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Liberty Chevrolet, Inc. v. Rainey

June 11, 2003


Appeal from the Circuit Court of Du Page County. No. 01--LM--3689 Honorable Hollis L. Webster, Judge, Presiding.

The opinion of the court was delivered by: Justice Callum


Plaintiff and counterdefendant, Liberty Chevrolet, Incorporated, sued in replevin (735 ILCS 5/19--101 et seq. (West 2000)) to recover an automobile that it had sold to defendant and counterplaintiff, Connie Rainey. Defendant filed a seven-count counterclaim alleging that plaintiff violated several federal and state consumer protection laws and seeking various types of relief. Relying on the arbitration clause in the parties' sales contract, plaintiff moved to compel arbitration of the counterclaim. The trial court granted the motion and allowed the voluntary dismissal (see 735 ILCS 5/2--1009 (West 2000)).

Defendant appeals (see 188 Ill. 2d R. 307(a)(1)), arguing that plaintiff waived its contractual right to arbitration by choosing to sue in circuit court instead of demanding the arbitration of its replevin claim. We disagree and affirm.

The pertinent facts are not in dispute. On November 14, 2001, plaintiff filed its complaint in replevin, alleging that defendant wrongfully retained a 1998 Chevrolet Malibu valued at $9,750. Plaintiff demanded possession of the car, the value of property not delivered, damages for the detention, and attorney fees and costs.

On January 25, 2002, defendant filed an answer and a seven-count counterclaim seeking damages (compensatory and punitive) and declaratory and injunctive relief. The counterclaim is based on the circumstances under which plaintiff induced defendant to sign the purchase contract and the accompanying financing contract. Defendant signed these documents on July 11, 2001.

Counts I and II of the counterclaim, based on the Truth in Lending Act (15 U.S.C.A. §1601 et seq. (West 1998)), allege alternatively that (1) there was no sale because plaintiff retained the title to the car; and (2) there was a sale and plaintiff failed to disclose certain financial information in writing before the purchase was consummated, thus depriving defendant of the chance to seek and obtain better financing. Counts III and IV are based on section 32705(a)(1) of the Motor Vehicle Information and Cost Savings Act (49 U.S.C.A. §32705(a)(1) (West 1997)) and section 3--112.1(c) of the Illinois Vehicle Code (625 ILCS 5/3--112.1(c) (West 2000)), respectively. These counts allege that, intending to defraud defendant, plaintiff did not tender her the original title for her to sign but instead induced her to sign a power of attorney, which plaintiff used to obtain a new certificate of title. In that way, plaintiff avoided disclosing the information that was on the original title, including the car's mileage.

Count V of the counterclaim, based on section 1681m of the Fair Credit Reporting Act (15 U.S.C.A. §1681m (West 2000)), alleges that, after originally approving defendant for financing, plaintiff denied her credit without disclosing the credit reporting agency on whose information plaintiff relied. Count VI, based on the Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1 et seq. (West 2000)), alleges that plaintiff misled defendant so that she would not demand her down payment back and deceived defendant by keeping her from seeing the mileage figures on the original certificate of title, denying her credit after telling her that she had been approved, and denying her access to the credit report on which plaintiff relied to refuse financing. Count VII alleges that plaintiff's sales documents did not comply with the Credit Services Organizations Act (815 ILCS 605/1 et seq. (West 2000)).

The counterclaim alleges that, although the parties had signed an arbitration agreement (Agreement), plaintiff waived its right to demand arbitration of the counterclaim. The Agreement states in pertinent part:

"1. All disputes and controversies of every kind *** arising out of or in connection with the installment loan contract between the parties executed on this same date, or arising out of or in connection with this Agreement, will be at the option of either party submitted to arbitration pursuant to the following procedure:

a. Either party may demand arbitration at any time after any controversy arises, but not more than 30 days following being served with a complaint in any litigation."

On January 31, 2002, plaintiff moved to compel defendant to submit the counterclaim to arbitration. Plaintiff amended its motion a week later. On February 15, 2002, plaintiff moved to stay all discovery in the case until March 19, 2002, the date set for the hearing on the motion to compel arbitration.

Defendant objected to the motions. She again asserted that, by filing the replevin complaint rather than demanding the arbitration of that claim, plaintiff waived its right to insist on the arbitration of any issues in the case, including those the counterclaim raised. Defendant also argued that plaintiff had to respond to the discovery requests she had made.

On March 4, 2002, the trial court allowed plaintiff 28 days from March 19, 2002, to respond to defendant's outstanding discovery requests. Plaintiff then replied to defendant's objection to the motion to compel arbitration. Plaintiff noted that it had followed the Agreement by making its demand within 30 days of being served with the counterclaim. Plaintiff emphasized that the replevin claim has one count and invokes a summary procedure, while the counterclaim has seven counts that raise complex issues that are quite separate from the replevin suit. Plaintiff added that, even had it originally waived its ...

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