Summary
In Dustman, a dispute arose between the plaintiff shareholders and two former shareholders, as well as the individuals that had purchased their shares.
Summary of this case from PML Dev. v. The Vill. of Hawthorn WoodsOpinion
4-21-0157
10-20-2021
J. ANTHONY DUSTMAN, M.D., JOSEPH B. NORRIS, M.D., and McLEAN COUNTY SURGICENTER, LTD., Plaintiffs-Appellants, v. ADVOCATE AURORA HEALTH, INC.; THE CARLE FOUNDATION; THE CENTER FOR ORTHOPEDIC MEDICINE, LLC, d/b/a The Center for Outpatient Medicine; and BROMENN PHYSICIANS MANAGEMENT CORPORATION Defendants-Appellees.
Thomas J. Pliura, of LeRoy, for appellants. Douglas B. Swill, Matthew M. Morrissey, and Natalie K. DeLave, of Faegre Drinker Biddle & Reath LLP, Terrence J. Dee and Michelle S. Lowery, of McDermott Will & Emery LLP, and Amy G. Doehring and Julia R. Lissner, of Akerman LLP, all of Chicago, for appellees.
Appeal from the Circuit Court of McLean County No. 20L114 Honorable Rebecca S. Foley, Judge Presiding.
Thomas J. Pliura, of LeRoy, for appellants.
Douglas B. Swill, Matthew M. Morrissey, and Natalie K. DeLave, of Faegre Drinker Biddle & Reath LLP, Terrence J. Dee and Michelle S. Lowery, of McDermott Will & Emery LLP, and Amy G. Doehring and Julia R. Lissner, of Akerman LLP, all of Chicago, for appellees.
JUSTICE CAVANAGH delivered the judgment of the court, with opinion. Justices Harris and Steigmann concurred in the judgment and opinion.
OPINION
CAVANAGH, JUSTICE
¶ 1 This appeal raises a question of arbitrability. The plaintiffs are J. Anthony Dustman, M.D., Joseph B. Norris, M.D., and McLean County SurgiCenter, Ltd. (SurgiCenter). The underlying dispute is over the sale of some shares in an Illinois limited liability company, The Center for Outpatient Medicine (Company), in which the plaintiffs are shareholders. Two other shareholders in the Company, Advocate Aurora Health, Inc. (Advocate), and Bromenn Physicians Management Corporation (Bromenn), sold their shares to another shareholder, The Carle Foundation (Carle). This sale effectively ended negotiations that were underway with a would-be partner of the Company, a Delaware corporation, AmSurg, which had offered the plaintiffs a handsome sum for 50% of their shares. The plaintiffs were chagrined at the scuttling of a lucrative deal. In the McLean County circuit court, they sued the defendants, Advocate, Bromenn, and Carle, for damages and injunctive relief. The operating agreement of the Company, however, included an arbitration clause, which the defendants moved to enforce. The court stayed the litigation and ordered the plaintiffs to proceed to arbitration. Pursuant to Illinois Supreme Court Rule 307(a)(1) (eff. Nov. 1, 2017), the plaintiffs appeal.
¶ 2 The plaintiffs argue, first, that the circuit court itself should have decided the question of arbitrability instead of leaving that question for the arbitrator to decide. (The plaintiffs adopt the arguments that another group of plaintiffs made in Seidl v. Advocate Aurora Health, Inc., No. 4-21-0128, which originally was consolidated with this appeal. A few days before oral arguments, the Seidl plaintiffs notified us that they had settled with the defendants.) The circuit court, however, did decide the question of arbitrability. The arbitrability of only one of the plaintiffs' claims was at issue-count III, their claim of tortious interference with a prospective business relationship-and the court explicitly held that they had to arbitrate that claim.
¶ 3 Second, the plaintiffs argue that their claim of tortious interference does not fall within the scope of the arbitration clause. In our de novo review, we note that the arbitration clause is broadly worded to embrace "any dispute between the parties relating to this Agreement." We find that the plaintiffs' tortious interference claim is, to some extent, related to the operating agreement. Consequently, the circuit court is correct: the tortious interference claim, like the other claims, must be arbitrated. The contract, the operating agreement, so requires.
¶ 4 Third, the plaintiffs argue that by previously spurning requests by Dustman and SurgiCenter for the mediation or arbitration of disputes, the defendants waived arbitration of the present disputes (that is, the disputes raised in the plaintiffs' complaint). We disagree that a subjective intention by the defendants to relinquish their contractual right to arbitrate all future disputes is clearly inferable from their alleged refusals to previously engage in mediation or arbitration.
¶ 5 Fourth, the plaintiffs contend that the defendants cannot insist on the performance of a contract (i.e., the operating agreement) that the defendants, allegedly, have materially breached by refusing requests by Dustman and SurgiCenter for mediation or arbitration. Despite those alleged breaches, however, the plaintiffs kept demanding, over and over again, that the defendants perform their promises in the mediation and arbitration section of the operating agreement. Recently, pursuant to the operating agreement, the plaintiffs themselves participated in a nonbinding mediation of the present disputes. Thus, the plaintiffs have manifested their election to keep the contract alive. Having so elected, the plaintiffs must continue to perform the promises they made in the contract-including their promise that, after failed mediation, they would submit to binding arbitration "any dispute between the parties relating to" the operating agreement.
¶ 6 Fifth, the plaintiffs object that the defendants' motion to compel arbitration failed to comply with the procedural requirements of the operating agreement. According to the operating agreement, however, the only preconditions to submitting a dispute to arbitration are (1) a failed mediation of the dispute and (2) a request to arbitrate the dispute. Mediation was unsuccessful, and the defendants' motion qualifies as a request for arbitration. Consequently, as the operating agreement puts it, "the dispute shall be submitted to and settled by binding arbitration." (Emphasis added.)
¶ 7 Accordingly, we affirm the interlocutory judgment ordering the plaintiffs to proceed to arbitration.
¶ 8 I. BACKGROUND
¶ 9 A. The Particulars of the Proposed Deal With AmSurg and How the Deal Fell Through
¶ 10 A nine-member board of managers runs the Company. Advocate had two managers on the board, and Carle one manager. Some orthopedic surgeons from McLean County Orthopedics, Ltd., also were on the board.
¶ 11 Around January 2018, through its board of managers, the Company began discussions with AmSurg. The plan was to develop a business relationship, specifically, a partnership, between the Company and AmSurg. In the course of their negotiations, the two businesses signed a confidentiality agreement.
¶ 12 On December 6, 2018, Advocate said it was willing to divest its ownership in the Company down to 25% so as to allow AmSurg to become a majority owner of the Company. AmSurg planned to buy 50% of the physician class member shares. The negotiations appeared to be sailing smoothly until January 17, 2019, when a potential obstacle appeared. That day, someone from the Company (the record does not appear to specify who) sent Advocate a letter expressing the following concern:
"[The Company] did not know about ADVOCATE'S existing agreement with SCA that may have an impact with an AMSURG/[Company] transaction until it was disclosed by Aron in an e-mail on January 7, 2019. As you might imagine, this has caused surprise and concern, given that [the Company] has been negotiating and meeting with AMSURG for the past 6 months as you are aware.
* * *
Full timely disclosure of this pre-existing conflict to the [the Company's] Board by (ADVOCATE'S) Board representatives might have allowed the [Company's] Board to better assess the merits and roadblocks of the AMSURG proposal, as well as other potential proposals. We expect that the Board representatives of (ADVOCATE) have now fully disclosed any other information relevant to these critical discussions about [the Company's] future. If there is anything else the Board should know, let me know immediately."
The record does not appear to reveal what "SCA" stands for, who "Aron" is, or what the nature of the "conflict" was.
¶ 13 On April 17, 2019, AmSurg offered $18 million for a 55% interest in the Company, which came to between $11,000 and $12,000 for each physician-owned share that AmSurg would buy.
¶ 14 On October 3, 2019, AmSurg added its signature to the letter of intent already signed by the shareholders of the Company. By that time, however, Advocate had withdrawn its support for the proposed deal with AmSurg.
¶ 15 In a board meeting on October 3, 2019, Robert Seidl, the chairman of the board, asked the two Advocate board members what the problem was. He wanted to know" 'if anything else [was] going on or if anything else [had] happened to make Advocate not want to move forward with AmSurg.'" According to the complaint, the board members in the know were less than forthcoming:
"29. Neither ADVOCATE board member nor the CARLE board member (attending by telephone) disclosed that ADVOCATE was in secret negotiations to
sell all of its Bloomington-Normal assets, including its shares in [the Company], to CARLE.
30. Thereafter, [the Company's] deal with AMSURG collapsed.
31.In June of 2020 CARLE offered to buy plaintiffs' shares for $8,000 per share."
This offer by Carle was thousands of dollars less per share than AmSurg had offered.
¶ 16 Count I of the plaintiffs' complaint (which was substantially identical to the Seidl plaintiffs' complaint) sought compensation for an alleged breach of fiduciary duties by the defendants. Count II sought an injunction forbidding the defendants to amend the terms of the operating agreement or to transfer Advocate's shares to Carle or any other entity. Count III sought damages for tortious interference with a prospective business relationship. Count IV sought a declaratory judgment that because the actions of Advocate and Carle resulted in an "Adverse Terminating Event," as defined in section 8.03(A) of the operating agreement, section 8.03(C) and (D) entitled the remaining shareholders of the Company to buy the shares of Advocate and Carle at a 40% discount.
¶ 17 B. The Mediation and Arbitration Clause of the Operating Agreement
¶ 18 The shareholders in the Company have entered into an operating agreement. Section 19.13 of the operating agreement, a section titled "Arbitration; Mediation," provides as follows:
"A. Right to Mediate or Arbitrate.
Except as set forth in Section 19.14 hereof, any dispute between the parties relating to this Agreement shall, upon the request of any party involved, first be submitted to nonbinding mediation in accordance with procedures agreed upon by
the parties. If the dispute is not resolved through mediation within forty-five (45) days of the initial request for mediation, then, upon request of any party involved, the dispute shall be submitted to and settled by binding arbitration in accordance with procedures set forth by the American Health Lawyers Association. B. Pre-Arbitration Procedure.
1.Any dispute shall be submitted to arbitration by notifying the other party or parties, as the case may be, hereto in writing of the submission of such dispute to arbitration (the 'Arbitration Notice'). The party delivering the Arbitration Notice shall specify therein, to the fullest extent then possible, its version of the facts surrounding the dispute and the amount of any damages and/or the nature of any injunctive or other relief such party claims.
2. The party (or parties, as the case may be) receiving such Arbitration Notice shall respond within twenty (20) days after receipt thereof in writing (the 'Arbitration Response'), stating its version of the facts to the fullest extent then possible and, if applicable, its position as to damages or other relief sought by the party initiating arbitration.
3. The parties shall then endeavor, in good faith, to resolve the dispute outlined in the Arbitration Notice and Arbitration Response. In the event the parties are unable to resolve the dispute within twenty (20) days after receipt of the Arbitration Response, the parties shall initiate the arbitration procedure outlined below; provided, however, that neither party shall make factual assertions in such arbitration with respect to the dispute that were not included in the Arbitration
Notice or Arbitration Response, unless the party could not reasonably have been aware of such facts at such time.
C. Arbitration Procedure.
1. If the parties hereto are unable to resolve the dispute within twenty (20) days after receipt of the Arbitration Response as set forth above, the parties shall submit the dispute to binding arbitration in accordance with the American Health Lawyers arbitration program."
¶ 19 On October 28, 2020, the defendants moved to stay the litigation because the parties had agreed to participate in nonbinding mediation.
¶ 20 On December 14, 2020, the parties participated in mediation from 9 a.m. to 2 p.m. The mediation failed to yield a resolution of the dispute.
¶ 21 On Friday, January 8, 2021, the defendants filed their motion to compel arbitration.
¶ 22 On Monday, January 11, 2021, the defendants e-mailed a notice of arbitration to the plaintiffs' attorneys.
¶ 23 On February 1, 2021, the circuit court held a hearing on the defendants' motion to compel arbitration.
¶ 24 On February 4, 2021, the circuit court granted the motion. In its order, the court found as follows:
"(a) Defendants have not waived the arbitration provision in Section 19.13 of [the Company's] Operating Agreement, and none of the following constitutes waiver of that provision or otherwise impairs its enforceability: (1) that Defendants did not attach the Arbitration Notice to their Motions; (2) that Defendants sought to stay the litigation and discovery pending mediation and arbitration; or
(3) Plaintiffs' allegation that Defendants purportedly breached the Operating Agreement's arbitration clause.
(b) Plaintiffs' tortious interference claims in both cases (Counts III) are related to [the Company's] Operating Agreement and are subject to arbitration under the Operating Agreement's arbitration clause that governs all claims 'relating to' the Operating Agreement." Accordingly, the court stayed the litigation in both cases (the plaintiffs' case and the Seidl plaintiffs' case) and ordered the plaintiffs in both cases to "proceed to arbitration."
¶ 25 This appeal followed.
¶ 26 II. ANALYSIS
¶ 27 A. The Controversy Over the Standard of Review
¶ 28 The plaintiffs contend that because all we must do in this appeal is construe statutes and a contract, our standard of review is de novo. See Monahan v. Village of Hinsdale, 210 Ill.App.3d 985, 993 (1991); Kardolrac Industries, Corp. v. Wang Laboratories, Inc., 135 Ill.App.3d 919, 925 (1985). The defendants contend, on the other hand, that because the circuit court scrutinized their actions to decide whether they had waived their contractual right to arbitration, as the plaintiffs claimed they have done, our standard of review is deferential and we should look for an abuse of discretion. See Pekin Insurance Co. v. Hiera, 362 Ill.App.3d 699, 701 (2005).
¶ 29 We agree that our standard of review would be deferential if, in the proceedings below, the material facts were disputed or if competing inferences reasonably could be drawn from the undisputed facts. However, "[w]here there is no dispute as to the material facts and only one reasonable inference can be drawn, it is a question of law as to whether waiver has been established." State Farm Mutual Automobile Insurance Co. v. Easterling, 2014 IL App (1st) 133225, ¶ 23. In the record of this appeal, the material facts are in the form of documentation: e-mails, a written contract, and pleadings. The authenticity of this documentation appears to be undisputed. Further, as we will explain, no reasonable inference could be drawn from this documentation that the defendants waived their contractual right to the arbitration of the plaintiffs' claims.
¶ 30 Waiver, it is important to keep in mind, is the intentional relinquishment of a known right. State Farm Mutual Automobile Insurance Co. v. Burke, 2016 IL App (2d) 150462, ¶ 73. To waive a right, therefore, the party must have had a subj ective purpose to give up the right. A waiver can be express or implied (Khan v. Gramercy Advisors, LLC, 2016 IL App (4th) 150435, ¶ 121), but either way, it is the intentional relinquishment of a right. The defendants never expressly waived their contractual right to the arbitration of the claims that the plaintiffs make in their complaint. The question, then, is whether the defendants impliedly waived their right to the arbitration of those claims.
¶ 31 An implied waiver must be clearly inferable from the circumstances. Id. In other words, "[a]n implied waiver arises when conduct of the person against whom waiver is asserted is inconsistent with any intention other than to waive [the right]" (Emphasis added.) Home Insurance Co. v. Cincinnati Insurance Co., 213 Ill.2d 307, 326 (2004). If, as the plaintiffs allege, the defendants previously ignored their requests for mediation or arbitration, such unresponsiveness or refusals by the defendants did not clearly and unmistakably reveal a subjective intention by the defendants to give up their right to arbitrate all future disputes, including those that have taken the form of expensive lawsuits.
¶ 32 We understand that it might be inconsistent and unfair of the defendants to refuse the plaintiffs' repeated requests for mediation and arbitration and then to turn around and insist on the arbitration of the present disputes. But the question is not whether the defendants have been consistent and evenhanded. The question is not whether they are innocent of arbitrariness. Rather, the question is whether they intended a prospective blanket relinquishment of their contractual right to arbitration. No reasonable trier of fact could confidently infer that the defendants so intended. Alternative inferences of intention could easily be drawn. It could be, for example, that the defendants intended to be opportunistic (to choose a pessimistic explanation). In other words, they wanted to arbitrate only when it suited their convenience to arbitrate.
¶ 33 Even assuming, for the sake of argument, that the defendants impliedly waived their right to the arbitration of the present disputes, the defendants were entitled to retract their waiver unless the time for arbitration had expired or unless the plaintiff had relied on the waiver to such an extent that allowing the defendants to retract the waiver would be unjust. As a reporter for the Restatement (Second) of Contracts (1981) explains:
"A party that, without consideration, has waived a condition that is within the other party's control before the time for occurrence of the condition has expired, can retract the waiver and reinstate the condition unless the other party has relied to such an extent that retraction would be unjust." (Emphasis in original.) E. Allan Farnsworth, Contracts § 8.5, at 589-90 (2d ed. 1990) (hereinafter Farnsworth on Contracts).
The time for arbitration had not expired when the defendants filed their motion to compel arbitration. The operating agreement does not forbid arbitration beyond a certain deadline. And, presumably, if the plaintiffs thought that retracting the alleged waiver would have been unjust, they would not have participated in mediation, which, under the terms of the operating agreement, is a prelude to arbitration.
¶ 34 In sum, we hold that when it comes to the plaintiffs' theory of waiver, only one reasonable conclusion can be drawn from the undisputed facts: there was no clear implied waiver by the defendants of their right to arbitration. See Easterling, 2014 IL App (1st) 133225, ¶ 23. Our standard of review, then, is de novo. See id.; Cohen v. Blockbuster Entertainment, Inc., 351 Ill.App.3d 772, 776-77 (2004) (holding that if the facts are undisputed, the "review of the arbitrability issue is de novo").
¶ 35 B. The Plaintiffs' Asserted Right to Be Released From Their Contractual Obligation to Arbitrate Their Present Claims
¶ 36 The plaintiffs represent to us that on January 14, 2020, April 2 and 7, 2020, and June 1, 9, 18, and 24, 2020, Dustman and SurgiCenter made demands upon the defendants for the mediation or arbitration of various issues, as provided in section 19.13 of the operating agreement, and that the defendants ignored or rejected the demands. Operating agreements, the plaintiffs reason, are contracts and should be treated as such. Under contract law, "a material breach of a contract provision by one party may be grounds for releasing the other party from his contractual obligations." Mohanty v. St. John Heart Clinic, S.C., 225 Ill.2d 52, 70 (2006). By ignoring or refusing the plaintiffs' demands for mediation or arbitration, the defendants materially breached the operating agreement, the plaintiffs argue, and as a consequence, the plaintiffs have been released from their contractual obligation to arbitrate the disputes expressed in their complaint. See id.
¶ 37 Again, let us assume, for the sake of argument, that the defendants did indeed refuse the demands for mediation or arbitration that Dustman and SurgiCenter previously made upon them. Let us further assume, for the sake of argument, that these refusals by the defendants were material breaches of the operating agreement. A material, uncured breach of contract brings the injured party to a fork in the path. One direction is the termination of the contract. See Susman v. Cypress Venture, 187 Ill.App.3d 312, 316 (1989); First National Bank of Evergreen Park v. Chrysler Realty Corp., 168 Ill.App.3d 784, 793 (1988); Farnsworth on Contracts § 8.18, at 643 (2d ed. 1990). The other direction is the continuation of the contract. See South Beloit Electric Co. v. Lar Gar Enterprises, Inc., 80 Ill.App.2d 367, 374 (1967); 14 Samuel Williston & Richard A. Lord, A Treatise on the Law of Contracts § 43:15 (4th ed. 2000) (hereinafter Williston on Contracts).
¶ 38 Farnsworth explains:
"If the injured party chooses to terminate the contract, it is said to treat the breach as total. The injured party's claim for damages for total breach takes the place of its remaining substantive rights under the contract. Damages are calculated on the assumption that neither party will render any further performance. They therefore compensate the injured party for the loss that it will suffer as a result of being deprived of the balance of the other party's performance, minus the amount of any saving that resulted from the injured party not having to render its own performance.
If the injured party does not terminate the contract, either because that party has no right to or does not choose to, the injured party is said to treat the breach as partial. The injured party has a claim for damages for partial breach, in addition to its remaining substantive rights under the contract. Damages are calculated on the assumption that both parties will continue to perform in spite of the breach. They therefore compensate the injured party only for the loss it suffered as the result of the delay or other defect in performance that constituted the breach, not for the loss
of the balance of the return performance. Since the injured party is not relieved from performing, there is no saving to it to be subtracted." (Emphases in original.) Farnsworth on Contracts § 8.15, at 634-35 (2d ed. 1990).
Thus, if the injured party becomes aware of a material, uncured breach by the other party, the injured party must make up its mind which direction to go-and then the injured party must abide by that decision. If the injured party chooses to keep the contract alive by treating the breach as "partial," to use Farnsworth's terminology, the injured party has to stick to that choice and act accordingly. "Where a contract is breached in the course of its performance, the injured party has a choice presented to him of continuing the contract or refusing to go on. If he chooses to continue performance, he has doubtless lost his right to stop performance." (Internal quotation marks omitted.) South Beloit, 80 Ill.App.2d at 374. To be sure, the injured party may sue for any damages caused by the partial breach, but having elected to keep the contract in force, the injured party must continue to perform the contract on pain of likewise incurring liability for a breach. Unless the injured party decides to end the contract by treating the other party's breach as total, both parties, including the injured party, must continue to perform their contractual promises. If the contract is to stay alive, it shall stay alive as to both parties.
¶ 39 An election by the injured party to carry on with the contract is, absent a further breach by the other party, irrevocable. In a section titled "The effect of an election to proceed," Williston teaches:
"Where there has been a material failure of performance by one party to a contract, so that a condition precedent to the duty of the other party's performance has not occurred, the latter party has the choice to continue to perform under the contract or to cease to perform, and conduct indicating an intention to continue the
contract in effect will constitute a conclusive election, in effect waiving the right to assert that the breach discharged any obligation to perform. In other words, the general rule that one party's uncured, material failure of performance will suspend or discharge the other party's duty to perform does not apply where the latter party, with knowledge of the facts, either performs or indicates a willingness to do so, despite the breach, or insists that the defaulting party continue to render future performance." 14 Williston on Contracts § 43:15 (4th ed. 2000).
¶ 40 Despite the defendants' alleged refusals to previously submit to mediation or arbitration, Dustman and SurgiCenter thereafter kept insisting, all the way up to June 24, 2020, that the defendants submit to mediation or arbitration pursuant to section 19.13 of the operating agreement. Dustman and SurgiCenter thereby "insist[ed] that the defaulting party continue to render future performance," thereby making a "conclusive election" to "continue the contract in effect." Id. Also, despite the defendants' alleged previous refusals to submit to mediation or arbitration, the plaintiffs, pursuant to section 19.13, underwent mediation of their present claims. Participation in the nonbinding mediation was a contractual performance by the plaintiffs. "[W]ith knowledge of the facts," the plaintiffs "perform[ed] *** despite the breach." Id. So, the plaintiffs have elected to save the contract. Over and over again, they have elected to do so. Because of that election, the plaintiffs themselves are obligated to render future performance, including performance of the arbitration provision in section 19.13 of the operating agreement. See Omni Partners v. Down, 246 Ill.App.3d 57, 63 (1993); South Beloit, 80 Ill.App.2d at 374; 14 Williston on Contracts § 43:15 (4th ed. 2000).
¶ 41 C. Procedural Objections
¶ 42 For two reasons, the plaintiffs maintain that the "defendants' motion to compel arbitration did not comply with the procedural requirements of the operating agreement."
¶ 43 First, the plaintiffs point out that the notice of arbitration was not filed with the motion to compel arbitration. As far as we can see, however, the operating agreement says nothing about motions to compel arbitration, let alone prescribes what must be attached to such motions. Assuming, for the sake of argument, that it was the defendants' contractual responsibility to draft and deliver an arbitration notice, we do not see why it makes any difference that they served the notice upon the plaintiffs a business day after filing their motion to compel arbitration instead of attaching the notice to their motion. It is unclear how plaintiffs suffered any resulting prejudice. By the time of the hearing on the defendants' motion to compel arbitration, the notice of arbitration had been served.
¶ 44 The plaintiffs assume that it is the notice of arbitration that triggers the duty to arbitrate a dispute. But that is not what the operating agreement says. Section 19.13(A) of the operating agreement provides as follows:
"A. Right to Mediate or Arbitrate *** If the dispute is not resolved through mediation within forty-five (45) days of the initial request for mediation, then, upon the request of any party involved, the dispute shall be submitted to and settled by binding arbitration in accordance with the procedures set forth by the American Health Lawyers Association." (Emphases added.)
Thus, under the plain language of section 19.13(A), it is the mere "request of any party involved" that triggers the contractual duty of submitting a dispute to arbitration. Surely, the defendants' motion to compel arbitration qualifies as such a request. Upon such a request, the dispute "shall" be submitted to binding arbitration. In contracts, we take the word "shall" as signifying something that must be done. See In re Marriage of Ackerley, 333 Ill.App.3d 382, 398 (2002). If, after a failed mediation, there is a request by a party to arbitrate the dispute, the trigger is pulled: the dispute "shall" be submitted to arbitration.
¶ 45 Section 19.13(B) goes on to prescribe a method for submitting the dispute to arbitration. It lays out a pre-arbitration procedure. But the pre-arbitration procedure presupposes an obligation to arbitrate the dispute-an obligation that arises (after an unsuccessful mediation) from a mere request for arbitration. The defendants' request for arbitration, in the form of their motion to compel arbitration, caused a promised performance by the plaintiffs to fall due, namely, a promise to engage in the pre-arbitration procedure.
¶ 46 Second, the plaintiffs insist that, until the pre-arbitration procedure in section 19.13(B) is exhausted, an order compelling arbitration is premature. They point out that "the response timeframes laid out by Section 19.13 B could not have been met prior the Court's consideration of the motion on February 4, 2021." The pre-arbitration steps, however, are part of the process of arbitration. Reasonably interpreted, the circuit court's order is to engage in the pre-arbitration procedure, as the operating agreement requires, and if the dispute is not thereby resolved, to proceed with the arbitration procedure in section 19.13(C). See Baldi v. Chicago Title & Trust Co., 113 Ill.App.3d 29, 33 (1983) (holding that "[a] judgment or decree like any other written instrument is to be construed reasonably and as a whole so as to give effect to the apparent intention of the court" and that a judgment "must be read and construed in connection with the pleadings [citation] just as, in an analogous situation, orders are interpreted within the context of the motions which accompany them" (internal quotation marks omitted)).
¶ 47 D. The Plaintiffs' Argument Against Arbitrability
¶ 48 1. The Threshold Question of What the Circuit Court Decided
¶ 49 In the jurisdictional statement and in the conclusion of their brief, the Seidl plaintiffs represented to us that on February 4, 2021, the circuit court "refused to address the issue of arbitrability." In the conclusion of their brief, the plaintiffs assert, "The Seidl plaintiffs correctly argue in their opening brief that the issue of arbitrability should have been decided by the trial court and not deferred to an arbitrator."
¶ 50 But the circuit court did decide the issue of arbitrability. In paragraph 1(b) of its order of February 4, 2021, the court found as follows: "Plaintiffs' tortious interference claims in both cases (Counts III) are related to [the Company's] Operating Agreement and are subject to arbitration under the Operating Agreement's arbitration clause that governs all claims 'relating to' the Operating Agreement." That looks to us like a decision on the arbitrability of the tortious interference claim. The court found that claim to be arbitrable. (The arbitrability of the remaining counts of the complaint is not in question.)
¶ 51 2. Whether the Tortious Interference Claims Related to the Operating Agreement and, Hence, Were Subject to the Arbitration Clause
¶ 52 a. The "Involvement" of a Third Party, AmSurg
¶ 53 The operating agreement provides that "any dispute between the parties relating to this Agreement" is arbitrable. The plaintiffs object that they "never agreed to arbitrate a claim based on tort that involves a third party," such as AmSurg. But the arbitration clause does not read "any dispute between the parties relating to the Agreement except tort claims and disputes that additionally involve a third party." Rather, the arbitration clause sweeps up "any dispute between the parties relating to the Agreement"-and that means any such dispute, regardless of whether the dispute is couched in contract or tort and regardless of whether the facts of the dispute involve a third party. (Emphasis added.) We are obligated to give full effect to the parties' choice of that word "any." See Rhomberg v. Texas Co., 379 Ill. 430, 435 (1942) (holding that "a construction will be adopted, if not in contravention of some positive rule of law, giving effect to the instrument and to each word and term employed, rejecting none as meaningless, repugnant, or surplusage").
¶ 54 As the appellate court has said, "a court will not rewrite a contract to suit one of the parties, but will enforce the terms as written." Wright v. Chicago Title Insurance Co., 196 Ill.App.3d 920, 925 (1990). It would have been easy for the parties to stipulate in the arbitration clause that tort claims connected to third parties were excluded. If certain provisions "easily could have been included in the contract but were not," there is a "strong presumption" that the omitted provisions were not part of the deal. (Internal quotation marks omitted.) Illinois Insurance Guaranty Fund v. Nwidor, 2018 IL App (1st) 171378, ¶ 34. We decline to "add new terms or conditions to which the parties do not appear to have assented." Leak v. Board of Education of Rich Township High School District 227 ', 2015 IL App (1st) 143202, ¶ 14; see also Kiefer Specialty Flooring, Inc. v. Tarkett, Inc., 174 F.3d 907, 909-10 (7th Cir. 1999) (describing an arbitration clause that covers controversies" 'relating to'" the agreements as being "extremely broad," broader even than an" 'arising out of" clause, and holding that the "expansive reach" of the" 'relating to'" language cannot be avoided by couching the complaint in tort); Rooyakker & Sitz, P.L.L.C v. Plante & Moran, P.L.L.C, 742 N.W.2d 409, 421 (Mich. Ct. App. 2007) (holding that "the broad language of the arbitration clause-'any dispute or controversy arising out of or relating to' the agreement-vests the arbitrator with the authority to hear [the] plaintiffs' tortious interference and defamation claims, even if they involve nonparties to the agreement").
¶ 55 b. The Relatedness of the Tortious Interference Claim to the Operating Agreement
¶ 56 According to count III, the plaintiffs had a reasonable expectation of entering into a prospective business relationship with AmSurg. The plan was for AmSurg to buy enough physician class member shares in the Company to become a 51% owner. For AmSurg to become the majority shareholder, Advocate would have had to divest its ownership interest down to 25%. Originally, Advocate expressed a willingness to do so. Afterward, Advocate changed its mind and instead entered into an agreement to sell its shares to another shareholder in the Company, Carle, effectively scuttling the negotiations with AmSurg. After agreeing to buy Advocate's shares in the Company, Carle offered to buy the plaintiffs' shares-for thousands of dollars less per share than AmSurg had been willing to pay. The plaintiffs seek damages from Advocate and Carle for tortious interference with the plaintiffs' prospective business relationship with AmSurg.
¶ 57 As the plaintiffs explain, a claim for tortious interference with a prospective business relationship has four elements: "(1) a reasonable expectancy of entering into a valid business relationship, (2) the defendant's knowledge of the expectancy, (3) an intentional and unjustified interference by the defendant that induced or caused a breach or termination of the expectancy, and (4) damage to the plaintiff resulting from the defendant's interference" (Anderson v. Vanden Dorpel, 172 Ill.2d 399, 406-07 (1996)). The interference is considered to be intentional "if the actor desires to bring it about or if he knows that the interference is certain or substantially certain to occur as a result of his action." Restatement (Second) of Torts § 766B, cmt. d (1979). But it is not enough that the interference was intentional; the intentional interference must also be "unjustified." Anderson, 172 Ill.2d at 406-07. Or, as the supreme court puts it," '[i]n order for the actor to be held liable, *** his interference [must] be improper.'" Dowd & Dowd, Ltd. v. Gleason, 181 Ill.2d 460, 485 (1998) (quoting Restatement (Second) of Torts § 766B, cmt. A (1979)).
¶ 58 Comment d of section 766B refers the reader to section 767 (Restatement (Second) of Torts § 767 (1979)) for "[t]he factors to be considered in determining whether an interference is improper." Restatement (Second) of Torts § 766B, cmt. d (1979); Downers Grove Volkswagen, Inc. v. Wigglesworth Imports, Inc., 190 Ill.App.3d 524, 528 (1989) (applying section 767). One of the factors in section 767 is "the relations between the parties." Restatement (Second) of Torts § 767(g) (1979). The operating agreement speaks to the "relations between" the plaintiffs and the defendants. In their complaint, the plaintiffs allege that, under section 12.03C of the operating agreement, they and the defendants had a contractual relationship that made the defendants fiduciaries, forbidding them to put their own business interests before those of the Company.
¶ 59 In their brief, under the heading of "Plaintiff[s'] tortious interference claim is not arbitrable because it is wholly unrelated to the parties' Operating Agreement," the Seidl plaintiffs criticized the defendants by-paradoxically-making repeated references to the operating agreement. The Seidl plaintiffs argued to us as follows:
"32. Section 12.03C. of the Seventh Amended and Restated Operating Agreement of the Center for Orthopedic Medicine, LLC ('Operating Agreement') provides in pertinent part, '. . . it shall be a breach of the fiduciary duty of the Manager or Member voting pursuant hereto or to Section 12.01 to vote in a manner intended to protect the business objectives of the Manager or Member or their Affiliate to the detriment of the Company. . .'
***
34. In breach of their fiduciary duties, ADVOCATE and CARLE, through their board members, committed the following acts:
* * *
d. seeking to amend the terms of the Operating Agreement to the benefit of their Affiliates and to the detriment of the physician owners of [the Company], including plaintiffs; and
e. advocating for changes to the Operating Agreement allowing [McLean County Orthopedics, Ltd., ] to acquire the shares of Craig Carmichael upon the relocation of his practice when [McLean County Orthopedics, Ltd., ] was not an institutional member of [the Company]."
¶ 60 Even if the alleged self-serving behavior in paragraph 34(d) and (e) was not in itself the tortious interference with a prospective business relation, those allegations perhaps would help the claim of tortious interference by illuminating "the actor's motive." Restatement (Second) of Torts § 767(b) (1979). Section 767(b) notes that, "[i]n determining whether an actor's conduct in intentionally interfering with *** a prospective contractual relation of another is improper or not, consideration is given to," among other factors, "the actor's motive." Id. The Seidl plaintiffs seemed to suggest that because the defendants' motive in seeking to change the terms of the operating agreement was to benefit themselves to the detriment of the Company, the defendants had the same motive in sabotaging the negotiations with AmSurg. Because the plaintiffs in this appeal incorporate by reference the arguments of the Seidl plaintiffs, we understand the plaintiffs as making the same suggestion.
¶ 61 In short, then, when we compare the tortious interference claim to the operating agreement, we find a significant relationship between the two, particularly with respect to the element of unjustifiability or impropriety. The defendants' interference was wrong, in the plaintiffs' view, because the defendants had a fiduciary duty arising from the operating agreement. Because of the contract, the defendants could not ruthlessly elbow the plaintiffs aside as if the plaintiffs were the opposing team in a soccer match. From that angle, the tortious interference claim is "related to," or "connected with," the operating agreement. Merri am-Webster's Online Dictionary, https://www.merriam-webster.com/dictionary/related%20to (defining "related to" as "connected with (someone or something)") (last visited Oct. 6, 2021) [https://perma.cc/B33V-WAJK]. Or to put it differently, the tortious interference claim, at least to some extent, "ha[s] reference to" the operating agreement. New Oxford American Dictionary (2005) (defining "relate to" as "have reference to").
¶ 62 The expansive language "any dispute between the parties relating to this Agreement" is crucial to our decision. In the cases on which the plaintiffs rely, the arbitration clauses lacked that language, and hence those cases are distinguishable. Cf. Koehler v. The Packer Group, Inc., 2016 IL App (1st) 142767, ¶ 6 (contract prescribing arbitration of" '[a]ny material breach, dispute, or claim resulting from this Agreement' "); Pictet Overseas, Inc. v. Helvetia Trust, 905 F.3d 1183, 1189 (11th Cir. 2018) (under the rules governing members of the Financial Industry Regulatory Authority, "a dispute with an associated person is arbitrable if it arises in connection with any business activities of the associated person"); Chelsea Family Pharmacy, PLLC v. Medco Health Solutions, Inc., 567 F.3d 1191, 1194 (10th Cir. 2009) (a clause requiring arbitration of disputes" 'arising out of or relating to payments to [Chelsea] by Medco'" (emphasis added)); Anderson v. Deere & Co., 429 P.3d 635, 639 (Mont. 2018) (holding that because the plaintiff is not the "Dealer" as defined in the contract, the arbitration clause requiring the arbitration of disputes between John Deere Company and "the Dealer" is inapplicable to the plaintiffs personal damage claims against John Deere Company).
¶ 63 III. CONCLUSION
¶ 64 The presumption of arbitrability raised by the broad language "any dispute between the parties relating to this Agreement" is unrebutted. See Kiefer, 174 F.3d at 909-10 (remarking that "[b]road arbitration clauses," such as" 'arising out of or relating to'" an agreement, "necessarily create a presumption of arbitrability"). Therefore, we affirm the circuit court's judgment.
¶ 65 Affirmed.