Hinch Law

Last February I wrote about the 5th District Appellate Court's decision in Carr v. Gateway, Inc .  here .  In this case, the designated arbitration forum stopped accepting consumer disputes.  The arbitration agreement was very specific as to the private forum for the arbitration and the rules to be used, and even included a clause to penalize any party seeking to arbitrate the dispute in another forum.  Well, the Illinois Supreme Court reviewed the decision and released its opinion  this week, affirming the Appellate Court's judgment.  Particularly emphasizing the penalty clause, the Court noted that the arbitration forum was integral to this agreement, Section 5 of the federal Arbitration Act did not apply to appoint a substitute arbitrator, and therefore the plaintiff's claims could proceed in court. Although this was an Illinois case, the Court considered precedent from other jurisdictions, and I believe really made a thorough analysis and wrote a well...

The Second District Appellate Court of Illinois recently held that an owner by filing a demand under Section 34 of the Mechanics Lien Act (the Act) can be deemed to have waived a contractual right to compel arbitration.  The case is Illinois Concrete-I.C.I, Inc. v. Storefitters, Inc , No. 2-09-0854 (2nd Dist. 2010).  In Storefitters, the plaintiff contractor filed a mechanics lien claim alleging that the defendants had failed to pay it for its work.  The Defendants then served notice on the plaintiff pursuant to Section 34 of the Act, requiring the contractor to file suit to commence an action to enforce the lien within 30 days, or else forfeit the lien claim (the "Section 34 Demand").  The contractor filed suit as required, at which point the defendants filed a motion to compel arbitration pursuant to a mandatory arbitration clause in the parties' contract (it appears from the opinion that the contract language actually called for mediation followed by arbitration)...

This question came up recently as I was reviewing a construction contract.  The contract, as is common in the construction industry, contained an agreement to submit any disputes to binding arbitration, and specified the organization to manage the arbitration.  The problem was that by the time the dispute arose the designated arbitration organization was no longer in business.  What now?  This issue was addressed in the recent Illinois case Carr v. Gateway, Inc,  No. 5-07-0711 (5th Dist. 2009). Carr is a class action case in which the plaintiffs alleged that Gateway and Intel Corp. had violated consumer protection laws in Illinois and elsewhere in the U.S. by engaging in deceptive advertising regarding the capabilities of various computer processors.    Gateway moved to dismiss the case or alternatively to stay the proceedings and compel arbitration pursuant to an arbitration agreement included when the Carrs (the named plaintiffs seeking to represe...