Heider v. Knautz

• Court: Appellate Court of Illinois
• Writing for the Court: Zenoff
• Citation: Heider v. Knautz, 919 N.E.2d 1058, 396 Ill.App.3d 553 (Ill. App. 2009)
• Decision Date: 04 December 2009
• Docket Number: No. 2-09-0808.,2-09-0808.
• Parties: Arlie HEIDER, Plaintiff-Appellee, v. Carl F. KNAUTZ, Defendant-Appellant.

919 N.E.2d 1058

Arlie HEIDER, Plaintiff-Appellee, v. Carl F. KNAUTZ, Defendant-Appellant.

No. 2-09-0808.

Appellate Court of Illinois, Second District.

December 4, 2009.

Adam S. Kreuzer, Nicole L. Johs, Esp, Krueser, Cores & McLaughlin, LLP, Wheaton, IL, for Appellant.

Patrick K. Cafferty, Thomas M. Devine, Hostak, Henzl & Bichler, S.C., Racine, WI, for Appellee.

Presiding Justice ZENOFF delivered the opinion of the court:

On July 29, 2009, the circuit court of Jo Daviess County entered an order compelling binding arbitration between the parties pursuant to the Illinois Uniform Arbitration Act (Act) (710 ILCS 5/1 et seq. (West 2008)). Defendant, Carl F. Knautz, appeals, arguing that because the parties did not enter into a written agreement to submit their dispute to arbitration, the Act does not apply, he was entitled to revoke his oral agreement to submit the dispute to arbitration, and the trial court erred in compelling arbitration. For the following reasons, we reverse and remand.

BACKGROUND

In April 2008, plaintiff, Arlie Heider, filed against defendant a complaint seeking damages for personal injuries plaintiff suffered as a result of a collision between plaintiff's and defendant's respective vehicles. Plaintiff alleged in his complaint that the collision was caused by defendant's negligent and careless operation of his vehicle. Defendant filed an answer denying that the collision was his fault and alleging that the collision was a result of plaintiff's negligence.

Because plaintiff's attorney was located in Wisconsin and not licensed to practice in Illinois, plaintiff filed an application for admission of counsel pro hac vice. A status hearing was held on September 11, 2008, before Judge Kevin J. Ward, during which the application for admission pro hac vice was presented to the trial court. At that hearing, the subject of arbitration was raised and the following conversation ensued:

"THE COURT: Good morning, gentlemen. The matter is set for progress call today.

MR. HAHN [plaintiff's attorney]: That's correct. We were here two months ago, Judge, if you recall ... um ... there was some discussions [sic] regarding arbitrating this by agreement and we set this out and also there was a Pro Hoc [sic] Vice Motion that I had filed that was pending.

THE COURT: I do remember.

MR. HAHN: We have reached an agreement with regard to the arbitration and we've picked an arbitrator and we're going to proceed forward with that.

I guess perhaps that will obviate the need for the Pro Hoc [sic] Vice Motion if we're not going—if I'm not—if we're not going to proceed in the court.

From a procedural standpoint, I guess I would possibly request a stay of this case while that arbitration takes place.

THE COURT: Which on the basis of those things, it would ordinarily be my expectation, of course, cart and horse with regard to Pro Hoc [sic] Vice but is that the understanding and is that what's sought to be done?

MR. RICHARDSON [defendant's attorney]: That's fine with me, Judge.

THE COURT: Would you like to have an order entered that formally states that the matter would be stayed pending arbitration, usually to a date certain (a progress call) at whatever period of time.

MR. HAHN: That's probably a good idea.

MR. RICHARDSON: That sounds reasonable.

THE COURT: And in the meantime probably not address the Motion for Pro Hac Vice?

MR. HAHN: That's fine, if that's the Court's ...

MR. RICHARDSON: Correct.

THE COURT: Is that consistent with—is there anything else we can or should try to address today?

MR. RICHARDSON: No, that's it. We're pretty much committed to the arbitration (binding arbitration) so THE COURT: That sounds to me like the biggest part of the battle right there usually.

Why don't I make this suggestion, gentlemen; if you'd like to prepare an order that essentially says that the matter [is] stayed in favor of an arbitration agreement to whatever—has there been any discussion about an appropriate period of time?

MR. HAHN: Um ... I think it could probably be accomplished fairly quickly, maybe four to six months, I would say would probably be sufficient. MR. RICHARDSON: Right.

THE COURT: Alright, go out to about March, perhaps, for a progress call. MR. HAHN: Sure.

MR. RICHARDSON: Sounds good, Judge.

CLERK: March 12th at 10:30.

MR. HAHN: Okay, that's fine.

MR. RICHARDSON: Okay.

THE COURT: If you'd be so kind, Counsel, as to prepare an order to that effect, we'll get that entered.

MR. HAHN: Great, thank you.

MR. RICHARDSON: Thank you."

Based on that discussion, defendant's attorney prepared, and the trial court signed, an order that read as follows: "This matter having come before this Court for Progress Call and Plaintiff's Motion Pro Hac Vice due notice given and the Court fully advised in the Premises[,] it is Hereby ordered: 1) This matter has been stayed pending binding arbitration between the Parties; 2) Plaintiff's Motion is entered and continued to March 12[,] 2008[,] at 10:30 a.m. at the next Progress call."

On June 30, 2009, defendant filed a motion for a protective order. In the motion, defendant alleged that during the course of discovery, he learned that in a subsequent car accident, plaintiff suffered a direct injury to the same knee he claimed to have injured during the collision with defendant, despite plaintiff's previous representations that he had not reinjured his knee in the second accident. Defendant also alleged that due to a change in counsel, his attorney was unable to attend arbitration on the scheduled date and that plaintiff's attorney refused to reschedule and had indicated that he would attend arbitration even in defense counsel's absence. Defendant argued that a protective order preventing plaintiff from attending arbitration was necessary to allow defendant to complete discovery prior to any arbitration.

A hearing on defendant's motion was held on July 7, 2009, before Judge William A. Kelly. Defendant argued that he needed time to conduct additional discovery related to the cause of plaintiff's knee injury and that until that discovery was completed, defendant would be unprepared to participate in arbitration. Defendant also indicated that given the new information that had come to light regarding plaintiff's injury and given that the agreement to arbitrate was based on the representation that plaintiff had not reinjured his knee in the second accident, defendant was unsure whether he wanted to continue with binding arbitration. Defendant requested, however, only that the trial court stay arbitration for six months until he was able to depose plaintiff's treating physician and to acquire all of plaintiff's workers' compensation records. Plaintiff responded that defendant had known about the second accident from the beginning, that plaintiff had, in fact, been willing to reschedule the arbitration but received a limited response from defendant's attorney, and that defendant's attorney had agreed to reschedule the arbitration to July 17, 2009. Plaintiff also represented that he was concerned about delaying arbitration for too long because the statute of limitations to file a lawsuit based on the second accident would expire in six weeks.

Following the parties' arguments, the trial court denied defendant's motion but gave the parties until August 30, 2009, to complete the additional discovery requested by defendant and to attend arbitration. The trial court also indicated that if defendant sought to withdraw from arbitration, he should file a motion for a determination of whether the agreement to arbitrate was revocable. Defendant stated that he desired to file such a motion, and the trial court set a hearing date of July 29, 2009, for that motion.

On July 20, 2009, defendant filed a "Motion for Judicial Determination Regarding Revocation of Oral Agreement to Submit to Alternative Dispute Resolution." In the motion, defendant argued that because the parties had not executed a written agreement to submit their dispute to binding arbitration, the Act did not apply and, thus, under the common law, defendant was free to revoke his agreement. Defendant requested that the trial court enter an order determining that defendant was entitled to revoke his agreement and setting the matter on the trial court's calendar. In his response to defendant's motion, plaintiff argued that under the Act, defendant's agreement to submit to arbitration was irrevocable. According to plaintiff, the Act did apply because during the September 11, 2008, hearing, defendant represented on the record that an agreement to arbitrate did exist and because the parties' agreement was reduced to writing in the trial court's September 11, 2008, order.

On July 29, 2009, at the hearing on defendant's motion (also before Judge Kelly), defendant presented the same arguments he presented in his written motion, with the exception that he also argued that he did not believe that the September 11, 2008, order constituted a written agreement under the Act. Similarly, plaintiff's arguments at the hearing were substantially the same as those presented in his written response, with the exception that he argued at the hearing that the September 11, 2008, order represented a stipulation between the parties to submit to arbitration.

The trial court found that the September 11, 2008, order was a written agreement to submit the parties' dispute to arbitration and, thus, the Act applied and defendant's agreement was irrevocable. Accordingly, the trial court entered an order compelling defendant to proceed with binding arbitration.

Defendant then filed this timely appeal.

ANALYSIS

Before addressing the merits of defendant's claim on appeal, we first review plaintiff's contention that we lack jurisdiction. Pursuant to Supreme Court Rule 307(a)(1) (188 Ill.2d R. 307(a)(1)), a party may take an interlocutory appeal from an order compelling arbitration, because an order compelling arbitration is injunctive. Salsitz v. Kreiss, 198...