In the

United States Court of Appeals

For the Seventh Circuit

Nos. 09-2982 & 09-3087

ALFRED JANIGA,

Plaintiff-Appellee,

v.

QUESTAR CAPITAL CORPORATION, et al.,

Defendants-Appellants.

Appeals from the United States District Court 

for the Northern District of Illinois, Eastern Division.

No. 09 C 2462—Milton I. Shadur, Judge.

ARGUED JANUARY 15, 2010—DECIDED AUGUST 2, 2010

Before WOOD, EVANS, and SYKES, Circuit Judges.

WOOD, Circuit Judge. This case poses the question

whether the court or an arbitrator is responsible for

deciding whether a particular document that the parties

signed qualifies as a contract, and if so, whether that

contract includes an arbitration clause. Alfred Janiga is

a Polish immigrant who has lived and worked in Illinois

for more than 20 years; nevertheless, to this day (by his

account) he understands only limited English. Janiga’s
2 Nos. 09-2982 & 09-3087

brother, Weislaw Hessek, runs Hessek Financial Services,

LLC (“Hessek Financial”) and is a registered representative of Questar Capital Corporation (“Questar”), a

securities broker-dealer. Problems erupted after Hessek

arranged for his brother to invest with Questar. Janiga

signed one page of Questar’s New Account Form and

began depositing money into his new account. The Form

included an arbitration clause. One year after opening

the account, and unhappy with the returns on his investment, Janiga sued Hessek, Hessek Financial, and Questar.

Defendants (to whom we refer collectively as “Questar”

unless the context requires otherwise) asked the district

court to stay proceedings and order arbitration under

the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 3, 4. The

district court decided that it could not order arbitration

immediately because it was not clear whether a contract

between Questar and Janiga even existed. It therefore

denied the motions without prejudice and told Questar

that it could renew its motion if and when the court

concluded that there was a contract. Construing this as

an order denying a motion to refer the case to arbitration, all three defendants filed this immediate appeal.

Id. § 16.

The Supreme Court has said that the responsibility to

determine the validity of the contract as a whole is assigned to the arbitrator, while specific challenges to an

arbitration clause normally remain with the court.

See Rent-A-Center, West, Inc. v. Jackson, 130 S. Ct. 2772, 2778

(2010) (agreements to arbitrate are on an equal footing

with other contracts and are subject to generally appli-
Nos. 09-2982 & 09-3087 3

cable contract defenses). But who decides whether a

contract exists at all? Janiga believes that this is an issue

for the district court. Questar takes the opposite position and urges that the arbitrators have this responsibility. The district court decided that it should address

the contract-formation question, but it refrained from

doing so on the ground that it lacked sufficient evidence

to reach a conclusion. We agree with the district court

that the existence of a contract is an issue that the courts

must decide prior to staying an action and ordering

arbitration, unless the parties have committed even that

gateway issue to the arbitrators. Id. at 2779-81. Unlike the

district court, however, we are satisfied that the record

contains enough evidence to resolve the question. That

evidence shows that the parties formed a contract and

that their agreement included an arbitration clause. We

therefore reverse the district court’s order and remand

with instructions to grant Questar’s motion to stay and

to order arbitration.

I

Janiga is the President and Secretary of Polkraft Builders

Corporation, an Illinois company that specializes in

residential and commercial remodeling. According to

Janiga, Hessek lobbied him for two years to invest with

Questar. After Janiga finally agreed to open an account

in March 2008, Hessek brought Janiga a “piece of paper”

and told him to sign it. The paper Hessek proffered

was page three of Questar’s New Account Form. Janiga

represents that Hessek never discussed “any terms of any
4 Nos. 09-2982 & 09-3087

agreement . . . including the meaning and existence of

arbitration as a dispute resolution” and, despite Janiga’s

explicit request, Hessek never provided copies of any

documents related to the account. Janiga speaks and

understands only limited English. According to Janiga,

all of his communications with Hessek were in Polish.

The New Account Form is actually just one in a series

of three connected documents; the other two forms are

the Client Agreement and the Sponsorship Program

Disclosure. All contract documents are written in English. Janiga admits that he saw and signed page three of the

New Account Form when Hessek gave it to him, but he

says that this is all that he saw. Page three, however, made

no secret of the fact that there was an arbitration clause in

the picture. Directly above Janiga’s signature, it proclaims:

“I/WE HAVE READ AND UNDERSTOOD THE

PRE-DISPUTE ARBITRATION AGREEMENT CONTAINED ON PAGE 4, PARAGRAPH 9 OF THE

CLIENT AGREEMENT AND HAVE RECEIVED A COPY

THEREOF.”

As that language indicates, the arbitration clause

appears in the separate Client Agreement, which follows

the page that Janiga signed. The clause states in part:

I (we) understand that my (our) account is subject

to the arbitration rules of the Financial Industry Regulatory Authority. Arbitration is used to resolve

a dispute between two parties. . . .

THIS AGREEMENT CONTAINS A PRE-DISPUTE

ARBITRATION CLAUSE. BY SIGNING AN ARBITRA-
Nos. 09-2982 & 09-3087 5

TION AGREEMENT, THE PARTIES AGREE AS

FOLLOWS:

(A) All parties to this agreement are giving up

the right to sue each other in court, including the

right to a trial by jury, except as provided by the

rules of the arbitration forum in which a claim is

filed.

(B) Arbitration awards are final and binding; a

party’s ability to have a court reverse or modify an

arbitration award is very limited.

. . . .

I (we) agree that all controversies that may arise

between us concerning any order or transaction, or

the continuation, performance or breach of this or

any other agreement between us, where entered into

before, on, or after the date this account is opened,

shall be determined by arbitration before a panel of

independent arbitrators set up pursuant to the rules

of the Financial Industry Regulatory Authority, or,

where applicable, a court of competent jurisdiction.

The Client Agreement specifies that New York law

governs the agreement and its enforcement, but the

arbitration clause found within the Client Agreement

provides that the FAA and Minnesota law govern the

arbitration agreement.

Once Janiga opened his account, Questar started to

send monthly statements. For a time, Janiga did not

register any complaints. Three months after signing the

agreement, Janiga invested an additional $180,000 in

his account. A year into the relationship, however, Janiga
6 Nos. 09-2982 & 09-3087

filed a complaint against Hessek, Hessek Financial, and

Questar in the United States District Court for the Northern District of Illinois. Janiga’s complaint asserted six

theories of recovery against the defendants: (1) violation

of Section 10(b) of the Securities Exchange Act of 1934

and Rule 10b-5; (2) negligence; (3) breach of fiduciary

duty; (4) fraud; (5) excessive trading and churning of an

investment account; and (6) violation of the Illinois

Fraud and Deceptive Business Practices Act.

On May 20, 2009, Questar filed a motion to dismiss, or

in the alternative, to stay proceedings and order arbitration. On June 10, 2009, Hessek and Hessek Financial

filed a separate motion asking the court to order arbitration. Janiga conceded that he “agreed to invest” with the

defendants, but he offered a number of reasons why

the district court should deny those motions and disregard the arbitration clause. To resolve these issues, the

district court held three status conferences over two

months. The first two of these addressed various

issues related to contract enforcement, such as Illinois

consumer protection law and Hessek’s purported

fiduciary duty. At the third and final status conference,

on July 10, 2009, the district court focused on the

“meeting of the minds,” in light of Janiga’s limited understanding of English and his assertion that he had never

seen more than one page of the contract. The district

court concluded that it would not stay proceedings and

order arbitration unless and until the defendants established that a contract was formed. The district court

judge orally explained his decision as follows:
Nos. 09-2982 & 09-3087 7

[T]he step that has to come first is to determine

whether there was an Agreement. And accordingly

I am at this point denying the motion to stay and to

compel arbitration . . . without prejudice for the possible renewal if it’s determined on an appropriate

record that there is indeed an Agreement to arbitrate

at all. . . . It seems to me that what [] you ought to

be thinking about is how to pose the issue in a way

that the Court can address it, whether through

hearing, I would expect, or some appropriate way.

The district court entered an order denying the motions

without prejudice on July 10, 2009. 

Questar filed a timely notice of appeal on August 7, 2009,

FED. R. APP. P. 4(a)(1)(A), and Hessek filed a separate

notice of appeal on August 20, 2009, FED. R. APP. P. 4(a)(3).

Questar’s notice of appeal was docketed as No. 09-2982;

Hessek’s appeal was docketed as No. 09-3087. We consolidated the appeals for our review.

II

Before turning to those questions, however, we must

explain why our appellate jurisdiction is secure. While

ordinarily the courts of appeals have jurisdiction only

over final decisions, 28 U.S.C. § 1291, the FAA establishes appellate jurisdiction over certain interlocutory

appeals. See Arthur Andersen LLP v. Carlisle, 129 S. Ct. 1896,

1900 (2009). It provides that an interlocutory appeal may

be taken from a district court order “refusing a stay of any

action . . . under this title” or “denying a petition . . . to
8 Nos. 09-2982 & 09-3087

order arbitration to proceed.” 9 U.S.C. § 16(a)(1)(A), (B).

We have held that this rule applies even if the district

court expressly intended to revisit the issue after additional fact-finding. See, e.g., Boomer v. AT&T Corp., 309

F.3d 404, 412-13 (7th Cir. 2002); Koveleskie v. SBC Capital

Mkts., Inc., 167 F.3d 361, 363 (7th Cir. 1999).

That said, we have also recognized that some housekeeping orders that give rise to a “delay incident to an

orderly process” are not immediately appealable. Cont’l

Cas. Co. v. Staffing Concepts, Inc., 538 F.3d 577 (7th Cir.

2008) (quoting Middleby Corp. v. Hussman Corp., 962 F.2d

614, 616 (7th Cir. 1992)). In Continental Casualty, the

district court struck without prejudice the defendants’

motion to dismiss or stay the action pending arbitration,

in order to give the court an opportunity to address

pending motions related to personal jurisdiction and

venue. 538 F.3d at 579-80. This rule recognizes that

district courts must be given the discretion to manage

their cases; routine orders that incidentally delay a decision on a motion to order arbitration fall outside the

scope of § 16.

This case involves more than an action designed to

permit an orderly process. The district court denied defendants’ motions to stay because it believed that the

defendants had not established that a contract existed.

This is the type of decision that we may review immediately. We do so now, and decide that the district

court erred in denying Questar’s motion, and that it

should take another look at Hessek and Hessek Financial’s motion.
Nos. 09-2982 & 09-3087 9

III

We begin our analysis with the FAA. 9 U.S.C. §§ 1-16.

The FAA provides that a written arbitration agreement

in certain contracts “shall be valid, irrevocable, and

enforceable, save upon such grounds as exist at law or

in equity for the revocation of any contract.” Id. § 2.

Although it is often said that there is a federal policy

in favor of arbitration, federal law places arbitration

clauses on equal footing with other contracts, not above

them. See Rent-A-Center, supra, at 2776; Gotham Holdings,

LP v. Health Grades, Inc., 580 F.3d 664, 666 (7th Cir. 2009)

(quoting Volt Information Sciences, Inc. v. Board of Trustees of

Stanford University, 489 U.S. 468, 476 (1989)). Any “preference” for arbitration is reserved for the interpretation of

the scope of a valid arbitration clause, see, e.g., AT&T

Techs., Inc. v. Communications Workers of Am., 475 U.S. 643,

649-50 (1986), which is not at issue here. The parties do not

dispute that the scope of the arbitration clause is broad

enough to encompass the issues raised in the complaint.

As we have already noted, all three defendants filed

motions under sections 3 and 4 of the FAA. Section 3

allows a party to an action in federal court to request a

stay of that action pending arbitration if a valid arbitration clause exists, and section 4 allows a party to file

a motion to order that arbitration. 9 U.S.C. §§ 3, 4. The

district court denied these motions without prejudice

pending a determination that a contract existed.

The first aspect of the district court’s ruling that Questar

challenges is the conclusion that it was the court’s job

to decide whether a contract exists. The division of labor
10 Nos. 09-2982 & 09-3087

between courts and arbitrators is a perennial question

in cases involving arbitration clauses. In Prima Paint Corp.

v. Flood & Conklin Manufacturing Co., 388 U.S. 395 (1967),

the Supreme Court announced that, when faced with

motions to stay suits or order arbitration, courts should

evaluate only the validity of the arbitration agreement;

challenges to the validity of the entire contract—e.g., fraud

in the inducement—should be left to the arbitrator.

See James v. McDonald’s Corp., 417 F.3d 672, 680 (7th Cir.

2005) (describing the Prima Paint rule). In Buckeye Check

Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006), the Court

reviewed a decision of the Supreme Court of Florida

that refused to enforce an arbitration clause in a contract that was challenged as unlawful under state law.

Applying Prima Paint and Southland Corp. v. Keating,

465 U.S. 1 (1984), the Court “conclude[d] that because

respondents challenge the Agreement, but not specifically its arbitration provisions, those provisions are

enforceable apart from the remainder of the contract.

The challenge should therefore be considered by an

arbitrator, not a court.” 546 U.S. at 446. In short, “a challenge to the validity of the contract as a whole, and not

specifically to the arbitration clause, must go to the arbitrator.” Id. at 449.

Buckeye thus reaffirmed the validity of Prima Paint in

allocating the responsibility for two types of challenges:

challenges to the validity of the arbitration agreement

and challenges to the contract as a whole. In a footnote,

however, the Court in Buckeye acknowledged the possibility of a third type of challenge, which is exactly the

issue that is before us now:
Nos. 09-2982 & 09-3087 11

The issue of the contract’s validity is different from

the issue whether any agreement between the

alleged obligor and obligee was ever concluded. Our

opinion today addresses only the former, and

does not speak to the issue decided in the cases cited

by respondents (and by the Florida Supreme Court),

which hold that it is for courts to decide whether the

alleged obligor ever signed the contract, whether

the signor lacked authority to commit the alleged

principal, and whether the signor lacked the mental

capacity to assent.

Id. at 444 n.1 (internal citations omitted). See Rent-ACenter, supra, at 2778, n.2 (“The issue of the agreement’s

‘validity’ is different from the issue whether any agreement between the parties ‘was ever concluded,’ and,

as in [Buckeye], we address only the former.”). As we

understand these footnotes, the Court was reserving

for another day the question who is responsible for deciding whether the parties formed a contract at all.

In Granite Rock Co. v. International Brotherhood of

Teamsters, 130 S. Ct. 2847 (2010), the Court eliminated

all doubt about the answer to that question, when it

said “[i]t is similarly well settled that where the dispute at issue concerns contract formation, the dispute is

generally for courts to decide.” Id. at 2855-56. In so doing,

it endorsed the position that this court had taken before

Buckeye. See, e.g., Deputy v. Lehman Bros., Inc., 345 F.3d 494

(7th Cir. 2003) (remanding a case to the district court

to assess whether there was a meeting of the minds in

light of a motion to compel arbitration); Sphere Drake Ins.
12 Nos. 09-2982 & 09-3087

Ltd. v. All Am. Ins. Co., 256 F.3d 587, 591 (7th Cir. 2001)

(holding that “as arbitration depends on a valid contract

an argument that the contract does not exist can’t

logically be resolved by the arbitrators”); Gibson v. Neighborhood Health Clinics, 121 F.3d 1126 (7th Cir. 1997) (addressing the argument that a promise lacked consideration as a judicially-determined issue). This rule follows

logically from the Court’s consistent emphasis on the

fact that arbitration is a matter of contract. See, e.g., Rent-ACenter, supra, at 2776.

On this point, therefore, the district court was correct—

the court must decide whether a contract exists before

it decides whether to stay an action and order arbitration. The only place where we part company with its

conclusion is its belief that it was not able to resolve

this threshold question. Since Janiga does not challenge

the validity of the arbitration clause itself, the district

court should have constrained its review to the narrow

question whether a contract existed between the parties.

In our view, the record contains enough information to

permit a decision on the existence of a contract. As our

review is de novo, we can resolve that issue ourselves.

See Newkirk v. Vill. of Steger, 536 F.3d 771, 774 (7th Cir.

2008) (reviewing the formation of a contract de novo).

What concerned the district court was whether Janiga

appreciated the nature of the agreement that he had

signed, or, as the court put it, whether there was a

meeting of the minds. Janiga follows the same path in

the arguments he made both in the district court and

now on appeal. These arguments, if accepted, might lead
Nos. 09-2982 & 09-3087 13

to the conclusion that the contract is not enforceable.

For example, Janiga argues that he did not get a copy of

the contract, he never read it, he could not read it if he

tried, and he did not know what he agreed to do. He

also argues that Hessek’s fiduciary duty, Illinois consumer protection law, and procedural unconscionability

invalidate the contract. But none of these arguments

refutes the basic point that Janiga signed an agreement

with Questar (using the services of Hessek) and that

the parties performed under that agreement for a year

or so. We are left only with the question whether that

contract is enforceable, and that is the kind of issue that

Prima Paint, Buckeye, and Rent-A-Center put squarely in

the arbitrator’s box.

Looking more formally at the question whether a contract exists between Janiga and Questar, we recognize

first that contract formation is governed by state law.

See First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938,

944 (1995). There is some question here about which

state’s law applies: the contract was signed in Illinois;

it provides that its enforcement shall be governed by the

laws of New York; and it separately provides that the

arbitration agreement is subject to Minnesota law. We

need not dwell on that problem, however, because we

see no difference among the laws of those three states

that would be dispositive. The goal in all three states is

to give effect to the intent of the parties as demonstrated

through objective conduct. Carey v. Richards Bldg. Supply

Co., 856 N.E.2d 24, 27 (Ill. 2006); Flores v. Lower E. Side

Serv. Ctr., 828 N.E.2d 593, 597 (N.Y. 2005); Hickman v.

SAFECO Ins. Co. of Am., 695 N.W.2d 365, 370 n.7 (Minn.
14 Nos. 09-2982 & 09-3087

2005). If the terms of the contract are unambiguous,

the court must enforce the contract as written. Lewitton v.

ITA Software, Inc., 585 F.3d 377, 380 (7th Cir. 2009) (applying Illinois law); Graev v. Graev, 898 N.E.2d 909, 918

(N.Y. 2008); Metro. Airports Comm’n v. Noble, 763

N.W.2d 639, 645 (Minn. 2009).

The problem for Janiga is that he signed a contract, and

that the paper he signed refers to arbitration. Janiga’s

signature—which he admits was given voluntarily—

objectively demonstrated his assent to the contract.

Indeed, Janiga admits that he agreed to open a brokerage

account. All that is left for us is to determine whether

the contract he signed included an arbitration clause. It

does. Even if we limit our review to the one page

that Janiga signed, it is impossible to avoid the conclusion that he agreed to arbitration. As we noted at the

outset of this opinion, directly above his signature is the

following statement, in all capital letters: “I/WE HAVE

READ AND UNDERSTOOD THE PRE-DISPUTE ARBITRATION AGREEMENT CONTAINED ON PAGE 4,

PARAGRAPH 9 OF THE CLIENT AGREEMENT AND

HAVE RECEIVED A COPY THEREOF.” This clause is

unambiguous; Janiga acknowledged by his signature

that he read, understood, and received a copy of the

arbitration agreement, and this clause (distinct from the

arbitration clause itself) says that disputes would be

subject to arbitration. Questar also offers various pieces

of objective evidence that support its claim that a

contract exists, including Janiga’s two deposits and his

admission that he agreed to invest. Again, Janiga’s various

complaints about enforceability are not at issue here;
Nos. 09-2982 & 09-3087 15

the only issue for the court is whether a contract was

formed. It was.

Janiga finally argues that the Seventh Amendment bars

arbitration. But that argument proves much too much;

parties are entitled to opt in a contract for an alternative method of dispute resolution that involves neither

courts nor juries. That is implicit in any arbitration agreement. Here there is more: the plain language of the

contract includes an express waiver of the right to a jury

trial, and we uphold such waivers even in form contracts. See, e.g., Sherwood v. Marquette Transp. Co., 587 F.3d

841, 842 (7th Cir. 2009). The district court therefore

should order arbitration between Janiga and Questar.

We cannot be as confident at this point that the arbitration agreement between Janiga and Questar also

sweeps in Hessek and Hessek Financial. The latter two

defendants have asked us to hold that the arbitration

clause benefits and binds them to the same extent as

Questar. Hessek’s primary argument is that he and his

company are agents of Questar. Certainly an agent may

bind a principal to an arbitration agreement, see Zurich

Am. Ins. Co. v. Watts Indus., 417 F.3d 682, 687 (7th Cir.

2005), so there is no dispute that Questar is a party to the

contract even though it was acting through Hessek.

Hessek’s appeal asks whether agents can receive the

benefit of an arbitration agreement between their

principal and a third party. We have answered that

question in the affirmative for employees acting within

the scope of their agency, Dunmire v. Schneider, 481 F.3d

465, 467 (7th Cir. 2007), and there does not seem to be
16 Nos. 09-2982 & 09-3087

any reason to change the rule for non-employee agents.

The remaining questions, therefore, are whether Hessek

and Hessek Financial were agents of Questar, and whether

the claims asserted here are within the scope of their

agency. This is an issue about the arbitrability of certain

claims, and so it should be decided by the court. But

since the district court has not had the opportunity to

pass on these issues in the first instance, we remand

this much of the case to the district court so that it can

make the findings necessary to decide whether these

contract terms apply to Hessek and Hessek Financial

based on agency principles or otherwise.

Our decision in this appeal should not be read to pass

any judgment on Janiga’s arguments regarding the

enforceability of the contract. Prima Paint and Buckeye

do not banish these arguments; they simply assign the

responsibility for evaluating them to an arbitrator.

For these reasons, we REVERSE the decision of the

district court to deny Questar’s motion and REMAND for

further proceedings consistent with this opinion.

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