Knight v. Guzman

                                                  Second Division
                                                  August 5, 1997









No. 1-96-1817

TOBY KNIGHT,                            )    Appeal from the
                                        )    Circuit Court of
     Plaintiff-Appellee,                )    Cook County.
                                        )
     v.                                 )
                                        )
HECTOR GUZMAN,                          )    Honorable
                                        )    Edwin J. Richardson,
     Defendant-Appellant.               )    Judge Presiding.

     JUSTICE RAKOWSKI delivered the opinion of the court:
     Defendant Hector Guzman appeals from an order of the circuit
court of Cook County striking his rejection of an arbitration
award and entering judgment on the arbitration award in favor of
plaintiff Toby Knight.  We reverse and remand.
                                   FACTS
     Plaintiff brought a negligence action against defendant to
recover for injuries and damages sustained during a motor vehicle
collision.  The case was assigned to mandatory arbitration.  The
arbitration hearing took place on September 26, 1995.  All
parties were present.  The panel of arbitrators found in favor of
plaintiff and against defendant in the amount of $2,100.  There
was no finding that defendant's participation in the arbitration
hearing was in bad faith.
     On October 17, 1995, defendant filed a notice of rejection
of the arbitration award.  Plaintiff moved to strike defendant's
rejection and both parties filed briefs in support of their
positions.  On January 18, 1996, the court struck defendant's
rejection and entered judgment in favor of plaintiff and against
defendant in the amount of $2,100.  Defendant contends the trial
court erred in barring him from rejecting the arbitration award. 
He also contends the court erred in failing to award sanctions
under Supreme Court Rule 137 (155 Ill. 2d R. 137).
                                 ANALYSIS
                          A.  Right of Rejection
     "Under Illinois' rules, parties have the right of rejection-
-unless they are subjected to a sanction debarring rejection." 
Williams v. Dorsey, 273 Ill. App. 3d 893, 905 (1995).  Supreme
Court Rule 93 (145 Ill. 2d R. 93) governs the procedure for
rejecting an arbitration award.  The rule states in part that
"any party who was present at the arbitration hearing, either in
person or by counsel, may file with the clerk a written notice of
rejection of the award."  145 Ill. 2d R. 93(a).  However, "[t]he
filing of a notice of rejection shall not be effective as to any
party who is debarred from rejecting an award."  145 Ill. 2d R.
93(a).  Accordingly, it has been held that a trial court may
debar a party from rejecting an award as a sanction even if the
party or his attorney was present at the arbitration hearing. 
See State Farm Insurance Co. v. Gebbie, No. 1-96-2774, slip op.
at 5-6 (May 19, 1997); Smith v. Johnson, 278 Ill. App. 3d 387,
391-92 (1996); Williams, 273 Ill. App. 3d at 900-01.
     Supreme Court Rule 91 (145 Ill. 2d R. 91) governs the
absence and participation of a party at the arbitration hearing. 
Rule 91(a) provides that "[t]he failure of a party to be present,
either in person or by counsel, at an arbitration hearing shall
constitute a waiver of the right to reject the award and a
consent to the entry by the court of a judgment on the award." 
145 Ill. 2d R. 91(a).  Rule 91(b) states that "[a]ll parties to
the arbitration hearing must participate in the hearing in good
faith and in a meaningful manner."  145 Ill. 2d R. 91(b).  If a
party fails to participate in the hearing in good faith and in a
meaningful manner, a court may order sanctions, including an
order debarring that party from rejecting the award.  145 Ill. 2d
R. 91(b).
     The arbitrators' award in this case is devoid of any
reference to defendant's failure to participate in the hearing in
good faith and in a meaningful manner.  Further, a review of the
record gives no indication that defendant failed to participate
in good faith.  To be sure, the record shows that defendant was
present at the hearing, represented by counsel, and presented a
defense.  Even plaintiff acknowledged that defendant's alleged
bad faith was not at the arbitration hearing but, rather, that
defense counsel's customary rejection of other arbitration awards
is indicative of bad-faith participation in the arbitration
process.  The trial court agreed, finding that Rule 91 requires
good-faith participation in the entire arbitration process, not
just the hearing, so as not to abuse the arbitration process or
make it meaningless.
     The trial court went on to find that the rejection filed
pursuant to Rule 93 was not filed by defendant or his counsel who
was present at the arbitration hearing, but by an associate of
defense counsel's firm.  The court held that this was not a
meaningful rejection because the associate had no contact with
the arbitration process and that "[i]f the [Supreme] Court meant
the rejection could be signed by an associate attorney, the
Supreme Court would have said so."  Thus, adopting plaintiff's
argument, the trial court held defendant was debarred from
rejecting the award.
                              1.  Rule 91(b)
     Initially, we observe that Rule 91(b) specifically governs
good-faith participation in the arbitration hearing; not the
entire arbitration process.  What a party does outside the
hearing with regard to rejection of the award is beyond the scope
of Rule 91 sanctions.
     Recently, in Webber v. Bednarczyk, 287 Ill. App. 3d 458
(1997), the court held that, under Rule 91(b), there was no basis
for the trial court to debar the defendant from rejecting the
arbitration award.  In Webber, as in this case, there was no
finding by the arbitrators that the defendant failed to
participate in the hearing in good faith.  The plaintiff argued
that the defendant's conduct prior to the hearing was a basis to
debar the defendant from rejecting the award.  The trial court
agreed and debarred the defendant from rejecting the arbitration
award as a sanction under Rule 91(b).  The appellate court
reversed and remanded, holding:
          "Supreme Court Rule 91(b) does not provide
          for sanctions for what the parties do or do
          not do prior to an arbitration hearing.  The
          rule only concerns itself with what occurs
          during a hearing.  The rule attempts to
          ensure that all parties participate in a
          meaningful manner in an arbitration hearing. 
          The rule does not attempt to do anything
          more."  Webber, 287 Ill. App. 3d at 463.
     In addition, like plaintiff here, the plaintiff in Webber
argued that because the law firm representing the defendant had a
high rate of prior rejections, it was more probable than not that
the rejection of the instant award was not in good faith.  The
appellate court rejected this argument, noting that a law firm's
rejection of numerous arbitration awards is more appropriately
the subject of attorney disciplinary proceedings.
          "Supreme Court Rule 91(b) provides authority
          for sanctions only for bad[-]faith
          participation in the hearing and not for the
          party's bad faith in rejecting an arbitration
          award.  ***  Certainly the integrity of the
          arbitration system is threatened by
          unjustified rejection of arbitration awards,
          but Rule 91(b) sanctions are not available to
          punish that conduct."  Webber, 287 Ill. App.
          3d at 464.
     In light of the holding in Webber, we conclude that Rule
91(b) does not provide for sanctions for a party's rejection of
an arbitration award or as punishment for his representative law
firm's track record in rejecting numerous awards.
                              2.  Rule 93(a)
     We disagree with plaintiff's contentions that Rule 93(a)
only allows a party or his counsel who was actually present at
the arbitration hearing to file a rejection of an award and that
an associate of the law firm representing defendant, but who was
not present at the hearing, could not sign the notice of
rejection.
     The text of Rule 91(a), Rule 93(a), and the committee
comments make clear that it is the party's right to reject an
arbitration award and that only a party who is present at the
hearing in person or by counsel is eligible to reject an award. 
145 Ill. 2d R. 91(a).  The phrase "either in person or by
counsel" in Rule 93(a) and Rule 91(a) refers to the party's
presence at the hearing; it does not refer to who must file or
sign the notice of rejection.  Thus, consistent with the
provisions of Rule 91(a), defendant could elect to reject the
award pursuant to Rule 93(a) because he was present in person or
by counsel at the arbitration hearing.
     We also reject plaintiff's argument that defendant's notice
of rejection was improperly signed and filed by an associate of
the law firm representing defendant who was not present at the
arbitration hearing.  It is axiomatic that the employment of a
law firm is the employment of all members of that firm unless
there is a special understanding otherwise.  Smith v. Brittenham,
109 Ill. 540 (1884); Burton v. Estrada, 149 Ill. App. 3d 965, 972
(1986); Corti v. Fleisher, 93 Ill. App. 3d 517, 521 (1981).  In
this case, the law firm retained by defendant initially filed an
appearance on behalf of defendant.  After the arbitration
hearing, defendant elected to reject the arbitration award.  An
associate of the retained law firm acted on behalf of defendant
in a representative capacity and signed and filed defendant's
notice of rejection of the award.  Even though the associate was
not actually present at the hearing, he could properly file and
sign the notice of rejection on behalf of defendant where
defendant was present at the hearing either in person or by
counsel.
     Finally, Supreme Court Rule 95 (134 Ill. 2d R. 95) sets
forth the proper form of the notice of rejection and requires an
attorney certification.  The rule states that the notice of
rejection shall be in substantially the form provided. 
Defendant's notice of rejection is in substantial compliance with
the form provided in the rules.  It makes no difference in this
case that an associate of the law firm rather than the lead
attorney who was present at the hearing certified the rejection
after defendant elected to reject the award.  The certification
of a notice of rejection by an attorney who was not present at
the hearing, in and of itself, is not a cause for sanctions in
the form of debarment from rejection.
                          B.  Rule 137 Sanctions
     Defendant argues the trial court abused its discretion in
refusing to award sanctions pursuant to Supreme Court Rule 137
(155 Ill. 2d R. 137) for plaintiff's alleged failure to conduct
reasonable inquiry prior to filing pleadings in this case.  We
need not reach this issue because defendant withdrew his motion
for sanctions in the trial court.
                                CONCLUSION
     Because there was no basis for the trial court to debar
defendant from rejecting the award, the order of the court
striking the rejection is reversed and vacated.  The cause is
remanded for further proceedings.
     Reversed and remanded.
     DiVITO, P.J., and TULLY, J., concur.