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7 September 2000

___________________________________________________________________________

JUSTICE STEIGMANN delivered the opinion of the court:

In June 1995, plaintiff, Ronald M. Hawrelak, anddefendant, Marine Bank, Springfield (the Bank), entered into anemployment agreement (Agreement). Hawrelak eventually left theBank's employment, and in June 1997, he sought arbitration onseveral compensation issues. In January 1999, following ahearing, the arbitrators awarded $64,893 to Hawrelak, who laterfiled a motion to vacate the award. In December 1999, the trialcourt granted Hawrelak's motion and vacated the arbitrationaward. The Bank appeals, and we reverse and remand.

Pursuant to the Agreement, Hawrelak served as presidentof the Bank's mortgage banking division from June 1995 untilApril 1997, when he resigned that position. The Agreementcontained all of the terms of Hawrelak's compensation, includinghow the Bank would compensate him upon the termination of hisemployment. The Agreement also provided for arbitration in theevent a dispute arose thereunder.

Following Hawrelak's resignation, he submitted forarbitration several compensation issues, including whether he wasentitled to damages or compensation on a quantum meruit theory orwhether there existed an enforceable contract under which theamounts payable to him were set forth. Pursuant to the terms ofthe Agreement, the Bank selected an arbitrator (Craig Lewis),Hawrelak selected an arbitrator (Roger Rutherford), and Lewis andRutherford then selected a third, neutral arbitrator (retiredcircuit judge Richard Mann). In November 1998, the arbitratorsconducted an eight-day hearing on the compensation issues. OnNovember 30, 1998, the arbitrators met and reached a majoritydecision on all issues raised by Hawrelak in the arbitration. The next day, Mann drafted a letter, which enclosed the majoritydecision, and sent copies to Lewis and Rutherford.

Around December 2 or 3, 1998, Lewis spoke by telephonewith the Bank's chief executive officer and informed him thatLewis and Mann had signed the majority decision. Lewis then senta copy of the decision to the Bank, and someone at the Bankforwarded a copy to the Bank's attorney. The Bank's attorney,who was unaware that Hawrelak had not yet received the decision,then telephoned Hawrelak's counsel to inquire about payment ofthe award. Later during December 1998, Rutherford providedHawrelak with a copy of the majority decision as well as memoranda prepared by Lewis and Rutherford during the deliberationprocess.

In January 1999, the American Arbitration Association(Association) issued the final award, which fully incorporatedthe November 1998 majority decision. In addition, the finalaward specified how the arbitration costs and fees would bedivided between the parties.

In February 1999, Hawrelak filed a motion in the trialcourt, seeking to vacate the arbitration award on the groundsthat (1) the award was procured by "undue means" under section12(a)(1) of the Uniform Arbitration Act (Act) (710 ILCS5/12(a)(1) (West 1998)) because (a) Lewis prematurely disclosedthe arbitration decision to the Bank, and (b) during the arbitration panel's deliberations, Lewis submitted a memorandum containing arguments and data that had not been presented during thehearing; (2) the arbitrators exceeded their powers under section12(a)(3) of the Act by not adhering to the language of theAgreement in awarding damages; and (3) the arbitrators violatedsection 12(a)(4) of the Act by refusing to postpone the hearingor exclude nontestifying witnesses. In response, the Bank fileda motion to confirm the award, pursuant to section 11 of the Act(710 ILCS 5/11 (West 1998)).

In May 1999, the trial court granted Hawrelak's request"to conduct limited discovery concerning the premature release ofthe decision and the contacts that may have occurred between thearbitrators and the parties." Hawrelak subsequently deposedLewis and Mann, and the Bank deposed Rutherford. All threearbitrators were deposed regarding the premature disclosure ofthe decision, ex parte communications between the arbitrators andthe parties, and the arbitral deliberation process. Followingthe depositions and further briefing by the parties, the courtentered an order vacating the arbitration award in its entirety,remanding for a new arbitration hearing, and denying the Bank'smotion to confirm the award. The court specifically found thatLewis' premature disclosure of the decision "prejudiced therights of Mr. Hawrelak" and justified vacating the award.

This appeal followed.

The scope of judicial review of an arbitration award isnothing like the scope of an appellate court's review of a trialcourt's decision (see American Federation of State, County &Municipal Employees v. Department of Central Management Services,173 Ill. 2d 299, 304, 671 N.E.2d 668, 672 (1996)) because the Actprovides for very limited judicial review of an arbitrator'saward. 710 ILCS 5/12, 13 (West 1998). In particular, the Actallows vacation of an award (1) procured by corruption, fraud, orother undue means, (2) where there was evident partiality ormisconduct on the part of the arbitrators, (3) where the arbitrators exceeded their powers, or (4) where the arbitrators refusedto postpone a hearing upon sufficient cause or to hear materialevidence, so as to prejudice the rights of a party. See 710 ILCS5/12(a)(1), (a)(2), (a)(3), (a)(4) (West 1998). If the arbitrators have acted in good faith, however, the award is conclusiveupon the parties. Garver v. Ferguson, 76 Ill. 2d 1, 7-8, 389N.E.2d 1181, 1183 (1979).

A presumption exists that the arbitrators did notexceed their authority. Moreover, arbitration awards should beconstrued, whenever possible, so as to uphold their validity. Rauh v. Rockford Products Corp., 143 Ill. 2d 377, 386, 574 N.E.2d636, 641 (1991). Such deference is accorded because the partieshave chosen in their contract how their dispute is to be decided,and judicial modification of an arbitrator's decision deprivesthe parties of that choice. Tim Huey Corp. v. Global Boiler &Mechanical, Inc., 272 Ill. App. 3d 100, 106, 649 N.E.2d 1358,1362 (1995). "'A contrary course would be a substitution of thejudgment of the Chancellor in place of the judges chosen by theparties, and would make an award the commencement, not the end,of litigation.'" Garver, 76 Ill. 2d at 9, 389 N.E.2d at 1184,quoting Burchell v. Marsh, 58 U.S. (17 How.) 344, 349, 15 L. Ed.96, 99 (1854).

Because the parties to an arbitration did not bargainfor a judicial determination, a reviewing court cannot set asidean arbitration award because of errors in judgment or mistakes oflaw or fact. Gross errors of judgment in law or gross mistakesof fact may be reviewable, but only if they are apparent upon theface of the award. Garver, 76 Ill. 2d at 7, 389 N.E.2d at 1183. A party seeking to vacate an arbitration award must provideclear, strong, and convincing evidence that the award was improper. Canteen Corp. v. Former Foods, Inc., 238 Ill. App. 3d167, 179-80, 606 N.E.2d 174, 182 (1992).

The Bank argues that the trial court erred by vacatingthe arbitration award because Lewis' premature disclosure of themajority decision had no effect on the final award issued by theAssociation. We agree.

Because the pertinent facts are undisputed and only thetrial court's legal conclusions are at issue, we review thecourt's ruling de novo. See In re D.G., 144 Ill. 2d 404, 408-09,581 N.E.2d 648, 649 (1991) ("where neither the facts nor [the]credibility of the witnesses is contested, the issue *** is alegal question which a reviewing court may consider de novo").

Section 12 of the Act provides, in pertinent part, thatan arbitration award can be vacated where the award "was procuredby corruption, fraud[,] or other undue means." 710 ILCS5/12(a)(1) (West 1998). "Undue means" has been interpreted asakin to fraud and corruption. Hahn v. A.G. Becker Paribas, Inc.,164 Ill. App. 3d 660, 667, 518 N.E.2d 218, 222 (1987). InSeither & Cherry Co. v. Illinois Bank Building Corp., 95 Ill.App. 3d 191, 196-97, 419 N.E.2d 940, 945 (1981), this courtdescribed an award procured by "undue means" as one in which"some aspect of the arbitrator's decision or decision-makingprocess *** was obtained in some manner which was unfair andbeyond the normal process contemplated by the [Act]."

In the present case, Hawrelak has failed to provide anyevidence showing that the final arbitration award was procured by"undue means" based on Lewis' premature disclosure of the majority decision. Instead, the record belies any claim that theaward was obtained in an unfair manner outside the normal processcontemplated by the Act. The undisputed evidence shows that theJanuary 1999 final award, which was issued by the Association,was--in all material respects--the same as the November 1998majority decision. The final award fully incorporated themajority decision, which was attached to Mann's December 1, 1998,letter. The only modification in the final award consisted oflanguage specifying how the arbitration fees and expenses wouldbe divided between the parties, and we agree with the Bank thatno real dispute existed regarding the allocation of those costs. In addition, the deposition testimony of the neutral arbitrator,Mann, clearly established that the November 1998 majority decision was a final decision and Lewis' premature disclosure of thatdecision had no impact upon the January 1999 final award. Wetherefore conclude that the trial court erred by finding thatLewis' premature disclosure of the majority decision requiredvacatur of the arbitration award.

B. Hawrelak's Other Claims of Error

Hawrelak urges this court to affirm the trial court'svacatur of the arbitration award because of other alleged errorsby the arbitrators. Specifically, he contends that the award wasimproper because (1) it was procured by undue means when, duringthe arbitration panel's deliberations, Lewis submitted a memorandum containing arguments and data that had not been presentedduring the hearing; (2) the arbitrators exceeded their powersunder section 12(a)(3) of the Act by not adhering to the Agreement's specific language in awarding damages; and (3) the arbitrators violated section 12(a)(4) of the Act by (a) refusing topostpone the hearing to allow him to depose one of the Bank'sexpert witnesses and (b) refusing to exclude nontestifyingwitnesses from the hearing room.

Hawrelak's arguments regarding the arbitrators' conductare akin to arguments that parties typically raise regarding atrial court's procedures and ruling. However, Hawrelak did notopt to submit to the judgment of the courts, and we will notinject ourselves into a case where the parties have exercisedtheir right to submit their disputes to arbitration--warts andall. The parties bargained for the arbitration panel's view ofthe facts and interpretation of the Agreement, and they got it.

Once parties bargain to submit their disputes to thearbitration system (a system essentially structured without dueprocess, rules of procedure, rules of evidence, or any appellateprocedure), we are disinclined to save them from themselves. Forinstance, Hawrelak's claim that the arbitrators erred by refusingto exclude nontestifying witnesses from the hearing room iswholly without merit. While this might be a serious issue intrial court proceedings, it is not an issue in arbitrationproceedings. Absent any evidence that this award was made in badfaith, that any of the arbitrators were guilty of fraud orcorruption, or that the arbitrators deliberately chose not tofollow the law, the trial court's vacatur of the arbitrationaward cannot stand.

In so concluding, we reaffirm what we wrote in TimHuey, 272 Ill. App. 3d 100, 649 N.E.2d 1358, in which we affirmedthe trial court's confirmation of an arbitration award:

"We see no principled way to injectourselves into this case, to correct an awardof damages we suspect is insufficient, wherethe parties have exercised their right toselect an alternate forum. That is not tosay that we are satisfied with the arbitrators' award in this case. If a jury had madethis award, we might well reverse it. *** We should not concoct some reason to reviewarbitration awards we do not like, however,at the same time stating that we will not setaside an award because of errors in judgmentor mistakes of law or fact." Tim Huey, 272Ill. App. 3d. at 108-09, 649 N.E.2d at 1364.

Tim Huey continues:

"'[W]here arbitration is contemplatedthe courts are not equipped to provide thesame judicial review given to structuredjudgments defined by procedural rules andlegal principles. Parties should be awarethat they get what they bargain for and thatarbitration is far different from adjudication.'" Tim Huey, 272 Ill. App. 3d at 111,649 N.E.2d at 1366, quoting Stroh ContainerCo. v. Delph Industries, Inc., 783 F.2d 743,751 n.12 (8th Cir. 1986).

We also take this opportunity to remind trial courtsthat they should be hesitant to allow discovery of arbitralprocesses. The trial court here allowed the parties to conductlimited discovery concerning the premature disclosure of themajority decision and ex parte contacts that may have occurredbetween the arbitrators and the parties. However, the record isreplete with instances where the parties delved into the arbitrators' deliberation process, in total disregard of the court'sorder. It is precisely because of this sort of abuse that courtsshould hesitate to allow any discovery of arbitral processes.

For the reasons stated, we reverse the trial court'sjudgment and remand for further proceedings.

Reversed and remanded.

COOK, P.J., and MYERSCOUGH, J., concur.