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THIRD DIVISION
FILED: March 29, 2001

No. 1-99-2788

PRESIDING JUSTICE HALL delivered the opinion of the court:

The petitioner, 7-Eleven, Inc., formerly known as The Southland Corporation,appeals from an order of the circuit court of Cook County denying its motion tovacate an arbitration award to the respondent, K. Musley Dar, and confirming theaward to the respondent.

The petitioner owns and franchises 7-Eleven stores. On January 21, 1983, thepetitioner and the respondent entered into a "Store FranchiseAgreement" (agreement) under which the respondent would lease a 7-Elevenstore and equipment from the petitioner. The agreement provided in pertinentpart as follows:

"7. Term. The license, lease, and continuing obligations of the parties shall begin on the Effective Date and continue for a term expiring on the earlier of 15 years or the end of 7-Eleven's leasehold rights as specified in Exhibit A, unless sooner terminated or extended."

Exhibit A provided in pertinent part as follows:

"The present term (remainder of primary term or current extended term) of the master lease expires on 31st day of December, 1990. 7-ELEVEN has no obligation to renew or exercise any option to extend the master lease, but if the master lease is renewed or extended by 7-ELEVEN, the term of the Agreement shall then last until the earlier of the end of 7-ELEVEN's then current leasehold rights or 15 years after the Effective Date."

On February 6, 1989, the parties entered into "YEAR 2000 AMENDMENT"to their original agreement. The amendment provided in pertinent part asfollows:

"(1) TERM; 7-ELEVEN Charge.

(a) Term. The term of the Agreement shall be extended to expire on August 31, 2000, unless earlier terminated as set forth below or pursuant to the terms of the Agreement[.]"

The amendment went on to provide as follows:

(2) TERMINATION - Loss of Leasehold Rights, Etc. This Agreement will terminate prior to the expiration of its term upon the loss of 7-ELEVEN's Leasehold Rights, a condemnation or transfer in lieu of condemnation which results in 7-ELEVEN's determination not to continue the Store as a 7-Eleven store, casualty damage to the Store building or Equipment which cannot reasonably be repaired or replaced within 30 calender days, or closing of the Store required by law if such closing was not the result of a violation by 7-ELEVEN."

The petitioner leased the property, which was subleased to the respondent,under the terms of a master lease, from The Southland's Employees' Trust. Amodification to the master lease provided an option whereby the petitioner couldextend the lease, which expired on December 31, 1990, for two periods, not toexceed five years each. The petitioner exercised the first option but not thesecond. Accordingly, the master lease expired on December 31, 1995.

On February 20, 1995, the respondent was notified by the petitioner that itwas not renewing the master lease for the real estate and that, therefore, theparties' agreement would terminate on December 31, 1995. The respondent filed ademand for arbitration as provided for in the parties' agreement.

The arbitrator denied the petitioner's motion to dismiss count III of therespondent's second revised complaint in which the respondent alleged that thepetitioner's failure to renew the lease amounted to wrongful termination. Interalia, the arbitrator rejected the petitioner's argument that the wrongfultermination count was time-barred because it was not filed within 10 days of thenotification of termination as required under the arbitration provision in theagreement. The arbitrator determined that because the agreement provided ashorter limitations period than did the Illinois Franchise Disclosure Act of1987 (815 ILCS 705/27 (West 1998)) (Act), it was ineffectual.

On December 24, 1998, the arbitrator granted the respondent's claim forwrongful termination and awarded him $195,720. The arbitrator also granted twoof the respondent's claims for breach of good faith and fair dealing and awarded$5,000 on each claim. Additionally, the arbitrator ordered the petitioner toprovide the respondent with final account statements and to pay to therespondent sums due him in connection with other alleged breaches of theagreement.

On March 24, 1999, the petitioner filed a petition to vacate the arbitrationaward. The respondent filed a motion to confirm the award and to strike thepetition to vacate the award. The circuit court denied the petition to vacateand granted the petition to confirm the award.

On appeal, the petitioner raises the following issues:  (1) whether the arbitrator exceeded his authority and/or committed gross errorwhen he determined that the respondent did not waive his right to arbitrationwhen he filed for arbitration after the time period for filing such a demand hadexpired pursuant to the agreement; (2) whether the arbitrator exceeded hisauthority and/ or committed gross error when he determined that the franchiseagreement was wrongfully terminated; (3) whether the arbitrator exceeded hisauthority and/or committed gross error when he awarded damages for breaches ofthe covenant of good faith and fair dealing; and (4) whether the arbitratorexceeded his authority and/or committed gross error when he failed to identify aspecific amount of damages owed on certain claims.

Arbitration awards should be construed, whenever possible, so as to upholdtheir validity. Ure v. Wangler Construction Co., 232 Ill. App. 3d 492,496, 597 N.E.2d 759, 762 (1992). There is a presumption that the arbitrator didnot exceed his or her authority. Ure, 232 Ill. App. 3d at 496, 597 N.E.2dat 762. If an award is within the submission and contains the honest decision ofthe arbitrator, after a full hearing, a court will not set it aside for error oflaw or fact. Ure, 232 Ill. App. 3d at 496, 597 N.E.2d at 762. However, ifall fair and reasonable minds would agree that the construction of the contractmade by the arbitrator was not possible under a fair interpretation of thecontract, then the court is bound to vacate or refuse to confirm the award. See Rauhv. Rockford Products Corp., 143 Ill. 2d 377, 391-92, 574 N.E.2d 636, 643(1991).

At the outset, the respondent points out that the agreement between theparties provided that if the arbitrator's decision was within the scope of hisauthority under the agreement, it was final and binding on the parties and that,with the exception of enforcement proceedings, judicial action was waived. Thepetitioner responds that, under the agreement, it did not waive its right tochallenge the award based upon errors of the arbitrator that resulted from thearbitrator exceeding his authority. Therefore, in the absence of a finding bythis court that the arbitrator exceeded his authority, the petitioner has waivedits right to raise error as a basis for vacating the award in this case.

We now turn to the issues raised by the petitioner in this appeal.

The petitioner contends, first, that the arbitrator exceeded his authoritywhen he determined that the respondent did not waive his right to arbitration.

The agreement in this case required the parties to submit to arbitration anycontroversy relating to the agreement that the parties "cannot mutuallyresolve." The agreement provided as follows:

"A demand for arbitration: if based in whole or part on wrongful termination, shall be filed with the [American Arbitration Association] within 10 days after a 30 day or longer notice of termination is issued or prior to any other notice of termination becoming effective."

There is no dispute that the respondent failed to comply with the abovenotice provision.

In denying the petitioner's motion to dismiss the wrongful termination count,the arbitrator relied on the fact that the Act provided a longer limitationsperiod than was provided in the parties' agreement and concluded that the Actcontrolled. Although not specifically stated as such, the basis for thatconclusion appears to be contained in section 41 of the Act, which provides asfollows:

"Any condition, stipulation, or provision purporting to bind any person acquiring any franchise to waive compliance with any provision of this Act or any other law of this State is void." 815 ILCS 705/41 (West 1998).

In support of the arbitrator's denial of the motion to dismiss, therespondent argues that questions involving contractual time limitations are forthe arbitrators, not the courts, to decide. Board of Education ofPosen-Robbins School District No. 143