A. Epstein and Sons International v. Eppstein Uhen Architects, Inc.Annotate this Case
Opinion filed January 11, 2011
Modified upon denial of rehearing March 8, 2011
APPELLATE COURT OF ILLINOIS
FIRST JUDICIAL DISTRICT
A. EPSTEIN AND SONS INTERNATIONAL,
EPPSTEIN UHEN ARCHITECTS, INC.,
Appeal from the Circuit Court
of Cook County, Illinois,
County Department, Chancery
No. 08 CH 18915
Leroy K. Martin, Jr.,
JUSTICE HARRIS delivered the judgment of the court, with opinion.
Presiding Justice Cunningham and Justice Connors concurred in the judgment and opinion.
Plaintiff, A. Epstein & Sons International Inc.(Epstein), appeals the judgment of the circuit
court of Cook County granting defendant, Eppstein Uhen Architects, Inc.’s (EUA) motion for
summary judgment pursuant to section 2-1005 of the Code of Civil Procedure (735 ILCS 5/21005 (West 2008)) and denying Epstein’s motion for partial summary judgment. We reverse the
judgment of the circuit court granting EUA’s motion for summary judgment and affirm the circuit
court’s judgment denying Epstein’s motion for partial summary judgment. We find that the terms
in the parties’ first alleged contract are ambiguous and require the aid of extrinsic evidence to
determine the parties’ intent. Therefore, summary judgment was not proper.
On April 24, 2009, the circuit court entered its final judgment denying Epstein’s motion to
reconsider. On May 22, 2009, Epstein filed its notice of appeal. Accordingly, this court has
jurisdiction pursuant to Illinois Supreme Court Rules 301 and 303 governing appeals from final
judgments entered below. Ill. S. Ct. R. 301 (eff. Feb. 1, 1994); R. 303 (eff. May 30, 2008).
In December of 2002, Franciscan Communities, d/b/a St. Joseph Home of Chicago, hired
EUA to provide professional design services for a construction project in Chicago, Illinois. EUA
then called upon Epstein to submit a proposal for it to provide engineering design services for
Franciscan’s construction project. Epstein submitted a signed proposal on November 6, 2002,
and EUA accepted it by signing it on December 2, 2002. Displeased with EUA’s performance on
its construction project, Franciscan filed an arbitration demand against EUA in December of
2007. In turn, EUA filed an arbitration demand upon Epstein in January 2008, asserting claims
arising out of Franciscan’s arbitration demand.
Epstein filed a petition to stay arbitration and complaint for declaratory judgment and
injunctive relief in May of 2008. Epstein attached two documents to its petition that are at the
center of the dispute between the parties. The first document, titled “MEPFP Engineering
Services Proposal” is dated November 6, 2002 (November document). The second document
attached to Epstein’s petition is dated December 9, 2002, and titled “Architect-Consultant
Agreement” (December document). The dispute is whether Epstein is bound by an arbitration
provision which is set out in a third unattached document, AIA Document C141-1997 (AIA
provision) that the December document purports to incorporate by reference.
The November document described the project; outlined the engineering design services,
administrative services, and structural engineering services plaintiff agreed to provide and in what
manner; as well as set out fees and expenses. The November document also attached and
incorporated terms and conditions of service. The terms and conditions of service state that EUA
will be bound by the terms of the November document once it is executed. Furthermore, any
modifications to those terms must be made in writing. Nothing in the November document
mentions that disputes between the parties will be resolved in arbitration. The relevant provisions
of the November document’s terms and conditions of service are as follows:
“1. These Terms and Conditions of Services are an integral
part of the Proposal dated November 6, 2002 between [Epstein]
2. *** Upon execution of this Proposal by [EUA]***,
[EUA] shall be bound by the Proposal and all of these Terms and
Conditions of Service ***. Any additions, deletions, or changes to
the Proposal or these Terms and Conditions of Services shall be in
writing and executed by both Parties.
3.(a)The services described in the Proposal constitute the
Scope of Services that Epstein agrees to provide to [EUA] under
(c) If, during Epstein’s performance of the Scope of
Services, [EUA] requests, in writing, a change in the Scope
of Services ***, such Change in Service and method of
compensation shall be agreed to in writing prior to Epstein
being obligated to undertake such Change in Service. If
Epstein performs such Change in Service and this
Subparagraph (c) has not been complied with, Epstein shall
be compensated at its then prevailing hourly rates.
(d)The Scope of the Project is set forth in the
Proposal. The scope of the Project shall not be altered
without the written consent of both Epstein and [EUA]. In
the event that the parties consent to alter the scope of the
Project, the Scope of Services and the fees and charges for
the Project as set forth in this Agreement shall be adjusted
in accordance with subparagraph (c) of this Paragraph 3.
21. This Agreement constitutes the entire integrated
Agreement between [EUA] and Epstein, and supercedes all prior
negotiations, representations, or agreements, whether written or
oral except as are specifically incorporated into this Agreement by
reference. This Agreement may not be amended except by written
instrument signed by both [EUA] and Epstein.
22. This Agreement shall be governed by the laws of the
State of Illinois.”
Epstein signed the November document on November 6, 2002, and EUA signed it on December
The December document stated that Epstein agreed to provide “Civil, Structural, and
MEP-FP engineering consulting design services” for a fixed fee of $275,000. The December
document also outlines how the construction documents are to be produced and stored, as well as
billing and insurance provisions. Most importantly, the December document referenced an
unattached document, the AIA provision, that requires disputes between the parties to be settled
by arbitration. The December document provides in pertinent part as follows:
“Said Engineering Services shall be provided in accordance with the
requirements set forth in the AIA Document C141-1997 Standard
Form of Agreement Between [EUA] and [Epstein] in its entirety
(Pages 1-14) for the engineering service disciplines named above
including such additional amendments as listed below:
A. Consulting services shall be as specified in [Epstein’s]
letter dated November 6, 2002.”
EUA signed the December document on December 9, 2002 and Epstein signed it on
December 16, 2002. Although not attached to the December document originally, Epstein
attached the AIA provision to its petition, which in relevant part provided:
“§9.2.1 Any claim, dispute or other matter in question
arising out of or related to this Agreement shall be subject to
arbitration. Prior to arbitration, the parties shall endeavor to
resolve disputes by mediation ***.”
In its petition, Epstein alleged that it only signed the December document because it was
told by EUA’s project manager that the December document was necessary in order to process
payments to Epstein. Epstein alleged that the December document identified the same scope of
services as the November document, the fees were the same, and EUA did not provide any
consideration for Epstein’s agreement to submit to arbitration. In count I of its petition, Epstein
sought a stay of arbitration pursuant to section 2 of the Illinois Uniform Arbitration Act (710
ILCS 5/2(b) (West 2008)), alleging that the November document did not contain any provisions
compelling arbitration. In count II of its petition, Epstein sought a declaratory judgment,
requesting the circuit court enter a judgment declaring that the November document “is the
agreement between Epstein and EUA governing the provision of services by Epstein on the
project” and that the December document “does not constitute a valid and binding modification”
to the November document and that the November document does not require disputes between
the parties to be submitted to arbitration. 1
On November 10, 2008, EUA filed a motion for summary judgment. 735 ILCS 5/2-1005
(West 2008). In its motion, EUA alleged that its arbitration demand was based solely on the
December document and that it is irrelevant that the November document does not contain an
arbitration clause. EUA alleged further that because the arbitration demand was based solely on
the December document, and not the November document, there is no ripe case or controversy
between the parties relative to the November document. Epstein responded that the December
document is not a valid and binding agreement because it lacks consideration, namely, that EUA
has not shown how Epstein received any benefit from the December document that it had not
already received in the November document. Epstein responded further that even if the
December document is the controlling agreement between the parties, it does not contain an
express agreement to arbitrate. Instead, Epstein argues that the December document is
ambiguous. EUA replied that the December document is not ambiguous and that it contained
adequate consideration, namely, a flat fee of $275,000, the agreement to arbitrate, as well as
insurance and indemnification provisions. EUA replied that the plain language of the December
document incorporated the AIA provision and that even if the November document is considered
a contract between the parties, the December document is a valid modification of the November
Epstein’s petition included a count III, but Epstein voluntarily dismissed this count on
August 29, 2008.
Also on November 10, 2008, Epstein filed its own motion for partial summary judgment
as to count I of its petition seeking a determination by the circuit court that the December
document’s reference to the AIA provision is not sufficient to obligate Epstein to submit to
arbitration. In doing so, Epstein did not concede that the December document was the operative
agreement between the parties, but rather sought a determination that as a matter of law, there is
nothing in the December document that would compel arbitration. EUA responded that the plain
language of the December document shows an agreement between the parties to submit to
arbitration. In its reply, Epstein maintained that the December document does not require it to
submit to arbitration because the reference in the December document to the AIA provision was
for the limited purpose of describing engineering services that Epstein was required to provide,
not to compel arbitration.
On January 30, 2009, the circuit court denied Epstein’s motion for partial summary
judgment and granted EUA’s motion for summary judgment. The circuit court found the
December document to be the governing contract between the parties and held that the December
document contained an agreement to arbitrate. The circuit court reasoned that the November
document appeared to be a proposal between the parties. Additionally, the circuit court found
that the December document’s language was clear and unambiguous that the AIA provision was
to be incorporated into the agreement in its entirety. On April 24, 2009, the circuit court denied
Epstein’s motion to reconsider the circuit court’s grant of summary judgment in favor of EUA as
to count II of Epstein’s petition. Epstein timely appeals.
On appeal, Epstein argues the circuit court erred in granting summary judgment. As to
count I, Epstein argues summary judgment was improper because the December agreement’s
terms on the AIA provision are ambiguous. As to count II, Epstein argues summary judgment
was improper because a genuine issue of material fact remained in dispute, namely which
document controlled. Epstein contends the circuit court’s finding that the December document
was the only agreement between the parties concerned a disputed issue of material fact not
appropriately decided at the summary judgment stage. EUA, on the other hand, argues that the
circuit court properly entered summary judgment in its favor because the December document is
the operative agreement between the parties and its terms requiring arbitration are clear and
Summary judgment is proper where “the pleadings, depositions, and admissions on file,
together with the affidavits, if any, show that there is no genuine issue as to any material fact and
that the moving party is entitled to a judgment as a matter of law.” 735 ILCS 5/2-1005(c) (West
2008). In ruling on a motion for summary judgment, the circuit court is to determine whether a
genuine issue of material fact exists, not try a question of fact. Williams v. Manchester, 228 Ill.
2d 404, 417 (2008). When determining whether a genuine issue of material fact exists the
pleadings are to be liberally construed in favor of the non-moving party. Id. We recognize that
“[a]lthough summary judgment can aid in the expeditious disposition of a lawsuit, it remains a
drastic means of disposing of litigation and, therefore, should be allowed only where the right of
the moving party is clear and free from doubt.” Id. We review summary judgment rulings de
An instrument’s legal effect is not “to be determined by the label which it bears or the
technical terms it contains.” Bonde v. Weber, 6 Ill. 2d 365, 377 (1955). Rather, it is the intention
of the parties that governs. Illinois Central R.R. Co. v. Michigan Central R.R. Co., 18 Ill. App.
2d 462, 474 (1958). When determining whether a document is a binding contract, we must
consider whether the three basic elements of a contract are present, namely, an offer, acceptance,
and consideration. Steinberg v. Chicago Medical School, 69 Ill. 2d 320, 329 (1977).
“Consideration consists of some detriment to the offeror, some benefit to the offeree, or some
bargained-for exchange between them.” Doyle v. Holy Cross Hospital, 186 Ill. 2d 104, 112
(1999). However, “if the alleged consideration for a promise has been conferred prior to the
promise upon which alleged agreement is based, there is no valid contract.” Johnson v. Johnson,
244 Ill. App. 3d 518, 528 (1993).
In reviewing the language of a contract, the “circuit court must initially determine, as a
question of law, whether the language *** is ambiguous as to the parties’ intent.” Quake
Construction Inc. v. American Airlines, Inc., 141 Ill. 2d 281, 288 (1990). Where the terms of a
contract are clear and unambiguous, the parties’ intent must be derived solely from the document.
Id. If the terms of the alleged contract are ambiguous or capable of more than one interpretation,
parole evidence is admissible to determine the parties’ intent. Id. Summary judgment is not
proper where a purported contract contains ambiguous terms, which require admission of
extrinsic evidence to interpret them. Loyola Academy v. S&S Roof Maintenance, Inc., 146 Ill. 2d
263, 272 (1992).
The circuit court’s finding that the December document controlled was primarily
determined by the fact that the November document is titled “proposal.” EUA’s briefed position
was that the November document is a proposal, not a contract. At oral argument, EUA admitted
that the proposal was an executed binding contract and our analysis continues with that being a
given. Both the November and December documents cannot be reconciled on the issues as to the
requirement of arbitration. Epstein maintains that the December document was a formality to
insure proper payment, not a modification of the November agreement. EUA argues that the
December document is the controlling contract as it modified the November agreement. The
intent of the parties is ambiguous, and therefore, parole evidence must be considered in
determining the parties’ intent behind these documents. Accordingly, summary judgment is not
appropriate. Loyola Academy, 146 Ill. 2d at 272 (summary judgment not appropriate where an
alleged contract is ambiguous and parole evidence is needed to interpret the intent of the parties).
Summary judgment is also not appropriate because the November document raises other
fact issues that need to be addressed at trial. Specifically, if the November document is a valid
contract, whether the December document is supported by sufficient consideration such that it is a
proper modification of that contract is an issue of fact. Epstein argues that any alleged
consideration in the December document was illusory because the fee in the December document
is the same fee in the November document. EUA argues that the December agreement contains
different consideration from that provided in the November document, namely, that EUA agrees
to pay Epstein a flat fee of $275,000. The November document contains a fee of approximately
$200,000 and a fee structure for expenses. It is not clear if the November document and the
December document contain the same fee once expenses are added. This is a genuine issue of
material fact that precludes summary judgment. If, as Epstein alleges, the December document
was not based on any new consideration, then the December document would not be a valid
contract. See Johnson, 244 Ill. App. 3d at 528. In construing the pleadings against EUA as the
movant, the issue of consideration is a material fact that is disputed by the parties and, thus, also
precludes summary judgment.
A review of the record shows that before the circuit court, EUA maintained that the
November document was a proposal, as opposed to an agreement between the parties. EUA
additionally briefed that as fact in its response to this appeal. However, at oral argument, EUA
conceded that the November document was in fact an agreement between the parties. This
discrepancy concerns us. The circuit court may well have ruled differently had the court had the
benefit of the concession of the November document being an agreement between the parties as
opposed to a proposal. Due to this discrepancy, as well as the need for the aid of extrinsic
evidence to determine the intent of the parties, summary judgment is not proper in this case.
For the foregoing reasons, the judgment of the circuit court of Cook County is affirmed in
part and reversed in part and the cause is remanded.
Affirmed in part and reversed in part; cause remanded.
REPORTER OF DECISIONS - ILLINOIS APPELLATE COURT
A. EPSTEIN AND SONS INTERNATIONAL, INC.,
EPPSTEIN UHEN ARCHITECTS, INC.,
Appellate Court of Illinois
First District, Second Division
Opinion filed January 11, 2011
Modified upon denial of rehearing March 8, 2011
JUSTICE HARRIS delivered the opinion to the court.
PRESIDING JUSTICE CUNNINGHAM and JUSTICE CONNORS
concurred in the judgment and opinion.
Appeal from the Circuit Court of Cook County.
The Honorable Leroy K. Martin, Jr., Judge Presiding.
Much Shelist Denendberg Ament & Rubenstein, P.C., 191 N. Wacker Drive,
Suite 1800, Chicago, IL 60606-1615, (Scott R. Fradin, of counsel), for APPELLANT.
Schuyler, Roche & Crisham, P.C., 130 East Randolph Street, Suite 3800,
Chicago, IL 60601, (Jeffrey T. Kubes, Jean M. Prendergast, Thomas W. Mulcahy
and Margaret M. Fitzsimmons, of counsel), for APPELLEE.