Spencer v. Ryland Group

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State: Illinois

Court: 1st District Appellate

Docket No: 1-05-1332 Rel

Case Date: 03/23/2007

Preview:SIXTH DIVISION March 23, 2007

No. 1-05-1332

MARY SPENCER, Plaintiff-Appellant, v. THE RYLAND GROUP, INC., d/b/a Ryland Homes, Defendant-Appellee.

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Appeal from the Circuit Court of Cook County, Illinois. No. 04 CH 08975 Honorable Patrick McGann Judge Presiding.

JUSTICE JOSEPH GORDON delivered the opinion of the court: Plaintiff, Mary Spencer, appeals from an order of the circuit court dismissing her complaint pursuant to section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West 2004)). In her complaint, Spencer alleged that the arbitrator in a dispute between her and defendant, The Ryland Group, Inc. (Ryland), exceeded his powers by not awarding her attorney fees as required by an agreement of sale between her and Ryland. The circuit court held that, although it disagreed with the arbitrator's decision not to award attorney fees, it was prohibited by stare decisis from amending that award. For the reasons that follow, we reverse and remand. I. BACKGROUND On June 19, 2003, Spencer entered into an agreement of sale (sales agreement) with Ryland for the purchase of a new town home in Lockport Illinois. At that time, Spencer paid Ryland $6,000 in earnest money. Paragraph 10 of the sales agreement, entitled "Arbitration," provided: "[a]ny controversy, claim or dispute arising out of or in any way relating to this

No. 1-05-1332 agreement, the property, your purchase of the property or our construction of the home shall be settled by binding arbitration with the American Arbitration Association." Paragraph 20 of the sales agreement, entitled "Attorneys' Fees and Costs," provided: "[t]he non-prevailing party in any proceeding to enforce or contest any provision(s) of this Agreement of Sale shall pay all reasonable costs, attorney's fees and expenses incurred by the prevailing party." On September 18, 2003, Spencer received a letter from Ryland, claiming that she was in default of the sales agreement and that her earnest money was being retained as damages. On November 22, 2003, Spencer submitted a demand for arbitration in which she sought $6,000 as a refund of her earnest money, $2,000 for her inconvenience and aggravation; punitive damages of up to $10,000, and attorney fees and costs pursuant to paragraph 20 of the sales agreement. On March 16, 2004, an arbitrator from the American Arbitration Association (AAA) issued a written award, in which he ordered Ryland to return Spencer's $6,000 in earnest money and pay $150 in interest. The arbitrator further stated: "The administrative fees and expenses of the [AAA] totaling $500.00 and the compensation and expenses of the arbitrator totaling $750.00 shall be borne by [Ryland]. Therefore, [Ryland] shall pay to [Spencer] the sum of $875.00, representing [Spencer's] share of deposits previously advanced the [AAA]. *** This Award is in full settlement of all claims submitted to this Arbitration. All claims not expressly granted herein are, hereby denied." The arbitration award did not mention attorney fees or specifically designate Spencer as the

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No. 1-05-1332 "prevailing party." Spencer requested reconsideration and modification of the award based on paragraph 20 of the sales agreement and on the federal Equal Credit Opportunity Act (ECOA) (15 U.S.C.

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