Lehman v. Eugene Matanky & Associates, Inc.

438 N.E.2d 614, 107 Ill. App. 3d 985, 63 Ill. Dec. 683, 1982 Ill. App. LEXIS 2088
CourtAppellate Court of Illinois
DecidedJuly 9, 1982
Docket81-1061
StatusPublished
Cited by13 cases

This text of 438 N.E.2d 614 (Lehman v. Eugene Matanky & Associates, Inc.) 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
Lehman v. Eugene Matanky & Associates, Inc., 438 N.E.2d 614, 107 Ill. App. 3d 985, 63 Ill. Dec. 683, 1982 Ill. App. LEXIS 2088 (Ill. Ct. App. 1982).

Opinion

JUSTICE LORENZ

delivered the opinion of the court:

Defendant appeals from the entry of an order granting summary judgment to plaintiffs and raises the following issues: (1) whether a dispute concerning the termination of the contract was within the scope of the arbitration clause so that the cause should have proceeded to arbitration and, in the alternative, (2) whether genuine issues of material fact remain concerning the termination of the listing agreement which precluded the entry of summary judgment in favor of plaintiffs.

Material to our disposition are the following facts. One September 18,1979, plaintiffs entered into a written real estate brokerage agreement whereby they employed Matanky as their exclusive sales agent to secure a buyer for the property located at 500 W. Touhy Avenue in Des Plaines, Illinois. The subject property was owned by Lehman Mobile Homes Park, Inc., an Illinois corporation, all of whose stock was owned in joint tenancy by the plaintiffs.

This agreement provided that Matanky’s employment as plaintiffs’ exclusive agent was “to extend for a period of not less than six months with authority to offer for sale, to advertise, to place a sign thereon and to sell said property * * *."

The brokerage contract also contained a notice requirement for termination of the exclusive agency relationship and a generic arbitration clause. The notice requirement stated: “This agreement shall remain in effect for the period above specified and thereafter until terminated by me or you in writing, giving the other party thirty (30) days prior notice.” The generic arbitration clause provided in pertinent part: “Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration in accordance with the rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.” The subject property was placed on the market for an asking price of $1,200,000. The brokerage contract was executed by the Lehmans and by Ken Baldwin and Grace Stample as agents for defendant.

On February 11,1980, plaintiffs’ attorney Carolyn Krause sent a letter to the defendant’s office, notifying it that “in accordance with the Real Estate Listing Agreement dated September 18,1978, we are hereby giving you notice that the said agreement shall terminate on March 18,1980.” Ken Baldwin replied to the Lehmans on February 13,1980, acknowledging receipt of their letter “terminating our exclusive as of March 18, 1980.” The letter further stated: “We will keep the property listed in our cooperative sales agency until the expiration date, and meanwhile will continue our efforts to sell the property even after the exclusive expires unless you advise us otherwise or until it is sold.”

On March 19, 1980, plaintiffs’ attorney mailed a rough draft of a proposed real estate contract between the plaintiffs and Patrick Lasco and Charles Drew. The rough draft was not signed by any of the named parties.

On April 14, 1980, Ken Baldwin submitted an offer to purchase the subject property to the plaintiffs which was on the same form as the March 19 draft. However, the terms of the original offer had been altered to provide, inter alia, that the Lehmans would pay a broker’s commission to the defendant in the amount agreed to in the exclusive brokerage agreement. The April 4 offer was signed by a new prospective purchaser, Henry Criz, in place of Lasco and Drew, whose names have been deleted.

For reasons not revealed in the record, neither sale was consummated, nor did the Lehmans ever accept either offer by signing a contract.

On July 5, 1980, the American Arbitration Association notified the Lehmans that Matanky had filed a demand for arbitration of the issue of the $84,000 brokerage commission. The Lehmans protested that filing, and contested the jurisdiction of the American Arbitration Association by claiming that the brokerage agreement which provided for arbitration had been properly terminated and no longer compelled arbitration of the issue.

Plaintiffs subsequently filed this lawsuit seeking to enjoin defendant from proceeding to arbitration. Following cross motions for summary judgment, the trial court ruled in favor of plaintiffs, and it is from this order that defendant appeals.

Opinion

Defendant initially contends that the trial court erred in finding that the parties had not agreed to arbitrate a dispute concerning the termination of the contract.

Section 2(a) of the Uniform Arbitration Act (Ill. Rev. Stat. 1977, ch. 10, par. 102(a)) provides:

“(a) On application of a party showing an [arbitration] agreement * * *, and the opposing party’s refusal to arbitrate, the court shall order the parties to proceed with arbitration, but if the opposing party denies the existence of the agreement to arbitrate, the court shall proceed summarily to the determination of the issue so raised and shall order arbitration if found for the moving party, otherwise, the application shall be denied.”

Under the Uniform Arbitration Act, adopted in Illinois in 1961, the trial court is authorized to determine arbitrability if one of the parties denies it has agreed to arbitrate. The chief effect and benefit of the 1961 Act is that it grants legal enforceability to arbitration agreements to settle future as well as existing disputes. Flood v. Country Mutual Insurance Co. (1967), 89 Ill. App. 2d 358, 232 N.E.2d 32, rev d on other grounds (1968), 41 Ill. 2d 91, 242 N.E.2d 149.

However, it is well settled that since arbitration is a matter of contract, a party cannot be required to arbitrate any dispute which he had not agreed to arbitrate (Butler Products Co. v. Unistrut Corp. (7th Cir. 1966), 367 F.2d 733; Atkinson v. Sinclair Refining Co. (1962), 370 U.S. 238,241, 8 L. Ed. 462, 466, 82 S. Ct. 1318, 1320-21), and it is for the courts to determine whether the claim is “on its face” covered by the contract. United Steelworkers v. American Manufacturing Co. (1960), 363 U.S. 564, 568, 4 L. Ed. 2d 1403, 1407, 80 S. Ct. 1343, 1346.

Thus, we note initially that the issue as to whether the brokerage contract in the present case required arbitration by its terms was properly decided by the trial court and not by an arbitrator. Board of Trustees v. Cook County College Teachers Union, Local 1600 (1980), 87 Ill. App. 3d 246, 408 N.E.2d 1026.

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438 N.E.2d 614, 107 Ill. App. 3d 985, 63 Ill. Dec. 683, 1982 Ill. App. LEXIS 2088, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lehman-v-eugene-matanky-associates-inc-illappct-1982.