Opinion
No. 1-05-1332
July 31, 2006. OPINION WITHDRAWN AUGUST 1, 2006.
Appeal from the Circuit Court of Cook County, No. 04 CH 8975, Patrick E. McGann, Judge, presiding.
Mary Spencer, plaintiff, appeals from an order of the circuit court dismissing her complaint under section 2-615 of the Code of Civil Procedure (the Code) ( 735 ILCS 5/2-615 (West 2004) (dismissal based on defects in the pleadings)). Spencer alleges that the arbitrator who decided her claim against Ryland Homes Group, Inc., defendant, erred in denying her request for attorney fees as the prevailing party, and the circuit court erred in dismissing her claim of arbitrator error. Because we conclude that Spencer was not the prevailing party, we affirm.
On June 19, 2003, Spencer signed an agreement of sale with Ryland to purchase a town home. She paid $6,000 in earnest money. Paragraph 10 of the agreement, entitled " Arbitration," provided: "[a]ny controversy, claim or dispute" between the parties would be settled by binding arbitration. This paragraph did not address which party would be responsible for the cost of arbitration or how the responsible party would be determined. Paragraph 20 provided: " Attorneys' Fees and Costs. The non-prevailing party in any proceeding to enforce or contest any provision(s) of this Agreement of Sale shall pay all reasonable costs, attorney's fees and expenses incurred by the prevailing party."
On September 18, 2003, Spencer received a letter from Ryland, stating she was in default on her contract and her earnest money was being retained as damages. On November 22, 2003, Spencer submitted a demand for arbitration. She sought actual damages of $6,000 in earnest money; $2,000 as compensation for inconvenience and aggravation; punitive damages of up to $10,000; and attorney fees and costs as provided in paragraph 20 of the agreement.
An arbitrator from the American Arbitration Association (Association) issued a written award on March 16, 2004. The award noted that the parties waived an oral hearing and the arbitrator made his decision on the parties' written documents. The arbitrator ordered Ryland to refund Spencer's $6,000 in earnest money plus $150 in interest. The arbitrator ordered Ryland to pay $1,250 for the administrative fees and expenses of arbitration, including Spencer's $875 advance payment. The award did not mention attorney fees or designate a prevailing party. It concluded: "[t]his award is in full settlement of all claims submitted to this Arbitration. All claims not expressly granted herein are, hereby denied."
Spencer requested reconsideration and modification of the award based on paragraph 20 of the sales agreement and the federal Equal Credit Opportunity Act (ECOA) ( 15 U.S.C. § 1691 et seq. (2000)), both of which, she argued, expressly entitled her, as the prevailing party, to attorney fees and costs. The arbitrator denied Spencer's request for reconsideration on March 31, 2004.
Spencer filed a timely, three-count complaint in the circuit court on June 3, 2004. See 710 ILCS 5/12(b) (West 2004). The only count at issue here is Spencer's request that the court vacate the award as to attorney fees under section 12(a)(3) of the Uniform Arbitration Act (Arbitration Act) ( 710 ILCS 5/12(a)(3) (West 2004)) because the arbitrator exceeded his powers. Ryland filed a motion to dismiss the complaint under section 2-615 of the Code ( 735 ILCS 5/2-615 (West 2004)), arguing that Spencer could not show that the arbitrator committed a gross mistake of fact or law that appeared on the face of the award.
The record shows that the trial judge believed the arbitrator misinterpreted the parties' agreement and erred in not granting attorney fees to Spencer as the prevailing party. But in his written order the judge allowed the arbitrator's award to stand because a court has an "absolute duty" under the doctrine of stare decisis to follow the decisions of the Illinois Appellate Court and to apply the holdings of a factually indistinguishable case, Perkins Restaurants Operating Co., L.P. v. Van Den Bergh Foods Co., 276 Ill. App. 3d 305, 657 N.E.2d 1085 (1995). See Scachitti v. UBS Financial Services, 215 Ill. 2d 484, 499, 831 N.E.2d 544 (2005) ("The doctrine of stare decisis requires strict adherence to prior decisions * * *"). The trial judge cited Perkins: "[a]s long as the arbitrators' interpretation of the agreement is a reasonably possible one, courts will not set aside the award. * * * A court is not empowered to overturn or change an arbitration award even if a court would have reached a different conclusion * * *." Perkins, 276 Ill. App. 3d at 311. The trial court granted Ryland's motion to dismiss.
Spencer appeals. Her main arguments are: (1) Perkins is legally and factually distinguishable from this case and should not have been followed by the court; and (2) even if Perkins does control, it should no longer be followed as a matter of public policy. Ryland contends that Perkins is, as the trial court wrote, virtually indistinguishable from this case. Ryland claims Spencer was not the prevailing party, despite the return of her earnest money, and she was not entitled to attorney fees under the terms of the agreement.
We review de novo the dismissal of a complaint under section 2-615 of the Code ( 735 ILCS 5/2-615 (West 2004)). Jarvis v. South Oak Dodge, Inc., 201 Ill. 2d 81, 86, 773 N.E.2d 641 (2002). We will consider Spencer's allegations in the light most favorable to her and decide whether she has stated a cause of action for which relief can be granted. Jarvis, 201 Ill. 2d at 86.
We note that the record and briefs mention Spencer's claims under the ECOA ( 15 U.S.C. § 1691(b) (2000)) and the Illinois Consumer Fraud and Deceptive Business Practices Act ( 815 ILCS 505/1 et seq. (West 1998)). But because Spencer states in her reply brief that she is not pursuing these claims on appeal, we will not consider them.
The Arbitration Act provides that a court can vacate an arbitration award under these circumstances:
"(1) The award was procured by corruption, fraud or other undue means;
(2) There was evident partiality by an arbitrator appointed as a neutral or corruption in any one of the arbitrators or misconduct prejudicing the rights of any party;
(3) The arbitrators exceeded their powers;
(4) The arbitrators refused to postpone the hearing upon sufficient cause being shown therefor or refused to hear evidence material to the controversy or otherwise so conducted the hearing, contrary to the provisions of Section 5 [of the Act], as to prejudice substantially the rights of a party; or
(5) There was no arbitration agreement * * *" 710 ILCS 5/12(a) (West 2004).
Spencer claims that the arbitrator exceeded his powers under section 12(a)(3) by failing to apply the unambiguous language of the agreement of sale. She claims the trial court erred in relying on Perkins.
In Perkins, the plaintiff purchased a used bakery oven from the defendant and later claimed the oven was defective. Perkins, 276 Ill. App. 3d at 307. The plaintiff claimed more than $1 million in damages. The parties' purchase agreement provided that controversies, disputes or claims between them "`shall be submitted for arbitration'" and that the arbitration decision and award "`shall be conclusive and binding upon the parties.'" Perkins, 276 Ill. App. 3d at 307. The agreement also provided that if either party took action to enforce its terms, "`the non-prevailing party shall reimburse the prevailing party for any costs it incurs * * *, including reasonable attorney fees * * *.' (Emphasis added.)" Perkins, 276 Ill. App. 3d at 307. The plaintiff's claims were submitted to an arbitration panel. Before rendering its decision, the panel of judges requested briefs from the parties on the legal meaning of the terms "prevailing party" and "non-prevailing party." Perkins, 276 Ill. App. 3d at 307-08. In its award, the panel ordered the defendant to pay the plaintiff $10,000 in damages but found that neither attorney fees nor costs would be reimbursed by one party to another. Perkins, 276 Ill. App. 3d at 308. The panel ordered each party to "`bear its own legal fees and costs'" and stated that the award was "`in full settlement of all claims and counterclaims submitted to this arbitration.'" Perkins, 276 Ill. App. 3d at 308. The plaintiff applied to the circuit court to modify or vacate the award. The circuit court denied the application and confirmed the award. The plaintiff appealed. This court affirmed the circuit court's order. Perkins, 276 Ill. App. 3d at 311.
The court in Perkins found:
"Judicial review of arbitration awards is extremely restricted. Courts encourage the settlement of disputes by arbitration and, accordingly, judicial review of an arbitration award is more limited than appellate review of a circuit court's decision. [Citation.] Courts must construe arbitration awards, whenever possible, to uphold their validity. [Citations.] Limited judicial review fosters the long-accepted and encouraged principle that an arbitration award should be the end, not the beginning, of litigation. [Citation.]
* * *
* * * [C]ourts must accord arbitrators the presumption that they did not exceed their authority. [ Rauh v. Rockford Products Corp., 143 Ill. 2d 377, 386, 574 N.E.2d 636(1991).] * * *
* * *
Gross errors of judgment in law or a gross mistake of fact will not vitiate an arbitration award unless the mistakes or errors are apparent on the face of the award. [ Rauh, 143 Ill. 2d at 393.] Even an arbitrator's gross abuse of discretion is not grounds for modifying an arbitration award * * *. [Citation.]
* * *
An arbitrator has no authority to ignore the plain language of the contract or to interpret unambiguous contract language. [ Shearson Lehman Brothers, Inc. v. Hedrich, 266 Ill. App. 3d 24, 29, 639 N.E.2d 228 (1994) (award vacated where the arbitrators exceeded their authority in awarding defendants an amount `which was clearly not based upon the precise and unambiguous mathematical formulas provided in the' agreements).] * * *
* * *
`An arbitrator exceeds his authority when he decides matters which were not submitted to him.' [ Water Pipe Extension, Bureau of Engineering Laborors' Local Union 1092 v. City of Chicago, 238 Ill. App. 3d 43, 47, 606 N.E.2d 112 (1992).] If, however, the award is within the submission and contains the honest decision of the arbitrators, after a full and fair hearing, a court will not set it aside for errors of fact or law. [ Rauh, 143 Ill. 2d at 394-95.] `A court may not set aside an arbitration award merely because the court would have reached a different result.' [ Water Pipe Extension, 238 Ill. App. 3d at 46.]
* * *
The fee decision by the arbitrators is presumed valid and cannot be vitiated by even gross mistakes in law. As long as the arbitrators' interpretation of the agreement is a reasonably possible one, courts will not set aside the award. Here, the arbitrators, after being fully briefed on the issue by both parties, determined that neither party was entitled to attorney fees. A court is not empowered to overturn or change an arbitration award even if a court would have reached a different conclusion from the language of [the agreement] and the legal definitions advanced." Perkins, 276 Ill. App. 3d at 308-11.
This excerpt supports the conclusion that Perkins is factually and legally analogous to this case. In both, a sales agreement between the parties provided that disputes would be submitted to binding arbitration and that the nonprevailing party would reimburse the prevailing party for attorney fees. In both, the arbitrators made a monetary award to the plaintiff but did not designate either party as the prevailing party. In neither case did the arbitrators award attorney fees to either party. There, as here, the plaintiff appealed, maintaining that, as the prevailing party, it was entitled to attorney fees on the grounds that the arbitrators exceeded their powers by failing to award attorney fees according to the agreement. One fact that differs is that the plaintiff in Perkins asked for $1 million and received $10,000. Here, Spencer asked for $18,000, and received $6,000. The variances in these dollar amounts have no bearing on the applicability of the reasoning in Perkins. These facts also contradict Spencer's argument that, with the return of her earnest money, she must be considered the prevailing party because she received all the relief she sought. In fact, just as the plaintiff in Perkins, Spencer did not receive all the relief she sought.
Here, Spencer prevailed in her pursuit of her earnest money and arbitration costs but lost on her claims for compensatory damages and punitive damages. Ryland prevailed in that it was not required to pay Spencer compensatory or punitive damages but was defeated in the effort to keep Spencer's earnest money as damages for default. Both parties won and lost on claims. Under the reasoning in Perkins, neither Spencer nor Ryland was the prevailing party. Perkins, 276 Ill. App. 3d at 311.
Spencer also argues that Perkins is distinguishable because the award there specifically stated that each party would bear its own legal expenses but, here, the arbitrator used "boiler plate" language that the award was "in full settlement for all claims" and "claims not expressly granted" were denied. She cites no authority for this claim, and we will not consider it. See Official Reports Advance Sheet No. 21 (October 17, 2001), R. 341(e)(7), eff. October 1, 2001.
Spencer also argues that the cases are not comparable because the arbitrators in Perkins asked for briefs on the meaning of "prevailing party," but here the arbitrator did not. First, there is no indication in Perkins as to if, or to what extent, the briefing informed the arbitrator's judgment in Perkins. Spencer does not argue, and we do not believe, that the definitions of these terms are in such a state of flux that arbitrators usually or always require special briefs. In fact, there has been much reliance on and no rejection of the principles set forth in Perkins in the more than 10 years since its filing. See, for example, Yorulmazoglu v. Lake Forest Hospital, 359 Ill. App. 3d 554, 564, 834 N.E.2d 468 (2005); Herricane Graphics, Inc. v. Blinderman Construction Co., 354 Ill. App. 3d 151, 156, 820 N.E.2d 619 (2004); Colmar, Ltd. v. Fremantlemedia North America, Inc., 344 Ill. App. 3d 977, 992, 801 N.E.2d 1017 (2003); Equity Insurance Managers of Illinois, LLC v. McNichols, 324 Ill. App. 3d 830, 837, 755 N.E.2d 75 (2001); Heatherly v. Rodman Renshaw, Inc., 287 Ill. App. 3d 372, 375, 678 N.E.2d 59 (1997). We do not believe the lack of a special briefing here renders Perkins distinguishable in a significant way.
In addition to the factual similarities shared by the cases, the legal principles in Perkins also apply here. Perkins established that it is reasonably possible for an arbitrator to conclude that neither party prevailed in an arbitration. Perkins, 276 Ill. App. 3d at 311. The court in Perkins concluded that neither party will be entitled to attorney fees, even if the agreement of sale provided attorney fees for the prevailing party, if a party prevailed on some, but not all, claims for relief. Perkins, 276 Ill. App. 3d at 306. See Brown Kerr, Inc. v. American Stores Properties, Inc., 306 Ill. App. 3d 1023, 1034, 715 N.E.2d 804 (1999) (where neither party can be said to be the prevailing party because both won and lost on claims or, where a case is deemed a draw, a court need not award attorney fees despite clear contract language).
Because both parties here won and lost on claims, it was not unreasonable to conclude that neither party prevailed and neither was entitled to attorney fees, despite the clear language of the agreement. The language did not pertain because there was no prevailing party.
We also conclude that Spencer's claim that the arbitrator exceeded his powers under section 12(a)(3) of the Arbitration Act is unsupported by the record. The record shows that Spencer submitted the specific issue of attorney fees in her November 22, 2003, demand for arbitration. Because the issue was submitted for arbitration, the arbitrator did not exceed his authority.
It is obvious that the trial judge here believed that the arbitrator erred in withholding attorney fees from Spencer. But Perkins and its progeny have stated repeatedly that a mistake by an arbitrator, unless it is a gross error of fact or law that appears on the face of the award, will not necessarily vitiate an award. An arbitration award will be rejected if a reviewing court can conclude, from the award's face, that the arbitrator was so mistaken as to the law that, if apprised of the mistake, he would have ruled differently. Yorulmazoglu, 359 Ill. App. 3d at 565. The party who challenges an award must prove by clear and convincing evidence that the award was grounded on such an error. Yorulmazoglu, 359 Ill. App. 3d at 565.
Here, no error is apparent on the face of the award. There was no misapplication of unambiguous language. We do not believe that the arbitrator's decision to designate neither party as prevailing means that he ignored the language of the contract or erroneously interpreted unambiguous language. Perkins established that a reference to "the prevailing party" in a sales agreement does not require the arbitrator to designate a prevailing party. Under Perkins, the trial court properly upheld the award and dismissed the complaint.
The dissent argues that an error is apparent on the face of the award because the arbitrator assessed arbitration costs but not attorney fees to Ryland as the nonprevailing party under paragraph 20 of the agreement. This is correct if paragraph 20, "Attorneys' Fees and Costs," is construed broadly as controlling not only attorney fees, costs and expenses but arbitration costs as well. But paragraph 20 reasonably can be interpreted as governing only "attorney fees," "attorney costs" and "attorney expenses," but not arbitration costs. Paragraph 10, which addresses the topic of "Arbitration," imposes no specific requirements or restrictions on how an arbitrator is to apportion arbitration costs. Nor does paragraph 10 mention prevailing or nonprevailing parties. It would not be unreasonable in reading paragraphs 10 and 20 together to conclude that the arbitrator must assess the costs, expenses and fees of attorneys to the prevailing party, but has no constraints on the assignment of arbitration costs. Under this reading, there is no facial inconsistency.
The language of the contract does permit both the majority's and the dissent's interpretations of paragraph 20. This reveals an ambiguity within the agreement itself. Where there is ambiguity in a contract with an arbitration clause, the arbitrator is the entity designated to interpret the ambiguity. Nagle v. Nadelhoffer, Nagle, Kuhn, Mitchell, Moss Saloga, P.C., 244 Ill. App. 3d 920, 930, 613 N.E.2d 331 (1993), citing Donaldson, Lufkin Jenrette Futures, Inc. v. Barr, 124 Ill. 2d 435, 448, 530 N.E.2d 439 (1988). This means that the arbitrator's decision to assess arbitration costs but not attorney fees to Ryland cannot be assailed as a facial inconsistency. The arbitrator was free to interpret the ambiguous contract as long as reasonable minds could agree and there were no gross errors of law or fact. See Rauh, 143 Ill. 2d at 393.
We next turn to Spencer's claim that the arbitration award was improper because, unlike the litigants in Perkins which had relatively equal bargaining powers, the litigants here were unequal. She claims the agreement of sale was a "contract of adhesion" where the consumer was forced to submit to an unfair arbitration clause to purchase a home. See Hubbert v. Dell Corp., 359 Ill. App. 3d 976, 987, 835 N.E.2d 113 (2005) ("[a] contract of adhesion exists where one party has absolutely no bargaining power or ability to change the contract terms").
But "`a perception of unequal bargaining power is not enough to unilaterally hold arbitration agreements unenforceable.'" Borowiec v. Gateway 2000, Inc., 209 Ill. 2d 376, 392, 808 N.E.2d 957 (2004), quoting Walton v. Rose Mobile Homes, LLC, 298 F.3d 470, 478 (5th Cir. 2002), citing Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 33, 114 L. Ed. 2d 26, 41, 111 S. Ct. 1647, 1656 (1991) (courts should be attuned to well-supported claims that an arbitration agreement resulted from fraud or overwhelming economic superiority, but such claims are best resolved on a case-by-case basis). Here, Spencer did not present well-supported claims of fraud or economic pressure to the arbitrator, to the trial court or to this court. She merely presents her perception that her bargaining power was unequal to Ryland's and Perkins cannot control because the parties there were economic equals. Based on the facts and claims of this case, we cannot say that the arbitration clause was unenforceable as a contract of adhesion.
In urging us to reject Perkins, Spencer asks us to follow Shearson, 266 Ill. App. 3d 24, and Grossinger Motorcorp, Inc. v. American National Bank Trust Co., 240 Ill. App. 3d 737, 607 N.E. 2d 1337 (1992), but these cases do not alter our conclusion. Both predate Perkins. Shearson concerned an arbitration where three terminated employees of a brokerage firm sought money owed them by the company's deferred compensation plan. Shearson, 266 Ill. App. 3d at 25. The arbitrators were to decide whether the employees were wrongly discharged and, based on their decision, whether the employees should be treated as fully vested or unvested for the purpose of calculating their compensation, including interest, under the deferred compensation plan. Different interest rates for vested and unvested employees were set out in the deferred compensation agreements between the employees and the firm. Shearson, 266 Ill. App. 3d at 27. The arbitrators found the employees were not wrongfully discharged. But they did not then apply the unambiguous interest rates in the agreement to calculate the award. The circuit court affirmed the award, but this court vacated it, finding that the arbitrators exceeded their authority by ignoring the unambiguous interest provisions of the agreements. Shearson, 266 Ill. App. 3d at 29.
Spencer claims that the arbitrator here made the same error as the panel in Shearson by ignoring the parties' unambiguous agreement that the prevailing party would be entitled to attorney fees from the nonprevailing party. We disagree. There, as here, the arbitrators engaged in a two-step analysis. They first determined the status of the parties and then determined an award based on that decision. In Shearson, the arbitrators found the employees were not wrongfully discharged but then erred in failing to follow the applicable rates in calculating the appropriate monetary award. To err in the way found in Shearson, the arbitrator here would have had to have found one party prevailed but then award attorney fees to the other party. That did not occur. The holding in Shearson, does not require this award be vacated.
Spencer relies next on Grossinger for the proposition that a plaintiff who receives the return of her earnest money cannot be considered the unsuccessful party. Grossinger, 240 Ill. App. 3d at 753. But the award here does not conflict with Grossinger because Spencer, who received earnest money, was not deemed the unsuccessful or nonprevailing party. It would not be unreasonable to conclude that the agreement here did not require a prevailing party to be determined. It required only that, if there were a prevailing party, that party would be entitled to attorney fees and expenses.
We now turn to Spencer's claims that the award here violates public policy and Perkins should be overturned. She contends that the Arbitration Association (Association) is widely known to be biased in favor of business and against consumers; that attorney fees are virtually never awarded in consumer arbitration cases; that these practices by arbitrators increase, not reduce, the costs of litigation; and that arbitrators are unwilling to explain why attorney fees are denied. But see William B. Lucke, Inc. v. Spiegel, 131 Ill. App. 2d 532, 536, 266 N.E.2d 504 (1970) (an arbitrator is not required to explain the award in great detail or show how he arrived at his conclusions * * *).
It is true that a court may vacate an arbitration award that contravenes paramount considerations of public policy. Heatherly v. Rodman Renshaw, Inc., 287 Ill. App. 3d 372, 375, 678 N.E.2d 59 (1997). A court may refuse to enforce an arbitration award that contravenes public policy as established in laws and legal precedents but may not refuse to enforce an award challenged merely on considerations of supposed public interest. General Casualty Co. v. Tracer Industries, Inc., 285 Ill. App. 3d 418, 424-25, 674 N.E.2d 473 (1996). Mere allegations of prejudice, such as Spencer's claim that the Association is notoriously pro-business, cannot vitiate an arbitration award. Christian Dior, Inc. v. Hart Schaffner Marx, 265 Ill. App. 3d 427, 436, 637 N.E.2d 546 (1994). A court will not vacate an award on the grounds of partiality unless a direct, definite and demonstrable interest in the outcome of the arbitration can be shown. Christian Dior, 265 Ill. App. 3d at 436. The alleged bias of an arbitrator must be shown with clear and convincing evidence, not evidence that is remote, uncertain or speculative. Ronwin v. Piper. Jaffray Hopwood. Inc., 113 Ill. App. 3d 687, 692-93, 447 N.E.2d 954 (1983).
Here, Spencer has not supported her claims by directing us to laws and legal precedents or presenting well-defined and dominant public policies. Her authority is limited. For example, she cites State Farm Fire Casualty Co. v. Miller Electric Co., 231 Ill. App. 3d 355, 359, 596 N.E.2d 169 (1992), to argue that fee-shifting provisions in the federal Magnuson-Moss Warranty-Federal Trade Commission Improvement Act ( 15 U.S.C. § 2301 et seq. (2000)) (Magnuson-Moss Act) were enacted to vindicate the rights of consumers who are injured and to encourage them to pursue legal remedies. She maintains that because of this provision, we should enforce, in her favor, the fee-shifting provision in her agreement with Ryland. But the discussion in State Farm relates to the federal act at issue there, not to fee shifting in general. In the next paragraph of the opinion, the court cautions against superimposing the Magnuson-Moss Act on Illinois statutes or concluding that fee-shifting provisions are intended to benefit "any and all prevailing parties." State Farm, 231 Ill. App. 3d at 359. The opinion goes on to explain that "the `American' rule consistently followed in Illinois is that a successful litigant is not entitled to recover attorney fees and the ordinary expenses of litigation and trial preparation." State Farm, 231 Ill. App. 3d at 359.
We believe that Spencer's public policy claims fall within the realm of "general considerations of supposed public interest" and do not show that the award affects paramount considerations of public policy. Despite her claim that Association arbitrators are biased against consumers, she has not shown or attempted to show that the arbitrator in her case was biased. She has not shown that the arbitrator had a direct, definite, and demonstrable interest in the outcome of the arbitration.
We conclude that the trial court did not err in dismissing Spencer's complaint under section 2-615 of the Code ( 735 ILCS 5/2-615 (West 2004)). Her pleadings have not demonstrated that she was the prevailing party in the dispute or that public policy considerations warrant a judgment in her favor and the abrogation of Perkins. The judgment of the circuit court is affirmed.
Affirmed.
Justice Burke participated in the disposition of this case before her retirement from the court.
GORDON, J., dissents.
I disagree with the result reached by the majority, even though I have no quarrel with the precedential underpinnings upon which its conclusions are based.
I do not disagree that alternate avenues of dispute resolution should be encouraged and have been given substantial, although not unlimited, autonomy by statute and precedent. See Rauh, 143 Ill. App. 3d at 386. Accordingly, there would be no entitlement to judicial vacature of an arbitration award on the grounds of substantive error unless the award exceeds the contractual power and the authorization of the arbitrator under the arbitration agreement or is otherwise tainted with fraud, bias or other failures on the part of the arbitrator to hear the evidence or provide a fair and impartial forum. See 710 ILCS 5/12 (West 2004). Thus, even gross error has been held not to warrant vacature or judicial preemption, unless such error is apparent from the face of the award, reflecting the arbitrator's total disregard for the arbitration agreement. See Rauh, 143 Ill. App. 3d at 386; Shearson, 266 Ill. App. 3d at 29. So long as there is room in reasonable minds for the arbitrator's contractual interpretation, it must be left standing without judicial intervention. See Rauh, 143 Ill. App. 3d at 386; Perkins, 276 Ill. App. 3d at 311.
However, the basis for my dissent in this case is that, here, the arbitrator's award is so facially inconsistent as to leave no question that it reflects on its face a total abandonment of the agreement, this invoking review and vacature under section 12 of the Arbitration Act, which provides for vacature where the arbitrators exceeded their powers. See 710 ILCS 5/12(a)(3) (West 2004); Shearson, 266 Ill. App. 3d at 29. The operative provision of the agreement upon which this appeal is predicated states as follows:
"The non prevailing party in any proceeding to enforce or contest any provision(s) of this agreement of sale shall pay reasonable costs, attorneys fees or expenses incurred by the prevailing party."
This provision is the basis for the award of both costs and fees. The provision does not distinguish or leave room for any distinction to be made with respect to costs, as opposed to fees. It is an all or nothing provision. Either one prevails and therefore becomes entitled to fees, as well as costs, or does not "prevail" and is therefore not entitled to either costs or fees. Under this agreement there is no basis whatsoever upon which to provide for the one without also providing for the other.
The arbitrator nevertheless proceeded to award costs and deny fees, blatantly ignoring the undisputable fact that under the contract the award of fees and costs travel in tandem, without any basis for differentiation. If a party is deemed to be the prevailing one so as to meet the award of costs, he ipso facto is the prevailing one for fees, as well. Thus, the award shows on its face that the arbitrator was not attempting to follow the agreement, but was simply imposing his own compromise arbitrarily, without the semblance of contractual authorization.
The majority's reliance on Perkins is therefore misplaced. Perkins, on its facts, involved only a review of the arbitrator's definition of the term "prevailing parties." There, the court correctly deferred to the arbitrator's interpretation as controlling. Perkins, 276 Ill. App. 3d at 307-08, 311. Perkins, however, even if grossly erroneous, did not involve facial inconsistency. In Perkins, the arbitrator uniformly denied both costs, as well as fees, on the common ground that the plaintiff was not a prevailing party. Perkins, 276 Ill. App. 3d at 311. Here, the arbitrator committed a "double speak" holding: on the one hand, that Spencer was the prevailing party for costs, but not for fees, although the contract provided for both under the same single provision. Such a result is not protected and should not survive vacature. Shearson, 266 Ill. App. 3d at 29.