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FIFTH DIVISION
MARCH 31, 2004

Following an evidentiary hearing, the circuit court of Cook County entered an orderdenying a motion of plaintiffs DHR International, Inc. (DHR), and David H. Hoffman, chiefexecutive officer and shareholder of DHR, for a preliminary injunction to stop defendant law firmWinston & Strawn (W&S) from representing defendants Spherion Atlantic Enterprises, LLC, andSpherion Pacific Enterprises, LLC (Spherion), in an arbitration proceeding Spherion broughtagainst DHR in New York City before the defendant American Arbitration Association (AAA),based on an alleged conflict of interest. Plaintiffs now appeal.

The record on appeal discloses the following facts. On February 18, 2003, plaintiffs fileda three-count "Complaint for Declaratory Relief and Preliminary and Permanent Injunction"against defendants. Count I sought a declaration that a conflict of interest existed arising out ofW&S's representation of Spherion in an arbitration proceeding Spherion brought against DHRbefore the AAA in a dispute arising from an asset purchase agreement. Plaintiffs alleged thatWilliam Doyle, an attorney who joined W&S after Spherion filed its claim with the AAA, also hadrepresented plaintiffs and that W&S failed to timely erect an ethical screen to prevent disclosureof plaintiffs' confidences to other attorneys at W&S. Count II sought to preliminarily enjoinSpherion and the AAA from moving forward with the arbitration proceeding pending resolutionof the conflict of interest issue. Count III sought to permanently enjoin: W&S from furtherrepresenting Spherion in the arbitration; Spherion from continuing with the arbitration so long asW&S represented it in the arbitration; and the AAA from moving forward until the allegedconflict of interest was ended.

Plaintiffs filed an emergency motion for a preliminary injunction. Although this motion istime-stamped as filed February 10, 2003, its reference to filing of the complaint and the certificateof service both suggest it was filed after the initial complaint.⁽¹⁾ This motion sought to preliminarilyenjoin: W&S from further representing Spherion in the arbitration; Spherion from continuingwith the arbitration so long as W&S represented it in the arbitration; and the AAA from movingforward until the alleged conflict of interest was ended.

On February 19, 2003, plaintiffs moved for a temporary restraining order (TRO). OnFebruary 21, 2003, the trial court found that it lacked jurisdiction over an arbitration that was tooccur in New York and hence declined to order the AAA to stay the arbitration. The trial courtalso declined to order Spherion not to proceed. The trial court entered a TRO restraining W&Sfrom representing Spherion in the arbitration, pending an expedited evidentiary hearing to beginon February 28, 2003.

On March 14, 2003, following a five-day hearing on the matter, the trial court issued awritten order denying the motion for a preliminary injunction for the reasons set forth by the courtin court on March 10, 2003 (the order stating that a true and correct copy of that decision isannexed as an "exhibit" to the order). The attached transcript shows that the trial court found that"there was no indication nor was there any evidence really ever present that Mr. Doyle everrepresented DHR." The trial court found that plaintiffs failed to show that Doyle had any specificconfidential information of DHR in the Spherion matter. The trial court noted that Hoffman didnot initially raise a conflict issue, though he or his agents received the statement of claim showingthat Spherion was being represented by W&S. The trial court found Hoffman's testimony that hedid not initially pay attention to the matter to be not credible, as Hoffman appeared to be asuccessful and articulate businessman who knew everything that went on in his business. The trialcourt further found that W&S had represented DHR, but had not represented DHR after 1998.

On March 17, 2003, plaintiffs filed a motion to voluntarily dismiss Spherion and the AAAas defendants, which the trial court granted that same day. Plaintiffs also filed their notice ofinterlocutory appeal to this court on that date. On March 18, 2003, plaintiffs moved for a stay ofthe denial of the preliminary injunction. The parties agree that the trial court denied a stay ofenforcement, but do not identify where an order denying the stay appears in the record. W&Sfiled a motion to amend the record to include a transcript of the hearing denying the stay. Inresponse, plaintiffs filed a motion to strike portions of W&S's brief referring to said transcript. OnNovember 19, 2003, this court entered an order denying without prejudice a motion by W&S todismiss the appeal as moot.

Initially, there is the issue of this court's jurisdiction over the appeal. Plaintiffs assert thatthis court has jurisdiction over this appeal pursuant to Supreme Court Rule 307(a)(1), whichpermits appeals as of right from an interlocutory order "granting, modifying, refusing, dissolving,or refusing to dissolve or modify an injunction." 188 Ill. 2d R. 307(a)(1); see also OfficialReports Advance Sheet No. 5 (March 5, 2003), R. 307, effective January 1, 2003. However, it iswell-established that an order regarding disqualification of counsel is neither final and appealable,nor an interlocutory ruling for injunctive relief from which a party may take an immediate appealunder Rule 307(a)(1). In re Estate of French, 166 Ill. 2d 95, 98-101, 651 N.E.2d 1125, 1126-28(1995), reaffirming Almon v. American Carloading Corp., 380 Ill. 524, 44 N.E.2d 592 (1942).⁽²⁾

This court has reviewed the propriety of granting a disqualification order in appeals ofcontempt findings based on such orders. E.g., SK Handtool Corp. v. Dresser Industries, Inc., 246Ill. App. 3d 979, 986, 619 N.E.2d 1282, 1286 (1993); Index Futures Group, Inc. v. Street, 163Ill. App. 3d 654, 657, 516 N.E.2d 890, 892-93 (1987). In Hasco, Inc. v. Roche, 299 Ill. App. 3d118, 123-124, 700 N.E.2d 768, 772 (1998), this court reviewed an order granting permanentinjunctive relief that effectively disqualified opposing counsel in an arbitration proceeding,reasoning that the permanent injunction was a final appealable order. In Hannan v. Watt, 147 Ill.App. 3d 456, 458, 497 N.E.2d 1307, 1308 (1986), this court reviewed the denial of a preliminaryinjunction effectively seeking disqualification of opposing counsel in seniority list integrationproceedings, but this court did not expressly address its jurisdiction therein and the orderreviewed also dismissed the complaint.⁽³⁾

In this case, plaintiffs seek review of an order denying a preliminary injunction thateffectively sought disqualification of opposing counsel in an arbitration, but the complaint was notdismissed. Without considering whether Hasco or Hannan is consistent with Estate of French,this case does not fall within the scope of cases where this court has reviewed effectivedisqualification orders. Accordingly, following Estate of French, this court lacks jurisdiction tohear this appeal under Rule 307(a)(1).

We note that after its decision in Estate of French, the Illinois Supreme Court amendedSupreme Court Rule 306 to allow for permissive appeals of orders granting motions to disqualifycounsel. 166 Ill. 2d R. 306(a)(7) (amended effective March 26, 1996). Plaintiffs could haveargued (though they did not) that even if the order at issue is nonfinal, this court should nevertheless consider whether to hear the case under Rule 306. Cf. In re Curtis B., 203 Ill. 2d 53, 63, 784N.E.2d 219, 225 (2002) (nonfinal permanency order in child custody proceedings remanded toappellate court for consideration under Rule 306(a)(5)). However, Curtis B. involved Rule306(a)(5), the broad language of which the supreme court noted plainly encompassed permanencyorders. Curtis B., 203 Ill. 2d at 61, 784 N.E.2d at 224. In contrast, the plain language of Rule306(a)(7) does not expressly refer to orders denying motions to disqualify counsel. Otherprovisions of Rule 306 demonstrate that the supreme court will specify that jurisdiction mayextend to the denial of certain orders where the supreme court so intends. Official ReportsAdvance Sheet No. 5 (March 5, 2003), Rs. 306(a)(2) (allowing appeal from grant or denial ofdismissal based on forum non conveniens), 306(a)(4) (allowing appeal from grant or denial ofcertain other motions for transfer of venue), effective January 1, 2003. Indeed, Rule 307(a)(1)--the very rule plaintiffs rely upon--expressly refers to orders granting or refusing injunctive relief. 188 Ill. 2d R. 307(a)(1); see also Official Reports Advance Sheet No. 5 (March 5, 2003), R. 307,effective January 1, 2003.

Moreover, in Curtis B., the case was remanded to this court for consideration under Rule306(a)(5) because the statute purporting to make the permanency order final was not struck downas unconstitutional by this court prior to the appeal. Curtis B., 203 Ill. 2d at 63, 784 N.E.2d at225. In contrast, Estate of French reaffirms a rule of jurisdiction set forth in 1942. The law didnot change while this case was on appeal.⁽⁴⁾

In short, this court does not have jurisdiction of this case under Rule 307(a)(1). Nor isthis the only jurisdictional problem with this case. There is also the issue of mootness, whichW&S first raised in its motion to dismiss. A case on appeal becomes moot where eventsoccurring after the filing of the appeal render it impossible for the appellate court to grant thecomplaining party effectual relief. In re A Minor, 127 Ill. 2d 247, 255, 537 N.E.2d 292, 295(1989). In this case, defendant's motion states that the underlying arbitration went forwardbeginning on July 7, 2003. Defendant's motion states that on October 21, 2003, the arbitrationpanel issued a partial final award, which included $982,516 to be paid to Spherion, as well asdeclaratory relief providing for future payments depending on DHR's financial performance. Theaward states that it retains jurisdiction solely on the issue of attorney fees.

Plaintiffs respond that the appeal is not moot because the arbitration panel has not entereda full final award, which has not been reduced to a judgment or collected. Plaintiffs state thatDHR recently discovered correspondence from an associate at Doyle's former firm (attached as anexhibit to the response), asking DHR's chief financial officer for copies of the shareholder agreement, bylaws, the most recent annual minutes where directors and officers were elected, and themost recent balance sheet. Plaintiff argues in the alternative that even if the case is moot, itqualifies for review as involving a question of great public interest based on: (1) the public natureof the question, (2) the desirability of an authoritative determination for the purpose of guidingpublic officers, and (3) the likelihood that the question will generally recur. A Minor, 127 Ill. 2dat 257, 537 N.E.2d at 296.

The determination of attorney fees, like disqualification, is an issue collateral to the meritsof the arbitration. DHR lost the arbitration of the merits; curiously, plaintiffs in this case havefailed to point to any unfair prejudice arising from W&S's representation of Spherion in thearbitration. Plaintiffs' exhibit shows a request for DHR's balance sheet and other documents, butthis letter goes to the issue of whether the decision should be reconsidered, not whether the actionis moot.

Nor would this case appear to fall within the public interest exception to the mootnessdoctrine. Plaintiffs were refused a preliminary injunction. Plaintiffs fail to explain how an opinionon the denial of preliminary relief, including an assessment of plaintiffs' likelihood of success,would provide an authoritative determination of the conflict issue.

In addition, while this case did not progress to the stage where W&S may have filed amotion to dismiss pursuant to section 2--619(a)(9) of the Code (735 ILCS 5/2--619(a)(9) (West2000)), we note in passing that Hoffman's standing in this case could be questioned, as he was nota party to the arbitration. It is the secrets and confidences of DHR, a separate corporate entity,which are allegedly in danger of being used or disclosed. Neither party has suggested this is acase where the corporate veil is likely to be pierced. During oral argument, plaintiffs' counselsuggested that Hoffman had standing to sue to protect his attorney-client privilege. Such aresponse assumes that Hoffman's personal secrets and confidences were in danger of beingdisclosed in the arbitration proceeding. There is no support in the record for that assumption.⁽⁵⁾

We further note that section 7.12 of the asset purchase agreement at the heart of theunderlying dispute provides for arbitration to occur in New York (absent an agreement of theparties to the contrary), and section 7.13 of the asset purchase agreement provides in part:

"All actions or proceedings arising in connection with thisAgreement for preliminary or injunctive relief or matters not subjectto arbitration, if any, shall be tried and litigated exclusively in thestate or federal court located in New York City, New York. Theaforementioned choice of venue is intended by the parties to bemandatory and not permissive in nature, thereby precluding thepossibility of litigation between the parties with respect to or arisingout of this Agreement in any jurisdiction other than specified in thisparagraph. Each party hereby waives any right it may have toassert the doctrine of forum non conveniens or similar doctrines orobject to venue with respect to any proceeding brought inaccordance with this paragraph, and stipulates that the State andFederal located in the shall have in personam jurisdiction over eachof them for the purpose of litigating any such dispute, controversyor proceeding." (Words missing in last sentence in original)

Where the parties have expressly agreed to arbitrate in another state, Illinois courts lack subjectmatter jurisdiction over judicial proceedings pertaining to the award, even where a party hasacquiesced in holding the arbitration in Illinois. Chicago Southshore & South Bend R.R. v.Northern Indiana Commuter Transp. Dist., 184 Ill. 2d 151, 152, 703 N.E.2d 7, 8 (1998).

The defendant in Chicago Southshore & South Bend R.R., 184 Ill. 2d at 158, 703 N.E.2dat 11, "steadfastly opposed the exercise of subject matter jurisdiction by the Illinois trial court,"which did not occur in this case. Although subject matter jurisdiction cannot be waived, thedefendant's objection may have been significant because Chicago Southshore & South Bend R.R.rests in part on section 16 of the Uniform Arbitration Act, which provides that "[t]he making ofan agreement *** providing for arbitration in this State confers jurisdiction on the court toenforce the agreement under this Act and to enter judgment on an award thereunder." (Emphasisadded.) 710 ILCS 5/16 (West 2000). In creating rights and duties unknown at common law, thelegislature was free to limit the circuit courts' jurisdiction over arbitration matters. See Board ofEducation of Warren Township High School District 121 v. Warren Township High SchoolFederation of Teachers, Local 504, 128 Ill. 2d 155, 166, 538 N.E.2d 524, 529 (1989) (discussingarbitration under Illinois Educational Labor Relations Act). However, the supreme court'sreference in Chicago Southshore & South Bend R.R. to the objection suggests that it views theUniform Arbitration Act as creating "justiciable matter" over which the circuit court has originaljurisdiction under the Illinois Constitution of 1970 and that a failure to comply with ajurisdictional limit may be the subject of an objection, but does not by itself divest the circuit courtof that jurisdiction. See Belleville Toyota, Inc. v. Toyota Motor Sales, U.S.A., 199 Ill. 2d 325,340, 770 N.E.2d 177, 188 (2002). Thus, in this case, Winston & Strawn might have been able toobject to the proceedings here based on section 16 of the Uniform Arbitration Act, but waivedthat objection by failing to lodge it in the circuit court.

In sum, an order refusing to disqualify counsel is not final or the sort of injunctive reliefimmediately appealable as a matter of right under Rule 307(a). The plaintiffs have not raised thesort of issues that would weigh in favor of granting an appeal under Rule 306(a)(7), particularlygiven that the case law already firmly established the nonappealability of the order. In addition,the matter is moot in light of the arbitrator's determination of the merits of the dispute.

For all of the aforementioned reasons, the case is dismissed for lack of jurisdiction.

Dismissed.

REID and HARTIGAN, JJ., concur.

1. Plaintiffs' brief notes that the time stamp may be in error.

2. Estate of French also implies that a disqualification order does not dispose of the rightsof the parties, either upon the entire controversy or some definite and separate part thereof. SeeEstate of French, 166 Ill. 2d at 101-02, 651 N.E.2d at 1128. "[A] disqualification order grants norelief with respect to the substantive merits of a claim between the parties that has been raised inthe actual controversy between them." Estate of French, 166 Ill. 2d at 102, 651 N.E.2d at 1129. Indeed, Estate of French suggests that disqualification orders should not be considered injunctivein nature. See Estate of French, 166 Ill. 2d at 100, 651 N.E.2d at 1128, citing Almgren v. Rush-Presbyterian-St. Luke's Medical Center, 162 Ill. 2d 205, 642 N.E.2d 1264 (1994).

3. During oral argument, plaintiffs' counsel cited Westinghouse Electric Corp. v. Kerr-McGee Corp., 580 F.2d 1311, 1312 (7th Cir. 1978), as an example of a case where a trial courtdenied disqualification, but was reversed on appeal. However, the United States Supreme Courtlater held that an order denying a motion to disqualify counsel is a collateral order not appealableprior to final judgment in the underlying litigation. Firestone Tire & Rubber Co. v. Risjord, 449U.S. 368, 379, 66 L. Ed. 2d 571, 581, 101 S. Ct. 669, 676 (1981). Estate of French also notedthat this is the law in federal court proceedings. Estate of French, 166 Ill. 2d at 103-04, 651N.E.2d at 1129-30.

4. We note that plaintiffs initially sought to enjoin the arbitration proceedings. Thus, aliberal construction of the pleadings might have led this court to view the pleadings as a motion tostay arbitration under section 2 of the Uniform Arbitration Act. 710 ILCS 5/2 (West 2000). Thedenial of such a motion in some cases might arguably be analogous to a denial of injunctive reliefappealable under Supreme Court Rule 307(a)(1). See Notaro v. Nor-Evan Corp., 98 Ill. 2d 268,456 N.E.2d 93 (1983). In this case, however, the trial court refused to enter a TRO against thearbitration proceedings in New York on the ground that the court lacked jurisdiction to do so. Plaintiffs did not appeal that order under Rule 307 and had the trial court dismiss Spherion andthe AAA as defendants in this case. Thus, this court does not address issues relating to that issue.

5. Regarding DHR's secrets and confidences, we note in passing that, in connection withthe asset purchase, Spherion and DHR had entered into a confidentiality agreement (lateramended) permitting the mutual disclosure of confidential information. At the hearing on themotion for a preliminary injunction, Hoffman testified that he did not know whether DHR gaveSpherion its balance sheets and income statements under the confidentiality agreement, but he"would guess that we gave them a lot more information than that."