Lake Environmental, Inc. v. Arnold

                                  Illinois Official Reports

                                          Appellate Court



                  Lake Environmental, Inc. v. Arnold, 

2014 IL App (5th) 130109

Appellate Court              LAKE ENVIRONMENTAL, INC., Plaintiff-Appellant, v. DAMON
Caption                      T. ARNOLD, in His Capacity as Director of Public Health, and THE
                             DEPARTMENT OF PUBLIC HEALTH, Defendants-Appellees.



District & No.               Fifth District
                             Docket No. 5-13-0109



Filed                        July 10, 2014



Held                         Pursuant to well-established appellate court precedent, the trial court’s
(Note: This syllabus         denial of a request for sanctions against the Director of the Department
constitutes no part of the   of Public Health pursuant to Supreme Court Rule 137 in an action
opinion of the court but     arising from an asbestos removal project was vacated and the cause
has been prepared by the     was remanded to the trial court with directions to enter an order on
Reporter of Decisions        plaintiff’s motion describing with specificity the reasons for the
for the convenience of       court’s ruling, since specific reasons must be set forth in a ruling on
the reader.)                 such a motion, regardless of whether sanctions are granted or denied.




Decision Under               Appeal from the Circuit Court of St. Clair County, No. 11-MR-226;
Review                       the Hon. Stephen P. McGlynn, Judge, presiding.



Judgment                     Order reversed; cause remanded with directions.
     Counsel on               David L. Antognoli and Anthony Catalfamo, both of Goldenberg,
     Appeal                   Heller, Antognoli & Rowland, P.C., of Edwardsville, for appellant.

                              Lisa Madigan, Attorney General, of Chicago (Michael A. Scodro,
                              Solicitor General, and Laura Wunder, Assistant Attorney General, of
                              counsel), for appellees.




     Panel                    JUSTICE SPOMER delivered the judgment of the court, with opinion.
                              Presiding Justice Welch and Justice Chapman concurred in the
                              judgment and opinion.




                                               OPINION

¶1         Following protracted litigation at the administrative and circuit court levels, on July 3,
       2012, the plaintiff, Lake Environmental, Inc., filed a motion, pursuant to Illinois Supreme
       Court Rule 137 (eff. Feb. 1, 1994), for sanctions against the defendants, LaMar Hasbrouck,
       in his capacity as Director of Public Health,1 and the Illinois Department of Public Health
       (IDPH). The motion was denied, and the plaintiff now appeals. For the following reasons, we
       reverse the order of the circuit court and remand with directions.

¶2                                                FACTS
¶3         As noted above, this case comes to us after protracted litigation. Accordingly, we shall
       put forth succinctly only those facts necessary to an understanding of our ruling on appeal.
       On February 18, 2008, IDPH issued a “notice of emergency work stop order” to the plaintiff,
       halting the plaintiff’s work on an asbestos removal project at Scott Air Force Base. On
       September 18, 2008, IDPH moved for voluntary dismissal of the emergency stop work order
       proceedings on mootness grounds. The following day, former defendant Damon T. Arnold,
       in his then-capacity as Director of IDPH, granted, with prejudice, the motion for voluntary
       dismissal. On March 25, 2010, IDPH sent the plaintiff a notice of intent to revoke the
       plaintiff’s asbestos contractor’s license, alleging as the basis for revocation noncompliance
       by the plaintiff with applicable laws and regulations, all related to the Scott Air Force Base
       project in 2008. Administrative proceedings followed, and ultimately, on July 28, 2011,
       Arnold issued a final administrative decision that revoked the plaintiff’s license. This
       complaint for administrative review of that decision was filed in the circuit court on August
       30, 2011.

             1
            Damon T. Arnold was the Director when this action commenced. He has since been replaced by
       Director LaMar Hasbrouck, who has been substituted as a party by operation of law. See 735 ILCS
       5/2-1008(d) (West 2010).

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¶4       On July 26, 2010, during the pendency of the administrative proceedings described
     above, IDPH initiated an action for civil penalties and injunctive relief against the plaintiff in
     the circuit court of St. Clair County, also on the basis of the alleged violations during the
     Scott Air Force Base project in 2008. On September 19, 2011, the trial judge in that case
     dismissed the civil penalties complaint, with leave to refile. Subsequently, in this case, on
     April 25, 2012, the same trial judge ordered IDPH to reinstate the plaintiff’s license pending
     his decision on the merits. On June 4, 2012, the judge entered an order that, inter alia,
     reversed the revocation of the plaintiff’s license and remanded for “further proceedings to
     determine whether or not” the plaintiff’s license “should be suspended or revoked.” On July
     3, 2012, the plaintiff filed a motion for sanctions pursuant to Illinois Supreme Court Rule 137
     (eff. Feb. 1, 1994). On July 24, 2012, a hearing was held on the motion, and at the conclusion
     of the hearing, the same trial judge took the matter under advisement and told the parties that
     a written decision would follow. On November 26, 2012, the judge entered an order which
     stated, in full, “Plaintiff’s request for sanctions pursuant to Rule 137 is denied.” The plaintiff
     filed a motion to reconsider the denial of sanctions, which was heard by a different judge, as
     the initial trial court judge was no longer on the bench. The motion to reconsider, which
     noted, inter alia, the lack of an explanation for the denial of sanctions, was denied on
     February 7, 2013, again without explanation, and this timely appeal followed.

¶5                                             ANALYSIS
¶6       As a threshold matter, we note that the defendants contend this court does not have
     jurisdiction over this appeal. As they correctly note, this court has a duty to consider its
     jurisdiction and to dismiss any appeal over which it determines that no jurisdiction exists.
     See, e.g., Peabody Coal Co. v. Industrial Comm’n, 

307 Ill. App. 3d 393, 395

 (1999). The
     defendants point out that, in general, when the circuit court reverses an administrative
     agency’s decision and remands the matter for further proceedings by that agency, the circuit
     court’s order is not final for purposes of appellate jurisdiction. See, e.g., Edmonds v. Illinois
     Workers’ Compensation Comm’n, 

2012 IL App (5th) 110118WC, ¶ 19

. “However, if, on
     remand, the agency has only to act in accordance with the directions of the court and conduct
     proceedings on uncontroverted incidental matters or merely make a mathematical
     calculation, then the order is final for purposes of appeal.” 

Id.

 In the case at bar, the
     defendants contend the trial judge’s June 4, 2012, order “appears patently non-final by
     ordering a remand that authorizes more than ministerial action.” The plaintiff counters that:
     (1) the order fully adjudicated all issues, found without merit IDPH’s purported justifications
     for revoking the plaintiff’s license, and therefore left IDPH with no discretion on remand and
     no choice but to reinstate the plaintiff’s license, and (2) in any event, by the time the trial
     judge ruled on the plaintiff’s request for sanctions, the remand had been completed and the
     plaintiff’s license had been reinstated. We agree with the plaintiff with regard to both counts
     and conclude we have jurisdiction over this appeal. Accordingly, we now turn to the
     arguments of the parties.
¶7       On appeal, the plaintiff contends that the trial judge’s one-sentence order–which, as noted
     above, states in full, “Plaintiff’s request for sanctions pursuant to Rule 137 is denied”–should
     be reversed and this cause should be remanded because the order provides no explanation for
     the judge’s decision to deny the plaintiff’s request for sanctions and because the trial judge
     provided no basis orally for his ruling, instead taking the matter under advisement at the

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     conclusion of the hearing and telling the parties a written decision would follow. We agree.
     As the plaintiff notes, our colleagues in the Second District have long held, in a
     well-reasoned line of decisions that stretches back to 1992, that when a trial judge rules on a
     motion for sanctions pursuant to Rule 137, that judge must provide specific reasons for his or
     her ruling, regardless of whether sanctions are granted or denied. In In re Estate of Smith,
     

201 Ill. App. 3d 1005, 1009

 (1990), our colleagues in the Third District acknowledged the
     long-standing rule that “[t]he decision whether to impose sanctions [pursuant to Rule 137] is
     within the sound discretion of the trial judge and will not be reversed on appeal absent an
     abuse of discretion,” but noted that “the predicate to such deference is that the circuit court
     make an informed and reasoned decision.” The Smith court noted that for such a decision to
     occur, the trial judge should hold a hearing on the motion for sanctions. 

Id.

 Following that
     hearing, the decision rendered–either orally or in writing–with regard to sanctions “needs to
     clearly set forth the factual basis for the result reached.” 

Id.

 That is because upon review it is
     the function of this court to determine “whether (1) the circuit court’s decision was an
     informed one, (2) the decision was based on valid reasons that fit the case, and (3) the
     decision followed logically from the application of the reasons stated to the particular
     circumstances of the case.” 

Id. at 1010

. The Smith court noted that “[f]or a court of review to
     enter its decision without benefit of the trial court’s explicit findings tends to establish too
     many ad hoc rules of law as to the correct result in any given case.” 

Id.

 Accordingly, the
     court vacated the trial court’s order and remanded with directions that the trial court hold a
     hearing and then “set forth on the record and with specificity the reasons for its decision.” 

Id.

¶8       Two years later, our colleagues in the Second District issued the first in their line of
     decisions on this issue, North Shore Sign Co. v. Signature Design Group, Inc., 

237 Ill. App. 3d 782

 (1992). Therein, the court cited Smith with approval and added reasoning that is
     particularly relevant to a case with as complicated a history as the instant one: “A reviewing
     court should not be put in the position of making the trial court’s findings” and “should not
     be required to speculate as to which of the determinative facts and legal theories the trial
     court relied on in deciding” whether to allow or deny sanctions. 

Id. at 791

. The following
     year, in Heiden v. Ottinger, 

245 Ill. App. 3d 612, 621-22

 (1993), the court held that even
     when a hearing on a Rule 137 motion has been held, if the trial judge fails to make specific
     findings that articulate the reasons for his or her decision to deny sanctions, the judge’s order
     must be vacated and the cause remanded for further proceedings. Subsequently, in O’Brien &
     Associates, P.C. v. Tim Thompson, Inc., 

274 Ill. App. 3d 472, 482-83

 (1995), the court
     rejected the notion that an explanation is required only when sanctions are granted, instead
     holding that the trial court “must set forth the reasons and basis for its decision” regardless of
     whether the court “imposes or declines to impose Rule 137 sanctions.” That is because
     “[w]ere a trial court not obliged to make explicit the legal or factual basis for its decision not
     to impose sanctions, the foundation for valid appellate review *** would crumble” and
     appellate review “would become an ad hoc, inconsistent, and speculative affair.” 

Id. at 483

.
     Likewise, in Kellett v. Roberts, 

281 Ill. App. 3d 461, 464-65

 (1996), the court found the
     following vagueness from a trial judge to be inadequate: “ ‘Rule 137, that’s within the
     discretion of the court to award or not to award. I’m exercising that discretion in this case. I
     will not award Rule 137 [sanctions] ***.’ ” The Kellett court reversed the trial judge’s
     decision and remanded for further proceedings. 

Id. at 465

.



                                                 -4-
¶9         Rather than addressing the reasoning found in this body of law, the defendants instead
       choose to refer to it as “preferred practice” and point to three decisions that they claim allow
       a trial judge to deny a motion for sanctions pursuant to Rule 137 without providing any
       justification for so ruling. The first decision cited by the defendants, Yunker v. Farmers
       Automobile Management Corp., 

404 Ill. App. 3d 816, 824

 (2010), does not even mention the
       extensive body of law described above, nor does it provide any explanation for its deviation
       therefrom; accordingly, it is utterly unpersuasive. In the second decision cited by the
       defendants, Elledge v. Reichert, 

250 Ill. App. 3d 1055, 1061-62

 (1993), our colleagues in the
       Fourth District concluded that under the plain language of Rule 137, reasons must only be
       given when sanctions are granted, not when they are denied. Elledge, however, predated the
       development of most of the body of law described above and presents no compelling analysis
       or reasoning that would support deviating from that body of law; moreover, the Elledge court
       expressly found that although the trial court in that case did not articulate in its written order
       its reasons for denying sanctions, the trial court did articulate those reasons orally at the
       conclusion of the hearing on the Rule 137 motion and that the reasoning was therefore
       reviewable by the appellate court based upon the transcript of that hearing. 

Id. at 1061

. The
       third decision cited by the defendants, Shea, Rogal & Associates, Ltd. v. Leslie Volkswagen,
       Inc., 

250 Ill. App. 3d 149, 155

 (1993), also predates most of the body of law described above
       and again provides no compelling reasoning or analysis that would justify deviating from that
       body of law. Moreover, although the Shea court held that no explanation is required when
       sanctions are denied, it, like the Elledge court, found that in the case before it, an explanation
       for denial was given, specifically, “a finding that no frivolous pleadings were filed.” 

Id.

 We
       find the reasoning put forward by our colleagues in the Second District over the last 22 years
       to be far more persuasive than anything found in Yunker, Elledge, or Shea, and hereby adopt
       the view taken in the Second District cases. Because the trial judge in the case at bar
       provided no explanation for his denial of sanctions, his order must be reversed and this cause
       remanded.

¶ 10                                         CONCLUSION
¶ 11      For the foregoing reasons, we reverse the order of the circuit court of St. Clair County
       and remand with directions for the circuit court to enter an order ruling on the plaintiff’s
       motion for sanctions, said order to describe, with specificity, the reasons for so ruling.

¶ 12      Order reversed; cause remanded with directions.




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