By Andrew R. Schwartz1 and Thomas J. Kanyock2
ANDREW R. SCHWARTZ, LLC, Chicago
A split of authority exists as to whether or not Rule 137 motions for sanctions qualify as “pleadings” under Illinois law. This article argues that sanctions motions qualify as pleadings, and are subject to the procedural rules and statutes governing pleadings. The authors also offer suggestions about litigating Rule 137 motions from the standpoint of movants, as well as respondents.
Consider the following scenario: Your opponent in a hotly-contested case moves for sanctions against you and your client to create bargaining leverage. The sanctions motion is baseless and poorly pled, and you have several affirmative defenses. However, addressing the substance of the motion will waste time, increase the cost of the litigation, and potentially create an untenable conflict between you and your client. Moving to dismiss the sanctions motion pursuant to 735 ILCS 5/2-615(a) and/or 735 ILCS 5/2-619(a) would be far more efficient. Can you do it?
The answer to that question is confusing because §5/2-615(a) and §5/2-619(a) motions may only be used to attack pleadings, and there is conflicting authority about whether or not Rule 137 motions are “pleadings.” Two Illinois Supreme Court cases and several appellate decisions suggest that sanctions motions are pleadings. By contrast, at least two First District decisions reach the opposite conclusion.
II. SUPREME COURT RULE 137 AND CASE LAW HOLDING THAT SANCTIONS MOTIONS ARE PLEADINGS
Rule 137 reads as follows, in relevant part:
Every pleading, motion and other paper of a party represented by an attorney shall be signed by at least one attorney of record in his individual name, whose address shall be stated. A party who is not represented by an attorney shall sign his pleading, motion, or other paper and state his address. Except when otherwise specifically provided by rule or statute, pleadings need not be verified or accompanied by affidavit. The signature of an attorney or party constitutes a certificate by him that he has read the pleading, motion or other paper; that to the best of his knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good-faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. If a pleading, motion, or other paper is not signed, it shall be stricken unless it is signed promptly after the omission is called to the attention of the pleader or movant. If a pleading, motion, or other paper is signed in violation of this rule, the court, upon motion or upon its own initiative, may impose upon the person who signed it, a represented party, or both, an appropriate sanction, which may include an order to pay to the other party or parties the amount of reasonable expenses incurred because of the filing of the pleading, motion or other paper, including a reasonable attorney fee.
All proceedings under this rule shall be brought within the civil action in which the pleading, motion or other paper referred to has been filed, and no violation or alleged violation of this rule shall give rise to a separate civil suit, but shall be considered a claim within the same civil action. Motions brought pursuant to this rule must be filed within 30 days of the entry of final judgment, or if a timely post-judgment motion is filed, within 30 days of the ruling on the post-judgment motion.
In John G. Phillips & Assoc. v. Brown3, the Illinois Supreme Court focused on the second paragraph of the Rule and concluded that a “… Rule 137 motion is the functional equivalent of adding a count to a complaint or counter-claim.”4 By that reasoning, the Supreme Court defined sanctions motions as “pleadings” because the Code of Civil Procedure recognizes complaints and counterclaims as “pleadings.”5 Moreover, a civil litigant presents a “claim” by filing a pleading.6
Five years later, in Krautsack v. Anderson,7 the Supreme Court affirmed the use of a §5/2-615(a) motion to strike a claim for fees under Rule 137. Krautsack was a Consumer Fraud Act case where the defendant prevailed at trial and then filed a fee petition under the Consumer Fraud Act and Rule 137. The plaintiff moved to strike the fee petition. The Cook County Circuit Court granted the motion to strike and the First District Appellate Court affirmed. The Supreme Court affirmed the First District’s decision, and rejected the sanctions claim based upon its review of the fee petition itself without requiring any evidence to be heard.8
The Krautsack Court’s affirmation of the use of a §5/2-615(a) motion to attack a Rule 137 fee petition is significant because §5/2-615(a) authorizes the use of motions to strike pleadings, but not to strike other motions.9
Numerous appellate decisions support the use of §5/2-615(a) motions to strike Rule 137 motions which fail to plead with specificity. To plead a proper Rule 137 sanctions claim, a movant must identify (a) each pleading, motion or other paper filed by the opposing party which contains a sanctionable statement, (b) the allegedly sanctionable statement(s) contained in each document, and (c) the fees incurred as a result.10
III. CASE LAW HOLDING THAT SANCTIONS MOTIONS ARE NOT PLEADINGS
The confusion about the status of Rule 137 motions as pleadings arises from two First District opinions, William J. Tempelman Co. v. Liberty Mut. Ins. Co.11 and Marriage of Nesbitt,12 and a Second District case, Marriage of Wolff.13 All three of these decisions contain language stating that Rule 137 motions are not pleadings. All three cases rely incorrectly on Marriage of Sutherland, and conflict with the holdings in John G. Phillips and Krautsack.
Sutherland was a divorce case, where the wife moved to vacate an order. The husband moved to dismiss the wife’s “petition to vacate,” and the court granted the husband’s motion.14 Reversing, the Second District characterized the wife’s petition as a motion to reconsider. The Sutherland Court then held:
Despite the husband’s urgings, that motion to reconsider could not be dismissed pursuant to section 2-615, because section 2-615 applies only to the dismissal of pleadings.15
Sutherland did not involve a Rule 137 sanctions claim.
Templeman was an insurance coverage dispute, which arose from a Rule 137 claim against the plaintiff and its counsel. The plaintiff notified its insurance carrier of a claim for coverage and asked the carrier to defend it against the sanctions proceedings. The plaintiff’s insurance policy provided coverage for claims against the plaintiff for malicious prosecution. When the carrier did not respond to that request, the plaintiff filed a declaratory judgment action seeking coverage.16
At issue in Templeman was whether the policy coverage for malicious prosecution claims also required the carrier to cover a Rule 137 sanctions claim. Affirming the trial court’s grant of summary judgment in favor of the carrier, the First District distinguished between the nature of malicious prosecution and Rule 137 claims, and ruled that the carrier’s coverage against the former did not require it to indemnify or defend against the latter.17
The Templeman Court wrote:
The plaintiffs never presented any pleadings seeking relief for malicious prosecution. Rather the allegations at issue are contained in a Rule 137 motion for sanctions, which is not a pleading. See In re Marriage of Sutherland, 251 Ill.App.3d 411, 413, 190 Ill.Dec. 695, 622 N.E.2d 105, 107 (1993) (“A motion is an application for a ruling or an order in a pending case. * * * A pleading, in contrast, consists of a party’s formal allegations of his claims or defenses”).18
The authors consider the Templeman Court’s flawed for several reasons. First, as noted above, Sutherland did not involve a sanctions claim, and therefore did not provide valid precedent for this point. Second, the authors believe the Templeman Court misconstrued the language of Rule 137, which says that a sanctions motion “shall be considered a claim.”
In any event, Templeman preceded the Supreme Court’s 2001 decision in John G. Phillips and its 2006 decision in Krautsack. To the extent the comment in Templeman conflicts with John G. Phillips and Krautsack, the later Supreme Court decisions control.
C. Marriage of Wolff
Wolff was similar to Sutherland, as it involved another motion to strike a motion to reconsider. The pertinent language from Wolff reads as follows:
We affirm the trial court’s denial of the motion to dismiss on the ground that petitioner employed a procedural nullity in filing a section 2-619 motion to dismiss respondent’s amended section 2-1203 motion. Section 2-619 applies only to the dismissal of pleadings. See 735 ILCS 5/2-619 (West 2002). A section 2-1203 motion to reconsider is not a pleading. See In re Marriage of Sutherland, 251 Ill.App.3d 411, 414, 190 Ill.Dec. 695, 622 N.E.2d 105 (1993) (motion to reconsider could not be dismissed pursuant to section 2-615 because that section applies only to the dismissal of pleadings). A motion is an application to the court for a ruling or an order in a pending case. William J. Templeman Co. v. Liberty Mutual Insurance Co., 316 Ill.App.3d 379, 388, 249 Ill.Dec. 65, 735 N.E.2d 669 (2000). A pleading, in contrast, consists of a party’s formal allegations of his claims or defenses. Templeman, 316 Ill.App.3d at 388, 249 Ill.Dec. 65, 735 N.E.2d 669 (holding that a motion for sanctions is not a pleading).19
Wolff does not mention John G. Phillips.
In Nesbitt, the First District cited Tempelman and Wolff for the following proposition:
Sections 2-619 and 2-615 of the Code apply only to pleadings. [Citations omitted]. A motion for Rule 137 sanctions is not a pleading and, thus, is not capable of being stricken under either section.20
Nesbitt does not mention John G. Phillips or Krautsack.
IV. ILLINOIS PLEADING REQUIREMENTS WHICH APPLY TO THE LITIGATION OF RULE 137 MOTIONS
As discussed above, the authors believe that the following sections of the Code of Civil Procedure21 apply to sanctions litigation:
E. 735 ILCS 5/2-603
Section 5/2-603 governs pleading practice, and reads as follows, in relevant part:
Sec. 2-603. Form of pleadings.
(a) All pleadings shall contain a plain and concise statement of the pleader’s cause of action, counterclaim, defense, or reply.
(b) Each separate cause of action upon which a separate recovery might be had shall be stated in a separate count or counterclaim, as the case may be and each count, counterclaim, defense or reply, shall be separately pleaded, designated and numbered, and each shall be divided into paragraphs numbered consecutively, each paragraph containing, as nearly as may be, a separate allegation.
To comply with §5/2-603(a), a Rule 137 sanctions motion must satisfy Illinois’ fact-pleading requirements. In People ex. rel Fahner v. Carriage Way West, Inc.,22 the Supreme Court expressed those fact-pleading requirements as follows:
although pleadings are to be liberally construed and formal or technical allegations are not necessary, a complaint must, nevertheless, contain facts to state a cause of action. [Citation omitted]. Which facts? The complaint is deficient when it fails to allege the facts necessary for the plaintiff to recover
To pass muster a complaint must state a cause of action in two ways. First, it must be legally sufficient; … Second and unlike Federal practice, the complaint must be factually sufficient; it must plead facts which bring the claim within the legally recognized cause of action alleged. If it does not, the complaint must be dismissed.23
If a sanctions motion does not allege sufficient facts, the authors recommend that the respondent move to strike pursuant to §5/2-615(a).
To comply with §5/2-603(b), the sanctions motion should comply with Illinois’ formal pleading requirements. For example, it must contain separate numbered paragraphs.24
F. 735 ILCS 5/2-606
Rule 137 provides a remedy only for the improper signing of pleadings, motions and other papers submitted in civil litigation. The relevant portion reads as follows:
If a pleading, motion, or other paper is signed in violation of this rule, the court … may impose upon the person who signed it, a represented party, or both, an appropriate sanction …
(Emphasis added). In Krautsack, the Supreme Court discussed this point, holding:
Because Rule 137 addresses the pleadings, motions and other papers a litigant files, the rule does not provide a sanction against all asserted instances of bad faith conduct by a litigant or the litigant’s attorney during the course of litigation.25
Therefore, any Rule 137 claim necessarily rests on a written document – namely the pleading, motion, or other paper signed in violation of the rule.
Section 5/2-606 reads as follows:
If a claim or defense is founded upon a written instrument, a copy thereof, or of so much of the same as is relevant, must be attached to the pleading as an exhibit or recited therein, unless the pleader attaches to his or her pleading an affidavit stating facts showing that the instrument is not accessible to him or her. In pleading any written instrument a copy thereof may be attached to the pleading as an exhibit. In either case the exhibit constitutes a part of the pleading for all purposes.
Therefore, a proper sanctions motion must attach the relevant portion of the offending document as an exhibit, or at least recite it.
If the sanctions motion does not comply with §5/2-606, the respondent may move to strike it. Failure to comply with §5/2-606 is grounds for dismissal of a claim.26
G. 735 ILCS 5/2-607
If a Rule 137 motion does not allege the sanctionable conduct with specificity, or fails to identify the fees and costs associated with the alleged violation, a respondent should consider demanding a bill of particulars to obtain that disclosure. As discussed supra, a proper Rule 137 motion must identify (a) each pleading, motion or other paper filed by the opposing party which contains a sanctionable statement, (b) the allegedly sanctionable statement(s) contained in each document, and (c) the fees incurred as a result.27
H. 735 ILCS 5/2-615
As discussed supra, Krautsack specifically affirmed the use of a §5/2-615(a) motion to attack a claim for fees under Rule 137. Therefore, it seems likely that the respondent could seek other relief under §5/2-615(a), such as a more definite statement, which is the functional equivalent of a notice and demand for a bill of particulars. The authors also believe parties to sanctions litigation should be able to move for judgment on the pleadings pursuant to §5/2-615(e) if there is no factual issue.
I. 735 ILCS 5/2-619
The authors have not found any appellate decisions addressing the use of §5/2-619(a) motions for involuntary dismissal to attack a Rule 137 sanctions motion. However, we believe that procedure should apply where an appropriate affirmative defense exists, such as estoppel or failure to mitigate.
For the foregoing reasons, the authors believe the Supreme Court correctly classified Rule 137 motions as pleadings, and that any disagreement by the Appellate Court in Nesbitt, Tempelman and Wolff is incorrect. In any event, the Nesbitt, Tempelman and Wolff Courts had no power to overrule or modify the Supreme Court’s decisions in John G. Phillips and Krautsack.28 Therefore, the authors believe the rules governing civil pleadings apply equally to sanctions litigation – including the responding party’s right to file §5/2-615 and §5/2-619(a) motions. To the extent any confusion exists, the authors believe the Supreme Court should clarify that sanctions motions are pleadings, either by amendment to Rule 137, or otherwise.
Andrew R. Schwartz is the managing member of Andrew R. Schwartz, LLC, where he concentrates his practice in commercial and fraudulent transfer litigation.
2 Thomas J. Kanyock is of counsel at Andrew R. Schwartz, LLC, where he concentrates his practice in civil and commercial litigation.
3 197 Ill 2d 337 (2001)
4 Id. at 339-40
5 735 ILCS 5/2-602
6 See KSAC Corp. v. Recycle Free, Inc., 364 Ill App 3d 593, 597 (2nd Dist 2006) (“A pleading ‘consists of a party’s formal allegations of his claims …’”) (emphasis added).
7 223 Ill 2d 541 (2006)
8 Id. at 546-47
9 E.g., Marriage of Sutherland, 251 Ill App 3d 411, 414 (2nd Dist 1993) (“Despite the husband’s urgings, that motion to reconsider could not be dismissed pursuant to section 2-615, because section 2-615 applies only to the dismissal of pleadings.”)
10 See, e.g., Marriage of Adler, 271 Ill App 3d 469 (1st Dist 1995); Whitmer v. Munson, 335 Ill App 3d 501 (1st Dist 2002); Marriage of Naylor, 220 Ill App 3d 366 (1st Dist 1991)
11 316 Ill App 3d 379 (1st Dist 2000)
12 377 Ill App 3d 649 (1st Dist 2007)
13 355 Ill App 3d 403 (2nd Dist 2005)
14 251 Ill App 3d at 412
15 Id. at 414
16 Templeman, 316 Ill App 3d at 380-81
17 Id. at 381-88
18 Id. at 388
19 Id. at 407 (emphasis added)
20 Id. at 407 (emphasis added).
21 735 ILCS 5/2-101, et. seq.
22 88 Ill 2d 300 (1981)
23 Id. at 308 (emphasis added).
24 See Allensworth v. First Galesburg Nat. Bank & Trust Co., 18 Ill App 2d 608 (2nd Dist 1958) (published abstract only) (pleading properly dismissed for failure to use numbered paragraphs); Pinnavaria v. C-Phone, 2002 WL 575699, *1 (ND Ill 2002) (striking complaint for failure to plead complaint in numbered paragraphs under Fed.R.Civ.Pro. 10(b)).
25 Id. at 562 (emphasis added). Accord, TruServ Corp. v. Ernst & Young, LLP, 376 Ill App 3d 218, 223 (1st Dist 2007)
26 Christoffel v. Country Mut. Ins. Co., 183 Ill App 3d 32, 35 (5th Dist 1989); accord, Plocar v. Dunkin’ Donuts of America, Inc., 103 Ill App 3d 740, 749 (1st Dist 1981) (“Section 36 of the Civil Practice Act … requires that if a claim is founded upon a written instrument, a copy thereof must be attached to the pleadings as an exhibit or recited therein. Since plaintiffs did not comply with this requirement, the trial court properly dismissed Count IV of their second amended complaint”).
27 Marriage of Adler, 271 Ill App 3d 469 (1st Dist 1995); Whitmer v. Munson, 335 Ill App 3d 501 (1st Dist 2002); Marriage of Naylor, 220 Ill App 3d 366 (1st Dist 1991)
28 See Village of Deerfield v. Greenberg, 193 Ill App 3d 215, 220 (2nd Dist 1990) (“It is fundamental that the appellate court is without authority to overrule or modify the decisions of the State supreme court”).