Summary
The Illinois Appellate Court affirmed an order setting off mutually awarded arbitration judgments arising from a construction dispute. The court held that setting off the judgments did not modify the arbitrator’s awards and that attorney fees were not exempt from set-off because the arbitrator had not awarded or specifically addressed such fees.
Topics
Practice areas
Questions Presented
- Whether a court-ordered set-off of two judgments entered on reciprocal arbitration awards constitutes an impermissible modification of the arbitrator's award under the Illinois Uniform Arbitration Act.
- Whether an arbitration award should be exempted from set-off under the attorney-fee exception when the arbitrator's award does not expressly designate any amount for attorney fees or costs.
Holdings
- A court's set-off of reciprocal judgments entered on arbitration awards does not modify the arbitrator's awards when the amounts awarded remain unchanged; the set-off is an enforcement measure within the court's authority over its judgments.
- An arbitration award is not exempt from set-off under the attorney-fee exception unless the award designates an amount for attorney fees or costs; an unspecified gross award does not create a presumption that fees were included.
Key quotations
“The amounts awarded to each of the parties by the arbitrator were not disturbed and were therefore confirmed; the set-off, applying these same amounts, was "in conformity" with the order confirming the award.” (135 Ill. App. 3d at 326)
“As section 12-178 exempts from set-off only that portion of an arbitrator's award designated for fees and costs, acceptance of plaintiff's argument that unspecified fees and costs were presumptively included in its award would require exemption of the entire award.” (135 Ill. App. 3d at 328)
Factual background
Adam Martin Construction Company and the Brandon Partnership were parties to a construction contract containing an arbitration provision. After the contractor filed a mechanic's lien foreclosure action, the matter and the partnership's liquidated-damages claim were arbitrated. The arbitrator awarded money to both parties, and the circuit court confirmed the awards and offset the smaller award to the partnership against the larger award to the contractor. The contractor argued that the set-off improperly modified the arbitral award and that its award should be protected from set-off because it allegedly included attorney fees and costs.
Procedural history
Adam Martin Construction initiated a mechanic's lien foreclosure action that was referred to arbitration under the parties' construction contract. The arbitrator awarded $26,585.79 to the defendant and $27,655.10 to the plaintiff. The circuit court entered separate judgments, later granted the defendant's motion for declaratory judgment, ordered a set-off, and entered judgment for the $1,069.31 balance due to plaintiff. After denying plaintiff's motion for reconsideration and to vacate, the circuit court's judgment was appealed and affirmed.