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Employer's Consortium Inc. v. Aaron

July 21, 1998

EMPLOYER'S CONSORTIUM, INC., AND CORY AND ASSOCIATES, INC., PLAINTIFFS-APPELLANTS,
v.
CARRIE A. AARON, DEFENDANT-APPELLEE.



The opinion of the court was delivered by: Justice Doyle delivered the opinion of the court:

IN THE APPELLATE COURT OF ILLINOIS SECOND DISTRICT

Appeal from the Circuit Court of Du Page County.

No. 96--AR--977

Honorable Richard A. Lucas, Judge, Presiding.

Plaintiffs, Employer's Consortium, Inc., and Cory & Associates, Inc., sued to recover on promissory notes made by defendant, Carrie A. Aaron. The case was referred to mandatory arbitration. The arbitrators found the plaintiffs had not participated in good faith and in a meaningful way pursuant to Supreme Court Rule 91(b) (145 Ill. 2d R. 91(b)). Based on this finding, the trial court debarred the plaintiffs from rejecting the arbitrator's award. Plaintiffs appealed the trial court's ruling. We affirm.

Plaintiffs' amended complaint alleged defendant owed approximately $33,000 on 11 separate promissory notes. Defendant's answer admitted making the notes but denied defaulting and asserted several affirmative defenses. Defendant was present with her attorney at the arbitration hearing on January 14, 1997. Plaintiffs were represented by counsel.

Plaintiffs' attorney made an opening statement but did not call any witnesses. The chairperson for the arbitrators offered plaintiffs' attorney the opportunity to contact any potential witnesses. Plaintiffs' attorney declined to call any witnesses and did not request a continuance. Plaintiffs' attorney then rested the case and submitted the unverified complaint along with the attached copies of the promissory notes to the arbitration panel. The arbitration panel made an award in favor of defendant. The arbitration panel also entered a unanimous Rule 91(b) finding that plaintiffs failed to participate in good faith and in a meaningful manner and listed as the factual basis therefor "failure to present any evidence."

On January 31, 1997, defendant filed a motion to bar rejection of arbitration. Defendant attached the affidavit of her attorney in support of the motion. Plaintiffs filed a written response including affidavits from plaintiffs' counsel and Andrew Corey. Plaintiffs' first affidavit stated inter alia that their counsel was informed the night before the arbitration hearing that Andrew Cory, president of the plaintiff corporations, would be unable to attend. The affidavit of Andrew Cory stated that he "was outside the State of Illinois and was unable to attend the arbitration." Defendant's motion to bar rejection was granted on March 11, 1997. Following denial of their motion for reconsideration, plaintiffs appealed.

Plaintiffs present a single issue for review, namely, whether the trial court properly debarred plaintiffs from rejecting the arbitration award based on the panel's finding that the plaintiffs failed to participate in good faith and in a meaningful manner as is required by Rule 91(b).

This issue requires a two-part analysis. First, we must consider whether the trial court's finding that plaintiffs failed to participate in good faith and in a meaningful manner was against the manifest weight of the evidence. Martinez v. Gaimari, 271 Ill. App. 3d 879, 883 (1995). Second, we must consider whether debarring plaintiffs from rejecting the award was an abuse of discretion. Williams v. Dorsey, 273 Ill. App. 3d 893, 901 (1995). The supreme court adopted Rule 91(b) requiring good faith participation at mandatory arbitration hearings. That rule provides in pertinent part:

"(b) Good-Faith Participation. All parties to the arbitration hearing must participate in the hearing in good faith and in a meaningful manner. If a panel of arbitrators unanimously finds that a party has failed to participate in the hearing in good faith and in a meaningful manner, the panel's finding and factual basis therefor shall be stated on the award. Such award shall be prima facie evidence that the party failed to participate in the arbitration hearing in good faith and in a meaningful manner and a court, when presented with a petition for sanctions or remedy therefor, may order sanctions as provided in Rule 219(c), including, but not limited to, an order debarring that party from rejecting the award, and costs and attorney fees incurred for the arbitration hearing and in the prosecution of the petition for sanctions, against that party." 145 Ill. 2d R. 91(b).

The committee comments to this rule indicate the intent of the rule was to prevent parties and lawyers from abusing the arbitration process by refusing to participate. 145 Ill. 2d R. 91, Committee Comments. Arbitration is not to be considered simply a hurdle to cross on the way to trial. 145 Ill. 2d R. 91, Committee Comments. The purpose of mandatory arbitration is to subject a case to the type of adversarial testing that would be expected at trial. Martinez, 271 Ill. App. 3d at 883-84.

Supreme Court Rule 91(b) provides that the finding of an arbitration panel that a party did not participate in good faith is prima facie evidence of that fact. 145 Ill. 2d R. 91(b). The party subject to sanctions of the Rule 91(b) has the burden of presenting evidence sufficient to rebut the prima facie evidence. Martinez, 271 Ill. App. 3d at 883.

Plaintiffs argue that less deference should be given to the panel's finding when a report of proceedings exists. Plaintiffs rely on Webber v. Bednarczyk, 287 Ill. App. 3d 458 (1997), and Williams, 273 Ill. App. 3d at 896-97, in asserting that less deference is due a Rule 91(b) finding when a report of proceedings is available. Webber, however, is inapposite. Webber stands for the contrary proposition that a trial court should not impose sanctions under Rule 91(b) in the absence of a finding by the arbitration panel without reviewing a transcript of the proceedings. Webber, 287 Ill. App. 3d at 463. Similarly, Williams does not provide guidance in this case, as it does not directly discuss the deference due findings under Rule 91(b) but instead discusses sanctions to be imposed for violations of Supreme Court Rule 237 (166 Ill. 2d R. 237). Williams, 273 Ill. App. 3d at ...


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