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Case Law: Arbitration
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- Anderson v. Pineda
Citation: 1st Appellate District: 1-04-0222
Date of Opinion: November 18, 2004
Summary: The appellate court upheld the trial court's order debarring the defendants' rejection of an arbitration award. The defendants did not comply with discovery orders prior to arbitration, resulting in court sanctions barring them from testifying or presenting evidence at trial or arbitration. After the arbitration panel found in favor of the plaintiff, the defendants moved to reject the award. The plaintiff moved to debar the defendants from rejecting the award; this motion was granted by the trial court. In affirming the trial court's decision, the appellate court held that although discovery happened outside of the arbitration process, the defendants' failure to comply "directly impacted" the arbitration, essentially amounting to a willful failure to participate meaningfully in the hearing. Thus, the sanctions imposed against the defendants were appropriate under Illinois Supreme Court Rule 91(b), which requires parties to arbitration hearings to participate in good faith and in a meaningful manner.
- Campuzano v. Peritz
Citation: 1st Appellate District: 1-06-0119
Date of Opinion: September 28, 2007
Summary: The appellate court upheld the disbarment of the defendants' rejection of an arbitration award. In this case, the defendants failed to fully comply with a discovery order prior to arbitration, which resulted in the court barring them from testifying or presenting evidence at trial or arbitration. In affirming the debarment of the defendants' rejection motion, the majority argued that "a party does not participate in an arbitration in good faith and in a meaningful manner when he fails to comply with prearbitration discovery." The defendant also challenged the constitutionality of Illinois Supreme Court Rule 91(b), which governs the sanctions at issue in this case, arguing that the language was unconstitutionally vague. The majority rejected this argument, finding the rule's language sufficiently understandable and citing multiple cases in which the court has ruled similarly on sanctions applied under the rule.
In his dissent, Justice Robert Gordon argued that because the defendants admitted negligence, the interrogatories sought by the plaintiff during discovery were unnecessary. The defendants' failure to comply with discovery therefore did not impact the integrity of the arbitration process, and the trial court had no reason to find the defendants participated in bad faith.
- Colmar, Ltd. V. Fremantlemedia North America, Inc.
Citation: 1st Appellate District: 1-02-3533
Date of Opinion: December 4, 2003
Summary: The Illinois Court of Appeals ruled that an award from an Illinois arbitration hearing was not voidable because one party's attorney was not admitted to practice law in the state. While normally a judgment would be void if representation was by a non-admitted attorney, the court found the rule inapplicable to arbitration. The court cited the lack of harm resulting from the conduct and the fact that arbitration rules do not require that parties be represented by an attorney.
- Eichler v. Record Copy Services
Citation: 1st Appellate District: 1-00-1228
Date of Opinion: December 29, 2000
Summary: In this case, the appellate court upheld the disbarment of the plaintiff's rejection of an arbitration award. The plaintiff had been prevented from testifying or presenting evidence at the arbitration hearing due to sanctions imposed against her by the court three months earlier for failing to comply with discovery orders. In affirming the trial court's disbarment order, the appellate court argued that the plaintiff's failure to comply with, modify or vacate the court sanctions before the arbitration was the equivalent of bad faith participation in arbitration.
- Janice Anderson v. Brian Mercy
Citation: 3rd Appellate District: 3-02-0718
Date of Opinion: April 21, 2003
Summary: The appellate court held that the trial court erred in debarring a defendant's rejection of an arbitration award. The trial court had found that since the defendant did not appear at the arbitration and did not present a case at the arbitration, he had not participated in good faith. He therefore could not reject the award. The Illinois Appellate Court held that since the plaintiff had not objected to the defendant's actions, had not been prejudiced or inconvenienced by the defendant's actions, and there was no transcript evidence of bad faith, the trial court's ruling should be vacated.
- Knight v. Guzman
Citation: 1st Appellate District: 1-96-1817
Date of Opinion: August 5, 1997
Summary: The appellate court reversed the trial court's order to debar the defendant's rejection of an arbitration award. The debarment was made based on a motion by the plaintiff, who argued that the defense counsel's high rate of arbitration award rejections amounted to a bad faith participation in the arbitration process. The appellate court held that Illinois Supreme Court Rule 91(b), upon which the trial court relied when making its order, governs only the arbitration hearing and not the entire arbitration process. While the defense counsel's conduct may have a negative impact on the arbitration, the court argued, it was not sanctionable under the rule.
- Lopez v. Miller
Citation: 1st Appellate District: 1-05-1035
Date of Opinion: February 27, 2006
Summary: The appellate court upheld the trial court's order to debar the defendant's rejection of an arbitration award. Due to sanctions imposed by the court for failing to comply with discovery prior to arbitration, the defendant had not been able to testify or present evidence at arbitration. Relying on rulings in Glover v. Barbosa and Anderson v. Pineda, the appellate court found that the defendant's failure to comply with, modify or vacate the sanctions against him before the arbitration amounted to bad faith participation in the arbitration itself. The court found the trial court's debarment of the rejection motion was appropriate under Illinois Supreme Court Rule 91(b).
- Mellon v. Coffelt
Citation: 2nd Appellate District: 2-99-0243
Date of Opinion: May 17, 2000
Summary: Mellon v. Coffelt involves a dispute over the filing fee in civil litigation to fund court-annexed mandatory arbitration. The plaintiff argues that she was unconstitutionally charged an $8 arbitration fee because her case was not one for which arbitration could be used. The court ruled against the plaintiff, stating that "because the System functions as part of a unified court system, the legislature may impose a fee on any, or all, litigants in the circuit courts to fund the System."
- Nix v. Whitehead
Citation: 1st Appellate District: 1-05-1412
Date of Opinion: September 5, 2006
Summary: The Appellate Court found that arriving at an arbitration hearing a few minutes after the 15-minute grace period does not bar a party from rejecting the arbitration award. The Appellate Court reversed the Trial Court's decision, stating that by arriving two minutes after the grace period the plaintiff neither failed to be present at the hearing, nor failed to participate in good faith, the two grounds that bar a party from rejecting an arbitration award under Supreme Court Rule 91. The Court referenced Zietara v. DaimlerChrysler Corp., 361 Ill. App. 3d 819 (2005), a similar case where the Court emphasized that the 15 minute grace period is not mandatory.
The Court remanded the case for a new arbitration hearing and noted this was a limited holding, stating, "We do not condone tardiness" and explaining that being "significantly late" could "result in debarment of the party from rejecting the arbitration award."
- R.J. Corman Derailment Services, LLC v. Int'l Union of Operating Engineers, Local Union 150, AFL-CIO
Citation: 422 F.3d 522
Date of Opinion: September 2, 2005
Summary: In R.J. Corman Derailment Services, LLC v. Local 150, the Seventh Circuit Court of Appeals decided the arbitrability of certain wage grievances that arose under an expired collective bargaining agreement. The Court held that the parties' dispute was not arbitrable. The Court reasoned that the Union's attempt to invoke arbitration was untimely. Because "a post-expiration grievance must be asserted within a reasonable time after its discovery," and given "the strong federal policy favoring prompt resolution of labor policies," the Seventh Circuit found the Union's 18-month delay unreasonable. Accordingly, the Union was not allowed to invoke the arbitration clause from the expired agreement.
- Rebecca Saldana v. Nicole M. Newmann
Citation: 1st Appellate District: No. 1-99-3878
Date of Opinion: January 19, 2001
Summary: The 1st District Appellate Court found that a trial court can hold that a lawyer failed to participate in a mandatory arbitration hearing in good faith without such a finding from the arbitration panel or transcripts of proceedings. The Appellate Court panel also rejected plaintiff's argument that her unintentional late arrival to the mandatory arbitration proceeding did not bar her from rejecting the arbitration award in favor of the defendant in a personal-injury case.
- Stemple v. Pickerill
Citation: 2nd Appellate District: 2-07-0151
Date of Opinion: December 21, 2007
Summary: The appellate court reversed a decision by the trial court to accept the withdrawal by the defendants of their rejection an arbitration award in favor of the plaintiff. The appellate court found that the Illinois Supreme Court Rules 86-95, which govern mandatory arbitration programs, include no provisions for allowing parties to withdraw award rejections once they have been submitted, and thus the trial court judge lacked the authority to grant the defendant's motion for withdrawal.
In a concurring opinion, Justice McLaren argued that the trial court judge erred not in granting the motion for withdrawal, but in subsequently denying the plaintiffs the right to reject the arbitration award after the defendants withdrew their rejection. Justice McLaren held that denying rejection withdrawals entirely could, in some cases, force parties into a trial unnecessarily. "So long as the trial court allows any other party that did not reject the award the opportunity to reject the award, the rights of all parties will be protected and there will be a vehicle for an early, economical, and fair resolution of monetary disputes."
- Walker v Lewis
Citation: 1st Appellate District: 1-03-2924
Date of Opinion: September 20, 2004
Summary: The court found that Illinois Supreme Court Rule 91(b) requires that sanctions for lack of good faith participation in court-annexed arbitration be initiated by a petition brought by the parties. It therefore does not authorize judges to, on their own, issue orders barring litigants from rejecting arbitration awards if they allegedly fail to participate in good faith. Therefore, the court found that the trial court abused its discretion in its sua sponte order barring defendant from rejecting the arbitration award
- Webber v. Bednarczyk
Citation: 1st Appellate District: 1-96-0777
Date of Opinion: March 27, 1997
Summary: The appellate court reversed the circuit court's debarment of the defendant's rejection of an arbitration award in this case. The plaintiff moved to have the defendant's rejection debarred based on his conduct prior to the arbitration hearing. The circuit court granted the motion and sanctioned the defendant under Illinois Supreme Court Rule 91(b). The appellate court held that Rule 91(b) only applied to conduct during an arbitration hearing. As there was no evidence the defendant had participated in bad faith at the hearing, the circuit court's decision was reversed.
- West Bend Mutual Insurance Company v. Herrera
Citation: 1st Appellate District: 1-95-3577
Date of Opinion: September 30, 1997
Summary: In this case, the appellate court overturned the circuit court's debarment of the defendant's rejection an arbitration award. The plaintiff had moved for the debarment, arguing that the Spanish-speaking defendants' failure to provide an interpretor at the arbitration hearing amounted to bad faith participation. The appellate court ruled that Illinois Supreme Court Rules only require parties to appear at arbitration hearings, and, as the arbitration panel did not find that the defendants failed to participate in good faith, the circuit court had no basis to grant the motion to debar.
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Case Law > Process Type > Arbitration