Illinois Appellate Court Clarifies When Jurisdiction Arises To Review Rule 137 Sanctions Order

by Uri Abt

The Illinois appellate court recently faced an unusual issue and took the opportunity to clarify the law regarding the appealability of orders under Rule 137.  It held that, absent a certification under Rule 304(a), an order granting sanctions under Rule 137 is not appealable if the amount of the sanctions remains to be determined, even if the rest of the case has been concluded.  Phoenix Capital, LLC v. Tabiti, 2016 IL App (1st) 162686.  

In Phoenix, the plaintiff obtained a default judgment against the defendant.  The defendant subsequently moved to vacate the judgment.  The court denied the defendant’s motion, thus leaving the judgment in place, and granted sanctions against the defendant under Rule 137.  The court then set a schedule for plaintiff to submit a fee petition.  The defendant appealed before the fee petition was due. 

Because “few cases address this question of the finality of a Rule 137 sanctions proceeding,” the appellate court issued an opinion “to provide some clarity.”  Id. at ¶ 4.  The court began by noting that whether a fee petition affects the finality of an order or judgment turns on whether the petition is brought “as part of a principal action” or is “made after the principal action has been decided.”  Id. at ¶ 7.  The former must be resolved before the appellate court has jurisdiction, the latter does not.  A petition for deposition costs or subpoena witness fess is an example of something in the latter category.  A sanction proceeding under Rule 137, however, falls squarely in the former category and must be concluded for the appellate court to have jurisdiction over an otherwise final order or judgment.

Because the amount of the sanction had yet to be determined, the Rule 137 proceeding was not concluded, and the trial court’s order was not final.  The appellate court dismissed the appeal for lack of jurisdiction.