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Cleeland v. Gilbert

June 4, 2002

JOHN CLEELAND, PLAINTIFF-APPELLEE,
v.
DARCIE GILBERT AND BRET GADBOIS, DEFENDANTS (AMERICAN FAMILY INSURANCE GROUP, DEFENDANT-APPELLANT).



Appeal from the Circuit Court for the 21st Judicial Circuit, Kankakee County, Illinois No. 93--L--228 Honorable Fred S. Carr, Jr. Judge, Presiding

The opinion of the court was delivered by: Justice Breslin

UNPUBLISHED

In this underinsured motorist action, defendant American Family Insurance Group appeals the trial court's decision confirming an arbitration award entered against it in favor of plaintiff John Cleeland. American Family claims that the decision was void for lack of jurisdiction and that monetary relief was inappropriate. While we conclude that jurisdiction was proper, we hold, inter alia, that the arbitration award must be vacated because the trial court exceeded its authority when it entered a monetary judgment pursuant to an application to compel arbitration in accordance with the Uniform Arbitration Act (Act) (710 ILCS 5/1 et seq. (West 2000)), without first making a finding of contempt on a rule to show cause. Accordingly, we affirm in part, vacate in part and remand.

FACTS

In October of 1993, Cleeland filed a negligence action against two defendants for injuries he sustained in a 1991 automobile accident. The action was eventually settled, and the trial court entered an order dismissing it with prejudice. Four years later, Cleeland's attorney sent American Family notice regarding his intent to pursue an underinsured motorist claim. American Family informed Cleeland that it had no record of the accident or of his policy. Although Cleeland's attorney provided additional policy information to Kimberly Eastman, the American Family claims adjuster, the insurance company continued to assert that it could find no information regarding a policy.

In October of 1998, Cleeland filed a "motion to compel arbitration" against American Family pursuant to section 2 of the Act (710 ILCS 5/2 (West 2000)). The motion was filed under the same case number as the previously dismissed action. It claimed that Cleeland was insured by American Family at the time of the accident, that the policy of insurance provided him with underinsured motorist benefits and contained a provision for arbitration, that Cleeland made a demand for arbitration, but that American Family failed to respond. American Family provided no response to the motion. Cleeland subsequently filed a motion requesting that arbitrators be appointed. At a hearing, American Family failed to appear, and the trial court granted the motion to compel arbitration and the motion appointing the arbitrators.

Over one year later, Cleeland filed a motion requesting that the court order the arbitration to proceed. Although American Family received notice, it did not appear at the hearing where the motion was granted and the arbitration hearing was scheduled. The arbitration hearing proceeded as scheduled; at its conclusion Cleeland was awarded $363,967. Afterwards, Cleeland filed a motion requesting an order confirming the arbitration award. Again, American Family did not appear at the hearing on that motion, and it was granted by the court.

In January of 2001, Cleeland filed a citation to discover assets, sending notice to American Family. Thereafter, American Family filed a special and limited appearance and a motion to quash service of summons, vacate the arbitration award, and dismiss for want of jurisdiction. After the motion was denied, American Family appealed.

Additional facts will be provided as they become pertinent to the analysis.

ANALYSIS

On appeal, American Family contends both that the trial court lacked personal and subject matter jurisdiction and that the order confirming the arbitration award should be vacated because Cleeland was not entitled to monetary relief on his application to compel arbitration. This court reviews issues of law de novo. Keller v. Walker, 319 Ill. App. 3d 67, 744 N.E.2d 381 (2001); Woods v. Cole, 181 Ill. 2d 512, 693 N.E.2d 333 (1998).

The first issue regards personal jurisdiction. American Family claims that the motion to compel arbitration was erroneously served on its employee in her individual capacity and not in her role as an officer or agent of the company. Because American Family was improperly served, it claims it was not properly joined as a party-defendant and all subsequent orders were void.

When serving a private corporation, a copy of the process may be left with the corporation's registered agent or any of its officers or agents within the state. See 735 ILCS 5/2-204 (West 2000); Megan v. L.B. Foster Co., 1 Ill. App. 3d 1036, 275 N.E.2d 426 (1971) (finding that service upon an intelligent clerk who acted as a receptionist and understood the purport of the service of summons was proper service upon an agent of the company). Service of summons, however, cannot be obtained upon a corporation by serving one of its purported agents personally or as an individual. See First State Bank & Trust Co. of Hanover Park v. Winfrey, 165 Ill. App. 3d 767, 520 N.E.2d 763 (1987). If a corporation is not served with process, all subsequent judgments against the corporation are void because the court lacks jurisdiction to enter orders against it. See State Bank of Lake Zurich v. Thill, 113 Ill. 2d 294, 497 N.E.2d 1156 (1986).

According to the record, Cleeland was listed as applicant and American Family was listed as respondent on both the motion and summons. The summons was addressed to "Kimberly Eastman Casualty Claim Analyst 745 McClintock Drive Suite 100 Burr Ridge Illinois 60521." The subsequent return of service showed that Eastman was served by "Personal Service: By leaving a copy of the summons and complaint with the named defendant personally." Although Eastman provided an affidavit stating that she had no recollection of receiving the summons, the affidavit failed to state that she had not been served. The affidavit ...


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