Foley v. Greer

Case Date: 08/27/2002
Court: 5th District Appellate
Docket No: 5-01-0778 Rel

Notice

Decision filed 08/27/02. The text of this decision may be changed or corrected prior to the filing of a Petition for Rehearing or the disposition of the same.

NO. 5-01-0778

IN THE

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT


STEVEN FOLEY and RUTH FOLEY, ) Appeal from the
) Circuit Court of
            Plaintiffs-Appellees, ) St. Clair County.
)
v. ) No. 01-LM-2063
)
FRANK GREER d/b/a INSPECTIONS BY )
REQUEST, INC., ) Honorable
) Jan V. Fiss,
           Defendant-Appellant. ) Judge, presiding.

JUSTICE KUEHN delivered the opinion of the court:

We allowed the defendant's request to file this interlocutory appeal on the basis ofSupreme Court Rule 306(a)(4) (166 Ill. 2d. R. 306(a)(4)). Because of the uniquecircumstances of this case, the question whether this case fits within the wording of that rule,and thus whether or not we have jurisdiction to hear this case, requires us to initiallydetermine the issue on appeal itself. Only by resolving the ultimate issue can we determineif this case meets the wording of Rule 306(a)(4).

Steven and Ruth Foley arrived in the Metro-East area in late 1997 by way of a UnitedStates Air Force transfer. In searching for a home in which to live, they located a 100-year-old candidate in the town of Lebanon. Prior to signing the purchase contract, the Foleyssought the counsel of a home inspector. The Foleys selected Inspections by Request, Inc. Inspections by Request, Inc., is not incorporated, despite its corporate designation, but isoperated by Frank Greer, using the business name Inspections by Request, Inc. Frank Greerpresented the Foleys with a contract. The contract, labeled an "Inspection Agreement," wasa form contract. The parties to the contract were Inspections by Request, Inc., and theFoleys. Frank Greer signed the contract on behalf of Inspections by Request, Inc., as an"Inspector." The Foleys paid $155 for an initial inspection and $65 for a follow-upinspection. The agreement provided that the inspector would conduct "a visual inspectionof the readily accessible portions of the building" at issue and its major systems. Theagreement provides that liability was limited to the lesser of the actual damages sustainedor the amount of money paid for the inspection. In the middle of this form contract, anarbitration-clause notice was highlighted in boldface type and in capital letters. By theclause, the parties agreed "to arbitrate any claim which may arise out of the performance ofthe Agreement."

Following his inspections, Frank Greer provided the Foleys with a verbal and writtenreport indicating that he found no significant structural or material defects with the house. The Foleys purchased the home. Thereafter, various problems were discovered. The Foleysfelt that these problems should have been found during the inspection, so that they couldhave made a better-informed decision of whether or not to purchase the home. The Foleyscontend that if they had known about these problems, they would not have purchased thehome. The Foleys claim damages as a result of necessary repairs, as well as the loss in thevalue of the home.

The Foleys made a claim with Inspections by Request, Inc., for their damages. Uponhis receipt and review of the Foleys' claim, Frank Greer offered the Foleys a full refund ofthe amounts they paid. That offer was refused. Because the agreement called for arbitration,the Foleys submitted the case to arbitration. On May 10, 2000, the case was arbitratedbefore attorney Irv Slate in his Granite City, Illinois, office. Granite City is located inMadison County.

There is some confusion regarding whether arbitrator Irv Slate was informed to holdoff on his decision because the parties were working to settle the claim on their own. In anyevent, after nine months of waiting for a decision, the Foleys decided to go ahead and filea civil complaint for damages in the St. Clair County circuit court. The complaint was filedon February 21, 2001. On February 22, 2001, Irv Slate issued his opinion, in which hefound in favor of Inspections by Request, Inc. On April 5, 2001, the Foleys filed anamended complaint, in which they acknowledge the arbitration order. Without specificallyasking for the arbitration order to be set aside, they argue that Irv Slate's neutrality wassuspect and that he should not have been allowed to enter an order so long after the case wasargued-especially after the Foleys sent Irv Slate a letter indicating that he might havecommitted malpractice by his delay.

In response to the amended complaint, Frank Greer filed a motion to transfer venuefrom St. Clair County to Madison County, in accordance with section 17 of the UniformArbitration Act (710 ILCS 5/17 (West 1998)). On August 28, 2001, the trial court deniedthis motion. On September 28, 2001, Frank Greer filed a petition in this court, pursuant toRule 306(a)(4), seeking leave to appeal from the August 28, 2001, order. We granted thispetition on November 19, 2001.

The Foleys argue that, jurisdictionally speaking, we should not have allowed thisinterlocutory appeal. They argue that Rule 306(a)(4) only allows appeals from a circuitcourt order denying a motion for a transfer of venue if the defendant is not a resident of thecounty in which the action was commenced and if there is no other legitimate basis forvenue in that county. There is no dispute that Frank Greer does not live in St. Clair County. In keeping with the general venue statute, the Foleys claim that their case was properly filedin St. Clair County. The general venue statute provides that every action should be filed ineither the county where the defendant resides or the county in which the transaction occurredfrom which the cause of action arose. 735 ILCS 5/2-101 (West 1998). Because theinspection occurred in St. Clair County and the contract was entered into in St. Clair County,the Foleys argue that their choice of venue was proper. The Foleys claim that because thereis a legitimate basis for St. Clair County venue, this interlocutory appeal should have beendisallowed. Frank Greer responds that the Foleys did not have a legitimate basis for St. ClairCounty venue. He argues that the Uniform Arbitration Act contains a specific, controllingvenue requirement, the application of which places venue in Madison County. See 710ILCS 5/17 (West 1998).

The appropriateness of this interlocutory appeal requires the resolution of the ultimateissue raised in this appeal. Does the arbitration venue statute take precedence over thegeneral venue statute? If it does, then the Foleys did not have a legitimate basis for claimingSt. Clair County venue and the trial court's denial of the motion to transfer venue to MadisonCounty would have been erroneous.

The Uniform Arbitration Act provides that court actions should be filed in the countyin which a previous arbitration hearing was held. 710 ILCS 5/17 (West 1998). In the onlycase directly on point, the court held that this specific venue statute controlled in a situationwhere the specific venue statute was in conflict with the general venue statute. See Mazurv. Quarters Designs, Inc., 248 Ill. App. 3d 873, 875, 619 N.E.2d 763, 764 (1993). The thirddistrict appellate court based its decision on the accepted rule of statutory construction thata specific statute prevails over a general statute where both relate to the same subject. Mazur, 248 Ill. App. 3d at 875, 619 N.E.2d at 764 (citing People ex rel. Myers v.Pennsylvania R.R. Co., 19 Ill. 2d 122, 166 N.E.2d 86 (1960)).

We agree with the holding of Mazur v. Quarters Designs, Inc. We conclude thatbecause the matter was arbitrated in Madison County, any related claim filed in the circuitcourt must also be filed in Madison County.

Before we reach the conclusion that the trial court erred in refusing to transfer thiscase to Madison County, we address arguments raised by the Foleys for the first time onappeal.

The Foleys contend that Frank Greer was not a party to the arbitration itself and thattherefore this suit cannot be deemed a "contest" of the arbitration that would requirecompliance with the Uniform Arbitration Act venue provision. On a similar note, the Foleysalternatively argue that Frank Greer was not a party to the inspection contract containing thearbitration clause, rendering the contract unenforceable, and thus that this suit has nothingto do with the arbitration. In short, the Foleys are seeking a loophole-an endeavor which,under these circumstances, is perfectly understandable. The problem with these argumentsis that they are contradicted by the very language of the Foleys' complaint. The lawsuit pitsthe Foleys against Frank Greer, the individual. Frank Greer is sued as an individual who isdoing business under the name Inspections by Request, Inc. The complaint alleges that theFoleys contracted with the defendant-Frank Greer. Attached to the complaint is a copy ofthe contract the Foleys entered into with Inspections by Request, Inc. The Foleys and FrankGreer, in his capacity as an inspector for Inspections by Request, Inc., signed this contract. The Foleys further allege that they demanded that the disagreement be arbitrated incompliance with this contract. The Foleys acknowledge that "the parties" submitted the caseto arbitration and that both "parties" offered evidence at the hearing. The only two partiesto this action are the Foleys and Frank Greer doing business as Inspections by Request, Inc. The argument that Frank Greer was not a party to the arbitration or to the arbitrationagreement is unpersuasive.

In another argument raised for the first time in this appeal, the Foleys claim that theinspection contract containing the arbitration clause should be declared invalid because ofthe confusion about whether Inspections by Request, Inc., was a corporation or an individualdoing business under that trade name. Regarding the complaint itself, it would appear thatthere was no confusion. Frank Greer was sued as an individual who does business underthe name Inspections by Request, Inc. In reviewing the complaint, we found no allegationsthat the manner or form in which Frank Greer conducted his business in any way misled,deceived, or defrauded the Foleys relative to the inspection or entering into the inspectioncontract.

Underlying all of these arguments is the theory that the Foleys' complaint does notinvolve the arbitration decision. In other words, the Foleys argue that they are not askingthe court to set aside the arbitration decision. If they were seeking to invalidate thatdecision, then venue clearly lies in Madison County, where that arbitration took place. Theargument is somewhat disingenuous. Even if not expressly stated, the relief sought on eachof the issues raised for the first time on this appeal involves invalidating the arbitrationagreement. Invalidating that agreement is a matter governed by the Uniform ArbitrationAct. Furthermore, the complaint is replete with references to the arbitration, the arbitrationhearing, the arbitrator, and the arbitrator's decision. The only way that relief can be obtainedat this point, given the existence of an arbitration decision, is to have that decision set aside. Whether or not the Foleys expressly state this intent, the intent is implied by the facts andthe allegations of the complaint.

We conclude that the judgment of the circuit court of St. Clair County must bereversed and the cause remanded with directions to transfer this cause to Madison County.

Reversed; cause remanded with directions.

MAAG, P.J., and HOPKINS, J., concur.

 

NO. 5-01-0778

IN THE

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT


STEVEN FOLEY and RUTH FOLEY, ) Appeal from the
) Circuit Court of
            Plaintiffs-Appellees, ) St. Clair County.
)
v. ) No. 01-LM-2063
)
FRANK GREER d/b/a INSPECTIONS BY )
REQUEST, INC., ) Honorable
) Jan V. Fiss,
           Defendant-Appellant. ) Judge, presiding.

Opinion Filed: August 27, 2002


Justices: Honorable Clyde L. Kuehn, J.

Honorable Gordon E. Maag, P.J., and

Honorable Terrence J. Hopkins, J.,

Concur


Attorney David L. Antognoli, Goldenberg, Miller, Heller & Antognoli, P.C., P.O. Box 959,

for 2227 South State Route 157, Edwardsville, IL 62025

Appellant


Attorney Timothy J. Bates, 10 S. Jackson, Suite 200, Belleville, IL 62220

for

Appellees