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This case originated in 1994 when Sandra Bickel, now deceased, and her husband,Raymond Bickel, now individually and as the special administrator of the estate of SandraBickel, filed a lawsuit in the circuit court of Madison County against, inter alia, Doctor'sAssociates, Inc. (Doctor's), and Subway Development of Chicagoland, Inc. (SubwayDevelopment). The lawsuit claimed fraud, breach of contract, and willful and wanton breachof contract and sought a declaratory judgment that the arbitration clauses in their twofranchise agreements were void and unenforceable. Here, Subway Development appealsfrom a $400,000 default judgment entered against it and in favor of the plaintiffs and fromthe denial of its motion to vacate that judgment. The other defendants are not a subject ofthis appeal. The issues raised by Subway Development are, in essence, (1) whether theservice of the complaint was proper and (2) if service was proper, whether the $400,000default judgment entered in favor of the plaintiffs and against Subway Development wasproper. We affirm in part, vacate in part, and remand for a hearing on the issue of damages.

The instant case is a study in the art of protracted litigation. We will recite only thosefacts necessary for an understanding of our decision herein. All of the plaintiffs' claims aroseout of or related to two Subway franchise agreements between the plaintiffs and Doctor's,dated November 23, 1984, and March 18, 1986, respectively. Both franchise agreementscontain arbitration clauses which provide that any controversies or claims arising out of orrelating to the contract be resolved through arbitration in Connecticut by the AmericanArbitration Association. On December 16, 1994, the plaintiffs filed suit in Madison Countyagainst, inter alia, Doctor's, the national franchiser of Subway sandwich shops, and SubwayDevelopment, a company operated by one of Doctor's sales agents. Doctor's is a Connecticutcorporation while Subway Development is an Illinois corporation.

On January 5, 1995, the plaintiffs served both Doctor's and Subway Development byleaving a copy of the complaint and the summons in the Office of the Illinois AttorneyGeneral, with the secretary for the chief counsel. Subway Development and Doctor'spreviously filed sworn consents appointing the Illinois Attorney General as their agent forservice of process. The Illinois Attorney General is the administrator for the FranchiseDisclosure Act of 1987 (Act) (815 ILCS 705/1 et seq. (West 1992)). Doctor's disclosurestatement, filed pursuant to the Act, states that the Illinois Attorney General is the agent forservice of process for both Doctor's and Subway Development. The disclosure statementwas distributed to prospective Subway franchise purchasers by both Doctor's and SubwayDevelopment.

On January 20, 1995, Doctor's filed a demand for arbitration against the plaintiffs anda petition for a preliminary injunction in the United States District Court for Connecticut.Doctor's sought to compel the plaintiffs to arbitrate their claims against Doctor's inConnecticut and requested a preliminary injunction against further prosecution in MadisonCounty. The plaintiffs do not have an arbitration agreement with Subway Development, andSubway Development was not a party to the arbitration demand or the petition to compelarbitration filed by Doctor's. The district court scheduled a hearing on Doctor's petition tocompel arbitration and motion for a preliminary injunction on February 13, 1995.

Neither Doctor's nor Subway Development entered its appearance in Madison Countywithin 30 days after January 5, 1995. Affidavits of employees of the Illinois AttorneyGeneral's office show that the Attorney General's office was served on January 5, 1995, andthat the Attorney General's office mailed two copies of the summons and complaint againstDoctor's to Doctor's Florida and Connecticut addresses and two additional copies of thesummons and complaint against Subway Development to Subway Development's Chicagooffice, as well as to Doctor's Florida office on behalf of Subway Development. On February7, 1995, the circuit court of Madison County entered a default judgment on the issue ofliability against Doctor's and Subway Development. The default judgment included adeclaratory judgment that the arbitration clause was void and unenforceable. The circuitcourt scheduled a hearing on damages for April 4, 1995.

On February 10, 1995, Subway Development filed a general entry of appearance anda request for an additional 30 days to respond to the plaintiffs' complaint. On February 17,1995, Doctor's likewise filed a general entry of appearance and the same request for anadditional 30 days to respond.

After a hearing on February 13, 1995, the district court entered an order grantingDoctor's petition to compel arbitration and motion to enjoin the Illinois action. Theinjunction did not, however, affect Doctor's or Subway Development's right to take steps tovacate the default judgment here in question.

On February 17, 1995, Doctor's and Subway Development filed a motion to set asidethe default judgment. On March 15, 1995, the plaintiffs filed a motion in opposition to themotion to vacate the default judgment, including an affidavit of Sandra Bickel. With regardto damages, the affidavit stated that the plaintiffs "were damaged because of their lostinvestment in the Subway stores, the lost income from those stores[,] and the lost value ofthose stores in the sum of $400,000." Ms. Bickel's affidavit was filed for the express purposeof opposing Doctor's and Subway Development's motion to vacate the default. During theApril 4, 1995, hearing on the motion to set aside the default, the plaintiffs' attorney stated asfollows:

"[A]s to this hearing today, we are not asking for any damages. As a matter of fact,we are enjoined from asking for damages. The only exception to the injunction isthey can ask to set aside the default judgment, which we feel is inappropriate, but thatwas an issue on appeal in the federal system, so there is no request for actual damagesor punitive damages or anything here, just that this default judgment which wasappropriate under the circumstances [sic]."

Despite the plaintiffs' attorney's statement that the plaintiffs were not seeking damages at thattime, the plaintiffs later claimed that damages had been proved at the hearing.

On September 12, 1995, the United States Court of Appeals for the Second Circuitreversed the order compelling arbitration, vacated the preliminary injunction entered onFebruary 13, 1995, and remanded that case, along with several other cases, to the districtcourt. Doctor's Associates, Inc. v. Distajo, 66 F.3d 438 (2d Cir. 1995). The preliminaryinjunction remained in place, however, until November 22, 1995, when the Second Circuitissued its mandate vacating the injunction.

On November 16, 1995, the circuit court heard additional arguments concerningSubway Development's motion to set aside the default. At that time, the plaintiffs' attorneystated, "[T]his was argued back in April of this year[,] at which time we submitted an[a]ffidavit of damages." The plaintiffs' attorney moved that the issue of punitive damagesbe separated and that a default judgment be entered after a mandate issued from the SecondCircuit vacating the preliminary injunction. The plaintiffs' attorney submitted a proposedjudgment that would award $400,000 in compensatory damages. Subway Development'scounsel objected to the proposed judgment and reminded the circuit court that the injunctionwas still in effect. Subway Development's counsel asked that if the motion to set aside wasnot granted, Subway Development be allowed a jury trial on the issue of damages. On December 6, 1995, the district court entered a temporary restraining order toenjoin the plaintiffs from proceeding with the Illinois lawsuit. On December 7, 1995, thecircuit court, unaware of the temporary restraining order, entered a judgment awarding theplaintiffs $400,000 in compensatory damages and severing the remaining claims (i.e.,punitive damages) for determination at a later date. The circuit court stated:

"The default judgment of February 7, 1995[,] scheduled a damage hearing forApril 4, 1995. The affidavit of Sandra Bickel established that [p]laintiffs sufferedactual damages in the sum of $400,000.00. [Doctor's and Subway Development]offered no contrary evidence. While the preliminary injunction issued by the [districtcourt] previously enjoined the [p]laintiffs from prosecuting their claims against anyof the [d]efendants in this case, it did not enjoin either [Doctor's or SubwayDevelopment]. ***

This [c]ourt, being advised that the [p]laintiffs are no longer enjoined fromproceeding with their claims against any of the [d]efendants in this case, including[Doctor's and Subway Development], hereby enters judgment in favor of [p]laintiffs*** in the sum of $400,000.00, plus court costs."

On January 5, 1996, Doctor's and Subway Development filed a notice of appeal from theabove-cited judgment.

Based upon the entry of the December 6, 1995, judgment, the plaintiffs argued thatthe district court should abstain from exercising jurisdiction over Doctor's motion to compelarbitration, because of the $400,000 default judgment. The district court rejected theplaintiffs' contention on the basis that "the Illinois judgment was entered almost immediatelyand without an evidentiary hearing," and it stated, "Such action does not constitute relativelysubstantial proceedings." Doctor's Associates, Inc. v. Distajo, 944 F. Supp. 1010, 1023 (D.Conn. 1996). The district court granted Doctor's motion to compel arbitration and issued apreliminary injunction against the Illinois proceedings, pending the outcome of arbitration. Distajo, 944 F. Supp. at 1023. The Second Circuit affirmed. Doctor's Associates, Inc. v.Distajo, 107 F.3d 126, 139 (2d Cir. 1997).

On March 6, 1996, Doctor's and Subway filed a motion to stay the appeal during thependency of the preliminary injunction, which this court granted. On June 17, 1998, SandraBickel died. During 2000, this court issued an order to show cause why the stay of thisappeal should not be lifted. Doctor's and Subway Development responded that because thefederal injunction had never been modified or reversed, the instant appeal remained enjoined. On May 20, 2003, after two days of hearings, an arbitrator in Connecticut issued afinal award on the claims for compensatory damages in the amount of $46,440 and deniedthe claim for punitive damages. The plaintiff filed a motion to confirm the award withrespect to liability but asked the district court to vacate the arbitrator's award of damages onthe basis that the damages were insufficient as a matter of law.

On November 19, 2003, the district court denied the motion to vacate and confirmedthe arbitrator's final award. The district court also denied Doctor's request that the Illinoiscase between Subway Development and the plaintiff be permanently enjoined, and thepreliminary injunction expired. The plaintiff moved this court to lift the stay of the appealof Subway Development only, which this court granted. Subway Development now appealsfrom the $400,000 default judgment.

The first issue we are asked to consider is whether the service of the complaint wasproper. Subway Development contends that the delivery of the complaint to a secretary atthe Illinois Attorney General's office, without more, does not constitute proper service underIllinois law. The plaintiff replies that Subway Development waived any objection to themethod or manner of service when it entered a general appearance, moved to vacate thedefault judgment, and acknowledged it had been served, without first specially appearing andobjecting to the circuit's court exercise of personal jurisdiction. We agree with the plaintiff.

Section 2-301 of the Code of Civil Procedure (Code) concerns objections to personaljurisdiction, and in 1994 it provided in pertinent part as follows:

"Special appearance. (a) Prior to filing any other pleading or motion, a specialappearance may be made either in person or by attorney for the purpose of objectingto the jurisdiction of the court over the person of the defendant. A special appearancemay be made as to an entire proceeding or as to any cause of action involved therein. Every appearance, prior to judgment, not in compliance with the foregoing is ageneral appearance." 735 ILCS 5/2-301(a) (West 1994).

A special and limited appearance is confined solely to the purpose of contesting jurisdiction. Charles v. Gore, 248 Ill. App. 3d 441, 446, 618 N.E.2d 554, 557 (1993). A special andlimited appearance must be designated as such to avoid being construed as a generalappearance. Ahart v. Young, 194 Ill. App. 3d 461, 464, 551 N.E.2d 685, 688 (1990). Anyaction taken by a litigant that recognizes the case as being in court will be considered ageneral appearance unless that action was for the sole purpose of contesting jurisdiction. Lord v. Hubert, 12 Ill. 2d 83, 145 N.E.2d 77 (1957).

In the instant case, neither Subway Development nor Doctor's filed a special entry ofappearance, contended that the circuit court lacked personal jurisdiction, or moved to quashthe service of the summons. On February 10, 1995, Subway Development filed a generalentry of appearance and a request for an additional 30 days to respond to the plaintiffs'complaint. On February 17, 1995, Subway Development and Doctor's filed a motion to setaside the default judgment; they asked that the default judgment be vacated pursuant tosection 2-1301(e) of the Code (735 ILCS 5/2-1301(e) (West 1994)).

Section 2-1301(e) provides that the court in its discretion may "set aside any default[]and may on motion filed within 30 days after entry thereof set aside any final order orjudgment upon any terms and conditions that shall be reasonable." 735 ILCS 5/2-1301(e)(West 1994). In the motion to set aside the default, Subway Development and Doctor'sacknowledged they had been served. They stated that the plaintiffs' counsel "changed theirpast practice of serving [Doctor's] through XL Corporate services and serving SubwayDevelopment through Mr. Samotny[] and instead served [Doctor's] and SubwayDevelopment at the [O]ffice of the Illinois Attorney General." (Emphasis added.) Thatmotion further acknowledged as follows: "On February 7, 1995, just the 32nd day afterservice of complaints upon the Illinois Attorney General, [the plaintiffs'] counsel filed a[m]otion for [d]efault ***." (Emphasis added.)

The section 2-1301(e) motion was clearly directed to the discretion of the trial court. A review of that motion shows that Subway Development was not contesting that the trialcourt had jurisdiction over it. Subway Development waived any jurisdictional argument itmight have had, by failing to file a special and limited appearance to contest jurisdiction. Under these circumstances, where Doctor's and Subway Development filed general entriesof appearance, acknowledged service at the Illinois Attorney General's office, and failed toassert a lack of jurisdiction, Subway Development has waived any objection to the methodor manner of service.

At first blush, the case of Sullivan v. Bach, 100 Ill. App. 3d 1135, 427 N.E.2d 645(1981), appears to support Subway Development's position. In Sullivan, the court held thata party does not waive jurisdictional objections in filing a petition to vacate a defaultjudgment entered before the court obtained jurisdiction. Sullivan, however, isdistinguishable from the case at bar because in Sullivan, unlike here, the defendant did notacknowledge that its registered agent had been served. The defendant in Sullivan assertedthat the person who had been served with the summons and complaint was not its registeredagent. Here, it is uncontested that the Illinois Attorney General's office was SubwayDevelopment's registered agent. Prior to the service, both Doctor's and SubwayDevelopment had filed sworn consents appointing the Illinois Attorney General as their agentfor service of process.

After careful consideration, we find that there has been a waiver of the argument onservice of process. Accordingly, we need not consider whether the service of process wasproper. We next, however, consider Subway Development's argument that regardless ofwhether the service was proper, the circuit court abused its discretion in refusing to set asidethe default judgment.

Subway Development argues that prior to the entry of the default it was unaware thatit had been served with a complaint and that after learning about the default, it moved almostimmediately to have it set aside. Subway Development further argues that its memorandumin support of its motion to set aside the default judgment identified several meritoriousdefenses, including the statute of limitations, a disclaimer signed by the plaintiffs before theypurchased their second store, in which they stated that Subway Development had not madeany representations to induce them to purchase their second store, and the arbitration clausescontained in the franchise agreements. Subway Development insists that under thesecircumstances, the circuit court's refusal to vacate the default judgment was an abuse ofdiscretion. We disagree.

As previously set forth, section 2-1301(e) of the Code vests the trial court withdiscretion to set aside a default. 735 ILCS 5/2-1301(e) (West 1994). A liberal policy existswith respect to vacating defaults under section 2-1301(e). City of Chicago v. CentralNational Bank, 134 Ill. App. 3d 22, 25, 479 N.E.2d 1040, 1043 (1985). However, theoverriding consideration under section 2-1301(e) is whether or not substantial justice is beingdone between the litigants and whether it is reasonable under the circumstances to force theother party to a trial on the merits. Stotlar Drug Co. v. Marlow, 239 Ill. App. 3d 726, 728,607 N.E.2d 346, 348 (1993).

A review of the record in the instant case shows that Subway Development was wellaware that a lawsuit had been filed in Illinois. Instead of dealing with the Illinois lawsuit,Subway Development made a calculated decision to ignore the Illinois case and focus itsenergy on having the matter determined by a Connecticut court. Accordingly, the circuitcourt refused to vacate the default judgment because it believed that the plaintiffs would bemore prejudiced by setting aside the default judgment than Subway Development would beif the default was not set aside.

During the hearing on the motion to set aside the default judgment, David Loseman,an attorney for Doctor's and Subway Development, admitted that they had received a copyof the complaint and the summons by January 19, 1995. He further admitted that SubwayDevelopment's response was not to file an answer in Illinois but to file a demand forarbitration with the American Arbitration Association and a petition for a preliminaryinjunction in Connecticut on January 20, 1995, knowing full well that a Madison Countycircuit judge had previously ruled that the arbitration clause was void and unenforceable. The following colloquy between the defendants' attorneys and the circuit court isenlightening:

"THE COURT: Why would you request an injunction in an arbitration againsta defendant that you now claimed had not been served?

MR. LOSEMAN: Your Honor, we knew the lawsuit was pending. We [d]idnot know when they had been served or if, but we knew the lawsuit had beenpending, or was filed, and if they hadn't been served yet[,] we knew service waseminent [sic]. We knew some of the other defendants had been served, so we thoughttwo defendants are served and [the plaintiffs' attorney] is good about gettingeverything served quickly.

THE COURT: What sort of strikes me is[,] since we are talking aboutgentleman's conduct, he who lives by a sword die[s] by the sword, and while you'rebegging for gentlemanly conduct, you took a risk by going to Connecticut, and youlost.

MR. WILLIAMS: Well, I don't think it's that simple. I'll tell you why. I thinkthat as [Mr. Loseman] just pointed out, you know, he used the date of January 11th,'95 as being the date that we had notice of a lawsuit. We filed the entry of appearanceon February 10, which is within the 30 days. It is questionable whether service ona secretary of the Attorney General's [o]ffice is proper service, but in any event, evenif it is, what you're talking about is the difference of about four days.

THE COURT: But the delay was to your benefit to attempt to get thejurisdiction in effect of this Court stopped.

***

THE COURT: I mean, what you're doing is playing fast and loose with thejurisdiction of this [c]ourt knowing full well apparently that Judge O'Neill in thiscourt has ruled the arbitration clause to be not valid, right?

MR. WILLIAMS: From what-

THE COURT: There is a ruling of this [c]ourt that the foundation of youraction in Connecticut is not valid.

MR. WILLIAMS: And the [district court] has found that it is, Your Honor. And so that's what's the dispute in front of the Appellate Court. It's not a flaunting ofJudge O'Neill's ruling. It's a divergence of rulings between the [district court] *** aswell as Judge O'Neill's decisions. It's all a divergence of the two courts.

THE COURT: Knowing that the Attorney General has been appointed asagent for service of process, under the statute, did you at any time check with theAttorney General's [o]ffice to see if they had been served?

MR. LOSEMAN: No, Your Honor.

***

THE COURT: Well, it's obviously not the normal case. This is not the normalcase. There is one question which I wish to check on first, and that's the service onthe secretary of the Attorney General and the validity of proceeding in this manner. I will, as I've stated previously, state for the record at this time what I feel to be oneof the more compelling facts in this case is that immediate action was taken on behalfof [Doctor's] in Connecticut. So this is not[-]it strikes the [c]ourt, at least in view ofthe adverse ruling previously entered by Judge O'Neill, that it appears that this is agamble on the part of the defendants. I will take the case under advisement."

The circuit court later entered an order denying the defendants' motion to set aside the defaultjudgment.

The circuit court concluded that the plaintiffs would be "absolutely prejudiced" if thedefault judgment was set aside because the case was stayed in district court and the plaintiffswould be unable to have their day in court in Illinois. The plaintiffs would be forced intoarbitration in Connecticut even though the Madison County circuit court had previouslydetermined that the arbitration clauses contained in the franchise agreements were void. While we are aware that a default judgment is a drastic remedy which should be used withgreat caution, under the circumstances presented here, we cannot say the trial court's decisionto refuse to set aside the default judgment was an abuse of discretion.

We now address the award of $400,000 entered in this case. Subway Developmentinsists that even if the circuit court properly denied the motion to set aside the default, it wasentitled to an evidentiary hearing on the issue of damages. The plaintiff responds that thecircuit court did not err in refusing to grant Subway Development's motion for an evidentiaryhearing on the issue of damages because the record establishes that such a hearing would nothave occurred, since Subway Development, acting through Doctor's, would have sought toobtain another injunction against the plaintiffs and the Illinois court before an evidentiaryhearing could have taken place. After a careful consideration of the record before us, wefind that the award of damages must be vacated and the cause remanded for a hearing ondamages.

Pursuant to section 2-1206(a) of the Code, even a party held in default has a right tohave the issue of damages tried by a jury. 735 ILCS 5/2-1206(a) (West 1994). It is wellestablished that a judgment for unliquidated damages cannot be entered without establishingthe fair amount of those damages. Nye v. Parkway Bank & Trust Co., 114 Ill. App. 3d 272,276, 448 N.E.2d 918, 921 (1983). The Illinois Supreme Court explained, "Althoughdefaulted, where the action is in tort or for an unliquidated claim or amount, a defendantnonetheless has the right to be heard on the matter of damages." Elfman v. Evanston BusCo., 27 Ill. 2d 609, 614, 190 N.E.2d 348, 351 (1963).

Here, Subway Development was not heard on the issue of damages. As a part of thedefault judgment entered on February 7, 1995, the circuit court scheduled a damages hearingfor April 4, 1995. When that date arrived, the circuit court did not conduct a hearing ondamages but instead held a hearing on the motion to set aside the default judgment. Duringthat hearing, the plaintiffs' attorney advised the trial court that because of an injunctionissued by the district court, the plaintiffs were not asking for any damages at that time. Theplaintiffs' attorney explained as follows:

"[A]s to this hearing today, we are not asking for any damages. As a matter of fact,we are enjoined from asking for damages. The only exception to the injunction isthey can ask to set aside the default judgment, which we feel is inappropriate, but thatwas an issue on appeal in the federal system, so there is no request for actual damagesor punitive damages or anything here, just that this default judgment which wasappropriate under the circumstances [sic]."

Six months later, on November 16, 1995, during a follow-up hearing on the motion to setaside the default judgment, one of the other attorneys for the plaintiffs told the circuit courtthat in April 1995 the plaintiffs submitted an affidavit of damages.

The plaintiffs' attorney moved to separate the issue of punitive damages and asked thata $400,000 default be entered upon the issuance of a mandate by the district court lifting theinjunction. The only evidence in support of such an award is contained in the affidavit ofSandra Bickel filed on March 15, 1995, as an attachment to the plaintiffs' response to themotion to vacate the default judgment. The affidavit was not filed in support of a damagesclaim but, rather, for the express purpose of opposing the motion to set aside the default. The affidavit stated, "Plaintiffs, Sandra and Raymond Bickel, in the Madison County, IL[,]case[] were damaged because of their lost investment in the Subway stores, the lost incomefrom those stores[,] and the lost value of those stores in the sum of $400,000." The plaintiffssubmitted a proposed judgment awarding them $400,000.

In response to the proposed judgment, Subway Development's attorney argued thatdamages could not be set at that time because the federal injunction was still in effect, andthe attorney asked that if the circuit court chose not to set aside the default, SubwayDevelopment be allowed "a jury trial on the issue of damages at a later time." Neither a jurytrial nor any type of hearing on the issue of damages transpired. Rather, on December 7,1995, the circuit court entered the plaintiffs' proposed judgment, awarding the plaintiffs$400,000 in compensatory damages.

After careful consideration, we agree with Subway Development that it is entitled toa hearing on the issue of damages. While the plaintiffs argue that the circuit court wasmerely exercising its discretion in accepting Sandra Bickel's March 15, 1995, affidavit assubstantive evidence because the circuit court was convinced that an evidentiary hearingcould not be scheduled because one of the defendants would seek an injunction, the recorddoes not support this contention. At the time the affidavit was submitted, the plaintiffs'attorney specifically advised the circuit court that the plaintiffs were not seeking damages,but six months later another one of the plaintiffs' attorneys claimed that the previouslysubmitted affidavit established actual damages in the amount of $400,000.

An award of $400,000 is not to be left to the total discretion of the circuit court butrequires evidence of actual damages. Ms. Bickel did not appear to testify, and SubwayDevelopment was given no opportunity to cross-examine her or submit its own evidence onthe issue of damages. Subway Development asked for a jury trial on the issue of damagesand never waived its jury demand. Accordingly, we find that the award must be set asideand the cause remanded for a hearing on the issue of damages as requested by SubwayDevelopment.

Finally, we address Subway Development's assertion that the plaintiff is barred underthe doctrines of res judicata and/or collateral estoppel from seeking to enforce the defaultjudgment against Subway Development, due to the arbitration award. Subway Developmentinsists that the district court's decision to confirm the arbitration award as a binding judgmentprecludes the instant lawsuit. We disagree.

The preclusive effect of a prior adjudication on a subsequent claim or cause of actionfalls under the law of res judicata. Res judicata is separated into two distinct doctrines: (1)true res judicata, known as "claim preclusion," and (2) collateral estoppel, known as "issuepreclusion." People v. Moore, 184 Ill. App. 3d 102, 104, 539 N.E.2d 1380, 1381 (1989),rev'd on other grounds, 138 Ill. 2d 162, 561 N.E.2d 648 (1990). Both serve the samepurpose, which is promoting judicial economy and preventing repetitive litigation. Moore,184 Ill. App. 3d at 104, 539 N.E.2d at 1381. Collateral estoppel applies when a partyparticipates in two separate and consecutive cases arising out of different causes of actionand some controlling factor or question material to the determination of both cases has beenadjudicated against the party in the former suit by a court of competent jurisdiction. Stathisv. First Arlington National Bank, 226 Ill. App. 3d 47, 53, 589 N.E.2d 625, 630 (1992). However, res judicata will not apply in cases in which it would be fundamentally unfair todo so, and parties will not be collaterally estopped unless the precise facts and issues wereclearly determined in the prior judgment. Nowak v. St. Rita High School, 197 Ill. 2d 381,390-91, 757 N.E.2d 471, 477-78 (2001).

While Illinois public policy favors arbitration and consistency with other states in theenforcement and interpretation of arbitration agreements (Reed v. Doctor's Associates, Inc.,331 Ill. App. 3d 618, 621-22, 772 N.E.2d 372, 375 (2002)), the instant case presents a uniqueset of facts. The plaintiff did not have an arbitration agreement with Subway Development,and Subway Development was not a party to the arbitration demand or petition to compelarbitration filed by Doctor's. The default judgment was entered on February 7, 1995, whilethe arbitration award was not issued until May 2003. The plaintiff is entitled to interest fromthe date the judgment was entered on February 7, 1995. We find that it would befundamentally unfair to bind the plaintiff to the arbitration award rendered more than sevenyears after the original default judgment was entered, especially in light of Doctor's andSubway Development's clear attempts to circumvent Illinois jurisdiction as outlined in thesecond part of our analysis.

In conclusion, we find that Subway Development waived any objection to the methodor manner of service and that the trial court did not abuse its discretion in refusing to setaside the default judgment under the facts presented here. Accordingly, we affirm theliability portion of the judgment of the circuit court of Madison County. As to the circuitcourt's award of $400,000, we find that the award must be vacated and the cause remandedfor a hearing on the issue of damages. At this juncture, we feel compelled to state theobvious. This case has gone on entirely too long, with both sides bearing responsibility fordelays caused by legal maneuvering and one-upmanship. It is time for all the parties to worktoward a definitive resolution on the issue of damages and put an end to this litigation.

For the foregoing reasons, the judgment of the circuit court of Madison County isaffirmed in part and vacated in part, and the cause is remanded with directions.

Affirmed in part and vacated in part; cause remanded with directions.

CHAPMAN and WELCH, JJ., concur.