2019 IL App (1st) 180576
FIRST DIVISION
Modified Opinion Filed July 22, 2019
No. 1-18-0576
IN THE
APPELLATE COURT OF ILLINOIS
FIRST DISTRICT
LAKESHORE CENTRE HOLDINGS, LLC, )
) Appeal from the
Plaintiff-Appellee/Cross-Appellant, ) Circuit Court of
) Cook County
v. )
) No. 12 L 10029
LHC LOAN, LLC; PETER GOLDMAN; JOHN READING )
WILSON; JONATHAN BROSS; and LHC INVESTMENT, ) The Honorable
LLC, ) James E. Snyder,
) Judge Presiding.
Defendants-Appellants/Cross-Appellees. )
JUSTICE PIERCE delivered the judgment of the court, with opinion.
Justice Griffin concurred in the judgment and opinion.
Presiding Justice Mikva dissented, with opinion.
OPINION
¶1 Defendants LHC Loan, LLC (Loan), Peter Goldman, John Reading Wilson, Jonathan
Bross, and LHC Investment, LLC (Investment) and plaintiff Lakeshore Centre Holdings, LLC
(Lakeshore) appeal from the circuit court’s judgment granting in part and denying in part
defendants’ motion for sanctions filed pursuant to Illinois Supreme Court Rule 137 (eff. July 1,
2013). For the reasons that follow, we find that defendants’ motion for sanctions—which was
filed nearly five months after entry of the circuit court’s final judgment pursuant to Illinois
Supreme Court Rule 304(a) (eff. Mar. 8, 2016)) on Lakeshore’s claims, and while those claims
No. 1-18-0576
were before this court on appeal—was untimely, and therefore the circuit court lacked
jurisdiction to grant any of the relief requested in the motion. We therefore vacate the circuit
court’s judgment on defendants’ Rule 137 sanctions motion.
¶2 I. BACKGROUND
¶3 We set forth only those facts necessary to understand our disposition. Lakeshore, facing
financial difficulties related to a health club it owned, sold its 34% ownership interest in LHC
Operating, LLC (Operating) to Loan in exchange for an option to repurchase the 34% ownership
interest on or before two specified dates for amounts specified in the parties’ agreement
(repurchase option). Lakeshore attempted to exercise the repurchase option, but was
unsuccessful. Lakeshore filed its initial complaint in September 2012. Lakeshore’s complaint
related solely to the sale of its 34% interest in Operating and the alleged failure of Loan to
perform under the repurchase option. Over the course of four years, and through four iterations
of its complaint, Lakeshore pursued claims against defendants for fraudulent inducement,
fraudulent misrepresentation, breach of contract, and tortious interference with a contract. During
the course of the litigation, Loan filed a counterclaim against Lakeshore for breach of contract
based on Lakeshore’s alleged failure to enter into good faith negotiations concerning Loan’s
potential purchase of a different health club owned by Lakeshore. None of the other defendants
were named as counterplaintiffs in Loan’s counterclaim. Loan’s counterclaim against Lakeshore
was not related to or dependant on the claims advanced by Lakeshore in its underlying amended
complaints.
¶4 On July 12, 2016, the circuit court entered summary judgment in favor of defendants on
the breach of contract claims in Lakeshore’s second amended complaint and dismissed
Lakeshore’s remaining claims, but granted Lakeshore leave to amend its fraud claims. Lakeshore
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filed a third amended complaint that contained amended fraud claims. The third amended
complaint also asserted breach of contract and tortious interference claims that were nearly
identical to the claims that were disposed of in the July 12, 2016, order. On November 30, 2016,
the circuit court dismissed Lakeshore’s third amended complaint in its entirety with prejudice
and made a finding pursuant to Rule 304(a). 1 The November 30, 2016, order also made the
circuit court’s July 12, 2016, final order entering summary judgment in favor of defendants on
Lakeshore’s breach of contract claims immediately appealable. Lakeshore filed a timely notice
of appeal on December 28, 2016. We affirmed the circuit court’s judgment in all respects, with
one justice dissenting in part. Lakeshore Centre Holdings, LLC v. LHC Loan, LLC, 2017 IL App
(1st) 163402-U (Lakeshore I), petition for leave to appeal denied, No. 123814 (Sept. 26, 2018).
¶5 On May 25, 2017, while Lakeshore I was pending in this court, defendants filed a motion
in the circuit court for sanctions against Lakeshore pursuant to Illinois Supreme Court Rule 137
(eff. July 1, 2013). 2 Defendants asserted that, based on the deposition testimony of Lakeshore’s
owner Walter Kaiser, all of Lakeshore’s claims falsely alleged that Goldman, Wilson, and Bross
made misrepresentations about the nature of the transaction and whether Lakeshore’s ownership
interest would be returned intact upon exercise of the repurchase option. Defendants also argued
that Lakeshore’s fraud claims, which were in the nature of promissory fraud claims, were legally
deficient, and that Lakeshore’s breach of contract claims were “baseless” and contained false
factual allegations. In short, the Rule 137 sanctions motion related solely to the underlying sale
1
The Rule 304(a) finding was necessary because of Loan’s pending counterclaim.
2
The Rule 137 sanctions motion was filed by all defendants, but could only in fact be pursued by
Loan. The circuit court’s summary judgment order resolved all of Lakeshore’s claims against Loan,
Investment, Goldman, Wilson, and Bross. The counterclaim was filed only by Loan. The circuit court
therefore lacked personal jurisdiction over Investment, Goldman, Wilson, and Bross. This issue, however,
was not addressed by the circuit court or the parties on appeal, and is immaterial to our disposition.
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No. 1-18-0576
and repurchase option of the 34% interest in Operating, and nothing in the sanctions motion
related to the underlying transaction that was the subject of Loan’s counterclaim.
¶6 After briefing and an evidentiary hearing, the circuit court entered a written order that
granted defendants’ Rule 137 sanctions motion in part and denied it in part. The circuit court
awarded defendants $825 in attorney fees. The circuit court denied defendants’ subsequent
motion to vacate and reconsider the sanctions award and denied defendants leave to file an
amended fee petition. Defendants filed a timely notice of appeal, and Lakeshore filed a timely
notice of cross-appeal. 3
¶7 After the parties briefed this appeal and cross-appeal of the sanctions judgment, we
ordered supplemental briefing on the issue of whether the circuit court had subject-matter
jurisdiction to grant the relief requested in defendants’ Rule 137 sanctions motion, which was
based solely on the allegations in Lakeshore’s complaint, where the Rule 137 sanctions motion
was filed more than 30 days after the circuit court entered a final and appealable judgment
pursuant to Rule 304(a) on all of the claims in Lakeshore’s complaint.
¶8 II. ANALYSIS
¶9 We have an independent duty to consider the circuit court’s subject-matter jurisdiction,
even if the issue is not raised by the parties. J&J Ventures Gaming, LLC v. Wild, Inc., 2015 IL
App (5th) 140092, ¶ 33, aff’d, 2016 IL 119870. Whether the circuit court had subject-matter
jurisdiction is a question of law reviewed de novo. J&J Ventures Gaming, LLC v. Wild, Inc.,
2016 IL 119870, ¶ 25. Furthermore, our jurisdictional analysis is guided by our interpretation of
Rule 137, which is also a question of law that we review de novo. Kaull v. Kaull, 2014 IL App
3
Lakeshore also filed a notice of separate appeal from the circuit court’s sanctions judgment,
which was docketed in this court as No. 1-18-0677. We entered an agreed order dismissing appeal No. 1-
18-0677 with the understanding that no party would be precluded from challenging any portion of the
circuit court’s sanctions judgment.
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No. 1-18-0576
(2d) 130175, ¶ 28. “Because Rule 137 is penal in nature, it will be strictly construed.” Dowd &
Dowd, Ltd. v. Gleason, 181 Ill. 2d 460, 487 (1998).
¶ 10 Rule 137 provides, in relevant part,
“(b) Procedure for Alleging Violations of This Rule. All proceedings under this
rule shall be brought within the civil action in which the pleading, motion or other
document 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.” (Emphasis
added.) Ill. S. Ct. R. 137(b) (eff. July 1, 2013).
¶ 11 The jurisdictional issue we consider in this appeal requires the consideration of the
relationship between judgments that may be immediately appealed under Rule 304(a) and the
time requirements for filing a Rule 137 sanctions motion. Rule 137(b) requires the filing of a
sanctions motion within 30 days of “the entry of final judgment.” Id. Clearly, where the
judgment disposes of the entire dispute as to all claims and between all of the parties, a Rule 137
sanctions motion must be filed within 30 days of entry of that judgment.
¶ 12 There are instances, however, where a judgment is entered on only a part of the dispute or
as to less than all of the parties. In that situation, the judgment can only be immediately appealed
under the provisions of Rule 304. See Roberts v. Board of Trustees of Community College
District No. 508, 2019 IL 123594, ¶¶ 1-2, 19 (appeal from circuit court’s dismissal with
prejudice and Rule 304(a) finding with respect to the plaintiff’s retaliatory discharge and
Whistleblower Act claims while the plaintiff’s wrongful termination claim remained pending in
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No. 1-18-0576
the circuit court); see also Schweihs v. Chase Home Finance, LLC, 2016 IL 120041, ¶ 18 (appeal
from the circuit court’s summary judgment and dismissal with prejudice of the plaintiff’s
intentional infliction of emotional distress and negligent infliction of emotional distress claims,
respectively, containing a Rule 304(a) finding, while the plaintiff’s trespass and negligent
trespass claims remained pending in the circuit court). Rule 304(a) “authorizes appeals from final
judgments that do not dispose of an entire proceeding ‘if the trial court has made an express
written finding that there is no just reason for delaying either enforcement or appeal or both.’ ”
Blumenthal v. Brewer, 2016 IL 118781, ¶ 23 (quoting Ill. S. Ct. R. 304(a) (eff. Feb. 26, 2010)).
“An order or judgment is considered to be final and appealable for purposes of [Rule 304(a)] if it
terminates the litigation between the parties on the merits or disposes of the rights of the parties,
either on the entire controversy or a separate part thereof.” Id. (citing In re Marriage of Gutman,
232 Ill. 2d 145, 151 (2008)).
¶ 13 Here, the circuit court’s July 12, 2016, and November 30, 2016, judgment orders
terminated the litigation between Lakeshore and defendants on the merits of Lakeshore’s claims
against defendants relative to the sale and repurchase option of Lakeshore’s 34% interest in
Operating. Those judgments became immediately appealable on November 30, 2016, when the
circuit court made an express finding pursuant to Rule 304(a) “that there is no just reason to
delay enforcement or appeal.” Without the express Rule 304(a) finding, the July 12 and
November 30 judgment orders would not have been immediately appealable because the
counterclaim filed by Loan, which defendants admit is unrelated to Lakeshore’s underlying
claims, remained unresolved. Therefore, the circuit court’s November 30, 2016, Rule 304(a)
finding applicable to the July 12 and November 30 judgment orders finally disposed of all claims
and parties related to the sale and repurchase of Lakeshore’s 34% interest in Operating, resulting
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in a final and immediately appealable judgment, and the December 28, 2016, notice of appeal
established the jurisdictional basis for our decision in Lakeshore I.
¶ 14 In their supplemental brief, defendants argue that “orders including 304(a) language are
not, definitionally, ‘final judgments’ as the underlying action has not been terminated,” and that
this court “should interpret Rule 137’s use of ‘final judgment’ in a manner consistent with Rule
301’s use of ‘final judgment.’ ” As a basis for their argument that “the underlying action [had]
not been terminated,” defendants rely on the fact that Loan’s unrelated counterclaim was still
pending when their motion for sanctions was filed. This argument overlooks, however, the
unambiguous phrase “final judgment” used in both Rules 301 and 304(a).
¶ 15 Rules 301 and 304(a) regulate the appealability of a final judgment, not the judgment’s
finality. Rule 301 provides that “[E]very final judgment of the circuit court in a civil case is
appealable as of right.” Ill. S. Ct. R. 301 (eff. Feb. 1, 1994). It is without dispute that a judgment
that resolves the entire controversy as to all claims and all parties is a final judgment and an
appeal therefrom must be filed within 30 days of entry pursuant to Rule 303(a)(1) (eff. Jan. 1,
2015).
¶ 16 Rule 304(a) recognizes that frequently there are lawsuits with multiple parties or multiple
claims and that the circuit court might enter “a final judgment as to one or more but fewer than
all of the parties or claims” before the action ultimately ends. Ill. S. Ct. R. 304(a) (eff. Feb. 26,
2010). In those situations, rather than allowing the immediate appeal of final judgments as to
fewer than all claims or parties as a matter of right, we look to Rule 304(a) “to discourage
piecemeal appeals in the absence of a just reason and to remove the uncertainty which existed
when a final judgment was entered on fewer than all of the matters in controversy” (In re
Marriage of Gutman, 232 Ill. 2d at 151), and to determine whether an immediate appeal may be
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No. 1-18-0576
taken. For example, where the circuit court enters summary judgment or a dismissal with
prejudice on some claims but not others, the circuit court’s judgment—while final—is not
appealable as a matter of right under Rule 301; it does not become immediately appealable until
a final judgment is entered on the remaining claims. Dubina v. Mesirow Realty Development,
Inc., 178 Ill. 2d 496, 502-03 (1997) (“Without a Rule 304(a) finding, a final order disposing of
fewer than all of the claims in an action is not instantly appealable. Such an order does not
become appealable until all of the claims in the multiclaim litigation have been resolved. Once
the entire action is terminated, all final orders become appealable under Rule 301.”).
¶ 17 When the circuit court enters a final judgment and makes a specific Rule 304(a) finding,
it promotes judicial economy by finding that a separate part of the overall controversy has come
to end, and that a party adversely affected by the judgment may either seek immediate appellate
review or be bound by the terms of the judgment. In other words, in a multiclaim or multiparty
lawsuit, a final judgment on a separate part of the controversy that is made immediately
appealable by a Rule 304(a) finding is as final and appealable as a final judgment governed by
Rule 301 that resolves all of the claims against all of the parties.
¶ 18 Rule 137(b) plainly states that a motion for sanctions filed pursuant to the rule is a claim
that must be filed within 30 days of the final judgment. Our supreme court has explained that
“motions for sanctions under our Rule 137 are ‘claims’ in the cause of action with which they are
connected” and that “a Rule 137 motion is the functional equivalent of adding an additional
count to a complaint, or counter-claim, depending on which party files the motion.” John G.
Phillips & Associates v. Brown, 197 Ill. 2d 337, 339-40 (2001). In John G. Phillips & Associates,
our supreme court explained that this motion deals with “the propriety of the filings in the
underlying action” that requires a review of “the entire context of the surrounding litigation from
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which it spawned. This is why Rule 137 provides that motions there under are claims in the
underlying litigation—review of such a motion will almost inevitably require familiarity with the
surrounding case.” Id. at 342. Therefore, to achieve Rule 137’s “purpose of providing a speedy
and efficient remedy” (Short v. Pye, 2018 IL App (2d) 160405, ¶ 44), a Rule 137 claim must be
asserted within 30 days of the judgment that conclusively resolved the claims in which the
allegedly sanctionable conduct took place.
¶ 19 Rule 137’s 30-day time limit coincides with the 30-day period established in Rules
303(a) and 304(a) governing the filing of notices of appeal from final judgments (Ill. S. Ct. R.
303(a)(1) (eff. Jan. 1, 2015), R. 304(a) (eff. Mar. 8, 2016)), and postjudgment motions directed at
final judgments (see, e.g., 735 ILCS 5/2-1203(a) (West 2016)) that toll the time in which to file a
notice of appeal (Ill. S. Ct. R. 303(a)(1)). Furthermore, our supreme court has repeatedly
observed that a motion for sanctions filed within 30 days of the circuit court’s final judgment
tolls the appealability of the final judgment until a judgment is entered on the pending motion for
sanctions “ ‘absent a finding pursuant to Rule 304(a) that there is no just reason to delay
enforcement or appeal.’ ” John G. Phillips & Associates, 197 Ill. 2d at 340 (citing Marsh v.
Evangelical Covenant Church, 138 Ill. 2d 458, 468 (1990)). It follows that, where the circuit
court makes a Rule 304(a) finding, a party that wants to appeal that final judgment must file a
notice of appeal within 30 days, and an unresolved motion for Rule 137 sanctions—or a motion
for sanctions filed after the timely filed notice of appeal but within 30 days of the judgment—
will not toll the time in which the notice of appeal must be filed. It also follows that the circuit
court retains jurisdiction over a motion for sanctions filed within 30 days of the judgment
containing a 304(a) finding, even if a notice of appeal has already been filed, since the sanctions
motion is timely under Rule 137(b). See Niccum v. Botti, Marinaccio, DeSalvo & Tameling, 182
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Ill. 2d 6, 7-9 (1998). In other words, Rule 137(b) requires that a Rule 137 sanctions motion must
be filed within 30 days after the circuit court makes a Rule 304(a) finding that a there is no just
reason to delay enforcement or appeal of a final judgment fully disposing of one or more but
fewer than all of the parties or claims, otherwise the circuit court loses jurisdiction over that part
of the cause of action in which the allegedly offending pleading, motion, or other document was
filed; if the sanctions motion is timely filed, the circuit court retains jurisdiction until the timely
filed Rule 137 motion is resolved. See Won v. Grant Park 2, L.L.C., 2013 IL App (1st) 122523,
¶ 20 (explaining that the circuit court “loses jurisdiction after 30 days from the time the final
judgment is entered when either (1) a posttrial motion directed against the judgment is not filed,
(2) 30 days pass from the time the trial court disposes of a timely filed posttrial motion, or (3) a
notice of appeal is timely filed.”).
¶ 20 In sum, if the circuit court enters a final judgment disposing of all of the claims of all the
parties, a litigant has 30 days from the entry of that final judgment to assert a Rule 137 claim. If
the circuit court enters a judgment that conclusively disposes of one or more but fewer than all of
the parties or claims—such as a dismissal with prejudice, or the entry of a judgment on the
pleadings or summary judgment—a litigant must assert any Rule 137 claim within 30 days from
the entry of a Rule 304(a) finding that there is no just reason to delay enforcement or appeal of a
specific final judgment; Rule 137(b)’s 30-day clock begins to run on the date that the circuit
court makes an express written finding pursuant to Rule 304(a). Ill. S. Ct. R. 304(a) (stating that
an express written finding “may be made at the time of the entry of the judgment or thereafter on
the court’s own motion or on motion of any party. *** In computing the time provided in Rule
303 for filing the notice of appeal, the entry of the required finding shall be treated as the date of
the entry of final judgment.”).
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¶ 21 Here, on November 30, 2016, the circuit court, pursuant to Rule 304(a), entered a final
and appealable judgment on all of Lakeshore’s claims, bringing an end to all of Lakeshore’s
claims against all defendants. On November 30, 2016, the clock began to run on all
postjudgment activity involving Lakeshore’s claims that were subject to the circuit court’s
judgment, including any motions to vacate or reconsider the judgment, motions for sanctions, or
the filing of a notice of appeal. Here, because no postjudgment motions were filed against the
circuit court’s November 30, 2016, final judgment, defendants were required to file their Rule
137 motion for sanctions based on the pleadings, motions, or other papers Lakeshore filed in
connection with its claims against Loan within 30 days of the final judgment, or within an
extended period allowed by the circuit court. The circuit court here did not extend the time for
filing a motion for sanctions. Instead, Lakeshore filed a timely notice of appeal on December 28,
2016, while defendants waited until May 25, 2017, to file a motion for sanctions in the circuit
court. By May 25, 2017, the circuit court no longer had jurisdiction over any of Lakeshore’s
claims because Lakeshore filed a timely notice of appeal, and the circuit court no longer had
jurisdiction to hear defendants’ Rule 137 motion because more than 30 days had passed since the
circuit court’s November 30, 2016, final judgment. Defendants’ Rule 137 sanctions motion was
untimely, and the circuit court did not have jurisdiction to entertain defendants’ sanctions
motion.
¶ 22 To further demonstrate the application of the time limitations set forth in Rules 137, 303,
and 304(a) to this case, consider a scenario where Lakeshore did not timely appeal and waited
until May 25, 2017, to file a motion to reconsider or a notice of appeal from the circuit court’s
November 30, 2016, final judgment. Lakeshore’s filings would have been untimely due to the
Rule 304(a) finding; the circuit court would have no authority to alter or amend its November 30,
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2016, judgment, and this court would have no jurisdiction over Lakeshore’s untimely notice of
appeal. The same must be true for defendants’ Rule 137 motion filed more than 30 days after
entry of the final judgment pursuant to Rule 304(a) that conclusively resolved the claims related
to the allegedly sanctionable conduct.
¶ 23 Finally, the fact that Loan had a pending counterclaim at the time of the circuit court’s
final judgment on Lakeshore’s claims does not alter our analysis. All of the alleged sanctionable
conduct was known to defendants at the time of the November 30, 2016, final judgment, and
defendants’ sanctions motion did not allege any fraudulent concealment by Lakeshore. Instead,
defendants’ motion for sanctions was focused solely on the allegations in Lakeshore’s
complaints that were finally disposed of and timely appealed. Defendants’ Rule 137 motion for
sanctions was not directed at any pleadings, motions, or documents filed by Lakeshore in
connection with Loan’s unrelated counterclaim. Had Loan’s counterclaim related to or depended
on proof of the same or similar operative facts underlying Lakeshore’s claims, a Rule 304(a)
finding would have been ineffective and the November 30, 2016, final judgment would not have
been immediately appealable. Our supreme court recognized in Blumenthal that, where “one
claim based on the same operative facts is stated differently in multiple counts,” or “where an
order only disposes of certain issues relating to the same basic claim,” the circuit court’s Rule
304(a) finding does not result in a final and appealable order. 2016 IL 118781, ¶ 27; see also
Lozman v. Putnam, 328 Ill. App. 3d 761, 771-72 (2002) (dismissing an appeal in part where a
Rule 304(a) finding was improper, since the circuit court dismissed fewer than all of the claims
in a complaint with prejudice and made a Rule 304(a) finding, even though some of the
adjudicated and unadjudicated claims could not be severed and “much factual overlap exist[ed]
between the decided and retained counts.”). Here, Loan’s counterclaim, a discrete portion of the
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overall controversy between the parties, did not in any manner arise out of or depend on proof of
any element of Lakeshore’s claims that were adjudicated by the circuit court’s November 30,
2016, final order containing a Rule 304(a) finding. Defendants’ supplemental brief does not
assert that any of the allegedly sanctionable conduct related in any manner to Loan’s
counterclaim. Therefore, the circuit court’s November 30, 2016, final and appealable judgment
on all of Lakeshore’s claims started the 30-day clock for defendants to bring any Rule 137
motions directed at Lakeshore’s conduct in connection with Lakeshore’s claims.
¶ 24 To find otherwise would undermine the purpose of Rule 137, which is to provide “a
speedy and efficient remedy” for violations of the rule. Short, 2018 IL App (2d) 160405, ¶ 44.
Defendants waited nearly five months after obtaining a favorable final and appealable judgment
disposing of all of Lakeshore’s claims before filing a Rule 137 claim attacking Lakeshore’s
pleadings. Defendants’ delay in filing their Rule 137 sanctions claim ignored both the time limit
set forth in Rule 137(b) and the overall purpose of Rule 137. Defendants failed to assert any
claim for sanctions within the time provided by Rule 137, and thus the circuit court no longer
had jurisdiction to consider defendants’ specific Rule 137 claims.
¶ 25 III. CONCLUSION
¶ 26 For the foregoing reasons, we vacate the circuit court’s October 25, 2017, judgment
granting in part and denying in part defendants’ motion for Rule 137 sanctions and awarding
defendants $825.
¶ 27 Judgment vacated.
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¶ 28 PRESIDING JUSTICE MIKVA, dissenting:
¶ 29 I write separately because I believe that defendants’ motion for sanctions in this case was
timely filed; the case as a whole was still pending in the circuit court and the circuit court
therefore had jurisdiction to entertain the motion.
¶ 30 The majority holds that when a circuit court’s rulings on one or more but not all of the
claims in a case are appealed under Illinois Supreme Court Rule 304(a) (eff. March 8, 2016), the
30–day deadline for filing a sanctions motion set out in Illinois Supreme Court Rule 137(b) (eff.
July 1, 2013) is triggered for any sanctions motion relating to the claims that are the subject of
that interlocutory appeal. In my view, this represents a significant new requirement not
contemplated by the plain language of Rule 137(b).
¶ 31 Rule 137 provides that the signature of an attorney or a litigant on any pleading, motion,
or other document is a certification that the document has a proper basis in law and fact and is
not “interposed for any improper purpose.” Ill. S. Ct. R. 137(a) (eff. July 1, 2013). Sanctions may
be imposed for the signing of a document in violation of the rule. Id. Subsection (b) of Rule 137,
governing the procedure and timing for bringing a motion for sanctions under the rule, provides
as follows:
“Procedure for Alleging Violations of This Rule. All proceedings under this rule
shall be brought within the civil action in which the pleading, motion or other document
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.” Ill. S. Ct. R. 137(b) (eff. July1, 2013).
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¶ 32 This provision makes several things clear. First, a sanctions motion must be brought
“within the civil action” in which the improper pleading, motion or other document was filed.
Second, the sanctions motion is to be “considered a claim within th[at] same civil action.” Third,
the sanctions motion must be filed within 30 days of the “final judgment” concluding that action.
Most notably, as our supreme court has stressed, a Rule 137 motion does not initiate a separate
proceeding, but functions as an additional “claim” brought in the same civil action that the
parties are already litigating. See John G. Phillips & Associates v. Brown, 197 Ill. 2d 337, 340
(“[M]otions for sanctions under our Rule 137 are ‘claims’ in the cause of action with which they
are connected.”). And it is well-established that additional claims may be added to a case at “any
time before final judgment.” 735 ILCS 5/2-616(a) (West 2016) (liberally permitting amendments
adding new causes of action).
¶ 33 The majority holds that the 30-day deadline in Rule 137(b) was triggered on November
30, 2016, when to the trial court made a finding under Rule 304(a) (eff. March 8, 2016) as to the
dismissal with prejudice of all of Lakeshore’s claims against defendants. At that point, Loan’s
counterclaim against Lakeshore was still pending. Rule 304(a), allowing for the immediate
appeal of one or more claims while others remain pending in the circuit court, is an exception to
the general rule that appeal must await the final disposition of all claims in a case. Under Rule
304(a), a judgment of the circuit court adjudicating anything fewer than all the claims or rights
and liabilities of all the parties is only final and appealable when the circuit court makes an
express finding “that there is no just reason for delaying either enforcement or appeal or both.”
Where a Rule 304(a) appeal has been taken, the “civil action” that the claims subject to the
appeal were a part of clearly remains pending in the circuit court.
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¶ 34 Here, because the “civil action” was still pending on Loan’s counterclaim against
Lakeshore when defendants filed their motion for sanctions, in my view the motion was timely
under Rule 137(b). The circuit court still had the case before it and retained jurisdiction to
consider a sanctions motion until “30 days of the entry of final judgment, or if a timely post-
judgment motion [was] filed, within 30 days of the ruling on the post-judgment motion.” Ill. S.
Ct. R. 137(b) (eff. July1, 2013).
¶ 35 There are certainly reasons why it may be desirable for a party to file a sanctions motion
relating to a claim that is the subject of the Rule 304(a) appeal soon after a final order was
entered on that claim. For example, the circuit court would have the opportunity to consider the
motion while the facts relating to it are fresher. But if this were of real concern, parties would be
encouraged to file sanctions motions soon after an objectionable pleading is filed. This court has,
to the contrary, advised litigants that “motion[s] for relief under Rule 137 at such an early stage
of a proceeding should be pursued cautiously.” Peterson v. Randhava, 313 Ill. App. 3d 1, 8
(2000). And it may be desirable for a sanctions motion to be filed sooner rather than later so that
an appeal from the grant or denial of such a sanctions motion can be consolidated with the Rule
304(a) appeal of the underlying claim. If the sanctions motion is not required to be filed until the
end of the case, it may be that a party, who believed its participation in the litigation had ended
with the resolution of a Rule 304(a) appeal, could be drawn back into the case through a motion
for sanctions. But all of these concerns can be raised without imposing the deadline that the court
has imposed here, by virtue of the fact that, “[t]he decision whether to impose sanctions under
Rule 137 is committed to the sound discretion of the circuit judge.” Dowd & Dowd, Ltd. v.
Gleason, 181 Ill. 2d 460, 487 (1998).
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¶ 36 Of course there are equally important reasons why a party’s access to relief under Rule
137 should not be constrained by an overly narrow reading of the rule’s timing requirements.
Most significantly, it may not be at all clear that the basis for a sanctions motion relates solely to
claims that have been appealed pursuant to Rule 304(a). Here, for example, although the
majority has determined that defendants’ sanctions motion related solely to Lakeshore’s claims
and not to Loan’s counterclaim, Loan suggests in its supplemental briefing on this issue that the
matter is not so clear. The majority’s holding will, in my view, encourage parties to file several
sanctions motions, when one would suffice, and will introduce disputes regarding the timing of
those motions that were never contemplated by Rule 137.
¶ 37 My view, shared by all the parties to this case until this court suggested otherwise and
requested additional briefing on the issue, is that under Rule 137(b) a sanctions motion may be
brought any time until 30 days after the “civil action” as a whole has been concluded.
Defendants’ sanctions motion was timely and the circuit court had jurisdiction to consider it.
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