Harrison F. Blades, Inc. v. Jarman Memorial Hospital Bldg. Fund, Inc.

• Decision Date: 03 June 1969
• Docket Number: Gen. No. 11008
• Citation: 248 N.E.2d 289,109 Ill.App.2d 224
• Parties: HARRISON F. BLADES, INC., a corporation, Plaintiff-Appellee, v. JARMAN MEMORIAL HOSPITAL BUILDING FUND, INC., a General Not for Profit Corporation, E. H. Marhoefer, Jr., Co., a Corporation, Carson-Payson Company, Illinois Building Foundation Construction Corporation and R. H. Bishop Company, Defendants, Jarman Memorial Hospital Building Fund, Inc., a General Not for Profit Corporation, Carson-Payson Company, Defendants-Appellees. Appeal of E. H. MARHOEFER, JR., CO., a Corporation, Defendant.
• Court: United States Appellate Court of Illinois

Page 289

248 N.E.2d 289

109 Ill.App.2d 224

HARRISON F. BLADES, INC., a corporation, Plaintiff-Appellee, v. JARMAN MEMORIAL HOSPITAL BUILDING FUND, INC., a General Not

for Profit Corporation, E. H. Marhoefer, Jr., Co., a

Corporation, Carson-Payson Company, Illinois Building

Foundation Construction Corporation and R. H. Bishop

Company, Defendants,

Jarman Memorial Hospital Building Fund, Inc., a General Not

for Profit Corporation, Carson-Payson Company,

Defendants-Appellees.

Appeal of E. H. MARHOEFER, JR., CO., a Corporation, Defendant.

Gen. No. 11008.

Appellate Court of Illinois, Fourth District.

June 3, 1969.

Massey, Anderson, Gibson & Pearman, Paris, Ralph S. Pearman, Paris, of counsel, Lord, Bissell & Brook, Chicago, Gordon R. Close, Thomas W. Dempsey and Paul W. Engstrom, Chicago, of counsel, for appellant.

Lemna & Lee, Tuscola, Acton, Baldwin, Bookwalter & Meyer, Danville, Frank J. Meyer and Harvey H. Acton, Danville, of counsel, Samuels, Miller, Schroeder, Jackson & Sly, Decatur, Carl R. Miller, Jerald E. Jackson, Thomas S. Sly, Decatur, of counsel, for appellees.

SMITH, Justice.

This appeal involves disputes arising between an owner, the general contractor and two subcontractors in a building construction project in Tuscola, Illinois. For convenience sake, the owner will be referred to as Jarman, the general contractor as Marhoefer, one subcontractor as Blades, and the second contractor as Carson-Ray-son. Taking the position that the contracts called for the arbitration of the various disputes, Marhoefer made a demand for arbitration proceedings before the American Arbitration Association. The owner and the two subcontractors requested that the arbitration hearings be held in Tuscola and this request was denied. Blades then filed this suit for an accounting between all the parties. The owner filed an application with the circuit court in this suit to stay arbitration. The general contractor filed a motion to enjoin the judicial proceedings and to direct the parties to proceed with the pending arbitration proceedings. The circuit court granted the application to stay the arbitration proceedings and denied the motion to direct the parties to proceed with arbitration. Marhoefer appeals from these orders.

After the trial of this case in the circuit court and after the briefs were filed in this court, our Supreme Court decided the case of Flood v. Country Mutual Insurance Co., 41 Ill.2d 91, 242 N.E.2d 149. That decision makes it clear that the Illinois Uniform Arbitration Act, Ill.Rev.Stat.1967, ch. 10, § 101 et seq., does not control the issues which are subject to arbitration, but such issues have their birth in and are delineated by the arbitration contract between the parties. At page 94, 242 N.E.2d at page 151, the court stated:

'Despite the salutory purpose of our Arbitration Act, parties are only bound to arbitrate those issues which by clear language they have agreed to arbitrate; arbitration agreements will not be extended by construction or implication.'

This language is simple, clear and concise. Whether or not and what they arbitrate must be stated in the contract between the parties in crystal clear language unextended and unenlarged either by construction or by implication. In Flood, our Supreme Court noted that the policy endorsement in question did not cover all disputes between the insured and the insurer and that there was no language in the endorsement which could be read as an agreement to submit to arbitration the issue of coverage. In Liberty Mutual Fire Insurance Company v. Loring, 91 Ill.App.2d 372, 235 N.E.2d 418, the policy in litigation defined a 'hit-and-run' vehicle as a vehicle which causes bodily injury to an insured arising out of physical contact of such vehicle with the insured or with an automobile which the insured is occupying at the time of the accident. The Appellate Court held that the trial court should have heard evidence as to whether or not there was physical contact between the defendant's vehicle and that of the alleged hit-and-run motorist and whether there was resultant coverage of the defendant's injuries under the policy provisions. We think it is clear from Flood and Liberty Mutual that in Illinois for an issue to be the subject of arbitration, it must be included in the contract in clear and unequivocal language.

Marhoefer cites United Steelworkers of America v. Warrior & Gulf Navigation Company, 363 U.S. 574, 80 S.Ct. 1347, 4 L.E.2d 1409, as authority for the proposition that all doubts as to the arbitrability of an issue should be determined by the arbitrators and not by the courts, and that the courts may deny access to the arbitrator's expertise only where the issue in question has been expressly excluded as an arbitrable issue in the contract. Thus, he says, since there is no provision in this contract expressly excluding arbitration of damages caused by the owner's changes and delays, that issue is subject to arbitration. The difficulty with this position is that the case cited is not blanket authority for the proposition for which it is cited and is expressly limited, as we read, to labor disputes. Its dichotomy is predicated upon the proposition that arbitration of labor disputes under collective bargaining agreements is part and parcel of the collective bargaining process itself. Indeed the power of a court to vacate an award under Ill.Rev.Stat.1967, ch. 10, 112, is delimited by § 12(5)(c), where the arbitration agreement is a part of or pursuant to a collective bargaining agreement. The reasoning in Warrior is neither persuasive nor controlling in the area of arbitration which faces us and we do not regard it as an 'open sesame' to uninhibited arbitration where collective bargaining is absent.

The demand for arbitration against Jarman sought $200,000 damages on account of changes and delays perpetrated by Jarman. The demand served on the subcontractors was to arbitrate the amount of damages to the contractor as a result of the delays occasioned by the respective subcontractors. Marhoefer argues that these matters are subject to arbitration by virtue of 7(a) of the General Conditions which were a part of the specifications and which reads '7. Arbitration--(a) It is mutually agreed that all disputes arising in connection with this contract shall be submitted to arbitration in accordance with the provisions of the current Standard Form of Arbitration Procedure of the American Institute of Architects. * * *' In neither Flood nor Liberty was there a general provision similar to the one in the case at bar. In Flood and Liberty, the court had no difficulty in determining that the scope of the arbitration agreement did not include the precise issue submitted and that an agreement to arbitrate some disputes cannot be extended to include an agreement to arbitrate all disputes.

It seems to have been the intention of the committee who wrote the Uniform Arbitration Act that the...