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McCarthy v. Taylor

Supreme Court of Illinois

June 20, 2019

GERALD S. McCARTHY, Appellee,
v.
ROZLYN TAYLOR et al. (Marvin Gray, Appellant).

          JUSTICE KILBRIDE delivered the judgment of the court, with opinion. Justices Thomas, Burke, and Theis concurred in the judgment and opinion. Chief Justice Karmeier concurred in part and dissented in part, with opinion.

          OPINION

          KILBRIDE, JUSTICE

         ¶ 1 In this appeal, we address, as a matter of first impression, whether a court may impose sanctions in the form of attorney fees under Illinois Supreme Court Rule 137(a) (eff. July 1, 2013) against a plaintiff to compensate an attorney defending himself against a frivolous cause of action. Here, plaintiff and defendant are both experienced licensed attorneys who proceeded pro se in the action below.

         ¶ 2 Plaintiff, Gerald S. McCarthy, filed a complaint against defendant, Marvin Gray. Plaintiff's complaint was dismissed, and the Cook County circuit court entered an order imposing Rule 137 sanctions against him, in favor of defendant. Plaintiff appealed, arguing that the circuit court erred in dismissing his tortious interference claim and issuing Rule 137 sanctions. The appellate court affirmed the dismissal of plaintiff's tortious interference claim and the finding that plaintiff violated Rule 137 in filing that frivolous claim, but it reversed the circuit court's finding that defendant was entitled to attorney fees and vacated that award. McCarthy v. Abraham Lincoln Reynolds, III, 2006 Declaration of Living Trust, 2018 IL App (1st) 162478.[1] We reverse that part of the appellate court judgment vacating defendant's attorney fee award and remand for further proceedings consistent with this opinion. The remainder of the appellate court's judgment is affirmed.

         ¶ 3 BACKGROUND

         ¶ 4 In 2006, Abraham Lincoln Reynolds III created and executed the "A. L. Reynolds III 2006 Declaration of Living Trust," naming himself as the trustee. Cherie Coles, the romantic interest of Reynolds, was named as successor trustee. Plaintiff was appointed as the second successor trustee. The trust granted 10% of the residuary estate to plaintiff, 80% to Coles, and 10% to Elaine Lawell. If Coles predeceased Reynolds, however, her 80% share would go to plaintiff, and plaintiff's 10% share "shall [be] extinguished and be given to Reverend Wayne Reynolds, Senior." The schedule of property attached to the trust document included bank accounts, savings bonds, a "1996 Mercury Grand Marquee [sic]" automobile, personal and household items, and a condominium apartment located in Chicago. Defendant was Reynolds's attorney who prepared the trust document.

         ¶ 5 Coles passed away in 2007. In 2010, Reynolds executed an amendment to the trust clarifying and augmenting the power of the trust to include the powers to borrow money on behalf of the trust and to pledge and encumber property of the trust. The amendment further provided that "the real property owned by [the trust] is encumbered or conveyed by [Reynolds] to secure payment" for a "Home Equity Conversion Mortgage" through Wells Fargo Bank.

         ¶ 6 Reynolds committed suicide on December 15, 2012. Defendant contacted plaintiff after Reynolds's death and notified him that Reynolds had amended the trust before his death. Defendant informed plaintiff that Reynolds came to defendant's home prior to his suicide and presented defendant with an amended trust document he "had made in his own handwriting." The amendments named Rozlyn Taylor as successor trustee. Reynolds and Taylor had become intimately involved after Coles's death. The amendments granted 20% of the residuary estate to plaintiff, 70% to Taylor, and 10% to Devon Morris. The schedule of property was amended to delete certain bank accounts and savings bonds as "gone" and added new bank and individual retirement accounts. The schedule of property also substituted a 1998 Oldsmobile for the 1996 Mercury.[2]

         ¶ 7 Plaintiff filed a pro se complaint in 2013, in another action that is not the subject of this appeal, alleging that Reynolds's amendment to the trust was invalid. Defendant testified as a witness at the trial. The circuit court ruled against plaintiff, finding that Reynolds's handwritten amendment to the trust naming Taylor as the successor trustee was valid. The appellate court affirmed. McCarthy v. Taylor, 2014 IL App (1st) 132239. On September 26, 2014, plaintiff filed a petition for leave to appeal with this court. We denied leave to appeal. McCarthy v. Taylor, No. 118293 (Nov. 26, 2014).

         ¶ 8 On June 9, 2014, plaintiff filed a pro se five-count complaint, the subject of this appeal, against Taylor, in her capacity as trustee and individually, and defendant. In relevant part, plaintiff presented two counts against defendant: (1) alleging defendant breached his fiduciary duty to plaintiff as a beneficiary of the trust and (2) alleging defendant tortiously interfered with plaintiff's share of the trust by making false statements and presenting misleading evidence against him in the 2013 case. In response, defendant filed a combined motion to dismiss pursuant to section 2-619.1 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619.1 (West 2012)).

         ¶ 9 On February 27, 2015, the circuit court dismissed plaintiff's tortious interference claim with prejudice pursuant to section 2-619(a)(4) of the Code (735 ILCS 5/2-619(a)(4) (West 2012)) based on the doctrine of res judicata, because plaintiff's action essentially asked the circuit court to relitigate the issues determined in the 2013 case, namely, the veracity of the handwritten trust amendment. The court also dismissed plaintiff's breach of fiduciary duty claim but on the basis of his failure to present a sufficient claim pursuant to section 2-615 of the Code (735 ILCS 5/2-615 (West 2012)). Plaintiff was granted leave to amend his complaint on the breach of fiduciary duty claim.

         ¶ 10 On March 27, 2015, plaintiff filed an amended complaint containing one count against defendant for breach of fiduciary duty. Plaintiff alleged defendant had a duty to act with due care in providing plaintiff with services related to the trust. On August 25, 2015, the circuit court again dismissed plaintiff's claim against defendant, stating:

"McCarthy has not alleged any facts which would establish that Gray owed him a fiduciary duty. McCarthy has cited no legal authority for the proposition that a trust attorney owes a fiduciary duty to the trust's beneficiaries as a matter of law. Since McCarthy and Gray were not otherwise in privity, McCarthy would need to allege facts which would show his eligibility for an exception to the rule. However, McCarthy has failed to allege facts to support that any contract was entered into for his benefit, or the benefit of all the beneficiaries. Since McCarthy has failed to make any more than a bare-bones assertion that a fiduciary duty exists, he has not alleged the essential elements of his cause of action."

         ¶ 11 Defendant then filed a motion seeking sanctions under Illinois Supreme Court Rule 137 (eff. July 1, 2013), including an award for attorney fees and an award for costs, against plaintiff. In support of his request for sanctions, defendant alleged that plaintiff made false statements in his complaint and that he and plaintiff did not have an attorney-client relationship. Defendant requested sanctions in the amount of $11, 232.55 as a result of having to defend against "plaintiff's unfounded, fallacious and specious allegations and pleadings." Defendant later amended the sanction expense to $12, 106.03 for the time expended in defending against the case as of November 13, 2015.

         ¶ 12 The circuit court entered an order granting in part and denying in part defendant's motion for Rule 137 sanctions. The court found that plaintiff's cause of action against defendant for tortious interference was frivolous and, therefore, subject to Rule 137 sanctions. The court concluded, however, that sanctions were not appropriate for the breach of fiduciary duty claim. The circuit court later entered a corrected order clarifying that it found Rule 137 sanctions were warranted only for the tortious interference claim. The court entered a sanction award in defendant's favor for $9907.98, including $102.28 in costs for parking and postage fees.

         ¶ 13 Plaintiff appealed, contending that the circuit court erred in dismissing his tortious interference claim based on res judicata and issuing Rule 137 sanctions. Plaintiff also contended that the circuit court erred in awarding fees as a sanction against him in favor of defendant.

         ¶ 14 The appellate court affirmed the dismissal of plaintiff's tortious interference claim and its finding that plaintiff violated Rule 137 in filing that frivolous claim. However, the appellate court reversed the circuit court's finding that defendant was entitled to attorney fees and vacated that award on the basis that a pro se attorney is not entitled to receive attorney fees. 2018 IL App (1st) 162478. We allowed defendant's petition for leave to appeal. Ill. S.Ct. R. 315 (eff. Apr. 1, 2018).

         ¶ 15 ANALYSIS

         ¶ 16 Defendant, proceeding pro se, has elected to allow his petition for leave to appeal to stand as his brief in this case. Ill. S.Ct. R. 315(h) (eff. Apr. 1, 2018). Although plaintiff proceeded pro se in the circuit court, he subsequently retained counsel to represent him in the appeal process.

         ¶ 17 The issue in this appeal is whether a court may impose sanctions in the form of attorney fees under Illinois Supreme Court Rule 137(a) (eff. July 1, 2013) against a plaintiff to compensate an attorney defending himself against a frivolous cause of action. Interpretation of the Illinois Supreme Court rules is governed by the same principles as statutory interpretation. Lake Environmental, Inc. v. Arnold, 2015 IL 118110, ¶ 12; People v. Santiago, 236 Ill.2d 417, 428 (2010). Our goal is to ascertain and give effect to the drafters' intention. People v. Campbell, 224 Ill.2d 80, 84 (2006). This court begins our interpretation with the language of the rule, given its plain and ordinary meaning. People v. O'Brien, 197 Ill.2d 88, 90 (2001). When the language of the rule is clear and unambiguous, we will apply the rule as written without resort to further aids of statutory construction. O'Brien, 197 Ill.2d at 90-91. "The interpretation of a supreme court rule, like the interpretation of a statute, is a question of law that we review de novo." Santiago, 236 Ill.2d at 428. "[B]ecause Rule 137 is penal in nature, it is narrowly construed." Lake Environmental, 2015 IL 118110, ¶ 12.

         ¶ 18 Rule 137(a) provides, in relevant part:

"Every pleading, motion or other document of a party represented by an attorney shall be signed by at least one attorney of record in his individual name, whose address shall be stated. *** The signature of an attorney or party constitutes a certificate by him that he has read the pleading, motion, or other document; that to the best of his knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or in a good-faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. *** If a pleading, motion, or other document is signed in violation of this rule, the court, upon motion or upon its own initiative, may impose upon the person who signed it, a represented party, or both, an appropriate sanction, which may include an order to pay to the other party or parties the amount of reasonable expenses incurred because of the filing of the pleading, motion or other document, including a reasonable attorney fee." (Emphasis added.) Ill. S.Ct. R. 137(a) (eff. July 1, 2013).

         ¶ 19 The plain language of Rule 137 authorizes a court to impose sanctions against a party or counsel for filing a motion or pleading that is not well grounded in fact; that is not supported by existing law or lacks a good-faith basis for the modification, reversal, or extension of the law; or that is interposed for any improper purpose. It is settled that "[t]he purpose of Rule 137 is to prevent abuse of the judicial process by penalizing claimants who bring vexatious and harassing actions." Sundance Homes, Inc. v. County of Du Page, 195 Ill.2d 257, 285-86 (2001); see also In re Estate of Wernick, 127 Ill.2d 61, 77 (1989) (noting that the purpose of section 2-611 of the Code of Civil Procedure (Ill. Rev. Stat. 1983, ch. 110, ¶ 2-611), the predecessor to Rule 137, was to "penalize the litigant who pleads frivolous or false matters, or who brings a suit without any basis in the law"). In other words, the clear purpose of Rule 137 is to prevent the filing of false and frivolous lawsuits. Cult Awareness Network v. Church of Scientology International, 177 Ill.2d 267, 279 (1997).

         ¶ 20 Nothing in the plain language of Rule 137(a) precludes imposition of a sanction for filing of a frivolous lawsuit in the form of an award of fees in favor of a pro se defendant who is also an attorney. The committee comments to Rule 137 also contain no express intended prohibition on imposing a sanction against a plaintiff in the form of attorney fees for filing a frivolous lawsuit in favor of a party who is a pro se attorney. See Ill. S.Ct. R. 137, Committee Comments (adopted June 14, 2013). The parties have not cited any Illinois case, nor has our research revealed any Illinois case, where a court has considered whether a monetary sanction for violation of Rule 137(a) may include attorney fees for time spent by a pro se litigant who is an attorney defending against a plaintiff's frivolous pleadings. Thus, the issue here is one of first impression.

         ¶ 21 In this case, the appellate court relied on this court's decision in Hamer v. Lentz, 132 Ill.2d 49 (1989), to conclude that the circuit court did not have authority to grant attorney fees as a remedy under Rule 137. In Hamer, this court held that an attorney appearing pro se as the plaintiff in an action brought pursuant to the Freedom of Information Act (FOIA) (Ill. Rev. Stat. 1987, ch. 116, ¶ 201 et seq.) was not entitled to attorney fees. Hamer, 132 Ill.2d at 63. Notably, Hamer involved the fee-shifting provisions of the FOIA rather than sanctions under Rule 137.

         ¶ 22 In Hamer, we recognized that the purpose of the fee-shifting provision of the Illinois FOIA is to ensure its enforcement, and that "is accomplished by removing the burden of legal fees, which might deter litigants from pursuing legitimate FOIA actions." Hamer, 132 Ill.2d at 61-62. We explained that the fee-shifting provision was not "intended as either a reward for successful plaintiffs or as a punishment against the government" and that "legal fees do not present a barrier to a pro se lawyer seeking to obtain information." Hamer, 132 Ill.2d at 62. We also recognized that one of the goals of the Illinois FOIA fee-shifting provision "is to avoid unnecessary litigation by encouraging citizens to seek legal advice before filing suit." Hamer, 132 Ill.2d at 62. Additionally, we also opined that "[t]he most effective way to deter abusive fee generation" by unscrupulous lawyers "is to deny fees to lawyers representing themselves." Hamer, 132 Ill.2d at 62-63.

         ¶ 23 The appellate court acknowledged that there was no Illinois case law applying Hamer to a Rule 137 motion and that "the purpose of Rule 137 is, in relevant part, to curb the filing of frivolous pleadings." 2018 IL App (1st) 162478, ¶ 29. The appellate court further acknowledged that plaintiff's tortious interference claim "was undoubtedly a frivolous cause of action." 2018 IL App (1st) 162478, ¶ 29. Nevertheless, the appellate court ...


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