Westwood Construction Group, Inc. v. Irus Property, LLC, 2016 IL App (1st) 142490

Plaintiffs Westwood, Magenta, and Adebayo originally sued IRUS, Sacks, R&C Financial, Rick Martin, and Continuum in federal court; federal claims were withdrawn and the federal case was dismissed for lack of subject-matter jurisdiction.
Plaintiffs refiled in Cook County circuit court. The court sua sponte struck the initial state complaint as insufficient and allowed plaintiffs to replead, saying it would review the amended pleading before ordering responsive pleadings.
In the amended complaint plaintiffs named IRUS and Sacks as defendants and designated R&C, Martin, and Continuum as respondents in discovery under 735 ILCS 5/2-402 (respondents-in-discovery are non-defendants who may have information essential to identifying additional defendants).
R&C, Martin, and Continuum moved to dismiss them as respondents and sought Rule 137 sanctions, arguing section 2-402 cannot be used to re-designate formerly named defendants as respondents-in-discovery and that the designation was bad faith.
The circuit court dismissed the three entities as respondents in discovery with prejudice and denied sanctions. Plaintiffs appealed; respondents cross-appealed the denial of sanctions.
The appellate court reversed the dismissal (reinstating the three as respondents in discovery), affirmed denial of sanctions without prejudice to renew after section 2-402 proceedings, and remanded for further proceedings.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a previously named (but dismissed without prejudice) defendant may be designated as a respondent in discovery under §2-402 in an amended pleading	§2-402 does not prohibit designating a former defendant as a respondent; statute contains no timing or sequence restriction	§2-402 is meant to identify unknown potential defendants before suing; it does not permit converting a named defendant into a respondent after dismissal; such use is bad faith	Reversed dismissal: §2-402 contains no express limitation; plaintiffs may designate former defendants as respondents in discovery; respondents reinstated as respondents-in-discovery and statutory conversion period runs from mandate
Whether Rule 137 sanctions were properly denied for the §2-402 designation	The designation was permissible and not per se frivolous; sanctions inappropriate on that basis	The designation constituted bad-faith pleading and Rule 137 sanctions should be awarded	Affirmed denial of sanctions without prejudice to renew after §2-402 discovery if facts warrant sanctions later

Bogseth v. Emanuel, 261 Ill. App. 3d 685 (Ill. App. Ct.) (purpose of §2-402 is to permit discovery against possible defendants before naming them)
Williams v. Medenica, 275 Ill. App. 3d 269 (Ill. App. Ct.) (procedural rules for converting a respondent-in-discovery to a defendant within six months upon probable cause)
Coyne v. OSF Healthcare System, 332 Ill. App. 3d 717 (Ill. App. Ct.) (§2-402 helps plaintiffs identify who should be sued in medical-malpractice and similar cases)
Robinson v. Johnson, 346 Ill. App. 3d 895 (Ill. App. Ct.) (statute intended to avoid naming everyone as a defendant and requires scrupulous observation of §2-402's requirements)
Knapp v. Bulun, 392 Ill. App. 3d 1018 (Ill. App. Ct.) (six-month conversion period for respondents-in-discovery generally begins when named)
Medjesky v. Cole, 276 Ill. App. 3d 1061 (Ill. App. Ct.) (leave of court required to add a respondent-in-discovery as a defendant)