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Advocate Financial Group v. Poulos

Court of Appeals of Illinois, Second District

March 31, 2014


Page 599

Appeal from the Circuit Court of Du Page County. No. 13-LM-336. Honorable Robert G. Gibson, Judge, Presiding.



The trial court's order confirming an arbitration award for plaintiff based on the charges and attorney fees plaintiff incurred pursuant to an agreement plaintiff had with defendants was affirmed, notwithstanding defendants' failure to participate in the arbitration proceedings and defendants' contentions that the arbitrator exceeded his authority and that proper notice was not given, since defendants forfeited their arguments by failing to assert them in a timely manner.

Kevin Q. Butler, Cornelius E. McKnight, and Courtney A. Adair, all of McKnight, Kitzinger & Pravdic, LLC, of Chicago, for appellants.

Kevin M. Gallaher, of Brooks, Tarulis & Tibble, LLC, of Naperville, for appellee.

JUSTICE JORGENSEN delivered the judgment of the court, with opinion. Justices McLaren and Hudson concurred in the judgment and opinion.



Page 600

[¶1] Defendants, Michael Poulos, Our Billing Department, Inc., Computer Health Network, Inc., and Trellis Health Management, LLC, appeal the trial court's June 19, 2013, order confirming and entering an arbitration award in favor of plaintiff, Advocate Financial Group. Specifically, the arbitrator awarded plaintiff $17,561.66 for charges and attorney fees it incurred under an agreement it had with defendants.

Page 601

Defendants did not participate in the arbitration. Nevertheless, defendants argue on appeal that the trial court erred in confirming the award, and that we should vacate the order and enter judgment in their favor, because the arbitrator exceeded his authority where the contract between the parties had expired and did not provide for attorney fees. Further, defendants argue that they did not receive proper notice of the arbitration hearing. For the following reasons, we affirm.


[¶3] A. The Agreement

[¶4] On January 11, 2012, Poulos and Ronald G. Javorek (plaintiff's representative) executed an agreement in which plaintiff agreed to act as defendants' agent in attempting to negotiate alternative financing to avoid foreclosure. Defendants wished to depart from their existing relationship with BMO Harris Bank, N.A. The following five sections of the agreement are relevant to this appeal.

[¶5] First, the agreement provides that plaintiff will assist defendants in obtaining a " Solution" to their situation, which is defined, in part, as: " the act, method, or process of solving a problem; the answer to a problem, explanation, clarification, relief (whether temporary or permanent), etc. [Plaintiff] will attempt to prevent the further loss of [defendants'] net worth/liquidity or to provide relief to circumstances ***." (Emphases added.)

[¶6] Second, the " Charges" section of the agreement provides:

" Retainer: [Defendants] shall pay to [plaintiff] a Retainer in the amount of $2,000.00 [ sic ] as compensation for professional and administrative services in conjunction with the attempt to provide the Solution, paid in the following two installments: The initial $2,000 portion of the Retainer is due upon the execution of this Working Agreement, and the second $2,000 payment is to be made upon successful refinance and departure from its current institution.
Solution fees: [Defendants] shall pay [plaintiff] the sum of 5% (less Retainer) of the amount of a Note Discount/Note relief at the time the Solution is complete. Since there is no certain loan amount to base a Solution fee, payment of this fee is at the discretion of [defendants].
3rd Party Fees: [Plaintiff] shall have the ability to earn any other fees associated with the Solution and paid to [plaintiff] from any 3rd Party. These fees are separate and independent of the Retainer and Solution fees.
Expenses: [Defendants] agree[] to pay all expenses of [plaintiff] that are/were directly attributable to the efforts of [plaintiff] in seeking a resolution (whether successful or not) or Solution. These expenses are not part of the Retainer or Solution Fees. All expense reimbursements are due upon demand. Expenses in excess of $150.00 needs [ sic ] [defendants'] approval.

[¶7] Third, the agreement specifies:

" DURATION: This Working Agreement is to be valid for a period of six-(6) months from the date of execution of this Working Agreement. Any Solution provided to [defendants] from [plaintiff] or any other Party will make the Charges due upon demand by [plaintiff]. Prior to 11:59 p.m., July 11, 2012, [plaintiff]

Page 602

may choose to extend the Working Agreement for a period of up to six-(6) months. This Working Agreement shall automatically terminate upon the Solution being provided to [defendants] and the payment of Charges. No Retainer will be due with an exercised extension."

[¶8] Fourth, the agreement provides that defendants accepted certain responsibilities, including not making any other agreements without first notifying plaintiff and, if contacted by a lender, explaining to the lender that defendants had sought plaintiff's " consultation, advice and loss mitigation services." (Emphasis added.) Further, defendants were required, during the " loss mitigation process," to forward to plaintiff any correspondence received in connection with plaintiff's representation of defendants. (Emphasis added.)

[¶9] Finally, the " Disclosure of Information" section at the end of the agreement notes, in part:

(1) " [Defendants] acknowledge[] and agree[] that [they] will be obligated to pay [plaintiff] the full amount due under this Working Agreement. All fees of amount owed, collection fees and court costs incurred in connection with such collection under this agreement will be given the highest priority under [defendants'] State of Residence laws."
(2) " To the fullest extent permitted by law, [defendants] shall pay all costs, including reasonable attorney's fees, court costs and collection costs without litigation or other formal proceedings, expended or incurred by [ sic ] in enforcing or defending any provision of this Working Agreement or any dispute arising from or related to this Working Agreement if Loss Mitigation is the prevailing or successful party in such action(s)." (Emphases added.)
(3) " [Defendants] understand[] that any dispute over this Working Agreement shall be handled by a reasonable 3rd party to act as an intermediate [ sic ], arbitrator or negotiator. Any decision by this 3rd party is to be final and [defendants] and [plaintiff] waive any right to trial. Within 24 hours of official dispute notification, [defendants] and [plaintiff] must agree on a 3rd Party to rule on the dispute. If a reasonable 3rd Party cannot be agreed upon in the time frame specified, [plaintiff] has the right to chose [ sic ] the 3rd Party so long as [plaintiff] has delivered three potential candidates to act as the 3rd Party to resolve the dispute. [Defendants] and [plaintiff] shall bear the costs of the 3rd Party, equally."

[¶10] B. The Dispute

[¶11] After the contract was executed, plaintiff received from defendants a check for the $2,000 initial retainer. The check was dated January 23, 2012. Plaintiff deposited the check on January 25, 2012.

[¶12] On July 23, 2012, Javorek sent Poulos a letter, stating that the letter was to serve as official notice that, as of July 11, 2012, plaintiff had chosen to exercise its option under the agreement to extend " the Working Agreement executed on January 19th, 2012," for up to six months. Accordingly, the letter provided that " As of July 11, 2012, [plaintiff] is exercising this option and hereby extends the duration of the Working Agreement for six (6) months or until January 23rd, 2013."

[¶13] On October 1, 2012, plaintiff sent Poulos a letter, congratulating him on his successful loan refinancing and departure from BMO Harris Bank and attaching an invoice in the amount of $13,281.66. The attached invoice lists the following charges and dates:

Page 603

(1) March 31, 2012, " [Plaintiff] 3rd party Fees Earned--Diamond Bank Refinance," in the ...

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