Tupanjac v. SZ Orland Park, LLC , 2024 IL App (1st) 232467-U ( 2024 )

2024 IL App (1st) 232467-UNo. 1-23-2467
Order filed July 26, 2024
FIFTH DIVISION
NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the
limited circumstances allowed under Rule 23(e)(1).
IN THE
APPELLATE COURT OF ILLINOIS
FIRST JUDICIAL DISTRICT
RADIVOJE TUPANJAC, Father and Next Friend ) Appeal from the
of LUKA TUPANJAC, a minor, ) Circuit Court of
) Cook County.
Plaintiff-Appellant, )
) No. 22 L 6952
v. )
) Honorable
SZ ORLAND PARK, LLC, a limited liability ) David B. Atkins,
company; ANTHONY LEMPARES, and ) Judge, presiding.
ZACHARY FRENZEL, )
)
Defendants-Appellees. )
PRESIDING JUSTICE MITCHELL delivered the judgment of the court.
Justice Mikva and Justice Lyle concurred in the judgment.
ORDER
¶1 Held: Plaintiff’s legal arguments challenging the validity of a contract as a whole, and not
specifically an arbitration clause, are themselves subject to arbitration.
¶2 Plaintiff Radivoje Tupanjac, father and next friend of Luka Tupanjac, a minor, appeals the
circuit court’s order in favor of defendants SZ Orland Park, LLC, Anthony Lempares, and Zachary
Frenzel. The issues on appeal are whether the circuit court erred in granting defendants’ motion to
compel arbitration and stay litigation and denying plaintiff’s motion for summary judgment
because: (1) the Sky Zone waiver agreement is invalid and unenforceable under Illinois law, and
No. 1-23-2467
(2) the waiver agreement is perpetual in duration and thus terminable at will. For the following
reasons, we vacate the circuit court’s order and remand with instructions.
¶3 I. BACKGROUND
¶4 Defendant SZ Orland Park, LLC, doing business as Sky Zone Vernon Hills, owns and
operates a trampoline park in Vernon Hills, Illinois. On January 29, 2022, Nada Tupanjac signed
a document titled “Sky Zone Vernon Hills Waiver” on behalf of her minor son, Luka Tupanjac.
The waiver agreement contained various provisions, including a provision which purported to
waive Luka Tupanjac’s right to a jury trial and instead set forth that any disputes were subject to
arbitration:
“I understand that by agreeing to arbitrate any dispute as set forth in this section, I
am waiving my right, and the right(s) of the minor child(ren) above, to maintain a lawsuit
against SZ and the other Releasees for any and all claims covered by this Agreement. By
agreeing to arbitrate, I understand that I will NOT have the right to have my claim
determined by a jury, and the minor child(ren) above will NOT have the right to have
claim(s) determined by a jury. *** ANY DISPUTE, CLAIM OR CONTROVERSY
ARISING OUT OF OR RELATING TO MY OR THE CHILD’S ACCESS TO
AND/OR USE OF THE SKY ZONE PREMISES AND/OR ITS EQUIPMENT,
INCLUDING THE DETERMINATION OF THE SCOPE OR APPLICABILITY OF
THIS AGREEMENT TO ARBITRATE, SHALL BE *** DETERMINED BY
ARBITRATION ***”
(Emphasis in original). The waiver agreement stated that “this agreement extends forever into the
future and will have full force and legal effect each and every time I or my [child] visit Sky Zone,
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whether at the current location or any other location or facility.” However, the agreement also
stated that it would expire on January 29, 2023.
¶5 The following day, Luka Tupanjac, accompanied by his mother, visited Sky Zone. While
participating in Sky Zone’s “stunt zone” attraction, Luka Tupanjac was injured when another
patron collided with him. In August 2022, plaintiff Radivoje Tupanjac, father and next friend of
Luka Tupanjac, filed a complaint against Sky Zone, and Sky Zone employees Anthony Lempares
and Zachary Frenzel. Plaintiff alleged that defendants were negligent, and that Sky Zone’s conduct
was willful and wanton. Plaintiff also sought declaratory relief that the Sky Zone waiver agreement
was void and unenforceable as a matter of Illinois law.
¶6 Defendants filed a motion to compel arbitration and stay litigation, pursuant to the
arbitration provision of the Sky Zone waiver agreement. The following day, plaintiff filed a motion
for summary judgment. Plaintiff sought summary judgment on his declaratory relief claim, and
additionally asked the circuit court to summarily determine that the waiver agreement was not a
bar to plaintiff’s negligence claims. After hearing the parties’ arguments, the circuit court entered
an order that granted defendants’ motion to compel arbitration and stay litigation, and denied
plaintiff’s motion for summary judgment. This timely appeal followed. Ill. S. Ct. R.307(a)(1) (eff.
Nov. 1, 2017).
¶7 II. ANALYSIS
¶8 Plaintiff argues the circuit court erred in granting defendants’ motion to compel arbitration
and denying plaintiff’s motion for summary judgment because the Sky Zone waiver agreement is
invalid and unenforceable under Illinois law, and because the waiver agreement is perpetual in
duration and thus terminable at will. Plaintiff argues that the waiver agreement is unenforceable
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because it violates the Physical Fitness Services Act (815 ILCS 645/1 et seq. (West 2022)), and
because it violates public policy by allowing a parent to waive his or her child’s right to jury trial
in favor of arbitration. Defendants argue that the waiver agreement is not governed by the Act,
does not violate public policy, and is not terminable at will.
¶9 The parties dispute the applicable standard of review. Defendants argue that the standard
of review for defendants’ motion to compel arbitration is abuse of discretion. Vassilkovska v.
Woodfield Nissan, Inc., 358 Ill. App. 3d 20, 24 (2005) (“Generally, interlocutory appeals are
reviewed under an abuse of discretion standard to determine whether the trial court was correct in
granting or denying the relief requested.” (Internal quotation marks omitted.)). However, where
the circuit court “grants a motion to compel arbitration without an evidentiary hearing and bases
its decision on a purely legal analysis, the applicable standard of review is de novo.” (Internal
quotation marks omitted.) Parker v. Symphony of Evanston Healthcare, LLC, 2023 IL App (1st)
220391, ¶ 24.
¶ 10 Here, no evidentiary hearing occurred before the circuit court entered its order. Defendants
argue that the court made two factual findings, that Sky Zone is not a physical fitness center
offering physical fitness services as defined by the Act, and that Luka Tupanjac derived a benefit
from the arbitration agreement. However, these are rulings of statutory and contractual
construction and thus are legal conclusions, not factual findings. Accordingly, our review is de
novo. Id.¶ 11 The parties also dispute whether we have jurisdiction on appeal to consider the circuit
court’s denial of plaintiff’s motion for summary judgment. Generally, orders denying summary
judgment are not appealable. In re Estate of Funk, 221 Ill. 2d 30, 85 (2006). However, a ruling not
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otherwise appealable under Rule 307(a) may be reviewed by an appellate court if it is sufficiently
“intertwined” with the lower court’s ruling as to injunctive relief. Weiss v. Waterhouse Securities,
Inc., 208 Ill. 2d 439, 448 (2004); Glazer's Distributors of Illinois, Inc. v. NWS-Illinois, LLC, 376
Ill. App. 3d 411, 420 (2007). Here, both motions dealt exclusively with the same issue: whether
the Sky Zone waiver agreement containing an arbitration provision was valid and enforceable.
Additionally, the circuit court heard oral arguments and issued rulings as to both motions
simultaneously. The circuit court’s ruling on one motion would cause any ruling on the other
motion to be a “foregone conclusion.” Weiss, 208 Ill. 2d at 449. Plaintiff’s motion for summary
judgment was sufficiently “intertwined” with defendants’ motion to compel arbitration and stay
litigation such that we have jurisdiction to review the summary judgment ruling. Id. at 448;
Glazer’s Distributors, 376 Ill. App. 3d at 420. A summary judgment ruling is reviewed de novo.
Aasen v. Rickert, 2018 IL App (2d) 170036, ¶ 20.
¶ 12 A. Combined Motion to Dismiss
¶ 13 As an initial matter, plaintiff argues that defendants’ motion to compel arbitration and stay
litigation violated the Code of Civil Procedure because defendants’ motion improperly raised
arguments under both section 2-619 and 2-615 of the Code and did not separate these arguments
as required under section 2-619.1 of the Code. Therefore, plaintiff contends the circuit court erred
in considering the motion on its merits. A motion to dismiss under section 2-615 “challenges the
legal sufficiency of a complaint based on defects apparent on its face.” Marshall v. Burger King
Corp., 222 Ill. 2d 422, 429 (2006). Meanwhile, “[a] motion to dismiss under section 2–619 admits
the legal sufficiency of the complaint but asserts a defense that defeats it.” Doe v. University of
Chicago Medical Center, 2015 IL App (1st) 133735, ¶ 35. A party may combine a section 2-615
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motion and a section 2-619 motion into one pleading, but the combined motion must be separated
into parts, and “each part shall be limited to and shall specify that it is made under” section 2-615
or 2-619. 735 ILCS 5/2-619.1 (West 2022). A movant’s failure to specifically designate whether
a motion to dismiss is brought pursuant to section 2-615 or section 2-619 is fatal if it results in
prejudice to the nonmovant. Mareskas-Palcek v. Schwartz, Wolf & Bernstein, LLP, 2017 IL App
(1st) 162746, ¶ 22.
¶ 14 Regardless of whether defendants’ motion here was procedurally improper, plaintiff was
not prejudiced. Defendants clarified in their reply brief and in oral argument that they were making
no claim for dismissal under section 2-615 and that the basis for their motion was section 2-
619(a)(9). The circuit court’s decision to grant defendants’ motion to compel was not based on
any argument concerning the legal sufficiency of the complaint under section 2-615. Because
plaintiff was not prejudiced, the circuit court did not err in hearing defendants’ motion on the
merits. Id.¶ 15 B. The Physical Fitness Services Act
¶ 16 Plaintiff argues that the Sky Zone waiver agreement violates the Physical Fitness Services
Act and therefore the entire agreement, including the arbitration provision, is void and
unenforceable. Under both federal and state law, “there is no arbitration without a valid contract
to arbitrate.” Aste v. Metropolitan Life Insurance Co., 312 Ill. App. 3d 972, 975 (2000). Therefore,
an arbitration agreement “may be invalidated by a state law contract defense of general
applicability[.]” Carter v. SSC Odin Operating Co., LLC, 2012 IL 113204, ¶ 18. While the Federal
Arbitration Act prohibits courts from invalidating arbitration agreements “under state laws
applicable only to arbitration provisions” (emphasis in original), a state law may invalidate an
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arbitration agreement if the law “arose to govern issues concerning the validity, revocability, and
enforceability of contracts generally.” (Internal quotation marks omitted.) Doctor's Associates,
Inc. v. Casarotto, 517 U.S. 681, 686-87 (1996). The Physical Fitness Services Act does not apply
solely to arbitration provisions and instead regulates the contracts of physical fitness centers
generally. See 815 ILCS 645/1 et seq. (West 2022). Thus, the Physical Fitness Services Act could
potentially be used to invalidate the arbitration provision in the Sky Zone waiver agreement,
provided that the waiver agreement is governed by the Act and violates its provisions. Casarotto,
517 U.S. at 686-87.
¶ 17 However, a court is not permitted under the Federal Arbitration Act to hear plaintiff’s
argument concerning the validity of the Sky Zone waiver agreement under the Physical Fitness
Services Act. Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 449 (2006). There are two
types of challenges to the validity of arbitration agreements. Bess v. DirecTV, Inc., 381 Ill. App.
3d 229, 234 (2008) “One type challenges specifically the validity of the agreement to arbitrate.
[Citation.] The other challenges the contract as a whole, either on a ground that directly affects the
entire agreement (e.g., the agreement was fraudulently induced) or on the ground that the illegality
of one of the contract's provisions renders the whole contract invalid.” (Internal quotation marks
omitted.) Id. at 234-35 (quoting Buckeye, 546 U.S. at 444). Plaintiff is arguing that the entire
waiver agreement, not just the arbitration provision, is void and unenforceable under the Physical
Fitness Services Act. The United States Supreme Court has held that “regardless of whether the
challenge is brought in federal or state court, a challenge to the validity of the contract as a whole,
and not specifically to the arbitration clause, must go to the arbitrator.” Buckeye, 546 U.S. at 449.
Therefore, this question is for the arbitrator to decide.
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¶ 18 Plaintiff argues that the Federal Arbitration Act, and its corresponding federal case law, do
not apply where the parties to a contract agree to arbitrate in accordance with state law. Glazer’s
Distributors, 376 Ill. App. 3d at 421-22. However, the language of the arbitration provision in the
Sky Zone waiver agreement clearly indicates that the parties agreed to arbitrate in accordance with
the Federal Arbitration Act. It states “[t]his agreement shall be governed by, construed and
interpreted in accordance with the laws of the State of Illinois, without regard to choice of law
principles. Notwithstanding the provision with respect to the applicable substantive law, any
arbitration conducted pursuant to the terms of this Agreement shall be governed by the Federal
Arbitration Act.” (Emphasis added.) The preceding sentence stating that the agreement shall be
governed by Illinois law does not change the fact that the parties agreed that any arbitration
conducted pursuant to the agreement would be governed by the Federal Arbitration Act. LRN
Holding, Inc. v. Windlake Capital Advisors, LLC, 409 Ill. App. 3d 1025, 1033-35 (2011) (holding
that a generic state choice-of-law clause was insufficient to prove that the parties to the contract
explicitly intended to conduct arbitration under state law rather than the Federal Arbitration Act).
Therefore, the arbitration agreement is governed by the Federal Arbitration Act, and Buckeye’s
holding applies here. Plaintiff’s argument regarding the Physical Fitness Services Act must be
heard by the arbitrator.
¶ 19 Plaintiff argues that the Sky Zone waiver agreement is unenforceable also because it
violates Illinois public policy by allowing a parent to waive his or her minor child’s right to trial
by jury in favor of arbitration. However, this argument is an attack against the validity of the waiver
agreement as a whole, and therefore is for the arbitrator to decide. See Hartz v. Brehm Preparatory
School, Inc., 2021 IL App (5th) 190327, ¶ 42 (“challenges to the validity of the contract as a whole,
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rather than the arbitration clause within the contract, are matters to be considered by the arbitrator
in the first instance.”). Plaintiff’s related argument concerning whether Luka Tupanjac disaffirmed
the Sky Zone waiver is also for the arbitrator to decide. K.F.C. v. Snap Inc., 29 F.4th 835, 837-38
(7th Cir. 2022) (holding that “Illinois treats the age of the contracting parties as a potential defense
to [contract] enforcement” and that arguments concerning this defense should go to the arbitrator)
(citing Dixon National Bank of Dixon v. Neal, 5 Ill. 2d 328, 336-37 (1955)). See also K.H. by &
through Headlee v. Chicago Urban Air, LLC, No. 22-CV-06494, 2023 WL 6976990, *7 (N.D. Ill.
Oct. 23, 2023).
¶ 20 Plaintiff argues that the Sky Zone waiver agreement is terminable at will because it is
indefinite and perpetual in duration. 1 Rico Industries, Inc. v. TLC Group, Inc., 2014 IL App (1st)
131522, ¶ 21. To support his argument, plaintiff points to language in the waiver agreement that
says that it “extends forever into the future and will have full force and legal effect each and every
time I or my [child] visit Sky Zone.” However, this language conflicts with other language at the
bottom of the final page of the agreement that states that the agreement expires on January 29,
2023. Plaintiff does not acknowledge this expiration date and offers no argument as to why it is
not applicable here. While “contracts of perpetual duration are terminable at will by the parties, a
contract which nonetheless provides that it will terminate upon the occurrence of a specific event
is not deemed perpetual in duration and is not terminable at will[.]” Jespersen v. Minnesota Mining
1 Here, plaintiff is not challenging the validity of the Sky Zone waiver agreement. Rather, by
arguing that the agreement is terminable at will and that Luka Tupanjac terminated it by filing this lawsuit,
plaintiff is disputing the agreement’s existence. Therefore, the courts are permitted to hear this argument.
Buckeye, 546 U.S. at 449 (“a challenge to the validity of the contract as a whole *** must go to the
arbitrator.”); Bahuriak v. Bill Kay Chrysler Plymouth, Inc., 337 Ill. App. 3d 714, 719 (2003) (“The issue of
whether a contract to arbitrate exists must be determined by the court, not an arbitrator.”).
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& Manufacturing Co., 288 Ill. App. 3d 889, 893 (1997). Here, despite language elsewhere in the
Sky Zone waiver agreement stating that the agreement extends forever into the future, the
agreement clearly states that it terminates upon the occurrence of a specific event: the passing of
the date of January 29, 2023. The agreement does not have an indefinite and perpetual duration,
and the circuit court did not err in holding that the waiver agreement is not terminable at will.
¶ 21 Notwithstanding Buckeye, plaintiff argues that this court should nonetheless rule on legal
questions before the case proceeds to arbitration because “the judicial power in this State is vested
solely in the courts,” and this power includes “the authority to judicially interpret and construe ***
statutes when necessary.” People ex rel. Harrod v. Illinois Courts Comm'n, 69 Ill. 2d 445, 472-73
(1977). While this is true, here the parties agreed that the arbitrator would decide any “dispute,
claim or controversy” relating to Luka Tupanjac’s use of the Sky Zone facility, including the scope
or applicability of the arbitration agreement. Under that agreement, the arbitrator decides questions
of law and fact. Board of Trustees of Community College District No. 508, Cook County v. Cook
County College Teachers Union, Local 1600, AFT, AFL/CIO, 74 Ill. 2d 412, 419 (1979)
(“Generally, the nature and extent of an arbitrator’s power will depend upon what the parties agree
to submit to arbitration.”); Hollister Inc. v. Abbott Laboratories, 170 Ill. App. 3d 1051, 1060-61
(1988) (“When parties agree to submit a dispute to arbitration, it is presumed that *** in the
absence of an express reservation, the parties agreed that everything, both as to law and fact, which
is necessary to the resolution of the dispute is within the authority of the arbitrator.”).
¶ 22 III. CONCLUSION
¶ 23 While the circuit court was correct to grant defendant’s motion to compel arbitration and
deny plaintiff’s motion for summary judgment, the circuit court erred in considering the merits of
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plaintiff’s legal arguments related to the validity of the waiver agreement. Those legal questions
properly belong before the arbitrator. Consequently, we vacate the circuit court’s order, and we
remand with instructions to refer the case to arbitration.
¶ 24 Vacated and remanded with instructions.
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