NOTICE

Decision filed 07/10/14. The text of this decision may be NO. 5-13-0109 changed or corrected prior to the filing of a Petition for Rehearing or the disposition of IN THE the same.

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT ________________________________________________________________________

LAKE ENVIRONMENTAL, INC., ) Appeal from the ) Circuit Court of Plaintiff-Appellant, ) St. Clair County. ) v. ) No. 11-MR-226 ) DAMON T. ARNOLD, in His Capacity as Director ) of Public Health, and THE DEPARTMENT OF ) PUBLIC HEALTH, ) Honorable ) Stephen P. McGlynn, Defendants-Appellees. ) Judge, presiding. ________________________________________________________________________

JUSTICE SPOMER delivered the judgment of the court, with opinion. Presiding Justice Welch and Justice Chapman concurred in the judgment and opinion.

OPINION

¶1 Following protracted litigation at the administrative and circuit court levels, on

July 3, 2012, the plaintiff, Lake Environmental, Inc., filed a motion, pursuant to Illinois

Supreme Court Rule 137 (eff. Feb. 1, 1994), for sanctions against the defendants, LaMar

Hasbrouck, in his capacity as Director of Public Health,1 and the Illinois Department of

1 Damon T. Arnold was the Director when this action commenced. He has since

been replaced by Director LaMar Hasbrouck, who has been substituted as a party by

1 Public Health (IDPH). The motion was denied, and the plaintiff now appeals. For the

following reasons, we reverse the order of the circuit court and remand with directions.

¶2 FACTS

¶3 As noted above, this case comes to us after protracted litigation. Accordingly, we

shall put forth succinctly only those facts necessary to an understanding of our ruling on

appeal. On February 18, 2008, IDPH issued a "notice of emergency work stop order" to

the plaintiff, halting the plaintiff's work on an asbestos removal project at Scott Air Force

Base. On September 18, 2008, IDPH moved for voluntary dismissal of the emergency

stop work order proceedings on mootness grounds. The following day, former defendant

Damon T. Arnold, in his then capacity as Director of IDPH, granted, with prejudice, the

motion for voluntary dismissal. On March 25, 2010, IDPH sent the plaintiff a notice of

intent to revoke the plaintiff's asbestos contractor's license, alleging as the basis for

revocation noncompliance by the plaintiff with applicable laws and regulations, all

related to the Scott Air Force Base project in 2008. Administrative proceedings

followed, and ultimately, on July 28, 2011, Arnold issued a final administrative decision

that revoked the plaintiff's license. This complaint for administrative review of that

decision was filed in the circuit court on August 30, 2011.

¶4 On July 26, 2010, during the pendency of the administrative proceedings

described above, IDPH initiated an action for civil penalties and injunctive relief against

the plaintiff in the circuit court of St. Clair County, also on the basis of the alleged

operation of law. See 735 ILCS 5/2-1008(d) (West 2010).

2 violations during the Scott Air Force Base project in 2008. On September 19, 2011, the

trial judge in that case dismissed the civil penalties complaint, with leave to refile.

Subsequently, in this case, on April 25, 2012, the same trial judge ordered IDPH to

reinstate the plaintiff's license pending his decision on the merits. On June 4, 2012, the

judge entered an order that, inter alia, reversed the revocation of the plaintiff's license

and remanded for "further proceedings to determine whether or not" the plaintiff's license

"should be suspended or revoked." On July 3, 2012, the plaintiff filed a motion for

sanctions pursuant to Illinois Supreme Court Rule 137 (eff. Feb. 1, 1994). On July 24,

2012, a hearing was held on the motion, and at the conclusion of the hearing, the same

trial judge took the matter under advisement and told the parties that a written decision

would follow. On November 26, 2012, the judge entered an order which stated, in full,

"Plaintiff's request for sanctions pursuant to Rule 137 is denied." The plaintiff filed a

motion to reconsider the denial of sanctions, which was heard by a different judge, as the

initial trial court judge was no longer on the bench. The motion to reconsider, which

noted, inter alia, the lack of an explanation for the denial of sanctions, was denied on

February 7, 2013, again without explanation, and this timely appeal followed.

¶5 ANALYSIS

¶6 As a threshold matter, we note that the defendants contend this court does not have

jurisdiction over this appeal. As they correctly note, this court has a duty to consider its

jurisdiction and to dismiss any appeal over which it determines that no jurisdiction exists.

See, e.g., Peabody Coal Co. v. Industrial Comm'n,

(1999). The

defendants point out that, in general, when the circuit court reverses an administrative 3 agency's decision and remands the matter for further proceedings by that agency, the

circuit court's order is not final for purposes of appellate jurisdiction. See, e.g., Edmonds

v. Illinois Workers' Compensation Comm'n,

.

"However, if, on remand, the agency has only to act in accordance with the directions of

the court and conduct proceedings on uncontroverted incidental matters or merely make a

mathematical calculation, then the order is final for purposes of appeal."

In the case

at bar, the defendants contend the trial judge's June 4, 2012, order "appears patently non-

final by ordering a remand that authorizes more than ministerial action." The plaintiff

counters that: (1) the order fully adjudicated all issues, found without merit IDPH's

purported justifications for revoking the plaintiff's license, and therefore left IDPH with

no discretion on remand and no choice but to reinstate the plaintiff's license, and (2) in

any event, by the time the trial judge ruled on the plaintiff's request for sanctions, the

remand had been completed and the plaintiff's license had been reinstated. We agree

with the plaintiff with regard to both counts and conclude we have jurisdiction over this

appeal. Accordingly, we now turn to the arguments of the parties.

¶7 On appeal, the plaintiff contends that the trial judge's one-sentence order–which,

as noted above, states in full, "Plaintiff's request for sanctions pursuant to Rule 137 is

denied"–should be reversed and this cause should be remanded because the order

provides no explanation for the judge's decision to deny the plaintiff's request for

sanctions, and because the trial judge provided no basis orally for his ruling, instead

taking the matter under advisement at the conclusion of the hearing and telling the parties

a written decision would follow. We agree. As the plaintiff notes, our colleagues in the 4 Second District have long held, in a well-reasoned line of decisions that stretches back to

1992, that when a trial judge rules on a motion for sanctions pursuant to Rule 137, that

judge must provide specific reasons for his or her ruling, regardless of whether sanctions

are granted or denied. In In re Estate of Smith,

(1990), our

colleagues in the Third District acknowledged the long-standing rule that "[t]he decision

whether to impose sanctions [pursuant to Rule 137] is within the sound discretion of the

trial judge and will not be reversed on appeal absent an abuse of discretion," but noted

that "the predicate to such deference is that the circuit court make an informed and

reasoned decision." The Smith court noted that for such a decision to occur, the trial

judge should hold a hearing on the motion for sanctions.

Following that hearing, the

decision rendered–either orally or in writing–with regard to sanctions "needs to clearly

set forth the factual basis for the result reached."

That is because upon review it is

the function of this court to determine "whether (1) the circuit court's decision was an

informed one, (2) the decision was based on valid reasons that fit the case, and (3) the

decision followed logically from the application of the reasons stated to the particular

circumstances of the case."

. The Smith court noted that "[f]or a court of

review to enter its decision without benefit of the trial court's explicit findings tends to

establish too many ad hoc rules of law as to the correct result in any given case."

Accordingly, the court vacated the trial court's order and remanded with directions that

the trial court hold a hearing and then "set forth on the record and with specificity the

reasons for its decision."

5 ¶8 Two years later, our colleagues in the Second District issued the first in their line

of decisions on this issue, North Shore Sign Co. v. Signature Design Group, Inc.,

(1992). Therein, the court cited Smith with approval and added reasoning

that is particularly relevant to a case with as complicated a history as the instant one: "A

reviewing court should not be put in the position of making the trial court's findings" and

"should not be required to speculate as to which of the determinative facts and legal

theories the trial court relied on in deciding" whether to allow or deny sanctions.

. The following year, in Heiden v. Ottinger,

(1993), the

court held that even when a hearing on a Rule 137 motion has been held, if the trial judge

fails to make specific findings that articulate the reasons for his or her decision to deny

sanctions, the judge's order must be vacated and the cause remanded for further

proceedings. Subsequently, in O'Brien & Associates, P.C. v. Tim Thompson, Inc.,

(1995), the court rejected the notion that an explanation is

required only when sanctions are granted, instead holding that the trial court "must set

forth the reasons and basis for its decision" regardless of whether the court "imposes or

declines to impose Rule 137 sanctions." That is because "[w]ere a trial court not obliged

to make explicit the legal or factual basis for its decision not to impose sanctions, the

foundation for valid appellate review *** would crumble" and appellate review "would

become an ad hoc, inconsistent, and speculative affair."

. Likewise, in Kellett

v. Roberts,

(1996), the court found the following vagueness

from a trial judge to be inadequate: " 'Rule 137, that's within the discretion of the court to

award or not to award. I'm exercising that discretion in this case. I will not award Rule 6 137 [sanctions] ***.' " The Kellett court reversed the trial judge's decision and remanded

for further proceedings.

.

¶9 Rather than addressing the reasoning found in this body of law, the defendants

instead choose to refer to it as "preferred practice" and point to three decisions that they

claim allow a trial judge to deny a motion for sanctions pursuant to Rule 137 without

providing any justification for so ruling. The first decision cited by the defendants,

Yunker v. Farmers Automobile Management Corp.,

(2010),

does not even mention the extensive body of law described above, nor does it provide any

explanation for its deviation therefrom; accordingly, it is utterly unpersuasive. In the

second decision cited by the defendants, Elledge v. Reichert,

, 1061-

62 (1993), our colleagues in the Fourth District concluded that under the plain language

of Rule 137, reasons must only be given when sanctions are granted, not when they are

denied. Elledge, however, predated the development of most of the body of law

described above and presents no compelling analysis or reasoning that would support

deviating from that body of law; moreover, the Elledge court expressly found that

although the trial court in that case did not articulate in its written order its reasons for

denying sanctions, the trial court did articulate those reasons orally at the conclusion of

the hearing on the Rule 137 motion and that the reasoning was therefore reviewable by

the appellate court based upon the transcript of that hearing.

. The third

decision cited by the defendants, Shea, Rogal & Associates, Ltd. v. Leslie Volkswagen,

Inc.,

(1993), also predates most of the body of law described

above and again provides no compelling reasoning or analysis that would justify 7 deviating from that body of law. Moreover, although the Shea court held that no

explanation is required when sanctions are denied, it, like the Elledge court, found that in

the case before it, an explanation for denial was given, specifically, "a finding that no

frivolous pleadings were filed."

We find the reasoning put forward by our colleagues

in the Second District over the last 22 years to be far more persuasive than anything

found in Yunker, Elledge, or Shea, and hereby adopt the view taken in the Second District

cases. Because the trial judge in the case at bar provided no explanation for his denial of

sanctions, his order must be reversed and this cause remanded.

¶ 10 CONCLUSION

¶ 11 For the foregoing reasons, we reverse the order of the circuit court of St. Clair

County and remand with directions for the circuit court to enter an order ruling on the

plaintiff's motion for sanctions, said order to describe, with specificity, the reasons for so

ruling.

¶ 12 Order reversed; cause remanded with directions.

8

NO. 5-13-0109

IN THE

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT

LAKE ENVIRONMENTAL, INC., ) Appeal from the ) Circuit Court of Plaintiff-Appellant, ) St. Clair County. ) v. ) No. 11-MR-226 ) DAMON T. ARNOLD, in His Capacity as Director ) of Public Health, and THE DEPARTMENT OF ) PUBLIC HEALTH, ) Honorable ) Stephen P. McGlynn, Defendants-Appellees. ) Judge, presiding. ________________________________________________________________________

Opinion Filed: July 10, 2014 ________________________________________________________________________

Justices: Honorable Stephen L. Spomer, J.

Honorable Thomas M. Welch, P.J., and Honorable Melissa A. Chapman, J., Concur ________________________________________________________________________

Attorneys David L. Antognoli, Anthony Catalfamo, Goldenberg, Heller, for Antognoli & Rowland, P.C., 2227 South State Route 157, Appellant Edwardsville, IL 62025 ________________________________________________________________________

Attorneys Lisa Madigan, Attorney General, Michael A. Scodro, Solicitor for General, Laura Wunder, Assistant Attorney General, 100 West Appellees Randolph Street, 12th Floor, Chicago, IL 60601 ________________________________________________________________________