Opinion
NO. 4-13-0169
12-17-2013
DECATUR MANOR HEALTHCARE, LLC, Plaintiff-Appellant and Cross-Appellee, v. J.J. SWARTZ COMPANY, an Illinois Corporation, Defendant-Appellee and Cross-Appellant, and J.J. SWARTZ COMPANY, an Illinois Corporation, Third-Party Plaintiff and Cross-Appellant, v. THE SHERWIN WILLIAMS COMPANY a Foreign Business Corporation Registered To Do Business in Illinois, Third-Party Defendant-Appellee, and THE SHERWIN WILLIAMS COMPANY, a Foreign Business Corporation Registered To Do Business in Illinois, Third-Party Plaintiff-Appellee, v. ELITE FLOOR COVERINGS, LLC, Third-Party Defendant.
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 Circuit Court of Macon County
No. 09L128
Honorable Thomas E. Little, Judge Presiding.
JUSTICE STEIGMANN delivered the judgment of the court.
Justices Knecht and Turner concurred in the judgment.
ORDER
¶ 1 Held: The appellate court reversed the trial court's judgment and remanded for a new trial. Due process entitled plaintiff to a trial de novo after the judge, following a trial and judgment in favor of defendants, sua sponte recused himself and vacated his judgment. ¶ 2 In July 2009, plaintiff, Decatur Manor Healthcare, LLC (Decatur Manor), sued J.J. Swartz Company (Swartz) for various common-law causes of action resulting from an allegedly unsatisfactory floor installation project performed by Swartz at Decatur Manor's nursing home facility. Swartz filed a third-party complaint against its subcontractor, the Sherwin Williams Company (Sherwin), which then filed a third-party complaint against its sub-subcontractor, Elite Floor Coverings, LLC (Elite). ¶ 3 In August 2012, following a three-day bench trial, Judge Scott Diamond entered a written order setting forth detailed factual findings and rendering judgment generally against Decatur Manor and in favor of Swartz, Sherwin, and Elite. Four days later, Judge Diamond sua sponte vacated his prior judgments and recused himself based upon his discovery of a potential conflict of interest. Following assignment of the case to a new judge, Sherwin moved to have the trial court enter judgment on the existing record without conducting a new trial. Following a January 2013 hearing, the court granted Sherwin's motion—over Decatur Manor's objection—and reinstated Judge Diamond's earlier findings and judgments. ¶ 4 Decatur Manor appeals, arguing that due process entitled it to a trial de novo. Swartz cross-appeals, arguing that the trial court erred in its calculation of damages in relation to Swartz's counterclaim. Elite filed a motion to dismiss Swartz's cross-appeal for lack of standing. For the reasons that follow, we reverse and remand for a new trial.
¶ 5 I. BACKGROUND
¶ 6 A. The Parties
¶ 7 In August 2009, after Decatur Manor filed its complaint against Swartz, Swartz filed (1) an answer to the complaint, (2) a counterclaim for monetary damages based on breach of contract, and (3) a third-party complaint against Sherwin, with which Swartz subcontracted to provide supplies and install the flooring at Decatur Manor's facility. ¶ 8 In October 2009, Sherwin filed (1) an answer to Swartz's third-party complaint and (2) a third-party complaint against Elite, with which Sherwin sub-subcontracted to install the floors at Decatur Manor's facility. In November 2009, Elite filed an answer to Sherwin's third-party complaint.
¶ 9 B. The Bench Trial and Judge Diamond's Original Judgment
¶ 10 In April 2012, the parties waived their right to a jury trial and, on August 7, 8, and 9, 2012, Judge Diamond presided over a bench trial on the parties' claims. Following the presentation of evidence and argument, Judge Diamond took the matter under advisement. ¶ 11 On August 16, 2012, Judge Diamond entered a written order setting forth 38 paragraphs of detailed factual findings. Based upon those findings, Judge Diamond ruled that (1) Decatur Manor failed to prove the allegation in its complaint, (2) Decatur Manor owed Swartz a balance of $63,781.20, which would be offset by $15,000 due to Elite's unworkmanlike performance, (3) Sherwin was liable to Swartz for the $15,000 offset, and, in turn, (4) Elite was liable to Sherwin for $15,000.
¶ 12 C. Judge Diamond's Amended Order and Recusal
¶ 13 On August 20, 2012, Judge Diamond sua sponte entered an amended order in which he stated that "on Sunday, August 12, 2012," he read over the pleadings and noticed that Sherwin's attorney was from the Peoria office of Hinshaw and Culbertson. Judge Diamond noted that six years prior to the bench trial in this case, his insurance company hired attorneys from the Springfield office of Hinshaw and Culbertson to represent him in proceedings before the Judicial Inquiry Board. (We note that Judge Diamond incorrectly stated in his amended order that he entered his original judgment "on August 17, 2012 *** based on a bench trial held August 14, 15, and 16." All parties agree that Judge Diamond actually entered his original judgment on August 16, following a bench trial held on August 7, 8, and 9. Accordingly, it is unclear whether Judge Diamond actually discovered the potential conflict "on Sunday, August 12, 2012," which would have been after the bench trial but before he announced his findings and judgments.) ¶ 14 After noting the potential conflict between himself and the attorneys for Sherwin, Judge Diamond cited generally to Illinois Supreme Court Rule 63C (eff. Apr. 16, 2007) and found as follows:
"9. That in good faith the Court did not believe at the time his impartiality might reasonably been challenged since six years had passed since the representation.Judge Diamond then vacated "all [j]udgments," recused himself from the case, and transferred the cause to the presiding judge for reassignment.
10. That the Court now has self-doubt.
11. That the Court now believes the Court should have been more prudent and asked for a Remittal of Disqualification under Supreme Court Rule 63D.
12. That the Court committed error and the Judgments should not stand."
¶ 15 D. Sherwin's Motion for Judgment on the Trial Record
¶ 16 In October 2012, following assignment of the case to a new judge, Judge Thomas E. Little, Sherwin filed a "motion for judgment on the trial record." In the motion, Sherwin described the costs of the three-day bench trial on the parties. Specifically, Sherwin alleged that the evidence included the testimony of 13 witnesses, including three employees of Decatur Manor, two employees of Swartz, two employees of Sherwin, the owner of Elite, and two experts. Sherwin also claimed that it would be "extremely prejudicial" if Decatur Manor were granted a new trial because Judge Diamond's detailed factual findings "provided Decatur Manor a roadmap on how to present a better case." Sherwin characterized Judge Diamond's potential conflict as "doubtful" and noted that Judge Diamond apparently did not notice the potential conflict until after the trial had concluded. Sherwin requested the newly assigned judge enter judgment based upon the existing trial record, including Judge Diamond's detailed factual findings. ¶ 17 At a January 8, 2013, hearing on Sherwin's motion, Decatur Manor argued that, in light of Judge Diamond's potential conflict and recusal, fairness entitled it to a new trial. Swartz and Elite argued in support of Sherwin's motion based largely upon the costs of the previous trial and the hardships that would result from repeating the process. ¶ 18 On January 25, 2013, the trial court entered the following order:
"The court has now reviewed and considered the contents of the court file, the court docket, and the record of proceedings from the bench trial conducted by Judge Diamond on August 7, 8, and 9, 2012. The court has also reviewed the contents of the Judgment entered on August 16, 2012, as well as the Amended Judgment entered on August 20, 2012. After considering and reflecting upon
the arguments of counsel, and being fully advised in the premises, the court removes this matter from advisement and finds that the Motion for Judgment on the Trial Record should be allowed. The Judgment originally entered by Judge Diamond on August 16, 2012, including all factual findings set forth therein, is reinstated this date and shall constitute the Judgment of this court."
¶ 19 E. Elite's Motion to Reconsider
¶ 20 On January 31, 2013, Elite filed a motion to reconsider, arguing that it had already discharged the $15,000 setoff entered against it by completing repairs to Decatur Manor's floors. Following a February 2013 hearing, the trial court granted Elite's motion to reconsider and amended its order to strike the $15,000 balance Elite owed to Sherwin, and, in turn, the $15,000 balance Sherwin owed to Swartz. However, the court did not adjust the damages Decatur Manor owed to Swartz, which remained offset by $15,000. ¶ 21 This appeal followed.
¶ 22 II. DECATUR MANOR'S DUE PROCESS CLAIM
¶ 23 On appeal, Decatur Manor argues that due process entitled it to a trial de novo following Judge Diamond's sua sponte recusal and vacation of his prior judgments. We agree. ¶ 24 "A procedural due process claim presents a legal question subject to de novo review." People ex rel. Birkett v. Konetski, 233 Ill. 2d 185, 201, 909 N.E.2d 783, 796 (2009). ¶ 25 In Smith v. Freeman, 232 Ill. 2d 218, 223, 902 N.E.2d 1069, 1071 (2009), the supreme court stated that "[t]he general rule is that a successor judge may not make findings of fact or conclusions of law without a trial de novo." The court explained that "due process entitles a litigant to have all the evidence submitted to a single judge who can see the witnesses testify and, thus[,] weigh their testimony and judge their credibility." Id. The Smith court ultimately held, however, that parties may stipulate or agree to allow a successor judge to decide the case based on written evidence received by the predecessor judge, even when issues of witness credibility exist. Id. at 229-30, 902 N.E.2d at 1075. ¶ 26 The dispositive fact in this case is that Decatur Manor did not agree to allow the successor judge to render a decision based upon the trial record or Judge Diamond's findings. A "judgment on the trial record" does not satisfy due process unless all of the parties enter into a "knowing, intentional, and voluntary" agreement or stipulation to allow the trial court to decide the case based on the trial record. Smith, 232 Ill. 2d at 229, 902 N.E.2d at 1075. ¶ 27 Swartz and Sherwin both cite Matter of McMahon, 221 Ill. App. 3d 383, 581 N.E.2d 1208 (1991), a case involving an involuntary commitment proceeding, in support of their argument that the trial court properly granted Sherwin's motion for judgment on the trial record. In McMahon, at the conclusion of the hearing on the petition for involuntary commitment, the presiding judge orally announced her findings regarding the respondent's need for involuntary commitment, which tracked the language of the statute delineating the requisite findings for involuntary commitment. Id. at 385, 581 N.E.2d at 1210. The judge then orally ordered the respondent committed for a period of 60 days. Id. However, for some unknown reason, a different judge signed the written order of commitment. Id. at 388, 581 N.E.2d at 1211-12. On appeal, this court held as follows:
"[I]t is proper for a successor judge to issue an order based on his predecessor's findings of fact where there is no indication that theWe find McMahon distinguishable from the facts of this case. ¶ 28 Unlike the findings at issue in McMahon, the findings of fact in this case were presumptively tainted by Judge Diamond's decision to vacate his judgments and recuse himself due to a potential conflict. As the supreme court stated in In re Marriage of O'Brien, 2011 IL 109039, ¶ 45, 958 N.E.2d 647, "[w]hether a judge should recuse himself is a decision in Illinois that rests exclusively within the determination of the individual judge, pursuant to the canons of judicial ethics found in the Judicial Code." (Emphasis in original.) Accordingly, neither we, the trial court, nor the parties are in any position to second-guess Judge Diamond's determination that he should not have presided over the trial, made findings of fact, or rendered judgment in this case. ¶ 29 In addition, the successor judge in McMahon merely signed the written order that embodied the oral findings and judgment announced by the predecessor judge at the conclusion of the hearing. The predecessor judge's oral findings and judgment amounted to a conclusive resolution of the case, and they remained unchallenged when the successor judge signed the written order that embodied them. In this case, the trial court rendered judgment by reinstating findings and judgments that had been vacated by a judge who concluded that they "should not stand" due to his own potential conflict. Judge Diamond's decision to vacate his judgments and recuse himself due to the potential conflict essentially called into question the propriety of his findings, his weighing of the evidence, and his determinations as to witness credibility. ¶ 30 Swartz and Sherwin both argue that Decatur Manor has failed to show that (1) Judge Diamond's potential conflict resulted in actual impartiality or (2) Judge Diamond's factual findings were against the manifest weight of the evidence. However, neither party can provide support for their argument that the vacated findings of a judge who recuses himself due to a potential conflict should stand unless the losing party can demonstrate that those findings were against the manifest weight of the evidence. Under these circumstances, we presume that Judge Diamond properly viewed his findings and judgments as tainted, and we decline to second-guess that determination. ¶ 31 Finally, even taking as true Sherwin and Swartz's position that Judge Diamond's recusal was unnecessary, Decatur Manor's due process right to have judgment rendered by the same judge who presided over the trial and observed the witnesses is no less applicable. We are aware of no rule stating that the right does not apply when the predecessor judge made a mistake recusing himself, or when a trial de novo would be inconvenient to the parties. The cases that discuss the right do not set forth any applicable exceptions. See Smith, 232 Ill. 2d at 223, 902 N.E.2d at 1071; Trzebiatowski v. Jerome, 24 Ill. 2d 24, 25-26, 179 N.E.2d 622, 623 (1962); Mills v. Ehler, 407 Ill. 602, 611-12, 95 N.E.2d 848, 853 (1950); People ex rel. Reiter v. Lupe, 405 Ill. 66, 71, 89 N.E.2d 824, 826 (1950); Anderson v. Kohler, 376 Ill. App. 3d 714, 718-19, 877 N.E.2d 110, 115 (2007). Although we are sympathetic to Sherwin and Swartz's positions that (1) Judge Diamond should have offered the parties a remittal of disqualification before announcing his findings and judgment and (2) a trial de novo would result in extra litigation expense, the parties have failed to demonstrate why those concerns should affect the validity of Decatur Manor's due-process claim. We conclude that they do not. ¶ 32 The trial court erred by granting Sherwin's motion for judgment on the trial record and depriving Decatur Manor of its due process right to a trial de novo. Our reversal of the court's judgment renders the computation of damages issue in Swartz's cross-appeal moot. Accordingly, we need not address Swartz's cross-appeal or Elite's motion to dismiss the cross-appeal for lack of standing.
factual findings were against the manifest weight of the evidence and no argument or evidence was presented that the order was not consistent with the findings made by the predecessor judge." Id. at 390, 581 N.E.2d at 1213.
¶ 33 III. CONCLUSION
¶ 34 For the foregoing reasons, we reverse the trial court's order reinstating Judge Diamond's judgment and findings, and remand for a new trial. ¶ 35 Reversed and remanded.