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American Invesco Realty v. Cent.21 Rother: Arbitration Awards Should Be Confirmed Immediately Upon Denial of Motion to Vacate

In American Invsco Realty, Inc. v. Century 21, Rohter & Co., the Appellate Court of Illinois reviewed the trial court's confirmation of a Board arbitration award. The appellate court held that Illinois law requires confirmation of an award whenever an application to vacate an award is denied.

American Invsco Realty, Inc. (AIR) was the listing broker for a multiple-unit hi-rise building. Mr. Rohter, of Century 21, Rohter & Co. (Rohter), inspected the building and submitted, through an AIR employee, his clients' offers to purchase the property. The owner rejected the first and second offers, but did indicate an amount which was acceptable. Rohter then requested a signed counter-offer from AIR, but this was objected to by the AIR employee. The employee stated that there were presently no other offers to give to the seller, and Rohter indicated that it would be in touch with the parties the following day. When Rohter departed, the AIR employee presented another offer to the seller, which was rejected as well.

Rohter telephoned AIR the following day to arrange a time to submit a purchase contract to the seller, but was asked to call back later. Upon calling back, Rohter was informed that the AIR employee and the owner were going to visit the building. He was also asked to call later to firm up a meeting with the seller. When Rohter called back the second time, he was informed that the seller had just accepted another offer. Subsequently, Rohter delivered to AIR a signed contract in the amount the owner had previously said was acceptable, and a check in that amount.

Rohter then filed a Request for Arbitration with the Board's arbitration committee, seeking money damages arising from AIR's violation of a Board constitution rule and bylaw. AIR responded by accusing Rohter of "brow beating" the seller. AIR also denied any wrong doing and concluded it dealt with Rohter in a manner which satisfied the Board's rules.

A Board arbitration hearing was held and Rohter was awarded one forth of the commission paid on the sale. Additionally, disciplinary action was invoked upon AIR, which then moved to vacate the Board arbitration award. Rohter requested a dismissal of the action. The Board complied with the court's order to submit a statement setting forth its basis for the award. Subsequently, Rohter's motion to dismiss was granted, judgment was entered confirming the award, with interest, and Rohter's request for attorney's fees and costs was denied. AIR appealed.

On appeal, AIR argued that the award should be vacated because it exceeded the arbitrators' authority. The Appellate Court of Illinois ruled that arbitrable issues have their birth in, and are delineated by, the arbitration contract between the parties. (See Harrison F. Blades, Inc. v. Jarman Memorial Hospital Building Fund, Inc., 109 Ill. App. 2d 224, 248 N.E.2d 289, appeal denied, 42 Ill. 2d 583 (1969)). AIR also contended that its conduct did not violate any of the Board's rules and, if it did violate a rule, such violation was insufficient to support the awards. The court found that the arbitration agreement anticipated a claim for money damages, as it stated that "the arbitration committee shall have jurisdiction to hear, decide and render awards in all matters involving monetary disputes among members."

AIR also argued that Rohter's complaint failed to set forth a legally cognizable claim. AIR cited Country Mutual Insurance Co. v. National Bank of Decatur, 109 Ill. App. 2d 695, 248 N.E.2d 299 (1969), appeal denied, 42 Ill. 2d 583 (1970) (holding that where an arbitrator issues an award based upon a complaint which fails to state a claim, the award must be vacated). However, the Appellate Court of Illinois ruled that Country Mutual was not applicable to the facts in this case.

In conclusion, the Appellate Court of Illinois stated that although the trial court confirmed the arbitration award, it did so not because Rohter applied for confirmation, but because Illinois law regarding arbitrations required confirmation when application to vacate an award is denied. Thus, the appellate court affirmed the trial court's confirmation of the award.

American Invsco Realty, Inc. v. Century 21, Rohter & Co., 96 Ill. App. 3d 56, 420 N.E.2d 692 (1981).