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05/01/97 BANKERS LEASING ASSOCIATION v. JOHN PRANNO

May 1, 1997

BANKERS LEASING ASSOCIATION, INC., AN ILLINOIS CORPORATION, PLAINTIFF-APPELLANT,
v.
JOHN PRANNO, INDIVIDUALLY AND D/B/A BROOK EQUIPMENT LEASING, DEFENDANT-APPELLEE.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE AARON JAFFE, JUDGE PRESIDING.

Released for Publication June 25, 1997.

Presiding Justice Wolfson delivered the opinion of the court. McNAMARA and Burke, JJ., concur.

The opinion of the court was delivered by: Wolfson

PRESIDING JUSTICE WOLFSON delivered the opinion of the court:

The issue in this case is whether an arbitrator had the power to clarify her award when the request for clarification came more than 20 days after the award was delivered to the applicant.

The relevant statute tells us an application for clarification of an award must be made within 20 days after its delivery. The trial court held the 20-day limit did not apply because the plaintiff was estopped from raising the jurisdiction issue. The case was sent back to the arbitrator for more clarification.

We do not find an estoppel here. Because the arbitrator was without jurisdiction to clarify her award, we reverse the trial court's order granting summary judgment to the defendant. We remand this cause with directions that summary judgment be granted to the plaintiff.

FACTS

The plaintiff-appellant, Bankers Leasing Association, Inc. (Bankers), is a commercial equipment lessor. The defendant-appellee, John Pranno (Pranno), individually and doing business as Brook Equipment Leasing, is an equipment lease broker.

A dispute arose between Bankers and Pranno over an April 21, 1990, agreement. On January 14, 1993, they jointly submitted to binding arbitration this issue:

"Whether Bankers Leasing Association, Inc., (Bankers), a lessor of equipment, is entitled to deduct from residual commissions it owes to John Pranno, a Lease Broker, any losses incurred by Bankers on leases presented to it by John Pranno, pursuant to the terms of the Exclusive Brokers Agreement dated April 21, 1990."

Later, on April 22, 1993, Pranno, acting alone, submitted a request that the issue be amended to include this language:

"To resolve the dispute and honor the commitments between Bankers and Brook regarding Clause # 7 of the contract between the parties dated April 21, 1990. Specifically, whether Bankers informed Brook of its intent to fund certain identifiable lease contracts on a recourse or in-house basis prior to credit approval. And that Bankers has incurred losses from these leases."

Bankers neither objected to nor joined the request.

On May 25, 1994, the arbitrator published her Award of Arbitration. The award provided:

"1. Bankers Leasing Association, Inc. (hereinafter "Respondent") shall pay to John Pranno - Brook Equipment Leasing (hereinafter "Claimant") the sum of FORTY FOUR THOUSAND FOUR HUNDRED AND TWENTY SIX DOLLARS AND THREE CENTS ($44,426.03).

2. Respondent is not entitled to set off any losses incurred in connection with the following leases: Braniff, Financial News Network, Solin & Breindel, Donohue & Scanlon, Epton[.] ***

5. This Award is in full settlement of all claims submitted to this arbitration."

The award also provided that Bankers would pay arbitration fees and costs.

Bankers submitted a check in the amount of the judgment on June 21, 1994, 27 days after the arbitrator entered her opinion. With the check, Bankers included a letter which said:

"Your acceptance of and endorsement on the enclosed check will serve as a general release of our liability and is in full settlement and satisfaction of all the claims submitted by either of us during the Arbitration."

The reverse side of the check contained the following language:

"In full settlement and satisfaction of any and all claims submitted during Arbitration Case No. 51-145-00080-93 and the disputes related thereto and as further described in the June 21, 1994 letter."

On July 6, 1994, 42 days after the award was published, Pranno wrote the arbitrator asking:

"Ms. Paulsen: please have the Arbitrator clarify # 5: Is the award in full settlement of all claims submitted which are past due or is the award in full settlement [of] all claims past due and to become due. Bankers has submitted payment but with a restrictive endorsement releasing them from any future monies yet to be due Brook per the Exclusive Brokers Agreements."

On July 7, 1994, Pranno's attorney sent a letter to the arbitrator. That letter said:

"The respondent on June 26, 1994, tendered the payment of the $44,426.03 plus the reimbursement to claimant for the fees set forth in the award and has tendered same as a full and complete payment for any and all monies due to the claimant and has taken the position that the claimant is not entitled to any other monies on residual values of leases that expired subsequent to February 1, 1994.

I am therefore requesting a clarification of paragraph 2 of the Award to the effect that the respondent is not entitled to off set any losses in connection with the leases set forth therein on future residual payments due the claimant."

Bankers objected to Pranno's request for clarification, arguing the arbitrator lacked jurisdiction to hear the request. Bankers claimed that Illinois law allowed Pranno only 20 days after the judgment to seek clarification of the award. It refused to respond to the substance of Pranno's request.

The arbitrator entered a Disposition of Application for Modification/Clarification of Award of Arbitrator on August 19, 1994. This disposition stated:

"1. I am granting the request for clarification of paragraph 2 of the Award to the effect that the respondent is not entitled to off set any losses in connection with the leases set forth ...


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