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CPM Productions Inc. Mobb Deep, Inc.

Case Date: 12/27/2000
Court: 1st District Appellate
Docket No: 1-99-3826,  4266 cons. Rel 

THIRD DIVISION

DECEMBER 27, 2000

Nos. 1-99-3826; 1-99-4266 (cons.)

CPM PRODUCTIONS, INC., an )Appeal from the
Illinois corporation,)Circuit Court of
)Cook County.
Plaintiff-Appellee,)
)
v.)
)
MOBB DEEP, INC.)Honorable
)John K. Madden,
Defendant-Appellant.)Judge Presiding.

JUSTICE CERDA delivered the opinion of the court:

Following an arbitration in November 1997, plaintiff, CPMProductions, Inc. (CPM), obtained a monetary award againstdefendant, Mobb Deep, Inc. (Mobb Deep), for damages and expensesallegedly caused by Mobb Deep's breach of a contract to perform amusical concert in Chicago. Upon Mobb Deep's failure to appearor otherwise answer the complaint of CPM seeking to enforce thearbitrator's award under the Illinois version of the UniformArbitration Act (710 ILCS 5/1 et seq. (West 1998)) (the Act), thecircuit court entered a default judgment on the award.

Mobb Deep, through counsel, thereafter filed a special andlimited appearance pursuant to section 2-301 of the Code of CivilProcedure (Code) (735 ILCS 5/2-301 (West 1998)), together with amotion to quash CPM's service of process and to vacate thedefault judgment order for want of personal jurisdiction.

Mobb Deep's motion was denied on October 1, 1999, and CPMthereafter filed a motion to amend the court's order of judgmentto reflect Mobb Deep's true identity as a partnership and not acorporation. On November 1, 1999, after the filing of CPM'smotion to amend, Mobb Deep filed an appeal from the court'sdefault order and its order refusing to vacate that judgment (No.1-99-3826). On November 5, 1999, the court issued an amendedjudgment order reflecting Mobb Deep's status as a partnership andentering judgment against its partners, Albert Johnson and KujuanMuchita. Thereafter, on December 6, 1999, Mobb Deep filed anotice of appeal from the court's November 5 amended judgmentorder (No. 1-99-4266).

In these consolidated appeals, Mobb Deep first challenges inappeal number 1-99-3826 the order of the circuit court denyingits motion to quash service and to vacate the default judgmententered in favor of CPM. Mobb Deep argues the court lackedsubject-matter jurisdiction to enter a judgment on thearbitrator's award and, alternatively, contends the denial of itsmotion to quash service and vacate judgment was erroneous whereCPM's service of process was ineffective to confer personaljurisdiction on the court. With respect to appeal number 1-99-4266, Mobb Deep claims the filing of its first notice of appealon November 1, 1999, deprived the circuit court of jurisdictionto enter the November 5 order amending the default judgment. Because, as Mobb Deep contends, the circuit court lacked theauthority to exercise its jurisdiction in the case, we reverseand vacate the default judgment entered on the arbitrator's awardin favor of CPM.

BACKGROUND

CPM is an Illinois corporation engaged in the business ofproducing concerts and stage shows featuring musicians and vocalartists. Mobb Deep is a musical rap group consisting of twomembers, Albert Johnson and Kujuan Muchita.

In early 1997, CPM contacted Mobb Deep's representativeagent, Violator Management, and booking agent, Ujaama Booking(Ujamma), about the prospect of engaging Mobb Deep to perform aconcert in Chicago. Following discussions, Ujaama sent CPM awritten contract, dated March 24, 1997, providing for the concertperformance of Mobb Deep, which is identified therein as "MobbDeep, Inc.," in Chicago on April 25, 1997. The contract requiredCPM to pay a flat fee of $10,000 plus additional consideration,and to forward an initial deposit of $5,000 to Ujaama beforeMarch 28, 1997.

Paragraph 10 of the contract set forth a dispute resolutionmechanism to be followed by the parties in the event either ofthem was in breach of the agreement's provisions. This paragraphprovides:

"Any claim or dispute arising out of orrelating to this agreement or the breachingthereof shall be governed by the laws of theState of New York and settled by arbitrationin New York, New York in accordance with therules or regulations then obtaining of theAmerican Arbitration Association. Theparties hereto agree to be bound by the awardin such arbitration and judgment upon theaward rendered by the arbitrator may beentered by any court having jurisdictionthereof." (Emphasis added.)

The contract was executed by Domingo Neris, CPM's president,who returned the signed agreement along with the initial check of$5,000 to Ujamma. CPM acknowledges it never received an executedcopy of the agreement by Mobb Deep. Nonetheless, according tothe allegations of the complaint, Ujamma orally advised CPM ofits receipt of the deposit check and confirmed with CPM MobbDeep's engagement pursuant to the terms of the agreement. CPMthereafter proceeded with the necessary measures for theproduction of the concert. However, on the scheduled date of theconcert, Mobb Deep advised CPM that it was canceling itsperformance.

CPM followed by sending a demand for arbitration notice tothe American Arbitration Association (AAA) in Chicago on June 6,1997, requesting an arbitration hearing in Chicago on the issueof Mobb Deep's breach of the parties' contract. The record showsthat between June 6, 1997, and October 16, 1997, the AAA sent theparties several pieces of correspondence relating to thearbitration, including a notice scheduling the arbitrationhearing for November 12, 1997, at the AAA's regional office inChicago.

Despite this correspondence, Mobb Deep failed to appear atthe November 12 hearing. Following the presentation of CPM'sproofs, the arbitrator awarded CPM $36,466.50 in damages, plus anadditional $1,125 in costs and expenses. A copy of thearbitrator's award was sent to Mobb Deep by the AAA on November26, 1997.

Because Mobb Deep failed to comply with CPM's demand forpayment, CPM filed a verified complaint against "Mobb Deep, Inc."in the circuit court of Cook County seeking "to enforce thearbitration award." Because Mobb Deep failed to appear orotherwise answer, Mobb Deep was found in default and the courtentered judgment on the award in favor of CPM on April 29, 1999.

Mobb Deep formally filed a special and limited appearance onMay 28, 1999. Mobb Deep additionally filed a motion to quash thepurported service of process, which was assertedly ineffective,and to vacate the court's entry of default judgment for want ofpersonal jurisdiction. The circuit court refused to quashservice and vacate its judgment, and Mobb Deep's timely appealfollowed.

 

ANALYSIS

The dispositive issue presented by this appeal is whetherthe circuit court properly exercised its subject-matterjurisdiction to enter judgment on the award of the arbitrator. This asserted lack of jurisdiction is Mobb Deep's main contentionon appeal. Although Mobb Deep never challenged the circuitcourt's authority below and raises this matter for the first timeon review, the asserted lack of the circuit court's authority toexercise its subject-matter jurisdiction can be raised atanytime, including for the first time on appeal. In re Estate ofGebis, 186 Ill. 2d 188, 193, 710 N.E.2d 385, 387 (1999); Reyes v.Court of Claims, 299 Ill. App. 3d 1097, 1101, 702 N.E.2d 224, 228(1998). The issue of whether the circuit court properlyexercised its jurisdiction is reviewed by this court de novo. See Reyes, 299 Ill. App. 3d at 1101, 702 N.E.2d at 228.

According to Mobb Deep, the circuit court lackedjurisdiction to enter judgment on the arbitrator's award sincethe parties' agreement to arbitrate did not provide forarbitration in Illinois, but rather New York City. Because thearbitration occurred in Chicago, Mobb Deep claims the circuitcourt was without authority to enter judgment in the case.

Pursuant to the Illinois Constitution, the circuit courthas, with certain limited exceptions not pertinent to thisappeal, "original jurisdiction of all justiciable matters." Ill.Const. 1970, art. VI,