A Cook County Circuit Court rule requiring a party to reject a commercial calendar arbitration award within seven days has the effect of an Illinois Supreme Court Rule, the Illinois Appellate Court recently decided. If the rejection is not timely filed, the award will be converted into a judgment and plaintiff will not be able to avoid the decree by voluntarily dismissing the case, the Court ruled.
The case Jones v. State Farm Automobile Insurance Company, 2018 Ill.App.3d (1st) 170, 710, put to rest confusion about the effect of Cook County Circuit Court Rule 25.11, which sets a short deadline allowing attorneys to reject arbitration awards entered through Cook County’s Commercial Mandatory Arbitration Program. Some attorneys challenged the rule as being too restrictive.
Cook County’s commercial mandatory arbitration program began as a pilot program in the Fall of 2014. By that time, most practitioners were familiar with the municipal arbitration program approved by the Illinois Supreme Court in 1987 for cases with damages under $30,000. Under the older program, attorneys have 30 days to reject an arbitration award.
In Jones, the Court confirmed that Cook County Circuit Court Rule 25, which codifies the new commercial mandatory arbitration program, carries the same authority as a Supreme Court Rule. As a result, Rule 25.11 trumps plaintiffs’ statutory right to non-suit, leaving plaintiffs stuck with unfavorable awards if their awards are not rejected within seven days. In the process, the Court dashed the hopes of those practitioners attempting to avoid the harsh results of the once-unfamiliar rule.
The Jones case involved a dispute between and insured and insurer over an automobile insurance claim. Jones filed suit in the Circuit Court of Cook County, and was assigned to Judge John Griffin’s Commercial Calendar. In June, 2016, Judge Griffin assigned the case to commercial mandatory arbitration. The arbitration proceeded on December 1, 2016, and on December 2, the arbitrator entered an award in State Farm’s favor. Nineteen days later, well beyond the seven-day deadline, Jones’ attorneys filed a rejection of the award. When they realized their error, Jones’ attorneys moved for a voluntary non-suit pursuant to 735 ILCS § 5/2-1009.
There was no question that Jones rejected the award after Rule 25.11’s seven-day deadline. The question, instead, became Rule 25.11’s proper place in the hierarchy of the rules governing court procedure in Illinois. In general, in matters of court procedure, local rules are trumped by procedural statutes, which are in turn trumped by Supreme Court Rules. Earlier cases held that failure to timely reject an arbitration award within the 30-day deadline imposed by Supreme Court Rule 93 defeated a party’s statutory right to non-suit, since the Supreme Court Rule would control over the statute in the event of a conflict. Would the same holding apply to a Rule 25.11 deadline?
Jones argued Rule 25.11 was a local rule, enacted by the Circuit Court of Cook County under the auspices of Supreme Court Rule 21. Rule 21 limits a circuit court’s rule making powers to enacting rules which are otherwise “consistent with these rules and the statutes of this State.” Ill. S. Ct. R. 21(a). Since Rule 25.11’s seven-day rejection period is not “consistent with” Rule 93’s thirty-day rejection period, Jones argued it was improper. In addition, Jones argued that since Rule 25.11 is a local rule, it does not trump the statutory right to a voluntary non-suit.
Jones’ argument was defeated, however, by the unique interplay between the circuit courts and the Illinois Supreme Court when it comes to rules governing local arbitration programs. Unlike other local rules, which are generally enacted by circuit court judges without any Supreme Court involvement, the Supreme Court is actively involved in overseeing the implementation of local arbitration programs. In the case of Rule 25’s commercial mandatory arbitration program, the Supreme Court formally approved the program in two orders: a November 26, 2014 Order approving the commercial mandatory arbitration pilot program, and a September 30, 2016 Order directing that the program would continue on a permanent basis, and would “continue to be administered through local rules.” Illinois Supreme Court Order M.R. 9166.
State Farm successfully argued that these Supreme Court orders formally approving the commercial mandatory arbitration program effectively elevated Rule 25 (including Rule 25.11’s seven-day rejection period) to the level of a Supreme Court Rule. That these orders constituted formal approval of all aspects of Rule 25, including its seven-day rejection period, had to be inferred rather than demonstrated, since there is no available legislative history relating to these Supreme Court orders. However, the only other inference the Appellate Court could have drawn was that the Supreme Court approved the commercial mandatory arbitration program without bothering to read Rule 25. Not surprisingly, the Appellate Court declined to draw that inference.
Once the Appellate Court agreed that the Illinois Supreme Court had specifically approved Rule 25, it concluded Rule 25.11 trumped Jones’ statutory right to non-suit.
The Appellate Court’s decision in Jones put an end to a series of appeals involving parties who failed to timely reject their unfavorable commercial mandatory arbitration awards. In those appeals, the parties who failed to reject attempted a variety of challenges to Rule 25.11, including one unsuccessful constitutional challenge (McBreen v. Mercedes Benz U.S.A., LLC, 2018 IL App (1st) 171415-U), and one attempt to excuse the failure to reject based on Illinois Supreme Court Rule 183’s good cause standard (Magic Island Daycare, Inc. v. Chateau Elite, LLC, 2018 IL App (1st) 172303). However, although the Appellate Court remanded the Magic Island Daycare case to permit a hearing on whether Plaintiffs could demonstrate good cause for their failure to reject, the plaintiff in that case faces an uphill battle; as the Court observed in McBreen, “The ignorance of a rule is the antithesis of good cause.”
Jones’ attorneys have filed a petition for leave to appeal to the Illinois Supreme Court.