Court Opinion

ID: 9520260
Source: CourtListenerOpinion
Date Created: 2023-08-07 01:34:54.013865+00
Date Added: 2024-06-11T12:45:52.791392
License: Public Domain

JUSTICE BILANDIC, dissenting: The majority precludes trial courts from ever exercising discretion when presented with a motion to compel arbitration of a single claim in a multiparty, multiclaim case. Under the majority’s holding, a motion to compel arbitration must be granted regardless of the inequities and inefficiencies that might result. I disagree with the majority’s adoption of an absolute rule requiring the enforcement of arbitration agreements in all cases regardless of the circumstances. I therefore dissent. It is true that, generally, agreements to arbitrate will be enforced despite the existence of multiple parties or multiple claims. See Iser Electric Co. v. Fossier Builders, Ltd., 84 Ill. App. 3d 161, 166 (1980). I do not disagree with this as a general rule. In certain, very limited circumstances, however, the policy favoring arbitration should yield to considerations of judicial economy, efficiency and fairness. Where, as here, arbitration will cause increased delay, costs and complexity and will create the potential for inconsistent results, a motion to compel arbitration is properly denied. A review of the complete procedural context of this case reveals why the trial court’s decision to deny Johnston’s motion was correct. This case involves one plaintiff, four defendants and seven third-party defendants. The plaintiff condominium board sued the four Zale defendants, alleged to be the developers of the condominiums, charging them with defects in the condominiums’ roofs. The four Zale defendants filed third-party claims for contribution or indemnification against seven subcontractors, including Johnston. Johnston is alleged to be the architectural firm that provided architectural and design services for the buildings, including the roofs. The other six named subcontractors are alleged to have furnished various materials and labor for the condominiums. The asserted liability of the Zale defendants is apparently based upon the actions of these subcontractors in designing and constructing the condominiums’ roofs. Each of the Zale defendants’ third-party claims seeks damages from the third-party defendants only in the event that the Zale defendants are found liable to the plaintiff. Only Johnston’s subcontract contained an arbitration clause. The interrelationship of these claims is such that the rights and liabilities of all the parties may not be equitably and consistently determined in separate proceedings. All of the claims arise out of the same construction project, relate to the same alleged defects and involve the designs provided by Johnston. Moreover, the evidence presented on each claim will be substantially the same. The asserted liability of the Zale defendants, as the developers, is vicarious for the acts of the subcontractors who designed and constructed the condominiums. Consequently, in order to establish the Zale defendants’ liability, the plaintiff will attempt to show that the roofs are defective and that the defects resulted from faulty design or construction or both. The Zale defendants, in addition to defending against the plaintiffs claim, will attempt to show that the defects, if any, were the result of the actions of the third-party defendants in designing or constructing the roofs. Each third-party defendant, Johnston included, will in turn attempt to prove that its actions did not cause a defect in the roofs. It must be emphasized that the claim against Johnston, like the other third-party claims, is entirely derivative. The Zale defendants seek damages from Johnston only in the event that they are held liable to the plaintiff. If judgment is entered in favor of the Zale defendants, there will be no need to resolve the third-party claim against Johnston. If, on the other hand, judgment is entered against the Zale defendants, proper apportionment of the liability may require a determination of Johnston’s liability. A single trier of fact should determine the defendants’ and the third-party defendants’ respective liabilities, if any, to the plaintiff and among each other. Further, given the role played by Johnston in the construction project, Johnston may be crucial to a complete resolution of this litigation. Presumably, the other six subcontractors followed the design prepared by Johnston in executing their contractual functions. Those subcontractors may attempt to defend the third-party actions on the ground that they acted in accordance with the designs provided by Johnston. In fact, one of those subcontractors, W.A. Anderson Construction Company, alluded to such a defense in a brief filed in the circuit court in opposition to Johnston’s motion. Accordingly, even if Johnston is not a party to the litigation, evidence relating to its performance on the project will be necessary to fully resolve the other claims. Moreover, as noted by the majority, Johnston may remain a third-party defendant in this litigation even if its motion to compel is granted. Johnston’s demand for arbitration was filed against Zale Construction only, not the other Zale defendants. Thus, even if Johnston’s motion to compel arbitration and stay proceedings is granted, Johnston may remain in the circuit court proceedings with respect to the third-party claims filed by the other Zale defendants. The majority acknowledges this possibility, but nonetheless orders that the single claim by Zale Construction against Johnston proceed separately in an arbitral forum. 183 Ill. 2d at 78. In addition, the potential exists for inconsistent results if the claim against Johnston proceeds in an arbitral forum. In the judicial proceeding, the trier of fact could potentially find for the plaintiff and against the Zale defendants without placing any responsibility on the six subcontractors who remained in the action, finding instead that Johnston’s design caused the roof defects. In the arbitration, however, the arbitrators could conclude that the roof defects were the result of improper construction, not Johnston’s designs. Finally, allowing arbitration of the claim against Johnston will increase costs and will be a highly inefficient use of resources. As demonstrated above, the claim against Johnston is so interwoven with the nonarbitrable claims that substantially the same evidence would be presented in both the litigation and the arbitration. The Zale defendants will be compelled to present the same evidence and arguments in two different forums. In addition, although Johnston stated in the circuit court that arbitration “could” await a determination of liability in the principal action, there is no indication in the record that Johnston has agreed to postpone the arbitration proceeding. Rather, in its brief, Johnston merely states that the arbitrator has the discretion to decide when to schedule the arbitration hearing. Accordingly, it is conceivable that the arbitration would take place before the resolution of the principal action. The reason that arbitration is a favored method of dispute resolution in this state is that it is viewed as “easier, quicker and more economical” than litigation. First Condominium Development Co. v. Apex Construction & Engineering Corp., 126 Ill. App. 3d 843, 846 (1984). In this case, however, enforcing the arbitration agreement will increase costs and complexity and will substantially delay the complete resolution of the case. In these limited circumstances, the trial court should have the discretion to deny arbitration. The trial court in this case correctly balanced the countervailing interests and denied Johnston’s motion to compel arbitration. I would affirm the appellate court’s affirmance of the trial court’s ruling. JUSTICE HARRISON joins in this dissent.