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                                     Appellate Court                        Date: 2016.11.21
                                                                            08:41:29 -06'00'




        State Farm Fire & Casualty Co. v. Watts Regulator Co., 2016 IL App (2d) 160275



Appellate Court          STATE FARM FIRE AND CASUALTY COMPANY, as Subrogee
Caption                  of Cecilia Montero, Plaintiff-Appellee, v. WATTS REGULATOR
                         COMPANY, Defendant-Appellant.



District & No.           Second District
                         Docket No. 2-16-0275


Filed                    September 29, 2016


Decision Under           Appeal from the Circuit Court of McHenry County, No. 15-AR-148;
Review                   the Hon. Michael J. Chmiel, Judge, presiding.



Judgment                 Affirmed.



Counsel on               Eugene M. LaFlamme, of McCoy Leavitt Laskey LLC, of Waukesha,
Appeal                   Wisconsin, for appellant.

                         William J. Hoffman and Jonathan J. Tofilon, both of Grotefeld
                         Hoffmann Schleiter Gordon Ochoa & Evinger, LLP, of Geneva, for
                         appellee.



Panel                    JUSTICE JORGENSEN delivered the judgment of the court, with
                         opinion.
                         Justices Hutchinson and Zenoff concurred in the judgment and
                         opinion.
                                                 OPINION

¶1        After plaintiff, State Farm Fire and Casualty Company, filed a subrogation suit against
     defendant, Watts Regulator Company, seeking to recover payments it made to its insured,
     Cecilia Montero, Watts moved to compel arbitration through Arbitration Forums, Inc. The
     parties were signatories to that entity’s “Property Subrogation Arbitration Agreement”
     (Arbitration Agreement), and they disagreed over the interpretation of an amendment to the
     Arbitration Agreement, which would determine whether Montero’s claim was subject to
     compulsory arbitration. Watts argued that the claim’s accrual date (i.e., the date of loss) was
     determinative of whether the amendment applied, and State Farm took the position that the
     filing date was determinative. The trial court ruled in State Farm’s favor, denying Watts’s
     motion to compel arbitration. We affirm.

¶2                                         I. BACKGROUND
¶3        This case arose after Montero’s home sustained water damage. The event occurred on
     September 7, 2013. At that time, the Arbitration Agreement mandated that signatories forgo
     litigation and submit certain personal, commercial, or self-insured property subrogation claims
     to arbitration. Specifically, arbitration was compulsory for property subrogation claims
     seeking up to $100,000.
¶4        On November 4, 2014, Arbitration Forums posted a bulletin on its website, notifying its
     members that the Arbitration Agreement would be amended, effective January 1, 2015, to
     exclude all product-liability claims from the compulsory-arbitration provision. Specifically,
     the amendment stated that “cases filed prior to January 1, 2015, will remain in arbitration’s
     jurisdiction and will be processed to hearing.” (Emphasis added.)
¶5        On April 15, 2015, State Farm filed its suit against Watts, seeking recovery of certain
     amounts it paid to Montero. In an amended complaint, State Farm alleged that, on September
     7, 2013, a fitting on a Watts-manufactured FloodSafe-brand supply line to Montero’s Wonder
     Lake home fractured and flooded the kitchen, hallway, and dining room, causing extensive
     damage. State Farm raised two counts, strict liability and negligence, 1 alleging that it paid
     Montero $14,385 for expenses and repairs under the terms of Montero’s policy and that it also
     sustained a loss of $1000 in the form of the deductible amount under the policy, thereby
     becoming subrogated to her rights thereunder. State Farm sought a judgment of $15,385.
¶6        On August 21, 2015, Watts filed its answer, denying the allegations and raising several
     affirmative defenses, including contributory negligence and spoliation. It also reserved the
     right to assert additional affirmative defenses, “once evidence is uncovered during discovery in
     this litigation that would support such additional defenses.”
¶7        On December 22, 2015, Watts moved to compel arbitration through Arbitration Forums
     and to stay or dismiss the arbitration proceedings through the trial court,2 asserting that the
         1
           There are two types of product-liability claims: strict-liability and negligence claims. Blue v.
     Environmental Engineering, Inc., 215 Ill. 2d 78, 89 (2005).
         2
           Pursuant to Illinois Supreme Court Rule 86 (eff. Jan. 1, 1994), the circuit court of McHenry
     County’s local rules provide that certain civil actions, including claims such as Montero’s, are subject
     to mandatory arbitration. 22d Judicial Cir. Ct. R. 17.01 (June 1, 2007). The trial court had set this case
     for arbitration pursuant to the local rule.

                                                     -2-
       claim here accrued on September 7, 2013, which was prior to the effective date of the
       Arbitration Agreement amendment and that thus the amendment did not apply. It also noted
       that State Farm had stipulated in other cases that claims that accrued prior to the amendment
       were subject to the Arbitration Agreement. Watts argued, as it does in this appeal, that (1) State
       Farm was judicially estopped from refusing to arbitrate Montero’s claim through Arbitration
       Forums and (2) the amendment did not apply to the claim.
¶8         The Arbitration Agreement, which the parties agree was effective when the claim accrued
       in this case, states that Arbitration Forums is authorized by signatory companies to make
       appropriate rules and regulations for the presentation and determination of controversies under
       the agreement. The amendment at issue states, in relevant part: “While the use of the Property
       Program to resolve disputes involving product liability claims arising from an alleged
       defective product will no longer be compulsory as of January 1, 2015, cases filed prior to
       January 1, 2015, will remain in arbitration’s jurisdiction and will be processed to hearing.”
       (Emphasis added.)
¶9         On February 25, 2016, State Farm filed its response to Watts’s motion to compel, arguing
       that, because the filing date determined whether the amendment applied and because it filed its
       suit after the amendment’s effective date, the claim need not be arbitrated under the Arbitration
       Agreement. It also noted that Watts filed its motion to compel after it filed an appearance and
       an answer to State Farm’s complaint. State Farm noted that Watts was a signatory to the
       Arbitration Agreement and in other jurisdictions had unsuccessfully challenged Arbitration
       Forums’ ability to alter the terms of the Arbitration Agreement.
¶ 10       On March 4, 2016, Watts moved to continue the court-set arbitration hearing, which was
       scheduled for April 8, 2016. As relevant here, Watts alleged that, shortly after Watts answered
       the amended complaint, State Farm approached Watts about resolving the claim through
       Arbitration Forums, although State Farm ultimately refused to submit the matter to arbitration
       through that entity. Watts noted that it continued to take the positions that State Farm should be
       ordered to submit to arbitration through Arbitration Forums and that the court-set arbitration
       should be stayed or dismissed, but, alternatively, Watts asked that the court continue the
       court-set arbitration for 60 days.
¶ 11       In its reply in support of its motion to compel, Watts argued that, because State Farm failed
       to address judicial estoppel in its response to Watts’s motion, it had conceded the issue. Watts
       also alleged that State Farm had initially, including in September 2015, represented that it
       would agree to voluntarily dismiss the suit and submit the matter to arbitration through
       Arbitration Forums. It attached correspondence between the parties’ counsel, including a
       September 23, 2015, e-mail wherein State Farm’s counsel stated that he “will file a motion to
       voluntarily dismiss the suit and strike the [court-set] Arb [sic] date.”
¶ 12       On March 18, 2016, the trial court denied Watts’s motion to compel arbitration. It also
       struck the April 8, 2016, court-set arbitration hearing date and set a new date.
¶ 13       Pursuant to Illinois Supreme Court Rule 307(a)(1) (eff. Jan. 1, 2016) (interlocutory appeals
       as of right concerning an injunction), Watts appeals the denial of its motion to compel
       arbitration.




                                                   -3-
¶ 14                                         II. ANALYSIS
¶ 15                                          A. Forfeiture
¶ 16       Preliminarily, we address State Farm’s argument that Watts has forfeited any challenge to
       arbitration through the trial court because Watts did not raise the issue in its answer and
       affirmative defenses. Watts responds that State Farm’s argument is itself forfeited because
       State Farm raises it for the first time on appeal. We agree with Watts that State Farm’s
       argument is forfeited. Indeed, as noted above, State Farm’s counsel stated in a September 23,
       2015, email that he “will file a motion to voluntarily dismiss the suit and strike the Arb date.”
       Given these circumstances, we decline to find Watts’s arbitration argument forfeited.

¶ 17                                         B. Judicial Estoppel
¶ 18        Turning to the merits, Watts argues first that judicial estoppel precludes State Farm from
       opposing arbitration through Arbitration Forums because its opposition is directly contrary to
       its position in other cases across the country against Watts. Watts acknowledges that the trial
       court did not address the application of judicial estoppel here, but it notes that it raised the issue
       in its motion to compel arbitration. Watts contends that State Farm should have been
       considered to have forfeited any opposition to the application of judicial estoppel and that the
       trial court erred in denying Watts’s motion to compel. Watts also contends that judicial
       estoppel applies to shifting legal, not merely factual, positions. For the following reasons, we
       conclude that judicial estoppel does not apply because State Farm’s opposition to arbitration
       through Arbitration Forums is based on its legal interpretation of the Arbitration Agreement
       and judicial estoppel applies only to inconsistent factual positions.
¶ 19        Judicial estoppel is an equitable doctrine invoked by the court at its discretion. New
       Hampshire v. Maine, 532 U.S. 742, 750 (2001); see also Ceres Terminals, Inc. v. Chicago City
       Bank & Trust Co., 259 Ill. App. 3d 836, 850-51 (1994) (trial court’s determination of whether
       to apply judicial estoppel is reviewed under abuse-of-discretion standard). The doctrine’s
       purpose is to protect the integrity of the judicial process by prohibiting parties from
       “deliberately changing positions” according to the exigencies of the moment. (Internal
       quotation marks omitted.) New Hampshire, 532 U.S. at 749-50. The judicial estoppel doctrine
       applies when litigants take a position in a judicial proceeding, benefit from that position, and
       then seek to take a contrary position in a later proceeding. Barack Ferrazzano Kirschbaum
       Perlman & Nagelberg v. Loffredi, 342 Ill. App. 3d 453, 460 (2003).
¶ 20        Generally, for judicial estoppel to apply, five requirements must be shown. The party to be
       estopped must (1) have taken two positions (2) that are factually inconsistent (3) in separate
       judicial or quasi-judicial proceedings, (4) with the intent that the trier of fact accept the facts
       alleged as true, and (5) have succeeded in the first proceeding and received some benefit from
       it. Id. A statement under oath is not required. Seymour v. Collins, 2015 IL 118432, ¶ 38.
¶ 21        Here, Watts contends that State Farm’s position in this case—that the filing date
       determines whether Montero’s claim is subject to compulsory arbitration through Arbitration
       Forums—is contrary to a recent position that it took in a Tennessee case. Specifically, in State
       Farm Fire & Casualty Co. v. Watts Water Technologies, Inc., No. 1750549 (D. Tenn. Nov. 5,
       2015), State Farm consented to an agreed order that the Arbitration Agreement was in effect
       when the claim “arose and accrued (i.e., the date of loss, which was January 20, 2013)”; thus,
       the court ordered arbitration through Arbitration Forums and noted that the case was nonsuited


                                                     -4-
       by State Farm.3 Watts argues that State Farm should be estopped from taking a contrary
       position here on the same issue. Furthermore, Watts contends that State Farm forfeited the
       judicial estoppel issue because it did not respond to it when Watts raised it in its motion to
       compel arbitration. Thus, Watts reasons, State Farm cannot now argue that the amendment to
       the Arbitration Agreement applies to the Montero claim, which accrued in 2013.
¶ 22       It has been noted that the judicial estoppel doctrine
               “does not apply to all types of inconsistency, but only inconsistency in assertions of
               fact. See People v. Jones, 223 Ill. 2d 569, 598 (2006) (State was not judicially estopped
               from changing its position on whether surcharge under section 5-9-1.1(c) of the
               Unified Code of Corrections (730 ILCS 5/5-9-1.1(c) (West 2004)) for a spinal research
               fund was a ‘fee’ rather than a ‘fine’ because these positions were ‘legally inconsistent,’
               not ‘factually inconsistent’); Cress v. Recreation Services, Inc., 341 Ill. App. 3d 149,
               172 (2003) (plaintiff was not barred from arguing that federal law preempted his state
               law contract claims even though he previously argued the opposite; judicial estoppel
               ‘does not apply to legal positions’).” McNamee v. Sandore, 373 Ill. App. 3d 636,
               649-50 (2007).
       Contrary to Watts’s claim, although older and federal cases have applied judicial estoppel to
       inconsistent legal positions (see Pepper Construction Co. v. Palmolive Tower Condominiums,
       LLC, 2016 IL App (1st) 142754, ¶ 66 (citing cases)), the supreme court has rejected this
       position (People v. Jones, 223 Ill. 2d 569, 598 (2006) (judicial estoppel does not apply to
       positions that were “merely legally inconsistent”)).
¶ 23       We conclude that judicial estoppel does not prevent State Farm from taking a position in
       this case concerning the interpretation of the amendment to the Arbitration Agreement—a
       legal question—allegedly inconsistent with the position it has taken in other cases concerning
       the same contract. Judicial estoppel does not apply to inconsistent legal positions.

¶ 24                                     C. Arbitration Agreement
¶ 25       Next, turning to the primary issue on appeal, Watts argues that the trial court erred in
       denying its motion to compel arbitration pursuant to the parties’ agreement with Arbitration
       Forums because claims that accrued prior to the amendment of the Arbitration Agreement,
       such as Montero’s, remain subject to compulsory arbitration thereunder. For the following
       reasons, we disagree.
¶ 26       Interpretation of an arbitration agreement presents a question of law, which we review
       de novo. Brown v. Delfre, 2012 IL App (2d) 111086, ¶ 11. The standard of review is also de
       novo where the trial court’s denial of a motion to compel arbitration, such as here, is based
       upon the interpretation of the underlying contract. Id. (citing Caligiuri v. First Colony Life
       Insurance Co., 318 Ill. App. 3d 793, 800 (2000)).
¶ 27       Arbitration contracts are interpreted in the same manner and according to the same rules as
       are all other contracts. J&K Cement Construction, Inc. v. Montalbano Builders, Inc., 119 Ill.
       App. 3d 663, 669 (1983). “The primary objective in construing a contract is to give effect to the
       intent of the parties.” Gallagher v. Lenart, 226 Ill. 2d 208, 232 (2007). A court may resort to
       rules of construction only where the language of the agreement is ambiguous. In re Estate of

          3
           Watts attached a copy of this order to its motion to compel arbitration.

                                                     -5-
       Chaitlen, 179 Ill. App. 3d 287, 291 (1989). Where the terms of an agreement are clear and
       unambiguous, they will be given their plain and ordinary meanings, and the parties’ intent
       must be determined from the language of the agreement alone. Reynolds v. Coleman, 173 Ill.
       App. 3d 585, 593 (1988). A contract is ambiguous when it is reasonably capable of being
       understood in more than one way. Zurich Midwest, Inc. v. St. Paul Fire & Marine Insurance
       Co., 159 Ill. App. 3d 961, 963 (1987). The mere fact that the parties have different views of the
       meaning of the contract does not render the contract ambiguous. Id.
¶ 28       Illinois public policy favors arbitration. See City of Centralia v. Natkin & Co., 257 Ill. App.
       3d 993, 996 (1994). It also favors consistency with other states in the enforcement and
       interpretation of arbitration agreements. See Bass v. SMG, Inc., 328 Ill. App. 3d 492, 497
       (2002). However, the presumption of arbitration is overcome where an express provision in an
       arbitration agreement excludes certain claims from arbitration. AT&T Technologies, Inc. v.
       Communications Workers of America, 475 U.S. 643, 650 (1986).
¶ 29       Watts relies on case law that, it contends, stands for the proposition that an arbitration
       clause survives the contract’s expiration because public policy favors arbitration and any
       ambiguity in a contract containing an arbitration provision must be resolved in favor of
       arbitration. See Litton Financial Printing Division, a Division of Litton Business Systems, Inc.
       v. National Labor Relations Board, 501 U.S. 190, 205-10 (1991) (collective bargaining
       agreement that contained arbitration provisions expired, and one year later, company laid off
       certain employees; Court noted that, absent explicit agreement that benefits continue past
       expiration, a postexpiration grievance arises under contract only where (1) it involves facts that
       arose before expiration, (2) a postexpiration action infringes a right that accrued or vested
       under the agreement, or (3) under normal contract-interpretation principles, the right survives
       expiration of the remainder of the agreement; however, Court held that layoff dispute was not
       arbitrable because order of layoffs was to be determined by nonconstant factors and, thus, it
       could not be inferred whether parties intended to freeze any particular order of layoffs or vest
       any contractual right as of the agreement’s expiration); Nolde Brothers, Inc. v. Local No. 358,
       430 U.S. 243, 253-55 (1977) (union’s claim for severance pay pursuant to expired collective
       bargaining agreement was subject to contract’s arbitration provisions; Court noted that, where
       the dispute involves provision in expired agreement, presumptions favoring arbitration must
       be expressly negated or negated by clear implication; further noting that an alternative holding
       “would permit the employer to cut off all arbitration of severance-pay claims by terminating an
       existing contract simultaneously with closing business operations”); Huffman v. Hilltop Cos.,
       747 F.3d 391, 394-97 (6th Cir. 2014) (broadly worded arbitration clause in employment
       agreement applied after expiration of contract, even though it (and noncompete, severability,
       and integration clauses) was not listed in agreement’s survival clause; there is a strong policy
       in federal arbitration statute favoring arbitration and, thus, a presumption of arbitrability; any
       ambiguity concerning the applicability of arbitration clause is resolved in favor of arbitration;
       fact that arbitration clause was not included in survival clause was not determinative, because
       survival clause was not an exhaustive list and, thus, this created ambiguity that court resolved
       in favor of arbitration); Goshawk Dedicated Ltd. v. Portsmouth Settlement Co. I, Inc., 466 F.
       Supp. 2d 1293, 1298-1301 (N.D. Ga. 2006) (applying Georgia law and holding that
       novation—assignment—of insurance contract did not extinguish arbitration provision;
       arbitration provision controlled any dispute arising out of the performance of the original
       agreement; “arbitration agreements are presumed to survive the termination of a contract”);


                                                    -6-
       Liberty University, Inc. v. Kemper Securities Group, Inc., 758 F. Supp. 1148, 1152-53 (W.D.
       Va. 1991) (noting that arbitration clause survives termination of a contract as to matter
       occurring prior to termination of contract or subject to the obligations of the contract but
       holding that arbitration clause at issue in expired investment-banking agreement did not
       survive agreement’s termination; after expiration, parties embarked on a new contract that was
       ultimately memorialized but not executed and that contained no arbitration clause; this second
       contract and dispute—negligence for failure to underwrite and purchase and/or distribute
       securities—arose three months after expiration of first contract); Mendez v. Trustees of Boston
       University, 285 N.E.2d 446, 448 (Mass. 1972) (noting that a contract’s termination does not
       necessarily terminate an arbitration provision therein, but holding that provision did not apply
       where a teacher had abandoned her employment contract and had not rendered services
       thereunder); In re Primex International Corp., 679 N.E.2d 624, 628 (N.Y. 1997) (parties
       entered into three successive service agreements, of which only the first two contained an
       arbitration clause; during the term of the third agreement, which contained a merger clause, a
       dispute arose, and the defendant sued for breach of all three agreements; court held that the
       merger clause did not act to retroactively revoke parties’ obligations to arbitrate claims arising
       under the first two agreements; court noted that, absent clear manifestation of a contrary intent,
       there is a presumption that the parties intended arbitration clause to survive termination of
       agreement as to subsequent disputes arising under the agreement; further noting that there was
       no good reason why the same principle should not apply as to arbitration arising out of
       antecedent contracts, when termination of those contracts is attributable to a general merger
       clause in a subsequent agreement).
¶ 30       We find the cases upon which Watts relies distinguishable because they involve contracts
       that contain arbitration clauses. Here, in contrast, the issue is the interpretation of an
       amendment to an existing arbitration agreement. It is not whether an arbitration clause
       continued to be in effect despite the expiration of an underlying contract. We must interpret the
       amendment and, as explained below, need not assess the presumptions that were necessary in
       the analyses in the foregoing cases, where the contracts were ambiguous.
¶ 31       To that end, we next determine whether the amendment is ambiguous. It provides, in
       relevant part: “While the use of the Property Program to resolve disputes involving product
       liability claims arising from an alleged defective product will no longer be compulsory as of
       January 1, 2015, cases filed prior to January 1, 2015, will remain in arbitration’s jurisdiction
       and will be processed to hearing.” (Emphases added.) We conclude that the amendment is not
       ambiguous. In our view, the amendment unambiguously reflects that the filing date, not the
       event date or date of loss, determines whether compulsory arbitration applies to a claim. The
       amendment clearly states that cases filed prior to January 1, 2015, will remain subject to
       compulsory arbitration. Necessarily, if a claim was filed on or after January 1, 2015, the only
       reading of the amendment is that the claim does not remain subject to the agreement. Here,
       Montero’s claim was filed on April 15, 2015, and therefore, it is not subject to compulsory
       arbitration through Arbitration Forums.
¶ 32       We reject Watts’s argument that the agreement is silent as to claims that accrued prior to
       the amendment’s effective date and that thus there is a presumption of arbitrability. Again, in
       our view, the amendment is clear that, because Montero’s claim was filed after January 1,
       2015, it is not subject to compulsory arbitration through Arbitration Forums. We need not
       engage in any presumptions. We also reject Watts’s contentions that it never agreed to


                                                   -7-
       retroactively nullify its rights that accrued under the Arbitration Agreement. Watts ignores the
       fact that, by signing the Arbitration Agreement, it expressly agreed to be bound by Arbitration
       Forums’ rules. Article 5 of the Arbitration Agreement, effective May 2, 2005, states that
       Arbitration Forums, as representative of the signatory companies, is authorized to “make
       appropriate Rules and Regulations for the presentation and determination of controversies
       under this Agreement.” Watts does not assert, for example, that the amendment somehow
       exceeded Arbitration Forums’ authority under the Arbitration Agreement or is otherwise
       invalid. Rather, it essentially argues that we should adopt its reading of the amendment. We
       decline to do so when the key language in the amendment is clear.
¶ 33       Watts also argues that “claims” and “cases” are distinct concepts and that, because the
       amendment addresses only “cases filed prior to January 1, 2015” (emphasis added), it is
       ambiguous with respect to claims that arose (i.e., had a date of loss) before that date, such as
       the Montero claim, and thus there arises a presumption of arbitration with respect to the claim.
       This argument also fails. The amendment, again, states that “cases filed prior to January 1,
       2015, will remain in arbitration’s jurisdiction and will be processed to hearing.” (Emphases
       added.) This provision is clear that the only disputes that “will be processed to hearing” are
       “cases filed prior to January 1, 2015” (emphasis added). Indeed, illustrating the fact that the
       date upon which a claim arose is not significant for purposes of the agreement, article 2
       (addressing exclusions) of the agreement states that an excluded claim includes “any claim
       [for] which a lawsuit was instituted prior to, and is pending, at the time the [Arbitration]
       Agreement is signed.” Thus, when an entity becomes a signatory, a claim for which a lawsuit
       has been filed and is pending is excluded from the agreement. Had Arbitration Forums
       intended that the date a claim arose would determine when arbitration is compulsory, the
       agreement would explicitly say so. However, it does not.
¶ 34       Watts also argues that this case raises the concern that parties like State Farm can avoid
       their obligations to arbitrate by waiting until an arbitration agreement expires. This concern,
       according to Watts, has been acknowledged in case law. See Litton, 501 U.S. at 205-10; Nolde
       Brothers, 430 U.S. at 253-55. We disagree with Watts that the scenario it outlines is precisely
       what occurred here. The concern raised in the cases it cites is that parties to a contract might
       avoid their obligations to arbitrate by waiting until a contract expires and bringing an action
       concerning a dispute that arose while the contract was in effect. However, the court-fashioned
       presumption of arbitrability forecloses such manipulation and avoidance of obligations. In any
       event, we do not believe that this case presents exactly such a scenario. The Arbitration
       Agreement and the amendment were presumably drafted exclusively by Arbitration Forums,
       and Watts and State Farm agreed to the agreement’s terms, including to be bound by
       Arbitration Forums’ rules. To engage in the manipulation and delay that Watts suggests, State
       Farm would have had to divine that Arbitration Forums was going to amend the agreement in a
       fashion that it deemed favorable to it with respect to Montero’s claim. This is fantastical. We
       do acknowledge that, once Arbitration Forums announced the amendment (on November 4,
       2014), State Farm theoretically could have delayed filing the Montero claim until January 1,
       2015, a period of 56 days. However, Watts points to no evidence that State Farm actually
       manipulated its filing date for this purpose, and as in every case, State Farm had to be
       cognizant of the two-year limitations period for product-liability claims (735 ILCS
       5/13-213(d) (West 2014)).



                                                  -8-
¶ 35     In summary, the amendment to the Arbitration Agreement unambiguously excludes
       Montero’s claim from compulsory arbitration through Arbitration Forums.

¶ 36                                    D. Motion Taken With the Case
¶ 37       In a motion we ordered taken with this case, Watts moves to strike the affidavit and
       declaration of Timothy McKernan that State Farm included in the appendix to its brief. The
       affidavit, dated October 8, 2015, and submitted to a California trial court in Neighborhood
       Spirit Property & Casualty Co. v. Watts Regulator Co., No. 8:15-CV-00199 DOC (C.D. Cal.
       Nov. 2, 2015), states that McKernan is the manager of quality, training, and arbitration rules
       for Arbitration Forums and that he oversees the application of the arbitration agreements and
       rules governing disputes between signatory companies. Addressing the arbitration agreement
       in that case (which is presumably identical to the one at issue here), McKernan averred that no
       Arbitration Forum rules “support the position that the date of loss dictates whether the product
       liability dispute falls within the jurisdiction of Arbitration Forums, Inc.” He also averred that
       Arbitration Forums has no jurisdiction over claims filed after January 1, 2015, unless both
       parties consent.
¶ 38       In its motion, Watts argues that McKernan’s affidavit consists of his interpretation of the
       Arbitration Agreement here and was also submitted in two foreign cases between Farmers
       Insurance and Watts, where State Farm was not a party. Watts also contends that State Farm
       did not submit the affidavit to the trial court in this case. Watts argues that, because the
       affidavit was not submitted to the trial court, is mentioned merely in a footnote in State Farm’s
       brief, and addresses the key issue in this case (i.e., interpretation of the Arbitration
       Agreement), it is inappropriate and should be stricken.4
¶ 39       State Farm responds that this court may take judicial notice of affidavits filed in collateral
       actions, that McKernan’s/Arbitration Forums’ position on the interpretation of the agreement
       is essential to this case, that Watts’s motion improperly argues the merits of its appeal, and that
       Watts was aware of the affidavit in the trial court and did not disclose it.
¶ 40       Pursuant to Illinois Rule of Evidence 201(b) (eff. Jan. 1, 2011), we may take judicial notice
       of facts that are “either (1) generally known within the territorial jurisdiction of the trial court
       or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot
       reasonably be questioned.” See also People v. Crawford, 2013 IL App (1st) 100310, ¶ 118 n.9
       (“[W]e may take judicial notice of information on a public website, even where the
       information does not appear in the record.”); Metropolitan Life Insurance Co. v. American
       National Bank & Trust Co., 288 Ill. App. 3d 760, 764 (1997) (appellate court may take judicial
       notice of public documents that are included in the records of other courts). We may take
       judicial notice of readily verifiable facts if doing so will aid the court in the efficient
       disposition of a case, even if the parties did not seek judicial notice in the trial court. Aurora
       Loan Services, LLC v. Kmiecik, 2013 IL App (1st) 121700, ¶ 37 (citing Department of Human
       Services v. Porter, 396 Ill. App. 3d 701, 725 (2009)).
¶ 41       We deny Watts’s motion to strike, and we take judicial notice of the fact that McKernan’s
       affidavit was filed in other cases. However, as to McKernan’s averments concerning the

           4
           Watts also notes that the affidavit was submitted in a Michigan case by Farmers Insurance and that
       the Michigan trial court ruled in Watts’s favor. Farmers Insurance v. Watts Regulator Co., No.
       15-005184-NP (Wayne Co., Mich., Feb. 19, 2016) (granting Watts’s motion to compel arbitration).

                                                     -9-
       interpretation of the Arbitration Agreement (including the amendment), we place no weight on
       his statements, most significantly because, as we held above, the amendment is not ambiguous;
       thus, we do not consider any extrinsic evidence such as the affidavit.

¶ 42                                      III. CONCLUSION
¶ 43      For the reasons stated, the judgment of the circuit court of McHenry County is affirmed.

¶ 44      Affirmed.




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