The opinion of the court was delivered by: ROBERT W. GETTLEMAN
Plaintiff Michael Messing brings this action for damages against defendants Carl Rosenkrantz, EMSA, a Florida limited partnership, and Provident Imaging Consultants, Inc. ("PIC"), claiming fraud and breach of an employment contract. The Court's jurisdiction is based on diversity of citizenship, 28 U.S.C. § 1332. Defendants have moved to the stay proceedings and compel arbitration pursuant to Section 3 of the Federal Arbitration Act ("FAA"), 9 U.S.C. § 3. For the reasons set forth below, the motion is granted.
Plaintiff is a medical doctor residing in Illinois. Defendant Rosenkrantz is president of PIC which is owned, at least in part, by defendant EMSA. All three defendants are allegedly engaged in the business of recruitment and placement of medical personnel with medical provider organizations. In July 1993 plaintiff met with Rosenkrantz, who was acting as agent for EMSA and PIC, regarding a position as Medical Director of Radiology at Provident Hospital located in Chicago and owned by Cook County, Illinois. Either PIC or EMSA had a contract with Cook County to procure personnel to staff Provident's Radiology Department, but none of defendants had authority to actually hire anyone without the consent and agreement of Provident. Sometime later in July, at plaintiff's inquiry, Rosenkrantz stated that Provident had approved plaintiff for the position. At the time Rosenkrantz made that statement he knew it to be false.
As a result of Rosenkrantz' representation, on August 1, 1993, plaintiff gave notice to his then employer that he had accepted the position at Provident effective August 15, 1993. On August 9, 1993, plaintiff signed a written employment agreement with PIC (the "Agreement") which provides, among other things, that PIC would employ plaintiff for two years as Director of Radiology at Provident at $ 250,000.00 for the first year, and $ 275,000.00 for the second year. The Agreement also contains an arbitration clause, which is the subject of the current motion. Shortly thereafter, Rosenkrantz informed plaintiff that Provident had not approved plaintiff's appointment. By then plaintiff had lost his previous position, and was unable to resurrect it. On May 24, 1994, plaintiff filed this two count action, alleging fraud and breach of contract for defendants' failure to employ him. Defendants have moved to stay this proceeding pursuant to the arbitration provision in the Agreement, and Section 3 of the FAA.
Section 3 of the FAA provides:
If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.
Paragraph 18 of the Agreement provides, in pertinent part:
Thus, there can be no question that at least as to PIC, this matter is subject to the arbitration clause. Clearly the breach of contract and fraud counts "arise out of, under, or in connection with" the Agreement and as such are referable to arbitration. Plaintiff's half-hearted attempts to argue that Count II for breach of contract is not subject to arbitration because the arbitration provision does not specifically include "disputes arising out of a breach" of the agreement is totally unfounded. Indeed, in Knorr Brake Co. v. Harbil, Inc., 556 F. Supp. 489 (N.D. Ill. 1983), a case plaintiff cites in his memorandum for other reasons, the court held that a breach of contract claim was subject to an arbitration provision that did not specifically refer to breaches of the agreement, but rather had general language similar to the language contained in the Agreement in the instant case.
Whether the Court should stay proceedings as to Rosenkrantz and EMSA is a separate matter, because neither is a signatory to the Agreement. Plaintiff maintains that the Court should not stay proceedings as to them because neither can be compelled to arbitrate. This is not really the issue, however, because each has already agreed to arbitrate by moving for the stay and, under section 3 of the FAA any order granting a stay could be conditioned on such an agreement. ...