{ "id": 485876, "name": "DOUGLAS D. DANNEWITZ et al., Plaintiffs-Appellees, v. EQUICREDIT CORPORATION OF AMERICA, Defendant-Appellant", "name_abbreviation": "Dannewitz v. Equicredit Corp. of America", "decision_date": "2002-08-09", "docket_number": "No. 1\u201402\u20140858", "first_page": "370", "last_page": "374", "citations": [ { "type": "official", "cite": "333 Ill. App. 3d 370" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "803 F.2d 396", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1629709 ], "year": 1986, "pin_cites": [ { "page": "400", "parenthetical": "\"the enforceability of an arbitration clause is a question for the court when one party denies the existence of a contract with the other\"" } ], "opinion_index": 0, "case_paths": [ "/f2d/803/0396-01" ] }, { "cite": "124 Ill. 2d 435", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3218645 ], "year": 1988, "pin_cites": [ { "page": "447-48" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/124/0435-01" ] }, { "cite": "198 Ill. 2d 1", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 29928 ], "weight": 2, "year": 2001, "pin_cites": [ { "page": "9" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/198/0001-01" ] }, { "cite": "240 Ill. App. 3d 731", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5138539 ], "weight": 2, "year": 1992, "pin_cites": [ { "page": "735" }, { "page": "735-36" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/240/0731-01" ] }, { "cite": "764 F.2d 804", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 378138 ], "year": 1985, "pin_cites": [ { "page": "806", "parenthetical": "contract construed against assignee of drafter as well as drafter" } ], "opinion_index": 0, "case_paths": [ "/f2d/764/0804-01" ] }, { "cite": "97 Ill. App. 3d 195", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3110765 ], "year": 1981, "pin_cites": [ { "page": "201", "parenthetical": "holding that an ambiguity or inconsistency in the mortgage must be construed against the lender" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/97/0195-01" ] }, { "cite": "318 Ill. App. 3d 793", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 279518 ], "year": 2000, "pin_cites": [ { "page": "800" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/318/0793-01" ] }, { "cite": "318 Ill. App. 3d 1101", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 279499 ], "year": 2001, "pin_cites": [ { "page": "1105", "parenthetical": "the denial of a motion to compel arbitration is analogous to a denial of injunctive relief and is appealable under Supreme Court Rule 307(a)(1)" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/318/1101-01" ] } ], "analysis": { "cardinality": 446, "char_count": 10023, "ocr_confidence": 0.755, "pagerank": { "raw": 6.011584009127899e-08, "percentile": 0.3729823630644103 }, "sha256": "507171729746bf398fb56937c1ee879abdafdd8adc0740d37e6ac5541eb60650", "simhash": "1:7b7f091c2b1f74ff", "word_count": 1494 }, "last_updated": "2023-07-14T19:13:04.462910+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "DOUGLAS D. DANNEWITZ et al., Plaintiffs-Appellees, v. EQUICREDIT CORPORATION OF AMERICA, Defendant-Appellant." ], "opinions": [ { "text": "JUSTICE O\u2019BRIEN\ndelivered the opinion of the court:\nDefendant, Equicredit Corporation of America, appeals the order of the circuit court denying defendant\u2019s motion to dismiss plaintiffs\u2019 complaint and compel arbitration. Plaintiffs, Douglas and Ellyn Dan-newitz, cross-appeal the order of the circuit court denying their motion for sanctions. We affirm the order denying defendant\u2019s motion to dismiss and compel arbitration; we dismiss plaintiffs\u2019 cross-appeal.\nPlaintiffs obtained a residential mortgage loan from HomeGold, Incorporated (HomeGold), on November 18, 2000. Shortly thereafter, HomeGold sold and assigned the note and mortgage to defendant. Plaintiffs later sued defendant for allegedly imposing an unlawful prepayment penalty.\nDefendant filed a motion to dismiss and compel arbitration pursuant to section 2 \u2014 619 of the Illinois Code of Civil Procedure (735 ILCS 5/2 \u2014 619 (West 2000)). Defendant\u2019s motion was based upon the arbitration agreement that plaintiffs signed as part of their transaction with HomeGold. The arbitration agreement provides that \u201c[a]ny Claim shall be resolved, upon the election of you or us, by binding arbitration pursuant to this Arbitration Agreement.\u201d (Emphasis added.) The arbitration agreement defines \u201cus\u201d as:\n\u201cHomeGold, Inc., all of its parents, wholly or majority owned subsidiaries, affiliates, predecessors, successors, and assigns; and all of the agents, employees, directors and representatives of such entities. In addition, *** \u2018us\u2019 mean[s] any third party providing any product or service in connection with the Credit Transaction (including but not limited to investors or potential investors, real estate brokers, mortgage brokers, credit bureaus, appraisers, mortgage life insurance companies, private mortgage insurance companies, closing agents, escrow agents, title insurance companies, loan originators, rating agencies and loan services) or any assignee of the Credit Transaction if, and only if, such third party is named as a codefendant with us in a Claim asserted by you.\u201d\nIn the trial court, the parties disputed whether defendant fell within the arbitration agreement\u2019s definition of \u201cus\u201d and, thus, whether defendant could compel arbitration in this case. Defendant argued that, as an assignee of HomeGold, it fell within the first sentence of the definition (\u201cHomeGold, Inc., all of its parents, wholly or majority owned subsidiaries, affiliates, predecessors, successors, and assigns\u201d (emphasis added)) and thus may compel arbitration. Plaintiffs responded that, as an assignee of plaintiffs\u2019 note and mortgage, defendant fell within the second sentence (\u201cany assignee of the Credit Transaction\u201d), pursuant to which defendant could compel arbitration only if it was \u201cnamed as a codefendant with\u201d one of the entities designated as \u201cus\u201d in the first sentence. Since plaintiffs filed their complaint solely against defendant, and not against any of the other entities designated as \u201cus\u201d in the arbitration agreement, plaintiffs argued that defendant may not compel arbitration.\nThe trial court found that defendant fell within both the first and second sentences of the arbitration agreement\u2019s definition of \u201cus.\u201d The trial court further found that, under the first sentence, defendant could compel arbitration; however, under the second sentence, defendant could not compel arbitration because none of the other entities designated as \u201cus\u201d in the first sentence were named as codefen-dants. The trial court resolved this inconsistency in favor of plaintiffs and denied defendant\u2019s motion to dismiss and compel arbitration.\nDefendant filed this timely interlocutory appeal pursuant to Supreme Court Rule 307(a)(1) (166 Ill. 2d R. 307(a)(1)). See Federal Signal Corp. v. SLC Technologies, Inc., 318 Ill. App. 3d 1101, 1105 (2001) (the denial of a motion to compel arbitration is analogous to a denial of injunctive relief and is appealable under Supreme Court Rule 307(a)(1)). The trial court\u2019s construction of the arbitration agreement is a matter of law subject to de novo review. Caligiuri v. First Colony Life Insurance Co., 318 Ill. App. 3d 793, 800 (2000).\nDefendant argues that the trial court erred in finding that the arbitration agreement\u2019s two-sentence definition of \u201cus\u201d is inconsistent. Defendant argues that the first sentence refers only to \u201cdirect\u201d assignees of HomeGold, i.e., those entities that purchased the loan directly from HomeGold, while the second sentence refers only to those additional entities that subsequently purchased the loan. Defendant argues that, as a \u201cdirect\u201d assignee of HomeGold, it falls only within the first sentence of the definition, pursuant to which defendant may compel arbitration.\nDefendant\u2019s argument fails, because the second sentence of the definition applies to \u201cany\u201d assignee of the credit transaction. Defendant was assigned the credit transaction (i.e., plaintiffs\u2019 note and mortgage), and thus, defendant falls within the second sentence of the definition.\nDefendant next argues that the second sentence\u2019s limitation on arbitration applies only to \u201cthird parties,\u201d not assignees. Defendant\u2019s argument fails, as the second sentence refers to assignees of the credit transaction as \u201cthird parties\u201d:\n\u201c '[U]s\u2019 mean[s] *** any assignee of the Credit Transaction if, and only if, such third party is named as a codefendant with us in a Claim asserted by you.\u201d (Emphasis added.)\nAs discussed, defendant is an \u201cassignee of the Credit Transaction\u201d and therefore falls within the second sentence.\nIn sum, defendant\u2019s attempts to reconcile the two-sentence definition are unavailing. The sentences are inconsistent because, under the first sentence, defendant, as an assignee of HomeGold, may compel arbitration; however, under the second sentence, defendant, as an assignee of the credit transaction, is prohibited from compelling arbitration because none of the entities designated as \u201cus\u201d in the first sentence were named as codefendants. The trial court correctly resolved this inconsistency in plaintiffs\u2019 favor, ruling that defendant may not compel arbitration. See, e.g., Farmers & Mechanics Bank v. Davies, 97 Ill. App. 3d 195, 201 (1981) (holding that an ambiguity or inconsistency in the mortgage must be construed against the lender); Federal Deposit Insurance Corp. v. University Anclote, Inc., 764 F.2d 804, 806 (11th Cir. 1985) (contract construed against assignee of drafter as well as drafter).\nNext, defendant argues that it may compel arbitration as a third-party beneficiary of the arbitration agreement. The third-party beneficiary doctrine applies to arbitration agreements. Johnson v. Noble, 240 Ill. App. 3d 731, 735 (1992). Where it is shown that the signatories to the agreement intended that the nonsignatories were to derive benefits from the agreement and where the arbitration clause itself is susceptible to this interpretation, then arbitration is proper. Johnson, 240 Ill. App. 3d at 735-36.\nHere, as discussed, the trial court correctly construed the arbitration agreement against defendant and found that defendant could not compel arbitration. Under this construction, defendant is not an intended beneficiary under the arbitration agreement. Accordingly, the third-party beneficiary doctrine does not apply.\nNext, defendant argues that the arbitrator (not the court) must decide whether plaintiffs agreed to arbitrate their claims against defendant. In support, defendant cites the arbitration agreement\u2019s definition of arbitrable claims: \u201cany claim, dispute or controversy between you and us *** including the validity, enforceability or scope of this Arbitration Agreement.\u201d (Emphasis added.) Defendant also cites Salsitz v. Kreiss, 198 Ill. 2d 1 (2001), which held \u201c \u2018when the language of an arbitration clause is broad and it is unclear whether the subject matter of the dispute falls within the scope of [the] arbitration agreement, the question of substantive arbitrability should initially be decided by the arbitrator.\u2019 \u201d Salsitz, 198 Ill. 2d at 9, quoting Donaldson, Lufkin & Jenrette Futures, Inc. v. Barr, 124 Ill. 2d 435, 447-48 (1988).\nHere, the issue is whether plaintiffs can be compelled to arbitrate with the assignee of the entity with which they first agreed to arbitrate, in other words, the issue is whether defendant is a party to the arbitration agreement. Since this issue goes to the existence of the agreement between plaintiffs and defendant in the first place, the court (not the arbitrator) must decide the matter. See, e.g., I.S. Joseph Co. v. Michigan Sugar Co., 803 F.2d 396, 400 (8th Cir. 1986) (\u201cthe enforceability of an arbitration clause is a question for the court when one party denies the existence of a contract with the other\u201d). As discussed, the trial court correctly ruled in favor of plaintiffs.\nNext, we address plaintiffs\u2019 cross-appeal from the trial court\u2019s order denying their motion for sanctions. Defendant argues that we should dismiss plaintiffs\u2019 cross-appeal as it does not fall within the scope of Supreme Court Rule 307(a) and is not immediately appeal-able. Plaintiffs concede that this court lacks jurisdiction over their cross-appeal, and plaintiffs state that they \u201cdo not object\u201d to its dismissal. Accordingly, we dismiss plaintiffs\u2019 cross-appeal.\nFor the foregoing reasons, we affirm the order of the circuit court denying defendant\u2019s motion to dismiss and compel arbitration; we dismiss plaintiffs\u2019 cross-appeal from the order of the circuit court denying their motion for sanctions.\nOrder affirmed; cross-appeal dismissed.\nBUCKLEY and O\u2019MARA FROSSARD, JJ., concur.", "type": "majority", "author": "JUSTICE O\u2019BRIEN" } ], "attorneys": [ "Dykema Gossett P.L.L.C., of Chicago (Arthur F. Radke and Sara E. Lorber, of counsel), for appellant.", "Edelman, Combs & Latturner, L.L.C., of Chicago (Daniel A. Edelman, Cathleen M. Combs, James O. Latturner, and Danity V. Ivory, of counsel), for appellees." ], "corrections": "", "head_matter": "DOUGLAS D. DANNEWITZ et al., Plaintiffs-Appellees, v. EQUICREDIT CORPORATION OF AMERICA, Defendant-Appellant.\nFirst District (6th Division)\nNo. 1\u201402\u20140858\nOpinion filed August 9, 2002.\nDykema Gossett P.L.L.C., of Chicago (Arthur F. Radke and Sara E. Lorber, of counsel), for appellant.\nEdelman, Combs & Latturner, L.L.C., of Chicago (Daniel A. Edelman, Cathleen M. Combs, James O. Latturner, and Danity V. Ivory, of counsel), for appellees." }, "file_name": "0370-01", "first_page_order": 388, "last_page_order": 392 }