FIRST DIVISION

									February 10, 2003

No. 1-01-4526

STATE FARM MUTUAL INSURANCE COMPANY,	)	Appeal from the

 								)	Circuit Court of					

	Plaintiff-Appellant,			)	Cook County.

								)

								)

			v.					)

								)	

IBRIBRAHIM NASSERCHARLES BELLAMY,					)	Honorable

				       			)	James P. McCarthy,

	Defendant-Appellee.		  		)	Judge Presiding.	

	JUSTICE O'MALLEY delivered the opinion of the court:

	The plaintiff, State Farm Mutual Insurance Company filed

this action against defendant, Ibrahim Nasser, alleging that his

negligent driving caused an accident with its insured, Harivada

Acharya.  Following mandatory arbitration, an award was entered

in favor of plaintiff.  Defendant filed a timely notice of

rejection of the award, which was allowed by the trial court. 

Defendant subsequently filed a motion to bar plaintiff from

presenting any evidence or testimony at trial as a sanction under

Supreme Court Rule 91(b) (145 Ill. 2d R. 91(b)) for its failure

to participate in good faith at the arbitration hearing.  After a

hearing, the trial court found a Rule 219(c) (166 Ill. 2d R.

219(c)) sanction appropriate, and granted defendant's motion.  Defendant subsequently filed a motion for summary judgment, which was also granted.

	On appeal, plaintiff contends that the trial court abused

its discretion in finding that it failed to participate in good

faith at the arbitration hearing.  Plaintiff also contends that

the trial court abused its discretion in barring it from

presenting evidence at trial.   We agree and vacate the judgment

of the circuit court and remand the cause for further

proceedings.

	On December 7, 1998, plaintiff filed a subrogation action

seeking damages from defendant in connection with an automobile

accident which occurred on September 14, 1997, in Chicago. 

According to the complaint, plaintiff's insured, Harivada

Acharya, was "rear-ended" by defendant, and sustained injuries as

well as property damage.  Plaintiff sought $7,492.53 plus costs

as reimbursement for amounts paid to its insured for property

damage and medical bills as a result of the accident.  On

September 1, 2000, defendant filed his appearance and, inter alia, a notice to produce pursuant to Supreme Court Rule 237 (166 Ill. 2d R. 237) notifying plaintiff to produce at the mandatory

arbitration hearing "Plaintiffs, Harivada Acharya, and Co-

Defendant(s) at the commencement of the case in chief of

Defendant Ibrahim Nasser."

	The case was subsequently assigned to mandatory arbitration and the arbitration hearing was scheduled for June 26, 2001.  On

June 13, 2001, defendant moved to be excused from the arbitration

hearing under Supreme Court Rule 90(g) (166 Ill. 2d R. 90(g)),

because he was admitting negligence.  On June 18, 2001, the trial

court entered an order excusing defendant's presence at the

arbitration hearing because he had admitted negligence and

proximate cause, but the order stated that plaintiff's insured

was not excused from the arbitration hearing because testimony

was needed concerning medical payments.

	On June 25, 2001, plaintiff filed an emergency motion for

leave to take the telephone testimony of its insured at the

arbitration hearing the next day because the insured had a heart

condition and his leg had been amputated.  Attached to the motion

was an affidavit from the insured, dated August 8, 2000, averring

to his medical condition.  The trial court continued the motion

until the next day for proof of the insured's medical condition. 

The trial court subsequently denied the motion.

	On the same day, the arbitration hearing commenced as

scheduled, and according to both parties, plaintiff's attorney

was present but its insured was not.  The arbitrators entered an

award for plaintiff and against defendant in the amount of

$5,699.12.  Neither party was awarded costs and the award does

not state that plaintiff acted in bad faith.  The record does not

contain a transcript of the arbitration hearing.  Defendant filed a timely notice of rejection of the award and requested a trial.

	Defendant then filed a motion for sanctions pursuant to 

Supreme Court Rules 91(b) (145 Ill. 2d R. 91(b)) and 219(c) (166

Ill. 2d R. 219(c)) seeking to bar plaintiff from presenting any

evidence at trial.  The motion alleged that plaintiff failed to

participate in the arbitration hearing in good faith, and for

violated Rule 237 (166 Ill. 2d R. 237) by not producing its

insured or its adjuster at the arbitration hearing.  Plaintiff

did not file a written response to defendant's motion.

	A hearing was held on defendant's motion on September 26,

2001, at which time  plaintiff responded that "obviously [we]

participated in a meaningful good faith manner because we

prevailed at arbitration."  Plaintiff also argued that nothing in

the award suggested that it failed to participate in a meaningful

manner and defendant's Rule 237 notice to produce was legally

insufficient because it did not designate any particular

representative of its company to appear.  Plaintiff made no

argument as to whether defendant's Rule 237 notice to produce was

sufficient to compel the appearance of its insured at the

arbitration hearing.

	The trial court granted defendant's motion for sanctions,

stating in part:

			"The simple standard that has to apply

is would you have tried a case in the same way that you approached this arbitration. 

And I don't believe that you go to a trial

without bringing in a witness who could at

least establish the basic elements of your

case.  I understand that there were certain

admissions, and I understand there were

certain stipulations based on other

considerations here, but I don't believe you

tried the case. That's the outline standard

of 91B [sic].  Good faith participation requires you to do that.

		* * * 

			[I]t's my understanding from everything

that I've read that the parties belong there

and that the case should be tried on the

merits through proper methods of cross-

examination and introduction of evidence, not

by shuffling papers because that's all that

we're accomplishing here.

			So in answer to your question under 219C

[sic], I believe that the sanction is appropriate in that you did not provide an

opportunity for this case to be tried on the

merits at the arbitration hearing.  This was not meaningful participation bringing in

paperwork, particularly on a total loss under

the circumstances as it was here."

Without any reference as to the nature of the case or any

reference to plaintiff's Supreme Court Rule 90(c) package (166

Ill. 2d R. 90(c)), the trial court then entered a written order

barring plaintiff from presenting any evidence at trial.

	Defendant subsequently moved for summary judgment, which was

granted, and plaintiff now appeals from that order.

	On appeal, plaintiff contends that the trial court abused

its discretion in finding that it failed to participate in good

faith at the arbitration hearing.  It argues that the trial court

could not make that finding because the arbitrators did not make

such a finding at the hearing and that the appearance of both a

party and that party's attorney are not required at an

arbitration hearing to avoid sanctions.

	Plaintiff also contends that the trial court abused its

discretion in barring it from presenting evidence at trial

because the sanctions "exceed the bounds of reason," and the

sanctions deprive it of the right to have a jury or the court

determine its damages.  Plaintiff argues that the appearance by

both the party and its counsel are not required to avoid

sanctions.  Plaintiff also argues that it fully participated in

the arbitration hearing and did not disregard the rules.

	Defendant responds that plaintiff disobeyed two court

orders, that plaintiff failed to participate in the arbitration

hearing in good faith and that plaintiff did not arbitrate the

case as it would have tried it.

	Supreme Court Rule 91(b) requires all parties to an

arbitration hearing to participate in the hearing in good faith

and in a meaningful manner.  145 Ill. 2d R. 91(b).  Specifically,

the rule provides, in part:

		"(b) Good-Faith Participation.  All parties

to the arbitration hearing must participate

in the hearing in good faith and in a

meaningful manner.  If a panel of arbitrators

finds that a party has failed to participate

in the hearing in good faith and in a

meaningful manner, the panel's finding and

factual basis therefor shall be stated on the

award.  Such award shall be prima facie evidence that the party failed to participate

in the arbitration hearing in good faith and

in a meaningful manner and an court, when

presented with a petition for sanctions or

remedy therefor, may order sanctions as

provided in Rule 219(c), including, but not

limited to, an order debarring that party from rejecting the award, and costs and

attorney fees incurred for the arbitration

hearing and in the prosecution of the

petition for sanctions, against that party." 

145 Ill. 2d R. 91(b).

	A trial court has discretion to enforce supreme court rules

and impose sanctions on the parties as appropriate and necessary

to "promote the unimpeded flow of litigation and maintain the

integrity of our court system."  Employer's Consortium, Inc. v. Aaron, 298 Ill. App. 3d 187, 191 (1998), citing Sander v. Dow Chemical Co., 166 Ill. 2d 48, 68 (1995).  A trial court's imposition of sanctions under Rule 91 will be reversed only where

the court's decision represents an abuse of discretion.  Goldman v. Dhillon, 307 Ill. App. 3d 169, 172 (1999).

	A party is required to participate in an arbitration hearing

in good faith by subjecting the case to the type of adversarial

testing expected at a trial.  Martinez v. Gaimari, 271 Ill. App. 3d 879, 883-84 (1995).  A party has acted in bad faith where its

actions amount to a deliberate and pronounced disregard for the

rules and the court.  State Farm Insurance Co. v. Jacquez, 322 Ill. App. 3d at 655.  Bad faith may consist of inept preparation

or intentional disregard for the process.  Schmidt v. Joseph, 315 Ill. App. 3d 77, 83 (2000).

	A party who appears at an arbitration hearing through counsel is still subject to sanctions for failure to appear

pursuant to a Rule 237 notice.  State Farm Insurance Co. v. Jacquez, 322 Ill. App. 3d 652, 655 (2001).  Those sanctions include the barring of testimony.  Fantasia v. Wiesch, 273 Ill. App. 3d 102, 104 (1995).

	Here, although the record does not contain any transcript of

the arbitration proceedings, the record reveals the following. 

Plaintiff filed a subrogation action to recover medical and

property damages paid to its insured allegedly sustained when

defendant "rear-ended" the insured's vehicle.  Defendant filed a

Rule 237 notice to produce plaintiff, the insured and any

codefendants.  Defendant subsequently admitted liability and

proximate cause and was accordingly excused from attending the

arbitration hearing.  The trial court, however, did not excuse

the insured's attendance and ordered him to be present at the

hearing to testify concerning medical payments.  Both parties

agree that they appeared through counsel at the arbitration

hearing, and that plaintiff's insured did not appear.  It is also

undisputed that plaintiff presented evidence of property damage

in the form of a Rule 90(c) package.  Apparently, the arbitrators

found this evidence persuasive and awarded Plaintiff damages in

the amount of 85% of the property damages claimed.  The

arbitrators did not make a finding that Plaintiff failed to

participate in good faith, nor does the award indicate noncompliance with a Rule 237 notice to produce.

	Defendant rejected the arbitration award, then filed a

motion for sanctions in which he alleged that Plaintiff's

adjuster and its insured were the subject of a notice to produce. 

Plaintiff did not file a written response to defendant's motion,

but instead argued orally at the hearing on that motion. 

Following the hearing, the trial court found that plaintiff

failed to participate in the arbitration in good faith because

plaintiff did not provide an opportunity for the case to be tried

on its merits.  Consequently, the court barred plaintiff from

presenting any testimony or other evidence at trial.  Based on

this sanction, the court later granted defendant's motion for

summary judgment.

	Here, we conclude that the trial court abused its discretion

in finding that plaintiff participated in the arbitration hearing

in bad faith.  Defendant had already admitted liability and

proximate cause of the accident, leaving the amount of property

damage and medical payments the only issues to be proven at the

arbitration.  It is undisputed that plaintiff's counsel was

present and presented evidence of property damage through its

Rule 90(c) package.  It is also undisputed that there was no

evidence presented concerning medical payments.  Although

plaintiff did not present any testimony of an adjuster or its

insured, we find that defendant's notice to produce was defective in that it only requested "plaintiff(s)" and did not designate a

specific employee to appear.  Moreover, Rule 237(b) does not

reach plaintiff's insured because the insured was not a party to

the lawsuit.  See 166 Ill. 2d R. 237(b); State Farm Insurance Co. v. Harmon, No. 1-01-2838, slip op. at 10-11 (November 27, 2002).  The proper means of securing plaintiff's insured as a witness was

the service of a subpoena.  See 166 Ill. 2d R. 237(a).  Defendant

bears the responsibility for any alleged insufficiency in

adversarial testing because he failed to secure evidence in the

appropriate fashion.  See State Farm Insurance Co. v. Rodrigues, 324 Ill. App. 3d 736, 742 (2001).

	Since we have found that plaintiff did participate at the

arbitration hearing in good faith, it follows then that the trial

court's sanction that barred plaintiff from presenting any

evidence at trial was an abuse of discretion.

	For the foregoing reasons, the judgment of the circuit court

is vacated and the cause is remanded for further proceedings.  

	Vacated and remanded.

	McNULTY and SMITH, JJ., concur.

	REPORTER OF DECISIONS - ILLINOIS APPELLATE COURT

	TITLE

	of Case

	Docket Nos.

	COURT

	Opinion

	Filed

	JUSTICES

	Appeal's

	Origination.

	Counsel for

	APPELLANT

	Counsel for

	APPELLEE

	STATE FARM MUTUAL INSURANCE COMPANY,

			Plaintiff-Appellant,

		v.

	IBRAHIM NASSER,

			Defendant-Appellee.

	No. 1-01-4526

	Appellate Court of Illinois

	First District, 1st Division

	February 10, 2003

	JUSTICE O'MALLEY delivered the opinion of the court:

		McNULTY and SMITH, JJ., concur.

	Appeal from the Circuit Court of Cook County.

	The Hon. James P. McCarthy, Judge Presiding.

	For Appellant, Susan L. Meadows, STEVEN D. GERTLER

& ASSOCIATES, of Chicago.

	For Appellee, Matthew E. Luecke, THOMAS L. BURDELIK

& ASSOCIATES, of Chicago.