ILLINOIS OFFICIAL REPORTS
Appellate Court
Clanton v. Ray, 2011 IL App (1st) 101894
Appellate Court STEVEN CLANTON, Plaintiff-Appellant, v. PURNIMA RAY,
Caption Defendant-Appellee.–STEVEN CLANTON, Plaintiff, v. MUNDEEP K.
RAINA, Defendant.
District & No. First District, Fifth Division
Docket No. 1-10-1894
Filed December 30, 2011
Rehearing denied October 23, 2012
Held Where plaintiff’s separate suits for his injuries arising from two unrelated
(Note: This syllabus automobile accidents were consolidated and the parties agreed to
constitutes no part of voluntary binding arbitration with the further agreement that defendants’
the opinion of the court liability would be limited to the extent that the first defendant would be
but has been prepared liable for no less than $250,000 and no more than $600,000, and the
by the Reporter of second defendant’s liability would be fixed at $90,250, and the arbitration
Decisions for the agreement barred disclosing the “high/low agreements” to the arbitrator,
convenience of the the trial court’s judgment on the arbitrator’s award, as “clarified”
reader.)
pursuant to the first defendant’s motion, was remanded for further
proceedings with restrictions on defendants’ ability to select the same
arbitrator, since that arbitrator had knowledge of the “high/low
agreement” and it was impossible to determine that plaintiff was not
prejudiced.
Decision Under Appeal from the Circuit Court of Cook County, Nos. 04-L-7549, 07-L-
Review 1748 cons.; the Hon. Donald J. Suriano, Judge, presiding.
Judgment Reversed and remanded.
Counsel on Alvin R. Becker and Stefania Pialis, both of Beerman Swerdlove LLP, of
Appeal Chicago, for appellant.
Michael J. Urgo, Jr., of Urgo & Nugent Ltd. and Michael Resis, of
SmithAmundsen LLC, both of Chicago, for appellee.
Panel JUSTICE J. GORDON delivered the judgment of the court, with opinion.
Presiding Justice Epstein and Justice McBride concurred in the judgment
and opinion.
OPINION
¶1 Plaintiff Steven Clanton appeals from the circuit court’s confirmation of an arbitration
award.
¶2 Clanton was involved in two unrelated automobile accidents. The first was on November
9, 2001, with a vehicle driven by defendant-appellee Purnima Ray, and the second was on
July 8, 2002, with a vehicle driven by defendant Mundeep Raina. Clanton filed separate suits
against Ray and Raina seeking compensation for his injuries. The suits were subsequently
consolidated into the present action.
¶3 The parties agreed to participate in voluntary binding arbitration. As part of their
arbitration agreement, the parties agreed to limit defendants’ liability as follows: Clanton’s
award against Ray would be no less than $250,000 and no more than $600,000, while
Clanton’s award against Raina would be fixed at $90,250. (It was understood by the parties
that Raina had limited insurance coverage in the amount of $90,250, while Ray was insured
by two insurance policies whose combined coverage was $1,250,000.) The arbitration
agreement specifically barred the parties from disclosing these “high/low agreements” to the
arbitrator.
¶4 On March 26, 2010, the arbitrator issued an opinion finding that Clanton suffered
$550,000 in damages, that his damages were indivisible, and that “[e]ach defendant is liable
at the percentage of 50%.” Thereafter a dispute arose between Ray and Clanton as to the
amount that Ray owed Clanton pursuant to the award. Ray contended that, under the plain
text of the opinion, she owed only 50% of $550,000, that is, $275,000, notwithstanding the
fact that Raina owed only $90,250 under the high/low agreement. Clanton contended that,
under the doctrine of joint and several liability, Ray was liable for the entire balance of the
$550,000 judgment not being paid by Raina, that is, $459,750. (The amount of Raina’s
liability is not in dispute.)
¶5 Ray filed a motion in the circuit court requesting that the court remand the case to the
arbitrator for clarification of the award, and the circuit court granted her motion. On May 6,
2010, the arbitrator issued a new award entitled “Arbitration Award–Clarified” in which he
stated, “The doctrine of joint and several liability is not applicable due to the ADR Systems
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high/low limits for each defendant in the contract.” (The record does not reveal who
disclosed the high/low limits to the arbitrator despite the fact that such disclosure was
forbidden under the terms of the arbitration agreement.) The arbitrator further stated that,
“[p]ursuant to the agreed arbitration conditions,” Ray was to pay $275,000 to Clanton.
¶6 Pursuant to this award, and over Clanton’s objection, the circuit court entered judgment
against Ray for $275,000 and against Raina for $90,250. Clanton now appeals. For the
reasons that follow, we reverse and remand.
¶7 I. BACKGROUND
¶8 Because a detailed recitation of the facts in the underlying tort actions is not material to
this appeal, we shall summarize those facts briefly.
¶9 On November 25, 2003, Clanton filed a negligence action against Ray in the circuit court
of Du Page County, seeking damages for bodily injuries he allegedly sustained as a result of
a collision between his automobile and Ray’s automobile on November 9, 2001. Ray filed
an answer denying all allegations of negligence. The parties proceeded to exchange discovery
and litigate the lawsuit. On July 6, 2004, Clanton filed a negligence action against Raina in
the circuit court of Cook County, seeking damages for bodily injuries he allegedly sustained
as a result of a collision between his automobile and Raina’s automobile on July 8, 2002.
Raina filed an answer likewise denying all allegations of negligence. Both actions were
subsequently consolidated in Cook County.
¶ 10 On October 21, 2009, all parties agreed to participate in voluntary binding arbitration to
be conducted by ADR Systems of America, L.L.C. The parties executed an ADR Systems
binding arbitration agreement setting forth the terms of the arbitration. As part of this
agreement, the parties agreed to limit defendants’ liability as follows:
“The Parties agree that for insurance claim # 13-7558-442 [Clanton’s claim against
Ray] the minimum award to Steven Clanton will be $250,000.00. Also, the maximum
award to Steven Clanton will be $600,000.00. These amounts represent the minimum and
maximum amounts of money that State Farm Insurance shall be liable to pay to Steven
Clanton.
The Parties agree that for Steven Clanton’s claim against Dr. Mundeep Raina, the
minimum and maximum award to be derived, inclusive of insurance claims, shall be
$90,250.00.” (Emphasis in original.)
The parties further agreed not to disclose this high/low agreement to the arbitrator:
“4. The Parties agree that they will not disclose any and all dollar figures, any
settlement negotiations, the terms of any applicable insurance policy, high/low
agreements between the Parties or any set-offs, whether they are MPC set-offs or set-offs
from an underlying policy, orally or in writing, to the Arbitrator at any time before or
during the Arbitration (including during any pre-hearing conference or at the hearing, or
at any time prior to the Arbitrator’s final decision).
a. Violation of the rule set forth in Paragraph (C)(4) shall constitute a material
breach of the agreement.”
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¶ 11 As a result of the parties’ agreement to enter into binding arbitration, the trial court
entered an order on October 27, 2009, dismissing the consolidated cases with prejudice, with
the court retaining jurisdiction to effectuate and enforce the settlement.
¶ 12 The parties proceeded to arbitration on November 3, 2009. Thereafter, on March 26,
2010, the arbitrator rendered an arbitration award (the March 26 award) which stated:
“Finding in favor of: ð [Clanton]
Gross Award: $550,000
See opinion as to comparative percentage for the Defendants.”
¶ 13 In the accompanying memorandum opinion, after summarizing the testimony of the
parties, the testimony of the parties’ medical experts, and Clanton’s documentary evidence
as to his medical expenses and lost wages, the arbitrator issued the following findings:
“1. The injuries suffered by plaintiff are indivisible.
2. The plaintiff is not contributory [sic] negligent from first motor vehicle accident
of November 29, 2001 with defendant Ray.
3. The plaintiff did not mitigate his damages due to smoking. The smoking of the
[plaintiff] was considered in entering the overall Award.
4. Each defendant is liable at the percentage of 50%.
AWARD: 550,000.00.”
¶ 14 On April 23, 2010, following the issuance of the March 26 award, Clanton filed a motion
in the trial court entitled “Plaintiff’s Motion to Enter Judgment and Enforce the Arbitration
Award.” In that motion, he contended, as he does in the instant appeal, that the March 26
award made Raina and Ray jointly and severally liable for the sum of $550,000, which would
leave Ray liable for $459,750, representing that portion of the judgment not owed by Raina
pursuant to the high/low agreement. Attached to Clanton’s motion was a copy of the
arbitration agreement between the parties.
¶ 15 In response, on April 30, 2010, Ray filed a motion in the trial court in which she
requested that the trial court remand the award to the arbitrator for clarification because “the
clear language of the Arbitration award seemingly leaves room for interpretation.” She did
not elaborate upon what alternatives or inconsistencies might be gleaned from the language
of the award. However, in support of her motion, Ray attached a letter from her counsel to
ADR Systems, dated April 27, 2010, in which her counsel requested that the arbitrator issue
a “clarification” of the award to make it clear that Ray would only be liable for 50% of
$550,000, that is, $275,000. In that letter, Ray’s counsel stated, “[T]he plaintiff attorney has
filed a Motion in court to reduce the award to a judgment in a manner in which he attempts
to obtain more than $275,000.00 from my client based upon the previously agreed hi/low
parameters.” Ray’s counsel did not elaborate upon the terms of the high/low agreement in
that letter.
¶ 16 The trial court granted Ray’s motion on April 30, 2010, and entered an order remanding
the case to ADR Systems “to clarify the award entered March 26 2010 as to the liability of
both defendants as to the issue of joint and several liability.” The court did not rule at that
time upon Clanton’s motion to reduce the award to a judgment.
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¶ 17 On May 6, 2010, the arbitrator issued an “Arbitration Award–Clarified” (the May 6
award). In that award, the arbitrator states:
“The doctrine of joint and several liability is not applicable due to the ADR Systems
high/low limits for each defendant in the contract. The arbitrator’s award is subject to the
parties agreed ADR Systems high/low limits in the arbitration agreement, which limits
the amount each defendant is liable for. These amounts were not disclosed to the
arbitrator prior to the March 26, 2010 arbitration decision.
Pursuant to the agreed arbitration conditions, and the decision of March 26, 2010, I
am clarifying the following amounts that are owed as follows from each defendant:
Purnima Ray to pay $275,000 to Steven Clanton
Dr. Mundeep Raina to pay $90,250 to Steven Clanton.”
¶ 18 On May 25, 2010, Clanton renoticed his original motion in the circuit court seeking
enforcement of the original March 26 award and filed a memorandum in its support. In that
memorandum, Clanton alleged that, on May 3, 2010, the arbitrator was presented with a copy
of the trial court’s remand order as well as a copy of Clanton’s original motion of April 23,
2010, seeking enforcement of the arbitration award. That motion, as previously noted, had
attached to it a copy of the parties’ arbitration agreement containing the details of the
high/low agreements between the parties. In his memorandum, Clanton urged that the May
6 award following the remand was improper, and he therefore urged the court to instead
confirm the original award of March 26, pursuant to which he contended that Ray would be
liable in the amount of $459,750. (Clanton does not disclose, either in the record below or
in his briefs on appeal, who presented the arbitrator with his original motion.)
¶ 19 The trial court denied Clanton’s motion on June 3, 2010, finding that, in issuing the May
6 award, the arbitrator had complied with the court’s request for clarification on the issue of
joint and several liability.
¶ 20 On June 21, 2010, the trial court ordered the entry of judgment in Clanton’s favor against
Ray in the amount of $275,000 and against Raina in the amount of $90,250. The trial court
further noted that the judgment against Ray was satisfied in open court by Ray’s tender of
two drafts totaling $275,000.
¶ 21 Clanton timely filed the instant appeal. Defendants do not raise any cross-appeal.
¶ 22 II. ANALYSIS
¶ 23 On appeal, Clanton raises two main contentions of error. First, he contends that the trial
court erred in remanding the March 26 award to the arbitrator for clarification, because Ray’s
request for clarification was untimely, and, in any event, the award was not in need of
clarification. Second, Clanton contends that the May 6 award must be vacated because: (1)
the arbitrator exceeded his authority by taking the high/low limits into account in rendering
that award, (2) the arbitrator exceeded his authority by entering what was, in effect, a
modification rather than a clarification, and because (3) a gross error of law appears upon the
face of the award, since, contrary to the arbitrator’s implication, the existence of a high/low
agreement does not preclude the application of joint and several liability. Ray disputes all of
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these contentions, as shall be developed below.
¶ 24 In considering Clanton’s contentions, we are mindful that, unlike review of a lower
court’s decision, judicial review of an arbitration award is “extremely limited.” Anderson v.
Golf Mill Ford, Inc., 383 Ill. App. 3d 474, 479 (2008). Because the parties have agreed that
their dispute shall be settled by an arbitrator, the court should not vacate an award simply
because its interpretation differs from that of the arbitrator. Galasso v. KNS Cos., 364 Ill.
App. 3d 124, 131 (2006); Board of Education of the City of Chicago v. Chicago Teachers
Union, Local No. 1, 86 Ill. 2d 469, 478 (1981) (“Because the arbitrator’s decision was
bargained for, the courts would have no business overruling the arbitrator’s interpretation
even if they disagreed.”). Thus, an award may not be vacated for mere errors in judgment or
mistakes of fact or law. Sloan Electric v. Professional Realty & Development Corp., 353 Ill.
App. 3d 614, 621 (2004). However, an award may be vacated where “a gross error of law or
fact appears on the award’s face.” (Emphasis in orginal.) Id.; see Galasso, 364 Ill. App. 3d
at 131. A gross error of law exists only where it appears from the face of the award that the
arbitrator was so mistaken as to the law that, if the arbitrator had been informed of the
mistake, the award would have been different. Chicago Teachers Union, 86 Ill. 2d at 477.
Moreover, the Illinois Uniform Arbitration Act (the Arbitration Act) presents five additional
circumstances in which an arbitration award shall be vacated: (1) the award was procured by
corruption or fraud, (2) there was evident partiality by an arbitrator appointed as a neutral
party, or corruption in any arbitrator, (3) the arbitrators exceeded their powers, (4) the
arbitrators refused to postpone the hearing upon a showing of sufficient cause, or refused to
hear evidence material to the controversy, or (5) there was no arbitration agreement between
the parties. 710 ILCS 5/12(a) (West 2008).
¶ 25 A. Whether the Trial Court Erred in Remanding the March 26 Award
¶ 26 In support of his contention that the trial court lacked authority to remand the March 26
award to the arbitrator for clarification, Clanton first argues, procedurally, that Ray’s request
for clarification was untimely under section 9 of the Arbitration Act, because it was not made
within 20 days of the issuance of the award. Clanton further argues, substantively, that it is
clear from the March 26 award that the arbitrator intended the defendants to be jointly and
severally liable for the sum of $550,000, such that Ray would be responsible for the entire
balance not paid by Raina. Therefore, he says, there was no legitimate basis for seeking
clarification of the award.
¶ 27 Clanton’s timeliness argument is without merit. Section 9 of the Arbitration Act
provides, in relevant part:
“On application of a party to the arbitrators, or, if an application by the court is pending
under Sections 11, 12, or 13, on submission to the arbitrators by the court under such
conditions as the court may order, the arbitrators may modify or correct the award upon
the grounds stated in paragraphs (1) and (3) of subdivision (a) of section 13, or for the
purpose of clarifying the award. The application shall be made within 20 days after
delivery of the award to the applicant.” 710 ILCS 5/9 (West 2008).
Clanton claims that, under this section, since the remand was not made within 20 days after
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delivery of the award to the defendants, it was untimely. However, the 20-day limit described
in this section only serves as a restriction on parties seeking clarification from the arbitrators,
not as a restriction upon the court. Federal Signal Corp. v. SLC Technologies, Inc., 318 Ill.
App. 3d 1101, 1113 (2001). The Federal Signal court rejected the plaintiff’s argument that
the trial court lacked authority to remand an arbitration award for clarification where the
defendant failed to take any action within the 20-day period allowed under section 9. Id. at
1112-13. The Federal Signal court explained: “The 20-day limit refers to the ‘application of
a party to the arbitrators.’ (Emphasis added.) [Citation.] It is not a prohibition upon the
court’s authority to submit the issue to the arbitrator, where, as here, a party files an
application to confirm, vacate or modify the arbitrator’s award.” Id. at 1113 (quoting 750
ILCS 5/9 (West 1998)).1
¶ 28 Bankers Leasing Ass’n v. Pranno, 288 Ill. App. 3d 255 (1997), cited by Clanton on this
point, is inapposite, because it deals with a party’s application for clarification. More than
20 days after the arbitrator had issued an award, the defendant sent the arbitrator two letters
requesting clarification of the award. Id. at 261. However, the defendant never filed a motion
in the trial court to modify, change, or clarify the award, nor did the trial court remand the
award for clarification. Id. Under these circumstances, the Bankers Leasing court found that,
pursuant to section 9 of the Arbitration Act, the arbitrator lacked jurisdiction to clarify the
award. Id.
¶ 29 Clanton nevertheless points out that the Bankers Leasing court further held that the trial
court could not remand the “clarified” award to the arbitrator for further clarification, since
the original application for clarification was void due to its untimeliness. Id. at 264.
However, that is readily distinguishable from the situation in the present case, since the
original remand by the court in this case was made by the court, not by application of a party,
and was therefore timely. On the other hand, in Bankers Leasing, the original application for
the award was untimely, since it was made by a party and therefore subject to a statutory time
limitation. Accordingly, when the court in Bankers Leasing remanded that clarified award
for further clarification, it was a clarified award that was not valid in the first instance when
it was rendered. Thus, the trial court’s action in this case was permissible under section 9 of
the Arbitration Act. Indeed, the Federal Signal decision specifically distinguishes Bankers
Leasing upon these grounds. Federal Signal, 318 Ill. App. 3d at 1113.
¶ 30 Clanton nevertheless argues that, even if the remand was not untimely, it was still
improper because it was clear from the March 26 award that the arbitrator intended to hold
the defendants jointly and severally liable for the sum of $550,000, pursuant to which both
defendants would be liable for the full amount of the award. Under such an interpretation,
since Raina’s liability was capped at $90,250 by the high/low agreement, which would
operate extrinsically without the participation of the arbitrator, Ray would necessarily be
liable for the entire remaining portion of damages. Ray, on the other hand, contends that the
1
Indeed, in his brief, Clanton admits Federal Signal is fatal to his untimeliness argument,
stating that “pursuant to the Federal Signal decision, … the trial court could still remand an award
to the arbitrator even though the application was made beyond the 20-day statutory period.”
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March 26 award was ambiguous as to whether the arbitrator intended the defendants to be
jointly and severally liable, or whether he intended to limit the liability of each defendant to
50% of $550,000, that is, $275,000. Under the latter interpretation, Ray’s liability would be
fixed at $275,000, notwithstanding the lower cap on Raina’s liability.
¶ 31 As noted, the March 26 award of the arbitrator was issued as a “Gross Award” of
$550,000, and the award further stated, “See opinion as to comparative percentage for the
Defendants.” In the opinion, the arbitrator stated:
“1. The injuries suffered by plaintiff are indivisible.
…
4. Each defendant is liable at the percentage of 50%.”
¶ 32 Although the arbitrator makes no express statement as to whether defendants are jointly
and severally liable, Clanton argues that joint and several liability is implicit in the
arbitrator’s finding that his injuries were indivisible. See Best v. Taylor Machine Works, 179
Ill. 2d 367, 423 (1997) (under the common law of joint and several liability, where two or
more defendants tortiously contribute to the same indivisible injury, each defendant may be
held jointly and severally liable for the entire injury, and the plaintiff may recover
compensation in full from any individual defendant).
¶ 33 Ray does not directly respond to Clanton’s argument with regard to the implications of
the arbitrator’s reference to indivisible injury, but she argues that ambiguity is introduced
through the arbitrator’s statement that “Each defendant is liable at the percentage of 50%.”
Upon its face, if taken literally, this statement would seem to imply that each defendant
would be liable for only 50% of the total award, that is, $275,000, rather than being jointly
and severally liable for the entire award.
¶ 34 Clanton attempts to explain the arbitrator’s reference to 50% liability by arguing that it
was merely intended to bring the award within the ambit of section 2-1117 of the Code of
Civil Procedure, which sets forth statutory guidelines for the imposition of joint and several
liability as follows:
“Except as provided in Section 2-1118, in actions on account of bodily injury or
death or physical damage to property, based on negligence, … all defendants found
liable are jointly and severally liable for plaintiff’s past and future medical and medically
related expenses. … Any defendant whose fault, as determined by the trier of fact, is
25% or greater of the total fault attributable to the plaintiff, the defendants sued by the
plaintiff, and any third party defendants except the plaintiff’s employer, shall be jointly
and severally liable for all other damages.” (Emphasis added.) 735 ILCS 5/2-1117 (West
2008).
See Unzicker v. Kraft Food Ingredients Corp., 203 Ill. 2d 64, 78 (2002) (stating that “[t]he
clear legislative intent behind section 2-1117 is that minimally responsible defendants should
not have to pay entire damage awards. The legislature set the line of minimal responsibility
at less than 25%.”). Thus, according to Clanton, in stating that each defendant was “liable
at the percentage of 50%,” the arbitrator intended that they be found jointly and severally
liable for nonmedical damages pursuant to this section.
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¶ 35 However, we are unpersuaded that such an interpretation is necessarily manifest from the
text. If the arbitrator wanted to invoke section 2-1117, he could have done so explicitly by
stating that each defendant would be jointly and severally liable for Clanton’s damages under
section 2-1117. There would be no need for him to employ such a roundabout reference as
appears in his actual opinion. In this vein, we note that the arbitrator’s statement is not
framed in terms of “fault,” which is the language used in section 2-1117, but rather states that
“Each defendant is liable at the percentage of 50%” (emphasis added). By speaking of
liability instead of fault, it is entirely plausible that the arbitrator intended to set forth a fixed
allocation of liability for each defendant instead of making an oblique reference to the terms
of section 2-1117.
¶ 36 Thus, the intent of the arbitrator as to the applicability of joint and several liability cannot
be ascertained with any certainty from the text of his opinion and therefore remains
ambiguous. Although, as noted, the arbitrator’s reference to indivisible injury would suggest
that he may have intended defendants to be jointly and severally liable, his statement that
each defendant is 50% liable would, on its face, suggest the opposite. In the absence of any
clarity on this issue, it would have been impossible for the trial court to determine the
amount due to Clanton once the high/low limits were applied. Accordingly, it was not
improper for the trial court to exercise its authority under section 9 of the Arbitration Act to
remand the award for clarification on the applicability of joint and several liability.
¶ 37 In this regard, we find the case of Harris v. Allied American Insurance Co., 152 Ill. App.
3d 88 (1987), to be instructive. In Harris, following an automobile accident, the plaintiff
brought suit against the defendant insurer to compel arbitration of her claim arising out of
that accident. Id. at 88. The parties agreed to seek arbitration on the issues of whether the
plaintiff was entitled to damages and, if so, the amount that the plaintiff was entitled to
recover. Id. at 88-89. The arbitrators issued a decision awarding $55,000 to the plaintiff but
made no determination as to what portion of that award, if any, was due under the insurance
policy at issue. Id. at 89. Thus, the Harris court found that the award was incomplete and
lacked finality, and it affirmed the trial court’s denial of the plaintiff’s motion to confirm the
arbitration award. Id. at 90.
¶ 38 Likewise, in this case, the amount of Ray’s liability could not be determined from the
award or from the accompanying opinion, there was no error in the trial court’s decision to
remand the award for clarification. Clanton claims that Harris is inapposite because, he
states, the March 26 award in this case was complete and left no issue undecided. However,
this conclusory assertion cannot stand in light of the foregoing discussion as to the ambiguity
of the award.
¶ 39 B. Whether the May 6 Award Must be Vacated
¶ 40 Clanton next contends that the May 6 award must be vacated because the award contains
a gross error of law on its face, insofar as it is premised upon the erroneous legal conclusion
that the high/low agreement would preclude defendants from being held jointly and severally
liable for Clanton’s damages. He additionally contends that the award must be vacated
because the arbitrator exceeded his authority by taking the high/low agreement into account
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and by issuing a modification of the award rather than a mere clarification.
¶ 41 As previously discussed, the arbitration agreement entered into by the parties explicitly
barred the parties from disclosing the high/low agreement to the arbitrator. The agreement
also specifically provided that lack of compliance with the nondisclosure clause “shall
constitute a material breach of the agreement.” Nevertheless, it is apparent that, by the time
the arbitrator issued the May 6 award, he had been told about the high/low agreement.
Indeed, he explicitly premises the May 6 award upon the presence of that agreement, stating:
“The doctrine of joint and several liability is not applicable due to the ADR Systems
high/low limits for each defendant in the contract. The arbitrator’s award is subject to the
parties’ agreed ADR Systems high/low limits in the arbitration agreement, which limits
the amount each defendant is liable for. These amounts were not disclosed to the
arbitrator prior to the March 26, 2010 arbitration decision.
Pursuant to the agreed arbitration conditions, and the decision of March 26, 2010, I
am clarifying the following amounts that are owed as follows from each defendant:
Purnima Ray to pay $275,000 to Steven Clanton
Dr. Mundeep Raina to pay $90,250 to Steven Clanton.”
Notwithstanding the arbitrator’s bland assertion that he is clarifying the amounts to be paid,
the award itself is not framed as a clarification, insofar as the arbitrator does not purport to
explain his original intent with respect to the applicability of joint and several liability in the
March 26 award. Rather, the arbitrator states that, regardless of what his original intent might
have been, his newfound awareness of the high/low agreement prevents him from finding
the defendants to be jointly and severally liable.
¶ 42 Clanton contends that this reflects an incorrect understanding of the law, arguing that the
presence of the high/low agreement is not incompatible with joint and several liability. In
support, he cites Burke v. 12 Rothschild’s Liquor Mart, Inc., 148 Ill. 2d 429 (1992), for the
proposition that, where one joint tortfeasor is partially protected from liability by a personal
privilege or setoff, the other joint tortfeasor may be held responsible for the entire remaining
portion of damages. The Burke plaintiff was involved in an altercation at Rothschild’s, a
liquor and beverage store, and taken into custody by police of the City of Chicago. Id. at 432.
In plaintiff’s subsequent personal injury suit against Rothschild’s and the city, the trial court
found Rothschild’s and the city to be jointly and severally liable for plaintiff’s damages. Id.
at 432. It also found that plaintiff was contributorily negligent with respect to Rothschild’s
in the amount of 32%, but plaintiff was not contributorily negligent with respect to the city.
Id. at 434. On appeal, the city contended that it, too, should benefit from the setoff available
to its codefendant, such that the damages for which the city was responsible would not
exceed 68% of plaintiff’s total damages. Id. at 452. The Burke court rejected this proposition,
instead finding that the city, as a joint tortfeasor, could be held responsible for the entire
amount of the judgment. Id. at 453. The court explained:
“Where one joint tortfeasor is protected against liability by a personal privilege, the
liability of the other tortfeasor is not affected. [Citation.] The same principle can be
applied here. If Rothschild’s had been immune to liability, the City, as codefendant,
would have been responsible for 100% of the award to plaintiff. That Rothschild’s was
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protected by the plaintiff’s contributory negligence from liability for 32% of the award
does not mean that the City’s liability should be reduced as well.” Id. at 453 (citing
Restatement (Second) of Torts § 880 (1965) (“If two persons would otherwise be liable
for a harm, one of them is not relieved from liability by the fact that the other has an
absolute privilege to act or an immunity from liability to the person harmed.”)).
See also Henry v. St. John’s Hospital, 138 Ill. 2d 533, 543 (1990) (if a plaintiff settles with
one defendant, the remaining defendants may still be held jointly and severally liable for the
full amount of the judgment minus the amount of the settlement). Thus, under Burke, where
two defendants are responsible for plaintiff’s indivisible injury, the fact that one defendant’s
liability is capped does not preclude the applicability of joint and several liability, and, in
such a situation, the cap on the first defendant’s liability does not affect the liability of the
other defendant, from whom plaintiff may still recover his full measure of damages. It would
therefore seem that the arbitrator erred in stating that the high/low agreement would render
the doctrine of joint and several liability inapplicable.
¶ 43 Ray does not attempt to argue that the reasoning of Burke would be inapplicable to the
facts of the instant case but, rather, makes the conclusory claim that any error made by the
arbitrator in this regard would not be sufficient to constitute gross error. However, we need
not decide whether this is sufficient to constitute gross error, because we find that, in any
event, by basing the May 6 award upon the high/low agreement, the arbitrator exceeded his
authority under the parties’ arbitration agreement, which is grounds for vacatur under section
12(a)(3) of the Arbitration Act. 710 ILCS 5/12(a) (West 2010) (“Upon application of a party,
the court shall vacate an award where: … (3) The arbitrators exceeded their powers ….”).
“[P]arties are only bound to arbitrate those issues which by clear language they have agreed
to arbitrate; arbitration agreements will not be extended by construction or implication.”
Flood v. Country Mutual Insurance Co., 41 Ill. 2d 91, 94 (1968). Thus, for instance, in Lee
B. Stern & Co. v. Zimmerman, 277 Ill. App. 3d 423, 427 (1995), the court held that the
arbitrators exceeded their powers by including attorney fees in the arbitration award where
the arbitration award did not provide for the assessment of such fees, and it vacated that
portion of the award granting attorney fees. Similarly, in Edward Electric Co. v. Automation,
Inc., 229 Ill. App. 3d 89, 105 (1992), the court vacated an arbitration award of punitive
damages where the parties’ arbitration agreement did not expressly provide the arbitrators
with the authority to award punitive damages.
¶ 44 Likewise, in the present case, the arbitrator was not authorized to know about the
high/low agreement. Indeed, the parties were explicitly prohibited from disclosing that
agreement to him. Thus, in basing the May 6 award upon that agreement, the arbitrator
exceeded the authority granted to him by the parties.
¶ 45 Ray nevertheless contends that vacatur of the May 6 award is not required, citing
Hawrelak v. Marine Bank, Springfield, 316 Ill. App. 3d 175 (2000). In Hawrelak, the parties
appointed three arbitrators to hear their case–one selected by the plaintiff, one selected by the
defendant, and one selected by both parties as a neutral arbitrator. Id. at 177. After the
hearing, but before an award had officially been issued, the defendant’s arbitrator informed
the defendant of the substance of the award. Id. The Hawrelak court held that this premature
disclosure did not warrant vacatur of the award, because the record affirmatively rebutted any
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claim that the premature disclosure prejudiced plaintiff in any way. Id. at 180. In particular,
the court noted the testimony of the neutral arbitrator, apparently unrebutted, that the
arbitrators had already reached their majority decision prior to the premature disclosure of
their ruling, and the premature disclosure had no impact upon the final award. Id.
¶ 46 By contrast, in the present case, the ambiguity of the March 26 agreement that
necessitated a remand for clarification in the first place makes it impossible to now determine
whether the arbitrator’s illicit knowledge caused any prejudice to Clanton. If, in the original
March 26 award, the arbitrator intended to hold the defendants jointly and severally liable,
then the change wrought in the May 6 award by his knowledge of the high/low agreement
would have prejudiced Clanton by reducing his total recovery; if, on the other hand, the
arbitrator originally intended to hold each defendant liable for the flat sum of $275,000, then
Clanton’s recovery would have remained the same. Yet we cannot tell from the text of the
March 26 award which of these scenarios is true, for all the reasons discussed above, and the
May 6 award provides no illumination in this regard, since it does not purport to state what
the arbitrator’s original intent was as of March 26 but merely bases its finding upon the
presence of the high/low agreement. The facts of Hawrelak, from which the court was able
to determine that the arbitrator’s improper conduct did not prejudice the plaintiff in any way,
are therefore inapposite. Id.
¶ 47 Accordingly, the May 6 award must be vacated under section 12(a)(3) of the Arbitration
Act, since it was premised upon the arbitrator’s knowledge of information that the arbitrator
was not permitted to know under the parties’ arbitration agreement and it is impossible to
determine that Clanton was not thereby prejudiced. However, contrary to Clanton’s assertion,
the March 26 award cannot be reinstated, because, as noted, it is ambiguous on its face as to
the applicability of joint and several liability and, therefore, to the amount of Ray’s liability.
Consequently, judgment cannot be entered on either award. Nor can the case be re-remanded
to the same arbitrator for further clarification, since the arbitrator has been exposed to
information about the high/low agreement. Thus, Clanton and Ray, who is the only defendant
in this appeal, must be left in the same position in which they found themselves before the
original arbitration commenced, except that they may not select the same arbitrator without
explicit agreement to do so.
¶ 48 For the foregoing reasons, we reverse and remand for proceedings not inconsistent with
this order.
¶ 49 Reversed and remanded.
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