Northeast Illinois Regional Commuter Railroad v. Chicago Union Station Co.

832 N.E.2d 214, 358 Ill. App. 3d 985, 295 Ill. Dec. 63, 2005 Ill. App. LEXIS 592
CourtAppellate Court of Illinois
DecidedJune 17, 2005
Docket1-04-2862, 1-04-2863 cons.
StatusPublished
Cited by18 cases

This text of 832 N.E.2d 214 (Northeast Illinois Regional Commuter Railroad v. Chicago Union Station Co.) 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
Northeast Illinois Regional Commuter Railroad v. Chicago Union Station Co., 832 N.E.2d 214, 358 Ill. App. 3d 985, 295 Ill. Dec. 63, 2005 Ill. App. LEXIS 592 (Ill. Ct. App. 2005).

Opinion

PRESIDING JUSTICE FITZGERALD SMITH

delivered the opinion of the court:

Defendant Chicago Union Station Company, an Illinois corporation, appeals from an order of the circuit court denying its motions to compel arbitration and to dismiss the expedited application for a stay of arbitration brought by plaintiff Northeast Illinois Regional Commuter Railroad Corporation, d/b/a METRA, a public corporation (plaintiff or Metra), and granting the stay of arbitration sought by Metra. On appeal, defendant contends that the court improperly found that it had waived its right to arbitration and that arbitration of a particular liability cost compensation issue was barred by the principle of res judicata. For the reasons that follow, we affirm the judgment of the circuit court.

BACKGROUND

This appeal involves questions of waiver of the right to arbitration of certain issues concerning a long-term lease of Chicago Union Station made between plaintiff and defendant. There are two lease agreements between plaintiff and defendant.

The parties entered the first such lease agreement in 1984. On May 1, 1984, defendant, as lessor, entered an agreement (the 1984 agreement or the lease) granting plaintiff, the lessee, the right to the use of the Chicago Union Station for the purpose of handling plaintiffs commuter passenger traffic for a term of five years. On May 1, 1988, the parties amended the agreement (1988 agreement or the amended agreement), extending the lease of the station for another 30 years, through April 30, 2019. Both agreements contain arbitration clauses.

The 1984 agreement contains a standard arbitration clause in section 13, which provides that disputes concerning the construction or interpretation of the agreement be submitted to arbitration. In pertinent part, it states:

“In case of any difference or dispute as to the construction or interpretation of this Agreement upon which the parties are unable to agree, the matter concerning to which there is a controversy shall be submitted to three competent arbitrators, one of whom shall be appointed by the Station Company [defendant] and one of whom shall be appointed by the Lessee [plaintiff]. The two so appointed shall select a third disinterested and competent person and the decision of this Board or of a majority shall be final and conclusive between the parties.”

The 1984 agreement contains a second arbitration clause, relating to lease-amending provisions. That arbitration clause, set forth in section 17, set July 1, 1988, as the date by which the parties would enter into negotiations for a new lease agreement; it provides that, if the parties failed to agree upon terms and conditions of a mutually acceptable new lease agreement by January 1, 1989, the issues in dispute would be submitted to arbitration pursuant to the provisions contained in section 13. The section further provides that all decisions of the arbitration panel would be applied retroactively to April 1, 1989.

The 1988 agreement also contains a lease-amending arbitration clause. Section 3 of the amended agreement provides that the existing agreement is extended for 30 years, to April 30, 2019, and that the lease remains in effect, subject to review every 5 years, unless within a 6-month review period the parties agree to certain amendments or, if they do not agree to the proposed amendments, the differences will be submitted to arbitration. Specifically, section 3 states:

“[T]he existing Agreement shall be reviewed every five years and amended as necessary upon terms and conditions mutually acceptable to the parties hereto, provided however, if the parties are unable to agree on the amendments to this Agreement within six months after the commencement of such review, the issues in dispute shall be submitted to arbitration pursuant to the provisions of Sections 13 and 17 of the Agreement, which arbitration panel shall determine just and reasonable terms and conditions for Lessee’s use of the Station, facilities and Property. The first review date shall be May 1,1994, unless an earlier review date is requested by either party.”

Thus, beginning in May 1994, the terms of the lease were subject to review for the five-year period of 1994-99. The next review, in May 1999, for the 1999-2004 period, is the one at issue here.

This litigation, which commenced in June 2004, arose from a letter sent by defendant the previous month, i.e., May 2004, notifying plaintiff that it sought to initiate arbitration for the 1999-2004 review period. In June 2004, plaintiff filed its action for preliminary and permanent injunction and the application for an expedited stay of arbitration in the circuit court.

At this juncture, we note that the record before this court consists solely of the common law record. Accordingly, the following is taken from the pleadings.

In April 1994, before the start of the first five-year review period (for 1994-99) under the amended agreement, defendant identified three items for negotiation pertaining to lease amendments in anticipation of the six-month negotiation period. After defendant’s identification of those items in a letter of April 28, 1994, the parties engaged in negotiations during the review period. Several times, the parties mutually agreed to extend the six-month negotiation period. The parties were still engaged in the review process in July 1995 but, because they did not reach mutually acceptable terms, the 1994 review period did not result in an amendment to the lease. Neither party initiated an arbitration to amend the agreement. In October 1995, defendant withdrew its request for review by letter.

During the extended course of the negotiations for the 1994 review, defendant repeatedly acknowledged (in letters of October 1994, January 1995, and March 1995) the six-month period of time provided, in section 3 of the agreement, for the negotiation process. In making such acknowledgment, defendant asserted that the only issues that could be reviewed were those raised in its April 1994 letter seeking review of those specific issues. Without the implementation of any amendment to the lease, the parties continued to operate under the existing terms of the 1984 lease agreement.

On April 27, 1999, defendant sent plaintiff a letter advising it that, pursuant to the 1984 agreement and section 3 of the 1988 agreement, “it is the intention of [defendant] to review and amend the terms of the compensation paid by Metra *** [defendant] will initiate the process of review by presenting to Metra in the next few weeks a number of proposed changes in the existing agreements.”

According to plaintiff, “neither party served written notice in 1999 of an intent to commence review of any lease issues” for the 1999-2004 period and that “the 1999 six-month review window closed” without the submission of any lease negotiation disputes to arbitration. Because there was no amendment or initiation of arbitration, plaintiff asserts, the parties continued to operate under the existing terms of the lease for the five-year period of 1999-2004.

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Cite This Page — Counsel Stack

Bluebook (online)
832 N.E.2d 214, 358 Ill. App. 3d 985, 295 Ill. Dec. 63, 2005 Ill. App. LEXIS 592, Counsel Stack Legal Research, https://law.counselstack.com/opinion/northeast-illinois-regional-commuter-railroad-v-chicago-union-station-co-illappct-2005.