APPEAL from the Circuit Court of St. Clair County; the Hon.
RICHARD GOLDENHERSH, Judge, presiding.
MR. PRESIDING JUSTICE KASSERMAN DELIVERED THE OPINION OF THE COURT:
This appeal arises from the trial court's interlocutory orders, consolidated for appeal, which invoke the jurisdiction of this court under both Supreme Court Rules 307(a)(1) and 308 (Ill. Rev. Stat. 1979, ch. 110A, pars. 307(a)(1) and 308). The trial court found, under Rule 308, that its order involved a question of law as to which there is substantial ground for difference of opinion and identified the question of law involved as follows:
"May a court enjoin the parties to a controversy from proceeding with a determination thereof before an arbitrator upon the same grounds that the Court could enjoin those parties from proceeding with litigation of the controversy before another court, or is the court prevented from doing so because the grounds specified in Illinois Revised Statute Chapter 10 Section 102 are exclusive?"
Section 2 of the Uniform Arbitration Act (Ill. Rev. Stat. 1979, ch. 10, par. 102), referred to in the trial court's order, includes the following provision:
"(b) On application, the court may stay an arbitration proceeding commenced or threatened on a showing that there is no agreement to arbitrate. That issue, when in substantial and bona fide dispute, shall be forthwith and summarily tried and the stay ordered if found for the moving party. If found for the opposing party, the court shall order the parties to proceed to arbitration." (Ill. Rev. Stat. 1979, ch. 10, par. 102(b).)
This is the sole provision in the Uniform Arbitration Act which addresses stays or injunctions in arbitration proceedings.
The record in the instant appeal discloses the following facts: Boatman Construction Company, a general contractor, contracted to build a house for the fixed price of $268,250 for Gary L. and Linda J. Vicik, owners. The contract contained a general arbitration clause, which provided that "[A]ll claims or disputes arising out of this Contract or the breach thereof shall be decided by arbitration * * * unless the parties mutually agree otherwise." The contract also provided a procedure for authorizing additional costs or changes in the house, which would add to the cost of construction.
As construction of the house neared completion, the general contractor presented the owners with bills for 90 changes in construction and claimed an additional $69,618.82. The owners disputed most of the changes, asserting that contractual procedures had not been followed.
While resolution of the disputed bills was being negotiated, four firms, some of whom were subcontractors and some of whom were materialmen, demanded foreclosure of mechanics' liens against the owners and the general contractor. These demands were made by some of the firms in original suits filed by them and by the remainder in counterclaims in pending suits. Included among the claims against the property were the following: Spengler Plumbing Company for $8,645; Liese Lumber Company for $14,279.89; Lickenbrock & Sons for $3,248.20; and J.F. Incorporated for $7,009.02. The general contractor then demanded arbitration of its dispute with the owners under the provision of its contract with them. Thereafter, the owners moved to consolidate the foreclosure suits and petitioned the court to enjoin the arbitration. The motion to consolidate was granted, and at the outset, the petition to enjoin the arbitration was also granted. Upon the general contractor's motion to reconsider, however, the trial court reversed itself and denied the petition for injunction. At the request of the owners, the court then certified the matter to this court under Supreme Court Rule 308.
On appeal, the owners contend that the trial court erred in denying their petition for an injunction. They argue that a court properly may refuse to compel an arbitration which involves some, but not all, of the parties to multiparty litigation. The general contractor urges that the court enforce the arbitration clause binding it and the owners. It asserts that under the provisions of the Uniform Arbitration Act, the circuit court is empowered to stay an arbitration proceeding only upon a showing that there is no agreement to arbitrate.
The only Illinois case to address the issue has established that generally, agreements to arbitrate will be enforced despite existence of claims by third parties or of pending multiparty litigation. In Iser Electric Co. v. Fossier Builders, Ltd. (1980), 84 Ill. App.3d 161, 405 N.E.2d 439, a general contractor entered into a contract with homeowners for the construction of a home. The contract included a general arbitration clause. Electrical work on the home was subcontracted to the plaintiff electrical company.
Before completion of the building, the homeowners terminated their contract with the general contractor pursuant to a contract provision. The homeowners then entered into a new contract with the plaintiff electric company for completion of the electrical work on the house.
Subsequently, the electric company filed suit against both the general contractor and the homeowners, seeking damages for breach of its contracts with the homeowners and its subcontract with the general contractor. The general contractor answered the complaint and filed a counterclaim against the homeowners. The homeowners then filed a motion pursuant to section 2(d) of the Uniform Arbitration Act (Ill. Rev. Stat. 1979, ch. 10, par. 102(d)) for an order to stay prosecution of the counterclaim pending arbitration and to require the general contractor to proceed by arbitration under the terms of the contract.
The trial court denied the homeowners' request to compel arbitration, finding that arbitration would not result in economy of litigation and would create the possibility of ...