Taxman v. First Illinois Bank of Evanston

Case Date: 11/27/2002
Court: 1st District Appellate
Docket No: 1-02-1399 Rel

THIRD DIVISION

FILED: 12/11/02





No. 1-02-1399

 

SEYMOUR TAXMAN and DONALD R. MAZZONI, ) Appeal from the
) Circuit Court of
           Plaintiffs-Appellees, ) Cook County
)
                        v. )
)
FIRST ILLINOIS BANK OF EVANSTON, not )
individually, but as Trustee under )
Trust Agreement dated September 30, 1958, )
and known as Trust Number 1151, and )
DANIEL F. McCARTHY, not individually, but )
as Directing Beneficiary of the Trust )
Agreement dated September 30, 1958, and )
known as Trust No. 1151, ) Honorable
) Lester Foreman,
          Defendants-Appellants. ) Judge Presiding.


 

JUSTICE HOFFMAN delivered the opinion of the court:

The defendants, the First Illinois Bank of Evanston, astrustee under a trust agreement dated September 30, 1958, and knownas Trust Number 1151 (hereinafter referred to as the "Trust"), andDaniel F. McCarthy, appeal from an order of the circuit court ofCook County which: denied their motion to vacate an arbitrationaward in favor of the plaintiffs, Seymour Taxman and Donald R.Mazzoni; confirmed the award; and entered judgment thereon. Forthe reasons which follow, we affirm.

The material facts giving rise to this litigation are not indispute. The Trust entered into an installment agreement with theplaintiffs pursuant to which the plaintiffs were to purchase fromthe Trust an improved parcel of real property, commonly known as9933 North Lawler Avenue in Skokie, Illinois. The agreement isdated May 10, 2000, and was executed on behalf of the Trust byDaniel F. McCarthy in his capacity as "Directing Beneficiary." Theagreement was modified by a letter also dated May 10, 2000, whichprovided, in part, that any disagreements which might arise betweenthe parties during the term of the agreement would be resolvedthrough binding arbitration.

In May of 2001, a dispute arose between the parties concerningthe provisions of the agreement relating to the Trust's obligationsto furnish certain documents to the plaintiffs and pay theplaintiffs a monthly co-management fee. On June 19, 2001, theplaintiffs filed a demand for arbitration with the AmericanArbitration Association (AAA).

On November 7, 2001, James A. Campion, the AAA arbitratorassigned to resolve the dispute, (hereinafter referred to as the"arbitrator") conducted a preliminary hearing by telephone and, onthe following day, entered a scheduling order reflecting that theparties had agreed, among other things, that the hearing of thematter would commence on January 20, 2002. By that same order, thearbitrator directed that, on or before December 28, 2001, theparties would file a stipulation of uncontested facts and adisclosure of all witnesses reasonably expected to be called totestify at the hearing, and exchange copies of all exhibits,schedules, summaries, diagrams and charts to be used at thehearing. The order also provided that all deadlines would bestrictly enforced and that, after the passage of the deadline, aparty would be unable to file a motion except with the arbitrator'spermission upon a showing of good cause.

On December 18, 2001, the plaintiffs served a notice for thetaking of McCarthy's deposition on December 26, 2001. On January3, 2002, the plaintiffs filed a request for sanctions with thearbitrator, asserting that the defendants had failed to providediscovery materials, McCarthy had failed to attend his scheduleddeposition, and the defendants had failed to cooperate in thepreparation of a stipulation of facts.

By a notice dated January 14, 2002, the arbitrator rescheduledthe arbitration hearing to commence on February 1, 2002. It alsoappears that the arbitrator extended the discovery cutoff toJanuary 30, 2002. On January 15, 2002, the plaintiffs served anotice for the taking of McCarthy's deposition on January 28, 2002.

On January 22, 2002, the defendants filed a motion to extendthe discovery cutoff date and to continue the scheduled hearing. In support of their request for a continuance, the defendantsalleged as follows:

"3. Subsequent to the parties teleconference with thearbitrator on December 14, 2001, Respondent DanielMcCarthy became involved in negotiations with a thirdparty concerning the disposition of a substantialunrelated land holding that he owns. The land inquestion constitutes a substantial portion of McCarthy'scurrent assets, and the disposition of the land may beara material impact upon McCarthy's personal estateplanning interests. Respondent McCarthy is currently 83years old.

4. Because of Mr. McCarthy's advanced age and thepotential impact of the transaction question upon hisestate planning, Mr. McCarthy is unable to devote thetime and attention required in order to sit for hisdeposition before January 30, 2002[,] and to thereafterprepare for the February 1, 2002[,] arbitration hearing.

5. In order to address his attention to the above-referenced competing land transaction and to advance thatmatter to a point where he can concentrate on the issuesraised in the pending arbitration claim, Mr. McCarthyrequires an additional month's time."

The arbitrator denied the defendants' request for acontinuance, and the arbitration hearing proceeded as scheduled onFebruary 1, 2002. Although the record before us does not containa transcript of the proceedings before the arbitrator on that date,we know from various pleadings contained in the record that theplaintiff Taxman and the defendant McCarthy both testified at thearbitration hearing. On February 11, 2002, the arbitrator enteredan award in favor of the plaintiffs which provides, among otherthings, that the plaintiffs are entitled to recover $31,333.33 fromthe defendants and the defendants are required to deliver certainspecified documents to the plaintiffs.

On March 5, 2002, the plaintiffs commenced the instant actionwith the filing of a pleading entitled "Motion for Confirmation andJudgment for Arbitration Award." The action was filed pursuant tosections 11 and 14 of the Uniform Arbitration Act (Act) (710 ILCS5/11, 14 (West 2000)) and requested that the circuit court confirmthe arbitrator's February 11, 2002, award and enter judgmentagainst the defendants in conformity with that award. On April 29,2002, the defendants filed a motion pursuant to section 12(a)(4) ofthe Act (710 ILCS 5/12(a)(4) (West 2000)), seeking an ordervacating the arbitration award by reason of the arbitrator's denialof their motion for a continuance. On May 10, 2002, the trialcourt denied the defendants' motion to vacate the arbitrationaward, granted the plaintiffs' motion to confirm the award, andentered judgment in favor of the plaintiffs in conformity with theaward. Thereafter, the defendants filed a timely notice of appeal.

In urging reversal of the May 10, 2002, order, the defendantsargue that the trial court erred in denying their motion to vacatethe arbitrator's award. They assert that they established goodcause for a continuance of the February 1, 2002, arbitrationhearing and that the arbitrator erroneously refused to postponethat hearing. In support of their argument, the defendants relyupon section 12(a)(4) of the Act which provides, in relevant part,that:

"12. Vacating an award. (a) Upon application of aparty, the court shall vacate an award where:

***

(4) The arbitrators refused to postpone the hearing uponsufficient cause being shown therefor *** or otherwise soconducted the hearing, contrary to the provisions ofSection 5, as to prejudice substantially the rights of aparty". 710 ILCS 5/12(a)(4) (West 2000).

Our first task in resolving the issue presented by this appealis to determine the appropriate standard to be applied by a courtin determining whether an arbitrator erred in refusing to postponea hearing. In Illinois, the determination as to whether to granta request for a continuance is a matter committed to the sounddiscretion of the trial court, and its decision in the matter willnot be disturbed on review absent a manifest abuse of thatdiscretion. In re Marriage of Knoche, 322 Ill. App. 3d 297, 308,750 N.E.2d 297 (2001). Although there is no Illinois authoritydirectly addressing the standard to be employed in determiningwhether an arbitrator appropriately ruled on a motion for acontinuance, we can conceive of no reason to apply any lessdeferential of a standard than we apply to similar rulings by atrial court. Judicial review of an arbitration award is even morelimited than appellate review of a trial court's decision. Rauh v.Rockford Products Corp., 143 Ill. 2d 377, 394, 574 N.E.2d 636(1991). We believe that this well-established principle supportsour conclusion that the decision to grant or deny a continuance ofan arbitration hearing rests with the discretion of the arbitrator.

Having determined that an abuse of discretion standard shouldbe applied to an arbitrator's decision to deny a request for acontinuance, we must determine whether there is any basis in therecord to conclude that the arbitrator in this case abused hisdiscretion in refusing to postpone the February 1, 2002, hearing.

The parties challenging an arbitration award have the burdenof proving their contention by clear, strong, and convincingevidence. Edward Electric Co. v. Automation, Inc., 229 Ill. App.3d 89, 102, 593 N.E.2d 833 (1992). Based on the record before us,we find that the defendants did not meet their burden in thisregard.

The defendants contend that they established good cause forpostponing the February 1, 2002, arbitration hearing and that thearbitrator should have granted their motion for a continuance. However, the only facts which the defendants asserted before thearbitrator in support of their request for a continuance are thosestated in the above-quoted portion of their motion for acontinuance. In their motion, the defendants alleged thatMcCarthy, an 83-year old man, had become involved in an unrelatedtransaction with a third party involving real estate which, theyasserted, constituted a "substantial" portion of his assets. Thedefendants supplied no information as to when McCarthy becameinvolved in the unrelated real estate transaction or the amount oftime that he would be required to devote to that transaction.

An abuse of discretion occurs only if it can be said that noreasonable person would take the position adopted by the trialcourt (In re Marriage of Knoche, 322 Ill. App. 3d at 308) or, inthis case, the arbitrator. We believe that the defendants' failureto furnish detailed information relating to the demands which wouldbe placed on McCarthy's time by reason of the unrelated transactionconstitutes a reasonable basis for the arbitrator's refusal topostpone the hearing.

The defendants also contend that they were prejudiced by thearbitrator's failure to continue the arbitration hearing because,after the hearing, McCarthy discovered preliminary drafts of theparties' installment agreement which would have corroborated histestimony as to the intended meaning of the co-management feeclause at issue in the proceeding. However, the defendants fail toexplain why McCarthy was unable to locate those preliminary draftsduring the seven months which elapsed between the commencement ofthe arbitration proceedings and the date of the hearing.

In sum, we find that the defendants have failed to meet theirburden of establishing that the arbitrator abused his discretion indenying their motion for a continuance or that the allegedprejudice that they suffered was not the result of their ownfailure to prepare for the arbitration hearing in a timely manner. As a consequence, we affirm the trial court's denial of thedefendants' motion to vacate the arbitration award.

When, as in this case, a motion to vacate an arbitration awardis denied and no other motion to correct or modify the award ispending, the trial court is required to confirm the award (710 ILCS5/12(d) (West 2000)) and enter judgment in conformity therewith(710 ILCS 5/14 (West 2000)). We, therefore, affirm the judgment ofthe circuit court.

Affirmed.

WOLFSON and HALL, JJ., concur.