text:
    WAYNE P. GRANE, Plaintiff-Appellant, v. HUBERT GRANE, JR., et al., Defendants-Appellees.
    Second District
    No. 83—982
    Opinion filed January 28, 1985.

      Michael G. Thomas, of Cassidy, Schade & Gloor, of Chicago, for appellant.
    Rodney W. Equi, of Donovan & Roberts, P.C., of Wheaton, and James J. Casey and A. Benjamin Goldgar, both of Keck, Mahin & Cate, Joseph E Cerveny, of Pfeffer, Becker, Gabric & Cerveny, Dennis M. O’Brien, and Richard F. Hudzik, all of Chicago, for appellees.
   JUSTICE LINDBERG

delivered the opinion of the court:

Plaintiff, Wayne P. Grane, appeals from an order of the circuit court of Du Page County denying his motion to stay arbitration and to conduct a hearing pursuant to section 2(b) of the Uniform Arbitration Act (Ill. Rev. Stat. 1981, ch. 10, par. 102(b)). Plaintiff contends the verified allegations in his second amended complaint established that he was fraudulently induced to sign the arbitration agreement. Because we conclude these allegations established a substantial and bona fide dispute as to the existence of an agreement to arbitrate, we reverse and remand the cause to the trial court for a section 2(b) hearing.

Plaintiff is the son of defendant Hubert Grane, Sr. (Grane, Sr.), and the brother of defendants Hubert Grane, Jr. (Grane, Jr.), Fred C. Grane and Daniel T. Grane. The corporate defendants are companies owned by the Grane family and Harris Bank, which is a trustee of certain Grane family trusts. The individual parties signed an agreement and understanding on December 10, 1980, which invested defendant Thomas J. Boodell, Jr. (Boodell), with the “sole authority to resolve any conflict existing between the Parties and to compromise any disputes concerning equity interests as he, in his sole judgment, after consultation with Mr. Hubert Grane, Sr., shall determine.” A dispute arose concerning the division of the family businesses and plaintiff filed a complaint on June 30, 1983, seeking a declaratory judgment determining the rights, interests and liabilities of the parties in the Grane family businesses. Plaintiff also filed an ex parte petition to compel defendants to produce certain business books and records which the court granted on July 7,1983.

In response, Grane, Jr., and certain corporate defendants filed a motion to vacate the order to compel, arguing in part that the parties had entered into an arbitration agreement requiring arbitration of all intrafamily disputes. Plaintiff thereupon filed a motion for leave to file a second amended complaint which contained a count requesting rescission of the arbitration agreement. The trial court allowed plaintiff to file the motion and the second amended complaint with the court, but reserved ruling on the decision whether to allow the motion.

Sometime during September or October 1983, Boodell began conducting an arbitration proceeding to resolve the family disputes, but plaintiff elected not to participate. On October 28, 1983, plaintiff filed a motion to stay the arbitration proceeding, contesting the validity and enforceability of the 1980 arbitration agreement, which the court denied that same day. Plaintiff filed a notice of appeal from the order denying the motion to stay on November 4, 1983. The trial court denied on November 7, 1983, plaintiffs motion to stay all court and arbitration proceedings pending appeal of this cause. On November 9, 1983, plaintiff filed a motion renewing his request that the trial court grant plaintiff leave to file his second amended complaint, which the court granted on November 10,1983.

The first issue which this court must address is whether it has jurisdiction to entertain this appeal. Boodell contends that this appeal must be dismissed as taken from a nonappealable interlocutory order. Boodell argues that the purpose of facilitating arbitration which underlies the Illinois Uniform Arbitration Act (Ill. Rev. Stat. 1981, ch. 10, par. 101 et seq.) is thwarted by allowing appeals from orders denying motions to stay arbitration. Citing decisions from other jurisdictions holding nonappealable orders denying motions to stay arbitration, and relying on the rule that judicial decisions of other States adopting the Uniform Arbitration Act should be given great deference to encourage uniformity, Boodell requests this court to rule that the instant interlocutory order is not appealable pursuant to the Illinois Uniform Arbitration Act. Ill. Rev. Stat. 1981, ch. 10, par. 101 et seq.

Section 18 of the Illinois Uniform Arbitration Act (Ill. Rev. Stat. 1981, ch. 10, par. 118) provides that “[ajppeals may be taken in the same manner, upon the same terms, and with like effect as in civil cases.” The order entered by the trial court here is interlocutory and therefore is governed by Supreme Court Rule 307, which provides that “[a]n appeal may be taken to the Appellate Court from an interlocutory order of court (1) granting, modifying, refusing, dissolving, or refusing to dissolve or modify an injunction.” (87 Ill. 2d R. 307(a)(1).) The jurisdictional question thus presented is whether the trial court’s denial of plaintiff’s motion for a stay of arbitration is analogous to an injunction and therefore appealable as an interlocutory order.

Both parties contend and our research confirms that no Illinois court has decided this precise question. (See Annot., 6 A.L.R.4th 652 (1981).) Boodell argues that because the Illinois arbitration statute is patterned after the Uniform Arbitration Act, we should look to and follow the decisions in other States which likewise have adopted the Uniform Arbitration Act. ■ In the three cases cited by Boodell (School Committee v. Agawam Educational Association (1977), 371 Mass. 845, 359 N.E.2d 956; Miyoi v. Gold Bond Stamp Co. Employees Retirement Trust (1972), 293 Minn. 376, 196 N.W.2d 309; Hodes v. Comprehensive Health Associates, P.A. (1983), 9 Kan. App. 36, 670 P.2d 76), however, the courts specifically based their decisions on the fact that their State arbitration statutes enumerated the orders which were appealable and did not include an order denying a motion to stay arbitration as an appealable order. Likewise, section 19(a) of the Uniform Arbitration Act on which these State statutes are based enumerates certain orders from which immediate appeals can be taken, but fails to include an order denying a motion to stay arbitration. See 7 Uniform Laws Annotated 77 (1978) .

As emphasized by plaintiff, the Illinois legislature apparently elected not to adopt the language of section 19(a) of the Uniform Arbitration Act on appeals and instead adopted with some variation the language of section 19(b) of the Uniform Arbitration Act that appeals can be taken as they are allowed in civil cases (Ill. Rev. Stat. 1981, ch. 10, par. 118). Based upon the distinction between the language governing appeals in the Illinois and Uniform Acts, this court need not follow cases construing different statutory language of other State arbitration acts which are patterned after the Uniform Arbitration Act.

The most instructive Illinois decision on this question is School District No. 46 v. Del Bianco (1966), 68 Ill. App. 2d 145, 215 N.E.2d 25, wherein this court considered whether an order denying a party’s motion to compel arbitration and to stay court proceedings was appealable. In ruling that the order was appealable, the Del Bianco court recognized that the order was not specifically enumerated in Supreme Court Rule 31 (Ill. Rev. Stat. 1963, ch. 110, par. 101.31), the predecessor statute to Supreme Court Rule 307 (87 Ill. 2d R. 307). Despite its absence from the statute, however, the order was interpreted by this court to be appealable as “amounting] to granting or refusing injunctive relief.” (School District No. 46 v. Del Bianco (1966), 68 Ill. App. 2d 145, 152, 215 N.E.2d 25, 28.) The Del Bianco rule recently has been cited favorably by this court. See J&K Cement Construction Co. v. Montalbano Builders, Inc. (1983), 119 Ill. App. 3d 663, 456 N.E.2d 889; Kelso-Burnett Co. v. Zeus Development Corp. (1982), 107 Ill. App. 3d 34, 437 N.E.2d 26; see also Notaro v. Nor-Evan Corp. (1983), 98 Ill. 2d 268 (order denying defendant’s motion to dismiss lawsuit and compel arbitration was an appealable, interlocutory order).

Boodell seeks to distinguish the Del Bianco court’s analogy of a motion to stay court proceedings to an interlocutory injunction on the basis that here, the order appealed from was a denial of a motion to stay arbitration, while Del Bianco involved the denial of a motion to compel arbitration. This distinction was considered persuasive by the Court of Appeals for the Seventh Circuit in construing section 1292(a)(1) of the United States Code (28 U.S.C. sec. 1292(a)(1) (1976)), which authorizes the immediate appeal of orders granting or denying preliminary injunctions. (Timberlake v. Oppenheimer & Co. (7th Cir. 1984), 729 F.2d 515.) This language is nearly identical to that contained in Supreme Court Rule 307 governing interlocutory appeals of orders granting or denying injunctions. In Timberlake, the plaintiff filed suit in Federal court against the brokerage house alleging churning and joined the pendent claims under State law. The defendants moved the district court for an order compelling arbitration of the pendent claims, but staying the arbitration until the court disposed of the plaintiff’s Federal claims. The court allowed the arbitration, but refused the stay order, and the defendants appealed complaining about the refusal to stay. The Seventh Circuit examined the decisions of the Federal circuit courts which were approximately evenly divided as to whether an order denying a motion to stay arbitration was appealable. Concluding that the order was not appealable, the Timberlake court cited as persuasive the distinction between orders denying motions to stay arbitration involved in that case and motions to compel arbitration.

“If a stay of arbitration is granted, the arbitration is halted, and an immediate appeal, if it leads to reversal of the stay, may actually expedite the arbitration. But if refusals to stay arbitration are appealable, then anyone who wants to appeal from an order to arbitrate need only ask for a stay of the order; the denial of this request would be appealable; and the appellant would have a shot at persuading the district court or the court of appeals to stay the arbitration pending appeal.” Timberlake v. Oppenheimer & Co. (7th Cir. 1984), 729 F.2d 515, 519; see generally Note, Interlocutory Appeal Of Orders Granting Or Denying Stays Of Arbitration, 80 Mich. L. Rev. 153 (1981).

Courts which refuse to distinguish between the granting and refusing of a stay of arbitration, the Timberlake court noted, emphasize the distinction is difficult to reconcile with the wording of section 1292(a)(1) “which allows appeals indifferently from orders denying as well as granting injunctions.” (729 F.2d 515, 519.) The language of Supreme Court Rule 307 likewise makes no distinction between orders granting or refusing injunctions. In interpreting the language of Rule 307, this court in School District No. 46 v. Del Bianco (1966), 68 Ill. App. 2d 145, 215 N.E.2d 25, focused on the effect of the stay order and analyzed whether its effect was similar to that of an injunction. Nowhere in its opinion did this court cite as support for its conclusion that immediate appellate review of the order denying the motion to compel arbitration furthered the legislative goal of prompt private dispute resolution. Despite recognition of the laudatory goal of promoting arbitration, therefore, our determination as to the appealability of an interlocutory order cannot be premised upon whether appealability accelerates or delays the arbitration process. Rather, the proper inquiry is whether the stay order is similar to an injunction and thereby appealable pursuant to Rule 307. In Del Bianco, we held that orders denying motions to compel arbitration were appealable as analogous to an injunction. We are unable to distinguish in terms of injunctive effect between an order which denies a motion to compel arbitration and stay court proceedings (School District No. 46 v. Del Bianco (1966), 68 Ill. App. 2d 145, 215 N.E.2d 25), and an order which denies a motion to stay arbitration and commence court proceedings as is involved here.

The structure of the Illinois arbitration statute further suggests that the legislature intended courts to determine at the outset whether the parties had in fact entered into an agreement to arbitrate. Section 2 states that the court shall hold a hearing to determine the existence of an agreement to arbitrate if that issue is in substantial and bona fide dispute and empowers the court to stay a pending arbitration proceeding until the existence of the agreement is established. By providing a mechanism for courts to determine if an agreement exists prior to the commencement of the arbitration process, our legislature demonstrated that the goal of promoting arbitration is not to be valued to the exclusion of all other interests. Rather, the legislature recognized as also deserving of consideration the countervailing interest that only parties who have entered into an agreement to arbitrate should be compelled to submit to arbitration. Were we to hold that an order denying a motion to stay arbitration was unappealable, the statutory mechanism of allowing a judicial determination as to the existence of an arbitration agreement prior to arbitration would in part be emasculated. A party upon a showing of a substantial and bona fide dispute could trigger a section 2 hearing, but if the trial court determined that an agreement existed, then he would be unable to obtain a final determination—appellate review—until after the arbitration was completed and the award was confirmed.

Even the goal underlying arbitration—prompt resolution of the parties’ dispute—could be frustrated were this court to prevent appeal of this order until after completion of the arbitration. For example, assuming that an arbitration agreement did not exist, but that the trial court incorrectly determined otherwise, the party opposing arbitration would not be able to obtain a correct ruling until after the arbitration had ended and review was sought in the appellate court. Only upon finding no agreement to arbitrate would the reviewing court reverse the trial court’s contrary ruling and void the arbitration decision. Throughout this process, both parties would have expended time and financial resources to conduct an unnecessary and unauthorized arbitration. (See Hayes v. Allstate Insurance Co. (7th Cir. 1983), 722 F.2d 1332, 1340 (Posner, J., dissenting) (“Since arbitration may be protracted *** a plaintiff forced into arbitration against his will may be irreparably harmed, for if it later turns out that the matter should not have been submitted to arbitration he will not be able to recover his lost time and expense”).) In contrast, were the trial court’s order appealable pursuant to Supreme Court Rule 307, the reviewing court would have ruled on the existence of an arbitration agreement before the commencement of arbitration. Based upon this hypothetical, therefore, the immediate appealability of the trial court’s order would facilitate and not delay the speedy resolution of the parties’ dispute by eliminating the necessity for participating in an unauthorized arbitration proceeding. (See, e.g., Merit Insurance Co. v. Leatherby Insurance Co. (7th Cir. 1983), 714 F.2d 673, cert. denied (1983), 464 U.S. 1009, 78 L. Ed. 2d 711, 104 S. Ct. 529 (arbitration proceeding lasting three years).) For these reasons, we hold that the trial court’s order denying defendant’s motion to stay arbitration was appealable on the authority of Supreme Court Rule 307 and therefore, we have jurisdiction to consider the merits of the parties’ dispute.

Plaintiff asserts that the trial court erred in failing to hold a hearing on the existence of an agreement to arbitrate the parties’ dispute. The arbitration statute in Illinois reads in pertinent part:

“On application, the court may stay an arbitration proceeding commenced or threatened on a showing that there is no agreement to arbitrate. That issue, when in substantial and bona fide dispute, shall be forthwith and summarily tried and the stay ordered if found for the moving party. If found for the opposing party, the court shall order the parties to proceed to arbitration.” (Ill. Rev. Stat. 1981, ch. 10, par. 102(b).)

On October 28, 1983, plaintiff presented a motion to stay the arbitration proceedings and requested a hearing as to the existence, validity and enforceability of the arbitration agreement. In the alternative, plaintiff requested that the trial court “temporarily remove the Stay in the present proceedings and thereby allow the Plaintiff to make his objections of record, with respect to the validity and enforceability of the subject alleged Arbitration Agreement.”

Based upon the statutory language, plaintiff was required to establish a substantial and bona fide dispute concerning the existence of an agreement to arbitrate. (Ill. Rev. Stat. 1981, ch. 10, par. 102(b).) Section 1 states the bases upon which an absence of an agreement to arbitrate can be found to exist:

“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 save upon such grounds as exist for the revocation of any contract ***.” Ill. Rev. Stat. 1981, ch. 10, par. 101.

The essence of plaintiff’s argument is that he was fraudulently induced to sign the agreement and that fraud in the inducement vitiates the contract. A close examination of the record is required to discover what kind of showing plaintiff made with respect to his fraud claim. In his arguments on his motion to stay arbitration proceedings or in the alternative to make record, plaintiff referred to his second amended complaint, which contained a count in rescission. Plaintiff also stated that he objected “to the validity of the whole arbitration agreement.” Plaintiff continued that he interpreted the Illinois arbitration statute as granting him the right to a judicial hearing and “if the Court finds for us, then the Court can, of course, stay the proceeding, since there is no underlying arbitration agreement.” Therefore, plaintiff requested the court to conduct a hearing on the validity of the arbitration agreement.

In response to plaintiff’s argument on October 28, 1983, defendant Boodell acknowledged to the trial court that plaintiff “has objected strenuously to the arbitration agreement that he entered into and has told your Honor that it has no force and effect.” Boodell contended at the hearing that the arbitration agreement attached to plaintiff’s complaint established an agreement to arbitrate, but also acknowledged that “[t]wo of those members [of the Grane family] have challenged the validity since the time it was entered into” and that plaintiff had challenged the agreement as early as December 1982.

Addressing Boodell’s argument that an agreement to arbitrate unquestionably existed, plaintiff admitted that he did sign the December 1980 agreement, but asserted the agreement was invalid. The trial court then recapitulated plaintiff’s contention:

“THE COURT: You acknowledge there is an agreement, but you question its validity.
Is that correct?
MR. FISCHER: Absolutely.
And under the statute it’s clear that we have a right to a hearing.
Mr. Boodell is correct that the statute does not say that you must stay his arbitration before the hearing. It does not say that.
However, I think just the general equitable powers that this Court has when you know that an arbitration award is coming down so soon I think allow you to stay the proceeding until we have a hearing.
We could have the hearing very quickly, and then the whole thing could be resolved.”

The court then ruled:

“I think you have preserved the question of attacking the validity of the arbitration agreement.
But I think the existence of the arbitration agreement signed by your client, as well as signed by all the other parties, I think the law regarding arbitration and the deferring by a Court to arbitration requires that the arbitration continue.”

Both parties contend, and we agree, that the trial court did not in the preceding portion of the trial court record conduct a section 2 hearing. Rather, the trial court in effect denied plaintiffs motion to stay arbitration either because it did not believe that a substantial and bona fide dispute had been established, or because it concluded without a hearing that an agreement to arbitrate existed. Our task based upon this record is to determine if plaintiff established the existence of a substantial and bona fide dispute, and if so, whether the trial court’s failure to conduct a section 2 hearing constitutes reversible error.

In addition to the arguments of plaintiff’s counsel before the trial court referred to in the above-quoted record, plaintiff also cites other portions of the record and other arguments of counsel which he contends presented to the trial court the existence of a substantial and bona fide dispute. Initially, we note that plaintiff argues in his appellate brief that he apprised the trial court of the bases of his fraud claim several times in chambers with all parties present between July and October 1983. Despite his reliance on these in-chambers discussions, these meetings were never transcribed and thus, his fraud claim which requires this court to review the facts cannot be based upon these discussions in chambers which are de hors the record. See Berner v. Kielnik (1983), 117 Ill. App. 3d 419, 453 N.E.2d 729.

Plaintiff also asserts that his verified second amended complaint sufficiently raised the bases for his fraud in the inducement claim. Boodell counters that since the motion to file the second amended complaint was not allowed by the trial court until after plaintiff filed his notice of appeal, it cannot provide support for plaintiff’s claim. Review of the chronology of the pleadings is necessary to resolve this issue. Plaintiff’s initial and first amended complaints contained no allegations of fraud concerning the 1980 agreement. However, certain defendants filed an emergency motion to vacate ex parte order and dissolve mandatory injunction in which they referred to the parties’ agreement attached to plaintiff’s complaint, raised the arbitration clause in that agreement, and requested that plaintiff’s cause of action be stayed pending resolution of the dispute in arbitration. In response, plaintiff filed his second amended complaint on July 26, 1983, which added Boodell as a defendant and contained a count in rescission. That same day, plaintiff filed a motion pursuant to section 2—616 of the Code of Civil Procedure (Ill. Rev. Stat. 1983, ch. 110, par. 2—616) for leave to file the second amended complaint. The trial court acknowledged and continued plaintiff’s motion until August 1, 1983, the date of the scheduled pretrial conference, and stated:

THE COURT: I’ll let you file it today. I’ll continue it until August 1st. You can file it, but I will continue it—
MR. FISCHER: What are you continuing exactly?
THE COURT: You’re filing your motion. I’m continuing whether or not I’m going to grant you leave until August 1st.”

Plaintiff asserts he requested the court during in-chambers status calls on August 1, October 4, and October 19 to rule on the motion, but that the court refused to rule on plaintiff’s motion and instead set a new status call date of November 8, 1983. Prior to the November status call, plaintiff filed on October 28, 1983, a motion to stay the arbitration proceeding which the court denied that day. Plaintiff filed his notice of appeal on November 4, 1983, and on November 9, 1983, the trial court granted his motion to amend his complaint.

Boodell argues that because the appellate court’s review of an interlocutory order is limited to what occurred at trial prior to the appeal, we cannot consider the allegations in the second amended complaint filed after the notice of appeal. However, the second amended complaint was allowed to be filed even though the court reserved ruling on granting or denying the motion for four months. Therefore, the fraud allegations in the second amended complaint were before the court prior to plaintiff’s request for a stay of the arbitration agreement. Boodell has cited no authority for the proposition that an amended complaint filed and placed in the trial court record cannot be considered by the trial court in acting on a subsequent motion to stay arbitration. Therefore, the filed and verified second amended complaint was available to the trial court in granting or refusing plaintiff’s stay request. Additionally, the second amended complaint is part of the appellate record, for “[t]he trial court record includes any report of proceedings prepared in accordance with Rule 323 and every other document filed and judgment and order entered in the cause.” (Emphasis added.) (87 Ill. 2d R. 321.) Thus, this court can consider the allegations in the second amended complaint in determining whether plaintiff established a substantial and bona fide dispute regarding the existence of an agreement to arbitrate.

Boodell contends that even if the fraud claims were before the court, they are insufficient because plaintiff did not allege a misrepresentation or concealment of a material fact, a prerequisite for a fraud cause of action. To constitute fraud sufficient to invalidate a contract, a representation must be one of material fact made for the purpose of inducing the other party to act, must be known to be false by the maker but reasonably believed to be true by the other party, and must be relied upon to the other party’s detriment. (Ainsworth Corp. v. Cenco, Inc. (1982), 107 Ill. App. 3d 435, 437 N.E.2d 817.) Fraud in the inducement vitiates the contract and renders the agreement voidable at the option of the injured party. Bresler Ice Cream Co. v. Millionaires Club, Inc. (1966), 71 Ill. App. 2d 342, 218 N.E.2d 891.

Boodell contends the arbitration agreement signed by plaintiff discloses that Boodell intended to act as attorney for Grane, Sr., and as the arbitrator. However, in paragraph 23 of count VIII of the verified second amended complaint, plaintiff alleged that Boodell failed to disclose that Boodell was acting and continued to act as attorney for Grane, Jr. In paragraph 24, plaintiff alleged that Boodell failed to disclose his law firm’s representation of defendant Daniel T. Grane in another lawsuit.

In Merit Insurance Co. v. Leatherby Insurance Co. (7th Cir. 1983), 714 F.2d 673, cert. denied (1983), 464 U.S. 1009, 78 L. Ed. 2d 711, 104 S. Ct. 529, the Court of Appeals for the Seventh Circuit citing section 18 of the American Arbitration Association (AAA), Commercial Arbitration Rules and Canon IIA of the Code of Ethics for Arbitrators in Commercial Disputes recognized an arbitrator’s continuing duty to disclose any existing financial, business, or professional relationship which is likely to affect his impartiality or create a reasonable appearance of bias. (714 F.2d 673, 678.) Unlike here, however, in Merit the arbitration was conducted under the auspices of the AAA and the challenged arbitrator was appointed from a list formulated by the AAA. These rules, however, are derived from the more general proposition that parties expect their chosen arbitrator to act impartially. (See Commonwealth Coatings Corp. v. Continental Casualty Co. (1968), 393 U.S. 145, 21 L. Ed. 2d 301, 89 S. Ct. 337.) As the Supreme Court said in that case when interpreting section 10 of the Federal Arbitration Act:

“This rule or arbitration [section 18 of the AAA Rules] and this canon of judicial ethics rest on the premise that any tribunal permitted by law to try cases and controversies not only must be unbiased but also must avoid even the appearance of bias. We cannot believe that it was the purpose of Congress to authorize litigants to submit their cases and controversies to arbitration boards that might reasonably be thought biased against one litigant and favorable to another.” (393 U.S. 145, 150, 21 L. Ed. 2d 301, 305, 89 S. Ct. 337, 340.)

We believe Boodell owed a similar duty to disclose even though the record did not disclose that he was chosen according to any specific association rules. However, plaintiff must also show that this nondisclosure amounted to fraud which induced his assent to the arbitration agreement.

Courts have recognized that fraud and collusion on the part of the arbitrator will warrant vacating an award, for a party to an arbitration proceeding has a right to the judgment of disinterested and honest men. (See 5 Am. Jur. 2d Arbitration & Award sec. 173 (1962), and cases cited therein.) Fraud comprises anything calculated to deceive, as in acts, omissions, and concealment including breach of legal or equitable duty, trust or confidence resulting in damage to another, and encompasses silence if accompanied by deceptive conduct or suppression of material facts constituting active concealment. (Cf. Russow v. Bobola (1972), 2 Ill. App. 3d 837, 841, 277 N.E.2d 769, 771 (failure of seller of home to inform buyer of drainage problems amounted to sufficient allegation of fraud to defeat a motion to dismiss).) Here, Boodell is accused of failing to disclose that he represented and continues to represent one of the sons standing to benefit from the allocation of the family businesses. Plaintiff alleged in his verified complaint that this omission was material and fraudulently induced his assent to the arbitration agreement. These allegations raise a substantial and bona fide dispute concerning the existence of an arbitration agreement.

During oral argument, Boodell cited this court’s decision in J&K Cement Construction, Inc. v. Montalbano Builders, Inc. (1983), 119 Ill. App. 3d 663, 456 N.E.2d 889, as support for his conclusion that disclosure of potential arbitrator bias prior to arbitration cured any breach of duty or appearance of impropriety. While Boodell did disclose his concurrent representation of Grane, Sr., plaintiff additionally alleged that Boodell did not disclose his concurrent representation of Grane, Jr., throughout the arbitration process. Because Montalbano involved only a disclosed relationship creating an appearance of bias, that case is distinguishable from the instant case. We conclude, therefore, that plaintiff’s allegation of Boodell’s undisclosed concurrent representation of Grane, Jr., while acting as the arbitrator of the family controversy raises a substantial and bona fide dispute as to whether plaintiff was fraudulently induced to sign the arbitration agreement.

Because plaintiff raised a substantial and bona fide dispute concerning the existence of an arbitration agreement, the trial court erred in denying plaintiff’s motion which in part requested the court “to set this matter for hearing with respect to the existence, validity and enforceability of an Arbitration Agreement between the parties herein.” Section 2(b) states that upon a finding of a substantial and bona fide dispute, that issue shall be summarily tried. (Ill. Rev. Stat. 1981, ch. 10, par. 102(b).) The presence of the term “shall” eliminates any discretion on the part of the trial court; it must hold a hearing upon a substantial and bona fide showing. The trial court’s failure to conduct this hearing in the case at bar was error.

Our conclusion that plaintiff’s allegation raised a substantial and bona fide dispute does not mean that plaintiff has proved fraud. Section 2(b) does not require plaintiff to prove fraud at the initial stage; otherwise, there would be no need for the statute’s requirement that the trial court “forthwith and summarily tr[y]” the issue after a showing of the substantial and bona fide dispute. All the statute required plaintiff to establish was a substantial and bona fide dispute, which he did based upon the verified allegations in his second amended complaint. Therefore, the trial court on remand after hearing the evidence presented must resolve the question whether plaintiff actually was fraudulently induced to sign the arbitration agreement.

Defendants contend, however, that this appeal is mooted by the filing of the arbitration award. Plaintiff here seeks a hearing conducted pursuant to section 2(b) (Ill. Rev. Stat. 1981, ch. 10, par. 102(b)), which authorizes the court to stay the arbitration proceeding upon concluding that a substantial and bona fide dispute exists. Since the arbitration is concluded, defendants contend, the statutory relief is ineffective, and thus, the issue is moot. We reject defendants’ argument for two reasons. First, plaintiff argues and the record confirms that certain parties have filed petitions to vacate or confirm the arbitration award. Since no rulings on these petitions are contained in the record on appeal, the arbitration is not concluded and a stay order would not amount to the doing of a useless act. Second, although the statute authorizes the court to stay an arbitration “commenced or threatened,” we do not read the section 2(b) stay power as the exclusive remedy in a situation such as the one at bar, where the stay application is made while the arbitration is ongoing, but the final order on the application is not entered until after the arbitration hearing has concluded. If after a section 2(b) hearing the trial court determines that no arbitration agreement exists, then even though no arbitration proceeding remains to be stayed, the court can declare the arbitration decision a nullity and the parties will be free to pursue their judicial remedies.

Also unpersuasive is defendants’ contention that section 12 relief is still available to plaintiff, thereby making unnecessary a section 2 hearing. Section 12 provides:

“Upon application of a party, the court shall vacate an award where:
(5) There was no arbitration agreement and the issue was not adversely determined in proceedings under Section 2 ***.” (Ill. Rev. Stat. 1981, ch. 10, par. 112(a)(5).)

Here, the trial court determined either that no substantial or bona fide dispute existed concerning the arbitration agreement, or concluded without a hearing that the two-page document signed by the parties constituted an agreement to arbitrate. Either interpretation of the court’s action would amount to an adverse determination under section 2, thereby precluding plaintiff from obtaining section 12 relief. Therefore, we conclude the appeal is not rendered moot simply because Boodell has submitted his arbitration award to the trial court or because of the existence of section 12 remedies.

The order of the circuit court of DuPage County is reversed and the cause is remanded for a section 2 hearing on whether the parties entered into a valid and enforceable agreement to arbitrate.

Reversed and remanded.

UNVERZAGT and SCHNAKE, JJ., concur.


source: Caselaw Access Project

author: JUSTICE LINDBERG

license: Public Domain

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. WILLIAM TACKETT, Defendant-Appellant.
    Second District
    No. 83—1138
    Opinion filed January 31, 1985.
    G. Joseph Weller and Jan K. Dargel, both of State Appellate Defender’s Office, of Elgin, for appellant.
    J. Michael Fitzsimmons, State’s Attorney, of Wheaton (Phyllis J. Perko and Marshall Stevens, both of State’s Attorneys Appellate Service Commission, of counsel), for the People.
   JUSTICE LINDBERG

delivered the opinion of the court:

After a jury found William Tackett, defendant, guilty of burglary and armed violence, the circuit court of Du Page County placed him on probation on the armed violence conviction for five years on January 9, 1980. The State filed a petition to revoke his probation on July 14, 1982. Defendant stipulated to the State’s petition and on December 1, 1983, the trial judge pronounced his sentence in open court to be an indeterminate period of incarceration of not less than 6% years and not more than 20 years, with credit for time spent in custody. In the written judgment order, dated and filed on the same date, December 1, 1983, and signed by the trial judge, defendant’s sentence was stated to be an indeterminate sentence of not less than six years, eight months and not more than 20 years’ imprisonment, with credit given for 377 days of incarceration served but no credit given for time served on probation but not in custody. The mittimus, dated and filed December 5, also included the denial of credit for time served on probation. Defendant appeals from this judgment and argues that the written judgment, which denied him credit for time served on probation, improperly increased the oral pronouncement of sentence imposed in open court. He requests this court to remand the cause and direct the circuit court to issue an amended mittimus giving him credit for time served on probation.

The State filed on appeal a supplemental record comprising a report of proceedings of a hearing held on August 9, 1984, over seven months after defendant filed his notice of appeal, in which the trial judge stated that he never intended to give defendant credit for any probationary time during which he was not in custody. The State’s Attorney said that the written judgment was completed immediately after the sentencing hearing and that defense counsel was not present when the order was signed. Defendant has filed objections to the filing of the supplemental record. This court ordered the State’s motion to file the supplemental record to be taken with the case.

I. Motion to Supplement the Record

Defendant objects to the State’s motion to supplement the record. The two cases he relies on to support his objections, Enlow v. Illinois Central R.R. Co. (1968), 103 Ill. App. 2d 269, 243 N.E.2d 847, and Denniston v. Skelly Oil Co. (1977), 47 Ill. App. 3d 1054, 362 N.E.2d 712, are inapposite. In those two cases, the appellants sought to supplement the record after the appellees responded to the appellants’ briefs by arguing the incompleteness of the record. The courts found that under those circumstances, it would be unfair to the appellees, who had already responded to the appellants’ briefs, to permit the supplementation of the record.

Nevertheless, we deny the State’s motion to supplement the record. Supreme Court Rule 329 (87 Ill. 2d R. 329) permits the amendment of the record where there are material omissions or inaccuracies or if the record otherwise is insufficient to present fully and fairly the questions involved. Here, the record filed by defendant sets out the relevant facts. It contains no material omissions or inaccuracies. The supplemental record merely attempts to clarify the trial judge’s intent. The motion to supplement the record is denied.

II. Pronouncement of Sentence

As defendant correctly states, where a trial court when imposing sentence upon the revocation of a defendant’s probation does not expressly deny the defendant credit against his jail sentence for time he spent on probation, the defendant is entitled to such credit. (Ill. Rev. Stat. 1983, ch. 38, par. 1005—6—4(h); People v. Hollingsworth (1982), 89 Ill. 2d 466, 467-68; People v. Campbell (1984), 126 Ill. App. 3d 1028, 467 N.E.2d 1112.) Further, the trial court may not increase a sentence once it has been imposed by subsequently denying credit for time served on probation, since such a denial would result in an increased length of sentence. (People v. Hills (1980), 78 Ill. 2d 500, 508; People v. Stiger (1979), 69 Ill. App. 3d 188, 191, 387 N.E.2d 55, 57; see generally Annot., 26 A.L.R.4th 905 (1983).) Defendant then argues that the trial court’s oral pronouncement of sentence and the subsequent written order represent two separate sentences which require a determination of which sentence prevails. According to defendant, the oral pronouncement of sentence as recorded in the report of proceedings prevails over the conflicting document contained in the common law record. He relies upon People v. Thompson (1977), 51 Ill. App. 3d 447, 366 N.E.2d 1009, and People v. Williams (1963), 27 Ill. 2d 327.

Defendant’s argument implicitly characterizes the oral pronouncement of sentence and the judgment order setting out his sentence as separate transactions so that the oral pronouncement barred a subsequent modification as prohibited in People v. Hills (1980), 78 Ill. 2d 500, 508. Although case law lends some support to his argument as he conceives the issue, here the oral pronouncement of sentence and the written judgment were part of a continuing transaction occurring on a single date.

In People v. Allen (1978), 71 Ill. 2d 378, the supreme court addressed the issue of whether a notice of appeal filed after the oral pronouncement of sentence but before the filing of the judgment order was timely. The court held that the period of time during which the notice of appeal had to be filed commenced when the trial court orally pronounced the defendant’s sentence. The court explained that the pronouncement of the sentence is the judicial act which comprises the judgment of the court, whereas the entry of the judgment order is a ministerial act which merely evidences the sentence. (71 Ill. 2d 378, 381.) The court continued, however, that the “record does not present the question nor need we consider what rule would apply in the event of a discrepancy between the judgment as pronounced and the order as entered.” (71 Ill. 2d 378, 381-82.) Thus, the supreme court did not wish to imply that its holding would mandate that the contents of the oral rendition of sentence would control over the written judgment.

In People v. Redman (1984), 122 Ill. App. 3d 787, 462 N.E.2d 21, the oral pronouncement that the probation sentence was to run consecutive to a prior sentence of probation differed from the written probation order dated the same day as the oral pronouncement but filed two weeks later and the docket sheet, in that the latter two made no mention that the probation sentence was to run consecutive to a prior sentence of probation. When the second sentence of probation was revoked and the defendant was sentenced to jail with credit for time served on probation on the second conviction as a result of the trial court’s silence, the question arose as to when that probation term commenced to calculate the amount of credit due the defendant. The State, relying on the oral pronouncement that the second sentence was to run consecutive to the prior sentence, argued that the period did not commence until after the first term of probation terminated, which would result in less credit afforded the defendant. The appellate court agreed with the State. It first noted that the record did not show that anything occurred before the written judgment which might have affected a change in the court’s view as to the proper sentence. The court analyzed cases which held that where a conflict between the report of proceedings and the common law record arises, the report of proceedings prevails (see People v. Thompson (1977), 51 Ill. App. 3d 447, 366 N.E.2d 1009; People v. DePratto (1976), 36 Ill. App. 3d 338, 343 N.E.2d 628), and further noted cases which held that while the common law record imports verity, where a conflict arises, the whole record should be considered to determine the matter (see People v. Williams (1963), 27 Ill. 2d 327; People v. Webb (1976), 38 Ill. App. 3d 629, 347 N.E.2d 486; People v. Gregory (1966), 77 Ill. App. 2d 188, 222 N.E.2d 182). The court then concluded that the judge’s imposition of a consecutive term as reflected in the report of proceedings must be given effect under the circumstances. It distinguished the rendition of judgment from the entry of judgment, finding that the rendition is not what is entered but what is ordered and considered, whereas the entry of judgment is a ministerial act. An imperfection or neglect in the ministerial act, the court continued, does not result in the modification or obliteration of the judicial act, “ ‘That which the court performs judicially, or orders to be performed, is not to be avoided by the action or want of action of the judges or other officers of the court in their ministerial capacity.’ ” People v. Redman (1984), 122 Ill. App. 3d 787, 792-93, 462 N.E.2d 21, 24-25, citing and quoting 1 A. Freeman, Freeman on Judgments sec. 46 (5th ed. 1925).

While the legal propositions in Redman appear to support defendant’s position, the court did not follow a hard-and-fast rule that the report of proceedings would prevail over the common law record. Rather, it determined that under the particular circumstances before it, the report of proceedings should prevail.

The same result is not warranted under the facts of the instant case. Defendant desires a correction of the mittimus to provide credit for time served on probation. The right to this credit arises from the trial judge’s silence when he orally pronounced sentence and not an affirmative statement. Therefore, it is not clear, as it was in Redman, that the trial judge “ordered and considered” that defendant should be credited for time served on probation as urged by defendant.

The entry of the written judgment on the same date as the oral pronouncement, without anything in the record indicating any development which would have affected the trial judge’s view of the proper sentence, supports the conclusion that mere inadvertence caused the trial judge to deny credit when he orally pronounced sentence. Indeed, it appears from the entire record that the trial judge merely did not fully articulate defendant’s sentence when he pronounced it in open court. The subsequent written order, therefore, would not constitute an increase of its oral sentencing pronouncement but rather its full articulation.

In arriving at this conclusion, it must be noted that although the appellate courts in People v. Thompson (1977), 51 Ill. App. 3d 447, 366 N.E.2d 1009, and People v. DePratto (1976), 36 Ill. App. 3d 338, 343 N.E.2d 628, held that where a conflict between the report of proceedings and the common law record arises, the report of proceedings prevails, those cases rely on People v. Williams (1963), 27 Ill. 2d 327, where the supreme court held that in such circumstances the reviewing court must look at the record as a whole to resolve the inconsistencies. (See People v. Jones (1977), 53 Ill. App. 3d 197, 204, 368 N.E.2d 452, 457.) Reading the record as a whole here, and considering the fact that the written order was dated and filed on the same date as the oral pronouncement, it appears clear that the written order and the oral pronouncement of sentence were one transaction and that the written order represented the full articulation of the sentence. We note that the appellate court in People v. Hayslette (1982), 107 Ill. App. 3d 647, 437 N.E.2d 1261, held, without the citation of authority, that “the formal written order of the court must control its oral pronouncements.” 107 Ill. App. 3d 647, 650, 437 N.E.2d 1261, 1264.

In People v. Stiger (1979), 69 Ill. App. 3d 188, 387 N.E.2d 55, the trial court revoked the defendant’s probation and sentenced him to a term of imprisonment. The report of proceedings did not indicate that the judge made any reference to the denial of credit for time served on probation. Similarly, the docket entry and the mittimus issued that day made no reference to credit. Subsequently, on a date the trial court found was not established, a notation initialed by the judge was made in the margin of the docket entry which denied credit for time served on probation. A new mittimus was also issued which denied credit for time served on probation. The appellate court, recognizing that a sentence may not be modified to deny credit, stated that “the trial court’s action in changing the record would have been improper unless it was a nunc pro tunc correction of the sentence rather than a modification.” (69 Ill. App. 3d 188, 191, 387 N.E.2d 55, 57.) The court noted that it was clear from the record that the trial judge intended that the defendant be denied credit, since he indicated that he wanted to impose a sentence of substance, and the granting of credit would have been inconsistent with that desire, and thus concluded that the failure to deny credit was inadvertent. Nevertheless, the court concluded that a record may not be amended merely from oral testimony or recollections of the judge but must be based upon a note or memorandum in the record, the minutes of the judge or papers on file in the case. It observed that the oral pronouncement of sentence was complete. The court then explained that “[ajlthough the intention of the court *** appears clear, and failure to uphold the court’s change in the order will give the sentence little effect, we are even more concerned with the problems arising from a rule permitting nunc pro tunc amendment to an order merely because the order as pronounced was illogical under the circumstances of record.” (69 Ill. App. 3d 188, 192, 387 N.E.2d 55, 58.) The court thus found the nunc pro tunc order to be improper and remanded the cause with directions that the sentencing order be amended to grant the defendant credit for time served on probation and that the mittimus be corrected.

The facts in Stiger are distinguishable from those present here. The report of proceedings reflecting the court’s oral pronouncement, the docket entry initialed by the judge and the mittimus all dated the same day were silent as to the court’s intention to deny credit for time served on probation. All indicated that the trial court’s notation at a later date was intended to rectify an error occurring on the date of sentencing in not denying credit for time served on probation. In the instant case, on the other hand, the trial court pronounced sentence and entered its written order thereon on the same date which under the facts of this case we view to be the same transaction. Therefore, the result in Stiger does not require a change in the mittimus in the case at bar.

Courts may determine which to follow, the common law record or the report of proceedings, depending on whether one of those sources has an internal inconsistency or would represent improper action. For example, in People v. Williams (1983), 97 Ill. 2d 252, cert. denied (1984), 466 U.S. 981, 80 L. Ed. 2d 836, 104 S. Ct. 2364, the supreme court held that the sentencing order may be considered to determine what sentence was imposed since the oral pronouncement of sentence was internally inconsistent. 97 Ill. 2d 252, 310.

In conclusion, viewing the oral pronouncement of sentence and the written order setting out the sentence, occurring on the same date, as one transaction, we conclude that the trial court effectively denied defendant credit for time he served on probation. Under these circumstances, the written judgment did not constitute an increase of defendant’s sentence. Defendant’s request that this court amend the mittimus is denied.

The judgment of the circuit court of Du Page County is affirmed.

Affirmed.

NASH, P.J., and REINHARD, J., concur.


author: PRESIDING JUSTICE NASH

text:
    SWIM CLUB OF ROCKFORD, LTD., et al., Plaintiffs-Appellees, v. THE CITY OF ROCKFORD, Defendant-Appellant.
    Second District
    No. 84—0247
    Opinion filed January 31, 1985.

      Charles E. Box and Kathleen Elliott, both of City of Rockford Department of Law, of Rockford, for appellant.
    David L. Martenson and Peter B. Nolte, both of Martenson, Alexander, Cicero & Nolte, of Rockford, for appellees.
   PRESIDING JUSTICE NASH

delivered the opinion of the court:

Defendant, city of Rockford, appeals from a declaratory judgment granting the request by plaintiffs, Swim Club of Rockford, Inc., and John S. Combs, for authority to dispense alcoholic liquor on plaintiffs’ premises and declaring defendant’s zoning ordinance unconstitutional and void insofar as it denied such use of plaintiff’s property. The city of Rockford contends the trial court erred in overruling its legislative action denying a special-use permit as: (1) plaintiffs failed to establish the proposed special use would not endanger the public health, safety, morals and general welfare; and (2) plaintiffs failed to prove the proposed use would not be injurious to the use, enjoyment and market value of nearby property. The city also asserts the trial court erred in failing to restrict sale of liquor on the premises during swimming pool hours.

The Swim Club of Rockford is located on a 3V2-acre tract in Rockford and consists of a two-story club house containing 6,000 square feet, three outdoor swimming pools, a water slide, pump house, fenced picnic area and parking lot. Its upper level consists of a snack bar, an open area with tables and offices; the lower floor contains a checkroom and two locker rooms. The swim club has been in operation at that place for several years and plaintiff Combs is presently the sole shareholder. He described the business as a country club without a golf course which members join for a fee for use of the facilities. The club operation lost $72,412 in 1982 and $25,815 in 1983 and, in order to attract more members and also use of the facilities by other groups for meetings and banquets in the off season from September to April, plaintiffs wished to dispense alcoholic drinks within the building.

In October 1982, plaintiffs applied to the zoning department of the city of Rockford for a special-use permit for a bar for use by club members and guests. It was considered first by the Rockford-Winnebago county planning commission, which recommended approval to the city zoning board of appeals. After a hearing, the zoning board also approved issuance of the special-use permit. That decision was appealed by objecting neighbors of the swim club premises to the city council,, which thereafter voted to deny plaintiffs’ application. This action was then commenced by plaintiffs for declaration that the zoning ordinance was invalid and void insofar as it prohibited the use plaintiffs wished to make of their property.

At trial, the evidence disclosed that plaintiffs’ property is zoned under the defendant’s ordinance in community commercial district. Uses permitted in that classification allow retail business, including the sale of alcoholic liquor by bars and package stores. Directly east of the subject property and at the rear of the clubhouse there is an alley or roadway to the east of which the properties are zoned R-l and used for single-family residences. The property north of plaintiffs’ land is also zoned for R-l use, but is actually used as a park and for a Commonwealth Edison substation. The property south of the swim club is zoned for community commercial uses and contains a neighborhood shopping center. Further south and across Charles Street, a four-lane thoroughfare, the land is zoned R-l and contains a high school and its grounds. The land west of the subject property is zoned for community commercial uses and contains businesses, apartment buildings and vacant land.

Richard Roths, who was a planner for the Rockford-Winnebago county planning commission at the time plaintiffs’ application was considered by it, testified he had viewed the subject, property and considered each of the six standards of the city of Rockford zoning ordinance which govern issuance of a special-use permit. Section 1503.5(a) of the 1980 ordinance provides:

“1. The establishment, maintenance, or operation of the Special Use Permit will not be detrimental to or endanger the public health, safety, morals, comfort, or general welfare;
2. The Special Use Permit will not be injurious to the use and enjoyment of other property in the immediate vicinity for the purposes already permitted, nor substantially diminish and impair property values within the neighborhood;
3. The establishment of the special use will not impede the normal or orderly development and improvement of the surrounding property for uses permitted in the districts;
4. Adequate utilities, access roads, drainage and/or necessary facilities have been, are being, or wall be provided;
5. Adequate measures have been or wall be taken to provide ingress or egress so designed as to minimize traffic congestion in the public streets; and
6. The special use shall, in all other respects, conform to the applicable regulations of the district in which it is located, except in those instances wherein either the use or the property is nonconforming in which case exceptions may be made as appropriate to result in the nonconforming use or property becoming more compatible with the existing character to the area.”

It was Roths’ opinion that the proposed use for which the permit was requested met all ordinance standards. He noted that there was adequate distance between the subject property and the residences to the east and they were separated by an alley which ran along the rear of these properties. As there were two entrances to plaintiffs’ property from Charles Street and parking was west of the building, Roths considered the effect of traffic on the adjacent residences would be minimal. He also noted that all liquor sales would be indoors and the proposed uses of the property conformed to Rockford’s existing community plan and zoning for that property; that all similar private clubs in Rockford had received permits for the sale of alcoholic liquor and, in his opinion, that use was appropriate in this instance and should have been granted by the city of Rockford.

David Noel was at the time of trial the director of the Winnebago County department of planning and economic development and, at the time plaintiffs’ application was considered, the director of the city-county planning commission; he is a licensed city planner. Noel testified he had reviewed plaintiffs’ application with his staff and considered that the sale of liquor as an accessory use to the primary swimming activity was reasonable. He noted the surrounding area was already developed and such use would have no adverse impact upon it. Noel testified that numerous other private clubs in Rockford, with similar zoning and also adjacent to residentially zoned areas, were permitted to sell alcoholic liquor. The witness concluded that the special use requested by plaintiffs was consistent with the zoning standards and practices of the city of Rockford.

Wayne Erickson, a real estate broker, and Jay Hart, an appraiser and broker, testified that the swim club had lost money in its operation and that a special-use permit for sale of liquor would increase the value of the property. These witnesses agreed that the highest and best use of the subject property was as a swim club with the additional use of the sale of liquor. Hart also testified the present market value of the property was $360,000, which would increase by $100,000 if liquor sales were permitted. He did not believe such sales would affect the value of surrounding properties, although he agreed that would depend in part on how the business was operated.

Alderman James James, chairman of the public services committee of the Rockford city council, testified that his committee had considered the standards set forth in section 1503.5 of the zoning ordinance and had recommended that the city council deny the appeal by neighbors of the approval of the permit by the zoning board. Alderman James considered that those parties and one of their aldermen were generally against the use of alcohol and pressured the council into denying the permit. In this witness’ opinion, that denial was arbitrary and not based upon the criteria of section 1503.5.

The city of Rockford called three witnesses in support of its case. Jean Carlson and Katherine Haley testified they had lived for many years in their homes located directly east of the swim club; Mrs. Carlson and her husband were former members of the club. Both witnesses stated they objected to the consumption of liquor in a family club where children swam and to a bar in a residential neighborhood. They also expressed concern for increased traffic and litter and believed that the values of their property would diminish if the liquor permit was granted.

Franklin Beach, an alderman of the ward in which the subject property is located, also testified in opposition to the use of liquor on the premises. He noted that some adjoining property owners objected to this use and expressed the opinion that the consumption of liquor should be restricted when sought in conjunction with swimming activities. This witness acknowledged that he was personally opposed to all liquor use applications and never supported any liquor-related issue in the city council.

After trial, the court found the zoning ordinance invalid and void insofar as it prohibited the requested use of its premises by plaintiffs and enjoined the city from interfering with the sale of liquor to members and guests therein. In doing so, the trial court also imposed certain restrictions regulating that use of the premises as to term; limited sales of liquor to club members, guests and private groups; prohibited sales to the general public; and specified the hours to which liquor sales were limited. The city of Rockford appeals.

Upon denial of a special use of his property, an owner has a right to test the denial by traditional standards of reasonableness that govern review of zoning ordinances. Although a city in exercise of its legislative function is not required to follow any set standards in determining whether to grant a special use, its decision is reviewable by the court and will be upheld only if it bears a substantial relationship to the public health, safety or welfare. As there is a presumption of validity to legislative action, the owner must demonstrate the lack of such relationship by clear and convincing evidence. The traditional factors apply: the use and zoning of nearby property; the extent to which existing zoning diminishes the subject parcel’s value; the suitability of the parcel for the purposes permitted, and relative gain to the public versus any hardship imposed upon the owner by existing uses. Cosmopolitan National Bank v. County of Cook (1984), 103 Ill. 2d 302, 311, 469 N.E.2d 183; Duggan v. County of Cook (1975), 60 Ill. 2d 107, 111-12, 324 N.E.2d 406; Drogos v. Village of Bensenville (1981), 100 Ill. App. 3d 48, 53, 426 N.E.2d 1276, appeal denied (1982), 88 Ill. 2d 550; American National Bank & Trust Co. v. City of Rockford (1977), 55 Ill. App. 3d 806, 809, 371 N.E.2d 337.

The city of Rockford contends first that plaintiffs failed to establish that the sale of liquor to members and guests of the swim club would not be detrimental to or endanger the public health, safety, morals and general welfare. It argues that the use of alcohol in conjunction with water activities, such as swimming, is dangerous, leading to drownings and injury. In support, the defendant offered its exhibit No. 6, which is the Morbidity and Mortality Weekly Report, dated August 13, 1982, volume 21, No. 31, issued by the Center for Disease Control of the United States Department of Health and Human Services. The report states that about 700 drownings occur in swimming pools each year and estimated that 140,000 injuries are related to swimming activities. The report refers to a study made in 1974 which indicated that many adults who drowned had evidence of alcohol in their blood and concludes that one means to prevent such deaths and injuries was to restrict the sale and consumption of alcohol in boating, pool, marina and beach areas. Defendant also relies upon the opinion expressed by Alderman Beach that alcohol and swimming do not mix.

Resolution of this issue is not controlled by the statistical report offered by defendant or the opinion expressed by Alderman Beach. Plaintiffs offered expert testimony that the proposed use of the subject property met all of the special-use standards contained in defendant’s zoning ordinance, which includes that it would not endanger public safety. That use is one which is authorized by the zoning ordinance by means of a special-use permit on property in a community commercial district, and permits for the sale of liquor have been issued to other facilities with swimming pools by defendant. The sale of liquor in hotels, motels and clubs which also have swimming facilities is a long-accepted practice. While there is some risk inherent in all human activity, defendant has not shown it to be such in these circumstances as to reasonably permit defendant to restrict the proposed special use of plaintiffs’ property on this ground.

Defendant also contends plaintiffs failed to prove the proposed use would not be injurious to the use and enjoyment of nearby property nor diminish property values.

The property to the east of plaintiffs’ is residential, and most of the owners objected to plaintiffs’ proposed use; the two neighbors who testified in trial were concerned that liquor sales at the swim club would cause more noise and extend the hours the swim club was patronized, thus affecting the value of their property.

The effect of a proposed use upon adjoining property is a legitimate consideration for making zoning decisions (Copley Memorial Hospital, Inc. v. City of Aurora (1981), 99 Ill. App. 3d 217, 221-22, 425 N.E.2d 493; Amalgamated Trust & Savings Bank v. County of Cook (1980), 82 Ill. App. 3d 370, 381-82, 402 N.E.2d 719, appeal denied (1980), 81 Ill. 2d 588), but is not always dispositive. (See Thompson v. Cook County Zoning Board of Appeals (1981), 96 Ill. App. 3d 561, 578, 421 N.E.2d 285, appeal denied (1981), 85 Ill. 2d 576.) The noise to which the neighbors objected in this case was caused by the swimming and recreational activities outside of the club. The expert witnesses called by plaintiffs testified that the additional use of the property for sale of liquor in the club building would not impair surrounding property values. While there may be increased patronage of the swim club, as plaintiffs hope, with the availability of liquor, it is speculative to consider that would be so extensive as to substantially increase the impact the club already has upon its neighbors.

Defendant contends, alternatively, that the trial court erred in failing to include in the restrictions the court imposed when granting the special use a provision prohibiting the sale of liquor during swimming pool hours.

In its judgment order the trial court found that defendant’s zoning ordinance was void as applied to plaintiffs’ property to the extent that it denied the special use requested by plaintiffs. The order further found plaintiffs were entitled to the special permitted use sought by their application and enjoined defendant from interfering with plaintiffs’ business and the sale of liquor “as provided by the liquor laws of the City of Rockford, subject only to the following restrictions:

a. That the special permitted use is valid only as long as the primary use of the subject property is that of a swim club.

b. That liquor sales are permitted to club members and guests or for private rentals or private groups, but shall not be available for the general public.

c. During the portions of each year that the Swim Club is open, consumption of liquor shall be allowed outside the club facility from 4 p.m. to midnight, Monday through Friday, and from noon to midnight on Saturdays and Sundays.”

The court reserved jurisdiction over the parties for enforcement of its order.

In our view, the trial court was not authorized to impose the additional restriction on use of the subject property urged by defendant, nor was it authorized to impose restrictions b and c noted in its judgment order.

Plaintiffs’ application to defendant for a special-use permit described its operation as a private club for which it sought permission for the sale of liquor to its members and guests, including use of the facilities by other organizations and for other functions. The application was approved as submitted by defendant’s zoning board of appeals, but rejected by the city council. The record discloses that defendant’s zoning ordinance has provisions for the imposition of such conditions or restrictions on the operation of a special use deemed necessary by the board of appeals or city council to secure the general objectives of the zoning ordinance (Rockford Zoning Ordinance, section 1503.5(B)(F)), but none were imposed in this instance. The city of Rockford also has a comprehensive liquor control ordinance which regulates the sale and consumption of alcohol, including in private clubs such as plaintiffs’, and provides limitations relating to whom liquor may be sold by a private club and the hours thereof.

In the amended complaint for declaratory judgment, plaintiffs prayed that the zoning ordinance be declared invalid and void insofar as it denied the special use and that plaintiffs have the right to provide liquor as requested in its special-use application. Plaintiffs’ prayer for relief was granted by the trial court, and defendant was enjoined from interfering with the sale of liquor by plaintiffs “as provided by the liquor laws of the City of Rockford.” The trial court should have stopped at that point and left the regulation and control of plaintiffs’ club to the provisions of the defendant’s liquor control ordinance.

After granting declaratory relief that a zoning ordinance is invalid as applied to property with respect to a proposed use, it is appropriate, when necessary, for the trial court to frame the judgment order with reference to the record before it in setting aside the zoning ordinance, but should do so only to the extent necessary to permit the specific use. (Schultz v. Village of Lisle (1972), 53 Ill. 2d 39, 42, 289 N.E.2d 614; Sinclair Pipe Line Co. v. Village of Richton Park (1960), 19 Ill. 2d 370, 379, 167 N.E.2d 406.) The courts should not, however, assume a legislative role by imposing restrictions or conditions on the use of property which are not required by the record before it. See Treadway v. City of Rockford (1962), 24 Ill. 2d 488, 493, 182 N.E.2d 219; Illinois National Bank & Trust Co. v. County of Winnebago (1960), 19 Ill. 2d 487, 496, 167 N.E.2d 401.

In the present case, when the trial court declared plaintiffs were entitled to use their property for the purposes set forth in the application to defendant and their amended complaint, it correctly did so subject to the restrictions contained in defendant’s liquor control ordinance. The record indicates there are 34 other private clubs within the city of Rockford, including two or more with swimming facilities, which hold class “C” liquor licenses under defendant’s liquor control ordinance. No basis is shown in the record for the imposition of conditions or restrictions by the trial court which may be different or in addition to those already in place regulating liquor in a private club. See Duggan v. County of Cook (1975), 60 Ill. 2d 107, 115, 324 N.E.2d 406.

By this action plaintiffs overcame the presumption of the validity of the legislative determination by clear and convincing evidence that defendant’s denial of the special use permit bore no substantial relationship to the public health, safety or welfare and that plaintiffs’ proposed use of their property was reasonable. In so using their property, however, plaintiffs will be subject to the same conditions and restrictions as are all other private clubs in the city of Rockford to which special use permits for the sale of liquor have been granted.

Accordingly, the judgment of the circuit court will be affirmed except for paragraphs b and c of its order, which are vacated.

Affirmed in part; vacated in part.

HOPF and STROUSE, JJ., concur.


author: JUSTICE GREEN

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. CHESTER RAY, Defendant-Appellant.
    Fourth District
    No. 4—84—0168
    Opinion filed November 20, 1984.
    Rehearing denied December 31, 1984.

      Daniel D. Yuhas and Jane Raley, both of State Appellate Defender’s Office, of Springfield, for appellant.
    Chris E. Freese, State’s Attorney, of Sullivan (Robert J. Biderman and David E. Mannchen, both of State’s Attorneys Appellate Service Commission, of counsel), for the People.
   JUSTICE GREEN

delivered the opinion of the court:

On February 1, 1984, following a jury trial in the circuit court of Moultrie County, defendant, Chester Ray, was convicted of burglary (Ill. Rev. Stat. 1983, ch. 38, par. 19—1(a)). He was subsequently sentenced to three years’ imprisonment and ordered to pay a $1,500 fine. On appeal, defendant contends that (1) he was deprived of his right to counsel; (2) the court erred in permitting the introduction of evidence that he had been arrested on a prior, unrelated charge; (3) the court abused its discretion in denying his motion to continue his sentencing hearing so that he might obtain counsel; and (4) the court erred in imposing a $1,500 fine and failing to give him credit for time served in custody prior to his conviction.

Defendant’s claim that he was deprived of his right to counsel arises from the manner in which the trial court accepted his waiver of counsel. The defendant maintains that the defect in procedure rendered his waiver involuntary. Supreme Court Rule 401(a) states:

“Any waiver of counsel shall be in open court. The court shall not permit a waiver of counsel by a person accused of an offense punishable by imprisonment without first, by addressing the defendant personally in open court, informing him of and determining that he understands the following:
(1) the nature of the charge;
(2) the minimum and maximum sentence prescribed by law, including, when applicable, the penalty to which the defendant may be subjected because of prior convictions or consecutive sentences; and
(3) that he has a right to counsel and, if he is indigent, to have counsel appointed for him by the court.” 87 Ill. 2d R. 401(a).

This court has held that no waiver of counsel can properly be accepted without strict compliance with each of the required admonitions. (People v. Johnson (1984), 123 Ill. App. 3d 128, 462 N.E.2d 930; People v. Derra (1981), 92 Ill. App. 3d 1106, 416 N.E.2d 688.) In Johnson, Justice Trapp explained that the strict requirement provides a procedure which eliminates any doubt that the waiver is made with the full understanding of the defendant. The requirement of strict compliance for waiver of counsel is in contrast to requirements for accepting pleas of guilty pursuant to Supreme Court Rule 402 (87 Ill. 2d R. 402) where, by the express terms of the Rule, only “substantial compliance” is required.

Here, the court accepted a waiver of counsel from defendant at a preliminary hearing on October 4, 1983. At that hearing, the trial court complied with all of the requirements of Rule 401(a) except that concerning the minimum and maximum sentences. On September 29, 1983, the defendant had been before the court and had been admonished by the court that he was charged with a Class 2 felony for which he could be imprisoned for a period of a minimum of three years and a maximum of seven years, with a mandatory supervised release period of two years to be served after completion of the imprisonment. The record indicates that defendant had previously been convicted of several offenses including burglary in the past 10 years and was thus eligible for an extended-term sentence of a maximum of 14 years. Defendant was not advised of this possibility.

We deal separately with the questions of the failure of the court (1) to ever advise defendant of the possibility of an extended-term sentence, and (2) to otherwise advise defendant at the hearing where counsel was waived as to the minimum and maximum sentences that could be imposed.

The parties do not dispute that no compliance was made with the requirement for admonishment as to the possibility of an extended-term sentence being imposed. No case touching upon this point has been called to our attention. Obviously, the defendant was not prejudiced by the lack of the admonishment as no extended-term sentence was imposed. Unlike a situation where a defendant is placed on probation and that probation is later revoked, no extended sentence could later be imposed here. We find analogy to the rule in criminal contempt cases where the trial court either fails to obtain a valid jury waiver from a respondent or refuses to honor the respondent’s request for a jury trial. Under those circumstances, a respondent’s conviction for contempt need not be set aside, but the sanction must be limited to the maximum punishment constitutionally permitted to be imposed without a jury trial. (County of McLean v. Kickapoo Creek, Inc. (1972), 51 Ill. 2d 353, 282 N.E.2d 720.) Here, the failure of the court to admonish the defendant as to the possibility of an extended-term sentence would have rendered erroneous any such sentence. As none was imposed, no reversible error occurred.

The failure of the court at the proceeding where counsel was waived to otherwise advise defendant of the minimum and maximum sentence that could be imposed stands in a different light. Clearly, if the requirement to give this admonition were not complied with, a new trial would have to be ordered, because defendant was given a sentence. The record does show that during the course of the pretrial proceedings there was strict compliance with the requirement for this admonition. The problem is that five days elapsed between the admonition and the waiver of counsel. Although the best practice is to give the admonition at the time of accepting the waiver, the failure to do so is not necessarily fatal. Each case must be determined on its own peculiar circumstances, with the principal focus upon the length of time between the waiver of counsel and the plea. The five-day lapse here was not inordinate and did not create reversible error.

The introduction of evidence that defendant had been arrested for an earlier, unrelated charge occurred when Charles Hess, a law enforcement officer, identified an arrest card bearing defendant’s fingerprints as having been made on January 1, 1980, when defendant was processed at the Moultrie County jail. The fingerprint was then used by a fingerprint expert in presenting testimony that the print on the card was of the same person as a latent print removed from the refrigerator of the house where defendant allegedly committed the instant burglary. Defendant made no objection to the introduction of this evidence and did not raise the issue in the post-trial motion. Accordingly, we may consider the propriety of the introduction of this evidence only if it was plain error. People v. Pickett (1973), 54 Ill. 2d 280, 296 N.E.2d 856.

Evidence that an accused has previously committed criminal offenses is usually inadmissible and cannot be used to prove a propensity on the part of the accused to commit crime. (People v. Watson (1977), 55 Ill. App. 3d 564, 371 N.E.2d 113.) In People v. Lewis (1964), 30 Ill. 2d 617, 198 N.E.2d 812, the court held that no error occurred from the admission of evidence of three subsequent sales of narcotics by an accused, charged with unlawful sale and possession of narcotics, when the evidence aided in establishing the identity of the accused as the person committing the crimes charged. In People v. Coleman (1974), 17 Ill. App. 3d 421, 308 N.E.2d 364, the court found no reversible error where evidence that photographs of the accused, shown to a victim in aid of identification, had come from a police station and the error had not been preserved. On the other hand, in People v. Hawkins (1972), 4 Ill. App. 3d 471, 281 N.E.2d 72, introduction into evidence of identifying photographs of the accused which showed they were taken when he was held on other charges was held to be error. The court refused to find the error to have been waived, even though it was not preserved in the defendant’s motion for a new trial. The issue had been raised in the trial court by objection to the admission of the evidence.

In order to determine whether plain error occurred here, we consider the strength of the State’s case. While the evidence of defendant’s guilt was not overwhelming, it was strong. As indicated, evidence was admitted that defendant’s fingerprint was found in the house where the burglary was alleged to have occurred. The presence of this print was not otherwise explained. Karen Brownlee testified that she and defendant had committed a burglary of a house belonging to Robert Kirkpatrick. He was the owner of the building described in the information. On cross-examination, Brownlee maintained that she had determined that the building she and defendant burglarized was not one owned by Kirkpatrick. She was shown to have pleaded guilty to burglary of Kirkpatrick’s building. She maintained that she was forced into that plea by the prosecutor. However, a transcript of the plea proceedings in that case was introduced into evidence, and the transcript clearly showed that Brownlee’s plea was voluntary. Brownlee was later called by defendant and testified that the building she had identified to police officers as the building she and defendant burglarized was not really the building they had burglarized.

Here, as in Lewis, the evidence which indicated that the accused may have committed another offense was also an aid in establishing a proper element of the State’s case. Here, the element was that the latent fingerprint was defendant’s. To make this proof, it was necessary to have a print known to be that of the defendant, in order for a comparison to be made. The fingerprint on the arrest card was likely to have been the only one available before defendant’s arrest for this crime. However, a fresh print could have been obtained from defendant after his arrest (87 Ill. 2d R. 413(a)(iii)) and then used at trial for comparison. Nevertheless, considering (1) the strength of the proof of defendant’s guilt, and (2) the properly probative use made of the fingerprint on the card, we hold that plain error did not occur in the process.

At the time of sentencing, defendant requested a continuance so that he could obtain counsel. Although his right to counsel was earlier waived, that waiver lapsed when he subsequently requested counsel. (People v. Baker (1982), 92 Ill. 2d 85, 440 N.E.2d 856.) Thus, the question to be decided is not whether defendant had a right to counsel, but whether he had a right to a continuance to obtain counsel. In People v. Williams (1982), 92 Ill. 2d 109, 440 N.E.2d 843, the court held that a defendant is not entitled to a continuance to obtain counsel when it appears that the continuance is requested to obtain delay. That case presented a gross situation where the defendant had already been given 19 continuances. We ruled similarly in People v. Marshall (1981), 101 Ill. App. 3d 244, 427 N.E.2d 1333, where defendant had been given several continuances and had asked to have previous counsel discharged. In Ungar v. Sarafite (1964), 376 U.S. 575, 11 L. Ed. 2d 921, 84 S. Ct. 841, the court found that a trial court did not abuse its discretion in refusing a continuance to obtain counsel when the defendant had five days’ notice of the withdrawal of his previous attorney and had done nothing to obtain counsel.

At the close of trial, on February 1, 1984, the court set February 22, 1984, as the date for sentencing. On February 6, 1984, defendant filed a post-trial motion which was then also set for hearing on February 22, 1984. At the beginning of the February 22 hearing, defendant requested a continuance contending that he had believed that sentencing was to take place February 27, 1984. Defendant then proceeded to argue his post-trial motion pro se. During the course of the argument, the prosecutor criticized the defendant’s argument and his reference to what he could have done had he had a lawyer. The prosecutor mentioned that the defendant had been offered counsel and had refused it on a number of occasions. Only then did defendant give indication that he wanted to obtain counsel. Defendant asked for a continuance for one week to get counsel. The court denied the request and then denied the post-trial motion. The sentencing hearing was then held.

We conclude that, as the defendant had from February 1, 1984, to February 22, 1984, to obtain counsel for his post-trial motion and sentencing if he had wished counsel, as in Unger, he had been most dilatory in failing to do so. Even if he had been reasonable in assuming the hearing to have been set for February 27, 1984, he was dilatory in obtaining counsel if he had not done so by February 22. His decision to obtain counsel was an afterthought when his post-trial motion was not well received. The court could have concluded that the request was a delaying tactic and did not abuse its discretion in denying the request.

We reject defendant’s contention that the imposition of a fine of $1,500 against him was a breach of discretion. Evidence showed that he had a motorcycle, a pickup truck, and was in the process of purchasing a mobile home. Moreover, the sum of $2,500 had been posted by him as a 10% bond deposit. Those proceeds were available for fine payment regardless of who may have furnished the money. People v. Nicholls (1978), 71 Ill. 2d 166, 374 N.E.2d 194.

The State agrees that defendant is entitled to a reduction in the amount of his fine in the sum of $160 as credit for the time he spent in jail prior to posting bond. (Ill. Rev. Stat. 1983, ch. 38, par. 110—14.) Accordingly, the amount of the fine is reduced to the sum of $1,340 and, as reduced, the sentence and the underlying conviction are both affirmed.

Conviction affirmed. Sentence affirmed as reduced.

MILLS, P.J., and TRAPP, J., concur.


author: JUSTICE MILLS

text:
    GILLIE CONLEY, Plaintiff-Appellant, v. SPRINGFIELD CLINIC et al., Defendants-Appellees.
    Fourth District
    No. 4—84—0536
    Opinion filed January 24, 1985.
    Leahy & Leahy, of Springfield (Cheryl Redfield Jansen and Mary Lee Leahy, of counsel), for appellant.
    Heyl, Royster, Voelker & Allen, of Springfield (Gary L. Borah and Ray E. Alexander, of counsel), for appellees.
   JUSTICE MILLS

delivered the opinion of the court:

Medical malpractice.

Gillie Conley appeals from a summary judgment in favor of the Springfield Clinic and Dr. Alan Rubenstein, granted on the grounds that the complaint was not timely filed.

We affirm.

The complaint, filed on September 2, 1983, alleged that Dr. Rubenstein negligently severed nerves in plaintiff’s neck during an operation on June 9, 1981. Plaintiff maintained that as a result of the alleged negligence her shoulder drooped and she suffered pain in the shoulder area.

In a discovery deposition, plaintiff stated that she felt pain in her shoulder since the time of the operation. On July 17, 1981, plaintiff saw Dr. Rubenstein and complained to him that she was having trouble with her shoulder. The following day, July 18, plaintiff returned to the clinic to have the sutures and dressings removed. At that time, she told Dr. Rubenstein’s nurse that “[h]e’s cut something that he shouldn’t have.” Plaintiff also suspected at that time that something had been done wrong in the surgical procedure. Plaintiff also stated in the deposition that, at the time she had the sutures removed, her husband thought the surgery had been performed improperly and that he said he wished she had never had the surgery. (Plaintiff filed no counteraffidavits.)

In ruling on the defendants’ motion for summary judgment, the trial court concluded from plaintiff’s deposition that she must have known by July 30, 1981, that her condition was caused by the defendants’ conduct. The court found, therefore, that the filing of the complaint on September 2, 1983, was beyond the two-year limit provided by section 13—212 of the Code of Civil Procedure. Ill. Rev. Stat. 1981, ch. 110, par. 13—212.

Section 13—212 provides in part:

“No action for damages for injury or death against any physician *** shall be brought more than 2 years after the date on which the claimant knew, or through the use of reasonable diligence should have known, *** of the existence of the injury or death for which damages are sought ***.”

In many cases, the time at which an injured party knows or reasonably should have known both of his injury and that it was wrongfully caused will be a disputed question to be resolved by the finder of fact. (Witherell v. Weimer (1981), 85 Ill. 2d 146, 421 N.E.2d 869.) However, where it is apparent from the undisputed facts that only one conclusion can be drawn, the question becomes one for the court. Witherell v. Weimer (1981), 85 Ill. 2d 146, 421 N.E.2d 869; see Nolan v. Johns-Manville Asbestos (1981), 85 Ill. 2d 161, 421 N.E.2d 864.

The limitation period of section 13—212 starts to run when a person knows or reasonably should know of his injury, and also knows or reasonably should know that it was wrongfully caused. (Witherell v. Weimer (1981), 85 Ill. 2d 146, 421 N.E.2d 869.) At that point, the burden is on the injured party to inquire further as to the existence of a cause of action. Witherell v. Weimer (1981), 85 Ill. 2d 146, 421 N.E.2d 869.

In the present case, the facts presented in plaintiff’s deposition were undisputed. They showed that by July 18, 1981, plaintiff felt pain in her shoulder and her shoulder drooped; plaintiff attributed these symptoms to the surgery performed by Dr. Rubenstein; and plaintiff complained to Rubenstein’s nurse that “[h]e’s cut something that he shouldn’t have.” It can only be concluded from these facts that—within six weeks of the surgery—plaintiff knew of her injury and attributed the injury to defendants’ wrongful conduct. At that point, the burden was upon plaintiff to make further inquiry as to the existence of a cause of action.

The complaint, filed after July 18,1983, was untimely.

Affirmed.

GREEN, RJ., and TRAPP, J., concur.


author: JUSTICE SCOTT

text:
    BLANCHE LINDGREN, Plaintiff-Appellant, v. FIRST NATIONAL BANK OF WYANET, Defendant-Appellee.
    Third District
    No. 3—84—0409
    Opinion filed January 30, 1985.

      Thomas R. Appleton, of Presney, Huffman, Kelly & Appleton, of Springfield, for appellant.
    Paul M. Scoma, of Johnson, Martin & Russell, P.C., of Princeton, for appellee.
   JUSTICE SCOTT

delivered the opinion of the court:

The plaintiff, Blanche Lindgren, brought the instant action seeking damages from the defendant, First National Bank of Wyanet (hereinafter the Bank), for breach of its duty in accepting Series E United States savings bonds. The trial court granted summary judgment for the defendant, and this appeal followed. We affirm.

The Bank submitted the admissions and the deposition of the plaintiff in support of its motion for summary judgment. From this record, it appears that Mr. James Miller contacted the plaintiff and her brother in the fall of 1981. Representing himself as an estate planner, Miller offered to invest the plaintiffs money for her. The plaintiff gave Miller a lump sum to invest in November 1981.

In January of 1982, Miller asked the plaintiff if she had any bonds which she wished to cash in order to invest in an investment company. The plaintiff went alone to the Bank of Wenona and removed her Series E bonds, with a total value of $30,000, from her safe deposit box.

On January 11, 1982, Miller went to the plaintiff’s home. He requested that the plaintiff endorse the bonds. He then telephoned the Bank to determine the value of the bonds. Miller dictated a note which the plaintiff transcribed in longhand. The note requested that Mr. Eric Paul of the Bank cash the bonds and certified that the plaintiff had endorsed the bonds. Miller took the endorsed bonds to the Bank. The plaintiff did not accompany him. The Bank cashed the bonds despite the plaintiff’s absence. When Miller failed to invest the plaintiff’s money for her, the plaintiff brought separate actions against Miller and the Bank. The plaintiff filed a multicount complaint against the Bank. In count I, she alleged that the Bank had a fiduciary duty of care to the public and to holders of securities issued by the United States. In count II, she alleged that the Bank had a duty under relevant Federal statutes and regulations to refrain from cashing bonds not presented by the owner. In count III, she alleged that the Bank had a duty to perform its services in a manner not grossly negligent. Counts IV, V and VI were substantially the same as counts I, II and III, respectively, but with prayers for increased damages. In each of counts I through VI, the plaintiff alleged that the Bank breached its duty and that this breach was the proximate cause of the plaintiffs injury.

The Bank filed a motion for summary judgment, asserting that there was no arguable question of fact and that, as a matter of law, its failure to require the plaintiff’s presence was not the proximate cause of her injury. The trial court granted the motion for summary judgment, finding that proximate cause had not been established.

The Federal regulation governing the redemption of Series E bonds provides that the bonds must be presented for redemption to a paying agent by the owner and the owner must establish his identity to the agent. (31 C.F.R. sec. 321.15 (1982).) The purpose of this requirement is to obviate, as much as possible, fraud, peculation and other such misconduct in connection with the cashing of the bonds. West Philadelphia Federal Savings & Loan Association v. United States (E. D. Pa. 1966), 256 F. Supp. 538.

A Series E bond issued by the United States is a Federal contract which creates contractual rights in the parties to the bond. (Estate of Curry v. United States (6th Cir. 1969), 409 F.2d 671.) A bank redeeming a Series E bond must comply with the regulations governing redemption which are an implied part of the contract between the parties to the bond. (Wolak v. United States (D. Conn. 1973), 366 F. Supp. 1106.) The redeeming bank, as an agent of the United States, is liable for the foreseeable damages resulting from a breach of the contract. Wolak v. United States (D. Conn. 1973), 366 F. Supp. 1106.

In the instant case, the plaintiff brought her action based upon three underlying tort theories. The plaintiff premised counts I, III, IV and VI upon common law duty. The plaintiff based count I of her action on a common law fiduciary duty of the Bank to know endorsements and to protect the holders of securities issued by the United States. Count III was similarly premised upon a common law duty to refrain from gross negligence. The common law of Illinois, however, does not recognize either of these actions.

The plaintiff relies on the decision in Maley v. East Side Bank (7th Cir. 1966), 361 F.2d 393, in which the plaintiff sued the defendant bank for gross negligence in disbursing corporate funds to a corporate officer. The plaintiff asserts that the court in Maley created a common law duty on the part of banks to refrain from gross negligence in the performance of banking functions. It is clear from a reading of Maley that the court utilized the principles of gross negligence in the context of the contractual rights of the parties as established under the Uniform Commercial Code. Both the court in Maley and the court in the subsequent decision of United Milk Products Co. v. Michigan Avenue National Bank (7th Cir. 1968), 401 F.2d 14, which relied on Maley, resolved the bank’s liability by looking to a “high standard of contractual responsibility.” (Emphasis added.)

The parties have cited no authority for the imposition of liability upon the Bank based upon common law negligence. Absent such authority, we find that the Bank had no common law duty, under either the law of Illinois or Federal law, to act as a fiduciary and protector of owners of United States government securities. We similarly find that the Bank had no common law duty, under either Illinois or Federal law, to refrain from gross negligence.

The plaintiff alleged in counts II and Y of her complaint that the Bank breached a statutory duty. She correctly asserts that a duty was imposed upon the Bank under the terms of the applicable Federal regulations. However, as discussed above, this duty was a contractual duty. (Estate of Curry v. United States (6th Cir. 1969), 409 F.2d 671.) No duty existed outside the contractual relationship, and breach of this duty was a breach of the contract. (Wolak v. United States (D. Conn. 1973), 366 F. Supp. 1106.) Accordingly, we find that the plaintiff was limited to a contractual remedy for breach of the Bank’s duty. The plaintiff failed, however, to plead any cause of action based upon the Bank’s breach of contract.

The trial court in the case at bar granted the Bank’s motion for summary judgment. Summary judgment is properly granted when the record demonstrates that there is no genuine issue as to a material fact and that the moving party is entitled to judgment as a matter of law. (Heller v. Sullivan (1978), 57 Ill. App. 3d 190, 372 N.E.2d 1036.) A reviewing court may consider the entire record and should affirm the trial court’s judgment if any basis exists for so doing. (Northern Trust Co. v. Winston (1975), 32 Ill. App. 3d 199, 336 N.E.2d 543.) A court reviewing the granting of summary judgment is not limited to the precise reasons expressed by the trial court. Coomer v. Chicago & North Western Transportation Co. (1980), 91 Ill. App. 3d 17, 414 N.E.2d 865.

In the instant case, the facts were not disputed. Further, the defendant was entitled to judgment as a matter of law because the plaintiff failed to plead a cause of action for which recovery could be had.

Accordingly, the judgment of the circuit court of Bureau County is affirmed.

Affirmed.

BARRY and STOUDER, JJ., concur.