CPM Productions, Inc. v. Mobb Deep, Inc.

• Decision Date: 27 December 2000
• Docket Number: No. 1-99-3826, No. 1-99-4266.
• Parties: CPM PRODUCTIONS, INC., an Illinois corporation, Plaintiff-Appellee, v. MOBB DEEP, INC., Defendant-Appellant.
• Court: United States Appellate Court of Illinois

742 N.E.2d 393

318 Ill.App.3d 369

252 Ill.Dec. 143

CPM PRODUCTIONS, INC., an Illinois corporation, Plaintiff-Appellee, v. MOBB DEEP, INC., Defendant-Appellant.

Nos. 1-99-3826, 1-99-4266.

Appellate Court of Illinois, First District, Third Division.

December 27, 2000.

Davidson, Goldstein, Mandell & Menkes, Chicago (Steven P. Mandell, Kenneth R. Wysocki, of counsel), Attorney for Appellant.

Merle L. Royce, Chicago (Merle L. Royce, of counsel), Attorney for Appellee.

Justice CERDA delivered the opinion of the court:

Following an arbitration in November 1997, plaintiff, CPM Productions, Inc. (CPM), obtained a monetary award against defendant, Mobb Deep, Inc. (Mobb Deep), for damages and expenses allegedly caused by Mobb Deep's breach of a contract to perform a musical concert in Chicago. Upon Mobb Deep's failure to appear or otherwise answer the complaint of CPM seeking to enforce the arbitrator's award under the Illinois version of the Uniform Arbitration Act (710 ILCS 5/1 et seq. (West 1998)) (the Act), the circuit court entered a default judgment on the award.

Mobb Deep, through counsel, thereafter filed a special and limited appearance pursuant to section 2-301 of the Code of Civil Procedure (Code) (735 ILCS 5/2-301 (West 1998)), together with a motion to quash CPM's service of process and to vacate the default judgment order for want of personal jurisdiction.

Mobb Deep's motion was denied on October 1, 1999, and CPM thereafter filed a motion to amend the court's order of judgment to reflect Mobb Deep's true identity as a partnership and not a corporation. On November 1, 1999, after the filing of CPM's motion to amend, Mobb Deep filed an appeal from the court's default order and its order refusing to vacate that judgment (No. 1-99-3826). On November 5, 1999, the court issued an amended judgment order reflecting Mobb Deep's status as a partnership and entering judgment against its partners, Albert Johnson and Kujuan Muchita. Thereafter, on December 6, 1999, Mobb Deep filed a notice of appeal from the court's November 5 amended judgment order (No. 1-99-4266).

In these consolidated appeals, Mobb Deep first challenges in appeal number X-XX-XXXX the order of the circuit court denying its motion to quash service and to vacate the default judgment entered in favor of CPM. Mobb Deep argues the court lacked subject-matter jurisdiction to enter a judgment on the arbitrator's award and, alternatively, contends the denial of its motion to quash service and vacate judgment was erroneous where CPM's service of process was ineffective to confer personal jurisdiction on the court. With respect to appeal number X-XX-XXXX, Mobb Deep claims the filing of its first notice of appeal on November 1, 1999, deprived the circuit court of jurisdiction to enter the November 5 order amending the default judgment. Because, as Mobb Deep contends, the circuit court lacked the authority to exercise its jurisdiction in the case, we reverse and vacate the default judgment entered on the arbitrator's award in favor of CPM.

BACKGROUND

CPM is an Illinois corporation engaged in the business of producing concerts and stage shows featuring musicians and vocal artists. Mobb Deep is a musical rap group consisting of two members, Albert Johnson and Kujuan Muchita.

In early 1997, CPM contacted Mobb Deep's representative agent, Violator Management, and booking agent, Ujamma Booking (Ujamma), about the prospect of engaging Mobb Deep to perform a concert in Chicago. Following discussions, Ujamma sent CPM a written contract, dated March 24, 1997, providing for the concert performance of Mobb Deep, which is identified therein as "Mobb Deep, Inc.," in Chicago on April 25, 1997. The contract required CPM to pay a flat fee of $10,000 plus additional consideration, and to forward an initial deposit of $5,000 to Ujamma before March 28, 1997.

Paragraph 10 of the contract set forth a dispute resolution mechanism to be followed by the parties in the event either of them was in breach of the agreement's provisions. This paragraph provides:

"Any claim or dispute arising out of or relating to this agreement or the breaching thereof shall be governed by the laws of the State of New York and settled by arbitration in New York, New York in accordance with the rules or regulations then obtaining of the American Arbitration Association. The parties hereto agree to be bound by the award in such arbitration and judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof." (Emphasis added.)

The contract was executed by Domingo Neris, CPM's president, who returned the signed agreement along with the initial check of $5,000 to Ujamma. CPM acknowledges it never received an executed copy of the agreement by Mobb Deep. Nonetheless, according to the allegations of the complaint, Ujamma orally advised CPM of its receipt of the deposit check and confirmed with CPM Mobb Deep's engagement pursuant to the terms of the agreement. CPM thereafter proceeded with the necessary measures for the production of the concert. However, on the scheduled date of the concert, Mobb Deep advised CPM that it was canceling its performance.

CPM followed by sending a demand for arbitration notice to the American Arbitration Association (AAA) in Chicago on June 6, 1997, requesting an arbitration hearing in Chicago on the issue of Mobb Deep's breach of the parties' contract. The record shows that between June 6, 1997, and October 16, 1997, the AAA sent the parties several pieces of correspondence relating to the arbitration, including a notice scheduling the arbitration hearing for November 12, 1997, at the AAA's regional office in Chicago.

Despite this correspondence, Mobb Deep failed to appear at the November 12 hearing. Following the presentation of CPM's proofs, the arbitrator awarded CPM $36,466.50 in damages, plus an additional $1,125 in costs and expenses. A copy of the arbitrator's award was sent to Mobb Deep by the AAA on November 26, 1997.

Because Mobb Deep failed to comply with CPM's demand for payment, CPM filed a verified complaint against "Mobb Deep, Inc." in the circuit court of Cook County seeking "to enforce the arbitration award." Because Mobb Deep failed to appear or otherwise answer, Mobb Deep was found in default and the court entered judgment on the award in favor of CPM on April 29, 1999.

Mobb Deep formally filed a special and limited appearance on May 28, 1999. Mobb Deep additionally filed a motion to quash the purported service of process, which was assertedly ineffective, and to vacate the court's entry of default judgment for want of personal jurisdiction. The circuit court refused to quash service and vacate its judgment, and Mobb Deep's timely appeal followed.

ANALYSIS

The dispositive issue presented by this appeal is whether the circuit court properly exercised its subject-matter jurisdiction to enter judgment on the award of the arbitrator. This asserted lack of jurisdiction is Mobb Deep's main contention on appeal. Although Mobb Deep never challenged the circuit court's authority below and raises this matter for the first time on review, the asserted lack of the circuit court's authority to exercise its subject-matter jurisdiction can be raised at anytime, including for the first time on appeal. In re Estate of Gebis, 186 Ill.2d 188, 193, 237 Ill.Dec. 755, 710 N.E.2d 385, 387 (1999); Reyes v. Court of Claims, 299 Ill. App.3d 1097, 1101, 234 Ill.Dec. 58, 702 N.E.2d 224, 228 (1998). The issue of whether the circuit court properly exercised its jurisdiction is reviewed by this court de novo. See Reyes, 299 Ill.App.3d at 1101, 234 Ill.Dec. 58, 702 N.E.2d at 228. According to Mobb Deep, the circuit court lacked jurisdiction to enter judgment on the arbitrator's award since the parties' agreement to arbitrate did not provide for arbitration in Illinois, but rather New York City. Because the arbitration occurred in Chicago, Mobb Deep claims the circuit court was without authority to enter judgment in the case.

Pursuant to the Illinois Constitution, the circuit court has, with certain limited exceptions not pertinent to this appeal, "original jurisdiction of all justiciable matters." Ill. Const.1970, art. VI, § 9. "Subject-matter jurisdiction" refers to the court's power both to entertain and determine the general question presented by the case and to grant the particular relief requested. Gebis, 186 Ill.2d at 192, 237 Ill.Dec. 755, 710 N.E.2d at 388; Health Cost Controls v. Sevilla, 307 Ill.App.3d 582, 587, 240 Ill.Dec. 925, 718 N.E.2d 558, 562 (1999).

Although the legislature has no authority to limit the original jurisdiction of the circuit courts to hear justiciable matters, it may create a justiciable matter—and thereby expand the jurisdiction of the circuit court—by enacting a statute that creates rights or duties that did not exist, and had no counterpart, in the common law or equity. Gebis, 186 Ill.2d at 192, 237 Ill.Dec. 755, 710 N.E.2d at 387; In re K.S., 264 Ill.App.3d 963, 966, 202 Ill.Dec. 427, 637 N.E.2d 1163, 1165 (1994). While the circuit court's original jurisdiction to adjudicate the matter derives from the constitution in such instances, the justiciable matter itself is defined by the statute. Gebis, 186 Ill.2d at 192, 237 Ill.Dec. 755, 710 N.E.2d at 387. The legislature may define the justiciable matter in such a manner as to limit or preclude the circuit court's authority, and where the justiciable matter is so defined, the circuit court is governed by the rules of limited jurisdiction and must proceed within the strictures of the statute. Gebis, 186 Ill.2d at 192-93, 237 Ill.Dec. 755, 710 N.E.2d at 387; In re R.V., 288 Ill.App.3d 860, 867, 224 Ill.Dec. 345, 681 N.E.2d 660, 666 (1997). That is, since the justiciable matter is statutory in origin, the legislature may impose nonwaivable conditions precedent to the circuit court's exercise of jurisdiction. In re Marriage of Fields, 288 Ill.App.3d...