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08/05/97 TOBY KNIGHT v. HECTOR GUZMAN

August 5, 1997

TOBY KNIGHT, PLAINTIFF-APPELLEE,
v.
HECTOR GUZMAN, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Cook County. Honorable Edwin J. Richardson, Judge Presiding.

Released for Publication September 11, 1997.

The Honorable Justice Rakowski delivered the opinion of the court. DiVITO, P.j., and Tully, J., concur.

The opinion of the court was delivered by: Rakowski

The Honorable Justice RAKOWSKI delivered the opinion of the court:

Defendant Hector Guzman appeals from an order of the circuit court of Cook County striking his rejection of an arbitration award and entering judgment on the arbitration award in favor of plaintiff Toby Knight. We reverse and remand.

FACTS

Plaintiff brought a negligence action against defendant to recover for injuries and damages sustained during a motor vehicle collision. The case was assigned to mandatory arbitration. The arbitration hearing took place on September 26, 1995. All parties were present. The panel of arbitrators found in favor of plaintiff and against defendant in the amount of $2,100. There was no finding that defendant's participation in the arbitration hearing was in bad faith.

On October 17, 1995, defendant filed a notice of rejection of the arbitration award. Plaintiff moved to strike defendant's rejection and both parties filed briefs in support of their positions. On January 18, 1996, the court struck defendant's rejection and entered judgment in favor of plaintiff and against defendant in the amount of $2,100. Defendant contends the trial court erred in barring him from rejecting the arbitration award. He also contends the court erred in failing to award sanctions under Supreme Court Rule 137 (155 Ill. 2d R. 137).

ANALYSIS

A. Right of Rejection

"Under Illinois' rules, parties have the right of rejection-unless they are subjected to a sanction debarring rejection." Williams v. Dorsey, 273 Ill. App. 3d 893, 905, 210 Ill. Dec. 310, 652 N.E.2d 1286 (1995). Supreme Court Rule 93 (145 Ill. 2d R. 93) governs the procedure for rejecting an arbitration award. The rule states in part that "any party who was present at the arbitration hearing, either in person or by counsel, may file with the clerk a written notice of rejection of the award." 145 Ill. 2d R. 93(a). However, "the filing of a notice of rejection shall not be effective as to any party who is debarred from rejecting an award." 145 Ill. 2d R. 93(a). Accordingly, it has been held that a trial court may debar a party from rejecting an award as a sanction even if the party or his attorney was present at the arbitration hearing. See State Farm Insurance Co. v. Gebbie, 288 Ill. App. 3d 640, 1997 Ill. App. LEXIS 299, 224 Ill. Dec. 280, 681 N.E.2d 595 slip op. at 5-6 (1997); Smith v. Johnson, 278 Ill. App. 3d 387, 391-92, 214 Ill. Dec. 965, 662 N.E.2d 531 (1996); Williams, 273 Ill. App. 3d at 900-01.

Supreme Court Rule 91 (145 Ill. 2d R. 91) governs the absence and participation of a party at the arbitration hearing. Rule 91(a) provides that "the failure of a party to be present, either in person or by counsel, at an arbitration hearing shall constitute a waiver of the right to reject the award and a consent to the entry by the court of a judgment on the award." 145 Ill. 2d R. 91(a). Rule 91(b) states that "all parties to the arbitration hearing must participate in the hearing in good faith and in a meaningful manner." 145 Ill. 2d R. 91(b). If a party fails to participate in the hearing in good faith and in a meaningful manner, a court may order sanctions, including an order debarring that party from rejecting the award. 145 Ill. 2d R. 91(b).

The arbitrators' award in this case is devoid of any reference to defendant's failure to participate in the hearing in good faith and in a meaningful manner. Further, a review of the record gives no indication that defendant failed to participate in good faith. To be sure, the record shows that defendant was present at the hearing, represented by counsel, and presented a defense. Even plaintiff acknowledged that defendant's alleged bad faith was not at the arbitration hearing but, rather, that defense counsel's customary rejection of other arbitration awards is indicative of bad-faith participation in the arbitration process. The trial court agreed, finding that Rule 91 requires good-faith participation in the entire arbitration process, not just the hearing, so as not to abuse the arbitration process or make it meaningless.

The trial court went on to find that the rejection filed pursuant to Rule 93 was not filed by defendant or his counsel who was present at the arbitration hearing, but by an associate of defense counsel's firm. The court held that this was not a meaningful rejection because the associate had no contact with the arbitration process and that "if the [Supreme] Court meant the rejection could be signed by an associate attorney, the Supreme Court would have ...


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