The opinion of the court was delivered by: Justice Gordon Delivered The Opinion OF The Court:
IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT
Appeal from the Circuit Court of Cook County
Honorable John K. Madden, judge Presiding.
Plaintiffs are physicians who are members of the Chicago Medical Society ("CMS"). Each is also a member of the Illinois State Medical Society ("ISMS") and/or on the staff at Alexian Brothers Medical Center, Inc. ("Alexian Brothers"), the organizations named as defendants. Plaintiffs brought suit to obtain access to the records of ISMS and Alexian Brothers under section 107.75 of the Illinois Not for Profit Corporation Act ("the Act") (805 ILCS 105/107.75 (West 1994)), in order to ascertain whether a Dr. Dennis M. Brown (not a party to this action) had been reimbursed by both defendant organizations for the same expenses he had incurred while attending medical conventions. At a pre-trial conference the circuit court dismissed plaintiff's action with prejudice because plaintiffs had "abused the settlement process." Plaintiffs appeal from that order. For the reasons set forth below, we reverse and remand.
In May 1996, plaintiffs filed a mandamus action in the Circuit Court of Cook County, requesting that ISMS and Alexian Brothers be directed to grant plaintiffs access to "all receipts for airline tickets, hotels and cancelled checks reflecting payment for these expenses" for which defendants reimbursed Brown. Plaintiffs stated that they wished to examine these records to determine "whether there have been any expense improprieties and possible double payments heretofore."
The circuit court initially attempted to resolve the petition on an expedited basis because plaintiffs' counsel represented that Brown was scheduled to assume the office of President of CMS on June 8, 1996, and they wished to have the matter resolved before that date. However, because of a delay in discovery occasioned by the plaintiffs' failure to produce witnesses or inform the defendants who their witnesses would be, the court determined that there could be no resolution before that date and decided to handle the case in its normal course.
Alexian Brothers represented that it was taking the position of a mere "stakeholder" with respect to the records in its possession. Counsel for Alexian Brothers stated that his client would turn over the records if the court so ordered, and did not have an independent position on the matter. In July, the court entered an order directing Alexian Brothers to turn over to plaintiffs all documents relating to reimbursement of Brown for expenses for any American Medical Association (AMA) meetings he attended on behalf of Alexian Brothers in 1993, 1994 and 1995. The court provided that after turning over those records, the suit would be dismissed with prejudice with respect to Alexian Brothers. At a status hearing on July 29, plaintiffs' counsel stated that he had received the records ordered to be turned over. In August, nunc pro tunc to July, the court dismissed Alexian Brothers with prejudice and without any award of attorneys' fees or costs.
It appears from statements of the court and counsel at the July 29 status call that in July plaintiffs also received some documents from Dr. Arvin Goyal, a trustee of ISMS. There does not appear in the record before us any order of the court requiring ISMS to provide plaintiffs with any such records, although on July 10 the court ordered an in camera inspection of the contents of a file Goyal had brought to his deposition but had refused to allow counsel for ISMS *fn1 to examine. The document Goyal provided is not contained in the record on appeal. Counsel for ISMS represented that Goyal had stated in his deposition that a particular portion of the document, apparently a computer printout, referred to reimbursements made to Brown for expenses incurred in attending the 1994 AMA interim meeting in Hawaii. *fn2 Counsel for plaintiffs agreed that the documents "obviously" showed at least one double billing, but that plaintiffs wished to see "whether it was double-billed on others."
At a status call in August, counsel for ISMS stated that plaintiffs had "arguably" shown a "proper purpose," as required by the Act (see 805 ILCS 105/107.75 (West 1994)) ("[a]ll books and records of a corporation may be inspected by any member *** for any proper purpose at any reasonable time") for inquiry into certain expenses for which Brown was reimbursed in connection with the 1994 meeting, and he was prepared to submit to plaintiffs an affidavit regarding those reimbursements. Counsel for plaintiffs did not accept this offer, reiterating that plaintiffs wished to see the actual records. The court ordered ISMS to bring in for an in camera inspection records relating to payments made to Brown for expenses he had incurred in 1994. At the next hearing, on August 15, after the court reviewed the records in camera, ISMS stated that it was willing to allow plaintiffs to make "extracts" from the records, which included copies of Brown's expense report and hotel bill, the expense check ISMS had issued to Brown, and a check Brown had written ISMS as a refund for the airfare. ISMS stated that it did not concede that plaintiffs had shown a proper purpose, nor that the court had so ruled, but that it had made the records available "in an effort to resolve this matter" and in the expectation that it would "bring this matter to a close." The circuit court's order of August 15 required ISMS to allow plaintiffs' counsel to examine and make abstracts of the records submitted by Brown regarding the 1994 interim meeting of the AMA in Hawaii, but did not grant plaintiffs access to records regarding any 1993 or 1995 meetings nor the 1994 AMA annual meeting. The court also ordered ISMS to produce to plaintiffs the affidavit regarding Brown's 1994 expenses.
Plaintiffs' counsel thereafter disseminated a letter to his clients (hereinafter "the client letter"), purporting to relate what had occurred in the litigation. Among other statements, the client letter reported that ISMS had used dilatory tactics in resisting inspection and that the court had ruled that plaintiffs had established a proper purpose and counsel was entitled to review the records. It also characterized the petition as having come to a "very successful conclusion" and stated that the records plaintiffs had received had established that Brown had received double reimbursements. It appears that ISMS became aware of this letter when a copy of it was attached to a letter from plaintiffs to ISMS demanding that ISMS request Brown to resign from all positions he held with the organization.
In reaction to the client letter, ISMS filed an "Emergency Motion for Injunction" in late August, which was heard on September 3. ISMS appended to its motion the client letter, the letter from plaintiffs to ISMS, and a letter from plaintiffs to CMS demanding that it also request Brown to resign from any positions he held with that organization. ISMS requested that the court enjoin plaintiffs and counsel from any further dissemination or publication of the client letter and that the court "enter sanctions against plaintiffs for the willful dissemination of false statements concerning this litigation including dismissal of the action and reasonable attorneys fees." At the hearing on the motion, plaintiffs' counsel stated that he had not yet received a copy of the motion, although eight or nine pages of it had been faxed to him. (The record reflects that the motion itself was only seven pages long, although including attachments it ran to more than twenty pages.) Plaintiffs' counsel stated that he had not read the motion and he requested 28 days in which to respond. Counsel for ISMS responded that the fax department of his law firm had told him that they had received a telephone call in which plaintiffs' counsel had told them that he had received five pages of the motion and did not need any more. The court stated that "[w]e got [sic] to give him time to respond," but allowed ISMS to convert its motion to a motion for a temporary restraining order ("TRO"). The court stated that it would pass the case, allow plaintiffs' counsel to read the motion, and would then entertain argument on the TRO.
When the case was recalled, on the same date, ISMS argued first (for approximately 5 pages of transcript) in favor of the TRO. ...