Just Pants v. Wagner

617 N.E.2d 246, 247 Ill. App. 3d 166, 187 Ill. Dec. 38
CourtAppellate Court of Illinois
DecidedMay 18, 1993
Docket1-91-2767
StatusPublished
Cited by18 cases

This text of 617 N.E.2d 246 (Just Pants v. Wagner) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Just Pants v. Wagner, 617 N.E.2d 246, 247 Ill. App. 3d 166, 187 Ill. Dec. 38 (Ill. Ct. App. 1993).

Opinion

JUSTICE SCARIANO

delivered the opinion of the court:

Defendant Joeine Wagner appeals from the the circuit court’s grant of summary judgment in favor of plaintiff Just Pants, an Illinois limited partnership, on the issue of whether an arbitration award was properly executed. Defendant also contends that because the court erred in holding that the award was enforceable, its subsequent confirmation of that award was necessarily infirm.

In November 1978, defendant and plaintiff entered into an agreement whereby defendant became a franchisee of plaintiff, which owned the franchise of an established national retail clothing store chain. Under the agreement, defendant would be entitled to open and to operate a “Just Pants” clothing store in a shopping mall in Athens, Georgia, and to use plaintiff’s trade name and trademarks. Pursuant to the agreement, she also subleased the Athens store from plaintiff. A later amendment to the existing contract authorized defendant in 1985 to open a second store in a Dalton, Georgia, shopping center, subject to the same terms as applied to the first store. The contract expressly provided that any disputes arising therefrom would be resolved in accordance with the provisions of the United States Arbitration Act (9 U.S.C. §1 et seq. (1988)), and the applicable rules of the American Arbitration Association (AAA).

In 1988, defendant, without explanation, stopped making payments to plaintiff for royalties, advertising fees and rent for the sublease on her two stores; thus, by October 1989, she was in arrears to plaintiff for more than $63,000. Plaintiff, pursuant to the franchise agreement, filed a demand for arbitration with AAA on July 12, 1989, seeking an adjudication of defendant’s liability and a recompense of the debt owed as well as attorney fees and costs. On August 16, 1989, AAA named William Capíes as the arbitrator of the dispute and asked the parties to advise it of a mutually agreeable date upon which the arbitration proceeding could be held. The parties chose October 6, 1989, as the hearing date. On August 24, 1989, AAA informed them that their hearing would be held on the agreed-upon date, and that notice of an intent to postpone must be given at least 48 hours in advance of the time set for the hearing. Nonetheless, on October 5, the day before the hearing was to commence, defendant phoned Capíes, requesting a postponement of the next day’s proceeding or, alternatively, that the hearing be conducted telephonically. Capíes denied both requests.

On the morning of October 6, 1989, defendant’s attorney again phoned Capíes asking that he delay the hearing. Capíes, citing defendant’s lack of diligence in securing a postponement, again denied the request, and pursuant to Rule 30 of AAA’s rules of commercial arbitration, acceded to plaintiff’s demand to conduct the hearing ex parte. After listening to testimony which encompasses over 100 pages of transcript and accepting substantial documentary evidence, Capíes closed the hearing on October 23, 1989. Subsequently, on November 2, 1989, defendant petitioned over plaintiff’s objection to reopen the proceeding, which Capíes denied.

In mid-November 1989, Capíes informed AAA that he was nearing completion of his decision and that he would be sending it forthwith. When the award did not arrive at AAA’s New York office, an official there telephoned Capíes to inquire into the source of the delay. Capíes advised the official that he had rendered a decision in favor of plaintiff in the amount of $81,142 and that his memorandum of the final award would be mailed to AAA. On November 17, 1989, Capíes, as promised, mailed to AAA a copy of an unsigned 11-page memorandum of his award which was attached to a signed cover letter. In the cover letter, Capíes identified the parties to the dispute and, inter alia, referred to the attached memorandum as being his decision with regard to the case.

AAA’s standard procedure upon the filing of an award by one of its arbitrators is to complete a “golden rod” which notifies AAA’s central office which party in a proceeding held under its auspices has prevailed, and also to transcribe the arbitrator’s decision onto one of AAA’s standard award forms which is then sent to the parties. Here, the official who had previously spoken to Capíes sent to AAA’s central office the “golden rod” naming plaintiff as the prevailing party in this action. He also ensured that the standard form expressed Capíes’ resolution of the dispute. He sent seven copies of the completed form to Capíes for his signature, but Capíes died before receiving them.

Plaintiff, seeking to enforce the award rendered by Capíes, filed a complaint in the circuit court seeking a declaratory judgment that the Capíes memorandum was enforceable as an award and asked the court to confirm it pursuant to section 9 of the United States Arbitration Act (9 U.S.C. §9 (1988)), and section 11 of the Illinois Uniform Arbitration Act (Ill. Rev. Stat. 1989, ch. 10, par. Ill). On February 26, 1991, plaintiff moved for summary judgment on both counts. Defendant moved to dismiss the complaint via a section 2 — 619 motion (Ill. Rev. Stat. 1989, ch. 110, par. 2—619), asserting that the award was never signed and, therefore, since a signed award is a statutory prerequisite to its subsequent confirmation, the court lacked jurisdiction to confirm it. However, defendant filed nothing in direct response to the motion for summary judgment. The court denied defendant’s motion to dismiss and instead granted plaintiff’s motion for summary-judgment. It found that the most equitable resolution to the controversy was to decree that the written award combined with the signed cover letter met the AAA’s requirement that an award must be written and signed. Accordingly, the court entered judgment in favor of plaintiff and confirmed Capíes’ award nunc pro tunc as of July 24, 1989, after which defendant filed a timely notice of appeal.

The sole question before us is whether a letter subscribed by the arbitrator and attached to the memorandum of his award explaining the basis of his decision, and which fully resolved the proceeding before him but which was not subscribed, constituted a “written, signed award” for the purposes of the applicable AAA rule pertaining to commercial arbitration. Defendant, adopting an exceedingly formalistic approach, argues that because the memorandum of decision was not subscribed by the arbitrator before his death, it cannot be considered a “written, signed award” as contemplated by Rule 42 of the AAA’s rules for commercial arbitration. Thus, under her approach, the award was never executed, and accordingly, a new proceeding must be held before a new arbitrator. Since the memorandum at issue does have the arbitrator’s typewritten name affixed at its end, she implicitly asserts that for the purposes of Rule 42, the “signed” requirement can be satisfied only by a subscription made by the arbitrator in his own hand.

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Cite This Page — Counsel Stack

Bluebook (online)
617 N.E.2d 246, 247 Ill. App. 3d 166, 187 Ill. Dec. 38, Counsel Stack Legal Research, https://law.counselstack.com/opinion/just-pants-v-wagner-illappct-1993.