Sabo v. Dennis

Rule 23 order filed NO. 5-09-0568
January 28, 2011;
Motion to publish granted IN THE
March 8, 2011.
APPELLATE COURT OF ILLINOIS
FIFTH DISTRICT
SHERRILL SABO, ) Appeal from the
) Circuit Court of
Plaintiff, ) Madison County.
)
v. )
)
MICHAEL DENNIS and DENNIS TECHNOLOGY, )
LLC, )
Defendants. )
)
----------------------------------------------------------------- ) No. 07-L-311
)
DENNIS TECHNOLOGY, LLC, )
)
Third-Party Plaintiff-Appellant, )
)
v. )
)
SPRINT NEXTEL CORPORATION, NEXTEL )
RETAIL STORES, LLC, NEXTEL )
OPERATIONS, INC., SPRINT SPECTRUM, )
L.P., SPRINT SOLUTIONS, INC., RALPH )
TRASK, and DM COMMUNICATION )
SERVICES, INC., ) Honorable
) David A. Hylla,
Third-Party Defendants-Appellees. ) Judge, presiding.
JUSTICE STEWART delivered the judgment of the court, with opinion.
Presiding Justice Chapman and Justice Wexstten concurred in the judgment and
opinion.
OPINION
This case is on appeal from the order of the Madison County circuit court granting a
motion to compel arbitration and staying the underlying trial court proceedings. On April
3, 2007, the plaintiff in the underlying action, Sherrill Sabo, filed a complaint against
Michael Dennis (Dennis) and Dennis Technology, LLC (Dennis Technology), alleging they
1
owed her in excess of $50,000 as a result of her employment with Dennis Technology.
Hereinafter, we will refer to both defendants as Dennis Technology, except when we refer
specifically and solely to Dennis.
Dennis Technology filed an answer, affirmative defenses, and a third-party complaint
against Sprint Nextel Corp. (Sprint Nextel) and Nextel Retail Stores, LLC (Nextel Retail).
Later, Dennis Technology filed an amended third-party complaint adding the remaining
third-party defendants, Nextel Operations, Inc. (Nextel Operations), Sprint Spectrum, L.P.
(Sprint Spectrum), Sprint Solutions, Inc. (Sprint Solutions), Ralph Trask (Trask), and DM
Communication Services, Inc. (DM Communication) (collectively, the third-party
defendants) (additionally, we collectively refer to all the third-party defendants except Trask
and DM Communication as Sprint Nextel).
In the amended third-party complaint, Dennis Technology purported to allege causes
of action for breach of contract, intentional interference with contractual relations,
defamation, and false representation and requested both monetary damages and injunctive
relief. Essentially, Dennis Technology alleged that the third-party defendants were
responsible for its failure to pay Sabo.
On July 5, 2007, Sprint Nextel and Nextel Retail filed a motion to compel arbitration
and stay the trial court proceedings, alleging that they had entered into certain agreements
with Dennis Technology whereby Dennis Technology had waived its right to litigate disputes
concerning those agreements and had agreed instead to submit those disputes to arbitration.
Later, the remaining third-party defendants filed similar motions to compel arbitration and
stay the trial court proceedings. Dennis Technology filed a response claiming that neither
Sprint Nextel nor Nextel Retail had signed an agreement giving them the right to compel
arbitration. Dennis Technology also alleged that it had a "variety of challenges to the
arbitration provision, including unconscionability, violation of due process, [and] lack of
2
mutuality." After an evidentiary hearin g, the trial court granted the motion to compel
arbitration with regard to Sprint Nextel and stayed the trial court proceedings with regard to
all the third-party defendants. Dennis Technology filed this appeal pursuant to Illinois
Supreme Court Rule 307(a)(1) (eff. Jan. 1, 2003).
On appeal, Dennis Technology makes four main arguments: (1) that we should reverse
the trial court's grant of the motion to compel arbitration with regard to all the third-party
defendants except Sprint Solutions because Sprint Solutions is the only third-party defendant
who signed the 2006 "Authorized Representative Agreement" (2006 AR Agreement), (2) that
we should reverse the trial court's stay with regard to the remaining third-party defendants,
(3) that the 2006 AR Agreement is unconscionable, and (4) that Sprint Nextel violated the
requirement that the parties negotiate and mediate before arbitration and thereby
constructively waived its right to arbitrate. We affirm.
BACKGROUND
At the evidentiary hearing on the motion to compel arbitration, the parties presented
the following relevant evidence. On March 18, 2002, Dennis Technology entered into an
"Authorized Representative Agreement" (2002 AR Agreement) with Nextel West Corp.
(Nextel). In the 2002 AR Agreement, Nextel authorized Dennis Technology to sell its
wireless telecommunication equipment and systems in southeastern Missouri and
southwestern Illinois for an initial period of two years, with the possibility of three one-year
extensions. Under the 2002 AR Agreement, either party was allowed to terminate the
agreement without cause upon 30 days' written notice to the other party. In addition, both
parties agreed to the following:
"Any controversy, dispute or claim arising out of the interpretation,
performance or breach of this Agreement *** shall be resolved by binding arbitration,
at the request of either party, in accordance with the rules of the American Arbitration
3
Association. The arbitration shall be conducted by a panel of three arbitrators ***.
The arbitration shall be held in New York City or such other location as shall be
mutually agreeable ***."
The parties agreed that Dennis Technology would receive compensation according to
specified plans, which included the eligibility to receive reimbursements on a sliding scale
for customer accounts that remained active for up to 36 months, which they referred to as
"Continuing Service Awards" (CSAs). Under the 2002 AR Agreement, Nextel reserved the
right to "reduce or change" Dennis Technology's compensation plan, including its eligibility
to receive CSAs. Additionally, the parties agreed that "[a]ll questions with respect to the
construction" of the agreement "and the rights and liabilities of the parties" would be
governed by Virginia law.
In 2003, Dennis Technology and Nextel entered into another AR Agreement (2003
AR Agreement), the relevant provisions of which were the same as the 2002 AR Agreement.
In August 2005, the merger that created Sprint Nextel was consummated. At that
time, Nextel dealers, such as Dennis Technology, were generally not authorized to sell Sprint
products and services, and Sprint dealers were generally not authorized to sell Nextel
products and services. Blair Frock testified that he was employed by Sprint at the time of
the merger with Nextel. After the merger, he was responsible for the accounts of Sprint
Nextel dealers in several midwestern states, including Dennis Technology's account. In
September 2005, Dennis Technology entered into an agreement with Sprint Nextel (the
Addendum). Frock testified that, after the merger, there were more than 3,000 Nextel and
Sprint dealers across the United States. Sprint Nextel required each of those dealers to
execute virtually the same addendum with it in order to authorize the Nextel dealers to sell
Sprint products and services and Sprint dealers to sell Nextel products and services.
Frock testified that, after the dealers signed the addendums and were allowed to begin
4
selling both Sprint and Nextel products and services, Sprint Nextel still had tw o
compensation plans, one for the former Sprint dealers and another for the former Nextel
dealers, which "made it very operationally inefficient for the dealers as well as for *** Sprint
Nextel." Frock testified that, in order to address those issues, Sprint Nextel sent all the
dealers, including Dennis Technology, an AR Agreement with uniform terms and conditions.
Under the May 1, 2006, AR Agreement between Dennis Technology and Sprint Nextel (2006
AR Agreement), Dennis Technology chose to become an exclusive dealer for Sprint Nextel.
Prior to signing the 2006 AR Agreement, Dennis Technology and the other Sprint Nextel
dealers were allowed to choose between three types of compensation plans, with the
exclusive plan providing the highest level of compensation. Frock testified that more than
30 days before the dealers were requested to sign the new AR Agreements, Sprint Nextel
sent each of them a notice that it was planning to change the terms of their compensation.
Frock testified that he personally met with each of the approximately 200 dealers in
his region to explain the terms of the AR Agreement Sprint Nextel was requesting them to
sign. Sprint Nextel wanted the dealers to be able to ask questions and get information about
the terms of the AR Agreement, but it was not willing to change any of the terms at the
request of any of the dealers. Frock testified that although Dennis and his attorney proposed
several changes to the 2006 AR Agreement, Sprint Nextel was "not able to accommodate"
those requests because it was attempting to get all of its nationwide dealers entered into
contracts with the same terms and conditions. He testified that allowing Dennis Technology
to have an individualized contract would have undermined the company's goal of operational
efficiency. He stated as follows:
"If Sprint Nextel had 3,000 different contracts, trying to operationally manage[,] that
would have been a nightmare. So that's why the decision was ultimately made from
our legal department and our operation department that everybody has to essentially
5
be on the same terms and conditions."
Frock testified that if Dennis Technology had not signed the 2006 AR Agreement,
Sprint Nextel would have terminated its dealership upon 30 days' written notice and that the
same consequence applied to every Sprint Nextel dealer to whom they sent the new AR
Agreement. He testified that if a dealer had not signed the new AR Agreement, Sprint Nextel
would have paid the accrued CSAs, either as a continuing income stream or in a lump sum
according to the net present value of that income.
The parties stipulated that Patricia Dennis, whom the record reflects is the mother of
Michael Dennis, is a practicing attorney, had practiced law for 10 years, had represented
Dennis Technology since its inception in 2002, and represented it in connection with the
negotiations prior to Dennis signing the 2006 AR Agreement.
Dennis testified that he is the president of Dennis Technology, a company he started
in 2002 in order to sell wireless products for Nextel. Dennis testified that, at the time of
Nextel's merger with Sprint, Dennis Technology was one of the top 10 Nextel dealers in the
St. Louis area and that, in the latter half of 2005, when the Addendum was presented to him,
he agreed to start selling Sprint equipment in addition to Nextel equipment. Before the
merger between Sprint and Nextel, there had been only one other store selling Nextel phones
and service near Dennis Technology. After the merger, the area was "heavily saturated" with
a variety of cell phone providers with retail outlets near Dennis Technology. He testified
that, in May 2006, it was not possible for Dennis Technology to become a cell phone dealer
for a provider other than Sprint or Nextel because the compensation plans of the other
providers would not have been nearly as profitable, especially given the location and number
of exclusive providers nearby.
Dennis explained that he was not happy with the compensation plans offered as a part
of the 2006 AR Agreement. After having his attorney review the proposed contract, he
6
"decided [it] was not a satisfactory contract," he wanted "a little bit more clarity," and he did
not want arbitration. He testified that he was very concerned with a number of issues and
tried to "illuminate those to Sprint." He testified that he had several conversations with
Sprint Nextel representatives about his concerns, but he could not remember the name of
anyone he spoke with, the date of any particular conversation, or any other details about the
conversations. Generally, Dennis testified that someone had told him that if he did not sign
the 2006 AR Agreement, his dealership would be terminated without giving Dennis
Technology 30 days' notice and that this person was "very clear that everything was going
to disappear." He also testified that an unidentified person had told him that Sprint Nextel
would not pay Dennis Technology its accrued CSAs if it was no longer a dealer. He
calculated the approximate value of his CSAs when he signed the 2006 AR Agreement in
May 2006 at $540,000, or $15,000 per month for 36 months. Frock testified that in the event
Dennis Technology did not sign the 2006 AR Agreement, Sprint Nextel would have paid
Dennis Technology the net present value of the CSAs, an amount between $100,000 and
$120,000.
Dennis testified that, prior to signing the 2006 AR Agreement, he initially requested
Sprint Nextel to remove the arbitration provision altogether, but its representatives declined
to make any changes and told him to "take it or leave it." He testified that if required to
arbitrate this dispute in New York City, he would not be able to afford the cost. He assumed
that the cost of a flight to New York City would be $1,200 per seat. He did not believe there
were any witnesses located in New York, and he stated that he would have to call about 30
to 40 potential witnesses, 95% of whom he estimated lived within a 50-mile radius of
Madison County and none of whom were located in New York State.
He admitted that he signed the 2002 and 2003 AR Agreements, both of which also
contained provisions requiring arbitration in New York City. He acknowledged that he did
7
not sign those agreements under duress and did not contend that they were unconscionable
in any way. He agreed that he had owned at least five different businesses over the previous
17 years and that, at the time of the hearing, Dennis Technology was still in business
providing consulting services but was no longer a Sprint Nextel dealer. In 2006, Dennis
Technology was earning approximately $75,000 per month. He consulted with his attorney
multiple times and had numerous conversations with Sprint representatives before signing
the 2006 AR Agreement.
On May 14, 2009, the trial court entered an order granting the motion to compel
arbitration with regard to all the third-party defendants except Trask and DM
Communication and staying the trial court proceedings with regard to all the third-party
defendants. The court found that there was a valid and enforceable arbitration provision in
the 2006 AR Agreement and that all of Dennis Technology's claims against the third-party
defendants fell within the scope of that provision. The court determined that Dennis
Technology failed to establish its defenses of duress and unconscionability as a matter of fact
and law. The court noted that the 2006 AR Agreement included a Virginia choice-of-law
provision and that, under either Illinois law or Virginia law, it would grant the motion to
compel arbitration.
The court found that the claim of duress applied to the agreement as a whole and that,
as a result, the arbitrators should decide that claim. The court noted, however, that if it were
to decide the issue of duress, it would not find that Dennis Technology signed the agreement
under duress because it had been operating under a "very similar agreement" since 2002 that
allowed Nextel to terminate its dealership without cause upon 30 days' notice. The court
found no foundation for Dennis's claim that Sprint Nextel had forced him to sign the
agreement after telling him that it would not honor the 30-day-notice provision and would
not pay accrued CSAs, because Dennis testified that he did not know who made the
8
statement, when it was made, whether it was made in person or over the telephone, or who
else was present when it was made. The court further found that Dennis Technology
"arguably" still had the right to "pursue an arbitration claim for breach of contract" if any
CSAs were not fully paid or if it incurred other damages as a result of the termination.
The court found that Dennis Technology had entered into the 2006 AR Agreement
"with full knowledge of the facts and its terms" and that it chose the "Exclusive Dealer plan,"
which required it to exclusively sell Sprint Nextel products and services in exchange for
greater compensation. The court noted that Dennis Technology had "continued to accept
compensation under the 2006 Agreement for many months" but that when Sprint Nextel
terminated the agreement in March 2007, it "obtained injunctive relief to prevent termination
of the agreement, thus affirming the validity of the 2006 [AR] Agreement."
The court further determined that Dennis Technology had failed to prove that the
2006 AR Agreement was unconscionable and that the issue of unconscionability was for the
arbitrators to decide. The court stated that if it were to decide the issue of unconscionability,
it would find that the 2006 AR Agreement "was a commercial contract entered into by both
parties exercising their own free will." The court did not find the selection of New York
City as the location of the arbitration unconscionable: "Dennis Technolog[y] did not present
sufficient evidence that the cost of arbitration in New York would be prohibitive such that
it would be deprived of the ability to fairly arbitrate; nor did [it] present any evidence that
litigating in Madison County would be less expensive than arbitrating in New York."
The court found that Sprint Nextel had not waived its right to arbitrate by filing the
motion to compel arbitration without first negotiating or mediating the dispute, because the
agreement included no provision requiring it "to negotiate or mediate after Dennis
Technolog[y] filed a lawsuit" against it. (Emphasis in original.) The court denied Dennis
Technology's motion to reconsider, and this appeal followed.
9
ANALYSIS
The parties disagree on the appropriate standard of review for this case. Dennis
Technology asserts that the appropriate standard is de novo because the trial court's
construction of an arbitration agreement states a question of law. That is correct to the extent
that our decision involves interpreting the parties' agreement. Peach v. CIM Insurance
Corp., 352 Ill. App. 3d 691, 694 (2004) (the review of a trial court's construction of an
arbitration agreement is a question of law). Sprint Nextel argues that we must apply the
abuse-of-discretion standard because the trial court conducted a full-day evidentiary hearing
and made several findings of fact in granting the motion to compel arbitration. This is an
interlocutory appeal pursuant to Illinois Supreme Court Rule 307(a)(1) (eff. Jan. 1, 2003),
under which the pivotal issue is whether there is a sufficient showing to sustain the trial
court's order, and the standard of review for the trial court's ultimate decision is whether it
abused its discretion in granting or denying the requested relief. Bishop v. We Care Hair
Development Corp., 316 Ill. App. 3d 1182, 1189 (2000). However, our review of the court's
interpretation of the parties' agreement is de novo. Peach, 352 Ill. App. 3d at 694.
The trial court's finding that there was a valid arbitration agreement covering the
dispute between Dennis Technology and Sprint Nextel involves interpreting the parties'
agreement, and the review is de novo. Congress enacted the Federal Arbitration Act (9
U.S.C. §1 et seq. (2006)) in order to overcome judicial resistance to arbitration. Buckeye
Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443 (2006). Section 2 of the Federal
Arbitration Act "embodies the national policy favoring arbitration and places arbitration
agreements on equal footing with all other contracts." Id. at 443; 9 U.S.C. §2 (2006).
Section 2 provides as follows:
"A written provision in any *** contract evidencing a transaction involving
commerce to settle by arbitration a controversy thereafter arising out of such contract
10
or transaction, or the refusal to perform the whole or any part thereof, or an agreement
in writing to submit to arbitration an existing controversy arising out of such a
contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save
upon such grounds as exist at law or in equity for the revocation of any contract." 9
U.S.C. §2 (2006).
Challenges to the validity of an arbitration agreement are divided into two types.
Buckeye Check Cashing, Inc., 546 U.S. at 444. One type challenges the validity of the
agreement to arbitrate, and the other challenges the contract as a whole, on grounds that
directly affect the entire agreement or that render the entire contract invalid due to the
illegality of a provision of the contract. Id. "[R]egardless 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." Id. at 449.
In this case, the parties agreed to binding arbitration of "[a]ny controversy, dispute or
claim arising out of the interpretation, performance or breach of this Agreement." Dennis
Technology's challenges to Sprint Nextel's motion to compel arbitration all went to the
contract as a whole rather than exclusively to the agreement to arbitrate. Therefore, the trial
court correctly decided that Dennis Technology's challenges to the contract must be
considered by the arbitrators. W e will briefly address the issues Dennis Technology raises
on appeal.
Dennis Technology first argues that Sprint Solutions is the only third-party defendant
that can compel arbitration because none of the others signed the 2006 AR Agreement. The
trial court ruled that there was a valid and enforceable agreement between Dennis
Technology and all the third-party defendants except Trask and DM Communication but that
Dennis Technology's third-party action against Trask and DM Communication should be
stayed pending the outcome of the arbitration. Dennis Technology concedes that there is a
11
valid arbitration agreement under which Sprint Solutions is entitled to compel arbitration and
stay the trial court proceedings. We determine this issue under Virginia law pursuant to the
parties' agreement. On appeal, Dennis Technology does not challenge this choice-of-law
provision.
"[U]nder Illinois's choice-of-law rules, an express choice-of-law provision will be
given effect if the provision does not contravene Illinois public policy and the state chosen
bears a reasonable relationship to the parties or the transaction." Hubbert v. Dell Corp., 359
Ill. App. 3d 976, 982 (2005). In our case, there is no public policy against the application
of Virginia law. The parties agreed in the trial court that the applicable Virginia and Illinois
laws were very similar. Additionally, there is a reasonable relationship between Sprint
Nextel and Virginia. In oral arguments before the trial court, Sprint Nextel alleged that its
headquarters at the time the parties entered into the 2006 AR Agreement was located in
Reston, Virginia, and Dennis Technology did not dispute that assertion.
Virginia law provides, "A written agreement to submit any existing controversy to
arbitration or a provision in a written contract to submit to arbitration any controversy
thereafter arising between the parties is valid, enforceable and irrevocable, except upon such
grounds as exist at law or in equity for the revocation of any contract." Va. Code Ann.
§8.01-581.01 (2008). Virginia law additionally provides as follows: "On application of a
party showing an agreement described in §8.01-581.01, and the opposing party's refusal to
arbitrate, the court shall order the parties to proceed with arbitration. However, if the
opposing party denies the existence of the agreement to arbitrate, the court shall proceed
summarily to the determination of the issue of the existence of an agreement and shall order
arbitration only if found for the moving party." Va. Code Ann. §8.01-581.02(A) (2008).
Under Virginia law, the trial court is authorized in the first instance to decide issues of
arbitrability, unless the parties have specifically agreed in their contract that the issue of
12
arbitrability is for the arbitrators. Waterfront Marine Construction, Inc. v. North End 49ers
Sandbridge Bulkhead Groups A, B & C, 251 Va. 417, 425, 468 S.E.2d 894, 898 (1996).
Generally, under V irginia law, the right to compel arbitration stems from the
underlying contract, and one who has not signed that contract may not compel arbitration.
Mission Residential, LLC v. Triple Net Properties, LLC, 275 Va. 157, 161, 654 S.E.2d 888,
890 (2008) (a party cannot be compelled to arbitrate unless he has agreed to arbitrate, and
the one seeking to compel arbitration has the burden of proving the existence of the
agreement). The 2006 AR Agreement is "between Sprint Solution, Inc., on behalf of itself
and its affiliates that provide products and services ('Sprint') and Dennis Technology, Inc."
There is no definition in the agreement for the term "affiliates" as used in the introductory
paragraph, but Dennis Technology argues that the term "affiliates" in the introductory
paragraph is synonymous with the term "Sprint Affiliates/Nextel Partners," which is defined
in the 2006 AR agreement as referring to "third parties not affiliated with Sprint that offer
Sprint Services outside of the geographic area covered by this Agreement." Dennis
Technology therefore contends that the term "affiliates" means "third parties not affiliated
with Sprint." Under the 2006 AR Agreement, Dennis Technology's argument fails.
We agree with the trial court's ruling on this issue:
"Certain findings of fact and law in support of this order were made. First, this
Court interprets the word 'affiliates' in the Agreement in question to include all the
Third-Party Defendants but for Ralph Trask and DM Communication[]. The Court
gives this word its plain and ordinary meaning because it does not appear that the
term is otherwise defined in the agreement. Also, Dennis Technolog[y] chose to sue
all five Sprint third-party defendants for breach of contract and related causes of
action. Therefore, if these defendants are not parties to the contract, there would be
no basis for a contract cause of action against them."
13
The terms of the 2006 AR Agreement do not support Dennis Technology's
interpretation, under which we would be required to find that Sprint Solutions entered into
the agreement on behalf of its "affiliates," which are third parties not affiliated with Sprint
Nextel, an interpretation that makes no sense and is contrary to other terms of the agreement.
The record supports the court's finding that the term "affiliates" refers to all the third-party
defendants except Trask and DM Communication. Frock testified at length about the
functions of each third-party defendant and how each is related to Sprint Solutions and Sprint
Nextel. As a result, the trial court had evidence about the interrelationship between the third-
party defendants and their affiliations to Sprint Solutions, a sufficient basis for determining
that all the third-party defendants except Trask and DM Communication were covered by
the term "affiliates."
In a related argument, Dennis Technology asserts that the trial court abused its
discretion by staying the proceedings against Trask and DM Communication, who are not
parties to the 2006 AR Agreement and are not included in the order compelling arbitration.
Dennis Technology claims that it has no remedy against Trask and DM Communication now
that the trial court has stayed the proceedings against them. That argument misstates the
record. The trial court granted Trask's and DM Communication's motion to stay further trial
court proceedings pending a resolution by arbitration of the issues between the remaining
third-party defendants and Dennis Technology.
In their motion, Trask and DM Communication alleged as follows: "Dennis
Technology's claims against Trask and DM Communication are so closely related to the
claims between Sprint and Dennis Technology that arbitration of those claims [is] likely to
resolve the issues involving Trask and DM Communication. Indeed, the parties would
duplicate their efforts in having to litigate as well as arbitrate similar legal issues and facts
if the claims against Trask and DM Communication were not stayed pending conclusion of
14
the arbitration claims between Dennis Technology and Sprint." Therefore, in granting the
motion for a stay, the trial court did not leave Dennis Technology without a remedy but
merely ordered Dennis Technology to wait to pursue litigation against Trask and DM
Communication until a resolution of the arbitration between Dennis Technology and the
remaining third-party defendants. The court did not abuse its discretion in granting the
motion for a stay because it furthers the legitimate goal of judicial economy and the strong
policy favoring arbitration. Moreover, the issues involving the third-party defendants are
sufficiently interrelated that there may be no need for further litigation after the resolution
of the arbitration.
Dennis Technology's remaining arguments–that the contract is unconscionable and
that Sprint Nextel has waived its right to arbitration because it failed to comply with certain
conditions precedent–are not for the court to decide but must be decided by the arbitrators.
Under Virginia law, once it is established that the parties have entered into an agreement to
arbitrate, there is a presumption in favor of arbitration, and "the remaining question is
whether the scope of the agreement is broad enough to include the disputed issue." Mission
Residential, LLC, 275 Va. at 161, 654 S.E.2d at 890. In the case at bar, Dennis Technology
admits that it entered into an agreement to arbitrate, but it argues that the agreement should
not be enforced. The record supports the trial court's conclusion that Sprint Nextel is entitled
to submit all the issues raised in the third-party complaint to arbitration. The broad language
of the arbitration provision requires us to find that all the issues raised by Dennis Technology
in its third-party complaint are covered by the agreement to arbitrate, the merits of which
must be decided by the arbitrators. See East Coast Hockey League, Inc. v. Professional
Hockey Players Ass'n, 322 F.3d 311, 314-15 (4th Cir. 2003) (courts should rule in favor of
arbitration unless the terms of the contract positively show that the issue is not subject to
arbitration, and if the issue is arbitrable, the court is not to rule on the potential merits).
15
Dennis Technology makes a final argument–that the trial court had no authority to
compel arbitration outside its jurisdiction. Sprint Nextel correctly points out that Dennis
Technology has forfeited this argument because it did not raise it in the trial court.
"Questions not raised in the trial court cannot be argued for the first time on appeal." Parks
v. Kownacki, 193 Ill. 2d 164, 180 (2000). Therefore, this issue is forfeited.
CONCLUSION
For all the reasons stated, we affirm the trial court's grant of the motion to compel
arbitration and for a stay of further proceedings against all the third-party defendants.
Affirmed.
16
NO. 5-09-0568
IN THE
APPELLATE COURT OF ILLINOIS
FIFTH DISTRICT
___________________________________________________________________________________
SHERRILL SABO, ) Appeal from the
) Circuit Court of
Plaintiff, ) Madison County.
)
v. )
)
MICHAEL DENNIS and DENNIS TECHNOLOGY, )
LLC, )
Defendants. )
)
----------------------------------------------------------------- ) No. 07-L-311
)
DENNIS TECHNOLOGY, LLC, )
)
Third-Party Plaintiff-Appellant, )
)
v. )
)
SPRINT NEXTEL CORPORATION, NEXTEL )
RETAIL STORES, LLC, NEXTEL )
OPERATIONS, INC., SPRINT SPECTRUM, )
L.P., SPRINT SOLUTIONS, INC., RALPH )
TRASK, and DM COMMUNICATION )
SERVICES, INC., ) Honorable
) David A. Hylla,
Third-Party Defendants-Appellees. ) Judge, presiding.
___________________________________________________________________________________
Rule 23 Order Filed: January 28, 2011
Motion to Publish Granted: March 8, 2011
Opinion Filed: March 8, 2011
___________________________________________________________________________________
Justices: Honorable Bruce D. Stewart, J.
Honorable Melissa A. Chapman, P.J., and
Honorable James M. Wexstten, J.,
Concur
___________________________________________________________________________________
Attorneys Thomas G. M aag, Maag Law Firm, LLC, 22 W. Lorena Ave., W ood River, IL
for 62095; Patricia L. Dennis, Dennis Law Office, 115 South Main Street, Edwardsville,
Appellant IL 62025
___________________________________________________________________________________
Attorneys John L. Gilbert, Hinshaw & Culbertson, LLP, 156 North Main, Suite 206,
for Edwardsville, IL 62025; Frederic R. Klein, Deborah Rzasnicki Hogan, Goldberg,
Appellees Kohn, Ltd., 55 East Monroe Street, Suite 3300, Chicago, IL 60603
___________________________________________________________________________________