Do Trial Courts Have the Authority to Stay the Entire Proceedings ?
In Hamlin v. Harbaugh Enterprises, Inc., 324 Ill. App. 3d 612, 618-19, 755 N.E.2d 993, 998, 258 Ill. Dec. 174 (2001), the plaintiff sought shareholder relief under section 12.56, as well as the compulsory examination of corporate records and damages for slander, civil conspiracy, and breach of fiduciary duty.
When the parties did not agree on the value of the plaintiff's shares, the corporation and two other shareholders petitioned for a stay of the proceedings to allow the court to determine the value, and the trial court stayed the entire proceedings. Hamlin, 324 Ill. App. 3d at 615, 755 N.E.2d at 995.
On interlocutory appeal, the Third District considered whether the court abused its discretion in staying the entire proceedings. Hamlin, 324 Ill. App. 3d at 620, 755 N.E.2d at 999.
The court first noted that the Act authorizes-and, in fact, requires-trial courts to stay only those proceedings arising under section 12.56. Hamlin, 324 Ill. App. 3d at 620, 755 N.E.2d at 999 (citing 805 ILCS 5/12.56(f)(6) (West 2000)).
The court noted, however, that trial courts have the inherent authority to stay any proceedings before them. Hamlin, 324 Ill. App. 3d at 620-21, 755 N.E.2d at 999 (citing Ardt v. Illinois Department of Professional Regulation, 154 Ill. 2d 138, 146, 607 N.E.2d 1226, 1230, 180 Ill. Dec. 713 (1992)).
The Hamlin court found that the record before it was insufficient for it to determine whether or not the trial court had properly exercised its discretion in ordering the entire proceedings stayed. Hamlin, 324 Ill. App. 3d at 621, 755 N.E.2d at 999.
As a result, the appellate court held that the trial court should have held a hearing to determine whether a stay of the additional claims was equitable. Hamlin, 324 Ill. App. 3d at 621, 755 N.E.2d at 999-1000.