Appeal from the Circuit Court of Cook County No. 02 CH 17427 Honorable Thomas P. Quinn, Judge Presiding.
The opinion of the court was delivered by: Justice Karnezis
This interlocutory appeal arises as a result of disputed charges on plaintiff's Saks Fifth Avenue credit card. The issue on appeal is whether an arbitration clause in an amended credit card agreement is enforceable.
Plaintiff, Richard Rosen, filed a class action lawsuit against defendants, SCIL, LLC, Saks Incorporated and DOES 1-10, disputing two charges of "fictitious taxes" on his Saks Fifth Avenue credit card. Defendants filed a motion to compel arbitration and to stay the proceedings pursuant to an amendment to plaintiff's credit card agreement permitting either party to compel arbitration. The circuit court denied the motion and defendants now appeal. We reverse and remand.
Plaintiff's complaint alleged that defendants unlawfully charged him sales tax on the purchase of services, i.e., alterations on clothing he purchased at defendants' store. The sales tax plaintiff paid on the two transactions totaled $3.19. Plaintiff's complaint further alleged that defendants' practice violated section 2 of the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/2 (West 2000)).
Defendants' motion to compel arbitration and stay the proceedings included a copy of the amendment to the credit agreement that was sent to Saks Fifth Avenue cardholders. The cover page of the arbitration agreement contained the following in large, bold-faced type.
"Important Notice Saks Fifth Avenue Credit Card Accounts
Please Read This Notice Carefully."
The following pages of the agreement contained the following relevant information.
"Summary of Important New Terms
1. Arbitration of Disputes. We are adding a provision to the New Agreement at paragraph 18 in which both we and you agree to resolve all disputes involving your account balance attributable to purchases charged to your account on or after the Effective Date) by arbitration rather than by litigation in court, if you OR we request arbitration on or for a particular dispute. This means that if only one of us requests arbitration for a dispute involving your account, (1) the dispute will be arbitrated in accordance with paragraph 18 (even if the other does not want to arbitrate the dispute), (2) there will be no jury trial for the dispute, (3) generally, there will be no prearbitration discovery (i.e., the pre-trial fact-finding process) for the dispute, and (4) the dispute will not be arbitrated on a class-action basis, and neither you nor we will have the right to participate as a representative or member of any class of claimants pertaining to any dispute involving your account. If neither you nor we requests arbitration, the dispute will not be resolved by arbitration and instead will be litigated in court. However, absent unusual circumstances, we currently intend to request arbitration for all disputes that are claims by you against us, and when we request arbitration the disputes will be arbitrated in accordance with paragraph 18 even if you do not want the disputes to be arbitrated.
Please carefully read paragraph 18 of the New Agreement. If you do not wish to agree to this new arbitration provision, do not charge a purchase to your account on or after the Effective Date. In that case, the arbitration provision will not apply to your account, and the current terms of your account will continue to apply until your account balance is paid in full. However, if you charge a purchase to your account on or after the Effective Date, that purchase will be your agreement to the new arbitration provision in which you agree to resolve all disputes between you and us by arbitration in accordance with paragraph 18 of the New Agreement, but arbitration will not apply to disputes involving any part of your account balance attributable to purchases charged to your account before the Effective Date." (Bold in original.)
"18. Arbitration for Disputes; No Jury Trials or Class Actions:
If we or you request arbitration of a Claim, we and you will not have the right to litigate the Claim in court. This means (1) there will be no jury trial on the Claim, (2) no prearbitration discovery except as the Rules permit, and (3) no claim may be arbitrated on a class-action basis, and neither we nor you will have the right to participate as a representative or member of any class of claimants pertaining to any Claim subject to arbitration. Generally, the arbitrator's decision will be final and binding. There are other rights that you would have if you went to court that also may not be available in arbitration.
If you make a request to us in writing, we will temporarily advance to you the filing, administrative, and hearing fees for the arbitration of your Claim against us * * * in excess of any filing fee you would have been required to pay to file the Claim in a state or federal court * * *. At the end of the arbitration, the arbitrator will ...