Panel Built, Inc. v. De Kalb Cnty.
| Decision Date | 22 February 2019 |
| Docket Number | No. 2-18-0334,2-18-0334 |
| Parties | PANEL BUILT, INC., Plaintiff-Appellant and Cross-Appellee, v. DE KALB COUNTY, Illinois, the De Kalb County Public Buildings Commission, and Aggressive Industrial Services, Defendants (De Kalb County, Illinois, and The De Kalb County Public Buildings Commission, Defendants-Appellees and Cross-Appellants). |
| Court | United States Appellate Court of Illinois |
Geoffrey A. Bryce and Tina M. Paries, of Bryce Downey & Lenkov, LLC, of Chicago, for appellant.
Richard D. Amato, State’s Attorney, of Sycamore (David J. Berault, Assistant State’s Attorney, of counsel), for appellees.
¶ 1 This appeal arises from the circuit court of De Kalb County's grant of the amended motion for sanctions filed by plaintiff, Panel Built, Inc., against defendants, De Kalb County and the De Kalb County Public Buildings Commission. The circuit court denied plaintiff's original motion for sanctions against defendants, and plaintiff appealed. We affirmed in part, vacated in part, and remanded. Panel Built, Inc. v. De Kalb County (Panel Built I ), 2016 IL App (2d) 150574-U, 2016 WL 1079144, ¶ 36. On remand, approximately 17 months after our mandate issued, plaintiff filed an amended motion for sanctions and the circuit court granted some but not all of the attorney fees and costs requested. Plaintiff now appeals the amount awarded and defendants cross-appeal, contending that the amended motion was untimely. For the reasons herein, we affirm in part, reverse in part, and remand.
¶ 3 The facts giving rise to this litigation began in the summer of 2009, and we summarized these facts in Panel Built I . In August 2009, defendants contracted with Aggressive Industrial Services (AIS) to construct a two-story storage system for a community outreach building, but they never obtained a valid performance-and-payment bond for the project, as required by the Public Construction Bond Act (Bond Act) ( 30 ILCS 550/0.01 et seq. (West 2008) ). Panel Built I , 2016 IL App (2d) 150574-U, ¶¶ 4-5. AIS contracted with plaintiff to work on the storage system. Id. ¶ 5. Plaintiff completed its work and defendants paid AIS, but AIS did not pay plaintiff. Id. ¶ 6.
¶ 4 Plaintiff filed its complaint against defendants and AIS1 on August 12, 2011. Plaintiff alleged four counts: (1) foreclosure of a mechanic's lien, (2) violation of the Bond Act, (3) violation of the Mechanics Lien Act ( 770 ILCS 60/5 (West 2008) ), and (4) breach of contract. Throughout a large part of the litigation, defendants did not inform plaintiff that AIS never posted a bond. Panel Built I , 2016 IL App (2d) 150574-U, ¶ 7. Correspondence from November 2010 between the deputy county commissioner and the architect for the building project showed that defendants never requested a bond from AIS. Id. Moreover, then-Assistant State's Attorney John Farrell, representing defendants, told plaintiff that a bond had in fact been obtained. Id. Farrell sent plaintiff partial copies of a bond that had been returned to AIS, and he represented that those copies were the actual bond for building the project. Id. He also engaged in unauthorized settlement negotiations. Farrell later left the State's Attorney's office and was subject to attorney disciplinary proceedings related in part to his misconduct in this litigation.2 Id.
¶ 5 Of particular importance to this case, Farrell signed the following responses to requests to admit:
In addition, defendants admitted that construction of the community outreach building was a public work that cost over $ 5000. The responses were filed with the court on March 8, 2012.
¶ 6 Plaintiff filed its first amended complaint on August 6, 2012. It added a fifth and sixth count for quantum meruit and estoppel, respectively. Defendants, through Farrell, answered that they lacked sufficient knowledge or information about whether AIS canceled its bond or whether they failed to obtain a bond.
¶ 7 Defendants eventually removed Farrell from the case. Their new counsel admitted in their February 13, 2013, motion to dismiss that there was no bond, contrary to prior assertions. Plaintiff moved for sanctions under Illinois Supreme Court Rule 137 (eff. July 1, 2013). The circuit court denied both defendants' motion to dismiss and plaintiff's motion for sanctions on October 23, 2013.
¶ 8 Defendants then moved for summary judgment on counts II (Bond Act) and III (Mechanics Lien Act), on January 9, 2014. The court granted defendants summary judgment on count III on February 20, 2014. It denied summary judgment on count II and granted plaintiff leave to replead count II as for breach of contract.
¶ 9 Plaintiff repled count II as for breach of contract in its second amended complaint on June 5, 2014, and it moved for summary judgment. The circuit court granted it summary judgment on count II on December 19, 2014, finding that defendants had violated the Bond Act by failing to obtain a bond. It also granted plaintiff leave to move for sanctions.
¶ 10 Plaintiff filed a postjudgment motion for prejudgment interest on January 14, 2015, and it filed a renewed motion for Rule 137 sanctions on February 2, 2015. It alleged that sanctions were appropriate due to Farrell's misconduct, including on the responses to plaintiff's requests to admit and the answer to its amended complaint. Plaintiff did not specify the amount of fees or costs resulting from the misconduct but instead sought fees and costs expended in connection with prosecuting the case. Defendants responded that Rule 137 applied only to documents filed with the court and not to general attorney misconduct, and they further argued that plaintiff failed to specify the amount of fees incurred as a result of any misconduct.
¶ 11 The circuit court denied both the motion for sanctions and the motion for prejudgment interest on May 4, 2015. The court found that, although plaintiff was the victim of wrongful and vexatious acts by defendants through Farrell, Farrell's actions were not subject to Rule 137. The court also found that defendants' argument on summary judgment that a bond was not required, although not successful, was not made for an improper purpose. The court did not address plaintiff's failure to specify the amount of fees sought.
¶ 13 Plaintiff appealed the circuit court's denial of its motion for sanctions. We found that the circuit court did not address Farrell's misconduct with respect to defendants' responses to plaintiff's requests to admit or their answer to its complaint. Id. ¶ 20. The misrepresentations about the bond in those documents filed with the court were subject to Rule 137 sanctions, and therefore the circuit court erred when it found that none of Farrell's misconduct was within the scope of Rule 137. Id. ¶¶ 20-21. While plaintiff did not specify the amount of fees sought, we explained that the circuit court had the discretion to permit an amendment to that effect. Id. ¶ 25. The circuit court never exercised that discretion, however, because it initially determined that none of the misconduct was subject to Rule 137. Id. Thus, because the circuit court's initial determination was error, we vacated the denial of sanctions and remanded the cause. Id. ¶ 26. We noted that on remand the circuit court had the discretion to allow plaintiff to file an amended motion specifying the amount of fees sought. Id.
¶ 15 Our mandate was filed with the circuit court on August 16, 2016. Plaintiff filed its amended motion for sanctions against defendants on January 25, 2018, based on their misrepresentations about securing a bond. Plaintiff sought all of its attorney fees and costs incurred in prosecuting the case, which amounted to $ 127,478.80 in attorney fees and $ 6074.08 in costs. Defendants responded on February 23, 2018, arguing in part that the court lacked jurisdiction to hear the motion, because it was filed so long after the mandate issued.
¶ 16 The circuit court heard the amended motion on March 29, 2018. Defendants argued that "the issue of timing had to be addressed" and that they did not "see how somebody can wait 527 days to file a renewed motion." Defendants asserted that plaintiff had to bring its amended motion within a reasonable time, and 527 days was not reasonable. Defendants also argued that, beyond the issue of timeliness, not every occurrence in this case was "soured" simply because of "one man's actions," referring to Farrell.
¶ 17 The court interjected that the "issue here is all about justice and reasonableness." It noted that plaintiff's reply indicated that, after the mandate issued, there were settlement negotiations and its counsel had a separate, lengthy jury trial. The court asked how it could decide what was reasonable when the case had been going on...
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