Mid-America Regional Bargaining Ass'n v. Modern Builders Indus. Concrete Co.

Decision Date15 October 1981
Docket NumberNo. 80-2835,MID-AMERICA,80-2835
Citation101 Ill.App.3d 83,427 N.E.2d 1011,56 Ill.Dec. 606
Parties, 56 Ill.Dec. 606 REGIONAL BARGAINING ASSOCIATION, Plaintiff-Appellant, v. MODERN BUILDERS INDUSTRIAL CONCRETE COMPANY, an Illinois Corporation, Defendant-Appellee.
CourtUnited States Appellate Court of Illinois

Vedder, Price, Kaufman & Kammholz, Allan E. Lapidus, Charles E. Murphy and Joan P. Simmons, Chicago, for plaintiff-appellant.

Thomas, Wallace, Feehan & Baron, Ltd., Joliet (Robert W. Thomas and George J. Vosicky, Joliet of counsel), for defendant-appellee.

ROMITI, Presiding Justice:

The plaintiff, having obtained a favorable arbitration award, appeals from the refusal of the trial court to confirm the award. The sole issue in this case is whether the defendant can raise the issue of whether there was an agreement to arbitrate seven months after it had notice of the award. In light of the clear language of the statute to the contrary (Ill.Rev.Stat.1979, ch. 10, par. 112), we hold that it cannot. Accordingly, we reverse the decision of the trial court, enter judgment in favor of plaintiff and confirm the arbitrator's award.

The Mid-America Regional Bargaining Association (MARBA) is an Illinois not-for-profit corporation formed in 1971 which represents various contractor associations whose members perform construction work throughout the greater Chicago area. Defendant, Modern Builders Industrial Concrete Company (Modern Builders), is an Illinois corporation that performs general contracting work. For many years it had been a member of a Contractors' Association of Will and Grundy Counties (the Association). By this membership the Association or its designee was designated as defendant's representative for collective bargaining. In 1971, the members of the Association voted to become a member of MARBA. The Association adopted an amendment to its by-laws which formally made MARBA the sole and exclusive bargaining agent for all its members. Thereafter, defendant signed an agreement indicating it had read and understood the by-laws of MARBA and it would abide by those by-laws. MARBA's by-laws provided, inter alia, that if a union took strike action against any member or members of MARBA, each member would, upon MARBA's request, lock out its employees. These by-laws further provided that each member agreed that in case of a breach thereof liquidated damages would be $100 per day per employee employed in violation of this provision, to be distributed to the members of MARBA. Any disputes arising under this provision were to be submitted to and decided by an impartial arbitrator selected by MARBA's board of directors from the names of arbitrators submitted by the American Arbitration Association. Proceedings were to be instituted by written notice from MARBA to the offending contractor not less than ten days before the date of the arbitration hearing; and the arbitration could proceed to a hearing and decision despite the failure or refusal of the offending contractor to participate. The arbitrator was given the authority to determine whether the offender had violated any of the provisions, and if so to compute, in accordance with the formula set forth in the by-laws, the amount of liquidated damages payable to MARBA and "to render a decision and award in favor of MARBA in the amount of such damages, together with such other award as the arbitrator shall consider appropriate."

On July 2, 1979 selected members of the Association were struck and picketed by the carpenter's union. In response, MARBA called a lockout to begin on July 6, 1979. Modern Builders violated this directive until July 17, 1979.

On July 9, 1979 MARBA sent Modern Builders a letter informing it that the Association had filed a complaint against it because of its failure to honor the lockout and that MARBA was proceeding to arbitration to collect the liquidated damages provided for in the by-laws. On the same day, Modern Builders sent a letter of resignation to the Association. On July 11, 1979 MARBA informed Modern Builders that the arbitration hearing would be held on July 23, 1979. In response to this notice, Modern Builders on July 17, 1979 informed MARBA that "not being a member of either the Association or of MARBA, Modern Builders does not feel obligated to attend the so-called arbitration hearing." Inconsistent with its claim that it was no longer a member Modern Builders on July 16, 1979 renewed its request to the Association for an exemption for one of its job sites from the lockout and on July 17 it began to honor lockout directives. On July 19, 1979 the Association informed Modern Builders that its attempted resignation was ineffective. Despite this notification Modern Builders failed to attend the hearing and, being absent, did not there assert that there was no binding agreement to arbitrate. 1 It also did not file an action to stay the proceeding.

The arbitrator, after the hearing, issued his award on July 25, 1979. He determined that Modern Builders was a paid up member of the Association; that the Association had designated MARBA to act as its bargaining agent; that MARBA was authorized to order a lockout; that Modern Builders was subject to a fine for failing to honor the lockout; and that it should, within thirty days, pay MARBA damages of $100 per carpenter who worked from July 6th through July 16, 1979. Modern Builders was sent notice of the award on July 26, 1979. When Modern Builders did not pay the award, MARBA commenced this action to confirm the award on November 21, 1979. On February 26, 1980 Modern Builders filed its answer, asserting as a defense that no contract requiring arbitration had ever existed between defendant and plaintiff. The trial court refused to confirm the award and granted defendant's motion for summary judgment.

Modern Builders contends on appeal that it was not a party to the arbitration agreement and therefore not bound by it. We find we have no power to consider the question because it was not timely raised.

It is true, as defendant contends, that under the Uniform Arbitration Act (Ill.Rev.Stat.1979, ch. 10, pars. 101, et seq.), before there can be arbitration there must be a valid arbitration agreement and that persons not parties to an arbitration agreement cannot be compelled to participate in arbitration. (Flood v. Country Mutual Insurance Co. (1968), 41 Ill.2d 91, 242 N.E.2d 149; Property Management, Ltd. v. Howasa, Inc. (1973), 14 Ill.App.3d 536, 302 N.E.2d 754.) If there is no agreement, the court may stay a threatened arbitration proceeding (Ill.Rev.Stat.1979, ch. 10, par. 102(b)), or may vacate the arbitration award. (Ill.Rev.Stat.1979, ch. 10, par. 112(a)(5).) But the absence of an arbitration agreement is a defense only if timely raised. (Ill.Rev.Stat.1979, ch. 10, par. 112; Schroud v. Van C. Argiris & Co. (1979), 78 Ill.App.3d 1092, 398 N.E.2d 103, 34 Ill.Dec. 428; Property Management, Ltd. v. Howasa, Inc. (1973), 14 Ill.App.3d 536, 302 N.E.2d 754; Ramonas v. Kerelis (1968), 102 Ill.App.2d 262, 243 N.E.2d 711; Board of Education v. Education Association (1979), 286 Md. 358, 408 A.2d 89; Wacker v. Allstate Insurance Co. (Minn.1977), 312 Minn. 242, 251 N.W.2d 346.) Section 12(b) of the Uniform Arbitration Act requires that the defense that there was no arbitration agreement must be raised in court within ninety days after delivery of a copy of the award to the applicant; here it was not raised until seven months had passed. As this court stated in Schroud, 78 Ill.App.3d 1096, 398 N.E.2d 106, 34 Ill.Dec. 431, where the identical issue was raised: "where the party has failed to file a timely motion to vacate, the award must be confirmed and the party bound thereby even though the matter should not have gone to arbitration."

Defendant contends, however, that:

1. The issue whether an...

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