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Konicki v. Oak Brook Racquet Club

OPINION FILED NOVEMBER 8, 1982.

DENNIS J. KONICKI, PLAINTIFF-APPELLANT,

v.

OAK BROOK RACQUET CLUB, INC., DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Du Page County; the Hon. Charles R. Norgle, Judge, presiding.

JUSTICE NASH DELIVERED THE OPINION OF THE COURT:

Rehearing denied December 7, 1982.

___ N.E.2d ___ Plaintiff, Dennis J. Konicki, appeals from an order of the circuit court of Du Page County dismissing his petition to vacate or modify a decision of an arbitrator following arbitration of a dispute with defendant, Oak Brook Racquet Club, Inc. (OBRC).

The record reflects that Konicki was part owner of the Oak Brook Racquet Club (the Club). In October 1974, OBRC, also a part owner, assumed Konicki's interest in the Club pursuant to a series of agreements which provided, as relevant, that OBRC was to pay certain sums to Konicki over a period of time. Additionally, Konicki entered into a consultation agreement with OBRC which prohibited Konicki from competing with OBRC in its business within "10 square miles" of the Club. All of the executed agreements were included within the terms of a separate arbitration agreement which provided, inter alia:

"Any dispute thereunder shall be determined by arbitration in accordance with rules determined by the arbitrators. The arbitrators shall be one person appointed by Konicki, one person appointed by the President of OBRC and one person appointed by the two said appointees. Notice of demand for arbitration of any issue shall be served on each party, and arrangements shall be made for the orderly conduct thereof by the law firm of McBride, Baker, Wienke & Schlosser. The decision of the arbitrators shall be final and conclusive, except for fraud or gross abuse of discretion. Failure to arbitrate shall preclude judicial actions to resolve disputes arising under the terms of said agreements or this Arbitration Agreement."

Subsequently, in 1976, Konicki participated in the establishment of the Westmont Tennis Club, purportedly within the area of the non-competition covenant, and OBRC thereafter refused to make any further payments to Konicki under the terms of its agreement with him.

On December 9, 1976, Konicki commenced this action in the circuit court seeking damages from OBRC for its breach of the agreement. OBRC filed a motion to stay proceedings pending the submission of the dispute to arbitration and on August 25, 1978, an agreed order was entered which provided, inter alia:

"It is expressly ordered that the interpretation of the contract, the scope and enforceability of the non-competition covenant, are exclusively to be determined by the arbitrator after an evidentiary hearing.

* * * In the event the arbitrator finds against plaintiff, the hearing will be continued for 30 days on the issue of damages due OBRC as a result of plaintiff's breach, which damages shall be an offset against principal and interest due Konicki under the aforementioned stock redemption agreement and Note."

The arbitrators determined that a valid non-competition agreement existed between the parties and that the proscribed "10 square miles" referred to an area within a three-mile radius of the Club. The arbitrators further found that Konicki had violated the non-competition covenant and that OBRC had sustained damage in the amount of $64,000. They also determined that OBRC owed Konicki $102,500 pursuant to the redemption agreement and, accordingly, offset the damages and on August 26, 1980, entered an award in favor of Konicki in the sum of "$48,500 [sic]" plus interest.

Within 20 days, OBRC petitioned the arbitrators to correct the mathematical error ($102,500 minus $64,000 equals $38,500, not $48,500) in the award pursuant to section 9 of the Uniform Arbitration Act (UAA). (Ill. Rev. Stat. 1979, ch. 10, par. 109.) On September 29, 1980, the arbitrators modified the award to reflect the correct damage figure of $38,500. Thereafter, on December 24, 1980, Konicki filed a petition to vacate or modify the decision of the arbitrators in the pending circuit court proceeding pursuant to sections 12 and 13 of the UAA. (Ill. Rev. Stat. 1979, ch. 10, pars. 112, 113.) The petition, which was filed within 90 days of entry of the modified award, but more than 90 days after the original award, alleged that the enforcement of the non-competition clause violated public policy; that the arbitrators ruled upon an issue not submitted to them; and that the award constituted a "gross abuse" of discretion.

OBRC moved to strike the petition contending that it was not timely filed within 90 days of the original award and otherwise failed to state a cognizable basis for review under sections 12 and 13 of the UAA (Ill. Rev. Stat. 1979, ch. 10, pars. 112, 113). OBRC's motion was granted on these grounds, and Konicki appeals.

Konicki contends that the dismissal of his petition was erroneous, asserting: (1) the section 9 application to the arbitrator to correct the initial award tolled the period in which the parties may petition the circuit court pursuant to sections 12 and 13 of the UAA, thus making his petition timely; (2) public policy considerations are grounds for review of an arbitrator's award even though not expressly enunciated in sections 12 and 13 of the Act; and (3) the petition otherwise stated a cognizable claim for review under the UAA since it alleged the award was beyond the scope of the submitted issues and constituted a "gross abuse of discretion."

Initially, we note that in considering a motion to dismiss a complaint or petition all well-pleaded facts contained therein must be taken as true and all inferences therefrom must be drawn in favor of the non-movant. (Album Graphics, Inc. v. Beatrice Foods Co. (1980), 87 Ill. App.3d 338, 344, 408 N.E.2d 1041, 1046; McCauley v. Chicago Board of Education (1978), 66 Ill. App.3d 676, 677, 384 N.E.2d 100, 101, appeal denied (1979), 74 Ill.2d 586.) A petition should not be dismissed for failure to state a claim unless it clearly appears that no set of facts could be proven under the allegations which would entitle the petitioner to relief. Felbinger & Co. ...


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