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Foley v. Greer

August 27, 2002


Appeal from the Circuit Court of St. Clair County. No. 01-LM-2063 Honorable Jan V. Fiss, Judge, presiding.

The opinion of the court was delivered by: Justice Kuehn

We allowed the defendant's request to file this interlocutory appeal on the basis of Supreme Court Rule 306(a)(4) (166 Ill. 2d. R. 306(a)(4)). Because of the unique circumstances of this case, the question whether this case fits within the wording of that rule, and thus whether or not we have jurisdiction to hear this case, requires us to initially determine the issue on appeal itself. Only by resolving the ultimate issue can we determine if this case meets the wording of Rule 306(a)(4).

Steven and Ruth Foley arrived in the Metro-East area in late 1997 by way of a United States Air Force transfer. In searching for a home in which to live, they located a 100-year-old candidate in the town of Lebanon. Prior to signing the purchase contract, the Foleys sought the counsel of a home inspector. The Foleys selected Inspections by Request, Inc. Inspections by Request, Inc., is not incorporated, despite its corporate designation, but is operated by Frank Greer, using the business name Inspections by Request, Inc. Frank Greer presented the Foleys with a contract. The contract, labeled an "Inspection Agreement," was a form contract. The parties to the contract were Inspections by Request, Inc., and the Foleys. Frank Greer signed the contract on behalf of Inspections by Request, Inc., as an "Inspector." The Foleys paid $155 for an initial inspection and $65 for a follow-up inspection. The agreement provided that the inspector would conduct "a visual inspection of the readily accessible portions of the building" at issue and its major systems. The agreement provides that liability was limited to the lesser of the actual damages sustained or the amount of money paid for the inspection. In the middle of this form contract, an arbitration-clause notice was highlighted in boldface type and in capital letters. By the clause, the parties agreed "to arbitrate any claim which may arise out of the performance of the Agreement."

Following his inspections, Frank Greer provided the Foleys with a verbal and written report indicating that he found no significant structural or material defects with the house. The Foleys purchased the home. Thereafter, various problems were discovered. The Foleys felt that these problems should have been found during the inspection, so that they could have made a better-informed decision of whether or not to purchase the home. The Foleys contend that if they had known about these problems, they would not have purchased the home. The Foleys claim damages as a result of necessary repairs, as well as the loss in the value of the home.

The Foleys made a claim with Inspections by Request, Inc., for their damages. Upon his receipt and review of the Foleys' claim, Frank Greer offered the Foleys a full refund of the amounts they paid. That offer was refused. Because the agreement called for arbitration, the Foleys submitted the case to arbitration. On May 10, 2000, the case was arbitrated before attorney Irv Slate in his Granite City, Illinois, office. Granite City is located in Madison County.

There is some confusion regarding whether arbitrator Irv Slate was informed to hold off on his decision because the parties were working to settle the claim on their own. In any event, after nine months of waiting for a decision, the Foleys decided to go ahead and file a civil complaint for damages in the St. Clair County circuit court. The complaint was filed on February 21, 2001. On February 22, 2001, Irv Slate issued his opinion, in which he found in favor of Inspections by Request, Inc. On April 5, 2001, the Foleys filed an amended complaint, in which they acknowledge the arbitration order. Without specifically asking for the arbitration order to be set aside, they argue that Irv Slate's neutrality was suspect and that he should not have been allowed to enter an order so long after the case was argued-especially after the Foleys sent Irv Slate a letter indicating that he might have committed malpractice by his delay.

In response to the amended complaint, Frank Greer filed a motion to transfer venue from St. Clair County to Madison County, in accordance with section 17 of the Uniform Arbitration Act (710 ILCS 5/17 (West 1998)). On August 28, 2001, the trial court denied this motion. On September 28, 2001, Frank Greer filed a petition in this court, pursuant to Rule 306(a)(4), seeking leave to appeal from the August 28, 2001, order. We granted this petition on November 19, 2001.

The Foleys argue that, jurisdictionally speaking, we should not have allowed this interlocutory appeal. They argue that Rule 306(a)(4) only allows appeals from a circuit court order denying a motion for a transfer of venue if the defendant is not a resident of the county in which the action was commenced and if there is no other legitimate basis for venue in that county. There is no dispute that Frank Greer does not live in St. Clair County. In keeping with the general venue statute, the Foleys claim that their case was properly filed in St. Clair County.

The general venue statute provides that every action should be filed in either the county where the defendant resides or the county in which the transaction occurred from which the cause of action arose. 735 ILCS 5/2-101 (West 1998). Because the inspection occurred in St. Clair County and the contract was entered into in St. Clair County, the Foleys argue that their choice of venue was proper. The Foleys claim that because there is a legitimate basis for St. Clair County venue, this interlocutory appeal should have been disallowed. Frank Greer responds that the Foleys did not have a legitimate basis for St. Clair County venue. He argues that the Uniform Arbitration Act contains a specific, controlling venue requirement, the application of which places venue in Madison County. See 710 ILCS 5/17 (West 1998).

The appropriateness of this interlocutory appeal requires the resolution of the ultimate issue raised in this appeal. Does the arbitration venue statute take precedence over the general venue statute? If it does, then the Foleys did not have a legitimate basis for claiming St. Clair County venue and the trial court's denial of the motion to transfer venue to Madison County would have been erroneous.

The Uniform Arbitration Act provides that court actions should be filed in the county in which a previous arbitration hearing was held. 710 ILCS 5/17 (West 1998). In the only case directly on point, the court held that this specific venue statute controlled in a situation where the specific venue statute was in conflict with the general venue statute. See Mazur v. Quarters Designs, Inc., 248 Ill. App. 3d 873, 875, 619 N.E.2d 763, 764 (1993). The third district appellate court based its decision on the accepted rule of statutory construction that a specific statute prevails over a general statute where both relate to the same subject. Mazur, 248 Ill. App. 3d at 875, 619 N.E.2d at 764 (citing People ex rel. Myers v. Pennsylvania R.R. Co., 19 Ill. 2d 122, 166 N.E.2d 86 (1960)).

We agree with the holding of Mazur v. Quarters Designs, Inc. We conclude that because the matter was arbitrated in Madison County, any related claim filed in the circuit court must also be filed in Madison County.

Before we reach the conclusion that the trial court erred in refusing to transfer this case to Madison County, we address arguments raised by the Foleys for the first time on appeal.

The Foleys contend that Frank Greer was not a party to the arbitration itself and that therefore this suit cannot be deemed a "contest" of the arbitration that would require compliance with the Uniform Arbitration Act venue provision. On a similar note, the Foleys alternatively argue that Frank Greer was not a party to the inspection contract containing the arbitration clause, rendering the contract unenforceable, and thus that this suit has nothing to do with the arbitration. In short, the Foleys are seeking a loophole-an endeavor which, under these circumstances, is perfectly understandable. The problem with these arguments is that they are contradicted by the very language of the Foleys' complaint. The lawsuit pits the Foleys against Frank Greer, the individual. Frank Greer is sued as an individual who is doing business under the name Inspections by Request, Inc. The complaint alleges that the Foleys contracted with the defendant-Frank Greer. Attached to the complaint is a copy of the contract the Foleys entered into with Inspections by Request, Inc. The Foleys and Frank Greer, in his capacity as an inspector for Inspections by Request, Inc., signed this contract. The Foleys further allege that they demanded that the disagreement be arbitrated in compliance with this contract. The Foleys acknowledge ...

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