Truserv v. Ernst & Young LLP.

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State: Illinois

Court: 1st District Appellate

Docket No: 1-06-2749, 1-06-3484 Cons. Rel

Case Date: 08/28/2007

Preview:SECOND DIVISION FILED: August 28, 2007

Nos. 1-06-2749 and 1-06-3484 (Consolidated) TRUSERV CORPORATION, Petitioner-Appellant, v. ERNST & YOUNG LLP, Respondent-Appellee. ____________________________________ ERNST & YOUNG LLP, Petitioner-Appellee, v. TRUSERV CORPORATION, Respondent-Appellant. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY

Nos.

06 CH 01024 06 CH 06902

THE HONORABLE SOPHIA H. HALL, JUDGE PRESIDING.

JUSTICE HOFFMAN delivered the opinion of the court: TruServ Corporation (TruServ), appeals from an order of the circuit court confirming an arbitration award issued in a contract dispute with Ernst & Young LLP (Ernst & Young). The circuit court confirmed the arbitration award in its entirety and denied TruServ's petition to vacate that portion of the award requiring it to pay attorney fees and costs incurred by Ernst & Young. On appeal, TruServ contends that (1) the arbitration panel exceeded its authority in awarding Ernst & Young attorney fees and costs under section 10a(c) of the Illinois Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/10a(c) (West 2004)), (2) the arbitration panel exceeded its authority in awarding attorney fees and costs that were not recoverable

Nos. 1-06-2749 and 1-06-3484 (Consolidated) under the Consumer Fraud Act and were not supported by evidence establishing that they were incurred in defending the consumer fraud claim, and (3) the circuit court erred in denying TruServ's request for post-arbitration discovery. For the reasons that follow, we reverse and remand. The record demonstrates that TruServ engaged Ernst & Young to perform financial auditing services for the fiscal years 1997, 1998, and 1999. The relationship between the parties was defined by a letter of engagement which provided for binding arbitration of all contract disputes that could not be resolved through voluntary mediation. The arbitration procedures contained in the contract provided, in relevant part, as follows: "The arbitrators may not award non-monetary or equitable relief of any sort. They shall have no power to award punitive damages or any other damages not measured by the prevailing party's actual damages, and the parties expressly waive their right to obtain such damages in arbitration or in any other forum. In no event, even if any other portion of these provisions is held to be invalid or unenforceable, shall the arbitrators have power to make an award or impose a remedy that could not be made or imposed by a court deciding the matter in the same jurisdiction. * * * The result of the arbitration will be binding on the parties, and judgment on the arbitrators' award may be entered in any court having jurisdiction." The arbitration agreement also stated that it was to be governed by the Federal Arbitration Act. 9 U.S.C.

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