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Schroeder Murchie Laya Associates, Ltd., v. 1000 West Lofts, LLC

Case Date: 03/16/2001
Court: 1st District Appellate
Docket No: 1-00-3108 Rel

FIFTH DIVISION
March 16, 2001

No. 1-00-3108

SCHROEDER MURCHIE LAYA ASSOCIATES, LTD.,

          Plaintiff and Counterdefendant-Appellant,

v.

1000 WEST LOFTS, LLC, a/k/a 1000 West
Washington Lofts, LLC; LASALLE NATIONAL
BANK, as Trustee u/t/n 119270, and as Trustee
u/t/n 119267,

                                              Defendant,

(1000 West Lofts, LLC, a/k/a 1000 West
Washington Lofts, LLC,

                                  Counterplaintiff-Appellee).

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)		 Appeal from the
Circuit Court of
Cook County.


No. 99 CH 08572



Transferred to
Municipal



Honorable
John G. Laurie,
Judge Presiding.


JUSTICE GREIMAN delivered the opinion of the court:

Schroeder Murchie Laya Associates, Ltd. (SML), brought the underlying actionon November 18, 1999, seeking payment for work performed under a contract it hadwith defendant 1000 West Lofts, LLC (1000 West). In response, 1000 West filed amotion to compel arbitration and stay court proceedings pursuant to anarbitration clause in the contract and under the Illinois Uniform ArbitrationAct (Act) (710 ILCS 5/1 et seq. (West 1998)). On January 20, 2000, thetrial court granted 1000 West's motion to compel arbitration and entered anorder dismissing the case without prejudice, but allowed for its reinstatementif within 90 days an arbitration had not been filed. After the 90 days, neitherparty filed a demand for arbitration, and the trial court reinstated the case.

After the case was reinstated, 1000 West filed its answer, affirmativedefenses, and a counterclaim to SML's first amended complaint. The counterclaimraised the following issues: (1) breach of contract; (2) professionalnegligence; and (3) contribution and implied indemnity. In response to thecounterclaim, SML moved to compel arbitration and stay proceedings in the trialcourt. 1000 West opposed the motion and asserted that SML had waived itscontractual right to arbitrate when it initiated the action in the circuit courtand opposed 1000 West's previous motion to compel arbitration. After hearingargument, the trial court denied the motion. Plaintiff has appealed. For thereasons that follow, we affirm.

In September of 1994, SML entered into a contract with 1000 West to providearchitectural design, construction administration, and construction supervisoryservices for the renovation and development of residential loft condominiumslocated at 1000 West Washington Street in Chicago. When a dispute arose betweenthe parties, SML filed a mechanics lien against the condominium development.Subsequently, it filed a complaint in the circuit court of Cook County seekingto foreclose its mechanics lien claim (count I). In its original complaint, SMLasserted additional claims against 1000 West and the individual condominium unitowners based on a breach of contract (count II) and unjust enrichment (countIII). On October 22, 1999, it voluntarily dismissed its complaint as to theindividual unit owners. The case was then transferred from the chancery divisionto the municipal division. On November 16, 1999, SML filed its first amendedcomplaint against 1000 West seeking to enforce the terms of the contract betweenthe parties.

On January 5, 2000, 1000 West filed a motion to stay the judicial proceedingsand compel arbitration. SML filed a brief in opposition to the motion, claimingthat the request for arbitration was untimely. On January 20, 2000, the trialcourt dismissed the case without prejudice and granted leave to reinstate thematter if arbitration was not scheduled in 90 days. On April 20, 2000, SML fileda motion with the circuit court seeking to reinstate the case. On May 3, 2000,the court entered an order granting SML's motion to reinstate the case. 1000West filed its answer, affirmative defenses, and counterclaim to the firstamended complaint on May 17, 2000. In its counterclaim, 1000 West seeks damagesagainst SML based upon breach of contract (count I), professional negligence(count II), and contribution and implied indemnity (count III).

In the counterclaim, 1000 West claimed in count I that SML failed to designthe structural, mechanical and electrical systems and specify the requiredmaterials in accordance with the applicable building codes, and that SML failedto properly supervise the construction phase of the project pursuant to thecontract. In count II, 1000 West alleged that SML breached a duty owed to 1000West to use reasonable care in supervising the construction phase of thedevelopment and that SML failed to design the development in accordance toapplicable building codes. In count III, 1000 West sought contribution andindemnity against SML to the extent that 1000 West is determined to be liable tothe board of managers of the 1000 West Lofts Condominium Association.

In response to the counterclaim, on July 26, 2000, SML switched its priorposition and moved to compel arbitration and stay proceedings in the trial courtpursuant to the contract. On August 16, 2000, 1000 West filed its response inopposition to SML's motion to compel arbitration on the basis that SML hadwaived its right to arbitrate the dispute. On August 17, 2000, the trial courtentered an order denying SML's motion to compel arbitration. SML has not soughta stay of the order pending appeal.

Initially, the parties disagree as to the applicable standard of reviewregarding the court's decision to deny SML's motion to compel arbitration. Atfirst glance, it appears that both arguments have merit. 1000 West claims that amotion to compel arbitration is akin to a prayer for injunctive relief and thatthe grant or denial of such a motion is reviewable as an interlocutory appealunder Supreme Court Rule 307(a)(1). Official Reports Advance Sheet No. 16(August 9, 2000), R. 307(a)(1), eff. July 6, 2000. Recently, we noted that"[t]he only issue before the court on interlocutory appeal of a trialcourt's order granting a motion to compel arbitration is whether there is asufficient showing to sustain the trial court's order. Amalgamated [TransitUnion, Local 900 v. Suburban Bus Division of the Regional TransportationAuthority], 262 Ill. App. 3d [334,] at 337 (1994); Barter Exchange, Inc.v. Barter Exchange, Inc., 238 Ill. App. 3d 187 (1992). Thus, the standard ofreview in an interlocutory appeal generally is whether the trial court abusedits discretion in granting or denying the requested relief." Bishop v.We Care Hair Development Corp., 316 Ill. App. 3d 1182, 1189 (2000).

In making its argument for a de novo standard of review, however, SMLnotes that the trial court entered the order at issue without holding anevidentiary hearing and without making any factual findings. Accordingly, itclaims, the trial court's denial of SML's motion was made as a matter of law andis reviewable by this court without any deference to the trial court. See Amalgamated,262 Ill. App. 3d at 337. In Amalgamated, this court specifically stated,"[t]he trial court determined this case without evidentiary hearings andwithout making any findings as to any factual issues. Accordingly, the trialcourt's finding that the grievance at issue was arbitrable was made as a matterof law and is reviewable de novo." Amalgamated, 262 Ill. App.3d at 337, citing Manella v. First National Bank & Trust Co., 173Ill. App. 3d 436, 442 (1988).

In its motion to compel arbitration and stay proceedings, SML included fourpages of argument why its motion should be granted. In sum, it claimed that theissues raised by 1000 West's counterclaim "were not resolved through priornegotiations" and consequently, "under the language of Sections 7 and12 [of the 1000 West