Order Form (01/2005)

United States District Court, Northern District of Illinois

Name of Assigned Judge

or Magistrate Judge

Morton Denlow Sitting Judge if Other

than Assigned Judge

CASE NUMBER 12 C 423 DATE 9/12/2012

CASE

TITLE

Karla Marquis v. Avalonbay Communities, Inc., et al

DOCKET ENTRY TEXT

Motion hearing held on 9/12/2012. The Court grants Third-Party Defendant ValleyCrest Landscape

Maintenance, Inc.’s (“ValleyCrest”) Third-Party Defendant’s Motion to Compel Arbitration and to

Stay Litigation as to Defendants’/Third-Party Plaintiffs’ Avalon Bay Communities, Inc. and Avalon

Illinois Value III LLC (“Avalon”) Third-Party Complaint . [Dkt. 38]. 

O[ For further details see text below.] Docketing to mail notices.

00:10

STATEMENT

The Services Agreement between Avalon and ValleyCrest contains an Arbitration/Litigation

provision which provides in relevant part: “Any controversy or claim arising out of or relating to this

Agreement or the breach thereof will be decided by binding arbitration....” [Dkt. 38-3 at p. 11]. 

ValleyCrest cured any procedural defects in its original demand for arbitration pursuant to the revised

demand attached to the reply brief. [Dkt. 44-1]. 

To compel arbitration, a party “need only show”: 1) an agreement to arbitrate; 2) a dispute within

the scope of the agreement; and 3) refusal by the opposing party to proceed to arbitration. Zurich Am.

Ins. Co. v. Watts Indus., Inc., 446 F.3d 577, 580 (7th Cir. 2006). An allegation of negligence based upon

a contractual obligation, although sounding in tort rather than contract, is nonetheless defined by the

contract. Eichengreen v. Rollins, Inc., 757 N.E.2d 952, 959 (Ill. App. 2001). 

The Court finds Board of Managers of the Courtyards at the Woodlands Condominium

12 C 423 Karla Marquis v. Avalonbay Communities, Inc. Page 1 of 2
STATEMENT

Association v. Iko Chicago, Inc., 697 N.E.2d 727 (Ill. 1998), to be controlling and persuasive. In that

case, the Illinois Supreme Court compelled arbitration where a named defendant sued a non-party for

third-party conditional contribution or indemnification. Id. at 729. 

The Board of Managers court held:

“We agree with [third-party defendant] that once the trial court determines that a valid arbitration

agreement exists, the court must compel arbitration, even when the principle litigation involves parties

that are not signatories to the arbitration agreement.... We base this holding primarily on our adherence

to the right of parties to freely contract. Arbitration is "consensual"; a creature of contract.... In essence,

once a contract containing a valid arbitration clause has been executed, the parties are irrevocably

committed to arbitrate all disputes arising under the agreement. The parties, therefore, are bound by their

contract with its obligations, duties, and liabilities.

Board of Managers, 697 N.E.2d 727, 731-32 (citations omitted).

As in the case at bar, the third-party defendant in Board of Managers was not sued by the plaintiff

directly. Id.; see Peregrine Fin. Grp., Inc. v. Ambuehl, 722 N.E.2d 723, 731 (Ill. App. 1999) (“[Board

of Managers] recognized a third-party defendant’s contractual right to arbitrate the third-party plaintiff’s

alleged right to contribution or indemnification. The court held that the contractual right to arbitrate

outweighed any public considerations favoring joinder of claims.”); compare Czarnik v. Wendover Fin.

Servs., 870 N.E.2d 875 (Ill. App. 2007) (refusing to compel arbitration between two defendants named

by the plaintiff based on collateral estoppel and distinguishing Board of Managers). ValleyCrest has not

been sued by Plaintiff Marquis. The question of ValleyCrest’s liability for contribution is an arbitral

claim. For the reasons stated above and in open court on September 12, 2012, the Court grants

ValleyCrest’s Motion to Compel Arbitration and Stay Litigation as to Avalon and ValleyCrest; the

remaining portions of the case may proceed.

12 C 423 Karla Marquis v. Avalonbay Communities, Inc. Page 2 of 2