Articles Posted in Standard of Review

Rosa Neal was guardian of a disabled person’s estate. On behalf of her ward, Rosa contracted to sell the ward’s home to Damon Perry. Damon asked for, and received, approval from the probate court of the contract for sale of the property.

The contract had a mortgage contingency clause. Damon asked for a 30-day extension a day before the contingency was set to expire. The estate refused Damon’s request. Damon then said he would waive the contingency and that he intended to purchase the house as planned. But the estate had received a better offer, so its attorney told Damon that his inability to get a mortgage commitment by the contingency deadline rendered the contract null and void.

Damon then asked the probate court to enforce his contract to purchase the house. But the probate court agreed with the estate, and ruled “that the contract was null and void due to the mortgage contingency provision, and, moreover, because of equitable considerations the contract was not in the best interests of the estate.”

Clara George Minch and Ronald George were divorced in 1982. In 2003, Clara learned that Ronald had sold his interest in a company that owned Florida real estate for more than $950,000. She sued George for fraud, asserting that during the divorce proceedings he misrepresented his interest in the stock.

After Clara presented her case, the trial court directed a verdict for George.

The trial court ruled that Clara did not prove fraud and thus failed to meet her burden of proof.

Jerri Blount sued Jovon Broadcasting. She claimed the company fired her because she agreed to testify for another employee who alleged racial and sexual discrimination against the company. After a trial, a jury awarded Blount $3,082,350, $2.8 million of which was for punitive damages. Jovon appealed, and among other things, argued that the punitive damages award was excessive.

The First District Illinois Appellate Court affirmed the verdict. The court indicated the standard of review for the propriety of a punitive damages verdict has two levels of analysis. First, the “amount of a punitive damages award will not be reversed unless it is so excessive that it must have been a result of passion, partiality, or corruption.” The appellate court also used the more familiar “manifest weight” standard: “Because a jury’s determination of the amount of punitive damages is a predominately factual issue, we will not reverse a jury’s determination as to the amount of punitive damages unless it is against the manifest weight of the evidence.”

So to get a reversal, an appellant must show by a manifest weight of the evidence that a punitive damages verdict was the result of passion, partiality, or corruption.

Christopher Mills sued Ryan McDuffa. Mills claimed he was injured when his car was rear ended by McDuffa. Two of Mills’s attorneys withdrew, and when Mills did not appear for a court hearing his case was dismissed for want of prosecution.

About four months later, a new lawyer for Mills filed a petition under Illinois Rule of Civil Procedure 2-1401 (relief from judgments more than 30 days old) to vacate the dismissal order. The trial court read the parties’ briefs and heard oral argument, but did not take live testimony from witnesses. The court then granted Mills’s petition.

McDuffa appealed. Their conclusions were opposite, but both McDuffa and Mills suggested that the standard of review was abuse-of-discretion. Nevertheless, the Second District Illinois Appellate Court ruled that the standard of review was de novo. The trial court’s decision to vacate the dismissal received no discretion because “the parties’ filings with the [trial] court were functionally equivalent to cross-motions for summary judgment, and the court’s disposition of Mills’s section 2-1401 petition was functionally equivalent to a grant of summary judgment to Mills. We review grants of summary judgment de novo.”

Pekin Insurance Company and Hallmark Homes disputed insurance coverage for a personal injury lawsuit filed by Bremer, the employee of another contractor at a construction site. Bremer sued Hallmark and MC Builders. Hallmark was named as an additional insured on MC’s insurance policy with Pekin.

Hallmark asked Pekin to defend Hallmark in Bremer’s case. Pekin refused, sued Hallmark, and asked the trial court for a judgment declaring that Pekin did not have to defend the case. Hallmark counterclaimed, seeking the opposite conclusion. Pekin asked for summary judgment, but the trial court instead ruled the insurance company had a duty to defend Hallmark in Bremer’s lawsuit. Pekin appealed.

The parties disputed the appellate standard of review. Hallmark argued that an “abuse of discretion” standard applied to rulings on declaratory judgment motions. Pekin asserted that the “law is unclear on this point, with different cases stating that a declaratory judgment received review ranging from the deferential standard of “abuse of discretion” to the nondeferential de novo standard.”

A group of townhome owners sued Carriageway Builders, the company that built the townhouse, and Carriageway’s owner, Wayne Johnson. Unfortunately, the foundation of the townhouse settled up to 10 inches, causing all sorts of damage to the building. A jury awarded the owners more than $1.3 million. A separate, non-jury hearing was held on a statutory consumer fraud action, and the trial court awarded punitive damages to the owners.

The builder appealed. Among other things, the builder claimed the punitive damages verdict should be reversed. The First District Illinois Appellate Court affirmed the punitive damages verdict. The opinion is notable because it identifies the three levels of appellate review the court used to assess the propriety of the punitive damages award under the consumer fraud act. Here is the analysis:

In reviewing a trial court’s decision to award punitive damages, we take a three-step approach, considering (1) whether punitive damages are available for the particular cause of action, using a de novo standard, (2) whether, under a manifest weight of the evidence standard, the defendants acted fraudulently, maliciously or in a manner that warrants such damages, and (3) whether the trial court abused its discretion in imposing punitive damages.

MidAmerica Bank sued Charter One Bank for failing to honor a $50,000 cashier’s check purchased at Charter. The check was payable to Essential Technologies of Illinois. David Hernandez was president of Essential. Mary Christelle, David’s mother, purchased the cashier’s check with money from her account at Charter.

Essential deposited the check into its account at MidAmerica. Four days later, Mary instructed Charter to stop payment on the check. Charter issued a stop-payment order, and refused to honor the check when MidAmerica presented it for payment. When the check was returned to MidAmerica with a “stop payment” stamp, MidAmerica sent it back to Essential and deducted $50,000 from MidAmerica’s account.

The opinion does not state what happened between MidAmerica and Essential, except that the bank did not discover a fraudulent scheme involving Essential. But MidAmerica sued Charter for $50,000 plus attorney fees and interest for dishonoring the check.

Walsh Construction Company and II In One Contractors formed a joint venture to bid on a contract being offered by the Metropolitan Water Reclamation District of Greater Chicago. The Walsh joint venture bid on the contract, but did not sign the required D-3 sheet. Although Walsh’s bid was about $10 million less than any other bid, the contract was awarded to a joint venture led by F. H. Paschen.

Walsh sued, and asked for a preliminary injunction to prevent the contract award to Paschen. After a two-day trial, the trial court denied Walsh’s request for an injunction and granted Pashen’s and the Water District’s request for a directed finding.

Walsh appealed, and the parties argued about the proper standard of review. Walsh asserted the trial court’s decision entailed legal issues only, so the proper review standard was de novo, which gives the trial court decision no deference. Paschen and Water District argued for “a manifest weight of the evidence” standard, noting that the [trial] court indeed considered the weight of the testimony and evidence presented in making its decision and did not, as Walsh insists, simply deny the request for preliminary injunction as a matter of law.”

Jeffrey Covinsky was CEO of Hannah Marine Corporation. He sued the company after it refused to pay him pursuant to a “golden parachute” clause in his employment contract. In turn, Hannah counterclaimed against Covinsky for breach of fiduciary duty. The trial court gave Covinsky summary judgment on his claim. Hannah appealed.

The First District Illinois Appellate Court analyzed the proper standard of review of a summary judgment in a contract action. The appellate court acknowledged the usual review standard for summary judgments is de novo (circuit court ruling gets no deference). However, “Whether a breach of contract has occurred generally is not a legal question subject to de novo review, but rather a question of fact which will not be disturbed unless the finding is against the manifest weight of the evidence.”

In this case, the trial court’s ruling was based only on an interpretation of the contract, and no question of fact was involved. So the appellate court chose the de novo standard. Here’s the court’s explanation:

Kathleen Savio’s death in 2003 first was ruled by the coroner to be an accident. But after her body was exhumed and additional autopsies conducted in 2007, the coroner ruled that Kathleen’s death likely was a homicide. Kathleen’s father and siblings then asked the court to reopen Kathleen’s estate, to have the executor removed, and to name the father and one of the siblings as new executors. The trial court granted that request.

Kathleen’s former husband, Drew Peterson, and the executor, James Carroll, appealed. The parties argued over the proper standard of appellate review. Peterson and Carroll asserted that the trial court’s ruling should get no deference on appeal.

But the Third District Illinois Appellate Court sided with the father and sibling, and ruled that the proper standard of review of an order to reopen an estate is “the manifest weight of the evidence.” Here’s the court’s analysis: