APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, SECOND DIVISION
518 N.E.2d 218, 164 Ill. App. 3d 660, 115 Ill. Dec. 693 1987.IL.1763
Appeal from the Circuit Court of Cook County; the Hon. Roger J. Kiley, Judge, presiding.
JUSTICE HARTMAN delivered the opinion of the court. STAMOS and BILANDIC, JJ., concur.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE HARTMAN
Defendants-counterplaintiffs Donald D. Hahn, an individual, and Hahn, Holland & Grossman, a partnership (collectively Hahn), appeal from orders: (1) granting the motion for summary judgment of plaintiffs-counterdefendants A. G. Becker Paribas, Inc., a corporation, Becker Paribas Incorporated, a corporation, and Merrill Lynch, Pierce, Fenner & Smith, Inc., a corporation (sometimes collectively Becker), denying Hahn's motion for summary judgment, vacating an arbitration award entered in Hahn's favor, and remanding the parties' claims and counterclaims for arbitration de novo ; and (2) denying Hahn's motion for reconsideration.
On appeal, we are asked to consider as issues whether: (1) the circuit court erred in granting Becker's motion for summary judgment and denying Hahn's motion for summary judgment (Ill. Rev. Stat. 1985, ch. 110, par. 2-1005); and (2) the circuit court erred in denying Hahn's motion for reconsideration (Ill. Rev. Stat. 1985, ch. 110. par. 2-1203).
On July 28, 1983, Becker entered into a written contract with Hahn, which would prepare and furnish stock market research materials for Becker and, in return, Hahn would receive an annual fee of $600,000, payable in monthly installments, for a two-year period. The contract also provided that "[any] disputes, controversies or claims arising under or in regard to this Agreement shall be settled by arbitration under the applicable rules and regulations of the [National Association of Securities Dealers]" .
At some point between July 28, 1983, and November 5, 1984, co-plaintiff-counterdefendant Merrill Lynch, Pierce, Fenner & Smith, Inc., purchased Becker and Becker apparently ceased to exist; it was succeeded by co-plaintiff-counterdefendant Becker Paribas, Inc.
Becker terminated the contract by letter on November 5, 1984. Hahn filed a statement of claim with NASD on March 19, 1985, alleging that Becker terminated the contract without cause and, as a result of the breach, Hahn suffered monetary damages of at least $450,000. Becker filed an answer and counterclaim with NASD on May 3, 1985, denying liability under the contract and alleging a misappropriation of certain proprietary information by Hahn.
Hearings were conducted before a NASD-appointed arbitration panel (the panel) on December 10, 1985, February 4, 1986, and February 5, 1986. At the December 10, 1985, hearing, Becker immediately admitted its breach of the contract and liability for the breach. The issues remaining before the panel, therefore, were the extent of damages suffered by Hahn as a result of the breach, and Becker's counterclaim. Hahn requested $443,259 in damages; Becker maintained that Hahn was entitled to only $237,310.
At the hearing of February 4, 1986, Hahn's counsel presented records purporting to reflect attorney fees incurred by Hahn as a result of the arbitration. The records were marked for identification as "Exhibit 19." Hahn's counsel stated that the amount of fees identified in exhibit 19 was not complete. According to Hahn's attorney, legal fees incurred by Hahn through February 3, 1986, amounted to $21,267.65, a sum greater than the amount recorded in exhibit 19. There is no indication in the record that Hahn moved to admit exhibit 19 into evidence. Becker did not object to Hahn's request for fees.
Following the Conclusion of hearings on February 5, 1986, the panel apparently determined that Hahn's award should include attorney fees incurred through the end of the hearings. The panel instructed a NASD staff attorney, Linda Garofola (Garofola), to obtain an updated statement of fees from Hahn's attorney, including fees claimed through the hearing process. The panel also instructed Garofola not to notify Becker of this request.
Garofola telephoned Hahn's counsel on the next day, February 6, advising him of the panel's request; he responded by letter the same day, stating that the records tendered at the February 4, 1986, hearing reflected $21,267.75 in fees incurred by Hahn through January 24, 1986, but fee services rendered to Hahn from January 25, 1986, through February 5, 1986, amounted to an additional $8,851, totaling $30,118.65 in legal fees. Neither the panel nor Garofola nor Hahn's counsel notified Becker of the panel's request or of the letter and fee statement mailed to Garofola by Hahn's counsel.
Garofola drafted the arbitration decision and submitted it to the panel for their signatures. The written decision was mailed to the parties on February 26, 1986. Hahn was awarded $333,120.53 in damages: $292,050 assessed against Becker for the breach; $10,951.88 in interest; and ...