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11/20/97 VIRGINIA CRUZ v. NORTHWESTERN CHRYSLER

November 20, 1997

VIRGINIA CRUZ, APPELLANT,
v.
NORTHWESTERN CHRYSLER PLYMOUTH SALES, INC., ET AL., APPELLEES.-JEFFREY KOLAR ET AL., APPELLANTS, V. ARLINGTON TOYOTA, INC., APPELLEE.



Appeal from the Appellate Court, First District, Cook County. CASE NUMBERS: AC1-95-2636, TR89M11809, TR90M1108773. TRIAL JUDGE: Hon. Sidney A. Jones, III.

The Honorable Justice Harrison delivered the opinion of the court.

The opinion of the court was delivered by: Harrison

The Honorable Justice HARRISON delivered the opinion of the court:

These two consolidated appeals present a common issue: What procedure should plaintiffs follow to obtain statutory attorney fee awards where their causes of action have been submitted to mandatory court-annexed arbitration in accordance the rules of this court? In each of the cases before us, the fee petitions were presented to and ruled upon by the circuit court after it entered judgment on the arbitration panel's award. For the reasons that follow, we have concluded that this procedure was improper. Plaintiffs should have presented their requests for fees to the arbitration panel, and the arbitration panel should have disposed of the fee requests along with all of plaintiffs' other claims for relief. Accordingly, the judgments of the appellate court setting aside the fee awards must be affirmed.

Both of the appeals before us today arose from consumer complaints against automobile dealerships and manufacturers. In No. 82619, plaintiff, Virginia Cruz, brought an action in the circuit court of Cook County against Northwestern Chrysler Plymouth Sales (Northwestern), Chrysler Credit Corporation (CCC), and Chrysler Corporation (Chrysler) alleging that the Chrysler automobile she purchased from Northwestern and financed through CCC was defective.

Cruz's complaint sought recovery based on breach of express and implied warranties, revocation of acceptance and unconscionability. She also asserted statutory claims under the Consumer Fraud and Deceptive Business Practices Act (the Consumer Fraud Act) (Ill. Rev. Stat. 1987, ch. 121 1/2, par. 261 et seq.) and the Magnuson-Moss Warranty Act (15 U.S.C. ยง 2310 (1988)), both of which authorize recovery of reasonable attorney fees and costs.

The circuit court of Cook County is one of those judicial circuits which has, with the approval of our court, elected to utilize the mandatory arbitration procedures set forth in the Supreme Court Rules 86 through 95 (155 Ill. 2d Rs. 86, 92; 134 Ill. 2d Rs. 87, 88, 94, 95; 166 Ill. 2d Rs. 89, 90, 93; 145 Ill. 2d R. 91). Because Cruz was seeking only monetary relief and because the amount she was seeking, exclusive of interest and costs, did not exceed the monetary limit authorized by this court for arbitration in Cook County, her case was submitted to a hearing before a panel of arbitrators.

The arbitration panel awarded Cruz $3,361.00. When none of the defendants filed a notice of rejection of the award and did not request a trial, the circuit court entered judgment on the award in favor of Cruz and against the three defendants in the amount of $3,361.00 plus costs. See 155 Ill. 2d R. 92; 166 Ill. 2d R. 93.

Following entry of judgment on the arbitration award, Cruz filed a petition with the circuit court asking for an award of her reasonable attorney fees. Cruz premised her petition on section 10a(c) of the Consumer Fraud Act, which provides that

"in any action brought by a person under this Section, the Court may award, in addition to the relief provided in this Section, reasonable attorney's fees and costs to the prevailing party." Ill. Rev. Stat. 1987, ch. 121 1/2, par. 270a(c).

Cruz had advised the arbitrators and the defendants that she intended to seek such fees if she ultimately prevailed, but stated that she would not present her petition to the arbitration panel. Her view was that she would not qualify as a "prevailing party" and therefore not be eligible for fees under the statute until the circuit court had entered judgment on the arbitration award.

Defendants opposed Cruz's request, invoking Supreme Court Rule 92(b) (155 Ill. 2d R. 92(b)), which provides that the arbitration panel's award "shall dispose of all claims for relief." Defendants asserted that under this rule, Cruz's request for attorney fees had to be submitted to and disposed of by the arbitration panel along with Cruz's claim for money damages. Because that was not done, defendants asserted that Cruz was precluded from seeking her fees in the circuit court.

Defendants contended, in the alternative, that the circuit court had no basis for granting an award of attorney fees. Defendants pointed out that attorney fees were authorized only if Cruz prevailed on her statutory claims under the Consumer Fraud Act or Magnuson-Moss Warranty Act. As previously indicated, however, Cruz's complaint asserted numerous other claims besides those, any of which would have supported the arbitration panel's decision. Because the arbitrator's award did not specify which claims it was relying on when it granted the award to Cruz, defendants claimed that it was pure speculation to conclude that Cruz had prevailed on her statutory claims.

The circuit court rejected defendants' arguments. It held that the failure of the arbitration panel to specify the basis for its decision was immaterial because the panel had no power to determine the question of attorney fees. In the circuit court's view, the arbitration process was intended to be inexpensive and timely and brief, and having fee questions determined by arbitration panels was inconsistent with those objectives. The circuit court believed that attorney fee awards fell within the province of the courts, not the arbitrators, and that fee petitions should be decided by the ...


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