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Danzot v. Zabilka

July 31, 2003


Appeal from the Circuit Court of Cook County No. 01 M1 300637 The Honorable John G. Laurie, Judge Presiding.

The opinion of the court was delivered by: Justice Greiman


Plaintiff, Guadalupe Danzot, appeals from the trial court's order granting summary judgment in favor of defendant as well as its previous sanction order, barring plaintiff from presenting any evidence or testimony at trial for her alleged bad-faith participation in arbitration, which served as the basis for the summary judgment.

The factual background of this case is as follows. On February 26, 2001, plaintiff filed suit against Johnnie Nunn (Nunn), alleging that his negligent driving caused an auto collision, nearly two years prior, that resulted in her injuries. Nunn was deceased at the time the action was filed; therefore, upon plaintiff's motion, the trial court appointed Dena Zabilka (defendant) as special administrator of Nunn's estate for the purpose of the litigation.

The trial court mandated the case to arbitration, further ordering that discovery would be closed on January 11, 2002. Plaintiff timely submitted answers to defendant's request for interrogatories. In addition, plaintiff timely submitted an evidence package in accordance with Supreme Court Rule 90(c) (134 Ill. 2d R. 90(c)) to both defendant and the arbitration panel. In her discovery responses, plaintiff identified potential witnesses - including Antonio and Erma Guzman (the Guzmans), who purportedly had observed the accident.

The arbitration hearing was held on April 10, 2002. While the record does not contain a transcript of the hearing, the parties do not dispute the following facts. At the hearing, defendant objected to the tendering of testimony by plaintiff and her husband, asserting that the testimony was prohibited by the Dead-Man's Act, which provides in relevant part:

"In the trial of any action in which any party sues or defends as the representative of a deceased person or person under a legal disability, no adverse party or person directly interested in the action shall be allowed to testify on his or her own behalf to any conversation with the deceased or person under legal disability or to any event which took place in the presence of the deceased or person under legal disability ***." 735 ILCS 5/8-201 (West 2002).

The arbitration panel rejected defendant's argument and permitted plaintiff to present the disputed testimony. Relying on that testimony, as well as the evidence in her Rule 90(c) package, plaintiff elected not to call other witnesses. At the conclusion of the approximately 90-minute hearing, the arbitrators signed a unanimous award, in the amount of $30,000, in favor of plaintiff. The award of the arbitrators contained no finding of bad-faith participation on the part of either party.

On May 1, 2002, defendant filed a notice of rejection of the award. Defendant further filed a motion for sanctions, entitled "Motion to Debar," citing Rule 91(b) (145 Ill. 2d R. 91(b)) and requesting sanctions for plaintiff's alleged bad-faith participation at the arbitration. On June 18, 2002, the trial court granted defendant's motion and ordered plaintiff "barred from presenting evidence or testifying at trial pursuant to Rule 91(b)." Plaintiff filed a motion to reconsider, which the trial court denied after a hearing on August 12, 2002.

Defendant filed a motion for summary judgment, arguing that no material issue of fact remained in the case because plaintiff was unable to present any evidence in support of her claim. On August 27, 2002, the trial court granted defendant's motion on the grounds suggested in defendant's motion. Plaintiff filed a timely notice of appeal, arguing that the trial court erred, first, by barring plaintiff from testifying or presenting evidence at trial and then, later, by granting summary judgment in favor of defendant on the basis of that sanction. We agree with plaintiff for the reasons that follow.

We address the sanction order first because it serves as the foundation for the summary judgment. Defendant has taken the position throughout this case that, by calling at the arbitration hearing only those witnesses whose testimony defendant claims would be barred by the Dead-Man's Act - and, more specifically, by not calling the Guzmans - plaintiff acted in a manner other than she would at trial, and as a consequence, she violated Rule 91(b), which commands a party's " good-faith participation." Plaintiff contends, however, that her behavior at the arbitration hearing in no way indicated bad faith but, rather, good faith, as the record reflects that she complied with the trial court's discovery order, presented an evidence package, offered witness testimony, and was unanimously awarded the maximum benefit by the panel. She further argues that the trial court was without authority to issue sanctions for her failure to call certain witnesses - which was merely part of her litigation strategy. Finally, she notes that the Dead-Man's Act would have affected only portions, but not all, of the testimony in dispute and would not require the complete barring of plaintiff and her husband as witnesses.

Rule 91(b) provides that all parties ordered to mandatory arbitration "must participate in the hearing in good faith and in a meaningful manner." 145 Ill. 2d R. 91(b). Upon petition, the trial court may sanction a party whom it finds has not participated in good faith at the arbitration hearing. 145 Ill. 2d R. 91(b). These sanctions are available through Rule 219(c), which provides a remedy for a party's unreasonable failure to comply with any order or rule regarding discovery, request for admission, or pretrial procedure issued by the court. 145 Ill. 2d R. 91(b); 166 Ill. 2d R. 219(c). Rule 91(b) was adopted in response to arbitrators' complaints that some parties and lawyers would merely attend, but refuse to participate in, arbitration. 145 Ill. 2d R. 91(b), Committee Comments. By providing for sanctions for violations of "good-faith participation," the rule is intended to discourage such misconduct and "assure the integrity of the arbitration process." 145 Ill. 2d R. 91(b), Committee Comments. A trial court's imposition of sanctions under Rule 91 will be reversed only where the decision is arbitrary or exceeds the bounds of reason, thus constituting an abuse of discretion. See State Farm Insurance Co. v. Harmon, 335 Ill. App. 3d 687, 690 (2002); State Farm Insurance Co. v. Rodrigues, 324 Ill. App. 3d 736, 740 (2001).

A party demonstrates bad faith when its conduct amounts to a deliberate and pronounced disregard for the rules and the court. Harmon, 335 Ill. App. 3d at 690. As previously mentioned, defendant argues in this case that plaintiff's failure to present the testimony of "disinterested" witnesses violated the Dead-Man's Act and was tantamount to bad faith under Rule 91(b). At the hearing on plaintiff's motion to reconsider, defendant made the following argument:

"There's two witnesses by way of their answers to interrogatories. They are Irma Gusman [sic] and Antonio Nicholas Gusman [sic]. Those are two individuals that the plaintiff named on their own answers to interrogatories. The whole issue when we had the hearing on the motion to bar their testimony at trial was that they brought just the husband, and my associate at the arbitration brought the case law of Dead Man's Act addressing the fact that a husband cannot testify because he's interested. A husband cannot ...

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