Court Opinion

ID: 4065537
Source: CourtListenerOpinion
Date Created: 2016-09-29 22:04:34.455262+00
Date Added: 2024-06-11T14:32:21.512200
License: Public Domain

2016 IL App (2d) 160275
                                  No. 2-16-0275
                         Opinion filed September 29, 2016
_____________________________________________________________________________

                                              IN THE

                              APPELLATE COURT OF ILLINOIS

                              SECOND DISTRICT
______________________________________________________________________________

STATE FARM FIRE AND CASUALTY             ) Appeal from the Circuit Court
COMPANY, as Subrogee of Cecilia Montero, ) of McHenry County.
                                         )
      Plaintiff-Appellee,                )
                                         )
v.                                       ) No. 15-AR-148
                                         )
WATTS REGULATOR COMPANY,                 ) Honorable
                                         ) Michael J. Chmiel,
      Defendant-Appellant.               ) Judge, Presiding.
______________________________________________________________________________

       JUSTICE JORGENSEN delivered the judgment of the court, with opinion.
       Justices Hutchinson and Zenoff concurred in the judgment and opinion

                                            OPINION

¶1     After plaintiff, State Farm Fire and Casualty Company, filed a subrogation suit against

defendant, Watts Regulator Company, seeking to recover payments it made to its insured, Cecilia

Montero, Watts moved to compel arbitration through Arbitration Forums, Inc. The parties were

signatories to that entity’s “Property Subrogation Arbitration Agreement” (Arbitration

Agreement), and they disagreed over the interpretation of an amendment to the Arbitration

Agreement, which would determine whether Montero’s claim was subject to compulsory

arbitration. Watts argued that the claim’s accrual date (i.e., the date of loss) was determinative of

whether the amendment applied, and State Farm took the position that the filing date was
2016 IL App (2d) 160275

determinative. The trial court ruled in State Farm’s favor, denying Watts’s motion to compel

arbitration. We affirm.

¶2                                      I. BACKGROUND

¶3     This case arose after Montero’s home sustained water damage. The event occurred on

September 7, 2013. At that time, the Arbitration Agreement mandated that signatories forgo

litigation and submit certain personal, commercial, or self-insured property subrogation claims to

arbitration. Specifically, arbitration was compulsory for property subrogation claims seeking up

to $100,000.

¶4     On November 4, 2014, Arbitration Forums posted a bulletin on its website, notifying its

members that the Arbitration Agreement would be amended, effective January 1, 2015, to

exclude all product-liability claims from the compulsory-arbitration provision. Specifically, the

amendment stated that “cases filed prior to January 1, 2015, will remain in arbitration’s

jurisdiction and will be processed to hearing.” (Emphasis added.)

¶5     On April 15, 2015, State Farm filed its suit against Watts, seeking recovery of certain

amounts it paid to Montero. In an amended complaint, State Farm alleged that, on September 7,

2013, a fitting on a Watts-manufactured FloodSafe-brand supply line to Montero’s Wonder Lake

home fractured and flooded the kitchen, hallway, and dining room, causing extensive damage.

State Farm raised two counts, strict liability and negligence, 1 alleging that it paid Montero

$14,385 for expenses and repairs under the terms of Montero’s policy and that it also sustained a

loss of $1,000 in the form of the deductible amount under the policy, thereby becoming

subrogated to her rights thereunder. State Farm sought a judgment of $15,385.

       1
           There are two types of product-liability claims: strict-liability and negligence claims.

Blue v. Environmental Engineering, Inc., 215 Ill. 2d 78, 89 (2005).

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¶6      On August 21, 2015, Watts filed its answer, denying the allegations and raising several

affirmative defenses, including contributory negligence and spoliation. It also reserved the right

to assert additional affirmative defenses, “once evidence is uncovered during discovery in this

litigation that would support such additional defenses.”

¶7      On December 22, 2015, Watts moved to compel arbitration through Arbitration Forums

and to stay or dismiss the arbitration proceedings through the trial court, 2 asserting that the claim

here accrued on September 7, 2013, which was prior to the effective date of the Arbitration

Agreement amendment, and that thus the amendment did not apply. It also noted that State Farm

had stipulated in other cases that claims that accrued prior to the amendment were subject to the

Arbitration Agreement.      Watts argued, as it does in this appeal, that: (1) State Farm was

judicially estopped from refusing to arbitrate Montero’s claim through Arbitration Forums; and

(2) the amendment did not apply to the claim.

¶8      The Arbitration Agreement, which the parties agree was effective when the claim accrued

in this case, states that Arbitration Forums is authorized by signatory companies to make

appropriate rules and regulations for the presentation and determination of controversies under

the agreement. The amendment at issue states, in relevant part: “While the use of the Property

Program to resolve disputes involving product liability claims arising from an alleged defective

product will no longer be compulsory as of January 1, 2015, cases filed prior to January 1, 2015,

will remain in arbitration’s jurisdiction and will be processed to hearing.” (Emphasis added.)

        2
            Pursuant to Illinois Supreme Court Rule 86 (eff. Jan. 1, 1994), the circuit court of

McHenry County’s local rules provide that certain civil actions, including claims such as

Montero’s, are subject to mandatory arbitration. 22nd Judicial Cir. Ct. R. 17.01 (June 1, 2007).

The trial court had set this case for arbitration pursuant to the local rule.

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¶9     On February 25, 2016, State Farm filed its response to Watts’s motion to compel, arguing

that, because the filing date determined whether the amendment applied, and because it filed its

suit after the amendment’s effective date, the claim need not be arbitrated under the Arbitration

Agreement. It also noted that Watts filed its motion to compel after it filed an appearance and an

answer to State Farm’s complaint.        State Farm noted that Watts was a signatory to the

Arbitration Agreement and in other jurisdictions had unsuccessfully challenged Arbitration

Forums’ ability to alter the terms of the Arbitration Agreement.

¶ 10   On March 4, 2016, Watts moved to continue the court-set arbitration hearing, which was

scheduled for April 8, 2016. As relevant here, Watts alleged that, shortly after Watts answered

the amended complaint, State Farm approached Watts about resolving the claim through

Arbitration Forums, although State Farm ultimately refused to submit the matter to arbitration

through that entity. Watts noted that it continued to take the positions that State Farm should be

ordered to submit to arbitration through Arbitration Forums and that the court-set arbitration

should be stayed or dismissed, but, alternatively, Watts asked that the court continue the court-

set arbitration for 60 days.

¶ 11   In its reply in support of its motion to compel, Watts argued that, because State Farm

failed to address judicial estoppel in its response to Watts’s motion, it had conceded the issue.

Watts also alleged that State Farm had initially, including in September 2015, represented that it

would agree to voluntarily dismiss the suit and submit the matter to arbitration through

Arbitration Forums.     It attached correspondence between the parties’ counsel, including a

September 23, 2015, email wherein State Farm’s counsel stated that he “will file a motion to

voluntarily dismiss the suit and strike the [court-set] Arb date.”

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¶ 12    On March 18, 2016, the trial court denied Watts’s motion to compel arbitration. It also

struck the April 8, 2016, court-set arbitration hearing date and set a new date.

¶ 13    Pursuant to Illinois Supreme Court Rule 307(a)(1) (eff. Jan. 1, 2016) (interlocutory

appeals as of right concerning an injunction), Watts appeals the denial of its motion to compel

arbitration.

¶ 14                                       II. ANALYSIS

¶ 15                                        A. Forfeiture

¶ 16    Preliminarily, we address State Farm’s argument that Watts has forfeited any challenge to

arbitration through the trial court, because Watts did not raise the issue in its answer and

affirmative defenses. Watts responds that State Farm’s argument is itself forfeited because State

Farm raises it for the first time on appeal. We agree with Watts that State Farm’s argument is

forfeited. Indeed, as noted above, State Farm’s counsel stated in a September 23, 2015, email

that he “will file a motion to voluntarily dismiss the suit and strike the Arb date.” Given these

circumstances, we decline to find Watts’s arbitration argument forfeited.

¶ 17                                    B. Judicial Estoppel

¶ 18    Turning to the merits, Watts argues first that judicial estoppel precludes State Farm from

opposing arbitration through Arbitration Forums, because its opposition is directly contrary to its

position in other cases across the country against Watts. Watts acknowledges that the trial court

did not address the application of judicial estoppel here, but it notes that it raised the issue in its

motion to compel arbitration. Watts contends that State Farm should have been considered to

have forfeited any opposition to the application of judicial estoppel and that the trial court erred

in denying Watts’s motion to compel. Watts also contends that judicial estoppel applies to

shifting legal, not merely factual, positions. For the following reasons, we conclude that judicial

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estoppel does not apply, because State Farm’s opposition to arbitration through Arbitration

Forums is based on its legal interpretation of the Arbitration Agreement and judicial estoppel

applies only to inconsistent factual positions.

¶ 19   Judicial estoppel is an equitable doctrine invoked by the court at its discretion. New

Hampshire v. Maine, 532 U.S. 742, 750 (2001); see also Ceres Terminals, Inc. v. Chicago City

Bank & Trust Co., 259 Ill. App. 3d 836, 850-51 (1994) (trial court’s determination of whether to

apply judicial estoppel is reviewed under abuse-of-discretion standard). The doctrine’s purpose

is to protect the integrity of the judicial process by prohibiting parties from “deliberately

changing positions” according to the exigencies of the moment. (Internal quotation marks

omitted.) New Hampshire, 532 U.S. at 749-50. The judicial-estoppel doctrine applies when

litigants take a position in a judicial proceeding, benefit from that position, and then seek to take

a contrary position in a later proceeding. Barack Ferrazzano Kirschbaum Perlman & Nagelberg

v. Loffredi, 342 Ill. App. 3d 453, 460 (2003).

¶ 20   Generally, for judicial estoppel to apply, five requirements must be shown. The party to

be estopped must: (1) have taken two positions (2) that are factually inconsistent (3) in separate

judicial or quasi-judicial proceedings, (4) with the intent that the trier of fact accept the facts

alleged as true, and (5) have succeeded in the first proceeding and received some benefit from it.

Id. A statement under oath is not required. Seymour v. Collins, 2015 IL 118432, ¶ 38.

¶ 21   Here, Watts contends that State Farm’s position in this case—that the filing date

determines whether Montero’s claim is subject to compulsory arbitration through Arbitration

Forums—is contrary to a recent position that it took in a Tennessee case. Specifically, in State

Farm Fire & Casualty Co. v. Watts Water Technologies, Inc., No. 1750549, slip op. at ___ (D.

Tenn. Nov. 5, 2015), State Farm consented to an agreed order that the Arbitration Agreement

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was in effect when the claim “arose and accrued (i.e., the date of loss, which was January 20,

2013)”; thus, the court ordered arbitration through Arbitration Forums and noted that the case

was nonsuited by State Farm. 3 Watts argues that State Farm should be estopped from taking a

contrary position here on the same issue. Furthermore, Watts contends that State Farm forfeited

the judicial-estoppel issue because it did not respond to it when Watts raised it in its motion to

compel arbitration. Thus, Watts reasons, State Farm cannot now argue that the amendment to

the Arbitration Agreement applies to the Montero claim, which accrued in 2013.

¶ 22   It has been noted that the judicial-estoppel doctrine:

       “does not apply to all types of inconsistency, but only inconsistency in assertions of fact.

       See People v. Jones, 223 Ill. 2d 569, 598 (2006) (State was not judicially estopped from

       changing its position on whether surcharge under section 5-9-1.1(c) of the Unified Code

       of Corrections (730 ILCS 5/5-9-1.1(c) (West 2004)) for a spinal research fund was a ‘fee’

       rather than a ‘fine’ because these positions were ‘legally inconsistent,’ not ‘factually

       inconsistent’); Cress v. Recreation Services, Inc., 341 Ill. App. 3d 149, 172 (2003)

       (plaintiff was not barred from arguing that federal law preempted his state law contract

       claims even though he previously argued the opposite; judicial estoppel ‘does not apply

       to legal positions’).” McNamee v. Sandore, 373 Ill. App. 3d 636, 649-50 (2007).

Contrary to Watts’s claim, although older and federal cases have applied judicial estoppel to

inconsistent legal positions (see Pepper Construction Co. v. Palmolive Tower Condominiums,

LLC, 2016 IL App (1st) 142754, ¶ 66 (citing cases)), the supreme court has rejected this position

(People v. Jones, 223 Ill. 2d 569, 598 (2006) (judicial estoppel does not apply to positions that

were “merely legally inconsistent”)).

       3
           Watts attached a copy of this order to its motion to compel arbitration.

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¶ 23   We conclude that judicial estoppel does not prevent State Farm from taking a position in

this case concerning the interpretation of the amendment to the Arbitration Agreement―a legal

question―allegedly inconsistent with the position it has taken in other cases concerning the

same contract. Judicial estoppel does not apply to inconsistent legal positions.

¶ 24                                 C. Arbitration Agreement

¶ 25   Next, turning to the primary issue on appeal, Watts argues that the trial court erred in

denying its motion to compel arbitration pursuant to the parties’ agreement with Arbitration

Forums, because claims that accrued prior to the amendment of the Arbitration Agreement, such

as Montero’s, remain subject to compulsory arbitration thereunder. For the following reasons,

we disagree.

¶ 26   Interpretation of an arbitration agreement presents a question of law, which we review de

novo. Brown v. Delfre, 2012 IL App (2d) 111086, ¶ 11. The standard of review is also de novo

where the trial court’s denial of a motion to compel arbitration, such as here, is based upon the

interpretation of the underlying contract. Id. (citing Caligiuri v. First Colony Life Insurance Co.,

318 Ill. App. 3d 793, 800 (2000)).

¶ 27   Arbitration contracts are interpreted in the same manner and according to the same rules

as are all other contracts. J&K Cement Construction, Inc. v. Montalbano Builders, Inc., 119 Ill.

App. 3d 663, 669 (1983). “The primary objective in construing a contract is to give effect to the

intent of the parties.” Gallagher v. Lenart, 226 Ill. 2d 208, 232 (2007). A court may resort to

rules of construction only where the language of the agreement is ambiguous. In re Estate of

Chaitlen, 179 Ill. App. 3d 287, 291 (1989). Where the terms of an agreement are clear and

unambiguous, they will be given their plain and ordinary meanings, and the parties’ intent must

be determined from the language of the agreement alone. Reynolds v. Coleman, 173 Ill. App. 3d

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585, 593 (1988). A contract is ambiguous when it is reasonably capable of being understood in

more than one way. Zurich Midwest, Inc. v. St. Paul Fire & Marine Insurance Co., 159 Ill. App.
3d 961, 963 (1987). The mere fact that the parties have different views of the meaning of the

contract does not render the contract ambiguous. Id.

¶ 28   Illinois public policy favors arbitration. See City of Centralia v. Natkin & Co., 257 Ill.

App. 3d 993, 996 (1994). It also favors consistency with other states in the enforcement and

interpretation of arbitration agreements. See Bass v. SMG, Inc., 328 Ill. App. 3d 492, 497

(2002). However, the presumption of arbitration is overcome where an express provision in an

arbitration agreement excludes certain claims from arbitration. AT&T Technologies, Inc. v.

Communications Workers of America, 475 U.S. 643, 650 (1986).

¶ 29   Watts relies on case law that, it contends, stands for the proposition that an arbitration

clause survives the contract’s expiration because public policy favors arbitration and any

ambiguity in a contract containing an arbitration provision must be resolved in favor of

arbitration. See Litton Financial Printing Division, a Division of Litton Business Systems, Inc. v.

National Labor Relations Board, 501 U.S. 190, 205-10 (1991) (collective bargaining agreement

that contained arbitration provisions expired, and, one year later, company laid off certain

employees; Court noted that, absent explicit agreement that benefits continue past expiration, a

postexpiration grievance arises under contract only where (1) it involves facts that arose before

expiration,   (2) a postexpiration action infringes a right that accrued or vested under the

agreement, or (3) under normal contract-interpretation principles, the right survives expiration of

the remainder of the agreement; however, Court held that layoff dispute was not arbitrable,

because order of layoffs was to be determined by nonconstant factors and, thus, it could not be

inferred whether parties intended to freeze any particular order of layoffs or vest any contractual

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right as of the agreement’s expiration); Nolde Brothers, Inc. v. Local No. 358, Bakery &

Confectionery Workers Union, AFL-CIO, 430 U.S. 243, 253-55 (1977) (union’s claim for

severance pay pursuant to expired collective bargaining agreement was subject to contract’s

arbitration provisions; Court noted that, where the dispute involves provision in expired

agreement, presumptions favoring arbitration must be expressly negated or negated by clear

implication; further noting that an alternative holding “would permit the employer to cut off all

arbitration of severance-pay claims by terminating an existing contract simultaneously with

closing business operations”); Huffman v. Hilltop Cos., 747 F.3d 391, 394-97 (6th Cir. 2014)

(broadly worded arbitration clause in employment agreement applied after expiration of contract,

even though it (and noncompete, severability, and integration clauses) was not listed in

agreement’s survival clause; there is a strong policy in federal arbitration statute favoring

arbitration and, thus, a presumption of arbitrability; any ambiguity concerning the applicability

of arbitration clause is resolved in favor of arbitration; fact that arbitration clause was not

included in survival clause was not determinative, because survival clause was not an exhaustive

list and, thus, this created ambiguity that court resolved in favor of arbitration); Goshawk

Dedicated Ltd. v. Portsmouth Settlement Company I, Inc., 466 F. Supp. 2d 1293, 1298-1301

(N.D. Ga. 2006) (applying Georgia law and holding that novation—assignment—of insurance

contract did not extinguish arbitration provision; arbitration provision controlled any dispute

arising out of the performance of the original agreement; “arbitration agreements are presumed

to survive the termination of a contract”); Liberty University, Inc. v. Kemper Securities Group,

Inc., 758 F. Supp. 1148, 1152-53 (W.D. Va. 1991) (noting that arbitration clause survives

termination of a contract as to matter occurring prior to termination of contract or subject to the

obligations of the contract, but holding that arbitration clause at issue in expired investment-

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banking agreement did not survive agreement’s termination; after expiration, parties embarked

on a new contract that was ultimately memorialized but not executed and that contained no

arbitration clause; this second contract and dispute—negligence for failure to underwrite and

purchase and/or distribute securities—arose three months after expiration of first contract);

Mendez v. Trustees of Boston University, 285 N.E.2d 446, 448 (Mass. 1972) (noting that a

contract’s termination does not necessarily terminate an arbitration provision therein, but holding

that provision did not apply where a teacher had abandoned her employment contract and had

not rendered services thereunder); In re Primex International Corp. v. Wal-Mart Stores, Inc., 679
N.E.2d 624, 628 (N.Y. 1997) (parties entered into three successive service agreements, of which

only the first two contained an arbitration clause; during the term of the third agreement, which

contained a merger clause, a dispute arose, and the defendant sued for breach of all three

agreements; court held that the merger clause did not act to retroactively revoke parties’

obligations to arbitrate claims arising under the first two agreements; court noted that, absent

clear manifestation of a contrary intent, there is a presumption that the parties intended

arbitration clause to survive termination of agreement as to subsequent disputes arising under the

agreement; further noting that there was no good reason why the same principle should not apply

as to arbitration arising out of antecedent contracts, when termination of those contracts is

attributable to a general merger clause in a subsequent agreement).

¶ 30   We find the cases upon which Watts relies distinguishable because they involve contracts

that contain arbitration clauses. Here, in contrast, the issue is the interpretation of an amendment

to an existing arbitration agreement. It is not whether an arbitration clause continued to be in

effect despite the expiration of an underlying contract. We must interpret the amendment and, as

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explained below, need not assess the presumptions that were necessary in the analyses in the

foregoing cases, where the contracts were ambiguous.

¶ 31   To that end, we next determine whether the amendment is ambiguous. It provides, in

relevant part: “While the use of the Property Program to resolve disputes involving product

liability claims arising from an alleged defective product will no longer be compulsory as of

January 1, 2015, cases filed prior to January 1, 2015, will remain in arbitration’s jurisdiction and

will be processed to hearing.” (Emphases added.) We conclude that the amendment is not

ambiguous. In our view, the amendment unambiguously reflects that the filing date, not the

event date or date of loss, determines whether compulsory arbitration applies to a claim. The

amendment clearly states that cases filed prior to January 1, 2015, will remain subject to

compulsory arbitration. Necessarily, if a claim was filed on or after January 1, 2015, the only

reading of the amendment is that the claim does not remain subject to the agreement. Here,

Montero’s claim was filed on April 15, 2015, and, therefore, it is not subject to compulsory

arbitration through Arbitration Forums.

¶ 32   We reject Watts’s argument that the agreement is silent as to claims that accrued prior to

the amendment’s effective date and that thus there is a presumption of arbitrability. Again, in

our view, the amendment is clear that, because Montero’s claim was filed after January 1, 2015,

it is not subject to compulsory arbitration through Arbitration Forums. We need not engage in

any presumptions. We also reject Watts’s contentions that it never agreed to retroactively nullify

its rights that accrued under the Arbitration Agreement. Watts ignores the fact that, by signing

the Arbitration Agreement, it expressly agreed to be bound by Arbitration Forums’ rules. Article

5 of the Arbitration Agreement, effective May 2, 2005, states that Arbitration Forums, as

representative of the signatory companies, is authorized to “make appropriate Rules and

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Regulations for the presentation and determination of controversies under this Agreement.”

Watts does not assert, for example, that the amendment somehow exceeded Arbitration Forums’

authority under the Arbitration Agreement or is otherwise invalid. Rather, it essentially argues

that we should adopt its reading of the amendment. We decline to do so when the key language

in the amendment is clear.

¶ 33   Watts also argues that “claims” and “cases” are distinct concepts and that, because the

amendment addresses only “cases filed prior to January 1, 2015” (emphasis added), it is

ambiguous with respect to claims that arose (i.e., had a date of loss) before that date, such as the

Montero claim, and thus there arises a presumption of arbitration with respect to the claim. This

argument also fails. The amendment, again, states that “cases filed prior to January 1, 2015, will

remain in arbitration’s jurisdiction and will be processed to hearing.” (Emphases added.) This

provision is clear that the only disputes that “will be processed to hearing” are “cases filed prior

to January 1, 2015” (emphasis added). Indeed, illustrating the fact that the date upon which a

claim arose is not significant for purposes of the agreement, article 2 (addressing exclusions) of

the agreement states that an excluded claim includes “any claim [for] which a lawsuit was

instituted prior to, and is pending, at the time the [Arbitration] Agreement is signed.” Thus,

when an entity becomes a signatory, a claim for which a lawsuit has been filed and is pending is

excluded from the agreement. Had Arbitration Forums intended that the date a claim arose

would determine when arbitration is compulsory, the agreement would explicitly say so.

However, it does not.

¶ 34   Watts also argues that this case raises the concern that parties like State Farm can avoid

their obligations to arbitrate by waiting until an arbitration agreement expires. This concern,

according to Watts, has been acknowledged in case law. See Litton, 501 U.S. at 205-10; Nolde

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Brothers, 430 U.S. at 253-55. We disagree with Watts that the scenario it outlines is precisely

what occurred here. The concern raised in the cases it cites is that parties to a contract might

avoid their obligations to arbitrate by waiting until a contract expires and bringing an action

concerning a dispute that arose while the contract was in effect. However, the court-fashioned

presumption of arbitrability forecloses such manipulation and avoidance of obligations. In any

event, we do not believe that this case presents exactly such a scenario.         The Arbitration

Agreement and the amendment were presumably drafted exclusively by Arbitration Forums, and

Watts and State Farm agreed to the agreement’s terms, including to be bound by Arbitration

Forums’ rules. To engage in the manipulation and delay that Watts suggests, State Farm would

have had to divine that Arbitration Forums was going to amend the agreement in a fashion that it

deemed favorable to it with respect to Montero’s claim. This is fantastical. We do acknowledge

that, once Arbitration Forums announced the amendment (on November 4, 2014), State Farm

theoretically could have delayed filing the Montero claim until January 1, 2015, a period of 56

days. However, Watts points to no evidence that State Farm actually manipulated its filing date

for this purpose, and, as in every case, State Farm had to be cognizant of the two-year limitations

period for product-liability claims (735 ILCS 5/13-213(d) (West 2014)).

¶ 35   In summary, the amendment to the Arbitration Agreement unambiguously excludes

Montero’s claim from compulsory arbitration through Arbitration Forums.

¶ 36                             D. Motion Taken With the Case

¶ 37   In a motion we ordered taken with this case, Watts moves to strike the affidavit and

declaration of Timothy McKernan that State Farm included in the appendix to its brief. The

affidavit, dated October 8, 2015, and submitted to a California trial court in Neighborhood Spirit

Property & Casualty Co. v. Watts Regulator Co., No. 8:15-CV-00199 DOC (C.D. Cal. Nov. 2,

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2015), states that McKernan is the manager of quality, training, and arbitration rules for

Arbitration Forums and that he oversees the application of the arbitration agreements and rules

governing disputes between signatory companies. Addressing the arbitration agreement in that

case (which is presumably identical to the one at issue here), McKernan averred that no

Arbitration Forum rules “support the position that the date of loss dictates whether the product

liability dispute falls within the jurisdiction of Arbitration Forums, Inc.” He also averred that

Arbitration Forums has no jurisdiction over claims filed after January 1, 2015, unless both parties

consent.

¶ 38   In its motion, Watts argues that McKernan’s affidavit consists of his interpretation of the

Arbitration Agreement here and was also submitted in two foreign cases between Farmers

Insurance and Watts, where State Farm was not a party. Watts also contends that State Farm did

not submit the affidavit to the trial court in this case. Watts argues that, because the affidavit was

not submitted to the trial court, is mentioned merely in a footnote in State Farm’s brief, and

addresses the key issue in this case (i.e., interpretation of the Arbitration Agreement), it is

inappropriate and should be stricken. 4

¶ 39   State Farm responds that this court may take judicial notice of affidavits filed in collateral

actions, that McKernan’s/Arbitration Forums’ position on the interpretation of the agreement is

essential to this case, that Watts’s motion improperly argues the merits of its appeal, and that

Watts was aware of the affidavit in the trial court and did not disclose it.

       4
           Watts also notes that the affidavit was submitted in a Michigan case by Farmers

Insurance and that the Michigan trial court ruled in Watts’s favor. Farmers Insurance v. Watts

Regulator Co., No. 15-005184-NP (Wayne Co., Mich. (Feb. 19, 2016) (granting Watts’s motion

to compel arbitration).

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¶ 40   Pursuant to Illinois Rule of Evidence 201(b) (eff. Jan. 1, 2011), we may take judicial

notice of facts that are “either (1) generally known within the territorial jurisdiction of the trial

court or (2) capable of accurate and ready determination by resort to sources whose accuracy

cannot reasonably be questioned.” See also People v. Crawford, 2013 IL App (1st) 100310, ¶

118 n.9 (“[W]e may take judicial notice of information on a public website, even where the

information does not appear in the record.”); Metropolitan Life Insurance Co. v. American

National Bank & Trust Co., 288 Ill. App. 3d 760, 764 (1997) (appellate court may take judicial

notice of public documents that are included in the records of other courts). We may take

judicial notice of readily verifiable facts if doing so will aid the court in the efficient disposition

of a case, even if the parties did not seek judicial notice in the trial court. Aurora Loan Services,

LLC v. Kmiecik, 2013 IL App (1st) 121700, ¶ 37 (citing Department of Human Services v.

Porter, 396 Ill. App. 3d 701, 725 (2009)).

¶ 41   We deny Watts’s motion to strike, and we take judicial notice of the fact that McKernan’s

affidavit was filed in other cases.      However, as to McKernan’s averments concerning the

interpretation of the Arbitration Agreement (including the amendment), we place no weight on

his statements, most significantly because, as we held above, the amendment is not ambiguous;

thus, we do not consider any extrinsic evidence such as the affidavit.

¶ 42                                     III. CONCLUSION

¶ 43   For the reasons stated, the judgment of the circuit court of McHenry County is affirmed.

¶ 44   Affirmed.

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