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Jensen v. Quik International

Case Date: 12/12/2003
Court: 1st District Appellate
Docket No: 1-03-2023 Rel

SIXTH DIVISION
DECEMBER 12, 2003



1-03-2023

ERIC JENSEN,

                        Plaintiff-Appellee,

                        v.

QUIK INTERNATIONAL, MURRAY MEAD,
and JACK REYNOLDS,

                        Defendants-Appellants.

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)		 Circuit Court of
Cook County.


No. 03 CH 7273


Honorable
Dorothy Kirie Kinnaird
Judge Presiding.


JUSTICE TULLY delivered the opinion of the court:

Plaintiff, Eric Jensen, filed a complaint against defendants, Quik International ("Quik"),Murray Mead and Jack Reynolds, seeking to rescind his franchise agreement with defendants onthe grounds that the Quik failed to comply with provisions governing the registration and sale offranchises in the Franchise Disclosure Act of 1987, as amended, 815 ILCS 705/5, 705/10. Defendants moved to stay the litigation pending arbitration and filed an arbitration demandpursuant to an arbitration provision in the franchise agreement. Thereafter plaintiff filed a motionto stay the arbitration pending the circuit court ruling on defendants' motion to stay the litigation. On June 20, 2003, the circuit court granted plaintiff's motion to stay the arbitration. On July 14,2003, the circuit court denied the defendants' motion to stay the litigation pending arbitration. This appeal followed.

On July 3, 2002, Jensen entered into a written franchise agreement with Quik wherebyQuik granted Jensen the right to operate a franchise in Illinois. The franchise agreement containsan arbitration clause which provides that:

"[A]ny controversy or claim arising out of or relating to this Agreement orits breach, including without limitation, any claim that this Agreement orany of its parts is invalid, illegal or otherwise voidable or void, shall besubmitted to arbitration***"

Sometime thereafter, Quik notified Jensen that it was in violation of the Illinois FranchiseDisclosure Act of 1987 because its registration as a franchise with the Illinois Attorney General'sOffice had expired at the time Quik and Jensen had entered into the franchise agreement. Thenotice sent by Quik to Jensen informed Jensen of his rights under the Act including Jensen's rightto sue for damages and/or recission.

On April 24, 2003, Jensen filed a complaint against Quik, its CEO and its President, in thecircuit court seeking damages and rescission of the franchise agreement. Count I of the complaintalleges that Quik violated Section 5 and 10 of the Illinois Franchise Disclosure Act of 1987 byfailing to register as a franchise in Illinois. Count II alleges that Quik violated Section 6 of theAct for making incomplete and misleading disclosures. Count III alleges violations of the IllinoisConsumer Fraud and Deceptive Business Practices Act. On June 2, 2003, Defendants filed aMotion to Stay Pending Arbitration. On June 5, 2003, Quik filed an arbitration demand pursuantto Section 3 of the Federal Arbitration Act, 9 U.S.C.