                                           No. 2--09--0854

                                               2-09-0854               Filed: 1-20-10
                                                IN THE

                               APPELLATE COURT OF ILLINOIS

                                        SECOND DISTRICT


ILLINOIS CONCRETE-I.C.I., Inc.,                    )   Appeal from the Circuit Court
                                                   )   of McHenry County.
       Plaintiff-Appellee,                         )
                                                   )
v.                                                 )   No. 09--CH--816
                                                   )
STOREFITTERS, INC., and TOM                        )
NESBITT, JR.,                                      )
                                                   )
       Defendants-Appellants                       )
                                                   )
(Richard P. Parillo, Jr.; Joanna Parillo; MB       )
Financial Bank, as Successor to Oak Brook          )   Honorable
Bank; and Unknown Owners and Nonrecord             )   Michael T. Caldwell,
Claimants, Defendants).                            )   Judge, Presiding.


       JUSTICE HUDSON delivered the opinion of the court:

       Defendants Storefitters, Inc., and Tom Nesbitt, Jr., appeal the denial of a motion to compel

arbitration in an action instituted against them by plaintiff, Illinois Concrete-I.C.I., Inc. Defendants

also appeal the denial of their motion to dismiss counts in plaintiff's complaint, an order over which

we lack jurisdiction. For the reasons that follow, we affirm the trial court's denial of the motion to

compel arbitration and we dismiss the remainder of this appeal.

       Plaintiff filed a complaint asserting six counts against defendants. The first three counts

pleaded the same claim in alternative ways. These counts stem from certain concrete work plaintiff

performed for defendants, for which plaintiff alleges defendants did not pay, and are based upon a
No. 2--09--0854


written contract that contained an arbitration clause. The other three counts pleaded a second claim

in alternative ways, based upon an oral contract (defendants contend that these counts also involve

work subject to the written contract by virtue of an integration clause). These counts pertain to the

"hauling of dirt and other miscellaneous construction material" for defendants, for which plaintiff

also alleges defendants did not pay. The latter three counts are not pleaded in the alternative to the

first three counts.

        Before filing suit, plaintiff filed mechanics liens based upon both claims. Defendants then

served upon plaintiff a notice pursuant to section 34 of the Mechanics Lien Act (Act) (770 ILCS

60/34 (West 2008)). That section provides, in relevant part:

                "Upon written demand of the owner, lienor, or any person interested in the real estate,

        or their agent or attorney, served on the person claiming the lien, or his agent or attorney,

        requiring suit to be commenced to enforce the lien or answer to be filed in a pending suit, suit

        shall be commenced or answer filed within 30 days thereafter, or the lien shall be forfeited."

        770 ILCS 60/34 (West 2008).

Plaintiff therefore filed the present complaint. Defendants responded by filing a motion to compel

arbitration of the first three counts. Defendants also moved to dismiss the latter three counts on two

grounds--that plaintiff did not attach a copy of the contract to the complaint and that plaintiff lacked

standing to sue.

        The trial court denied defendants' request to compel arbitration. It found that defendants

waived their right to arbitration by filing the section 34 demand for plaintiff to file suit. It also

denied defendants' motion to dismiss the latter three counts, granted defendants 28 days to answer

the complaint, and set the case for a status hearing. Defendants sought interlocutory review, citing



                                                  -2-
No. 2--09--0854


Supreme Court Rule 307(a)(1) (Official Reports Advance Sheet No. 7 (April 8, 2009), R. 307(a)(1),

eff. March 20, 2009) as the basis for this court's jurisdiction. Rule 307(a)(1) grants a party an appeal

as of right for any order "granting, modifying, refusing, dissolving, or refusing to dissolve or modify

an injunction." Official Reports Advance Sheet No. 7 (April 8, 2009), R. 307(a)(1), eff. March 20,

2009. An order denying or compelling arbitration is injunctive in nature, so the trial court's denial

of defendants' request to compel arbitration is within the scope of this rule. Craine v. Bill Kay's

Downers Grove Nissan, 354 Ill. App. 3d 1023, 1025 (2005). However, defendants also rely upon

Rule 307(a)(1) as the jurisdictional basis for this court to review the trial court's denial of their

motion to dismiss the latter three counts of the complaint. We find that this rule does not provide

us with jurisdiction over this order.

       It has been held that, in accordance with Rule 307(a)(1), " '[t]he sole issue before the

appellate court on an interlocutory appeal is whether a sufficient showing was made to sustain the

order of the trial court denying the motion to compel arbitration.' " Menard County Housing

Authority v. Johnco Construction, Inc., 341 Ill. App. 3d 460, 463 (2003), quoting Yandell v. Church

Mutual Insurance Co., 274 Ill. App. 3d 828, 830 (1995). In Mohanty v. St. John Heart Clinic, S.C.,

358 Ill. App. 3d 902, 905 (2005), the First District, after noting the limited scope of review under

Rule 307(a)(1), stated, "The rule may not be used to determine the merits of the case." This court

previously held, "An appeal under Rule 307 does not open the door to a general review of all orders

entered by the trial court up to that date." Olympic Federal v. Witney Development Co., 113 Ill.

App. 3d 981, 984 (1983). We did also note that, with respect to certain orders, some exceptions do

exist. Olympic Federal, 113 Ill. App. 3d at 984.




                                                  -3-
No. 2--09--0854


       Defendants seek to invoke one of those exceptions. They cite Alfred Engineering, Inc. v.

Illinois Fair Employment Practices Comm'n, 19 Ill. App. 3d 592, 599-600 (1974), which holds as

follows:

               "Upon this interlocutory appeal we do not reach the merits of the case, the single

       justiciable issue being whether the trial court properly granted the preliminary injunctive

       relief. [Citation.] However, upon an interlocutory appeal, the appellant is permitted to ask

       this court to determine not only whether the trial court had the discretionary right to issue the

       temporary or preliminary injunction but also to consider whether or not the complaint upon

       which the temporary injunction was issued was proper to sustain such injunction [citation]

       or to sustain a judgment."

Reading this passage as broadly as defendants advocate would eviscerate the limited scope of Rule

307(a)(1). Defendants essentially contend that, because the complaint joins the latter three counts

(which have nothing to do with the propriety of arbitration) with the first three counts (which are the

subject of the motion to compel arbitration), this court has jurisdiction over the ruling on the latter

three counts. Beyond an identity of parties, these two claims, as pleaded, have nothing to do with

each other. The propriety of compelling arbitration on the first three counts is completely

independent of the propriety of dismissing the latter three counts. The Alfred Engineering court

expressly held that Rule 307(a)(1) jurisdiction could extend to "the complaint upon which the

temporary injunction was issued." Alfred Engineering, Inc., 19 Ill. App. 3d at 600. We will not read

this holding as extending jurisdiction to a ruling on any otherwise unrelated counts that happen to

be joined in a complaint.




                                                 -4-
No. 2--09--0854


       We further note that defendants assert in their reply brief that the trial court implicitly found

that the arbitration agreement applied to the latter three counts. This argument, which is a strained

reading of the trial court's ruling, is largely undeveloped and unsupported by any legal authority, so

we will not consider it further. Obert v. Saville, 253 Ill. App. 3d 677, 682 (1993) ("A reviewing

court is entitled to have issues clearly defined with pertinent authority cited and cohesive arguments

presented [citation], and it is not a repository into which an appellant may foist the burden of

argument and research").

       Finally, we also note that defendants assert that the oral agreement merged with the

subsequent written contract. Plaintiff responds that there is nothing in the record to indicate that the

oral agreement and the written contract applied to the same work. It is axiomatic that, for merger

to occur, a previous agreement and a subsequent written agreement must pertain to the same subject

matter. Barille v. Sears Roebuck & Co., 289 Ill. App. 3d 171, 177 (1997). As evidence that the

agreements pertained to the same work, defendants point to the mechanics lien based on the oral

contract, which states that it is for the "trucking and hauling of dirt." They then point to the written

contract, which provides that it is for, inter alia, "removing and hauling concrete walls, footings and

slabs in [the] subcontractor's trucks, digging a hole for a new addition and hauling away excess dirt."

Defendants claim that this shows that the scope of the work is "identical." We disagree. Quite

obviously, the mechanics lien does not mention demolition work, while the contract does, e.g.,

"Remove existing Concrete walls." The mere fact that both agreements involved using trucks is far

too slender a reed for us to conclude that the arbitration agreement applied to the oral contract and

that we therefore have jurisdiction to determine the merits of defendants' motion to dismiss the latter

three counts of the complaint. Moreover, because these arguments involve disputed facts as opposed



                                                  -5-
No. 2--09--0854


to purely legal questions, the abuse of discretion standard would apply. Household Finance Corp.

III v. Buber, 351 Ill. App. 3d 550, 553 (2004). Our review of the briefs and the record leads us to

conclude that defendants could not establish an abuse of discretion by the trial court. Parenthetically,

even if the latter three counts were subject to the contract's arbitration provision, by filing, and

obtaining a ruling on, their motion to dismiss them, defendants clearly waived their right to compel

arbitration. See Kostakos v. KSN Joint Venture No. 1, 142 Ill. App. 3d 533, 536 (1986).

Accordingly, we will confine our review to the trial court's decision to deny defendants' request to

compel arbitration. We dismiss the balance of defendants' appeal for want of jurisdiction.

        We begin our analysis of this issue with the recognition that it is the public policy of this state

that arbitration agreements are generally favored. See Liberty Chevrolet, Inc. v. Rainey, 339 Ill. App.

3d 949, 953 (2003). Nevertheless, like any contractual right, the right to compel arbitration may be

waived. Kostakos, 142 Ill. App. 3d at 536. A waiver may occur where a party's actions are

inconsistent with its right to seek arbitration and thus indicate an abandonment of the right. Jenkins

v. Trinity Evangelical Lutheran Church, 356 Ill. App. 3d 504, 507 (2005). Hence, in Yates v.

Doctor's Associates, Inc., 193 Ill. App. 3d 431, 440 (1990), the Fifth District of the Appellate Court

held, where a defendant filed a number of forcible entry and detainer actions after the plaintiff

initiated an action, that the defendant waived its right to have the conflict resolved by arbitration.

This issue is subject to de novo review to the extent that its resolution requires no factual findings.

Household Finance Corp. III, 351 Ill. App. 3d at 553.

        The parties both cite La Hood v. Central Illinois Construction, Inc., 335 Ill. App. 3d 363

(2002). In that case, a contractor filed a mechanics lien after a dispute arose between it and a land

owner. It then filed a request to have the dispute submitted to arbitration. The owner responded by



                                                   -6-
No. 2--09--0854


filing a demand under section 34 of the Act (770 ILCS 60/34 (West 2000)). In response to the

demand, the contractor filed suit, but immediately requested that court proceedings be stayed and

the matter submitted to arbitration. The court held that the contractor had not waived its right to

compel arbitration. La Hood, 335 Ill. App. 3d at 365. The court first noted that filing the mechanics

lien was not inconsistent with seeking arbitration. La Hood, 335 Ill. App. 3d at 365. The court then

observed that the contractor filed suit only after the owner demanded that it do so and that it then

promptly moved for a stay and to compel arbitration. La Hood, 335 Ill. App. 3d at 365. The

contractor's actions were completely responsive to the owner's demand. They did not, therefore,

manifest an intent to abandon arbitration. See La Hood, 335 Ill. App. 3d at 365-66. Another case

providing sound guidance for the resolution of this appeal is Household Finance Corp. III, 351 Ill.

App. 3d 550. There, we held that the plaintiff did not waive the right to compel arbitration, because

the plaintiff had "merely responded to [the] defendant's legal maneuvering." Household Finance

Corp. III, 351 Ill. App. 3d at 555.

       In this case, the key issue is whether defendants, by filing their demand under section 34 of

the Act (770 ILCS 60/34 (West 2008)), acted in a manner inconsistent with their right to seek

arbitration. We hold that they did. Following such a demand, a party claiming a lien must file suit

within 30 days or lose the lien. 770 ILCS 60/34 (West 2008). Nothing compelled defendants to

make this demand, and they could have simply sought arbitration. Thus, the demand was not

responsive to any action that plaintiff took. See Household Finance Corp. III, 351 Ill. App. 3d at

555. The trial court properly determined that defendants, by making their section 34 demand,

waived their right to compel arbitration, and we affirm its decision.




                                                -7-
No. 2--09--0854


        Defendants raise six arguments as to why the trial court was incorrect. First, defendants

contend that section 34 confers a statutory right not cognizable in an arbitration proceeding.

Defendants assert that "a party cannot waive arbitration by invoking a remedy which is beyond the

scope of in [sic] the language of the arbitration agreement." A section 34 demand does not invoke

a remedy; it is a means to a remedy. What defendants ultimately seek is clear title. They could have

pursued this via section 34 and a trial or through arbitration--both are means to the same remedy.

That they expressly chose a method outside the scope of the arbitration agreement bolsters the trial

court's conclusion that they intended to abandon arbitration.

        Second, defendants argue that "using section 34 notice can be an effective means of

invalidating a lien on property without resort to litigation if the lien holder does not file suit within

the statutory time." While true, it may also be an effective way to resolve such a matter without

resort to arbitration. Moreover, defendants ignore the fact that, by resorting to section 34, defendants

were demanding that a suit be filed. That plaintiff might have chosen not to file a suit says nothing

about defendants' intent in serving the demand in the first place. Regarding defendants' intent, the

fact that they demanded litigation is more relevant.

        Third, defendants claim that section 34 is simply a responsive means of dealing with a cloud

on title. Defendants cite nothing indicating that they were required to respond in that manner or lose

some right. Pursuant to applicable case law, that is what is meant when an action is said to be

"responsive." See La Hood, 335 Ill. App. 3d at 365. The mere fact that defendants were responding

to a plaintiff's lien is insufficient, given that they could have simply sought arbitration instead.

Indeed, filing a mechanics lien is not inconsistent with a desire to seek arbitration (La Hood, 335 Ill.

App. 3d at 365), so it is defendants who first manifested a desire to resort to the court system.



                                                  -8-
No. 2--09--0854


        Fourth, defendants claim that plaintiff elected the legal forum in derogation of its duty to seek

arbitration. This argument begs the question in that it assumes that defendants' demand that plaintiff

proceed to litigation was meaningless. Instead, in response to defendants' demand, plaintiff filed

its complaint to protect its lien as section 34 of the Act required. 770 ILCS 60/34 (West 2008).

        Fifth, defendants point to a provision of the contract that incorporates a rule from the

American Arbitration Association Rules for the Construction Industry. That rule provides, "No

judicial proceeding by a party relating to the subject matter of the arbitration shall be deemed a

waiver of the party's right to arbitrate." We note that in two cases, this very rule and another similar

one have been held not to be dispositive of the issue. See Household Finance Corp. III, 351 Ill. App.

3d at 554; La Hood, 335 Ill. App. 3d at 366. Instead of merely relying on the contractual provisions

incorporating the rules, the courts in those cases performed full analyses of the parties' respective

conduct. See Household Finance Corp. III, 351 Ill. App. 3d at 554-56; La Hood, 335 Ill. App. 3d

at 364-66. Such provisions provide evidence of the parties' intent at the time of contracting. See La

Hood, 335 Ill. App. 3d at 366 ("The inclusion of the specific reference to the AAA Construction

Industry Arbitration Rules *** indicates that the parties intended to favor arbitration and, as such,

we will not waive that right lightly"). Nevertheless, subsequent conduct also provides evidence of

intent. In this case, defendants clearly and affirmatively demanded litigation. Plaintiff was forced

to acquiesce at the pain of losing its lien. Defendants cannot now rely on the right that they so

clearly relinquished. Finally, the plain language of the provision cited by defendants states that filing

a suit in itself does not constitute a waiver. It does not say that demanding that the other party file

a suit does not constitute a waiver. The latter, of course, is what defendants did. Defendants'

contention that making a section 34 demand does not even reach the level of filing a suit, and thus



                                                  -9-
No. 2--09--0854


also cannot constitute a waiver, is not well taken. Filing a suit can take place in various contexts--

such as in response to a section 34 demand--that would diminish any inference regarding an intent

to abandon arbitration. Conversely, demanding that litigation be instituted pursuant to section 34

is unequivocal.

       Sixth, defendants assert that "the subcontract itself evinces an intention to mediate followed

by arbitration if mediation proves unavailing." While true, the question is not what arbitration right

the contract established; it is whether defendants waived that right. Defendants state, "Deference

should be given to the contract's terms." It is defendants who acted in derogation of the contract's

terms by demanding litigation and placing plaintiff in a position where it was required to file a

complaint or be prejudiced by its inaction.

       In light of the foregoing, the order of the circuit court of McHenry County denying

defendants' motion to compel arbitration is affirmed. The balance of this appeal is dismissed for lack

of jurisdiction. Defendants raise various other points throughout their briefs that are largely

undeveloped and that we, in any event, do not find persuasive. We remand this cause to the circuit

court for further proceedings.

       Affirmed in part and appeal dismissed in part; cause remanded.

       O'MALLEY and SCHOSTOK, JJ., concur.




                                                -10-
