Dunaway v. Ashland Oil, Inc.

• Decision Date: 03 October 1989
• Docket Number: No. 5-87-0792,5-87-0792
• Parties: , 136 Ill.Dec. 538 Scott DUNAWAY, et al., minors, Plaintiffs-Appellants, v. ASHLAND OIL, INC., et al., Defendants (Long, Rabin & Young, Ltd., Appellants; Douglas C. Lambert et al., Defendants-Appellees).
• Court: United States Appellate Court of Illinois

Page 1313

544 N.E.2d 1313

189 Ill.App.3d 106, 136 Ill.Dec. 538

Scott DUNAWAY, et al., minors, Plaintiffs-Appellants, v. ASHLAND OIL, INC., et al., Defendants (Long, Rabin & Young Ltd., Appellants; Douglas C. Lambert et al Defendants-Appellees).

No. 5-87-0792.

Appellate Court of Illinois,

Fifth District.

Oct. 3, 1989.

Duane D. Young, Long, Rabin & Young, Ltd., Springfield, and Paul J. Bargiel, P.C., Chicago, for Scott Dunaway.

Patrick J. Hitpas and T. Fritz Levenhagen, Patrick J. Hitpas P.C., Carlyle, for Douglas C. Lambert and Judy A. Lambert.

Justice CHAPMAN delivered the opinion of the court:

Plaintiffs brought a multi-count complaint against multiple defendants seeking recovery for personal injury, loss of consortium, and expenses, arising out of an explosion which occurred in Centralia, Illinois. On March 6th, 1987 summary judgment was granted in favor of the defendants, Douglas and Judy Lambert. On April 1st, 1987 the Lamberts filed a Motion for Attorney Fees and Costs pursuant to section 2-611 of the Code of Civil Procedure (Ill.Rev.Stat.1987, ch. 110, par. 2-611), against both the plaintiffs and their attorneys. Subsequently, plaintiffs filed a response to defendants' motion, and moved that attorney fees be assessed against the defendants under section 2-611. The circuit court denied plaintiffs' motion for section 2-611 sanctions, and granted defendants' motion for section 2-611 sanctions against plaintiffs' attorneys. On appeal plaintiffs challenge the court's order as to both section 2-611 rulings. The defendants have filed a motion to dismiss plaintiffs' appeal.

Defendants' motion to dismiss raises the issue of this court's jurisdiction of this appeal. Defendants cite the recent second district case of Sherman Hospital v. Wingren (1988), 169 Ill.App.3d 161, 119 Ill.Dec. 752, 523 N.E.2d 220, in support of their argument that since the trial court imposed section 2-611 sanctions only on plaintiffs' attorneys and not on plaintiffs themselves and that since the ruling did not prejudice any right of the plaintiffs and a reversal of the ruling would not benefit plaintiffs in any manner, plaintiffs lack standing to appeal the imposition of sanctions against their attorneys. Defendants concede that plaintiffs' attorneys would be entitled to raise the section 2-611 issue for appeal, but argue that since they failed to do so the appeal should be dismissed.

In Sherman, section 2-611 sanctions were imposed against defendants' attorneys at trial, and the defendants sought review of the trial court's imposition of a sanction. The appellate court refused to reach the merits of the issue, holding that defendants were not entitled to raise the issue of sanctions entered against their attorneys only. The court reasoned that the imposition of sanctions in that case did not prejudice any right of defendants nor would a reversal of the ruling benefit defendants in any way.

We decline to adopt the ruling of the Sherman court in the case at bar and agree instead with the ruling in Ignarski v. Heublein (1988), 171 Ill.App.3d 830, 121 Ill.Dec. 688, 525 N.E.2d 995. In that case attorney fees were assessed against a law firm representing a plaintiff in a personal injury action. The law firm's standing to appeal the judgment entered against it was questioned. In finding that the law firm had standing the court held that although the firm was a non-party to the lawsuit which gave rise to the judgment, it was evident that the judgment directly affected a pecuniary interest and that interest appears in the record on appeal. The court reasoned that a non-party is prejudiced or aggrieved in the legal sense when a legal right has been invaded or a pecuniary interest has been directly affected. (Ignarski, 171 Ill.App.3d 830, 833, 121 Ill.Dec. 688, 690, 525 N.E.2d 995, 997.) The non-party's interest must appear in the record or be alleged in the points relied on for reversal. Metropolitan Sanitary District ex rel O'Keeffe v. Ingram Corp., (1980), 85 Ill.App.3d 859, 865, 41 Ill.Dec. 129, 132, 407 N.E.2d 627, 631, quoting Almon v. American Carloading Corp. (1942), 380 Ill. 524, 530, 44 N.E.2d 592, 595.

In the instant case it is undeniable that plaintiffs' counsel has a direct pecuniary interest in this appeal. Sanctions under section 2-611 of the Code of Civil Procedure were assessed against plaintiffs' counsel, and the trial court specifically enjoined plaintiffs' attorneys from seeking or accepting reimbursement from the plaintiffs for the sanctions. It is clear that the judgment entered against counsel directly affected a pecuniary interest and this interest appears in the record on appeal. We find therefore, that counsel for the plaintiffs do have standing to prosecute the instant appeal.

We next address the issue of whether failure to join plaintiffs' counsel as party appellants to this appeal precludes this court from deciding the merits. Whenever a party has been omitted whose presence is so indispensable to a decision of the case upon its merits that a final decree cannot be made without materially affecting his interests, the court should not proceed to a decision on the merits. (Hobbs v. Pinnell (1959), 17 Ill.2d 535, 536, 162 N.E.2d 361, 362.) The requirement of "joinder" of necessary parties is absolute and inflexible and applies to trial courts as well as to appellate courts which have a duty to enforce this principle of law sua sponte as soon as it is brought to their attention. (Glickauf v. Moss (1974), 23 Ill.App.3d 679, 683, 320 N.E.2d 132, 136.) Section 2-407 of the Code of Civil Procedure provides:

" § 2-407. Nonjoinder and misjoinder of parties--Change of parties. No action shall be dismissed for misjoinder of parties or dismissed for nonjoinder of necessary parties without first affording reasonable opportunity to add them as parties. New parties may be added and parties misjoined may be dropped by order of court, at any stage of the cause, before or after judgment, as the ends of justice may require on terms which the court may fix."

It would be inappropriate for us to dismiss this appeal simply because plaintiffs' counsel was not joined as an indispensable party, since failure to join an indispensable party does not deprive a court of its jurisdiction over parties that are properly before it. Moenning v. Commonwealth Edison (1985), 134 Ill.App.3d 468, 472, 89 Ill.Dec. 684, 687, 481 N.E.2d 36, 39.

We note that the purpose of a notice of appeal is to inform the party in whose favor judgment has been rendered that the unsuccessful party desires a review of the judgment. Accordingly, the notice of appeal is to be liberally construed. (McMahon v. McMahon (1981), 97 Ill.App.3d 448, 450, 52 Ill.Dec. 941, 943, 422 N.E.2d 1150, 1152.) When the deficiency in the notice is one of form and not of substance, the appeal may still be entertained by the reviewing court. (In re Estate of Malloy (1981), 96 Ill.App.3d 1020, 1024, 52 Ill.Dec. 395, 399, 422 N.E.2d 76, 80; In re Estate of Kaluza (1978), 62 Ill.App.3d 267, 269, 19 Ill.Dec. 563, 564-65, 379 N.E.2d 78, 79-80.) The present notice of appeal attains its purpose and sufficiently apprises the defendants that plaintiffs' counsel seeks review of the imposition of section 2-611 sanctions. We mustn't forget that the requirements of notice are to be given a liberal application to make certain a case will be considered on the merits by the court of review. (Moenning, 134 Ill.App.3d 468, 471, 89 Ill.Dec. 684, 687, 481 N.E.2d 36, 39.) In this case there is no showing that the formal defect in not naming plaintiffs' counsel as party-appellant prejudiced defendants. We herewith join plaintiffs' counsel as party-appellants to this cause, and find that this court has jurisdiction to decide this appeal.

With the question of jurisdiction resolved, we turn to the substantive issues. Presented for our review is the question of whether the trial court erred in its rulings as to each party's motion for sanctions under section 2-611. We will first address the plaintiffs' argument that the trial court erred in ordering sanctions against plaintiffs' attorneys. Plaintiffs reason that no recognized action against plaintiffs' attorneys existed at the time the pleadings complained of were filed. The complaint in this case was filed August 14, 1986. On April 1, 1987 defendants filed their motion for attorney fees and costs alleging that the trial court entered summary judgment in their favor, that plaintiffs' complaint was not well-grounded in fact, and that had plaintiffs conducted an investigation of the facts of the case, defendants would not have been made party to the case and would not have incurred attorney fees or costs related to the defense of the case. Prior to November 25, 1986, section 2-611 of the Code of Civil Procedure provided, inter alia:

"Allegations and denials, made without reasonable cause and found to be untrue, shall subject the party pleading them to the payment of reasonable expenses, actually incurred by the other party by reason of the untrue pleading, together with a reasonable attorney's fee, to be summarily taxed by the court upon motion made within 30 days of the judgment or dismissal." (Ill.Rev.Stat.1985, ch. 110, par. 2-611.)

This version of section 2-611 was applicable only against parties, not their attorneys. (Ignarski v. Heublein (1988), 171 Ill.App.3d 830, 835, 121 Ill.Dec. 688, 690, 525 N.E.2d 995, 997; Evans v. Stoval (1980), 83 Ill.App.3d 257, 259, 38 Ill.Dec. 717, 719, 403 N.E.2d 1321, 1323.) It wasn't until the current version of section 2-611 became effective on November 25, 1986 that sanctions under the rule could be imposed on attorneys, as persons who sign pleadings, motions or other papers in violation of the statute. (Ill.Ann.Stat., ch. 110, par. 2-611, Supplement to Historical and Practice Notes, at 20 (Smith-Hurd 1988).) The question for our review is whether sanctions against a party's attorney may be imposed with...