Articles Posted in Standard of Review

Warren County Soil is important to Illinois appellate practitioners because it clears the confusion over the standard of review in appeals from orders growing from 2-1401 disputes. (Illinois Civil Procedure Code § 1401 allows relief from judgments that are more than two years old.) This is what the Illinois Supreme Court said:

[W]e hold that when a section 2-1401 petition presents a fact-dependent challenge to a final judgment or order … the petitioner must set forth specific factual allegations supporting each of the following elements: (1) the existence of a meritorious defense; (2) due diligence in presenting this defense; and (3) due diligence in filing the section 2-1401 petition for relief … The quantum of proof necessary to sustain a section 2-1401 petition is a preponderance of the evidence, and the circuit court’s ultimate decision on the petition is reviewed for an abuse of discretion … In addition, when the facts supporting the section 2-1401 petition are challenged by the respondent, a full and fair evidentiary hearing should be held … Relevant to this appeal, the trial court may also consider equitable considerations to relax the applicable due diligence standards under the appropriate limited circumstances …‍

But when the fight concerns only a question of law — e.g., a claim that the judgment was void — then there is a de novo standard of review (no discretion given to the circuit court).

Warren County Soil and Water Conservation District v. Walters, 2015 IL 11783, is important to understand if you’re dealing with a 2-1401 petition at any level. You can read the whole opinion by clicking here.

Lake Environmental was doing asbestos removal at Scott Air Force Base in southern Illinois. The State, claiming that Lake had violated regulations, persuaded the Department of Public Health to revoke Lake’s asbestos removal license. Lake asked the trial court to review the department’s decision. But while that review was still pending, the State filed another complaint in the Department that asked for penalties and an injunction.

The trial court reversed the Department’s decision to revoke the license. Lake then asked the court to sanction the State. The trial court denied the sanction request, but did not say why. So Lake appealed the denial of sanctions to the Illinois Fifth District Court of Appeals.

The appellate court ruled that it had no basis to affirm the denial of sanctions because the trial court’s terse denial did not meet the requirement that a court must provide a reasoned analysis for its sanctions ruling.

This is how the court explained it:

“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 determinitive facts and legal theories the trial court relied on in deciding” whether to allow or deny sanctions.

The appellate court reversed the no-sanctions decision and sent the case back to the trial court with directions to issue an opinion stating “with specificity” why it denied sanctions.

Click here to read the entire opinion, Lake Environmental v. Arnold, 2014 IL App (5th) 130109 (7/10/2014).

Poolman of Wisconsin services and sells swimming pools, hot tubs, and fireplaces. Through a third-party, the company faxed an unsolicited advertisement to UESCO Industries, a company that manufactures cranes. Angered at Poolman‘s advertising method, UESCO sued Poolman under a federal law that prohibits unsolicited fax advertisements.UESCO asked for class action certification, claiming it could adequately represent all parties that received Poolman’s fax advertisement.

An Illinois trial court granted UESCO’s request for class action status. Poolman appealed.

UESCO and Poolman argued for opposite appellate standards of review. Poolman asserted the appellate court should review the matter de novo (no discretion given to the trial court) “because the issues presented on appeal are ‘purely legal.’” UESCO argued that the trial court should be reversed only if it abused its discretion. The First District Illinois Appellate Court sided with UESCO, and ruled that the trial court gets discretion with one condition.

Here is how the appellate court described it. “Based on our review of the cases cited by defendant and pertinent Illinois authority, our determination here involves whether the circuit [trial] court abused its discretion or applied impermissible legal criteria.”

UESCO won the standard-of-review battle but lost the war. In the end, the appellate court reversed the ruling that allowed class certification. Read the whole opinion, UESCO Industries v. Poolman of Wisconsin, 2013 IL App (1st) 112566 (6/17/13), by clicking here.

Carolyn Mahoney sued her former husband, Billy J. Cox, and his lawyer, Marc Gummerson, for plotting to kill her. Cox was in jail, so Mahoney served the Illinois Department of Corrections with a subpoena to find out information about the plot. The DOC asked the trial court to quash the subpoena because the documents Mahoney wanted contained the name of a confidential informant. The DOC argued the informant’s safety could be at risk if his identity were disclosed.

Trial court refused quash the subpoena, and instead compelled the DOC to produce the records. The DOC then asked for an immediate appeal of whether the informant’s identity was privileged under an Illinois statute.

The appeal was allowed, and a question about whether the statute made the informant’s identity confidential was certified. The DOC filed its brief, but neither Mahoney, Cox, nor Gummerson responded. So the issue was how the appellate court should treat an appeal that no one opposed.

The Second District Illinois Appellate Court acknowledged the usual methodology when an opposing brief is not filed: the court considers the merits of the appeal “if the issues and record are susceptible to easy decision, but that a court otherwise decide the case in favor of the appellant [party appealing] if the appellant establishes a prima facie [on its face; at first blush] case for reversal.”

But the appellate court ruled that the typical method would not work in this case because the court had to decide a certified question of law. Here’s how the court explained it:

“[I]n an appeal that considers certified questions … ruling in favor of the appellant who establishes a prima facie case would entail not ordering a case-specific outcome but, rather, articulating a legal proposition that may or may not be correct… [T]he failure to file an appellee’s brief does not establish or corroborate the answer to a certified question. A certified question is a question of law that is not susceptible to either a default or a prima facie showing of error. Therefore, we address certified questions on their merits, regardless of their simplicity. Our review is de novo [no trial court discretion] because we are presented solely with questions of law.”

Read the whole opinion, Mahoney v. Gummerson, 2012 IL App (2d) 120391 (11/20/12), by clicking here.

While still married to John, Betsy D’Attomo began developing a bakery. John and Betsy financed the bakery partly with money from a home equity loan. The couple decided to divorce. At the divorce trial, John claimed the money from the home equity loan was a loan to the bakery that must be paid back. Betsy testified that the money was an equity investment. The circuit court sided with Betsy, and ruled that the advance was an investment, not a loan.

John appealed. But other than his own testimony, John did not have any evidence to prove the advance was a loan. He argued that the loan contract was implied in fact. He also argued that the existence of an implied-in-fact contract was a question of law, which the appellate court should review de novo. [No discretion for the trial court decision.]

The First District Illinois Appellate Court disagreed with John on the standard of review. Implied-in-fact contracts are reviewed under a de novo standard if they arise out of a written document. But John did not have a written loan agreement. So the appellate court ruled that the more deferential manifest-weight-of-the-evidence standard applied because “the trial court is in a better position to weigh the testimony adduced at trial.”

In the end, the appellate court went along with the ruling that the home equity money was an investment. Read the whole case, IRMO D’Attomo, 2012 IL App (1st) 111670 (9/26/12), by clicking here.

Here is a nice, concise statement of how the Illinois Appellate Court reviews the personal jurisdiction of the trial court.

When the trial court decides a jurisdictional question solely on the basis of documentary evidence and without an evidentiary hearing, as it did here, then the question is reviewed de novo on appeal. Rosier v. Cascade Mountain, Inc., 367 Ill.App.3d 559, 561, 305 Ill.Dec. 352, 855 N.E.2d 243 (2006). On appeal, any conflicts in the pleadings and affidavits must be resolved in the plaintiff’s favor. MacNeil v. Trambert, 401 Ill.App.3d 1077, 1080, 342 Ill.Dec. 314, 932 N.E.2d 441 (2010). “However, well-alleged facts within affidavits presented by the defendant must be taken as true notwithstanding the existence of contrary averments in the plaintiff’s pleadings unless the defendant’s affidavits are contradicted by affidavits presented by the plaintiff, in which case the facts in the plaintiff’s affidavits prevail.” Keller v. Henderson, 359 Ill.App.3d 605, 611, 296 Ill.Dec. 125, 834 N.E.2d 930 (2005). If we determine that plaintiff has made a prima facie case for jurisdiction, we must then determine if there exist any material evidentiary conflicts. Id. If a material evidentiary conflict exists, we must remand the cause for an evidentiary hearing. Id.

Click here for the whole case, Soria v. Chrysler Canada, 2011 IL App (2d) 10123.

Center Partners v. Growth Head grew out of a complex asset purchase agreement. The question in this opinion concerned whether Westfield, one of the parties involved in the agreement, had waived the attorney-client privilege during negotiations and had to produce documents in connection with the waived subject.

The trial court ruled that Westfield had waived the privilege and had to produce some 1,500 documents that otherwise were subject to the attorney-client privilege. Westfield refused to produce the records, so the trial court held Westfield in contempt.

Westfield appealed the contempt order. The first question was the proper standard of review. Contempt orders generally are reviewed for an abuse of discretion. But the First District Illinois Appellate Court applied a de novo standard [trial court decision gets no discretion]. This case was different than the typical contempt appeal “because a trial court lacks the discretion to compel the disclosure of privileged information, [so] we apply a de novo standard of review in determining the applicability of the attorney-client privilege.”

In the end, the court appellate court ruled that the privilege had been waived. Read the whole case, Center Partners v. Growth Head, 2011 IL App (1st) 11038, by clicking here.

Hadley and David Newton were getting divorced. Grund, an attorney had met with David concerning the divorce, and took notes of the conversation with David. Nonetheless, Grund and Leavitt agreed to represent Hadley in the divorce case.

Grund and Leavitt asked the trial court for an award of Hadley’s attorney fees from David, about $250,000. But David asked the trial court to disqualify Grund and Leavitt from representing Hadley because of a conflict of interest from Grund’s representation of David. Before it ruled on the fee request, the trial court disqualified Grund and Leavitt.

A week later the trial court denied the fee request based on the conflict of interest. At the court hearing, the law firm refused to obey the disqualification order, so the trial court found Grund and Leavitt to be in direct contempt of court.

The law firm appealed the contempt order, and the parties fought over the proper standard of review. Grund and Leavitt argued for de novo review (no discretion to the trial court) because, they claimed, the correctness of the contempt order was purely a question of law. David argued for the more lenient abuse-of-discretion standard.

The First District Illinois Appellate Court sided with the law firm. Here is the court’s reason for choosing the abuse-of-discretion standard:

When the facts of a contempt finding are not in dispute, their legal effect may be a question of law, which we review de novo. … “As a general rule, a trial court’s decision to award fees is a matter of discretion and will not be disturbed on appeal absent an abuse of discretion.” … Here, however, the circuit court indicated its belief that it could not award attorney fees once Grund and Leavitt were disqualified. Meanwhile, Grund and Leavitt argue that, although they were disqualified, they are still entitled to their fees accrued for work performed for Hadley under section 508 of the [Marital Dissolution] Act before the disqualification and assert that nothing in the ethical rules explicitly states that no fees are allowed if an attorney is disqualified. The legal question is thus whether the circuit court properly denied attorney fees from the beginning of Grund’s representation of Hadley. Whether a court or administrative agency has the authority to award attorney fees is a question of law that we review de novo. …” Furthermore, whether a party may recover attorney fees and costs pursuant to any specific act is a question of law.” … Thus, since the facts of the contempt are not in dispute and since Grund and Leavitt are not appealing the disqualification, we are presented with a question of law and we review this issue de novo.

Grund and Leavitt won the battle over the standard of review, but lost the war. The appellate court affirmed the contempt order, in effect depriving the firm of attorney fees. Read the whole case, IRMO Newton, No. 1-09-0684 (6/30/11), by clicking here.

Chris Ward wanted to be a judge in the state trial court in Will County, Illinois. Circuit court judges are elected by popular vote in Illinois, so Ward filed a candidacy petition to run in the primary. But when he filed, he did not live in the subcircuit he filed in.

Daniel Goodman, husband of one of Ward’s primary opponents, filed an objection to Ward’s candidacy petition. Goodman argued Ward was ineligible to run for judge in a subcircuit he did not live in when the petition was filed.

The Will County electoral board agreed with Ward and ruled that Ward could appear on the election ballot. Goodman appealed the board’s decision to the circuit (trial level) court, which agreed with him, and precluded Ward from the ballot. Ward then took the case to the Illinois Appellate Court, which also agreed with Goodman.

The Illinois Supreme Court took Ward’s appeal. The standard of review was among the preliminary issues. Did the case present a question of law, a question of fact, or a mixed question of law and fact? Each has a different standard of review. The question in this case, the supreme court ruled, was whether the governing law had been interpreted properly given the undisputed facts. Here’s how the Illinois Supreme Court explained it:

As in other administrative review cases, the standard of review we apply to an election board’s decision depends on what is in dispute, the facts, the law, or a mixed question of fact and law … In this case there is no argument about the facts. The issue is whether, given those facts, the Will County officers electoral board correctly concluded that Ward’s nominating petitions were sufficient under the controlling law to permit his name to appear on the ballot for the February 2, 2010, primary election as a candidate for the Democratic nomination to fill a subcircuit vacancy.

Our court has held that where the historical facts are admitted or established, the controlling rule of law is undisputed and the issue is whether the facts satisfy the statutory standard, the case presents a mixed question of fact and law for which the standard of review is “clearly erroneous.” … We have also held, however, that where the historical facts are admitted or established, but there is a dispute as to whether the governing legal provisions were interpreted correctly by the administrative body, the case presents a purely legal question for which our review is de novo … The matter before us here falls within the latter category. Our review is therefore de novo, a standard we have characterized as “independent and not deferential.”

In the end, the supreme court ruled that Ward did not belong on the election ballot. Read the whole case, Ward v. Goodman, No. 109796 (3/24/11), by clicking here.

Old Town Development sued a slew of companies for fraud and breach of fiduciary duties in operating Old Town Development. After a bench trial, the trial court awarded Old Town over $1 million compensatory damages and three times that for punitive damages.

The defendant companies appealed. The appellate court’s opinion is instructive on the standards of review for the various aspects of a punitive damages award.

The first part of the punitive damages test was whether “punitive damages were available as a matter of law [under] plaintiff’s cause of action.” The appellate court ruled that its standard of review was de novo (no discretion to the trial court). In this case, the First District Illinois Court of Appeals ruled, a breach of fiduciary duty action could support a claim for punitive damages.

The second part of the test was whether the defendant companies acted with willful and wanton disregard for Old Town’s rights. The appellate court reviewed the “factual determination that defendants acted willfully and that aggravating factors exist under the manifest-weight standard … In applying this standard, we give deference to the trial court as the finder of fact because it is in the best position to observe the conduct and demeanor of the parties and the witnesses … For that reason, we may not substitute our judgment for that of the trial court regarding the credibility of witnesses, the weight to be given to the evidence, or the inferences to be drawn.”

In this case, the appellate court affirmed the finding of willful disregard of Old Town’s rights because the trial court “‘was shocked by the nonchalance with which both McLean [defendant] and his accountant * * * described their misconduct in their testimony’ and how any device they could use to deceive Tully was deemed justified because Tully was considered a pest and an impediment to McLean’s business interests.”

Next was the whether it was proper to award punitive damages in view of its legal purpose ― punishment and deterrence. The appellate court gave the trial court lots of latitude on this question, and ruled the standard of review was abuse-of-discretion.

The company defendants argued that the court was biased, and thus the punitive damages award was not made to punish or deter. But the appellate court again referred to McLean’s nonchalance, “which was well within the scope of the [trial] court’s consideration. There is nothing to show the court’s decision to award punitive damages was the result of the court’s bias against defendants …”

The appellate court also considered whether the amount of the punitive damage award was appropriate. The appellate court did not state a standard of review on this question, but it did “review the [trial] court’s computation of the amount of punitive damages award to determine whether the amount was excessive or the result of passion, partiality, or corruption.” The defendant companies argued that a three-to-one punitive-to-compensatory ratio was too harsh because there was no intention to hurt Old Town.

But the appellate court ruled that didn’t matter. “The fact that defendants may not have intended to harm plaintiffs does not take away from the fact that they were fully aware of and ignored the impact their ‘on demand loans’ [taken out of Old Town] would have on Old Town … OTD [Old Town] was harmed by the transfers in that it couldn’t meet its financial obligations and was charged late fees and penalties as a result. It was also unable to use its own funds or earn interest thereon during the period the interest-free loans were outstanding.”

The defendant companies also challenged the punitive damages award as violating their due process rights under the U.S. Constitution. Reviewing the constitutional argument under a de novo standard of review, the appellate court ruled there was no due process violation.

Read this most interesting opinion, Tully v. McLean, No. 1-09-2976 (4/26/11), by clicking here.