Court Opinion

ID: 9779617
Source: CourtListenerOpinion
Date Created: 2023-08-30 00:26:18.939039+00
Date Added: 2024-06-11T11:22:39.922613
License: Public Domain

JUSTICE TURNER, specially concurring in part and dissenting in part: I agree with the majority that the breach-of-contract counts are subject to arbitration in this case. However, I believe the remaining claims are also matters to be settled by the arbitrator. Therefore, I respectfully dissent. Given the federal policy favoring arbitration, “any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.” Moses H. Cone, 460 U.S. at 24-25, 74 L. Ed. 2d at 785, 103 S. Ct. at 941. Moreover, “there is a presumption of arbitrability in the sense that ‘[a]n order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage.’ ” AT&T, 475 U.S. at 650, 89 L. Ed. 2d at 656, 106 S. Ct. at 1419, quoting United Steelworkers, 363 U.S. at 582-83, 4 L. Ed. 2d at 1417-18, 80 S. Ct. at 1353. In case No. 09 — L—140, plaintiffs’ allegations against BDO are sufficiently connected to the consulting agreements to compel arbitration. The arbitration provisions cover each of plaintiffs’ claims because the causes of action alleged arise from the services provided under the consulting agreements. The consulting agreements indicated BDO agreed to provide consulting services in conjunction with “Transactions” and assist plaintiffs in structuring the “Transactions” to attain the most beneficial tax results. Plaintiffs sought damages in part because the IRS determined they owed back taxes, penalties, and interest as a result of the “Investment Strategies.” The issues here clearly fall within the scope of the arbitration clauses. See Denney v. BDO Seidman, L.L.P., 412 F.3d 58, 69 (2d Cir. 2005) (concluding the plaintiffs’ claims fell within the scope of the arbitration provision based on the tax, financing, and business consultation services BDO provided). In case No. 09 — L—139, plaintiffs argue the trial court erred in holding the arbitration provisions — which cover disputes “arising in connection with” the performance or breach of the consulting agreements — are broad in scope. Plaintiff cites State Farm Mutual Automobile Insurance Co. v. George Hyman Construction Co., 306 Ill. App. 3d 874, 882, 715 N.E.2d 749, 756 (1999), where this court stated “[a]n arbitration clause that provides ‘all disputes arising in connection with’ a contract are to be arbitrated has been read narrowly to apply only to claims relating to matters specifically mentioned in the contract.” Defendants, on the other hand, argue the arbitration provisions are broad, clear, and unequivocal. “[C]ourts have generally construed ‘generic’ arbitration clauses broadly, concluding that the parties are obligated to arbitrate any dispute that arguably arises under an agreement containing a ‘generic’ provision. [Citation.] The particular language which courts have in the past labeled ‘generic’ demands arbitration of either disputes ‘arising out of or disputes ‘arising out of, or related to’ the agreement at issue.” (Emphasis in original.) Bass v. SMG, Inc., 328 Ill. App. 3d 492, 498, 765 N.E.2d 1079, 1085 (2002). Moreover, this court has noted “ [arbitration clauses applying to disputes ‘relating to or arising from’ a contract are given broader meaning than those governing disputes ‘in connection with’ a contract.” State Farm, 306 Ill. App. 3d at 883, 715 N.E.2d at 756. In this case, the arbitration provisions apply to “any dispute, controversy[,] or claim [that] arises in connection with the performance or breach of this agreement.” The trial court found the provisions were broad in nature. See Miron v. BDO Seidman, LLP, 342 E Supp. 2d 324, 330 (E.D. Pa. 2004) (finding this same clause to be broad on its face). I would find the distinction between “in connection with” or “arising out of’ to be one of semantics in this case considering that all of plaintiffs’ claims represent a “dispute, controversy[,] or claim” and all are related to the “performance or breach” of the consulting agreements. Even if the language of the provisions is given a narrow construction, plaintiffs’ claims are well within the scope of the arbitration provisions. Plaintiffs, however, contend their claims do not fall within the scope of the provisions because BDO intentionally omitted the “Distressed Debt Strategies” from the scope of services to be rendered under the consulting agreements and each agreement stated it did not apply to “investment” advice and services. All of plaintiffs’ causes of action arise from services BDO provided pursuant to the consulting agreements, which stated BDO would provide “certain consulting services in connection with the Transactions.” Plaintiffs do not dispute the “Transactions” are the “Distressed Debt Strategies” at issue in their complaint. Plaintiffs’ claims concern the tax advice and tax services provided by EDO and seek the recovery of damages for the fees they paid to EDO under the consulting agreements. That the agreements state EDO was not providing “investment advice” does not change the fact that plaintiffs’ claims are based on the services EDO did provide under the agreement. Plaintiffs’ claims are within the scope of the arbitration provisions. See Denney, 412 F.3d at 69. Therefore, I would affirm the trial court’s judgment in these consolidated cases.