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Best Coin-op, Inc. v. Clementi





Appeal from the Circuit Court of Cook County; the Hon. William D. Kelly, Judge, presiding.


Anthony Clementi and William McCarthy (defendants) appeal from the February 5, 1982, order of the circuit court of Cook County granting to Best Coin-Op, Inc. (Best), judgment on the pleadings in the amount of $3,484.96 in Best's action to confirm an arbitrator's award pursuant to section 11 of the Uniform Arbitration Act (Act). Ill. Rev. Stat. 1979, ch. 10, par. 111.

The dispositive issue on appeal is whether defendants' alleged failure timely to assert any of the statutory grounds for vacatur of the arbitrator's award enumerated in section 12 (Ill. Rev. Stat. 1979, ch. 10, par. 112) of the Act waived their right to challenge that award.

On July 1, 1977, Best entered into a lease agreement with Frank Stape Builders, developer and original owner of a six-unit apartment building at 8647 Forster (Forster property) in Chicago. Under the lease which was to run from June 1, 1977, to June 30, 1984, Best was to equip and maintain a laundry room in the building, and lessor was to receive "25% of all gross revenue" resulting from the use of the laundry equipment by the building's tenants. The lease, a copy of which is present in the record, contains the following paragraphs pertinent to the instant case:

"13. In the event of any dispute or controversy arising out of the operation or alleged breach of this Lease Agreement such dispute or controversy shall be submitted to and be governed by the rules of the American Arbitration Association, and the decision rendered thereunder, whether legal or equitable in nature, shall be final and binding upon the parties. No litigation shall be instituted between the parties hereto except to enforce the award or order of the arbitrators.

15. This Lease Agreement shall be binding upon and shall inure to the benefit of the Lessor and the Lessee and their respective successors and assigns, including any future owners, beneficiaries or lessees of the Building, it being the intention of the parties that the interest granted to Lessee herein shall run with the land and Building." (Emphasis added.)

The Forester property was sold by Frank Stape Builders to James Weitzema, and in August 1979 Weitzema sold to defendants his beneficial interest in the property.

Defendant Clementi in his testimony acknowledged he was aware of the machines in the building prior to the consummation of defendants' purchase of the building on August 9, 1979. Defendants contend that Weitzema initially "represented * * * that there was no lease between him and [Best] and that the machines would be removed if the defendants so desired." Defendants later learned of Best's claim that its lease remained effective. On March 30, 1980, without resolving the lease dispute, Clementi disconnected the machines and notified Best to remove them. Best accordingly removed its equipment and on July 16, 1980, instituted action against defendants *fn1 seeking damages for an alleged breach of the lease. On April 1, 1981, defendants moved to dismiss the action on the ground that the lease contained an arbitration clause. Defendants' motion was granted and Best was directed by the trial court to pursue arbitration "if he so desire[d]." *fn2

Best accordingly instituted arbitration proceedings, an arbitrator was designated, and on June 26, 1981, an arbitration hearing was held. At the outset of the arbitration proceedings, defendants' counsel challenged the validity of the lease between Best and Frank Stape Builders; the effect, if any, such lease had on defendants; and whether the lease violated the statute of frauds. Counsel for Best argued that under paragraph 15 of the lease, subsequent purchasers of the property are bound by the lease. Upon completion of testimony, the arbitrator found that a valid and enforceable lease existed between Best and the "ownership of the property located at 8647 Forster in Chicago," and that Clementi "knowingly disconnected the machines that were in the property." These oral findings were incorporated into the written findings issued by the arbitrator and received by the parties on July 10, 1981. Additional findings by the arbitrator which are pertinent to this case included the following:


1. That the Respondent, ANTHONY CLEMENTI, objected in the Circuit Court of Cook County to a law suit and requested that this mater be settled through arbitration as provided in Exhibit #1, the laundry lease agreement.

2. That ANTHONY CLEMENTI is one of the beneficial owners and authorized agent for the other beneficial owners of the land trust that holds title to the premises which is the subject matter of this case.

3. That at the time ANTHONY CLEMENTI purchased the premises he ...

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