Work Zone Safety, Inc. v. Crest Hill Land Development LLC ( 2015 )

Illinois Official Reports
Appellate Court
Work Zone Safety, Inc. v. Crest Hill Land Development, L.L.C.,
2015 IL App (1st) 140088
Appellate Court WORK ZONE SAFETY, INC., Plaintiff-Appellant, v. CREST HILL
Caption LAND DEVELOPMENT, L.L.C., Defendant-Appellee.
District & No. First District, Second Division
Docket No. 1-14-0088
Filed March 10, 2015
Decision Under Appeal from the Circuit Court of Cook County, No. 10-CH-38661; the
Review Hon. Thomas R. Allen, Judge, presiding.
Judgment Affirmed in part and reversed in part.
Counsel on Goldstine, Skrodzki, Russian, Nemec & Hoff, Ltd., of Burr Ridge
Appeal (William H. Hrabak, Jr., and Sara L. Spitler, of counsel), for appellant.
Fuoco Law Group, Ltd., of Highland Park (Steven C. Fuoco, of
counsel), for appellee.
Panel JUSTICE LIU delivered the judgment of the court, with opinion.
Presiding Justice Simon and Justice Neville concurred in the judgment
and opinion.
OPINION
¶1 Plaintiff, Work Zone Safety, Inc. (Work Zone), appeals an order of the circuit court
granting defendant, Crest Hill Land Development (CHLD), equitable relief on a judgment
confirming an arbitration award. The arbitration involved a dispute that arose out of CHLD’s
sale of certain wetlands property to Work Zone. The arbitrator concluded that CHLD was
obligated to repurchase the property at a specific price and awarded Work Zone damages in
the amount of said price–noting that the award “stands” if CHLD failed to repurchase the
property. The circuit court confirmed the award and entered a judgment against CHLD.
Subsequently, CHLD did not repurchase the property or appeal the judgment. Instead, CHLD
moved to dismiss the supplementary proceedings and asked for a “return of excess payment,”
arguing that it was inequitable for Work Zone to both retain the property and collect money
damages. Work Zone challenged the motion as “an improper collateral attack” on the
judgment. Following a hearing, the court ordered Work Zone to transfer the property to
CHLD. This appeal followed.
¶2 BACKGROUND
¶3 Work Zone and CHLD entered into a “Wetlands Escrow Agreement” (agreement) in
connection with CHLD’s sale of a 10.75-acre tract of vacant land to Work Zone. Pursuant to
the agreement, CHLD was required to complete certain mitigation work on 3.7 acres of
wetlands on the tract within a year of the closing. The agreement provided that if CHLD
failed to perform the work, Work Zone had a right to elect that CHLD repurchase the
wetlands property (property) for the price of $224,029.08. The agreement also provided that
certain monies designated as the “Wetlands Escrow Funds” would be used for the mitigation
work. After CHLD failed to perform the work, Work Zone demanded that CHLD repurchase
the property. CHLD refused to buy back the property, and Work Zone initiated arbitration
proceedings.
¶4 In August 2010, the arbitrator ruled that Work Zone had properly exercised its
contractual right to demand CHLD’s repurchase of the property and that CHLD had failed to
satisfy its repurchase obligation under the agreement. Work Zone was awarded $224,029.08
in damages, along with $25,000 in legal fees and $9,350 in administrative fees and expenses.
The arbitration award provided, specifically: “If [CHLD] fails or refuses to accomplish its
role as purchaser of the Returned Property, the Award of $224,029.08 in favor of [Work
Zone] stands.”
¶5 In September 2010, after CHLD failed to repurchase the property, Work Zone filed a
complaint in the circuit court to confirm the arbitration award. CHLD filed an answer and a
counterclaim to vacate the award. On March 11, 2011, the court confirmed the arbitration
award and entered judgment for Work Zone in the amount of $249,029.08, based on
$224,029.08 in damages and $25,000 in legal fees. The court later entered, on April 14, 2011,
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a corrected order for a judgment amount of $258,379.08, which included $9,350 in
administrative fees and expenses related to the arbitration. In an effort to collect the judgment
amount, Work Zone issued citations to discover assets to CHLD and other third parties.
Despite CHLD’s failure to respond to the citations, Work Zone recovered approximately
$105,000 of the judgment amount through supplementary proceedings.
¶6 In May 2011, in response to an emergency motion filed by CHLD, 1 the circuit court
granted CHLD another opportunity to repurchase the property. The court ordered CHLD to
“close on the sale of the property” in accordance with the agreement and the arbitration
award “on or before June 6, 2011 for a price of $268,379 minus offsets for any amounts
collected by Work Zone in supplemental proceedings.”2 The court further stated: “In the
event that the transaction does not occur on 6-6-11, for reasons within the control of
[CHLD], the 3-11-11 & 4-14-11 orders shall stand.” CHLD failed to purchase the property
by the June 6 deadline, and Work Zone continued to seek enforcement of the judgment.
¶7 Twenty-two months later, on March 5, 2013, CHLD filed a motion to dismiss the
citations to discover assets and requested an “Order of Satisfaction with Release of Lien and
Return of Excess Payment” (motion to dismiss).3 CHLD argued that Work Zone’s retention
of the wetlands property and recovery of money damages constituted a windfall and,
therefore, was inequitable. Relying on theories of unjust enrichment or, alternatively,
equitable set off, CHLD asked the circuit court to order the disgorgement of the alleged
excess recovery that Work Zone had obtained in supplementary proceedings. Three days
later, on March 8, CHLD filed a motion for a preliminary injunction, seeking to enjoin Work
Zone from taking any further action to collect the judgment until the circuit court ruled on
CHLD’s motion to dismiss. For the first time, in its motion for a preliminary injunction,
CHLD identified section 12-183(b) of the Code of Civil Procedure (Code) (735 ILCS
5/12-183(b) (West 2012)) as the basis for its request for an order of satisfaction and release
of lien.
¶8 The circuit court ultimately ruled in favor of CHLD and determined that equitable relief
was warranted. In reaching this decision, the court explained that although Work Zone was
“entitled to its judgment of $258,579.08 with running post judgment interest accruing,” it
could not also retain title to the property. The matter was then continued to allow the parties
to discuss a possible remedy. On October 2, 2013, the court entered a written order awarding
CHLD title to the wetlands property and stating as follows:
“By and large, this Court has already expressed that equitable relief for [CHLD] is
warranted. (Order, May 30, 2013). For Work Zone to enforce the remaining balance
of the judgment against [CHLD] while maintaining title of the 3.6 acre wetlands goes
beyond what the Court finds to be fair and equitable. *** Work Zone is entitled to
1
While CHLD’s emergency motion is not contained in the record before us, there is no need to
supplement the record because neither party has raised an issue on appeal related to the motion itself.
2
The record is silent as to why a discrepancy exists between the $268,379 price in the May 13 order
and the $258,379.08 judgment in the April 14 order; however, it has no bearing on our disposition of the
case.
3
We note that CHLD’s motion to dismiss was filed in the same chancery action in which the
arbitration award was confirmed, but a different judge presided over the proceedings related to the
motion to dismiss.
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such remaining balance of the judgment reflected in that accounting, plus any interest
accrued from the date of that accounting until the date of this Order. Accordingly,
[CHLD] is entitled to the title of the Returned Property as valued per the Wetlands
Escrow Agreement in the amount of $224,029.08. As such, no current valuation of
the Returned Property will be determined.”
¶9 Work Zone subsequently filed a petition for the legal fees and costs incurred in the circuit
court proceedings subsequent to the entry of the arbitration award, contending that it was
entitled to fees and costs under the fee-shifting provision set forth in section 9(g) of the
agreement. Additionally, Work Zone argued, “it would be grossly inequitable to allow
[CHLD] to sit idly by for years while [Work Zone] incurred substantial attorney’s fees and
expenses only to show up at the eleventh hour offering to satisfy the Judgment but not the
fees.” The court denied the fee petition, holding that the fee-shifting provision in the
agreement did not apply to this case because the “dispute [was] not about the Wetlands
Escrow Funds.”
¶ 10 On appeal, we must determine if the circuit court erred in (1) ordering Work Zone to
transfer title of the property to CHLD and (2) denying Work Zone’s request for legal fees and
costs related to the collection proceedings. We reverse in part and affirm in part.
¶ 11 ANALYSIS
¶ 12 As an initial matter, the parties disagree over the proper standard for reviewing the circuit
court’s order for equitable relief. Work Zone maintains that a de novo standard of review
applies because the circuit court effectively either (1) awarded CHLD relief from judgment
under section 2-1401 of the Code, or (2) vacated or otherwise modified the arbitration award
and the judgment confirming the award. CHLD argues that the circuit court did not enter
judgment pursuant to section 2-1401 or modify the award and, therefore, a deferential
standard of review is applicable to the circuit court’s “factual findings” in this case. We
conclude that the proper standard of review is de novo because the issues on appeal do not
involve the circuit court’s factual findings but, rather, questions of law. We must first
determine whether the circuit court properly construed the arbitration award and the
judgment order confirming the award. Thereafter, we must decide whether the court’s order
granting equitable relief to CHLD effectively modified or vacated the arbitration award and
the judgment order confirming the award. See In re Marriage of Rice, 2011 IL App (1st)
103753, ¶ 25 (“We note that we owe no deference to the trial court’s interpretation of the ***
order, as it involves no factual findings but is a purely legal question, much like the
interpretation of a statute or contract.”).
¶ 13 Turning to the merits, Work Zone first contends that the circuit court erred in awarding
equitable relief to CHLD because CHLD’s motion to dismiss constituted an improper
collateral attack on the 2011 judgment orders and sought to modify or vacate the arbitration
award. “Once a court with proper jurisdiction has entered a final judgment, that judgment can
only be attacked on direct appeal, or in one of the traditional collateral proceedings now
defined by statute”–namely, habeas corpus, relief from judgment under section 2-1401, or a
postconviction hearing. Malone v. Cosentino, 99 Ill. 2d 29, 32-33 (1983). CHLD took none of
these actions after the circuit court entered its judgment in 2011. It is undisputed that CHLD
never appealed the arbitration award, the order confirming the award, or the judgment orders
entered by the court in April and May of 2011. Furthermore, CHLD’s request for equitable
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relief occurred well outside of the 30-day period for filing postjudgment motions. See 735
ILCS 5/2-1301(e) (West 2012); Ill. S. Ct. R. 303 (eff. May 30, 2008). While a party can seek
to vacate or modify a final judgment older than 30 days under certain circumstances pursuant
to section 2-1401, CHLD notably concedes that section 2-1401 does not apply here. Instead,
it relies solely on section 12-183 (735 ILCS 5/12-183(b) (West 2012)) as support for the
circuit court’s award of equitable relief–a theory it first advanced in its motion for injunctive
relief.
¶ 14 In response, CHLD maintains that a motion “seeking an equitable setoff in
supplementary proceedings does not seek to modify a judgment but rather to satisfy a
judgment and therefore is not subject to posttrial motion filing time limits.” According to
CHLD, the circuit court’s order did not modify the judgment but instead “correct[ed] the
windfall” created by Work Zone’s “inequitable refusal to perform its unilateral ‘sell back’
conveyance,” as required by the agreement. CHLD limits its argument, on appeal, to the
applicability of section 12-183(b).
¶ 15 “The purpose of section 12-183 is to serve as proof of the payment of the judgment,
barring any further attempts by the judgment creditor to enforce the judgment, and to stop the
accrual of postjudgment interest.” Bricks, Inc. v. C&F Developers, Inc., 361 Ill. App. 3d 157,
161 (2005). In other words, a section 12-183 proceeding “determine[s] whether all sums of
money ‘really due’ from the judgment debtor have in fact been paid and the judgment
satisfied.” Klier v. Siegel, 200 Ill. App. 3d 121, 124 (1990). Section 12-183(b) specifically
prescribes the procedure by which a judgment debtor may petition the court for such relief:
“If the judgment creditor, his or her assigns of record or other legal representative to
whom tender has been made of all sums of money due him or her from the judgment
debtor including interest, on any judgment entered by a court, wilfully fails or refuses,
at the request of the judgment debtor or his or her legal representative to execute and
deliver to the judgment debtor or his or her legal representative an instrument in
writing releasing such judgment, the judgment debtor may petition the court in which
such judgment is of record, making tender therewith to the court of all sums due in
principal and interest on such judgment, for the use of the judgment creditor, his or
her executors, administrators or assigns, whereupon the court shall enter an order
satisfying the judgment and releasing all liens based on such judgment.” 735 ILCS
5/12-183(b) (West 2012).
See In re Marriage of Pitulla, 202 Ill. App. 3d 103, 110 (1990) (“The effect of this section of
the statute is to compel the entry of satisfaction of judgment.”).
¶ 16 According to CHLD, section 12-183 applies in this case because the circuit court did not
modify the award or orders confirming the award but, instead, made a determination
concerning whether the money “really due” from CHLD to Work Zone was paid and whether
the judgment amount was satisfied. We disagree. By requiring Work Zone to transfer the
deed and title of the property to CHLD without additional compensation or consideration for
that conveyance, the circuit court effectively modified the arbitration award and the judgment
order confirming the award. The plain and unambiguous language of the circuit court’s
orders supports this conclusion. The March 11, 2011 order imposed a judgment for a
monetary amount based on the arbitration award and made no reference whatsoever to any
disposition of the property. The April 14, 2011 order simply corrected the March judgment
amount and, again, imposed no obligation for a transfer of the property. Implicit in both
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orders is the right of Work Zone to retain the property, as neither required Work Zone to
return the property to CHLD upon collection of the judgment in full or, alternatively, to
credit the value of the property as a setoff to the judgment. Finally, the May 13, 2011 order
provided specifically that if the sale did not occur by June 6 “for reasons within the control of
Crest Hill,” then the orders dated March 11, 2011 and April 14, 2011 “shall stand.” We
construe this language to mean that the status quo of the parties under the March and April
orders–including Work Zone’s entitlement to the property–would be resumed if the closing
did not occur by the deadline. We conclude, therefore, that by imposing a new obligation on
Work Zone, i.e., to deed the title of the property to CHLD, the circuit court effectively
modified the judgment and underlying arbitration award by dispossessing Work Zone from
the property it was entitled to keep as a consequence of CHLD’s decision to disregard its
obligations under the agreement and May 2011 order. Because the circuit court’s equitable
relief actually modified a final judgment–as opposed to merely releasing a judgment that had
been satisfied–we conclude that section 12-183 does not apply in this case and cannot be
asserted as a basis for relieving CHDL from its obligation to satisfy the judgment.4
¶ 17 CHLD nevertheless suggests that equitable relief was appropriate because, according to
CHLD, Work Zone had an obligation under the agreement to sell the property back to
CHLD. This argument is not persuasive, given the fact that prior to raising the purported
“inequity” at issue, CHLD elected to avoid its obligation to repurchase the property in
accordance with the agreement on three separate occasions. Even after the arbitrator and the
circuit court provided for the option to repurchase the property at the previously agreed upon
price set forth in the agreement, CHLD refused to comply. Moreover, it failed to appeal any
part of the award or order of which it now complains.
¶ 18 As a general principle, the entry of an order that modifies a final judgment based solely
on equitable and fairness considerations, in the absence of a showing that all requirements of
section 2-1401 are satisfied, subverts the statutory purpose of section 2-1401. As our
supreme court recognized in People v. Vincent, 226 Ill. 2d 1 (2007), “[w]hen the legislature
abolished the [common law] writs in favor of [the] statutory remedy[, i.e., section 2-1401],”
for vacating a final judgment, “it became inaccurate to continue to view the relief in strictly
equitable terms.” Id. at 16. Rather, to warrant relief from a final judgment under section
2-1401, a petitioner must establish: “ ‘(1) the existence of a meritorious defense or claim; (2)
due diligence in presenting this defense or claim to the circuit court in the original action; and
(3) due diligence in filing the section 2-1401 petition for relief.’ ” West Bend Mutual
Insurance Co. v. 3RC Mechanical & Contracting Services, LLC, 2014 IL App (1st) 123213,
¶ 11 (quoting Smith v. Airoom, Inc., 114 Ill. 2d 209, 220-21 (1986)). Here, CHLD has not
attempted to make the requisite showing under section 2-1401, and awarding relief from a
final judgment based on the equities alone circumvents section 2-1401’s requirements and
undermines the finality of judgments.
4
This conclusion is further bolstered by CHLD’s counsel’s concession, during oral arguments, that
he did not know whether CHLD ever made a demand on Work Zone “to execute and deliver” to CHLD
“an instrument in writing releasing [the] judgment” as required by section 12-183. CHLD’s counsel
explained that, in the 2011 circuit court proceedings, CHLD had requested that Work Zone deed the
property to CHLD, but he was unable to confirm that CHLD had satisfied section 12-183.
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¶ 19 CHLD relies on four cases which it maintains support the circuit court’s equitable relief
in this case: Star Charters v. Figueroa, 192 Ill. 2d 47 (2000); International Supply Co. v.
Campbell, 391 Ill. App. 3d 439 (2009); Klier v. Siegel, 200 Ill. App. 3d 121 (1990); and
Heller v. Lee, 130 Ill. App. 3d 701 (1985).5 These cases are distinguishable.
¶ 20 Star Charters and Klier stand for the proposition that supplementary proceedings to setoff
or satisfy a judgment need not be filed within the 30-day period for filing postjudgment
motions because such proceedings do not modify or attack the judgment. Because, as
discussed above, the circuit court’s order actually did modify the judgment, these cases are
inapplicable. Star Charters involved the defendant’s posttrial request for a setoff based on
amounts already paid to the plaintiff in court-approved settlements. It holds that such a
request need not be made within the 30-day period for filing posttrial motions because “a
defendant’s request for setoff to reflect amounts paid by settling defendants seeks not to
modify, but rather to satisfy, the judgment entered by the trial court.” (Emphases in original.)
Star Charters, 192 Ill. 2d at 48. Klier reached a similar conclusion with respect to a petition
brought under section 12-183. In Klier, a personal injury action, the defendants had advanced
the plaintiff certain payments for medical expenses and lost wages before the plaintiff filed
the lawsuit. The jury ultimately returned a verdict of $11,000 for the plaintiff, and judgment
was entered. More than 30-days after final judgment, the defendants petitioned under section
12-183 for a satisfaction of the judgment upon the defendants’ payment of the outstanding
balance on the judgment (i.e., $11,000 minus the amount paid before litigation commenced),
which the circuit court granted. On appeal, the appellate court affirmed over the plaintiff’s
objection that the circuit court lacked jurisdiction to modify the judgment. The court
explained that by seeking a setoff, the “[d]efendants were not challenging the final judgment
itself,” but rather were seeking “an enforcement or supplementary proceeding invoking the
continuing power of the court to control its own process.” Klier, 200 Ill. App. 3d at 125. In
other words, a section 12-183(b) petition “is not, technically speaking, an attack on the final
judgment itself but is rather in the nature of a supplemental enforcement proceeding.” Id. at
128.
¶ 21 CHLD next relies on International Supply and Heller to argue that the circuit court
properly granted defendant equitable relief because it was inequitable for Work Zone to
retain title to the property while also collecting the money judgment. But CHLD’s reliance
on this authority is misplaced. While both cases address windfalls to the plaintiffs based on
their receipt of title to a property, neither case involves the modification of a final judgment
in the absence of a showing that the requirements under section 2-1401 were satisfied.
¶ 22 In International Supply, the plaintiffs assisted the defendants in securing loans for a land
development, in exchange for a personal guaranty from the defendants and escrow of two
property deeds. International Supply, 391 Ill. App. 3d at 441-42. Following the defendants’
default on the loans, the plaintiffs took title to the properties and sued to enforce the
guaranty. On appeal, the court explained that by taking “full ownership and control of the
5
CHLD also argues that Work Zone “waived all challenge to the equitable relief granted defendant
below” by failing to address these cases in its opening brief. We reject this waiver argument. Work
Zone expressly argued in its opening brief that section 12-183 did not apply because CHLD was
requesting relief from a judgment as opposed to a satisfaction of a judgment. And it additionally cited to
case law addressing the purpose of section 12-183.
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two properties” held as collateral, the plaintiffs had “accepted the transfer of the two
properties as substitute performance in full satisfaction of defendants’ obligation under the
personal guaranty” and was therefore not entitled to any further damages. Id. at 451.
¶ 23 Unlike the present case, International Supply addressed the issue of whether plaintiffs
were still entitled to recover their “damages” for breach of contract after they took and
developed the properties held in escrow as collateral for the defendants’ loans. In contrast,
the case at bar does not involve any consideration of the wetlands property as “collateral” for
damages in the event of a breach of the agreement. The arbitration award and the 2011
judgment orders all indicate, unequivocally, that Work Zone is entitled to collect a judgment
of $258,379.08 regardless of CHLD’s actions vis-à-vis the property. Whether CHLD
repurchased the property or not by the June 6, 2011 deadline did not impact the amount of
the monetary damages that Work Zone was entitled to recover. The court’s imposition of the
June 6 deadline further supports the notion that CHLD’s right to repurchase the property was
not interminable and in fact expired after June 6, 2011. Furthermore, the award and the
judgment orders provided that if CHLD failed to repurchase the property, the monetary
award would “stand”–meaning that Work Zone would be entitled to collect the money in
spite of the fact that it was still holding title to the property. Therefore, unlike the two
escrowed properties in International Supply, the wetlands property in this case is not being
held by Work Zone as “collateral” for its money damages.
¶ 24 In Heller, after a money judgment was entered in favor of the plaintiffs, the defendants
posted an appeal bond consisting of a deed to real property and a certificate of deposit.
Heller, 130 Ill. App. 3d at 702. Following release of the bond, the plaintiffs received the
certificate of deposit and took title to the property but only applied the value of the certificate
of deposit against the judgment amount. The plaintiffs then filed collection proceedings
against the defendant to recover the deficiency. The defendants filed a section 12-183
petition for a release from judgment and return of excess bond. The trial court dismissed the
petition. The appellate court affirmed the dismissal of the petition because defendants had
“faile[d] to allege facts sufficient to show satisfaction of the judgment in cash or an
agreement to transfer property in lieu of cash.” Id. at 703. The court found, however, that the
defendants were “entitled to equitable relief” because the plaintiffs had “received a windfall”
by retaining the property, and remanded the case with directions to the trial court “to sell the
property, apply the proceeds to the judgment, and remit the excess, if any, to the defendants.”
Id.
¶ 25 Here, in contrast, the property was not posted by CHLD as a bond to satisfy the
judgment. Rather, Work Zone has held title to the property since before the arbitration
proceedings commenced. Therefore, unlike the situation in Heller, Work Zone did not hold
title to the property as collateral for the money judgment, nor did it accept the title as
payment of the money judgment.
¶ 26 By filing its motion to dismiss that sought to modify the final judgment and underlying
arbitration award, after failing to appeal either the judgment or award and failing to respond
to any of the supplementary proceedings and citations initiated by Work Zone, CHLD
essentially brought a collateral attack on the final judgment without satisfying any of the
requirements under section 2-1301 or 2-1401. We find that section 12-183 had no
applicability in this case because the relief that CHLD sought under this section required a
modification of the judgment, which allowed Work Zone to both collect the money damages
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and to retain the property. Therefore, we reverse the court’s order requiring Work Zone to
transfer the title and deed to the property to CHLD.
¶ 27 Work Zone also contends that the circuit court effectively vacated the arbitration award
and the 2011 judgment orders when it awarded CHLD the title to the property. Because we
have already found that the court’s order granting CHLD equitable relief resulted in
impermissible modification of the judgment and underlying arbitration award, we need not
decide at this time whether the order resulted in a vacatur of the arbitration award and
judgment orders.
¶ 28 The second issue on appeal is whether the circuit court erred in not awarding Work Zone
its attorney fees and costs incurred in connection with the circuit court proceedings. Section
9(g) of the agreement specifically provides that attorney fees may be awarded to the
prevailing party if the dispute involves “the disposition of the Wetlands Escrow Funds
hereunder.” Our review of the circuit court’s denial of the fee petition is de novo in this case,
because the circuit court’s determination was based on its interpretation of the agreement.
See Wendy & William Spatz Charitable Foundation v. 2263 North Lincoln Corp., 2013 IL
App (1st) 122076, ¶ 40 (reviewing “de novo the trial court’s interpretation of [contract
provisions governing attorney fees]”). For the reasons that follow, we affirm the court’s
judgment denying attorney fees.
¶ 29 Work Zone contends that, because the arbitrator awarded attorney fees and costs in the
underlying arbitration proceeding, the circuit court was bound by the arbitrator’s
interpretation of the applicability of section 9(g) to the dispute and that it “effectively
overruled the Arbitrator” by denying the fee petition. Next, Work Zone maintains that the
court misinterpreted the agreement by holding that the fee-shifting provision did not apply to
the fees and costs incurred in the circuit court proceedings. Last, Work Zone argues that
notwithstanding the language of the agreement, the circuit court’s denial of fees in this case
is inequitable.
¶ 30 Section 9(g) of the agreement provides for an award of fees as follows:
“If either Purchaser [Work Zone] or Seller [CHLD] obtains a judgment or arbitration
award against the other by reason of a dispute regarding the disposition of the
Wetlands Escrow Funds hereunder, the prevailing party is entitled to collect
reasonable attorneys’ fees and costs incurred by such prevailing party in any such
judgment or award and the prevailing party is entitled to all interest earned on the
Wetlands Escrow Funds, if any.”
¶ 31 As to Work Zone’s first argument, CHLD persuasively argues that Work Zone has
forfeited any argument that the arbitrator’s award of fees and costs necessarily bound the
circuit court to award fees and costs in the postjudgment proceedings because Work Zone
never presented this argument to the trial court. As a result, CHLD maintains, it was
forfeited. See U.S. Bank National Ass’n v. Prabhakaran, 2013 IL App (1st) 111224, ¶ 24
(“Arguments not raised before the circuit court are forfeited and cannot be raised for the first
time on appeal.”). Work Zone notably failed to offer a response in its reply brief to CHLD’s
forfeiture argument. Accordingly, we conclude that it forfeited this argument on appeal. See
Ill. S. Ct. R. 341(h)(7) (eff. Feb. 6, 2013) (“Points not argued are waived and shall not be
raised in the reply brief, in oral argument, or on petition for rehearing.”); see also Department
of Central Management Services/The Department of State Police v. Illinois Labor Relations
Board, State Panel, 2012 IL App (4th) 110356, ¶ 26 (holding party forfeited an argument
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when it failed to a file a reply brief and did not respond to the opposing party’s forfeiture
argument).
¶ 32 Turning to Work Zone’s second argument, we hold that Work Zone failed to establish
that the circuit court erred in interpreting the agreement’s fee-shifting provision. Work Zone
boldly contends that “[t]he plain language of the foregoing fee-shifting provision contains no
limitations or restrictions on the fees and costs that can be awarded by the prevailing party,
except that such fees must be reasonable.” Notably, Work Zone omits and avoids any
reference to the language in section 9(g) that limits applicability of the fee-shifting provision
to a disagreement over “the disposition of the Wetlands Escrow Funds hereunder.” (Emphasis
added.) The circuit court concluded that the fee-shifting provision did not apply to Work
Zone’s request for fees and costs because the “dispute [was] not about the Wetlands Escrow
Funds.” We find no explanation by Work Zone in the record concerning how the current
dispute involves the “Wetlands Escrow Funds.” Under the circumstances, we conclude that
Work Zone has failed to establish that the circuit court erred in its interpretation of the
agreement.
¶ 33 Finally, Work Zone maintains that the denial of its request for fees was inequitable. In
response, CHLD argues that the award of attorney fees is a matter of law, based either on
contract or statute, not equity, and accordingly equity should not be a basis for a fee award.
We agree with the latter proposition. As our supreme court has explained, “Illinois follows
the ‘American Rule,’ which prohibits prevailing parties from recovering their attorney fees
from the losing party, absent express statutory or contractual provisions.” (Emphasis added.)
Sandholm v. Kuecker, 2012 IL 111443, ¶ 64. Again, Work Zone neglects to address this
general rule and offers no response to CHLD’s position that an award of fees is improper in
the absence of statutory or contractual authority. We follow the American Rule in this case
and reject Work Zone’s argument that the circuit court could award fees based on equity
alone.
¶ 34 CONCLUSION
¶ 35 For the foregoing reasons, we reverse the circuit court’s judgment ordering Work Zone to
transfer title of the property to CHLD, and we affirm the circuit court’s judgment denying
Work Zone’s request for attorney fees and costs related to the circuit court proceedings.
¶ 36 Affirmed in part and reversed in part.
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