Landmark Properties, Inc. v. Architects International-Chicago

526 N.E.2d 603, 172 Ill. App. 3d 379, 122 Ill. Dec. 344, 1988 Ill. App. LEXIS 966
CourtAppellate Court of Illinois
DecidedJune 30, 1988
Docket87-0859
StatusPublished
Cited by55 cases

This text of 526 N.E.2d 603 (Landmark Properties, Inc. v. Architects International-Chicago) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Landmark Properties, Inc. v. Architects International-Chicago, 526 N.E.2d 603, 172 Ill. App. 3d 379, 122 Ill. Dec. 344, 1988 Ill. App. LEXIS 966 (Ill. Ct. App. 1988).

Opinion

JUSTICE MANNING

delivered the opinion of the court:

Plaintiffs, Landmark Properties, Inc., and Sheffield Development Corporation, appeal from an order granting summary judgment in favor of the defendant, Architects Intemational-Chicago, and an order requiring the parties to submit to arbitration. For the reasons that follow, we affirm the decision of the trial court.

In June 1983, the plaintiffs, developers of property located at the comer of Sheffield and Fullerton known as the “Sanctuary Project,” entered into an agreement with the defendant, an architectural firm, to provide services with regard to the project. In July 1983, the defendant sent a letter to the plaintiffs stating that the services required by plaintiffs to be performed on the project were not very well defined and recommended that they proceed on an hourly basis until plans were finalized.

Defendant, in October 1983, sent two copies of a form, owner/architect agreement prepared by the American Institute of Architects (AIA), to the plaintiffs requesting that they sign one copy and return it to the defendant. Defendant stated that the form, which contained a provision requiring arbitration of any disputes, could be amended. The plaintiffs never signed or returned the form. From October to December 1983, the defendant rendered services which were accepted by the plaintiffs. In December 1983, the plaintiffs accepted completed construction documents prepared by the defendant.

In January 1984, defendant sent a letter to plaintiffs regarding the total charges for services to be rendered by the defendant on phase II of the project and offered to draft an owner/architect agreement covering phase II. Plaintiffs orally accepted the fee arrangement. Three days later, defendant sent two copies of an AIA form and the owner/architect agreement for phase II to the plaintiffs, again requesting that they sign one and return it to the defendant. Plaintiffs neither signed the agreement nor returned it to the defendant.

Throughout this time, the defendant billed the plaintiffs for services rendered and plaintiffs continually promised that the payments would be forthcoming. In March 1984, plaintiffs sent a letter to the defendant promising that payment would be forthcoming provided all services were performed in accordance with the AIA contract.

Between April 1984 and December 1984, the defendant sent correspondence to the plaintiffs requesting payment and the parties engaged in various oral and written negotiations regarding the rate of interest due on the delinquent invoices.

Defendant, in December 1984, advised the plaintiffs that it intended to file a mechanic’s lien against the Sanctuary Project property. In March 1985, defendant again threatened to file a mechanic’s lien and a lawsuit if necessary.

Two months later, defendant filed a demand for arbitration against the plaintiffs with the American Arbitration Association (AAA). In June 1985, the plaintiffs requested a mediation conference prior to the commencement of arbitration. In September 1985, the AAA received a submission to mediation executed by plaintiffs’ counsel indicating that the defendant’s claim was for $113,375.55 plus interest and that the plaintiffs’ counterclaim was for $225,000 plus interest. In November 1985, plaintiffs advised the AAA that they were withdrawing from mediation because they were not bound to arbitration.

Sometime in December 1985, the defendant advised the AAA that it intended to proceed with arbitration, and subsequently the AAA notified the parties that it would proceed with the arbitration hearing unless it was stayed by the courts. The day before the arbitration hearing, on February 18, 1986, plaintiffs filed a complaint and emergency motion in the circuit court seeking to block the arbitration proceeding. At that hearing, the defendant voluntarily agreed not to proceed with arbitration, pending the trial court’s determination of the arbitration issue.

Defendant subsequently filed a motion for summary judgment seeking dismissal of the action and an order requiring the plaintiffs to proceed with arbitration. The motion alleged that even though the plaintiffs had not signed the written contracts, no question of fact existed as to whether the plaintiffs were bound to arbitrate their disputes. Defendant claimed that the plaintiffs had accepted the terms of the AIA contracts through their conduct, and consequently were subject to the arbitration provisions. The motion was supported by copies of defendant’s demand for arbitration, plaintiffs’ response requesting mediation prior to arbitration, a submission agreement for mediation signed by the defendant and counsel for the plaintiffs, a letter written by plaintiffs’ counsel attempting to withdraw from mediation, the affidavit of James Peterson, president of Architects International-Chicago, in which he states that he has read and has personal knowledge of the facts set forth in the mediation brief and that they are true and correct to the best of his knowledge and various other correspondence between the parties regarding the project and payment.

In response to the motion, plaintiffs argued that a question of fact existed as to whether there was an arbitration agreement between the parties. They conceded that a contract existed between the parties but claimed that the AIA contract was not the embodiment of their agreement and that they never agreed to arbitrate their disputes. Their response was supported by the affidavit of Patrick Gallaher, owner of Sheffield Development Corporation and Landmark Properties, Inc., stating that he did not sign, nor did he authorize his employees to sign, a written contract with the defendant. During this time, plaintiffs unsuccessfully attempted to consolidate the present action with another suit pending in the circuit court between different parties, but involving the Sanctuary Project.

After a hearing on December 18, 1986, the trial court granted defendant’s motion for summary judgment, holding that a contract existed between the parties as a result of their conduct and that it included the requirement that they submit their disputes to arbitration. Plaintiffs filed a motion to vacate that order partially based on the position that the supporting exhibits to defendant’s motion for summary judgment did not comply with Supreme Court Rule 191(a) (107 Ill. 2d R. 191(a)). The trial court denied the motion to vacate and this appeal followed.

When a party denies the existence of an agreement to arbitrate, section 2(b) of the Uniform Arbitration Act (Ill. Rev. Stat. 1985, ch. 10, par. 102(b)) requires that the court, upon application of a party, determine the question of arbitrability as a matter of law. (Donaldson, Lufkin & Jenrette Futures, Inc. v. Barr (1987), 151 Ill. App. 3d 597, 602, 503 N.E.2d 786.) In such a proceeding the court is not to consider the merits of the issue, but must summarily determine whether an agreement to arbitrate disputes exists. If the court finds that such an agreement exists, it should order arbitration; if not, then it should stay arbitration. (Geldermann, Inc. v. Mullins (1988), 171 Ill. App.

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526 N.E.2d 603, 172 Ill. App. 3d 379, 122 Ill. Dec. 344, 1988 Ill. App. LEXIS 966, Counsel Stack Legal Research, https://law.counselstack.com/opinion/landmark-properties-inc-v-architects-international-chicago-illappct-1988.