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02/18/94 CLINTON KENNEDY v. COMMERCIAL CARRIERS

February 18, 1994

CLINTON KENNEDY, DALE LONG, KENNETH H. CHANDLER, AND HAROLD SUTPHIN, INDIVIDUALLY AND ON BEHALF OF A CLASS OF SIMILARLY SITUATED PERSONS, PLAINTIFFS-APPELLEES,
v.
COMMERCIAL CARRIERS, INC., A MICHIGAN CORPORATION, DEFENDANT-APPELLANT.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. THE HONORABLE JOSEPH N. CASCIATO, JUDGE PRESIDING.

Rehearing Denied March 23, 1994. Released for Publication April 19, 1994. Petition for Leave to Appeal Denied October 6, 1994.

Cousins, Jr., Gordon McNULTY

The opinion of the court was delivered by: Cousins

JUSTICE COUSINS, JR. delivered the opinion of the court:

Defendant, Commercial Carriers, Inc. (CCI), filed this interlocutory appeal pursuant to Supreme Court Rule 307 (134 Ill. 2d R. 307) to challenge the circuit court's denial of its motion to compel arbitration of plaintiffs' breach of contract actions.

We affirm.

BACKGROUND

CCI is engaged in the business of transporting automobiles as a contract and common carrier. Plaintiffs Clinton Kennedy, Dale Long, Kenneth Chandler and Harold Sutphin are transport equipment owners who brought the underlying breach of contract action against CCI on behalf of all persons who leased transport equipment to CCI through 1988. During the time periods at issue, plaintiffs were members of the Central and Southern Conference of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (the Union). CCI and the Union were parties to a collective bargaining agreement which covered the plaintiffs.

Each of the plaintiffs had a separate written lease agreement with CCI, and each lease required CCI to pay as rent a percentage of CCI's gross revenues minus certain allowable deductions. Plaintiffs alleged that CCI breached the leases by failing to pay them the proper rents. According to plaintiffs, CCI improperly calculated the gross rents by deducting "ancillary charges" from its gross billings prior to applying the 65% rental factor.

Count I of plaintiffs' complaint seeks damages equal to 65% of the ancillary charges. Count II seeks an accounting of CCI's billings to its customers in connection with deliveries made on vehicles leased to CCI by the plaintiffs.

Procedural History

On January 18, 1990, CCI removed this case to Federal court. CCI argued that the lease agreements between it and plaintiffs incorporated provisions of the collective bargaining agreement. CCI asserted that because the collective bargaining agreement defined an essential term of the lease agreements, "gross revenues," plaintiffs' claims were, in essence, claims for breach of the collective bargaining agreement. Thus, CCI maintained that a Federal question was raised under the Labor Management Relations Act (29 U.S.C. section 185(a)) which provides jurisdiction over suits alleging violations of collective bargaining agreements.

On May 25, 1990, the Federal District Court remanded the case to the circuit court of Cook County, finding that no Federal question was presented by this case:

"The dispute before us does not involve a breach of the collective bargaining agreement. Nor is resolution of plaintiffs's claims 'inextricably intertwined with consideration of the terms of the labor contract.' [Citation] Rather, the dispute is over the parties rights under the lease agreements, some of which incorporate certain portions of the collective bargaining agreement.

The issue of whether plaintiffs' claims are subject to arbitration was neither raised before, nor decided by the District Court.

Following remand to the circuit court, CCI moved to dismiss plaintiffs' claims for lack of subject matter jurisdiction pursuant to section 2-619 of the Code of Civil Procedure (735 ILCS 5/2-619 (West 1992)). Specifically, CCI argued that plaintiffs' claims were preempted by section 301 of the Labor Management Relations Act ...


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