Hjerpe v. Thoma

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Appellate Court Date: 2017.08.17
13:24:20 -05'00'
Hjerpe v. Thoma, 2017 IL App (4th) 160844Appellate Court ERIC HJERPE, Plaintiff and Counterdefendant-Appellee, v.
Caption ROLAND J. THOMA, Defendant and Counterplaintiff-
Appellant.—ROLAND J. THOMA, Plaintiff-Appellant, v. ERIC
HJERPE, Defendant-Appellee.
District & No. Fourth District
Docket Nos. 4-16-0844, 4-16-0846 cons.
Filed July 13, 2017
Decision Under Appeal from the Circuit Court of McLean County, Nos. 11-L-224,
Review 11-CH-451; the Hon. Charles M. Feeney III, Judge, presiding.
Judgment Affirmed.
Counsel on Ryne J. Takacs and Richard E. Stites, of Livingston, Barger, Brandt &
Appeal Schroeder, LLP, of Bloomington, for appellant.
William M. Anderson IV, of Anderson & Harper, of Creve Coeur, for
appellee.
Panel JUSTICE STEIGMANN delivered the judgment of the court, with
opinion.
Justices Harris and Appleton concurred in the judgment and opinion.
OPINION
¶1 Roland J. Thoma and Eric Hjerpe were the principal members of Thoma & Hjerpe,
Certified Public Accountants (T&H), an accounting firm located in Bloomington, Illinois. In
January 2010, Thoma and Hjerpe signed a document, entitled “Integrated Business
Acquisition and Employment Agreement” (Agreement) that governed their business
relationship. In December 2011, the parties filed lawsuits against each other, and the trial court
determined the Agreement required the parties to pursue their claims through binding
arbitration. In June 2016, the arbitrators issued their decision and an offset award in favor of
Hjerpe for $271,194.42. Thoma filed a motion in the trial court to modify, correct, or vacate
the arbitrators’ decision. The court denied the motion and awarded Hjerpe $12,335.75 in
attorney fees for the trial court litigation of Thoma’s motion.
¶2 On appeal, Thoma argues that the arbitration award should be vacated and that the trial
court’s award of attorney fees was improper. For the reasons that follow, we disagree and
affirm.
¶3 I. BACKGROUND
¶4 In December 2011, Hjerpe filed a complaint against Thoma, alleging breach of contract
and tortious interference with a business relationship (McLean County case No. 11-L-224).
Hjerpe alleged Thoma joined a competitor and, using false statements, attempted to lure T&H
customers to Thoma’s new employer. Based on these allegations, Hjerpe filed a motion for a
temporary restraining order and preliminary injunction.
¶5 Later in December 2011, Thoma filed a complaint against Hjerpe, alleging tortious
interference with a business relationship, defamation, replevin, and rescission of contract
(McLean County case No. 11-CH-451).
¶6 Later that month, the trial court consolidated case Nos. 11-L-224 and 11-CH-451. The
court found section 10.11 of the Agreement governed the parties’ claims and required them to
participate in mediation, followed by binding arbitration.
¶7 Two additional complaints followed. In January 2012, Thoma filed a verified
countercomplaint in case No. 11-L-224, in which he sought payments owed under the
Agreement. In March 2012, Thoma and his wife, Donna Thoma, filed a complaint against
Hjerpe and T&H alleging unpaid wages, common-law retaliatory discharge, and false light
invasion of privacy (McLean County case No. 12-L-43).
¶8 Over the next several years, the parties engaged in discovery and made numerous filings.
Thoma filed an interlocutory appeal with this court, challenging the trial court’s order granting
sanctions for a discovery violation in case Nos. 11-CH-224 and 12-L-43. This court affirmed.
See Hjerpe v. Thoma, 2014 IL App (4th) 130360-U.
¶9 In October 2015, a five-day evidentiary hearing commenced before the three arbitrators
whom the parties selected.
¶ 10 In March 2016, the arbitrators issued a 29-page interim award, detailing their findings. The
arbitrators awarded damages to both parties and, after offsetting the award, found in favor of
Hjerpe for $271,194.42. The arbitrators noted a fee-shifting provision in the Agreement
allowed the successful party to receive attorney fees for the cost of the action. The arbitrators
reserved the issue of attorney fees and requested the parties to respond in writing as to which
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party, if any, was entitled to attorney fees for the arbitration proceedings. The fee-shifting
provision in the Agreement provided, as follows:
“In the event that any action is filed in relation to this agreement, the unsuccessful party
in the action shall pay to the successful party, in addition to all the sums that either
party may be called on to pay, a reasonable sum for the successful party’s attorney
fees.”
¶ 11 In May 2016, Thoma filed a motion in the trial court to modify, correct, or vacate the
decision of the arbitrators.
¶ 12 In June 2016, the arbitrators issued their final award. The award remained unchanged from
the interim award, but the arbitrators concluded that neither party was entitled to attorney fees
because both parties were successful on different claims.
¶ 13 In August 2016, Thoma’s substitute counsel filed a new motion to modify, correct, or
vacate the decision of the arbitrators. Thoma argued that the arbitrators exceeded their power
and showed partiality and that the arbitration award contained facial miscalculations.
¶ 14 On September 26, 2016, Hjerpe responded to Thoma’s motion and requested that the trial
court (1) deny Thoma’s motion, (2) enter judgment in Hjerpe’s favor based on the arbitrators’
award of $271,194.42, (3) enjoin Thoma from disposing of any assets, and (4) grant Hjerpe
attorney fees for defending the trial court motion.
¶ 15 In October 2016, the trial court held a hearing on Thoma’s motion to modify, correct, or
vacate the decision of the arbitrators. The court denied the motion and reserved the issue of
attorney fees until a later hearing. The court entered judgment in favor of Hjerpe for
$271,194.42.
¶ 16 Later that month, the trial court heard arguments and testimony on the issue of attorney
fees for the litigation of Thoma’s motion to modify, correct, or vacate the arbitrators’ decision.
The court awarded attorney fees in favor of Hjerpe for $12,335.75.
¶ 17 This appeal followed.
¶ 18 II. ANALYSIS
¶ 19 Thoma argues that (1) the arbitration award should be vacated because (a) the arbitrators
exceeded their powers and (b) the arbitration award contained facial miscalculations, and (2)
the trial court’s award of attorney fees was improper. We disagree and affirm.
¶ 20 A. The Arbitration Award
¶ 21 Our review of an arbitration award is nothing like the scope of our review of a trial court’s
decision. Hawrelak v. Marine Bank, Springfield, 316 Ill. App. 3d 175, 178, 735 N.E.2d 1066,
1068 (2000). The Uniform Arbitration Act (710 ILCS 5/1 to 23 (West 2016)) provides for very
limited judicial review of an award and only allows vacatur or modification of such an award
in limited circumstances. 710 ILCS 5/12, 13 (West 2016). As long as “the arbitrator acted in
good faith, the award is deemed conclusive upon the parties.” International Ass’n of
Firefighters v. City of Springfield, 378 Ill. App. 3d 1078, 1081, 883 N.E.2d 590, 592 (2008).
¶ 22 Accordingly, an arbitration award should be construed to uphold its validity. Hawrelak,
316 Ill. App. 3d at 179, 735 N.E.2d at 1069. This deferential approach is strongly guided by
public policy: Because the parties chose in their contract how disputes would be decided,
judicial modification of such an award would deprive the parties of this choice. Id.; see also
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Garver v. Ferguson, 76 Ill. 2d 1, 9, 389 N.E.2d 1181, 1184 (1979) (“A contrary course would
be a substitution of the judgment of the [court] in place of the [arbitrators] chosen by the
parties, and would make an award the commencement, not the end, of litigation.” (Internal
quotation marks omitted.)). As such, “a reviewing court cannot set aside an arbitration award
because of errors in judgment or mistakes of law or fact.” Hawrelak, 316 Ill. App. 3d at 179,
735 N.E.2d at 1069.
¶ 23 First, Thoma argues the arbitrators exceeded their powers and showed partiality because
they removed Hjerpe’s burden to establish lost profits with reasonable certainty when they
developed their own calculations and values to determine the parties’ damages.
¶ 24 We note that Thoma’s contentions on appeal are analogous to arguments parties typically
raise regarding a trial court’s procedures and rulings. However, Thoma did not contract to
submit to the judgment of the courts, and we will not inject ourselves into a case where the
parties have exercised their rights to submit their disputes to arbitration. The parties bargained
for the arbitrators’ review of the facts and assessment of damages, and they got it. See id. at
181, 735 N.E.2d at 1070 (“Once parties bargain to submit their disputes to the arbitration
system (a system essentially structured without due process, rules of procedure, rules of
evidence, or any appellate procedure), we are disinclined to save them from themselves.”); see
also Tim Huey Corp. v. Global Boiler & Mechanical, Inc., 272 Ill. App. 3d 100, 110-11, 649
N.E.2d 1358, 1365-66 (1995) (cautioning parties that arbitration is an inferior system of justice
and courts should not interfere with the parties’ contractual choices). The record is devoid of
any indication that the arbitrators made their decision in bad faith, that any of the arbitrators
were guilty of fraud or deception, or that the arbitrators deliberately chose not to follow the
law. Consequently, Thoma’s contentions are of no concern to this court.
¶ 25 Thoma alternatively argues that the arbitration award contains facial miscalculations and
must be modified and corrected. Although it is true that a reviewing court can set aside an
arbitration award because of gross errors of judgment in law or gross mistakes of fact, they
must be apparent on the face of the award. See Hawrelak, 316 Ill. App. 3d at 179, 735 N.E.2d
at 1069. However, Thoma does not argue that any of the alleged errors are gross in nature.
Further, the error he alleges is not apparent on the face of the award. This is evidenced by his
brief, which includes numerous pages of explanations and calculations demonstrating how the
arbitrators should have calculated the parties’ respective damages. We decline Thoma’s
request to dissect the arbitrators’ award and remind him that he bargained for arbitration,
which included the arbitrators’ assessment of damages.
¶ 26 B. Attorney Fees
¶ 27 Thoma argues that it was improper for the trial court to award attorney fees to Hjerpe for
the litigation of Thoma’s motion to modify, correct, or vacate the decision of the arbitrators.
¶ 28 Illinois follows the “American Rule,” which provides that, absent statutory authority or a
contractual agreement providing otherwise, each party must bear his or her own attorney fees
and costs. Sandholm v. Kuecker, 2012 IL 111443, ¶ 64, 962 N.E.2d 418. An exception to this
rule applies when a contract provides a fee-shifting provision for attorney fees, and a reviewing
court is required to strictly construe it to mean nothing more, but also nothing less, than the
plain language of the provision. Bright Horizons Children’s Centers, LLC v. Riverway
Midwest II, LLC, 403 Ill. App. 3d 234, 254-55, 931 N.E.2d 780, 798 (2010). A trial court’s
award of attorney fees must include only reasonable fees for reasonable services. McHenry
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Savings Bank v. Autoworks of Wauconda, Inc., 399 Ill. App. 3d 104, 113, 924 N.E.2d 1197,
1206 (2010). Whether to award attorney fees is a matter within the trial court’s discretion, and
its decision will not be disturbed absent an abuse of that discretion. Central Illinois Electrical
Services, LLC v. Slepian, 358 Ill. App. 3d 545, 550, 831 N.E.2d 1169, 1173 (2005). “An abuse
of discretion occurs only when the trial court’s decision is arbitrary, fanciful, or unreasonable
or where no reasonable person would take the view adopted by the trial court.” Seymour v.
Collins, 2015 IL 118432, ¶ 41, 39 N.E.3d 961.
¶ 29 As previously stated, section 10.12 of the Agreement provided:
“In the event that any action is filed in relation to this agreement, the unsuccessful party
in the action shall pay to the successful party, in addition to all the sums that either
party may be called on to pay, a reasonable sum for the successful party’s attorney
fees.”
¶ 30 Thoma argues that the trial court erroneously classified his motion to modify, correct, or
vacate the arbitration award as an independent action. Instead, he contends his motion
constituted a continuation of the arbitration proceedings, and because the arbitrators decided
neither party was entitled to attorney fees, his motion was not subject to attorney fees. We
disagree.
¶ 31 Here, the record shows that the parties entered into a contractual agreement, which
included the previously mentioned fee-shifting provision for attorney fees. The plain,
unambiguous language of that provision permitted the prevailing party—namely, Hjerpe—to
recoup his reasonable attorney fees from Thoma, the unsuccessful party, for any action filed in
connection with the Agreement. The action that triggered the fee-shifting provision was
Thoma’s motion to modify, correct, or vacate the arbitrators’ award (based on the same
grounds he raises on appeal). As this court has already determined, his contentions were not
justiciable. Regardless, Thoma’s motion in the trial court to modify, correct, or vacate the
arbitration award constituted an action where the prevailing party would be entitled to
reasonable attorney fees under the fee-shifting provision of the Agreement. Thus, the trial
court did not abuse its discretion when it awarded Hjerpe, the successful party, reasonable
attorney fees for the litigation of the motion.
¶ 32 III. CONCLUSION
¶ 33 For the foregoing reasons, we affirm the trial court’s judgment.
¶ 34 Affirmed.
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