The First District Appellate Court provided a primer on sanctions Tuesday in a ruling that reverses a $2 million default judgment against the City of Chicago and four employees of its fire academy.
Trial judges, the appeals panel held, must “weigh the efficacy of less drastic alternatives” and issue warnings before entering a default judgment --“the most damaging sanction available”—against a party.
Determining that the lower court in this case -- Joseph W. Locasto v. The City of Chicago, et al.-- failed to do either, the panel found the default judgment was unwarranted and as such, reversed it and remanded for further proceedings.
Justice Michael B. Hyman delivered the court’s ruling in the matter that included appeals from both sides, as well as a supervisory order from the Illinois Supreme Court in 2012.
Justices P. Scott Neville and Aurelia Pucinski concurred in the 16-page opinion, which lists now-retired Cook County Circuit Judge James D. Egan as the judge who presided over the case and offers a few tips on how and when to seek and impose sanctions.
“For years lawyers have complained about how rarely trial judges mete out sanctions for dilatory discovery practices,” Hyman wrote. “This reluctance, they say, has contributed to an environment in which some lawyers (and parties, too) flout court rules and court orders because the chances of unpleasant consequences tends to be so low."
"But," he adds, "that is not what happened here.”
The panel’s ruling stems from a suit Joseph W. Locasto brought in 2009 against the City of Chicago, John McKillip, director of fire academy EMS training, and instructors Arf Abdellatif, Monica Porter and Anthony Longini.
Locasto had been hired by the city as a paramedic candidate and attended the first two days of training at the fire academy in May 2009.
During training, he claimed “fire academy instructors verbally coerced, intimidated, and hazed the candidates, and refused to let anyone drink water or other fluids, except during a one-hour lunch break and a single one-minute water break toward the end of each day.”
Following the second day of training, Locasto’s suit alleged his legs began to swell and that he went to the emergency room the next morning after noticing he had tea-colored urine.
He was diagnosed, according to the panel’s opinion, “with rhabdomyolsis, a breakdown of muscle tissue which often leads to acute kidney damage, and compartment syndrome, a potentially life-threatening condition due to increased pressure within the muscles.”
As a result of his health problems, Locasto underwent surgery and spent a month in the intensive care unit. He blamed his condition on the fire academy training and in October 2009, filed a six-count complaint against the defendants.
The city filed a motion to dismiss, arguing that the Illinois Pension Code prohibits employee suits against employers when there is no intent to injure. The trial court denied that motion and gave the defendants 30 days to file an answer.
When the city failed to answer his complaint, Locasto moved for a default judgment. The deadline apparently was extended and after the defendants failed to answer a second time, Locasto again sought default.
The defendants, the opinion notes, filed a motion to dismiss instead of answering, spurring Locasto to ask the trial court to issue a default order under Illinois Supreme Court Rule 137, which governs sanctions at the pleadings stage.
The trial judge granted the default, a ruling the opinion states was later vacated, and set the matter for a prove-up. The defendants answered the complaint the next day and the case moved to discovery.
The panel notes in its opinion that while the trial court “took control of discovery early on,” the defendants “dragged their feet on discovery, a relatively common transgression.”
In 2011, a few months after Locasto issued discovery requests, he filed a motion to compel and sought sanctions under Supreme Court Rule 219, which allows for default judgment for failing to comply with discovery rules and orders.
The trial court granted the motion to compel, entered a default against the defendants for “repeated discovery violations" and ordered them to complete the discovery.
Locasto then moved to transfer the case for default prove-up, claiming the defendants had been defaulted at least three times for discovery violations and hadn’t fully answered his interrogatories.
Although the defendants completed their responses to the interrogatories before the next hearing, the trial judge found they remained in default for continued violations and ordered two of the defendants to be deposed within 30 days.
The trial court in October again found the defendants in default and transferred the case for a prove-up. The defendants sought to vacate the default.
At the November prove-up hearing, which the panel’s opinion states was held before a different judge, the defendants’ motion to vacate the default was denied and Locasto was awarded nearly $2 million in damages, although his $1 million request for emotional injuries was denied.
The defendants filed a post-judgment motion to vacate the default judgment and Locasto appealed the denial of his emotional damages request. The defendants then sought dismissal of his appeal.
The trial court stayed a hearing on the defendants’ motion to vacate until the appellate court issued a ruling on the motion to dismiss Locasto’s appeal. The appellate court dismissed his appeal, a ruling the Supreme Court vacated in a 2012 supervisory order.
The defendants then asked for an extension of time to file an appeals notice, which was granted, and the appellate court consolidated both sides’ appeals.
In the opinion, Hyman wrote he and his colleagues only addressed the defendants’ claim that trial court erred in entering default as a sanction because they agreed with them.
The court began its analysis by acknowledging that "dealing with disruptive or manipulative conduct can be demoralizing and distracting, and, certainly, has the potential to increase expenses" for parties trying to obtain discovery.
“Also, it often leads to increased tensions and a decay of civility between lawyers. Indeed, unless and until trial judges clamp down on discovery abuses–be it engaging in stonewalling, foot dragging, obfuscation, or any other shenanigans–little incentive exists for the already recalcitrant party to comply.”
While “sanctions have a dual purpose: to combat abuses of the discovery process and maintain the integrity of the court system,” Hyman wrote they “should be tailored to promote discovery, not punish a dilatory party” and “customized to address the nature and extent of the harm.”
“One way for trial judges to put the brakes on this kind of nonsense and push compliance is to describe the sanction that may be imposed for noncompliance in a court order, and then follow through with the sanction should the conduct so warrant,” he wrote.
He adds in his opinion, “Thereafter, an even more intrusive sanction should be imposed for continued noncompliance. How long this goes on depends on the situation, but, at least, the recalcitrant party knows the repercussions of his, her, or its conduct.”
In this case, Hyman wrote, the “defendants treated the deadlines as if they were optional and not obligations,” creating delays that “apparently (and appropriately) earned the opprobrium of the trial court.
While the panel notes the defendants “appear to concede that their repeated discovery violations warrant some type of sanction,” they argued that the “the trial court abused its discretion by holding them in default before less drastic sanctions had been attempted and determined to be ineffective.”
Agreeing with the defendants, the appeals panel found that “Nothing in the record indicates that, before entering the default, the trial court considered a lenient alternative to coax cooperation or warned defendants of default as a possible sanction.”
Pointing to sanctions under Rule 137 and Rule 219, both of which were requested by Locasto, Hyman explains the two rules have similarities, but different purposes.
Rule 137 deals with the pleadings stage and aims to be punitive while Rule 219 focuses on abuse or disregard of the discovery process and intends to be coercive in nature, he wrote.
While Locasto argued the trial court should have considered the Rule 137 sanction it imposed, but later vacated, when ruling on his request for sanctions under Rule 219, the appeals panel disagreed.
“While we deplore all dilatory actions, we must respect the distinctions embodied in the rules themselves.” the panel held. “Nothing in either rule or committee comments suggests that sanctions under one rule should be taken into account in determining sanctions under the other rule.
When it comes to Rule 219, Hyman wrote that trial courts must review several factors before imposing sanctions under this rule and should only use it “for the most recalcitrant and unyielding parties” as it provides for “the ultimate sanction” of default or dismissal.
“In entering a sanction for discovery abuses, a trial court wants to ensure compliance with discovery and advance the litigation, not punish the offending party," he explains.
Hyman wrote “a pattern of dilatoriness should not be tolerated, as it hurts the opposing party and is a burden on the court system" and allowing “a party to defy a discovery order without facing sanctions can be likened to a dog without teeth–all bark and no bite.”
Turning to the case at issue, the panel found that the record below shows the defendants were slow to respond to discovery requests, “but did not exhibit blatant disregard for the court’s authority.”
Aside from the defendants’ behavior, the appeals panel also examined Locasto’s actions in its analysis and determined he “went too far” in seeking the sanction of default.
“Locasto went for the jugular, default, in the first instance rather than seek sanctions in proportion to the gravity of the violations,” Hyman wrote, later adding that “the trial court should have considered and invoked a less onerous sanction.”