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Lehman v. Eugene Matanky & Assoc.





APPEAL from the Circuit Court of Cook County; the Hon. RICHARD CURRY, Judge, presiding.


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, ...

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