Woman to get prejudgment interest after arbitration win

From Emma Oxnevad's article in the Chicago Daily Law Bulletin

A woman who prevailed in a personal injury arbitration is entitled to receive prejudgment interest, an appellate panel held.

A majority panel of the 1st District Appellate Court found no conflict between the awarding of prejudgment interest and mandatory arbitration provisions.

However, it affirmed the lower court’s ruling that the plaintiff was not entitled to statutory costs.

One justice dissented on the statutory fees issue, writing that the majority improperly applied an Illinois Supreme Court case in its ruling. Justice Freddrenna M. Lyle delivered the judgment of the court, with opinion.

In 2021, Irma Jordan sued Esmeralda Macedo in Cook County Circuit Court, alleging negligence related to injuries she suffered when her car was rear-ended by Macedo.

The case proceeded through the Law Division’s mandatory arbitration program.

The arbitrator found in favor of Jordan against Macedo for more than $13,000. Neither party rejected the award within the permitted time frame.

Judge Daniel A. Trevino entered the award in November 2022

The same day, Jordan filed a motion to recover $685 in fees under section 5-108 of the Code of Civil Procedure as the prevailing party and $524 in prejudgment interest under section 2-1303(c).

Trevino denied Jordan’s motion.

He found that both parties had an opportunity to reject the award, but neither did, and that the arbitration award “contained the full amount which would be reduced to a judgment in the absence of a timely filed rejection.”

Jordan appealed.

In the panel’s opinion, filed Friday, Lyle wrote that Trevino correctly denied Jordan’s motion for statutory costs.

Lyle cited Cruz v. Northwestern Chrysler Plymouth Sales, Inc., 179 Ill. 2d 271 (1997), in which the Illinois Supreme Court determined that a plaintiff’s request for attorney fees must be submitted to and disposed of by the arbitration panel as part of the mandatory arbitration program.

Lyle noted that Jordan did not present the fees as claims for damages to the arbitrator — as instructed by Cruz, as well as Cook County and Illinois Supreme Court rules — and accepted the award without the fees included.

“After neither party rejected the award within the time period provided by the Cook County rules, the circuit court’s sole function was to enter judgment on the award,” she wrote. “The court could not, as Ms. Jordan requested, ‘grant any monetary relief in addition to the sums awarded by the arbitrators.’”

Lyle rejected Jordan’s argument that she could not seek statutory costs until the arbitrator determined that she was the “prevailing party.”

She wrote that the arbitrator could have added the requested amount to Jordan’s award or left Trevino to determine the amount by providing a fixed award “plus costs,” citing Magee v. Garreau, 332 Ill. App. 3d 1070, 1071 (2002).

“Only then could Ms. Macedo make an informed decision about whether to reject the award based on the full amount of her liability,” Lyle wrote, citing Cruz. “This is the procedure envisioned by the mandatory arbitration system.”

However, Lyle wrote that Jordan was entitled to prejudgment interest.

She wrote that there was no conflict between section 2-1303(c), which allows for prejudgment interest in personal injury cases, and mandatory arbitration provisions.

Lyle wrote that the case began to accrue prejudgment interest when filed in October 2021.

She also noted Macedo’s “highest written settlement offer” within the year after filing was $5,000 and that Jordan was awarded more than $13,000 in November 2022.

“Therefore, under section 2-1303(c), Ms. Jordan was entitled to prejudgment interest at a rate of 6% per annum on $8,070 — the difference between the $13,070 judgment and the $5,000 settlement offer — for the 13 months between the filing of the action and the judgment date,” she wrote.

The majority of the panel reversed Trevino’s order denying Jordan’s motion for prejudgment interest and remanded the case with instructions to grant her $524.

Justice David R. Navarro concurred in the judgment and opinion.

Justice Mary L. Mikva concurred in part and dissented in part.

Mikva agreed that Jordan was entitled to prejudgment interest but also found that she was entitled to statutory court costs.

She noted that statutory costs, like prejudgment interest, do not need to be submitted to the arbitrator or made part of the arbitration award.

Further, Mikva rejected the majority’s citing of Cruz and noted that statutory court fees are “limited and insignificant” compared to attorney fees.

“Nothing in the award of costs requires any understanding about the issues, the difficulty of litigating the case, or the effectiveness of counsel,” she wrote. “The Cruz court’s rationale for having the arbitrator consider the amount of attorney fees is thus irrelevant to the consideration of costs.”

Mikva also noted that the majority’s ruling provides that both plaintiffs and defendants must “provide to the arbitrator a specific cost calculation, presumably with evidentiary support, or be foreclosed from a recovery of this statutory right.”

“I do not think that is in keeping with the arbitration rules or with the statutory right to costs,” she wrote.

Craig M. Sandberg of Sandberg Law Office, P.C. represented Jordan.

“I’m ecstatic that the appellate court agreed with me and my interpretation of the law regarding prejudgment interest,” he said. “I expect that others will be able to use this opinion to collect monies that they’re owed.”

Sandberg said he was disappointed with the majority opinion on mandatory statutory costs but “encouraged” by Mikva’s dissent. He said he will “be looking towards potentially filing a leave of appeal” on the issue.

Jonathan W. Goken and Cameron Ash of Lewis Brisbois Bisgaard & Smith LLP represented Macedo. They could not be reached for comment.

The case is Jordan v. Macedo, 2024 IL App (1st) 230079