J & K Cement Const., Inc. v. Montalbano Builders, Inc.

• Decision Date: 22 June 1981
• Citation: 456 N.E.2d 889,119 Ill.App.3d 663,75 Ill.Dec. 68
• Court: United States Appellate Court of Illinois
• Parties: , 75 Ill.Dec. 68 J & K CEMENT CONSTRUCTION, INC., an Illinois corporation, Plaintiff-Appellee, v. MONTALBANO BUILDERS, INC., an Illinois corporation, Defendant-Appellant, and Joseph Falbo, and Mary Falbo, his wife; Chicago Title and Trust Company, not individually but as Trustee in Trust deeds dated

Page 889

456 N.E.2d 889

119 Ill.App.3d 663, 75 Ill.Dec. 68

J & K CEMENT CONSTRUCTION, INC., an Illinois corporation Plaintiff-Appellee, v. MONTALBANO BUILDERS, INC., an Illinois corporation Defendant-Appellant and Joseph Falbo, and Mary Falbo, his wife; Chicago Title and Trust Company, not individually but as Trustee in Trust deeds dated 6/22/81 and 3/31/81; Bryan D. Ogdon: Fern P and Edward Matza, d/b/a Autumn Installations: Gale Insulation, Inc., an Illinois corporation; Century Supply Co., an Illinois corporation; William J. Lenien d/b/a Bill Lenien Decorating: F.H. Leinweber Co., Inc., an Illinois corporation; Schulhof Company, an Illinois corporation; Northwest Millwork Co., an Illinois corporation; Doors Systems of Lombard, Inc.; Kencor Stairs & Woodworking, Inc., an Illinois corporation; A.M. Plumbing, Inc., an Illinois corporation; Mid-America Tile Distributors, Inc., an Illinois corporation; Giebel Construction Inc., an Illinois corporation; Pioneer Electric Company, a foreign corporation; And Unknown Owners, Defendants- Appellees.

No. 82-1000.

Appellate Court of Illinois, Second District.

Nov. 15, 1983.

Conklin & Adler, Ltd., Gerard B. Gallagher, Michael McGurn, Oak Brook, for defendant-appellee.

William D. Lyman, Oak Brook, for plaintiff-appellee.

LINDBERG, Justice.

Defendant-appellant, Montalbano Builders, Inc. (Montalbano) appeals from an order of the circuit court of DuPage County denying his motion to stay all proceedings and to compel arbitration. Montalbano and defendant-appellees Joseph and Mary Falbo (the Falbos) entered into a written contract which included an arbitration clause on October 29, 1980, for the construction of a home. The Falbos agreed to pay Montalbano $360,000 for the construction work. Montalbano entered into various contracts with subcontractors to perform the work, none of which contained an arbitration clause.

To date, the Falbos have paid $208,236.00 to Montalbano on the contract. During construction, a dispute arose between the Falbos and Montalbano and the Falbos have refused to pay any additional sums to Montalbano until certain corrections are made. Prior to litigation, 15 subcontractors and Montalbano had filed lien claims with the Office of Recorder of Deed of DuPage County. Two subcontractors filed separate suits to foreclose on mechanics' lien claims against the Falbos' real property. The cases were consolidated on July 21, 1982.

The Falbos filed their answer and counter-complaint against Montalbano, alleging (1) breach of contract; (2) breach of an implied warranty of habitability; (3) precontract fraud; (4) unfair and deceptive trade practices; (5) negligence, and also petitioned the court for a general settlement under Section 30 of the Mechanics' Lien Act. (Ill.Rev.Stat.1981, ch. 82, par. 30.) As its responsive pleading to all complaints, Montalbano filed on September 29, 1982, a motion to stay all proceedings and for an order compelling arbitration between the Falbos and Montalbano. Prior to this motion, eight subcontractors joined the lawsuit in addition to those who had initiated the proceedings. After five more subcontractors joined this litigation, the court on November 17, 1982, denied Montalbano's motion, who then filed a timely interlocutory appeal.

After oral argument in this case, Montalbano filed on May 24, 1983, a motion to realign the parties on appeal and to suggest the mootness of objections to Montalbano's motion to compel arbitration. In his appellate motion, Montalbano asserted that it had settled and compromised the claims of nine subcontractors and was assigned their lien rights. Additionally, Montalbano stated that seven more subcontractors had withdrawn any objections to and joined in its motion to compel arbitration. On May 31, 1983, the Falbos filed their answer and supporting memorandum wherein they asserted that Montalbano's motion lacked certain procedural requisites, and did not render any issue moot. On July 20, 1983, this court granted Montalbano's motion to file a reply to the Falbos' answer and ordered that the reply be taken with this case.

Although the order appealed from in the instant case is interlocutory, we nonetheless have jurisdiction for the trial court's denial of the requested relief is analogous to the denial of an injunction. (Kelso-Burnett Co. v. Zeus Development Corp. (1982), 107 Ill.App.3d 34, 37, 62 Ill.Dec. 789, 791, 437 N.E.2d 26, 28; School District No. 46 v. Del Bianco (1966), 68 Ill.App.2d 145, 152-53, 215 N.E.2d 25, 28-29.) The only question brought before a reviewing court on an interlocutory appeal is whether there was a sufficient showing to sustain the order of the trial court granting or denying the relief sought. (107 Ill.App.3d 34, 42, 62 Ill.Dec. 789, 794, 437 N.E.2d 26, 31; see Ording v. Springer (1980), 88 Ill.App.3d 243, 246, 43 Ill.Dec. 428, 431, 410 N.E.2d 428, 431.) We conclude that there was not a sufficient showing and therefore reverse the trial court's order denying Montalbano's motion to compel arbitration.

In Illinois, contractual arbitration provisions are construed in light of the Illinois Uniform Arbitration Act. (Ill.Rev.Stat.1981, ch. 10, par. 101 et seq.) Illinois adopted the provisions of the Uniform Arbitration Act with minor modifications in 1961. (School District No. 46 v. Del Bianco (1966), 68 Ill.App.2d 145, 153, 215 N.E.2d 25, 29.) Prior to the enactment of the Uniform Arbitration Act, the common law rule in many states was that agreements to arbitrate were revocable until the arbitrator rendered his decision and agreements to arbitrate future disputes were unenforceable. The Uniform Arbitration Act was established to change the common-law rule.

"One of the fundamental objectives of the act was to encourage and facilitate the arbitration of disputes by providing a speedy, informal, and relatively inexpensive procedure for resolving controversies arising out of commercial transactions, including the labor-management field. The language of the act emphasizes an intention to change the common-law policy of judicial hostility toward arbitration to one favoring arbitration. Contrary to decisions found in many states, it specifically makes a written agreement to arbitrate effective whether relating to existing or future disputes." Layne-Minnesota Co. v. Regents of the University of Minnesota (1963), 266 Minn. 284, 287-88, 123 N.W.2d 371, 374. See School District No. 46 v. Del Bianco (1966), 68 Ill.App.2d 145, 154, 215 N.E.2d 25, 29.

Both the Uniform Arbitration Act and the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. (1976), enacted in 1925 are patterned after the New York arbitration statute enacted in 1920. (Sonderby, Commercial Arbitration: Enforcement of An Agreement to Arbitrate Future Disputes, 5 J.Mar.J.Prac. & Proc. 72, 75-76 (1971), citing N.Y.Sess.Law 1920, C. 275 originally in N.Y.Civ.Pract.Act § 1448-69, now in N.Y.Civ.Pract.Law & Rules § 7501-14 (McKinney 1963); see also Greenfield, The Contract to Arbitrate Future Disputes: A Comparison of the New Mexico Act With the New York and Federal Acts, 9 N.M.L.Rev. 71, 71-72 (1978-79).) Given the common origins of the federal and uniform statutes, courts interpreting state arbitration statutes patterned after the Uniform Arbitration Act look for guidance to federal court decisions interpreting similar provision of the Federal Arbitration Act. (See Charles J. Frank, Inc. v. Associated Jewish Charities of Baltimore, Inc. (1982), 294 Md. 443, 450 A.2d 1304; Loomis, Inc. v. Cudahy (1982), 104 Idaho 106, 656 P.2d 1359; National Camera, Inc. v. Love (1982), Colo.App., 644 P.2d 94; see also Northern Illinois Gas Co. v. Airco Industrial Gases, A Division of Airco, Inc. (7th Cir.1982), 676 F.2d 270 (recognizing that federal and Illinois authorities are in accord in the law of arbitration).) Similarly, the Illinois Supreme Court has stated that judicial opinions from other jurisdictions are given greater than usual deference in construing the Uniform Arbitration Act since the purpose of the act is to make uniform the laws of those states which enact it. (Garver v. Ferguson (1979), 76 Ill.2d 1, 8, 27 Ill.Dec. 773, 389 N.E.2d 1181.) Because of the common origin of the federal and uniform acts, and the fact that the Illinois Uniform Arbitration Act is patterned after the Uniform Arbitration Act, we proceed to interpret our statute with the aid of decisions from other states and federal courts.

Section 2(a) of the Illinois Uniform Arbitration Act, Ill.Rev.Stat.1981, ch. 10, par. 102(a), provides:

"On application of a party showing an [arbitration] agreement * * *, and the opposing party's refusal to arbitrate, the court shall order the parties to proceed with arbitration, but if the opposing party denies the existence of an agreement to arbitrate, the court shall proceed summarily to the determination of the issue so raised and shall order arbitration if found for the moving party, otherwise, the application shall be denied."

At a hearing to stay a judicial proceeding and to compel arbitration, the trial court should concern itself solely with whether an agreement exists to arbitrate the dispute in question. Farris v. Hedgepeth (1978), 58 Ill.App.3d 1040, 1043, 16 Ill.Dec. 311, 313, 374 N.E.2d 1086, 1088; Bunge Corp. v. Williams (1977), 45 Ill.App.3d 359, 362, 4 Ill.Dec. 11, 12, 359 N.E.2d 844, 845.

The trial court did not make a finding with respect to the existence of an agreement to arbitrate which was error. (Kelso-Burnett Co. v. Zeus Development Corp. (1982), 107 Ill.App.3d 34, 41, 62 Ill.Dec. 789, 794, 437 N.E.2d 26, 31.) In their pleadings, the parties disputed whether an agreement to arbitrate existed. On appeal, Montalbano points to Paragraph 22 of the typewritten Standard Contract Agreement initialed by the parties which states: "All claims, disputes and other matters in question arising out of, or relating to this Agreement, or the breach thereof, shall be decided by arbitration, pursuant...