Court Opinion

ID: 4108256
Source: CourtListenerOpinion
Date Created: 2016-12-16 23:05:25.427403+00
Date Added: 2024-06-11T13:54:23.905077
License: Public Domain

NOTICE
                                      2016 IL App (5th) 160038
 Decision filed 12/16/16.   The
 text of this decision may be              NO. 5-16-0038
 changed or corrected prior to
 the filing of a Peti ion for
 Rehearing or the disposition of               IN THE
 the same.

                                   APPELLATE COURT OF ILLINOIS

                             FIFTH DISTRICT
________________________________________________________________________

MIDLAND FUNDING LLC,                            ) Appeal from the
                                                ) Circuit Court of
      Plaintiff and Counterdefendant-Appellant, ) St. Clair County.
                                                )
v.                                              ) No. 15-L-200
                                                )
MELISSA HILLIKER,                               ) Honorable
                                                ) Christopher T. Kolker,
      Defendant and Counterplaintiff-Appellee.  ) Judge, presiding.
________________________________________________________________________

      JUSTICE CATES delivered the judgment of the court, with opinion.
      Presiding Justice Schwarm* and Justice Goldenhersh concurred in the judgment
and opinion.

                                           OPINION

¶1       Plaintiff-counterdefendant, Midland Funding LLC, appeals the circuit court’s

order denying its motion to compel arbitration of a counterclaim filed by defendant-

counterplaintiff, Melissa Hilliker. For reasons that follow, we affirm.

¶2                                      BACKGROUND

¶3       Defendant-counterplaintiff, Melissa Hilliker, obtained a credit card from Chase

Bank USA, N.A. (Chase Bank) in April 2001. Hilliker was provided with a specified line

         *
       Presiding Justice Schwarm fully participated in the decision prior to his
retirement. See Cirro Wrecking Co. v. Roppolo, 153 Ill. 2d 6, 605 N.E.2d 544 (1992).
                                          1
of credit for consumer purchases, wherein she agreed to make at least the minimum

payment shown on her monthly billing statement.

¶4     On September 9, 2013, plaintiff-counterdefendant, Midland Funding LLC

(Midland), a company in the business of purchasing outstanding consumer debt, filed a

complaint against Hilliker in the circuit court of St. Clair County. Midland alleged that it

was the successor in interest to Hilliker’s Chase Bank account; that Midland had

purchased Hilliker’s credit card account from Chase Bank in the regular course of

business in good faith and for value; that there was an unpaid balance of $8,809.38 due

on Hilliker’s account; that because Hilliker had failed to make the monthly payments due

on the account, Hilliker was in default on the account; and that Midland was entitled to a

judgment for the unpaid balance, plus costs.

¶5     In support of its complaint, Midland attached the “Affidavit of Kory Holst In

Support Of Judgment.” In the affidavit, Holst stated that he was a “Legal Specialist,” who

had access to “pertinent account records for Midland Credit Management, Inc.

(‘MCM’),” the entity servicing this account on behalf of Midland. Holst further stated

that he was making the statements contained in his affidavit based upon personal

knowledge. Holst averred he had reviewed MCM’s account records; that he was familiar

with, and trained in, the methods by which MCM created and maintained its records; and

that MCM’s records were kept in the ordinary course of its business. Based on his

personal knowledge of the MCM account records, Holst asserted that Midland was the

“current owner of, and/or successor to, the obligation sued upon, and was assigned all the

rights, title, and interest” in Hilliker’s credit card account with Chase Bank. Holst stated
                                                2
that MCM’s records showed that Hilliker opened her account with Chase Bank on April

23, 2001; that her last payment was posted on January 13, 2009; that the account was

charged off on August 31, 2009; and that Hilliker owed $8,809.38 as of July 15, 2013.

Midland did not provide any records documenting the sale of Hilliker’s debt, or the terms

of the assignment of that debt, in support of the Holst affidavit or the complaint. Contrary

to section 2-606, Midland did not provide a copy of any written instrument upon which

they based their claim for the debt, nor did they attach an affidavit indicating that the

written instrument evidencing the debt was not accessible to it. 735 ILCS 5/2-606 (West

2012).

¶6       Midland’s complaint was automatically assigned to the St. Clair County circuit

court’s arbitration docket because the amount in controversy was between $5,000 and

$50,000, exclusive of costs and interest. 20th Judicial Cir. Ct. Mandatory Arb. Rs. (eff.

Aug. 2, 2004) (Civil Actions Subject to Mandatory Arbitration, describing St. Clair

County provisions pursuant to Ill. S. Ct. R. 86 (eff. Jan. 1, 1994)). This arbitration docket

is a nonbinding, court-annexed arbitration docket and is a part of the Illinois judicial

system. See generally Ill. S. Ct. Rs. 86 to 95 (rules regarding arbitration). Thus, the

provisions of the Illinois Code of Civil Procedure and the rules of the Illinois Supreme

Court are applicable to the arbitration proceedings, except where specific arbitration rules

otherwise provide. See Ill. S. Ct. R. 86.

¶7       On October 14, 2013, Hilliker filed an answer to Midland’s complaint, denying

the main allegations, including the allegation that Midland was the successor in interest to

the Hilliker account. Hilliker also filed a counterclaim. Therein, she alleged that
                                          3
Midland’s complaint violated the Illinois Collection Agency Act (Collection Agency Act)

(225 ILCS 425/1 et seq. (West 2012)), because Midland failed to attach the proper

documents, including the assignment documents, to its complaint. She also alleged that in

violating provisions of the Collection Agency Act, Midland also violated the Illinois

Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS

505/1 et seq. (West 2012)). Hilliker sought damages, including filing fees, attorney fees,

penalties, and punitive damages.

¶8     On November 4, 2013, Midland filed a motion to dismiss Hilliker’s counterclaim.

Midland asserted that the counterclaim should be dismissed pursuant to section 2-615 of

the Illinois Code of Civil Procedure (Code) (735 ILCS 5/2-615 (West 2012)), because it

failed to set forth sufficient factual allegations to state a legally recognized cause of

action, failed to set forth a proper prayer for relief, and was not verified. Midland also

asserted that Hilliker’s counterclaim should be dismissed under section 2-619 of the Code

(735 ILCS 5/2-619 (West 2012)). Midland asserted that it was the owner of Hilliker’s

debt, and that the assignment for collection criteria in section 8b of the Collection

Agency Act (225 ILCS 425/8b (West 2012)) did not apply to debt owners, such as

Midland. Midland argued that the counterclaim was insufficient in law and should be

dismissed because it was not possible for Midland to have violated the Collection Agency

Act as alleged. Midland also filed a motion to strike Hilliker’s answer because it was not

verified.

¶9     The parties appeared for a status hearing on January 16, 2014. On that date,

Hilliker was allowed to file an amended counterclaim. In the first amended counterclaim,
                                           4
Hilliker alleged that Midland did not own Hilliker’s debt because the claimed assignment

from Chase Bank to Midland was legally defective. Hilliker further alleged that Midland

violated the Collection Agency Act by filing suit, and attempting to collect a debt that it

did not own, and that Midland violated the Consumer Fraud Act in that it violated the

Collection Agency Act.

¶ 10   On February 18, 2014, Midland filed a motion for involuntary dismissal of the

first amended counterclaim with prejudice under section 2-619 of the Code and alleged

that the counterclaim was insufficient in law. Midland asserted that the Holst affidavit

was sufficient verification that it owned Hilliker’s debt and was appended to verify the

allegations in the complaint. In its motion to dismiss, Midland also attached an unverified

document titled “Bill of Sale.” The “Bill of Sale” stated in part that “Chase Bank USA,

N.A. (‘Seller’) for value received and pursuant to the terms and conditions of Credit Card

Account Purchase Agreement dated May 8, 2009[,] between Seller and Midland Funding

LLC (‘Purchaser’), *** hereby assigns effective as of the File Creation Date of

September 8, 2009, all rights, title and interest of Seller in and to those certain

receivables, judgments or evidences of debt described in Exhibit 1 attached hereto and

made part hereof for all purposes.” Notably, Midland did not attach a copy of Exhibit 1,

as referenced in the Bill of Sale, and did not attach a copy of the Credit Card Account

Purchase Agreement referenced in support of its motion to dismiss. In fact, Midland did

not attach any documents identifying the particular accounts purchased or the terms of

the assignment.

                                            5
¶ 11   On October 3, 2014, Hilliker filed a motion to compel Midland to respond to

interrogatories and a request for production that had been served by Hilliker on April 23,

2014. Hilliker’s counsel alleged that despite counsel’s efforts to comply with Illinois

Supreme Court Rule 201(k) (eff. July 1, 2014), including having a telephone conference

with counsel for plaintiff-counterdefendant, Midland refused to respond to any of

Hilliker’s discovery requests. Midland filed no response in defense of Hilliker’s motion.

The motion to compel was heard on October 7, 2014. Following the hearing, the trial

court entered an order granting Hilliker’s motion to compel, over Midland’s objection.

The court ordered Midland to answer the outstanding discovery within 60 days.

According to a certificate of service in the record, Midland sent its responses to Hilliker’s

interrogatories and request for production on December 8, 2014, the last day allotted by

the court’s order.

¶ 12   On December 16, 2014, Hilliker filed a second motion to compel, and alleged that

Midland had responded to the discovery requests with answers that were mostly

nonresponsive, with the vast majority of the answers consisting of objections and “with

very few answers to the discovery.” Following a hearing on January 8, 2015, the court

entered an order directing Midland to answer the interrogatories and requests for

production, without objections and within 30 days of the order. A status hearing was

scheduled for March 5, 2015.

¶ 13   On February 9, 2015, the thirtieth day allowed for by the court’s prior order,

Midland filed a motion for a protective order with regard to Hilliker’s request that

Midland produce the entire debt purchase agreement with Chase Bank. Midland argued
                                          6
that the agreement contained information which was confidential or proprietary in nature

and contained other information that was not relevant to the issue of Midland’s

ownership of the Hilliker account. Midland sought to produce a copy of the debt purchase

agreement under seal and to redact all financial information and all information regarding

consumers other than Hilliker. According to a certificate of service in the record, Midland

sent responses to Hilliker’s interrogatories and requests for production to Hilliker on

February 11, 2015.

¶ 14   During the status hearing on March 5, 2015, Hilliker filed a motion to amend her

counterclaim. The motion was granted over Midland’s objection, and the second

amended counterclaim, erroneously captioned “Third Amended Counterclaim,” was filed

that day (hereinafter referred to as the third amended counterclaim).

¶ 15   In the third amended counterclaim, Hilliker again alleged that Midland did not

own the debt sued upon because the purported assignment was defective. Hilliker further

alleged that the debt buyers were subject to all of the requirements of the Collection

Agency Act, including the requirement that they purchase a debt before they attempt to

collect that debt, and that Midland violated section 9 of the Collection Agency Act (225

ILCS 425/9 (West 2012)) by filing suit to collect a debt that it did not own. Hilliker also

alleged that Midland’s complaint and affidavit contained misleading statements regarding

the assignment and ownership of accounts and that Holst’s affidavit was misleading

because it was not based on his own personal knowledge. Hilliker claimed damages in

excess of $50,000, as she sought to represent a class of similarly situated residents of

Illinois. The third amended complaint also contained a count alleging violations of the
                                          7
Fair Debt Collection Practices Act (FDCPA) (15 U.S.C. §§ 1692 et seq. (2012)). In

support of her claim under the FDCPA, Hilliker relied on the same factual allegations

alleging the use of misleading statements, as plead previously.

¶ 16   On March 26, 2015, Hilliker filed a motion for sanctions. Once again, Hilliker

claimed that Midland had failed to comply with the court’s order of January 8, 2015.

Specifically, Hilliker’s counsel claimed that the answers provided to Hilliker’s discovery

“were non-responsive to the questions contained in the discovery.” Hilliker alleged that

Midland had displayed “continued disrespect” for the court’s authority and requested

sanctions.

¶ 17   Also on March 26, 2015, Hilliker filed a motion to compel the deposition of Kory

Holst, the affiant who had attested to Midland’s original complaint. In this motion,

Hilliker alleged that her counsel had made repeated calls and requests for dates to take

the deposition of Holst, but the “calls and requests have gone unanswered.” Additionally,

Hilliker filed a motion to transfer the case to the “L” docket, because the amount

requested in her counterclaim exceeded the jurisdictional limit of the arbitration docket.

¶ 18   On March 26, 2015, Midland obtained new counsel, as reflected by an entry of

appearance filed that date. Midland also filed a motion to dismiss the third amended

counterclaim and to compel arbitration pursuant to the terms of the Chase Bank

“Cardmember Agreement.” In its motion, Midland argued that Hilliker had drastically

altered the scope of her claim when she filed the third amended counterclaim and sought,

for the first time, “to certify a nationwide class for violations of the FDCPA and a

statewide class action for violations of the [Collection Agency Act] and the [Consumer
                                             8
Fraud Act].” In anticipation of Hilliker’s arguments, Midland claimed that it had not

waived its right to arbitrate, as it had filed the case in the “arbitration court, thereby

asserting its contractual rights under the Arbitration Agreement.” Further, Midland

argued that even if the court found that its actions in the trial court constituted waiver, the

court should permit Midland to rescind the waiver because of the significant changes in

the third amended counterclaim. Midland also argued that the third amended

counterclaim should be dismissed because the allegations regarding the assignment and

ownership of the Hilliker account fell within the scope of the arbitration agreement and

because the arbitration agreement contained a class waiver provision. Finally, Midland

indicated that it had sent a letter to Hilliker’s attorneys on March 25, 2015, advising them

of Midland’s intent to arbitrate.

¶ 19   In support of its arguments, Midland attached the declaration of Kyle Hannan, the

manager of operations for Midland Credit Management, who claimed that the Hilliker

account had been properly assigned and that Midland owned that debt. A number of

documents were attached to and referenced in Hannan’s affidavit, including an affidavit

and a copy of a Chase Bank Cardmember Agreement. The affidavit of Christine L. Sallie,

a “CSD Strategy Analyst” affiliated with Chase Bank, stated that Chase Bank sold off a

pool of accounts to Midland in September 2009. Sallie did not identify the Hilliker

account, or any other specific account, within the pool of accounts sold, and she provided

no information regarding the specific nature of the assignment from Chase Bank to

Midland. Hannan’s affidavit indicated that the Chase Bank Cardmember Agreement,

purportedly issued with Hilliker’s account, was “difficult to read due to poor copying and
                                            9
font size.” Hannan further explained that in order to clarify the terms of the Cardmember

Agreement, an exemplar of the Cardmember Agreement, containing larger type, known

as a portfolio-level Cardmember Agreement had to be consulted. Hannan further

explained that these portfolio-level agreements serve as exemplars, and, when read in

conjunction with the Cardmember Agreement, make the arbitration agreement readable.

Once legible, it appeared the arbitration agreement contained a provision prohibiting

class-action arbitration. According to the portfolio-level exemplar, the arbitration

paragraph also contained an exception that allowed a party to pursue an action in small

claims court on an individual basis. There were no documents appended to Hannan’s

affidavit or Midland’s motion identifying the assignment or specific terms of sale from

Chase Bank to Midland regarding Hilliker. There was no Cardmember Agreement signed

by Hilliker or any document containing Hilliker’s consent to arbitration.

¶ 20   On April 6, 2015, Midland filed its opposition to the motion to transfer the case to

the “L” docket. On April 9, 2015, the court granted the motion to transfer the case to the

“L” docket and continued all pending motions until reassignment of the case.

¶ 21   On July 10, 2015, Midland filed a motion to stay discovery pending resolution of

its March 26, 2015, motion to dismiss and compel arbitration. Two months later, on

September 4, 2015, Midland filed responses in opposition to Hilliker’s motion to compel

the deposition of Kory Holst and her motion for sanctions.

¶ 22   On September 8, 2015, Hilliker filed a response in opposition to Midland’s motion

to compel arbitration. Hilliker argued that Midland had waived its right to arbitrate when

it elected to file its original complaint in a judicial forum and thereafter participated in
                                              10
litigation of the case in that forum. Hilliker claimed that Midland’s demand for arbitration

was untimely. She pointed out that Midland’s first notice of intent to arbitrate was made

to Hilliker’s counsel on March 25, 2015, approximately 18 months after it filed its

original complaint and only after Hilliker filed her third amended counterclaim. Hilliker

argued that Midland’s actions in the court were inconsistent with a party seeking to

arbitrate its claim and that Midland had not overcome the rebuttable presumption that

attaches when a party chooses to proceed in a judicial forum. Specifically, Hilliker

argued that Midland’s choice of the St. Clair County circuit court raised a rebuttable

presumption that Midland had waived its right to arbitrate, and Midland had not

overcome that presumption. Hilliker further argued that the court should not allow

Midland to change its mind and arbitrate, after months of “dragging its heels.” Hilliker

also claimed that Midland’s untimely delay in demanding arbitration and filing a motion

to stay discovery caused her prejudice, as she had expended significant time and effort

litigating Midland’s motions to dismiss and her motions to compel discovery, and that

she incurred significant costs associated with filing fees and attorney fees.

¶ 23   On September 18, 2015, Midland filed a reply in support of its motion to compel

arbitration. Midland argued that it did not substantially invoke the judicial process by

filing the original collection action seeking limited relief in the trial court. Midland

claimed that its participation in the litigation was “minimal,” noting that it only filed a

complaint and two motions to dismiss, and that it only answered discovery after being

compelled to do so. Midland concluded that its decision to pursue a summary action for

limited relief in the court, coupled with its limited participation in the proceedings, did
                                             11
not amount to a waiver of its right to arbitrate. Midland claimed that its demand for

arbitration was timely and that there was no prejudice to Hilliker. Midland further argued

that that even if the court found waiver, the court should permit it to resuscitate its right

to arbitrate because Hilliker dramatically changed the nature of the litigation by filing the

third amended complaint, which exposed it to substantial liability. Midland also

reasserted its claims that Chase Bank properly assigned the Hilliker account and that the

arbitration agreement was enforceable.

¶ 24   Midland’s motion to dismiss the counterclaim and to compel arbitration was called

for hearing on December 14, 2015. After considering the arguments of counsel, the trial

court denied the motion. In a written order entered December 30, 2015, the court

determined that Midland waived its right to arbitrate due to its substantial participation in

the litigation. The court also determined that provisions in the arbitration agreement were

unconscionable and that the agreement was unenforceable. Finally, the court denied

Midland’s motion to dismiss the counterclaim on grounds of legal insufficiency. The

court found that Midland had not presented sufficient evidence to show that it owned the

Hilliker account and debt. Midland appealed.

¶ 25                                 DISCUSSION

¶ 26   This appeal is taken from the denial of a motion to compel arbitration. Ill. S. Ct. R.

307(a)(1) (eff. July 6, 2000). Where an interlocutory appeal is taken pursuant to Supreme

Rule 307(a)(1), controverted facts or the merits of the case are not decided. Woods v.

Patterson Law Firm, P.C., 381 Ill. App. 3d 989, 993, 886 N.E.2d 1080, 1084 (2008). The

only question is whether there was a sufficient showing to affirm the trial court’s decision
                                            12
to deny the motion to compel arbitration. Woods, 381 Ill. App. 3d at 993, 886 N.E.2d at

1084. The standard of review is dictated by the nature of the question presented to the

trial court. LAS, Inc. v. Mini-Tankers, USA, Inc., 342 Ill. App. 3d 997, 1001, 796 N.E.2d

633, 636 (2003). In this case, the trial court was called upon to determine as a matter of

law whether Midland’s participation in the litigation constituted a waiver of the right to

arbitrate. This presents a legal question that is subject to de novo review. LAS, Inc., 342

Ill. App. 3d at 1001, 796 N.E.2d at 636.

¶ 27   Generally, Illinois considers arbitration to be a favored method of settling

disputes. Kostakos v. KSN Joint Venture No. 1, 142 Ill. App. 3d 533, 536, 491 N.E.2d

1322, 1325 (1986). That said, the right to arbitrate a dispute, like all other contract rights,

is subject to waiver. Woods, 381 Ill. App. 3d at 994, 886 N.E.2d at 1085. A party may

waive the right to arbitrate when its conduct is inconsistent with the arbitration clause,

thereby demonstrating that it has abandoned the right to arbitrate. Kostakos, 142 Ill. App.

3d at 536, 491 N.E.2d at 1325. Thus, waiver will be found where the party seeking to

compel arbitration invokes the judicial process and substantially participates in the

litigation to a point inconsistent with an intent to arbitrate, to the detriment or prejudice of

the other party. Woods, 381 Ill. App. 3d at 994, 886 N.E.2d at 1085; LAS, Inc., 342 Ill.

App. 3d at 1002, 796 N.E.2d at 637. Whether a party’s conduct results in waiver depends

on the unique facts and circumstances present in a particular case. LAS, Inc., 342 Ill. App.

3d at 1002, 796 N.E.2d at 637.

¶ 28   In this particular case, it is the plaintiff who, after filing suit and pursuing its claim

in the circuit court for 18 months, now seeks to arbitrate. Midland filed the original
                                         13
complaint, together with a supporting affidavit, and sought a judgment against Hilliker

without demanding binding arbitration. Hilliker then filed an answer denying the

allegations in Midland’s complaint. Additionally, she filed a counterclaim challenging

Midland’s claim that Hilliker’s account was among those sold and assigned to it by Chase

Bank. Midland responded with a motion to dismiss Hilliker’s counterclaim with

prejudice, alleging it was legally insufficient, and a motion to strike Hilliker’s answer and

to enter a judgment in its favor. Midland did not demand that the court stay the

proceedings to allow Midland to arbitrate the counterclaim. When Hilliker filed her first

amended counterclaim, Midland again responded with a motion to dismiss on grounds of

legal insufficiency, and sought a judgment in its favor. Again, it did not move to stay the

proceedings or demand arbitration pursuant to any Cardmember Agreement. In fact,

Midland did not even raise the existence of the agreement until it filed its motion to

compel arbitration, 1½ years after Midland filed its complaint in the circuit court.

Moreover, on two separate occasions, Midland was ordered to respond to discovery.

Despite these court orders, Midland did not move to stay the discovery or request

arbitration. Instead, after months of foot dragging, it engaged the trial court, asking for a

judicial order of protection.

¶ 29   The record shows that Midland actively and substantially participated in the

proceedings in the circuit court, including the filing of dispositive motions in an attempt

to defeat the counterclaims and to secure a judgment on the pleadings, without ever

requesting arbitration or a stay of the proceedings. Midland even took advantage of its

right under the rules of civil procedure to request a change of judge after the case was
                                            14
transferred to the “L” division over Midland’s objection. Midland repeatedly sought a

substantive judicial determination of a disputed issue and a judicial termination of the

litigation.

¶ 30   Midland argues that its intent was to pursue a summary action for limited relief in

the circuit court, but does not explain how such relief could be granted in summary

fashion. Further, Midland claims that its intent to arbitrate was illustrated by having filed

its complaint in the “arbitration court” of St. Clair County. These arguments are

disingenuous, at best. As noted previously, St. Clair County has a nonbinding arbitration

court that was approved by the Illinois Supreme Court. A case is assigned to the

arbitration docket based upon the value of the claim asserted. The parties to the litigation

are required to participate in arbitration whether there was an agreement to do so or not.

Therefore, Midland’s claim that it did not waive its right to arbitrate based upon its

participation in the St. Clair County arbitration court is without merit. The record

supports the trial court’s determination that Midland’s actions in the judicial forum were

inconsistent with those of a party intent on asserting its right to arbitrate and evidenced a

clear abandonment of that right.

¶ 31   Midland contends that even if the trial court found a waiver of a right to arbitrate,

the court should have permitted it to rescind the waiver because the third amended

counterclaim significantly altered the nature of the litigation. We do not agree. In this

case, the original action filed by Midland and the counterclaims filed by Hilliker,

including the third amended counterclaim, arose out of the same dispute and required

consideration of many of the same issues regarding the assignment of Chase Bank’s
                                        15
customer accounts and debts to Midland. Additionally, the factual allegations and issues

raised in the third amended counterclaim were similar to those asserted in the original and

first amended counterclaim. The count alleging a violation of the FDCPA involved the

same, basic factual allegations as the counts alleging violations of the Collection Agency

Act and Consumer Fraud Act. While the request for class status was new, the basic

factual allegations and claims made in third amended counterclaim were not.

¶ 32   The significant change in the third amended complaint was not in the nature of the

factual allegations, but rather, as Midland candidly acknowledged, with its potential

exposure in a class action suit. Midland has not suggested that the request for class

certification was unexpected or unforeseeable. As noted by the trial court, Midland is not

an unsophisticated litigant. The record shows that Midland continued to attack the legal

sufficiency of the allegations in the third amended complaint and seek a judgment in its

favor, even after it moved to compel arbitration. Midland’s actions did not constitute

limited legal maneuverings. After reviewing the record, we do not find that the third

amended counterclaim so drastically altered the nature of the litigation or raised complex

claims that could not have been foreseen, when Midland filed its complaint. Cabinetree

of Wisconsin, Inc. v. Kraftmaid Cabinetry, Inc., 50 F.3d 388 (7th Cir. 1995). The

procedural history of this case indicates that Midland was quite content to proceed with a

judicial determination of the issues until it decided that it would be better off in

arbitration. Selection of a forum in which to resolve a legal dispute should be made at the

earliest opportunity. The failure of a party to move promptly for arbitration is compelling

evidence of its election against arbitration and that election should be binding, except in
                                             16
the case of extraordinary circumstances. Cabinetree, 50 F.3d at 391. This case does not

present such extraordinary circumstances. The trial court did not err in denying that

portion of Midland’s motion seeking rescission of its waiver of arbitration.

¶ 33   Where the court considers a party’s waiver of its right to seek arbitration, Illinois

law requires that the court next consider whether the delay in seeking arbitration caused

any prejudice to the party opposing arbitration. Kostakos, 142 Ill. App. 3d at 537, 491

N.E.2d at 1325. Therefore, we consider whether Hilliker was prejudiced by the belated

demand for arbitration. The record shows that Hilliker filed several pleadings, including

an answer, counterclaims, and motions to compel discovery. Her counsel made repeated

attempts under the rules to persuade Midland to comply with discovery, but it outright

refused. When doing so, it did not respond with a motion to stay discovery. Midland

simply offered no excuse for its failure to answer discovery until Hilliker filed a motion

for sanctions. Even then, Midland did not file a motion to stay discovery but sought

protection from the court by filing a motion for a protective order. Additionally, the court

continued to hold status conferences and hearings, all of which were attended by Midland

and Hilliker’s counsel. The record on appeal demonstrates that Hilliker’s counsel

expended considerable resources in terms of time and attorney fees. Hilliker also incurred

filing fees and costs. Very few of these resources would have been expended in

arbitration had Midland not delayed in its quest to seek an arbitral forum. Therefore, we

believe that the record supports a finding that Hilliker was prejudiced by Midland’s

substantial participation in the litigation and its delay in demanding arbitration. Finally,

we find there is no basis upon which the trial court should resuscitate Midland’s right to
                                           17
seek arbitration. The allegations made in the third amended counterclaim were not

significantly different than those raised by Hilliker’s original and first amended

counterclaim. There was simply no sea change that allowed Midland the right to rescind

its waiver of arbitration.

¶ 34                               CONCLUSION

¶ 35   After reviewing the record, we find that Midland waived its right to compel

arbitration by filing the original action and subsequently filing pleadings that presented

substantive issues for a determination by the trial court. Midland’s extensive participation

in the litigation process, coupled with its delay in raising the existence of the Chase Bank

Cardmember Agreement and its demand for arbitration and the resulting prejudice to

Hilliker, amount to a waiver of arbitration. Midland’s conduct was inconsistent with the

actions of a party seeking to compel arbitration and demonstrated a clear abandonment of

any claimed right to arbitration. The trial court did not err in denying Midland’s motion

to compel arbitration. Because our resolution of the waiver issue is dispositive, we need

not address the remaining claims of error regarding the validity, unconscionability, and

enforceabililty of the arbitration agreement in the Chase Bank Cardmember Agreement.

Finally, we will not address the propriety of the trial court’s order denying Midland’s

section 2-619 motion to dismiss the third amended counterclaim for legal insufficiency,

as it is not a final and appealable order. Cabinet Service Tile, Inc. v. Schroeder, 255 Ill.

App. 3d 865, 627 N.E.2d 253 (1993).

¶ 36   Accordingly, the order of the circuit court denying Midland’s motion to compel

arbitration is affirmed, and the cause is remanded for further proceedings.
                                             18
¶ 37   Affirmed; cause remanded.

                                   19
                              2016 IL App (5th) 160038

                                   NO. 5-16-0038

                                       IN THE

                        APPELLATE COURT OF ILLINOIS

                                  FIFTH DISTRICT

MIDLAND FUNDING LLC,                            ) Appeal from the
                                                ) Circuit Court of
      Plaintiff and Counterdefendant-Appellant, ) St. Clair County.
                                                )
v.                                              ) No. 15-L-200
                                                )
MELISSA HILLIKER,                               ) Honorable
                                                ) Christopher T. Kolker,
      Defendant and Counterplaintiff-Appellee.  ) Judge, presiding.
________________________________________________________________________

Opinion Filed:        December 16, 2016
________________________________________________________________________

Justices:          Honorable Judy L. Cates, J.

                 Honorable S. Gene Schwarm, P.J., and
                 Honorable Richard P. Goldenhersh, J.,
                 Concur
________________________________________________________________________

Attorneys        Heather L. Kramer, Jennifer A. Warner, Dykema Gossett PLLC,
for              10 South Wacker Drive, Suite 2300, Chicago, IL 60606; Theodore
Appellant        W. Seitz, Dykema Gossett PLLC, Capitol View, 201 Townsend
                 Street, Suite 900, Lansing, MI 48933
________________________________________________________________________

Attorneys        James R. Williams, Ashley P. Cook, Williams, Caponi &
for              Associates, P.C., 30 East Main Street, P.O. Box 565, Belleville, IL
Appellee         62220
_____________________________________________________________________