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Wylie v. Waste Management

July 21, 2010

JOHN R. WYLIE, PLAINTIFF,
v.
WASTE MANAGEMENT, INC., DEFENDANT.



The opinion of the court was delivered by: Joan Humphrey Lefkow United States District Judge

Judge Joan H. Lefkow

OPINION AND ORDER

Plaintiff John R. Wylie ("Wylie") filed this declaratory judgment action against Waste Management, Inc. ("WM") seeking a declaration that WM may not unilaterally alter the terms of a guaranty it gave Wylie when he purchased his home. Jurisdiction is proper under 28 U.S.C. §1332 as the amount in controversy is alleged to exceed $75,000 and the citizenship of the parties is diverse: Wylie is a citizen of Illinois and WM is a Delaware corporation with its principal place of business in Texas. WM moves to dismiss the suit under Federal Rule of Civil Procedure 12(b)(6),*fn1 arguing that the issues presented are subject to arbitration. For the following reasons, WM's motion to dismiss [12] is granted.

BACKGROUND

On July 30, 2003, Wylie bought a home in the Prairie Crossing development in Grayslake, Illinois. Prairie Crossing is located near a landfill owned by WM. WM, pursuant to an agreement with Prairie Crossing, issues homeowners a "New Home Value Guaranty" ("Guaranty"). Under the terms of the Guaranty, WM promises to compensate homeowners for any difference between their sale and purchase prices. It further provides that if a homeowner is unable to sell their property, WM will purchase the property at the price the homeowner paid after a 180 day listing period ("Listing Period") expires. To claim the Guaranty, a homeowner need comply with the requirements set forth in Sections B and C, which provide, inter alia, that

(1) the homeowner must have continuously owned the property for at least one year; (2) the homeowner must list the property with a broker approved by WM and keep it listed on the market for the Listing Period; (3) the homeowner must not reject any bona fideoffer to purchase the property at an amount equal or greater to the price at which the homeowner purchased the property; (4) the homeowner must have maintained the property in "no worse than average condition"; and (5) the listing broker must inform WM of any offer to buy the property within three days of the receipt of the offer. Wylie's compliance with these requirements is not disputed.

Section D of the guaranty sets out the procedure by which homeowners may claim their Guaranty:

D. Claims Procedure. In order to receive benefits under the Guaranty, the Homeowner must comply with the following procedures:

1. The Homeowner shall meet the notice requirements set forth under Section B.

2. Homeowner shall have complied with the provisions of Section C.

3. The Homeowner shall present a written Claim form to WM no later than ten (10) Business Days before the scheduled closing dates of the sale giving rise to WM's obligations under this Guaranty, or, if WM shall be obliged to buy the Property directly from Homeowners as a result either of WM's having notified Homeowners that an offer was unacceptable or of Homeowners' failure to receive, during the Listing Period, any Offers that result in a Sale, then such Claim for shall be submitted 30 days prior to the date on which Homeowners desire to convey title to WM.

F. Disputed Claims. In the event that WM shall (I) fail to respond to a Claim within five (5) days of receipt, (ii) fail to pay, in a timely manner, a Claim which it has accepted or (iii) deny a Claim within five (5) days of receipt, the Homeowner's Association shall cause such matter to be arbitrated in accordance with the provisions of this section.

3. In the event that WM shall timely deny a Claim, then upon the Homeowner's written request, the Homeowner's Association and WM shall appoint an arbitrator to resolve the dispute, provided, however, that if the Homeowner's Association and WM shall be unable, within 10 days, to agree upon an arbitrator, within 10 days the Homeowner's Association and WM shall each appoint an arbitrator who shall within 10 days together appoint a third whose decision shall be binding upon WM and the Homeowners. If WM shall decline to participate in appointment of an arbitrator or fail to respond, the Homeowner's Association shall, acting alone, appoint an arbitrator. Such arbitration shall be conducted in accordance with the then current rules of the American Arbitration Association. In the event that the arbitration shall be decided in favor of the Homeowners, unless such amount ...


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