Peterson v. Superior Bank FSB

611 N.E.2d 1139, 242 Ill. App. 3d 1090, 183 Ill. Dec. 491, 1993 Ill. App. LEXIS 177
CourtAppellate Court of Illinois
DecidedFebruary 17, 1993
Docket1-91-4039
StatusPublished
Cited by7 cases

This text of 611 N.E.2d 1139 (Peterson v. Superior Bank FSB) 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
Peterson v. Superior Bank FSB, 611 N.E.2d 1139, 242 Ill. App. 3d 1090, 183 Ill. Dec. 491, 1993 Ill. App. LEXIS 177 (Ill. Ct. App. 1993).

Opinion

JUSTICE GREIMAN

delivered the opinion of the court:

Plaintiff, James Peterson, appeals the trial court’s granting of summary judgment in favor of defendants, Sanctuary Urban Renewal Investment Corporation (hereinafter SURIC) and Superior Bank FSB, formerly known as Lyons Savings and Loan Association (hereinafter Bank), in an action seeking a declaratory judgment that SURIC and the Bank are responsible for an alleged joint venture debt to plaintiff.

On appeal, plaintiff asserts that (1) he is entitled to pursue SURIC for satisfaction of the judgments entered against Landmark Properties, Inc. (hereinafter Landmark), and Sheffield Development Corporation (hereinafter Sheffield) based on an arbitration award; and (2) his cause of action is not time-barred by any statute of limitations.

For the reasons which follow, we affirm the order granting summary judgment for defendants.

The underlying facts are not in dispute.

SURIC was a co-joint venturer with Landmark and Sheffield in a joint venture known as “The Sanctuary” project. The joint venture was formed to renovate a building complex located at 2358 North Sheffield Avenue in Chicago. SURIC was a wholly owned subsidiary of defendant Bank.

Plaintiff is the owner of an architectural firm. Plaintiff entered into two contracts (dated July 27, 1983, and February 2, 1984) with Landmark and Sheffield to provide certain architectural services for the designated owners, i.e., Landmark and Sheffield.

On May 7, 1985, plaintiff filed a demand for arbitration against Landmark and Sheffield because of their failure to pay plaintiff. The arbitration provision in the contracts provided:

“All claims, disputes and other matters in question between the parties to this Agreement, arising out of or relating to this Agreement or the breach thereof, shall be decided by arbitration. *** No arbitration, arising out of or relating to this Agreement, shall include, by consolidation, joinder or in any other manner, any additional person not a party to this Agreement except by written consent containing a specific reference to this Agreement and signed by the Architect, the Owner, and any other person sought to be joined.”

After plaintiff filed a demand for arbitration in 1985, Landmark and Sheffield sought to block the arbitration claiming they had never agreed to arbitrate their disputes in a written contract with plaintiff. Subsequently, this court required the parties to submit to arbitration in Landmark Properties, Inc. v. Architects International-Chicago (1988), 172 111. App. 3d 379, 526 N.E.2d 603. Landmark and Sheffield argued that the controlling agreement between the parties was an oral one and not the written contract which had been submitted by plaintiff in Jie course of negotiation. Although the contract had never been signed, this court determined that the conduct of Landmark and Sheffield indicated an assent to be bound by the terms of the unsigned contract. Landmark, 172 Ill. App. 3d at 383-84.

On December 9, 1988, an award of arbitration was entered in favor of plaintiff and against Landmark and Sheffield in the amount of $151,566.88 for architectural services performed on the project.

Thereafter, Landmark declared bankruptcy and on December 23, 1988, the Federal bankruptcy court confirmed the arbitration award as a proper claim against Landmark.

On January 17, 1989, the circuit court, chancery division, confirmed the arbitration award as a final judgment against Sheffield. That judgment remains unsatisfied.

On May 9, 1990, plaintiff filed a three-count complaint for declaratory judgment against SURIC and the Bank. Count I sought a declaratory judgment that the Bank and SURIC are not separate entities. Count II alleged SURIC vicariously liable for the judgment against Landmark and Sheffield based on SURIC’s status as a joint venturer in the Sanctuary Project. Count III sought to hold the Bank liable for satisfaction of the judgments claiming that SURIC is the alter ego of the Bank.

The trial court granted summary judgment for defendants reasoning that plaintiff’s cause of action accrued at the time of the underlying breach of the contract for architectural services rather than at the time of the arbitration award or the confirmation of that award and, thus, his present complaint was barred by the statute of limitations.

Initially we note that plaintiff does not allege nor does the record disclose that he was not aware that SURIC was a joint venturer. However, plaintiff had entered into contracts with two of the joint venturers and, upon breach of those contracts, wished to take advantage of the arbitration provision of that agreement, an agreement whose terms expressly limited plaintiff’s right to join any nonsignatory party to the arbitration proceedings.

The reasons for a preference for arbitration over a suit in the circuit court are hardly obscure. A speedy resolution to the controversy without long delay and endless discovery must have been appealing. Moreover, plaintiff may have been required to exhaust his arbitration remedy as to Landmark and Sheffield.

However, since partnership principles govern joint ventures (.Bachewicz v. American National Bank & Trust Co. (1986), 111 Ill. 2d 444, 448, 490 N.E.2d 680), Landmark and Sheffield, as co-joint venturers, could not bind the joint venture or their co-joint venturers by an arbitration award if they acted without the authority of their co-joint venturer because section 9(3Xe) of the Uniform Partnership Act specifically prohibits such conduct. (HI. Rev. Stat. 1985, ch. IO6V2, par. 9(3Xe); Moseley, Hallgarten, Estabrook & Weeden, Inc. v. Ellis (7th Cir. 1988), 849 E2d 264, 269; see also Atlas v. 7101 Partnership (1982), 109 Ill. App. 3d 236, 440 N.E.2d 381.) Section 9(3Xe) provides:

“(3) Unless authorized by the other partners or unless they have abandoned the business, one or more but less than all the partners have no authority to:
* * *
(e) Submit a partnership claim or liability to arbitration or reference.” HI. Rev. Stat. 1985, ch. lOO1^, par. 9(3Xe).

Although paragraph 8.3 of the contract states that “[t]he Owner and the Architect, respectively, bind themselves, their partners, successors, assigns and legal representatives to the other party to this Agreement” (emphasis added), Landmark and Sheffield had no power to bind either SURIC or the joint venture to arbitration unless consent had been given or unless their conduct ratified the contract.

Accordingly, to enforce a judgment based upon an arbitration award, plaintiff must allege that all of the parties agreed to submit the matter to arbitration.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Apollo Real Estate Investmend Fund, IV, L.P. v. Gelber
935 N.E.2d 949 (Appellate Court of Illinois, 2009)
Apollo Real Estate Investment Fund v. Gelber
Appellate Court of Illinois, 2009
Associated Aviation Underwriters v. Wood
98 P.3d 572 (Court of Appeals of Arizona, 2004)
Palumbo Brother, Inc. v. Wagner
Appellate Court of Illinois, 1997
Palumbo Bros., Inc. v. Wagner
688 N.E.2d 837 (Appellate Court of Illinois, 1997)

Cite This Page — Counsel Stack

Bluebook (online)
611 N.E.2d 1139, 242 Ill. App. 3d 1090, 183 Ill. Dec. 491, 1993 Ill. App. LEXIS 177, Counsel Stack Legal Research, https://law.counselstack.com/opinion/peterson-v-superior-bank-fsb-illappct-1993.