Court Opinion

ID: 9722442
Source: CourtListenerOpinion
Date Created: 2023-08-26 09:32:12.093459+00
Date Added: 2024-06-11T18:24:35.389524
License: Public Domain

Mr. JUSTICE NASH, dissenting: I respectfully dissent. While partners who wish to do so may by their contract agree that questions of termination, dissolution and winding up will be determined by arbitration rather than pursuant to the partnership statutes, these parties did not agree to do so and we should not impose that requirement upon them. The arbitration clause here is broad but does not suggest that the parties intended the Uniform Arbitration Act to apply to the exclusion of the partnership statutes, and such preemption should not be mandated without a clear contractual provision to support it. The majority agree that by law the partnership statutes are deemed to be part of a partnership agreement (Goble v. Central Security Mutual Insurance Co. (1970), 125 Ill. App. 2d 298, 260 N.E.2d 860), but then find the parties to this contract intended otherwise. The only authority cited for this far-reaching conclusion is Lowengrub v. Meislin (1954), 376 Pa. 463, 103 A.2d 405, in which dissolution of a partnership was submitted to arbitration. While the majority states “it is clear that it was the generally broad scope of the arbitration clause, and not any specific reference to dissolution, that was the basis of the court’s decision,” the partnership agreement in that case provided as follows: “In the event any dispute should arise concerning any of the terms, covenants or conditions of this agreement, or with respect to the enforcement thereof, or with respect to any dissolution or liquidation of the partnership, or with respect to any matter affecting the operation and conduct of the business of the co-partnership, such dispute shall be disposed of by arbitration ° * (Emphasis added.) (376 Pa. 463, 464-65, 103 A.2d 405, 406.) It seems to me that the court in Lowengrub simply enforced the plain terms of an agreement the parties had made and did not by construction or implication seek to extend its arbitration provisions. I note also that in Waddell v. Shriber (1975), 465 Pa. 20, 348 A.2d 96, the Supreme Court of Pennsylvania again considered that issue and again determined that a partnership will be dissolved by arbitration when the contract so provides. Lowengrub and Waddell appear to be the only reported cases from any jurisdiction, including Illinois, where the question of dissolution of a partnership by arbitration has been directly considered. In my view, our supreme court in Flood v. Country Mutual Insurance Co. (1968), 41 Ill. 2d 91, 242 N.E.2d 149, stated the principles which should guide us in this case. The court held that parties are only bound to arbitrate those issues which by clear language they have agreed to arbitrate and that their arbitration agreement will not be extended by either construction or implication. (41 Ill. 2d 91, 94, 242 N.E.2d 149, 151.) The appellate court has heretofore consistently followed Flood and declined to impose upon parties to an arbitration agreement provisions which they did not clearly intend when making the contract. See Harrison F. Blades, Inc. v. Jarman Memorial Hospital Building Fund, Inc. (1969), 109 Ill. App. 2d 224, 248 N.E.2d 289; Silver Cross Hospital v. S. N. Nielsen Co. (1972), 8 Ill. App. 3d 1000, 291 N.E.2d 247; Donoghue v. Kohlmeyer & Co. (1978), 63 Ill. App. 3d 979, 380 N.E.2d 1003. In this case the order from which plaintiff appeals found that all disputed matters arising from the partnership agreement are subject to arbitration, necessarily including whether the partnership may be terminated and dissolved and, if so, the winding up of its affairs. As the determinations of an arbitrator, acting within his powers, are final and not reviewable by any court absent fraud, impartiality or misconduct by the arbitrator (Fredman Bros. Furniture Co. v. Retail Store Employees Union, Local 575 (1979), 69 Ill. App. 3d 518, 388 N.E.2d 849), we should not lightly decide the parties intended that procedure be followed. We must, of course, carry out their intention when that may be ascertained by the plain terms of their agreement. Having said that I do not agree with the broad sweep of the majority opinion which has removed all consideration of the provisions of the partnership statutes from this case, that is not to say there are no matters between these parties which are subject to arbitration; here, however, the trial court did not differentiate between arbitrable and nonarbitrable issues which may exist. A similar question was recently presented to this court in Farris v. Hedgepeth (1978), 58 Ill. App. 3d 1040, 374 N.E.2d 1086, and we there directed the trial court to conduct a hearing to make that determination. I would find that the arbitration clause of the contract did not extend to the exclusion of the provisions of the partnership statutes and would remand for a determination of arbitrable issues.