993).

The determination of whether to impose sanctions under Rule 137 rests with the sound discretion of the trial court. The decision to impose or deny sanctions is entitled to great weight on appeal and will not be disturbed on review absent an abuse of discretion. In re Estate of Wernick (1989), 127 Ill. 2d 61, 77-78, 535 N.E.2d 876, 129 Ill. Dec. 111 (1989); Bennett, 256 Ill. App. 3d at 1007. This general rule does not, however, preclude this court from independently reviewing the record and finding an abuse of discretion where the facts so warrant. See e.g., Wittekind v. Rusk, 253 Ill. App. 3d 577, 625 N.E.2d 427, 192 Ill. Dec. 467 (1993); Edward Yavitz Eye Center, Ltd. v. Allen, 241 Ill. App. 3d 562, 608 N.E.2d 1235, 181 Ill. Dec. 761 ...


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