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Peach v. CIM Insurance Corp.9/24/2004
UNPUBLISHED
Rule 23 order filed August 27, 2004
This is an appeal from the Madison County circuit court's refusal to compel plaintiff Armettia Peach to arbitrate her claims against defendant CIM Insurance Corp. (CIM). On appeal, CIM seeks the reversal of the circuit court's arbitration ruling. This interlocutory appeal followed; we have jurisdiction pursuant to Illinois Supreme Court Rule 307(a)(1) (188 Ill. 2d R. 307(a)(1)). We affirm.
BACKGROUND
Armettia Peach filed a class action complaint against CIM for violations of the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/2 (West 2000)), common law fraud by misrepresentation, conspiracy to commit consumer fraud, and breach of contract.
CIM sells "Extended Protection Plans" (EPPs) to consumers who purchase automobiles. Peach's complaint alleged that CIM, through Enterprise Car Sales (Enterprise), a car dealership located in Glen Carbon, Illinois , misrepresented to consumers that the full amount paid by the consumers for the EPPs would be passed through to CIM when, in fact, and unknown to the consumers, the dealerships retained a portion of the proceeds. This alleged fraud was accomplished through the "Vehicle Buyer's Order" (VBO), which listed the EPP under the heading "Other Charges," grouped together with other pass-through charges, such as "License Fee" and "Documentary Fee." The accompanying CIM EPP form contract likewise represented that the amount paid for the EPP was passed through to CIM. However, only a portion of the amount listed on these form contracts was "passed through" to CIM for the extended warranties, and the remainder was retained by the dealer.
After the suit was filed, CIM filed a motion to compel arbitration and to stay the litigation of Peach's first amended complaint. CIM premised its entitlement to compel arbitration on the presence of an arbitration provision in the contract between Peach and Enterprise. Pointing to Peach's allegation in her complaint that Enterprise acted as CIM's agent in accomplishing the claimed fraud, CIM argued that, as the alleged principal behind the alleged fraud, CIM should be entitled to enforce the arbitration provision even though CIM was not a signatory to the contract. Peach opposed CIM's motion.
The trial court entered an order denying CIM's motion. According to the order: (i) CIM cannot enforce the arbitration provision in the contract between Peach and Enterprise, (ii) the arbitration provision is unconscionable because it precludes class action relief, (iii) the arbitration provision lacks mutuality of obligations, (iv) the costs of arbitration are prohibitively high, and (v) the arbitration provision is a part of a fraudulent scheme. CIM then filed a notice of interlocutory appeal. We will limit our analysis to whether CIM, as a nonsignatory to the contract between Peach and Enterprise, can enforce the arbitration provision in that contract, because it is dispositive of this case.
ANALYSIS
An order to compel arbitration is injunctive in nature and is appealable under Supreme Court Rule 307(a)(1) (188 Ill. 2d R. 307(a)(1)). Salsitz v. Kreiss, 198 Ill. 2d 1, 11, 761 N.E.2d 724, 730 (2001). Generally, the standard employed in reviewing an interlocutory order granting or denying a motion to compel arbitration is whether the circuit court abused its discretion. Bishop v. We Care Hair Development Corp., 316 Ill. App. 3d 1182, 1189, 738 N.E.2d 610, 616 (2000). However, a review of a trial court's construction of the arbitration agreement states a question of law that is subject to a de novo standard. Caligiuri v. First Colony Life Insurance Co., 318 Ill. App. 3
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