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01/20/94 CITY PERU v. ILLINOIS POWER COMPANY

January 20, 1994

CITY OF PERU, AN ILLINOIS HOME RULE MUNICIPAL CORPORATION,
v.
ILLINOIS POWER COMPANY, A CORPORATION, AND ILLINOIS TRUCKS, INC., A CORPORATION, DEFENDANTS-APPELLANTS, V. ILLINOIS MUNICIPAL ELECTRIC AGENCY, A MUNICIPAL CORPORATION, INTERVENOR-APPELLEE.



Appeal from the Circuit Court of the 13th Judicial Circuit, La Salle County, Illinois. No. 93 CH 43. Honorable Robert L. Carter, Judge Presiding.

Petition for Rehearing Denied and Released for Publication April 15, 1994.

Honorable Kent Slater, Presiding Justice, Honorable Peg Breslin, Justice, Honorable Michael P. Mccuskey, Justice

The opinion of the court was delivered by: Mccuskey

JUSTICE McCUSKEY delivered the opinion of the court:

The City of Peru (Peru) filed a complaint for injunctive relief against the defendant, Illinois Power Company (Illinois Power). Illinois Power later filed a motion to compel the arbitration of the dispute. The motion was based upon an arbitration provision contained in a power coordination agreement between Illinois Power and the Illinois Municipal Electric Agency (IMEA). The trial court denied the motion to compel arbitration, and Illinois Power filed this interlocutory appeal.

Illinois Power raises two issues on appeal: (1) whether Peru should have been compelled to arbitrate the dispute based upon thepower coordination agreement signed in 1992 (the 1992 Agreement); and (2) whether Peru should have been compelled to arbitrate based upon the power coordination agreement signed in 1986 (the 1986 Agreement).

Following our careful review of the record, we conclude that the trial court properly found Peru could not be compelled to arbitrate the dispute based upon the 1992 Agreement. The record clearly shows that Peru was not a party to the 1992 Agreement. We also conclude that the trial court correctly determined that Peru could not be compelled to arbitrate the dispute based upon the 1986 Agreement. Although Peru was a party to the 1986 Agreement, that agreement was expressly cancelled by the 1992 Agreement. Accordingly, we affirm the ruling of the trial court.

On April 21, 1993, Peru filed a verified complaint seeking injunctive relief against Illinois Power. Peru also filed a motion for a temporary restraining order. Peru alleged that it was a distributor of electric power and was a member of IMEA. IMEA supplied Peru with wholesale electric power. Peru also alleged that Illinois Power began providing electric power to one of Peru's customers, Central Illinois Trucks (CIT), on April 21, 1993. Peru alleged that this action violated the 1992 Agreement between IMEA and Illinois Power. A copy of the lengthy 1992 Agreement was attached to the complaint.

The trial court entered a temporary restraining order on April 21, 1993. It found that Peru had a legitimate and protectable business interest in maintaining CIT as a customer of its electric power. As a result, Illinois Power was restrained from providing electric power to CIT until further order of the court.

On May 13, 1993, IMEA filed a petition for leave to intervene in the action. It alleged that the dispute between Peru and Illinois Power did not involve the 1992 Agreement "but rather is a dispute between two retail suppliers of electricity as to which party will provide electricity to a particular customer." IMEA further alleged that it was a party to the 1992 Agreement and would be bound by the court's interpretation of the applicability of the Agreement. IMEA therefore requested leave to intervene in the action.

On May 21, 1993, the court granted IMEA'S petition to intervene. The court also allowed Peru to file an amended complaint. In its amended complaint, Peru alleged that Illinois Power's attempt to provide electric power to CIT was a violation of section 14 of the Electric Supplier Act (220 ILCS 30/14 (West 1992)). Peru did not mention or rely upon the 1992 Agreement between Illinois Power and IMEA.

On June 18, 1993, Illinois Power filed a motion to dismiss Peru'samended complaint and to compel arbitration. Illinois Power argued that the actual dispute between the parties required an interpretation of the 1992 Agreement. Therefore, Illinois Power argued that the dispute was covered by the arbitration provision in the 1992 Agreement. As an alternative argument, Illinois Power pointed out that it had entered into an agreement with IMEA in 1986. The 1986 Agreement also contained an arbitration provision. Peru had adopted the 1986 Agreement by ordinance and was a party to the 1986 Agreement. Illinois Power therefore argued that Peru was bound by the arbitration provision in the 1986 Agreement.

On August 4, 1993, Illinois Power filed an additional motion to compel arbitration and to stay the trial court proceedings. A hearing was held on September 16, 1993. Following the hearing, the court denied Illinois Power's motion. The court found that Peru was a third-party beneficiary of the 1992 Agreement. The court also found that Peru was not a party to the arbitration provision in the 1992 Agreement and was not bound by the arbitration provision. Furthermore, the court found that the dispute between Illinois Power and Peru did not come within the scope of the 1992 Agreement and was not covered by the arbitration provision. Additionally, the court found that the 1986 Agreement did not apply to the dispute. After its motion to reconsider was denied, Illinois Power filed its notice of interlocutory appeal.

On appeal, Illinois Power argues that the trial court erred in denying its motion to compel arbitration. We initially note that the sole question before a reviewing court in an interlocutory appeal is whether there was a sufficient showing to sustain the trial court's order granting or denying the relief sought. Glenn H. Johnson ...


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