In re Marriage of Schneider

Sixth Division
Filed: 06/30/98

No. 1-96-1822

IN RE THE MARRIAGE OF ) Appeal from the Circuit
) Court of Cook County
IRWIN SCHNEIDER, )
)
Petitioner/Appellant/Cross-Appellee, )
)
and )
)
PEGGY ODELL SCHNEIDER, )
)
Respondent, ) No. 91 D 12177
)
(BERNARD B. RINELLA, Esq., and )
WALTER J. MONCO, Esq., )
)
Appellants/Cross-Appellees, )
)
and )
)
ERNEST SEMERSKY, ) Honorable
) Richard S. Kelly,
Additional Party Defendant/Appellee/Cross-Appellant). ) Judge Presiding.

JUSTICE ZWICK delivered the opinion of the court:

Petitioner, Irwin Schneider, and his trial counsel, Bernard B. Rinella and Walter J.
Monco, appeal the trial court's imposition of sanctions against them pursuant to Supreme
Court Rule 137. Additional Party Defendant Ernest Semersky has filed a cross-appeal,
challenging the trial court's refusal to award a portion of the attorney fees requested in his
petition. We affirm the rulings of the trial court.
The record reveals that on August 2, 1991, petitioner Irwin Schneider filed a petition
for dissolution of marriage, alleging, inter alia, that respondent Peggy Odell Schneider had
engaged in an adulterous affair with Ernest Semersky. Thereafter, on December 16, 1991,
Irwin filed a second amended petition for dissolution. That petition named Semersky as an
additional party defendant and included an allegation as follows:
"19. That IRWIN strongly believes from statements made to him by
PEGGY and ERNEST SEMERSKY that PEGGY has transferred or caused to
be transferred certain marital and non-marital assets of the parties into the
possession of ERNEST SEMERSKY in order to defeat any interest in said
assets being held by ERNEST SEMERSKY which the Court on final
disposition of this cause may determine should be the property of IRWIN
SCHNEIDER."
In addition, the second amended petition sought imposition of a constructive trust upon
marital assets purportedly held by Ernest Semersky and requested an order requiring
Semersky to account for his management of those assets.
On December 30, 1991, Ernest Semersky filed a demand for a bill of particulars,
requesting, inter alia, that Irwin provide the following information:
"2. State in detail the specific statements alleged to be made to
petitioner Irwin Schneider by respondent and defendant Semersky concerning
the alleged transfer of property as complained of in paragraph 19 of Count II of
the Petition including, but not limited to:
a) the date of the statement;
b) the approximate time of the statement;
c) the place at which the statement was made;
d) the person who made the statement;
e) the content of the statement; and
f) identify any other persons present at the time that
the statement was made.
3. Identify each item of non-marital property alleged to be transferred
to defendant Semersky as complained of in paragraph 19 of Count II of the
Petition including the location of each item prior to the alleged transfer.
4. Identify each item of marital property alleged to be transferred to
defendant Semersky as complained of in paragraph 19 of Count II of the
Petition including the location of each item prior to the alleged transfer."
Irwin's response to the demand for a bill of particulars asserted that on January 1, 1991, and
on various other dates in March and April 1991, Peggy and Ernest made statements that
"Irwin should invest funds with Ernest who stated he could earn as much as 10 times the
amount which Irwin would invest with him." Irwin also identified several items of jewelry
and other personal property which "may have come into [Ernest's] possession." Finally, Irwin
asserted, on information and belief, that an unidentified sum of "marital funds" had been
transferred by Peggy to Ernest during 1991.
In his answer to the second amended petition for dissolution, Semersky denied each of
the allegations against him.
Both Irwin and Peggy were deposed in November 1992. During their depositions each
of the parties was asked several questions which specifically related to Ernest Semersky. On
three separate occasions, counsel for Irwin caused notices to issue for the deposition of
Semersky. However, on each of those occasions, the deposition was either postponed or
cancelled. Counsel for Irwin never sought to compel Ernest's appearance for the deposition.
The financial issues in the case were tried before the court in January 1993. After
three and one-half days of testimony, Irwin rested his case-in-chief, without offering any
evidence to support the allegations made against Semersky. At that time, Semersky brought a
motion for entry of judgment in his favor, which the trial court granted. The court also
retained jurisdiction over the matter in order to consider a petition by Semersky for Rule 137
sanctions based upon Irwin's assertion of claims which were not well grounded in fact or
predicated upon a reasonable inquiry.
Counsel for Semersky subsequently filed a petition pursuant to Supreme Court Rule
137, seeking costs, attorney fees, and sanctions against Irwin and his trial counsel, Bernard B.
Rinella and Walter J. Monco. Upon consideration of briefs and argument by all parties, the
trial court determined that Semersky was entitled to costs and fees incurred in the property
and financial portion of the case, but he was not entitled to any costs or fees incurred as a
result of his participation in the custody phase of the proceedings. The court ordered that
Semersky's attorney submit an amended petition and affidavit which deleted any entries
relating to the custody issue.
On January 9, 1996, the court entered an order which stated that all requirements for
the imposition of Rule 137 sanctions had been met and awarded Semersky costs and attorney
fees in the amount of $22,187.42. This order specifically found that Irwin had failed to
present a prima facie case on his claim against Semersky. In addition, the court found that
the pleadings directed against Semersky and signed by Irwin and his attorneys were not based
upon a reasonable inquiry prior to filing, were not well grounded in fact, and were in
violation of Supreme Court Rule 137.
On February 15, 1996, Irwin and his attorneys filed a motion for reconsideration of the
order entered January 9, 1996. The court denied this motion, and the instant appeal was filed
on May 16, 1996. Semersky filed a timely notice of cross-appeal on May 30, 1996,
challenging the denial of fees and costs incurred in his participation of the custody phase of
the proceedings.
We initially address the argument by Irwin and his attorneys that the trial court
committed reversible error in failing to make sufficiently specific findings to justify the
imposition of sanctions in this case. We find this argument unpersuasive.
Rule 137 provides that when sanctions are imposed under the rule, the judge shall set
forth with specificity the reasons and basis of any sanction so imposed either in the judgment
order itself or in a separate written order." See 155 Ill. 2d R. 137. This requirement has been
interpreted to require trial courts to make explicit factual findings as to the reasons for the
imposition of sanctions. See Airolen Capital Ventures v. Petri, 265 Ill. App. 3d 80, 82-83,
637 N.E.2d 1256 (1994); Bertuli v. Gaull, 215 Ill. App. 3d 603, 605, 574 N.E.2d 1390 (1991).
The specific factual basis of the court's decision is necessary to enable the reviewing 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. North Shore Sign
Co. v. Signature Design Group, Inc., 237 Ill. App. 3d 782, 790-91, 604 N.E.2d 1157 (1992);
In re Estate of Smith, 201 Ill. App. 3d 1005, 1009-10, 559 N.E.2d 571 (1990). Merely
reciting the language of the rule is insufficient to satisfy the requirement of specificity.
Bertuli, 215 Ill. App. 3d at 605.
The only allegation against Semersky which related to property or financial issues was
contained in paragraph 19 of Count II of the second amended petition for dissolution. The
substance of that paragraph alleged that Peggy had transferred to Semersky certain marital and
non-marital assets in order to defeat Irwin's interest therein.
At the August 3, 1995, hearing on Semersky's petition for sanctions, the trial judge
specifically addressed the obligation of the petitioner to conduct a pre-filing investigation. In
response to the court's inquiries, neither Irwin nor his attorneys offered any explanation as to
what investigation had been made prior to the filing of the second amended petition. Rather,
counsel for Irwin argued only that Rule 137 sanctions were inappropriate in this case, where
Semersky had refused to comply with pre-trial discovery requests. The court replied, stating,
"under Rule 137, you were to have made an investigation before filing a document.
Therefore, that investigation would -- you could have put that proof in, at least. *** [E]ven
if discovery was not forthcoming, there had to be evidence, or should have been evidence,
that warranted the filing of the complaint in the first place, and that evidence was, presumably
-- that evidence was in your control prior to any discovery, and that evidence, therefore, could
have been put in, even if discovery were not complied with."
As noted above, the order entered by the trial court on January 9, 1996, specifically
found that Irwin had failed to present a prima facie case on his claim against Semersky,
explicitly referring to the complete lack of evidence at trial in support of the allegations
contained in paragraph 19 of Count II of the second amended petition. In addition, the court
found that the pleadings directed against Semersky and signed by Irwin and his attorneys
were not based upon a reasonable inquiry prior to filing and were not well grounded in fact.
Thus, the order clearly and adequately stated the basis for finding a Rule 137 violation. See
Koch v. Carmona, 268 Ill. App. 3d 48, 53-54, 643 N.E.2d 1376 (1994). We find that the trial
court's order awarding Rule 137 sanctions articulated sufficiently specific factual findings to
support the imposition of sanctions. Therefore, we will not reverse the ruling of the trial
court on this ground.
We next consider the assertion that the trial court erred in imposing sanctions where
Semersky failed to establish that Irwin made false allegations without reasonable cause.
Supreme Court Rule 137 allows a court to impose sanctions against a party or counsel who
files a pleading or motion that is not well grounded in fact, is not warranted by existing law
or a good-faith argument for the extension, modification, or reversal of existing law, or is
interposed for any improper purpose. 155 Ill. 2d R. 137. The rule serves to penalize the
litigant or attorney who pleads false or frivolous matters, or who brings suit without any basis
in the law. In re Estate of Wernick, 127 Ill. 2d 61, 77, 535 N.E.2d 876 (1989); Senese v.
Climatemp, Inc., 289 Ill. App. 3d 570, 581, 682 N.E.2d 266 (1997); Swanson v. Cater, 258
Ill. App. 3d 157, 162, 630 N.E.2d 193 (1994). Rule 137 imposes an affirmative duty on
attorneys and litigants alike to conduct an investigation of the facts and the law before filing
an action, pleading, or other paper. O'Brien & Associates, P.C. v. Tim Thompson, Inc., 274
Ill. App. 3d 472, 482, 653 N.E.2d 956 (1995); Couri v. Korn, 202 Ill. App. 3d 848, 855, 560 N.E.2d 379 (1990).
The determination of whether to impose sanctions rests within the sound discretion of
the trial court and that decision is entitled to great weight and will not be disturbed on review
absent an abuse of discretion. Yassin v. Certified Grocers of Illinois, Inc., 133 Ill. 2d 458,
467, 551 N.E.2d 1319 (1990); Senese, 289 Ill. App. 3d at 581-82; Doe v. Roe, 289 Ill. App.
3d 116, 131, 681 N.E.2d 640 (1997); Bennett & Kahnweiler, Inc. v. American National Bank
& Trust Co., 256 Ill. App. 3d 1002, 1007, 628 N.E.2d 426 (1993). The standard for
evaluating a party's conduct under this rule is one of reasonableness under the circumstances
existing at the time the pleading was filed. Bennett & Kahnweiler, Inc., 256 Ill. App. 3d at
1007. A trial court is said to exceed its discretion regarding the imposition of sanctions under
Rule 137 only where no reasonable person would take the view adopted by it. Senese, 289
Ill. App. 3d at 582; Board of Library Trustees v. Cinco Construction, Inc., 276 Ill. App. 3d
417, 426, 658 N.E.2d 473 (1995).
A party seeking the imposition of Rule 137 sanctions against an opponent is the
burdened party (Yassin, 133 Ill. 2d at 467), and a hearing is necessary to determine whether
any untrue statement within a pleading was made without reasonable cause, unless the court's
determination of the issue can be made on the basis of the pleadings or trial evidence.
Century Road Builders, Inc. v. City of Palos Heights, 283 Ill. App. 3d 527, 531, 670 N.E.2d 836 (1996). See also In re Estate of Smith, 201 Ill. App. 3d 1005, 559 N.E.2d 571 (1990);
Beno v. McNew, 186 Ill. App. 3d 359, 542 N.E.2d 533 (1989).
Here, the trial court clearly did not abuse its discretion in imposing Rule 137
sanctions. As previously stated, when questioned by the court at the Rule 137 hearing,
neither Irwin nor his attorneys offered any indication that a pre-filing investigation had been
conducted to support the allegations against Semersky. In addition, Irwin's response to
Semersky's demand for a bill of particulars indicated only that on various dates in the winter
and spring of 1991, Peggy and Ernest made statements that "Irwin should invest funds with
Ernest who stated he could earn as much as 10 times the amount which Irwin would invest
with him." Irwin also identified several items of jewelry and other personal property which
"may have come into [Ernest's] possession. Finally, Irwin asserted, on information and belief,
that an unidentified sum of "marital funds" had been transferred by Peggy to Ernest during
1991. These answers establish that, at the time the petition was filed, Irwin and his counsel
lacked a factual basis to support the claim asserted in paragraph 19. In addition, it is
abundantly clear that neither Irwin nor his counsel endeavored to conduct a reasonable inquiry
prior to filing the petition naming Semersky as an additional party defendant. Indeed, it
appears that they did not engage in even a minimal investigation of the claims against
Semersky before filing suit.
In our view it is beyond dispute that imposition of sanctions is appropriate where a
defendant is required to endure unnecessary litigation and incur needless expense due to the
plaintiff's violation of rule 137 by filing of unsubstantiated pleadings based upon allegations
which were never subjected to a reasonable inquiry. See Rios v. Valenciano, 273 Ill. App. 3d
35, 652 N.E.2d 416 (1995); Swanson, 258 Ill. App. 3d at 162-63. Accordingly, we find no
abuse of discretion by the trial court.
We also reject the contention that the court erred in imposing Rule 137 sanctions
because that result serves to punish Irwin for electing not to compel compliance with
discovery. Semersky's refusal to appear for his deposition or to otherwise comply with
discovery is irrelevant to the issue of whether it was appropriate to impose Rule 137 sanctions
against Irwin and his counsel. As the trial court recognized, Irwin and his trial counsel were
obligated to conduct a pre-filing investigation to assess whether there was a sufficient factual
basis on which to premise the claim contained in paragraph 19. Semersky's subsequent lack
of cooperation cannot be asserted as justification or explanation for the prior filing of the
second amended petition without the requisite investigation. Consequently, we find no error.
In his cross-appeal, Semersky challenges the trial court's refusal to award attorney fees
and costs for the custody phase of the proceedings. In support of this claim, Semersky relies
primarily upon the opinions in Rios v. Valenciano, 273 Ill. App. 3d 35, 652 N.E.2d 416
(1995), and in Ashley v. Scott, 266 Ill. App. 3d 302, 640 N.E.2d 677 (1994), where the court
held it was an abuse of discretion to deny sanctions for the entire proceedings. We find,
however, that those decisions were premised upon facts which are radically different from
those presented in the case at bar. Here, the trial court conducted a bifurcated proceeding,
hearing the issues of custody and property separately. Thus, Semersky and his counsel were
well aware that the hearings on the issue of custody did not involve either actual or potential
claims against Semersky. As a result, his appearance at those proceedings and the presence
of his attorney were neither mandatory nor necessary in order to protect his interests. See
generally In re B.A., 283 Ill. App. 3d 930, 933, 671 N.E.2d 69 (1996).
Rule 137 vests the trial court with broad discretion in imposing a sanction which is
appropriate. See Bachmann v. Kent, 293 Ill. App. 3d 1078, 1086, 689 N.E.2d 171 (1997).
We hold that the trial court correctly determined that Semersky was not entitled to fees for
that portion of the proceedings which involved custody of the minor children.
Finally, we address Semersky's claim that he is entitled to an award of fees for
defending the instant appeal.
Supreme Court Rule 375(b) (155 Ill. 2d R. 375(b)) provides that if the court
determines that an appeal is frivolous, or that it is not taken in good faith, it may impose an
appropriate sanction, including reasonable attorney fees. If, under an objective standard of
conduct, a reasonably prudent attorney in good faith could have brought the appeal, a request
for sanctions will be denied. Bank of Chicago v. Park National Bank, 277 Ill. App. 3d 167,
174, 660 N.E.2d 19 (1995); Ben Franklin Financial Corp. v. Davis, 226 Ill. App. 3d 414,
421-22, 589 N.E.2d 857 (1992). We deny Semersky's request for appellate fees because we
find that, under an objective standard of conduct, a reasonably prudent attorney acting in good
faith could have brought this appeal.
For the foregoing reasons, the judgment of the circuit court is affirmed, and
Semersky's request for appellate fees is denied.
AFFIRMED.
GREIMAN, J., and QUINN, J., concur.