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Schroud v. Van C. Argiris & Co.: Illinois Appellate Court Confirms Arbitration Award Based Upon Statute's Procedure

Illinois Appellate Court Confirms Arbitration Award Based Upon Statute's Procedure

In Schroud v. Van C. Argiris & Co., the Appellate Court of Illinois addressed procedural issues relating to a Board arbitration award. The appellate court affirmed the trial court's decision confirming the award.

A dispute arose between Van C. Argiris & Co. (Argiris) and Schroud, who was Mr. Argiris's former employer. After months of legal maneuvering between the parties regarding jurisdiction and other procedural matters, an arbitration hearing was finally held. At the hearing, there was no denial by Argiris that commissions were owed. The arbitration panel determined that it has jurisdiction, found that Argiris admitted liability, and made an award in favor of Schroud.

Schroud then sought to confirm the award with the trial court. Argiris filed a Motion to Dismiss Schroud's confirmation motion on the ground Argiris had 90 days to vacate the award and the complaint was premature. The Motion to Dismiss was denied and Argiris was allowed 28 days in which to respond to the complaint. Two weeks after the 90-day period expired, Argiris filed a response to Schroud's complaint, admitting that the award had not been paid because the Board had no jurisdiction. Argiris argued that for this reason, the complaint should be dismissed.

Schroud moved to strike the affirmative defense and for entry of judgment on the pleadings on the ground Argiris failed to contest the award within the statutory 90-day period. The trial court granted Schroud's request on the ground the Board had jurisdiction. Argiris appealed the trial court's decision.

The Appellate Court of Illinois cited the Illinois statute relating to arbitration awards and Bloom v. Landy, 72 Ill. App. 3d 383, 389 N.E.2d 1286 (1979). The court found that by failing to move to vacate the award in a timely manner, Argiris waived any right to challenge the award. The court found nothing in the statute indicating that the 90-day period could be extended. The appellate court also found that the legal maneuvering which took place in the trial court and the orders issued relating thereto could not possibly extend the 90-day period provided by statute.

The Appellate Court of Illinios addressed Argiris's contentions that: (1) there was no agreement to arbitrate because Schroud was not a member of the Board, and (2) the arbitrators exceeded their authority. The court reasoned that while these were proper defenses attacking an award, they must be brought within the 90-day period. The court noted that where the party failed to file a timely motion to vacate, the award must be confirmed and the party bound thereby even though the matter should not have gone to arbitration. (See Wacker v. Allstate Insurance Co., 251 N.W.2d 346 (Minn. 1977)). The court further noted that even if it could consider the validity of the award, it would affirm, noting that the bylaws of the Board, to which Argiris agreed by joining, governed controversies between members. Both Argiris and Schroud were members of the Board when the matter was heard and decided.

In its conclusion, the Appellate Court of Illinois noted that it could not rewrite the bylaws of the Board. It also noted that an arbitration agreement is construed in the same manner as any other agreement. (See Flood v. Country Mutual Ins. Co., 89 Ill. App. 2d 358, 232 N.E.2d 32, rev'd on other grounds, 41 Ill. 2d 91, 242 N.E.2d 245 (1968)). After addressing other key issues in the case, the appellate court affirmed the trial court's decision confirming the award.

Schroud v. Van C. Argiris & Co., 78 Ill. App. 3d 1092, 398 N.E.2d 103 (1979).