Forged Evidence Calls Out for Entry of Judgment or Dismissal as an Appropriate Sanction in Business Litigation

Forged evidence and documents have become more prevalent as parties can use programs such as Adobe Acrobat to alter key documents. Our firm has faced issues where documents have been forged and sought sanctions to rectify the situation including the sanctions of entry of a judgment in our client’s favor.

Judge Shadur a well-respected judge in Chicago’s federal court stated that “a bona fide signature…that has indisputably been transposed onto a totally bogus document…is the most egregious fraud on the court that this Court has encountered in its nearly 33 years on the bench.” Flava Works, Inc. v. Momient, 11 C 6306, 2013 WL 1629428 at *2 (N.D. Ill. Apr. 16, 2013) Judge Shadur went on to suggest that the plaintiff’s (the offending party’s) complaint would ultimately be dismissed with prejudice as a sanction for this fraud on the court.. Id. at *3 (citing Pope v. Fed. Express Corp., 974 F.2d 982 (8th Cir.1992) and Chambers v. NASCO, Inc., 501 U.S. 32 (1991)).

Illinois Circuit courts have authority to enter judgment against a party who attempts to use forged evidencet on two independent bases: (i) Illinois Supreme Court Rule 219 and (ii) the inherent authority of the Court to issue sanctions.

Illinois Supreme Court Rule 219(c) provides the following:

If a party…unreasonably fails to comply with any provision of part E of article II of the rules of this court (Discovery, Requests for Admission, and Pretrial Procedure) or fails to comply with any order entered under these rules, the court, on motion, may enter, in addition to remedies elsewhere specifically provided, such orders as are just, including, among others, the following:

(v) That, as to claims or defenses asserted in any pleading to which that issue is material, a judgment by default be entered against the offending party or that the offending party's action be dismissed with or without prejudice; or (vi) That any portion of the offending party's pleadings relating to that issue be stricken and, if thereby made appropriate, judgment be entered as to that issue.

“The appropriate sanction for a party’s noncompliance with discovery rules is a matter within the broad discretion of the trial court, and absent an abuse of that discretion, its decision will not be disturbed on appeal.” Harris v. Harris, 196 Ill.App.3d 815, 819-20 (1990). An order for a default judgment is a drastic sanction to be invoked in those cases where the party’s actions show a deliberate, contumacious or unwarranted disregard of the court’s authority. Shimanovsky, et al v. General Motors Corporation, 181 Ill.2d 112, 123 (1998).

Illinois courts have entered judgment against a defendant (or dismissed a plaintiff’s complaint) under Rule 219 for discovery abuse that does not nearly rise to the level of Midwest’s intentional alteration of key evidence. See e.g. Koppel v. Michael, 374 Ill.App.3d 998 (1st Dist. 2007) (entry of default judgment against defendants as a discovery sanction was not an abuse of discretion where defendants had been subject to 12 orders regarding their discovery noncompliance, failed to pay initial sanctions for attorney fees, increased plaintiffs’ costs, wasted valuable judicial resources, and filed a false affidavit); R.M. Lucas Co. v. Peoples Gas Light and Coke Co., 963 N.E.2d 274, 281 (1st Dist. 2011) (finding “circuit court did not abuse its discretion by dismissing plaintiffs’ action with prejudice where they defied discovery deadlines set by the court and ignored defendant's discovery requests.”); Adcock v. Brakegate, Ltd., 164 Ill.2d 54, 66 (1994) (court ordering admission of each element of deceased worker's estate’s civil conspiracy claim against manufacturer when asbestos manufacturer refused to comply with trial court's order compelling production of corporate officials). Therefore, this Court has the authority under Rule 219 to enter judgment against Midwest on all counts of the Amended Complaint, and should do so based upon the particularly egregious nature of Midwest’s conduct.

Moreover, all courts have the inherent authority to sanction a party who “has acted in bad faith, vexatiously, wantonly, or for oppressive reasons.” Chambers v. NASCO, 501 U.S. 32, 33, 45-46 (1991). It is well recognized that any sanction short of dismissal with prejudice or entry of judgment against a party fails as sufficient punishment for reliance upon inauthentic, forged evidence. In Quela v. Payco-Gen. Am. Creditas, Inc., finding “that default judgment is the only appropriate remedy under the inherent power of the court”, Judge Castillo of the Northern District of Illinois stated:

Given the extreme importance of accurate and truthful discovery, our court system must have zero tolerance for parties who seek to intentionally distort the discovery and trial process... The defendants’ conduct shows such blatant contempt for this Court and a fundamental disregard for the judicial process that their behavior can only be adequately sanctioned with a default judgment. Entering a default judgment will send a strong message to other litigants, who scheme to abuse the discovery process and lie to the Court, that this behavior will not be tolerated and will be severely punished. 99 C 1904, 2000 WL 656681 (N.D. Ill. May 18, 2000)

Thus, dismissal or entry of judgment under the court’s inherent powers is frequently invoked when parties rely on or create forged documents. See Brady v. United States, 877 F. Supp. 444 (C.D. Ill. 1994) (dismissal where plaintiff fabricated and destroyed evidence); Aoude v. Mobil Oil Corp., 892 F.2d 1115, 1117 (1st Cir. 1989) (dismissal affirmed where plaintiff attached forged document to his complaint and relied upon the document as the “centerpiece” of the litigation); Pope v. Fed. Express Corp., 974 F.2d 982, 986 (dismissal affirmed where forged document was attached to complaint and was the “linchpin of plaintiffs case”).

Illinois courts routinely used evidentiary hearings to determine whether to impose sanctions for spoliation and other discovery violation issues. See Shimanovsky, 181 Ill.2d at 123 (remanding to the trial court for an evidentiary hearing to determine the appropriate sanctions for plaintiffs spoliation of evidence); Doe v. Lutz, 253 Ill. App. 3d 59, 63 (1st Dist. 1993) (noting that the circuit court held an evidentiary hearing for, inter alia, a motion for sanctions under Rule 219); In re Estate of Smith, 201 Ill.App.3d 1005, 1009, (3d Dist. 1990) (remanding to the circuit court for an evidentiary hearing regarding Rule 219 sanctions so that the circuit court could make “an informed and reasoned decision” on sanctions).

The business litigation attorneys at Lubin Austermuehle, P.C. are extremely knowledgeable about the various laws governing business torts. Our Wheaton, Hinsdale, and Schaumburg attorneys have represented clients all over Chicago, Cook, and the surrounding counties. To consult with an experienced business law trial lawyer in the Chicago area today, contact us online or call us at 630-333-0333.