Appeal from the Circuit Court of Cook County. Honorable Margaret Stanton McBride, Judge Presiding.
Rehearing Denied December 23, 1996. Released for Publication January 15, 1997.
The Honorable Justice Greiman delivered the opinion of the court. Cerda and Gallagher, JJ., concur.
The opinion of the court was delivered by: Greiman
JUSTICE GREIMAN delivered the opinion of the court:
Following the entry of an arbitration award, plaintiffs Albin T. Cerajewski, Madeline Cerajewski and Patricia Gilman appeal the trial court's orders that vacated the punitive damages awarded in arbitration and that denied attorney fees.
This appeal raises three issues: (1) whether punitive damages are allowable in an arbitration award; (2) if punitive damages are allowed, whether plaintiff is entitled to accumulated interest on the punitive damage award; and (3) whether attorney fees should be awarded to plaintiffs for the action in the circuit court to confirm the arbitration award and for the appeal to this court.
We reverse the order that vacated the punitive damages award and remand the cause to reinstate such award and to allow the interest on such award. We affirm the denial of attorney fees requested by plaintiff.
In August 1993, plaintiffs initiated an arbitration claim with the National Association of Securities Dealers (NASD) against defendant Alexandra Kunkle, a securities broker at Gruntal & Co. (Gruntal). Plaintiffs alleged that defendant engaged in unauthorized trading and recommendations and purchases of securities. On November 29, 1993, defendant signed a document entitled "Uniform Submission Agreement," and thereby agreed to submit the controversy "to arbitration in accordance with the Constitution, By-Laws, Rules, Regulations and/or Code of Arbitration Procedure of the sponsoring organization ." In June and July of 1995, five sessions of the arbitration hearing were held. Prior to the commencement of the hearing, plaintiffs reached a settlement with Gruntal.
In August 1995, the arbitrators entered an award in favor of plaintiffs in the amounts of $18,680.44 as compensatory damages and the same amount ($18,680.44) as punitive damages. The award expressly stated:
"In making this award of punitive damages, the undersigned arbitrators find that they have the authority to award punitive damages after considering the written submissions and arguments of the parties."
The arbitration award further held that each party must bear its own costs, expenses and attorney fees with the exclusion of specifically enumerated fees, such as forum fees and filing fees.
On October 2, 1995, plaintiffs filed a circuit court action for an order confirming the arbitration award, for judgment upon such order and for interest, fees and costs, pursuant to the Illinois Uniform Arbitration Act (Act) (710 ILCS 5/11 (West 1992)). On October 31, 1995, defendant filed a motion to vacate the arbitration award, alleging that the arbitration panel was not impartial under section 12(a)(2) of the Act (710 ILCS 5/12(a)(2) (West 1992)) and the arbitrators exceeded their powers in assessing punitive damages pursuant to section 12(a)(3) of the Act (710 ILCS 5/12(a)(3) (West 1992)).
Thereafter, the trial court entered two orders. First, on February 26, 1996, the trial court ...