Enbridge Pipeline (Ill.), LLC v. Monarch Farms, LLC

2019 IL App (4th) 150807-U

ENBRIDGE PIPELINE (ILLINOIS), LLC,n/k/a Illinois Extension Pipeline Company, LLC., Plaintiff-Appellant, v. MONARCH FARMS, LLC; BRYAN CARLSON, Tenant;NON-RECORD CLAIMANTS; and UNKNOWN OWNERS, Defendants (Thomas J. Pliura, Appellee).

NO. 4-15-0807

APPELLATE COURT OF ILLINOIS FOURTH DISTRICT

April 25, 2019

NOTICE

This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1).

Appeal from the Circuit Court of McLean County

No. 14ED27

The Honorable Paul G. Lawrence, Judge Presiding.

JUSTICE STEIGMANN delivered the judgment of the court.

Presiding Justice Holder White and Justice Turner concurred in the judgment.

ORDER

¶ 1 Held: The appellate court (1) affirmed the trial court's denial of Illinois Supreme Court Rule 137 (eff. Jan. 1, 2018) sanctions and (2) declined the request for Illinois Supreme Court Rule 375 (eff. Feb. 1, 1994) sanctions.

¶ 2 I. BACKGROUND

¶ 3 In June 2014, Enbridge Pipeline (Illinois), LLC, now known as the Illinois Extension Pipeline Company, LLC (IEPC), brought an easement condemnation action against (1) Monarch Farms, LLC, and its tenant, Bryan Carlson , and (2) unknown others (collectively landowners). See Enbridge Pipeline (Illinois), LLC v. Monarch Farms, LLC, 2017 IL App (4th) 150807, ¶ 2, 82 N.E.3d 1234 (Monarch Farms I). In July 2014, landowners filed traverse motions. Ultimately, the trial court denied landowners' traverse motions, and landowners appealed.

¶ 4 In July 2017, this court reversed the trial court's ruling and remanded for the trial court to conduct a traverse hearing in accordance with our directions. Id. ¶ 113. This court retained jurisdiction to review the trial court's ruling on remand. Id.; Ill. S. Ct. R. 615(b) (eff. Jan. 1, 1967).

¶ 5 In January 2018, Thomas J. Pliura, the attorney representing landowners, filed a memorandum entitled "Evidence Landowners Seek to Present to Rebut The 'Good-Faith Negotiation' Presumption" (memorandum) in support of landowners' traverse motions. In this memorandum, Pliura argued that based on the totality of the circumstances, IEPC did not negotiate in good faith. In June 2018, after conducting a traverse hearing, the trial court denied landowners' traverse motions.

¶ 6 In June 2018, IEPC filed a motion for sanctions pursuant to Illinois Supreme Court Rule 137 (eff. Jan. 1, 2018). After conducting a hearing on the motion for sanctions in August and September of 2018, the trial court denied the motion for sanctions, concluding that Pliura's memorandum was not "interpose[d] *** for an improper purpose, such as to harass or cause unnecessary delay or needless increase in the cost of litigation." In addition, the trial court, in accordance with our mandate, stated the following:

"Now, this appears to put an end to this litigation. In paragraph 107 of the Monarch Farms decision it says that if the landowners failed to rebut the presumption of public use, or failed to refute the commission's good faith determination, then the Court should so rule, deny the landowners' traverse motion, certify the record, and return the matter back to this Court. So I think that's where we are at now. The Court is prepared then to certify the record and return the matter back to the [Appellate] Court."

¶ 7 IEPC appeals, arguing (1) the trial court abused its discretion by denying its mo-tion for Rule 137 sanctions and (2) this court should sanction Pliura pursuant to Illinois Supreme Court Rule 375(b) (eff. Feb. 1, 1994). We disagree and affirm.

¶ 8 I. BACKGROUND

¶ 9 A. The First Appeal

¶ 10 In April 2014, the Illinois Commerce Commission (Commission) granted IEPC eminent-domain authority to acquire easements over certain real estate for the planned construction of an approximately 170-mile liquid petroleum (oil) pipeline project known as the Southern Access Extension (SAX). See Monarch Farms I, 2017 IL App (4th) 150807, ¶ 1. In July 2014, landowners filed traverse motions, seeking dismissal of IEPC's condemnation complaints. Id. ¶ 3. (A traverse motion is filed to oppose the condemnation of private property and challenges (1) the rebuttable presumption of public use and public necessity and (2) the presumption that the condemner negotiated in good faith. See Enbridge Pipeline (Illinois), LLC v. Hoke, 2017 IL App (4th) 150544, ¶¶ 133, 134, 80 N.E.3d 807.)

¶ 11 Ultimately, the trial court denied landowners' traverse motions. Monarch Farms I, 2017 IL App (4th) 150807, ¶ 3. Landowners appealed, arguing that the trial court erroneously considered the traverse hearing as a motion to dismiss. Id. ¶ 87. In July 2017, this court agreed and concluded that the trial court failed to conduct a proper traverse hearing and vacated the trial court's traverse judgment. Id. ¶ 113. This court remanded the case back to the trial court to conduct "a proper traverse hearing in accordance with this court's direction[.]" Id. ¶ 96. This court retained jurisdiction to review the trial court's ruling on remand. Id.; Ill. S. Ct. R. 615(b) (eff. Jan. 1, 1967).

¶ 12 B. Pliura's Memorandum on Remand

¶ 13 In January 2018, Pliura filed his memorandum in support of the traverse motion inwhich he argued that, based on the totality of the circumstances, IEPC did not negotiate in good faith. Pliura also filed a memorandum titled "Evidence Landowners Seek to Present to Rebut the 'Public Use' Presumption." In May 2018, IEPC filed a response to Pliura's memorandums.

¶ 14 In June 2018, the trial court conducted a traverse hearing. At the traverse hearing, Pliura withdrew his public use argument because it had been recently rejected in Enbridge Energy (Illinois), LLC v. Kuerth, 2018 IL App (4th) 150519-B, 99 N.E.3d 210. In Pliura's good-faith memorandum, he argued that IEPC failed to (1) base offers on an appraisal, (2) inform landowners that their offers were based on the land market study, and (3) inform landowners of the right to abandon.

¶ 15 After argument, the trial court concluded that the landowners did not present "clear and convincing evidence, or any evidence, to refute the substantial deference afforded [to] the commission's good-faith determination." Accordingly, the trial court denied landowners' traverse motions. As we noted earlier, the court, after denying the traverse and Rule 137 motions, said to certify the record to this court. Landowners do not appeal the trial court's traverse ruling.

¶ 16 C. The Motion for Rule 137 Sanctions

¶ 17 Also in June 2018, citing Pliura's memorandum, IEPC filed a motion for sanctions pursuant to Illinois Supreme Court Rule 137 (eff. Jan. 1, 2018), in which IEPC asserted that (1) Pliura knowingly made legal arguments that were contrary to binding precedent and (2) there was no good-faith basis in fact to support Pliura's arguments. Pliura filed a response in which he (1) rejected IEPC's assertions and (2) alleged that IEPC had filed its motion for sanctions for an improper purpose.

¶ 18 In August and September of 2018, the trial court conducted a hearing on IEPC's motion for sanctions. After hearing argument from both sides, the trial court concluded thatPliura's memorandum was not filed for any improper purpose and was not sanctionable. In addition, the trial court stated:

"The Court has wide discretion in a [Rule] 137 motion for sanctions. I do note that Mr. Pliura did not bring up the public use argument at all, because of the [Kuerth] decision and others. He did proceed on the good faith argument, and he was unsuccessful. But I cannot find in exercising my discretion that the reason he did that was to interpose it for an improper purpose, such as to harass or cause unnecessary delay or needless increase in the cost of litigation. *** And so I am going to deny the motion for [Rule] 137 sanctions."

¶ 19 IEPC appealed the trial court's denial of Rule 137 sanctions to this court. Landowners did not appeal the trial court's denial of their traverse motion.

¶ 20 D. The Motion for Rule 375(b) Sanctions

¶ 21 In February 2019, after Pliura submitted his brief, IEPC filed a motion for sanctions pursuant to Illinois Supreme Court Rule 375(b) (eff. Feb. 1, 1994). IEPC argues that Pliura should be sanctioned because he "prosecute[d] claims on behalf of [landowners] who had actually withdrawn their just-compensation awards[.]" IEPC is essentially arguing that Pliura's actions were contrary to existing law and were unreasonable.

¶ 22 II. ANALYSIS

¶ 23 IEPC appeals, arguing (1) the trial court abused its discretion by denying its motion for Rule 137 sanctions and (2) this court should sanction Pliura pursuant to Rule 375(b). We disagree and affirm.

¶ 24 A. The Trial Court's Denial of Rule 137 Sanctions

¶ 25 IEPC argues that the trial court abused its discretion by denying its motion forRule 137 sanctions. We disagree.

¶ 26 1. The Applicable Law on Rule 137 Sanctions

¶ 27 Illinois Supreme Court Rule 137 (eff. Jan. 1, 2018) authorizes the trial court to impose sanctions against a party or its attorney when a motion or pleading is "not well grounded in fact, not supported by existing law, or lacks a good-faith basis for modification, reversal, or extension of the law, or is interposed for any improper purpose." Whitmer v. Munson, 335 Ill. App. 3d 501, 513-14, 781 N.E.2d 618, 628 (2002). The attorney's conduct must be judged by an objective standard. Deutsche Bank National Trust Co. v. Ivicic, 2015 IL App (2d) 140970, ¶ 24, 46 N.E.3d 395. Because Rule 137 is penal in nature, it must be strictly construed. Id. In addition, "the rule is designed to prohibit the abuse of the judicial process by claimants who make vexatious and harassing claims based upon unsupported allegations of fact or law." Peterson v. Randhava, 313 Ill. App. 3d 1, 7, 729 N.E.2d 75, 79-80 (2000). "The purpose of Rule 137 is to prevent the filing of false and frivolous lawsuits." Yunker v. Farmers Automobile Management Corp., 404 Ill. App. 3d 816, 824, 935 N.E.2d 630, 637 (2010). However, "[t]he rule is not...