Fuqua v. SVOX AG

Illinois Official Reports

Appellate Court

Fuqua v. SVOX AG, 2014 IL App (1st) 131429

Appellate Court KURT FUQUA, Plaintiff-Appellant, v. SVOX AG; SVOX USA,

Caption INC.; NUANCE COMMUNICATIONS, INC.; VOLKER

JANTZEN; EUGEN STERMETZ; MARTIN REBER; ERIC

LEHMANN; and THOMAS SOSEMAN, Defendants-Appellees.

District & No. First District, First Division

Docket Nos. 1-13-1429, 1-13-1540 cons.

Filed June 9, 2014

Rehearing denied July 1, 2014

Held The trial court’s order granting defendants’ motion to stay litigation

(Note: This syllabus and compel arbitration of a dispute arising from plaintiff’s action

constitutes no part of the challenging the termination of his employment was affirmed,

opinion of the court but notwithstanding his contention that the arbitration clause of his

has been prepared by the employment contract was procedurally and substantively

Reporter of Decisions unconscionable, since the parties bargained over the terms of the

for the convenience of clause before it was executed, their relative bargaining power was not

the reader.) vastly unequal, and plaintiff negotiated and requested some of the

terms that he later claimed were inequitable.

Decision Under Appeal from the Circuit Court of Cook County, No. 12-L-3607; the

Review Hon. John C. Griffin, Judge, presiding.

Judgment Affirmed in part; cause remanded with directions.

Counsel on Moran Law Group, of Chicago (John Thomas Moran, Jr., of counsel),

Appeal for appellant.

Littler Mendelson, P.C., of Chicago (John A. Ybarra, Darren M.

Mungerson, and Amanda E. Inskeep, of counsel), for appellee SVOX

AG, SVOX USA, Inc., and Nuance Communications, Inc.

Konicek & Dillon, P.C., of Geneva (Daniel F. Konicek and Michael J.

Corsi, of counsel), for appellee Thomas Soseman.

Panel JUSTICE CUNNINGHAM delivered the judgment of the court, with

opinion.

Presiding Justice Connors and Justice Delort concurred in the

judgment and opinion.

OPINION

¶1 This interlocutory appeal arises from a March 7, 2013 order entered by the circuit court

of Cook County which granted the motion to stay litigation and compel arbitration and the

motion to lift the stay of arbitration filed by defendants-appellees SVOX AG, SVOX USA,

Inc. (SVOX USA), and Nuance Communications, Inc. (Nuance) (collectively, the SVOX

defendants); and granted the motion to dismiss filed by defendant-appellee Thomas Soseman

(Soseman). This appeal also arises from a May 7, 2013 order which denied the motion for

reconsideration filed by plaintiff-appellant Kurt Fuqua (Fuqua). On appeal, Fuqua argues

that: (1) the circuit court erred in granting the SVOX defendants’ motion to lift the stay of

arbitration; (2) the circuit court erred in granting the SVOX defendants’ motion to stay

litigation and compel arbitration; and (3) the circuit court erred in granting Soseman’s motion

to dismiss. For the following reasons, we affirm in part and reverse in part the judgment of

the circuit court of Cook County.

¶2 BACKGROUND

¶3 The facts of this case are lengthy and complex. In the interest of clarity, we present only

the facts that are pertinent to our resolution of the case. Fuqua is a computational linguist

who has created numerous inventions in the field of computational linguistics. SVOX USA is

a wholly owned subsidiary of SVOX AG, a foreign corporation. 1 At the time of the dispute

between the parties, SVOX USA was a Delaware corporation located and doing business in

Illinois. SVOX USA is a technology services company that researches and develops

1

On June 16, 2011, Nuance acquired SVOX AG and SVOX USA.

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text-to-speech technology. On December 23, 2008, Fuqua was offered an employment

position with SVOX USA and was asked to sign an employment agreement. Fuqua and

SVOX USA negotiated some of the terms of the agreement, and on January 28, 2009, the

employment agreement was executed. The employment agreement contained an arbitration

clause, which states, in pertinent part:

“16. Arbitration. Any dispute or controversy arising under or in connection with

this Agreement or any other dispute concerning [Fuqua’s] employment with [SVOX

USA] *** shall be settled exclusively by arbitration, conducted before a single,

mutually agreed upon arbitrator or, if no such single arbitrator can be mutually agreed

upon, then before a panel of three arbitrators (with one arbitrator to be chosen by each

party and the third arbitrator to be chosen by agreement of the first two), sitting in a

location selected by mutual agreement within the City of Chicago, Illinois in

accordance with the rules for commercial arbitration of the American Arbitration

Association then in effect. Judgment may be entered on the arbitrator’s award in any

court having jurisdiction. Notwithstanding the agreement to arbitrate such disputes

and controversies, Either party shall be entitled to enforce, in any court of competent

jurisdiction, Fuqua’s compliance with any restrictive covenant or confidentiality

provision contained in this Agreement to the fullest extent permitted by law by

seeking any remedy available at law or in equity, including but not limited to a

temporary restraining order, injunction, and specific performance, without having to

arbitrate and without need to post a bond to do so.” (Emphasis added.)

Notably, Fuqua requested that the phrase “Either party” be included in the arbitration clause

as a replacement for the term “Employer” in order to make the restrictive covenant provision

“symmetric.”

¶4 On February 1, 2009, Fuqua began his employment as vice president–professional

services for SVOX USA. In October 2009, SVOX USA decided to terminate Fuqua’s

employment and he was given 90 days’ notice of his termination. On December 8, 2009,

Fuqua filed a demand for arbitration with the American Arbitration Association (AAA),

alleging, among other things, breach of contract and unauthorized withholding of wages. On

January 3, 2010, Fuqua filed a second demand for arbitration with a claim amount of $10,000

alleging breach of contract and seeking payment of funds owed. Both arbitration demands

were filed in accordance with the rules under the “Employment: Promulgated Plans”

(employment rules) of the AAA. On February 10, 2010, SVOX USA filed a complaint for

injunctive relief in the circuit court of Cook County against Fuqua. The complaint alleged

that Fuqua refused to return SVOX computer equipment and software, which contained

confidential and proprietary information. On February 11, 2010, SVOX USA’s complaint

was voluntarily dismissed. SVOX USA then refiled its complaint in the circuit court of Lake

County. On March 18, 2010, SVOX USA’s Lake County complaint was voluntarily

dismissed. The AAA then consolidated Fuqua’s arbitration demands.

¶5 On April 6, 2010, SVOX USA filed an answer and counterclaims to Fuqua’s arbitration

demand. SVOX USA also filed a motion requesting that the AAA determine whether the

employment rules or the commercial arbitration rules (commercial rules) apply to the

arbitration between the parties. On July 7, 2010, AAA Arbitrator Timothy Klenk (Arbitrator

Klenk) issued an order which determined that the commercial rules would apply to the

arbitration between the parties. Applying the AAA rules, Arbitrator Klenk found that

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although the employment agreement contains a “standardized arbitration clause” which

normally triggers the employment rules, in this case the commercial rules apply because the

agreement was an “individually-negotiated employment agreement.” Arbitrator Klenk’s

finding was significant because under the commercial rules, Fuqua and SVOX USA would

be responsible for splitting the cost of arbitration whereas under the employment rules, it

would be much less expensive for Fuqua to pursue arbitration. Notably, Arbitrator Klenk

stated that he was troubled by the potential cost to Fuqua if the commercial rules applied.

However, Arbitrator Klenk extended multiple opportunities to Fuqua to present legal and

factual support to demonstrate that his financial position would make it burdensome for him

to pay half the arbitration costs. Arbitrator Klenk ultimately opined that Fuqua did not meet

his burden of establishing financial inability to meet his obligations under the commercial

rules.

¶6 On or around August 9, 2011, Fuqua filed a complaint in the United States District Court

for the Northern District of Illinois against the SVOX defendants, Soseman, Volker Jantzen

(Jantzen), Eugen Stermetz (Stermetz), Martin Reber (Reber), and Eric Lehmann (Lehmann)

(collectively, the defendants). On March 12, 2012, the district court ruled on Fuqua’s

complaint in a memorandum opinion and order. The district court noted that Fuqua’s

complaint alleged violations of the American Reinvestment and Recovery Act of 2009

(ARRA) and violations of state law. The district court also noted that the defendants filed a

motion to dismiss Fuqua’s complaint. The district court dismissed Fuqua’s ARRA claim with

prejudice. Because the district court dismissed the only federal law claim in the complaint,

the court declined to exercise supplemental jurisdiction over Fuqua’s state law claims and the

state law claims were stricken without prejudice to be refiled in state court.

¶7 On April 4, 2012, Fuqua filed a complaint in the circuit court of Cook County against the

defendants. Fuqua’s complaint alleged breach of contract, retaliatory discharge, and

violations of the Illinois Wage Payment and Collection Act (820 ILCS 115/1 et seq. (West

2008)), the Illinois Whistleblower Act (Whistleblower Act) (740 ILCS 174/1 et seq. (West

2008)), the Illinois Employee Patent Act (Employee Patent Act) (765 ILCS 1060/1 et seq.

(West 2008)), and the Illinois Personnel Record Review Act (820 ILCS 40/1 et seq. (West

2008)). On April 13, 2012, Fuqua filed a revised motion to stay arbitration pursuant to

sections 1 and 2(b) of the Illinois Uniform Arbitration Act (Uniform Arbitration Act) (710

ILCS 5/1, 2(b) (West 2008)).

¶8 Instead of filing an answer to Fuqua’s motion to stay arbitration, on April 25, 2012, the

defendants filed a notice of removal to the United States District Court for the Northern

District of Illinois, on the basis of diversity jurisdiction. Additionally, on April 25, 2012, the

defendants’ notice of removal to federal court was filed in the circuit court of Cook County.

Todd Church (Church), counsel for the SVOX defendants, executed a signed declaration

(Church declaration) which stated that a “notice to adverse party of notice of removal” was

hand-delivered to Fuqua’s counsel by Velocity Courier on April 25, 2012. According to the

Church declaration, the delivery tracking log of Velocity Courier shows that the notice to

adverse party was delivered at 3:46 p.m. on April 25, 2012. On that same day, counsel for the

SVOX defendants sent a letter to the presiding judge in the Cook County case informing him

of the removal to federal court. The letter notes that Fuqua’s counsel was copied. However,

the record contains affidavits executed by Fuqua and Fuqua’s counsel which state that they

were not served with the notice to adverse party on April 25, 2012, as the letter from the

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SVOX defendants seems to indicate and did not become aware of the removal until April 26,

2012.2

¶9 On April 26, 2012, the circuit court granted Fuqua’s motion to stay arbitration. In the

circuit court’s order, it stated “[d]efendant’s [sic] notice of removal has not been stamped by

the clerk of the Northern District of Illinois and this court continues to retain jurisdiction.”

Litigation then proceeded in the Northern District of Illinois. On August 22, 2012, the district

court ruled on a motion filed by Fuqua to remand the case to state court. The district court

found that it did not have diversity jurisdiction over the matter because Soseman and Fuqua

were both residents of Illinois. Because diversity was the only jurisdictional basis on which

the defendants removed the matter to federal court, the district court remanded the remainder

of Fuqua’s claims to state court.

¶ 10 On September 20, 2012, Fuqua filed an amended complaint in the circuit court of Cook

County alleging similar claims as his original circuit court complaint. On October 18, 2012,

the SVOX defendants filed a motion to stay litigation and compel arbitration, and a motion to

lift the stay of arbitration that was ordered on April 26, 2012. On January 10, 2013, Fuqua

filed a combined response to the SVOX defendants’ motions. On January 24, 2013, the

SVOX defendants filed a reply in support of their motion to lift the stay of arbitration. On

February 27, 2013, Fuqua filed a surresponse to the SVOX defendants’ motions.

¶ 11 On March 7, 2013, the circuit court granted the SVOX defendants’ motion to lift the stay

of arbitration and motion to stay litigation and compel arbitration. Additionally, the circuit

court granted Soseman’s motion to dismiss with prejudice. Initially, the circuit court found

that its April 26, 2012 order, which granted the stay of arbitration, was entered improperly

and without jurisdiction. The circuit court found that the defendants’ notice of removal

divested the court of jurisdiction and it was unable to enter the April 26, 2012 order that it

purportedly entered. The court noted that on April 25, 2012, the Northern District of Illinois

assigned a case number to the notice of removal and that the defendants hand-delivered to

Fuqua the notice to adverse party of notice of removal. As such, the circuit court found that

the April 25, 2012 notice of removal divested the court of jurisdiction. Also, the circuit court

stated that it would not consider the arguments in Fuqua’s surresponse because he did not

seek leave to file the surresponse. Further, the circuit court found that the arbitration clause

was enforceable because it was not procedurally or substantively unconscionable.

Additionally, the circuit court found that the defendants did not waive their right to arbitrate

and that the claims against Soseman must be dismissed because Soseman is afforded a

qualified privilege as an attorney for the defendants.

¶ 12 On April 5, 2013, Fuqua filed a notice of appeal of the circuit court’s March 7, 2013

order. On that same day, he filed a motion for reconsideration of the circuit court’s March 7,

2013 order. On April 24, 2013, the circuit court held a hearing on Fuqua’s motion for

reconsideration. At the hearing, the circuit court asked Fuqua’s counsel about the notice of

2

The affidavits were attached to a surresponse filed by Fuqua on February 27, 2013. In the circuit

court’s order from which Fuqua appeals, the court stated that it did not consider the arguments

presented in Fuqua’s surresponse because Fuqua did not request leave to file the surresponse. However,

the circuit court was aware of the arguments that were presented in the surresponse and the surresponse

was included in the record on appeal to this court. Therefore, we may reference the affidavits attached

to the surresponse.

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appeal. Fuqua’s counsel stated “my associate filed it. It’s premature. It doesn’t vacate the

jurisdiction of the court on the motion.” On May 7, 2013, the circuit court denied Fuqua’s

motion for reconsideration. Also on May 7, 2013, Fuqua filed a request for preparation of the

record on appeal, which referenced April 5, 2013 as the date the notice of appeal was filed.

On May 14, 2013, Fuqua filed a notice of interlocutory appeal of the circuit court’s May 7,

2013 order which denied Fuqua’s motion for reconsideration. The May 14, 2013 appeal was

filed pursuant to Illinois Supreme Court Rule 307 (eff. Feb. 26, 2010). On May 23, 2013,

Fuqua filed a motion to consolidate the April 5, 2013 appeal and the May 14, 2013 appeal.

On June 12, 2013, this court granted Fuqua’s motion to consolidate the appeals.

¶ 13 ANALYSIS

¶ 14 As a preliminary matter, we must determine whether we have jurisdiction to consider

Fuqua’s appeals. Rule 307(a)(1) states that an appeal may be taken to this court from an

interlocutory order that grants, modifies, refuses, dissolves, or refuses to dissolve or modify

an injunction. Ill. S. Ct. R. 307(a)(1) (eff. Feb. 26, 2010); Craine v. Bill Kay’s Downers Grove

Nissan, 354 Ill. App. 3d 1023, 1025 (2005). An order compelling arbitration is an injunctive

order and is thus considered to be an appealable interlocutory order. Craine, 354 Ill. App. 3d

at 1025. Further, this court has applied the following interpretation in determining whether an

interlocutory order is appealable under Rule 307:

“Rule 307(a)(1) permits interlocutory appeals from four types of orders: (1)

orders that deny (i.e., refuse) injunctions; (2) orders that create (i.e., grant)

injunctions; (3) orders that change the effects of (i.e., modify or dissolve) existing

injunctions; and (4) orders that perpetuate the effects of (i.e., refuse to modify or to

dissolve) existing injunctions. [Citation.]” Id.

¶ 15 In this case, the circuit court’s March 7, 2013 order was an injunctive order because,

among other things, it granted the SVOX defendants’ motion to stay litigation and compel

arbitration. The circuit court’s May 7, 2013 order refused to modify an existing injunction by

denying Fuqua’s motion for reconsideration of the March 7, 2013 order. Thus, both orders

are appealable under Rule 307(a)(1). Further, “ ‘[t]he sole issue before the appellate court on

an interlocutory appeal [of this type of order] is whether a sufficient showing was made to

sustain the order of the trial court denying the motion to compel arbitration.’ ” Menard

County Housing Authority v. Johnco Construction, Inc., 341 Ill. App. 3d 460, 463 (2003)

(quoting Yandell v. Church Mutual Insurance Co., 274 Ill. App. 3d 828, 830-31 (1995)).

Accordingly, this court applies the abuse of discretion standard of review in evaluating this

appeal. Menard, 341 Ill. App. 3d at 463.

¶ 16 We note that the SVOX defendants3 argue that this court does not have jurisdiction to

consider Fuqua’s appeals because Fuqua did not timely comply with the requirements of

filing an appeal as mandated by Rule 307. Specifically, the SVOX defendants highlight that

at the hearing on the motion for reconsideration, Fuqua’s counsel stated that the April 5,

3

In this case, the SVOX defendants have filed a brief on appeal and Soseman has individually filed

a brief on appeal. Defendants Jantzen, Stermetz, Reber, and Lehmann have not filed a brief or presented

any arguments on appeal. The SVOX defendants have presented many more arguments than Soseman.

In the interest of clarity, we will respond primarily to the SVOX defendants’ arguments and will discuss

Soseman’s arguments when appropriate.

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2013 notice of appeal was “premature.” Also, the SVOX defendants point out that Fuqua did

not file the record, nor did he file the docketing statement, pay the filing fee, or file an

appellate brief, within the time requirements of Rule 307. However, as Fuqua points out,

even in cases involving interlocutory appeals pursuant to Rule 307, the only jurisdictional

step is filing the notice of appeal and other deficiencies, such as failing to timely file the

record, will not divest this court of jurisdiction. Venturi v. Bulk Petroleum Corp., 70 Ill. App.

3d 967, 970 (1979); see also Greco v. Coleman, 127 Ill. App. 3d 806, 808-10 (1984). Thus,

despite the comments made by Fuqua’s counsel at the hearing on the motion for

reconsideration, the record shows that the April 5, 2013 notice of appeal was properly and

timely file stamped by the circuit court. Because the April 5, 2013 notice of appeal was filed

within 30 days of the March 7, 2013 order, the notice of appeal was timely. Therefore, we

have jurisdiction to consider Fuqua’s arguments on appeal pursuant to Rule 307.

¶ 17 We next determine whether the circuit court erred in granting the SVOX defendants’

motion to lift the stay of arbitration.

¶ 18 On April 25, 2012, the defendants once again filed a notice of removal in order to remove

the case from the circuit court to the federal district court. On April 26, 2012, the circuit court

granted Fuqua’s motion to stay arbitration. The circuit court also found that “[d]efendant’s

[sic] notice of removal has not been stamped by the clerk of the Northern District of Illinois

and this court continues to retain jurisdiction.” In its March 7, 2013 order, the circuit court

granted the SVOX defendants’ motion to lift the stay of arbitration, effectively overruling its

April 26, 2012 order, because the court found that it did not have jurisdiction when it entered

its April 26, 2012 order. The circuit court found that the defendants’ April 25, 2012 notice of

removal divested the circuit court of jurisdiction and it should not have entered the April 26,

2012 order.

¶ 19 On appeal, Fuqua argues that the circuit court’s March 7, 2013 order, which granted the

SVOX defendants’ motion to lift the stay of arbitration and motion to stay litigation and

compel arbitration, was in error. He contends that the court did have jurisdiction to enter its

April 26, 2012 order. Fuqua asserts that the circuit court is not divested of jurisdiction until

removal is perfected, regardless of when the notice of removal was filed. Fuqua contends that

as of April 26, 2012, the defendants had not yet perfected their removal because they had not

complied with all the requirements set forth in 28 U.S.C. § 1446(d). Namely, Fuqua claims

that the defendants did not provide written notice to him of the notice of removal by the time

the circuit court entered its April 26, 2012 order. Fuqua argues that because the defendants’

removal was not perfected as of April 26, 2012, the circuit court had jurisdiction to enter its

order which stayed arbitration. Therefore, Fuqua argues that in its March 7, 2013 order, the

circuit court erred by granting the SVOX defendants’ motion to lift the stay of arbitration.

¶ 20 In response, the SVOX defendants argue that the circuit court’s March 7, 2013 order was

proper, and that the court properly granted their motion to lift the stay of arbitration.

Specifically, the SVOX defendants argue that the circuit court was correct in finding that it

did not have jurisdiction to enter its April 26, 2012 order. The SVOX defendants point out

that 28 U.S.C. § 1446(d) required them to file a notice of removal, and provide Fuqua with

written notice of the removal. The SVOX defendants assert that they complied with all the

requirements of 28 U.S.C. § 1446(d) before the circuit court entered its April 26, 2012 order.

Thus, they contend that the circuit court was divested of jurisdiction and was unable to enter

its April 26, 2012 order. In support of their argument, the SVOX defendants point out the

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following facts: the notice of removal was file stamped by the circuit court on April 25,

2012; on that same day the defendants sent a letter to the presiding judge in the circuit court

of Cook County informing him of the removal, and they copied Fuqua’s counsel on the letter;

and the Church declaration states that the Velocity Courier tracking information showed that

the notice to adverse party of notice of removal was hand-delivered to Fuqua’s counsel at

3:46 p.m. on April 25, 2012. Therefore, the SVOX defendants argue that the circuit court’s

March 7, 2013 order was proper.

¶ 21 The resolution of this issue hinges on whether the circuit court had jurisdiction to enter its

April 26, 2012 order. In order to answer this question, we must determine whether the

defendants perfected their notice of removal before the circuit court entered its April 26,

2012 order. The removal procedure is governed by section 1446(d), which states as follows:

“(d) *** Promptly after the filing of such notice of removal of a civil action the

defendant or defendants shall give written notice thereof to all adverse parties and

shall file a copy of the notice with the clerk of such State court, which shall effect the

removal and the State court shall proceed no further unless and until the case is

remanded.” 28 U.S.C. § 1446(d) (2006).

¶ 22 “When a petition for removal has been filed in Federal district court and other

requirements of [section 1446(d)] have been met, the State court loses jurisdiction to proceed

further until the case is remanded.” (Emphasis added.) Hartlein v. Illinois Power Co., 151 Ill.

2d 142, 154 (1992) (citing Eastern v. Canty, 75 Ill. 2d 566, 571 (1979)).

¶ 23 We note that there is little Illinois authority addressing whether removal is perfected in a

situation similar to the one in this case. In this case, the circuit court entered an order after the

notice of removal was filed, but it is unclear from the record whether Fuqua was given

written notice of the removal before the circuit court entered its order. As Fuqua points out,

our supreme court has held:

“Under [section 1446(d)] the filing of a petition for removal must be followed

promptly by written notice to all adverse parties and the filing of a copy of the

petition in the State court. As noted previously, no question can be raised here as to

the latter requirement. With respect to the requirement of prompt written notice to the

plaintiff, however, the petition for removal does not allege, nor does the record show,

the giving of such notice, and language in [citation], and other decisions suggest[ ]

that, like failure to file a copy of the petition in State court, lack of prompt notice to

adverse parties also amounts to a failure to perfect removal. [Citations.]” Eastern, 75

Ill. 2d at 571-72.

¶ 24 Thus, pursuant to Eastern, if written notice of the removal is not given to the adverse

party then the removal is not perfected. Accordingly, if the defendants in this case did not

provide written notice of the removal to Fuqua before the circuit court entered its April 26,

2012 order, then the removal was not perfected and the circuit court was not divested of

jurisdiction.

¶ 25 We find further support for this analysis in the decisions of federal district courts. Federal

courts across several districts have analyzed similar situations in which it is unclear whether

the written notice requirement of section 1446(d) had been satisfied and unclear whether

removal had been perfected. The district courts have consistently held that when a defendant

makes a good-faith effort to provide the plaintiff with written notice of the removal, and the

plaintiff suffers no prejudice as a result of the failure of that attempt, then section 1446(d) is

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sufficiently satisfied and removal is perfected. (Emphasis added.) Busby v. Capital One, N.A.,

759 F. Supp. 2d 81, 85-86 (D.D.C. 2011); Arnold v. CSX Hotels, Inc., 212 F. Supp. 2d 634,

637 (S.D. W. Va. 2002); L&O Partnership No. 2 v. Aetna Casualty & Surety Co., 761 F.

Supp. 549, 552 (N.D. Ill. 1991).

¶ 26 In this case, we have competing affidavits and declarations regarding whether the

defendants provided written notice of the removal to Fuqua before the circuit court entered

its April 26, 2012 order. The Church declaration states that Velocity Courier hand-delivered

the notice to adverse party to Fuqua’s counsel on April 25, 2012. The affidavits executed by

Fuqua’s counsel state that the notice to adverse party was not received until after the circuit

court entered its April 26, 2012 order. There is nothing in the record from Velocity Courier

stating to whom the notice of adverse party was delivered, or where the notice to adverse

party was placed upon delivery. Based on the information before this court, Velocity Courier

could have handed the notice to adverse party to the wrong person, placed it in the mail room

among other mail, or taken any number of actions that would have delayed the notice

reaching Fuqua’s counsel. Taking the affidavits and declaration at face value, it seems that

Church made a good-faith effort to provide Fuqua’s counsel with written notice of the

removal, but that the delivery of the written notice was not accomplished until after the

circuit court entered its order on April 26, 2012.

¶ 27 Based on the unique facts of this case, Church’s good-faith effort in providing Fuqua

with written notice of the removal was not enough to perfect the removal. This is because

Fuqua certainly suffered prejudice as a result of Church’s failed attempt. As noted above, in

its March 7, 2013 order, the circuit court found that the notice of removal divested the court

of jurisdiction and that the court improperly entered its April 26, 2012 order, which granted

Fuqua’s motion to stay arbitration. Thus, in its March 7, 2013 order, the circuit court

effectively overruled the order that granted Fuqua’s earlier motion. This is certainly

prejudicial to Fuqua. The circuit court was incorrect in finding that the defendants perfected

their removal and complied with all the requirements of section 1446(d). On the other hand,

if in its March 7, 2013 order the circuit court had found that the removal was not perfected on

April 25, 2012 due to lack of written notice, then the court would likewise have found that it

was not divested of jurisdiction to enter its April 26, 2012 order. In other words, if the circuit

court had found that Fuqua was not provided with written notice of the removal, then it

would also have found that the court had jurisdiction to enter its April 26, 2012 order.

Accordingly, we find that the circuit court had jurisdiction to enter its April 26, 2012 order.

Thus, we reverse the portion of the circuit court’s March 7, 2013 order that granted the

SVOX defendants’ motion to lift the stay of arbitration and which vacated the April 26, 2012

order.

¶ 28 Although we reverse a portion of the circuit court’s March 7, 2013 order, that reversal

does not invalidate the remainder of the circuit court’s order of that date. Indeed, we may

affirm the circuit court’s judgment on any basis supported by the record, regardless of the

circuit court’s reasoning. In re Marriage of Petrik, 2012 IL App (2d) 110495, ¶ 33; Christian

v. Lincoln Automotive Co., 403 Ill. App. 3d 1038, 1044 (2010); Heinz v. County of McHenry,

122 Ill. App. 3d 895, 898 (1984). Thus, we examine the other issues in this case in totality in

determining whether the circuit court erred in granting the SVOX defendants’ motion to stay

litigation and compel arbitration.

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¶ 29 We note that Fuqua argues that the SVOX defendants’ motion to lift the stay of

arbitration, and motion to stay litigation and compel arbitration, were actually untimely

motions to reconsider the circuit court’s April 26, 2012 order. As such, Fuqua argues that the

circuit court improperly considered those motions. We have already reversed the portion of

the circuit court’s March 7, 2013 order which granted the SVOX defendants’ motion to lift

the stay of arbitration, and need not address that further. However, regarding the motion to

stay litigation and compel arbitration, we do not agree, as Fuqua contends, that it is actually a

motion to reconsider. On September 19, 2012, after this case was remanded to the circuit

court from the federal district court, the circuit court granted Fuqua leave to file an amended

complaint. The circuit court also gave the defendants until October 19, 2012 to answer or

otherwise plead. On September 20, 2012, Fuqua filed an amended complaint. On October 18,

2012, the SVOX defendants filed the motion to stay litigation and compel arbitration. The

SVOX defendants’ motion was filed in response to Fuqua’s amended complaint and pursuant

to section 2-619 of the Code of Civil Procedure (735 ILCS 5/2-619 (West 2012)), which

governs motions to dismiss. Thus, the circuit court properly considered the SVOX

defendants’ motion to stay litigation and compel arbitration.

¶ 30 Fuqua next argues that the circuit court erred in granting the SVOX defendants’ motion

to stay litigation and compel arbitration because the arbitration clause in the employment

agreement is unenforceable. Fuqua contends that the arbitration clause is unenforceable

because it is procedurally and substantively unconscionable. Fuqua presents many reasons as

to why the arbitration clause is procedurally and substantively unconscionable. First, Fuqua

argues that it would be extremely expensive for him to pursue arbitration. He claims that he

has already been billed $16,469.25 and will be required to advance at least $23,619.25 to

arbitrate. Fuqua claims that after he was terminated, he was not employable in his field due to

the noncompete clause in the employment agreement, and thus is unable to afford the costs of

arbitration. Also, Fuqua argues that the arbitration clause is unconscionable because of the

carve-out provision that works solely against him. Specifically, Fuqua highlights the

provision in the arbitration clause that states, “[e]ither party shall be entitled to enforce, in

any court of competent jurisdiction, [Fuqua’s] compliance with any restrictive covenant or

confidentiality provision contained in this Agreement *** without having to arbitrate.”

(Emphasis added.) Fuqua argues that the carve-out provision is an illusory promise because

there is no legitimate reason for him to seek to enforce his own compliance with the

noncompetition and confidentiality provisions. Also, Fuqua claims that the parties agreed to

arbitrate all claims, but the carve-out provision allows SVOX USA to enforce the

noncompetition and confidentiality provisions in court. Fuqua argues that this shows a lack

of mutuality between the parties. As such, Fuqua asserts that the carve-out provision makes

the arbitration clause unconscionable.

¶ 31 Additionally, Fuqua argues that the application of the AAA’s commercial rules to the

arbitration renders the arbitration clause unconscionable. Fuqua points out that he originally

filed a request for arbitration under the employment rules, which allocate fees and costs

differently than the commercial rules. However, in response to a motion filed by SVOX

USA, Arbitrator Klenk ruled that the commercial rules would apply to the arbitration. Fuqua

claims that the commercial rules are designed for arbitration of disputes between businesses,

not for claims arising out of employment agreements. Also, he claims that the arbitration

clause does not highlight the applicability of the commercial rules. Fuqua contends that he

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was completely surprised by the fact that the commercial rules could apply, and he cannot

afford to pursue arbitration under the commercial rules. Thus, Fuqua argues that the

arbitration clause in the employment agreement is unenforceable and unconscionable, and the

circuit court erred in granting the SVOX defendants’ motion to stay litigation and compel

arbitration.

¶ 32 In response, the SVOX defendants argue that in its March 7, 2013 order, the circuit court

properly granted their motion to stay litigation and compel arbitration. The SVOX defendants

argue that the arbitration clause in the employment agreement is valid and enforceable under

the Uniform Arbitration Act and the Federal Arbitration Act (9 U.S.C. § 2 (2006)). The

SVOX defendants point out that the arbitration clause clearly states “[a]ny dispute or

controversy arising under or in connection with this Agreement or any other dispute

concerning [Fuqua’s] employment with [SVOX USA] *** shall be settled exclusively by

arbitration.” The SVOX defendants contend that all of Fuqua’s claims in this case relate to

his employment and circumstances of his termination, which fall directly under the

arbitration clause. Also, the SVOX defendants assert that the arbitration clause meets all the

requirements of a valid and enforceable contract under Illinois law. In support of this

argument, the SVOX defendants point out that the parties negotiated terms of the

employment agreement, and there was an offer and acceptance of employment as evidenced

by the signed agreement. The SVOX defendants assert that the mutual promises in the

arbitration clause and Fuqua’s employment constitute sufficient consideration. Also, the

SVOX defendants contend that the terms of the arbitration clause are clear and definite.

Thus, the SVOX defendants argue that the arbitration clause is enforceable.

¶ 33 Additionally, the SVOX defendants argue that the arbitration clause is not procedurally

or substantively unconscionable. The SVOX defendants contend that under Illinois law,

procedural unconscionability is based on impropriety during the process of forming the

contract. Thus, the SVOX defendants assert that this court should evaluate the issue of

procedural unconscionability based only on the parties’ conduct when the employment

agreement was being negotiated and executed. Further, the SVOX defendants argue that the

arbitration clause was not difficult to find, read, or comprehend, and that Fuqua had an

opportunity to negotiate terms of the arbitration clause and employment agreement. As such,

the SVOX defendants contend that there was not vastly unequal bargaining power between

SVOX USA and Fuqua. Also, the SVOX defendants assert that Arbitrator Klenk’s

application of the commercial rules does not render the arbitration clause unconscionable

because Arbitrator Klenk made that determination after carefully considering the entire

employment agreement and the AAA rules. Therefore, the SVOX defendants argue that the

arbitration clause is not procedurally unconscionable.

¶ 34 Moreover, the SVOX defendants argue that the arbitration clause is not substantively

unconscionable. The SVOX defendants assert that substantive unconscionability is based on

whether the terms of a contract are so one-sided as to render the contract unconscionable.

The SVOX defendants claim that a majority of Fuqua’s argument is based on the fairness of

applying the commercial rules to the arbitration clause. However, the SVOX defendants

contend that it is not the proper function of the appellate court to review Arbitrator Klenk’s

interlocutory arbitration order. Also, the SVOX defendants argue that the terms of the

arbitration clause were not unfair. The SVOX defendants point out that before making his

determination, Arbitrator Klenk gave Fuqua multiple opportunities to present evidence of

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financial hardship, but Fuqua never presented adequate evidence in support of the argument

for financial hardship that he is now making. Also, the SVOX defendants note that Fuqua

argues that the arbitration clause lacks mutuality because the carve-out provision only

benefits the SVOX defendants. However, the SVOX defendants argue that the carve-out

provision only governs a narrow classification of disputes and the majority of disputes

arising under the employment contract must be arbitrated. Therefore, the SVOX defendants

argue that the arbitration clause is not substantively unconscionable. Accordingly, the SVOX

defendants argue that in its March 7, 2013 order, the circuit court did not err in granting the

SVOX defendants’ motion to stay litigation and compel arbitration.

¶ 35 The Uniform Arbitration Act is applicable to this case. The Uniform Arbitration Act

states as follows:

Ҥ 1. Validity of arbitration agreement. 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

***.” 710 ILCS 5/1 (West 2008).

It is well established that arbitration agreements are evaluated under the same standards as

any other contract. Melena v. Anheuser-Busch, Inc., 219 Ill. 2d 135, 149-50 (2006). The

elements of an enforceable contract include offer, acceptance and consideration. All

American Roofing, Inc. v. Zurich American Insurance Co., 404 Ill. App. 3d 438, 449 (2010).

Consideration is a bargained-for exchange where one party receives a benefit or the other

party suffers a detriment. Id.

¶ 36 The court decides as a matter of law whether a contract clause is unconscionable. Razor

v. Hyundai Motor America, 222 Ill. 2d 75, 99 (2006). “Unconscionability can be either

‘procedural’ or ‘substantive’ or a combination of both.” Id. Procedural unconscionability

occurs when a term is so difficult to find, read, or understand that it cannot be fairly said that

the plaintiff was aware that he was agreeing to the term. Id. at 100. In determining whether a

term is procedurally unconscionable, the court considers a lack of bargaining power. Id.

Substantive unconscionability occurs when terms are inordinately one-sided in one party’s

favor. Id. “ ‘Substantive unconscionability concerns the actual terms of the contract and

examines the relative fairness of the obligations assumed.’ ” Kinkel v. Cingular Wireless

LLC, 223 Ill. 2d 1, 28 (2006) (quoting Maxwell v. Fidelity Financial Services, Inc., 907 P.2d

51, 58 (Ariz. 1995)).

¶ 37 We find that the SVOX defendants have the more reasonable argument and interpretation

of applicable legal principles. Thus, pursuant to section 51 of the Uniform Arbitration Act,

the arbitration clause in this case is valid and enforceable. The arbitration clause is supported

by the offer of employment to Fuqua, Fuqua’s acceptance of the offer, and the consideration

of Fuqua’s employment and the promise to resolve any employment disputes through

arbitration. Thus, the arbitration clause can only be invalid or unenforceable if there are

grounds for revocation of a contract. The grounds for revocation at issue are procedural and

substantive unconscionability.

¶ 38 In this case, the arbitration clause was not procedurally unconscionable because it was

easy to find within the employment agreement, and it was clear and easy to understand.

Fuqua claims that he was unaware that the commercial rules could apply and that he only

anticipated arbitration under the employment rules. However, the arbitration clause makes no

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mention whatsoever of the employment rules. Rather, the arbitration clause states that any

disputes arising in connection with the employment agreement or Fuqua’s employment shall

be settled by arbitration “in accordance with the rules for commercial arbitration of the

[AAA] then in effect.” This clause does not instruct whether the employment rules or

commercial rules will apply, but rather states that the AAA rules will determine whether the

employment rules or commercial rules will apply. That is precisely what happened.

Arbitrator Klenk applied the appropriate AAA rules in reaching a conclusion regarding

whether the employment rules or commercial rules applied. Fuqua negotiated with SVOX

USA regarding the terms of the arbitration clause and even changed some of the language of

the arbitration clause. So, he was an active participant in the negotiations and the terms of the

contract. Yet he made no attempt to amend the clause pertaining to the rules of arbitration.

According to Arbitrator Klenk’s finding, the rules of the AAA dictate that the commercial

rules apply to the arbitration between the parties in this case. Understandably, Fuqua is upset

because Arbitrator Klenk’s determination was unfavorable to him from a financial point of

view. However, that cannot be the basis for nullifying a clause that he negotiated and agreed

to. At the time the employment agreement was executed, the relative bargaining power

between SVOX USA and Fuqua was not vastly unequal. Arbitrator Klenk’s finding was

made after the arbitration clause was negotiated, agreed to, and executed. Thus, procedural

unconscionability is not a factor under these facts. Accordingly, the arbitration clause was

not procedurally unconscionable.

¶ 39 Likewise, the arbitration clause is not substantively unconscionable. The crux of Fuqua’s

unconscionability argument is that the cost of arbitration under the commercial rules is

financially burdensome, and thus he cannot afford to pursue arbitration. We acknowledge

that the allocation of costs between the parties under the commercial rules puts a relatively

greater burden on Fuqua than would occur under the application of the employment rules.

However, in Arbitrator Klenk’s lengthy order, he outlined his reasoning for his ruling. We

can find no fault with his reasoning or his ruling. Further, he gave Fuqua an opportunity to

present evidence to support his argument of undue financial hardship and Fuqua did not avail

himself of the opportunity to do so. It is not this court’s prerogative to review Arbitrator

Klenk’s order in the manner requested by Fuqua. Even if it were, we would have no reason to

depart from Arbitrator Klenk’s findings. Although Fuqua repeatedly states that it will be

expensive for him to pursue arbitration, there is nothing in the record that reflects his

financial situation, or supports his argument on that issue.

¶ 40 Similarly, the carve-out provision in the arbitration clause does not render the arbitration

clause substantively unconscionable. Fuqua argues that the carve-out provision is unfair and

lacks mutuality because he would have no reason to enforce restrictive covenants against

himself. However, Fuqua fails to acknowledge that he negotiated and requested some of the

very terms in the carve-out provision of which he now complains. Indeed, Fuqua requested

that the phrase “Either party” be included in the arbitration clause as a replacement for the

term “Employer” in order to make the restrictive covenant provision “symmetric.”

Accordingly, it can be inferred that Fuqua had ample opportunity to object to the carve-out

provision and request changes to the terms. His argument when carefully analyzed shows that

he successfully negotiated the contract clause that he is now arguing is unfair to him. Thus,

the arbitration clause is not substantively unconscionable. Because the arbitration clause is

not procedurally or substantively unconscionable, there are no grounds to revoke the valid

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and enforceable arbitration clause. Accordingly, in its March 7, 2013 order, the circuit court

did not abuse its discretion in granting the SVOX defendants’ motion to stay litigation and

compel arbitration. We affirm the circuit court’s order of March 7, 2013 on that issue.

¶ 41 We note that Fuqua also argues that, in its March 7, 2013 order, the circuit court erred in

dismissing the complaint claims against Soseman with prejudice. However, as Soseman

points out on appeal, the circuit court dismissed the claims against him based on the rule that

an attorney is entitled to qualified immunity for actions taken by a client pursuant to the

attorney’s advice unless the plaintiff can set forth facts showing actual malice by the

attorney. Schott v. Glover, 109 Ill. App. 3d 230, 235 (1982). In this case, Fuqua did not allege

any facts showing actual malice by Soseman and presented no arguments that overcome an

attorney’s qualified immunity privilege. Therefore, the circuit court did not abuse its

discretion in dismissing the claims against Soseman with prejudice. 4 Accordingly, we affirm

the circuit court’s order of March 7, 2013 that dismissed the claims against Soseman with

prejudice.

¶ 42 For the foregoing reasons, we affirm the circuit court’s March 7, 2013 judgment that

granted the SVOX defendants’ motion to stay litigation and compel arbitration. We affirm

the circuit court’s March 7, 2013 judgment that dismissed the claims against Soseman with

prejudice. We affirm the circuit court’s March 7, 2013 judgment that granted the SVOX

defendants’ motion to lift the stay of arbitration. We affirm the circuit court’s May 7, 2013

judgment that denied Fuqua’s motion to reconsider the court’s grant of the SVOX

defendants’ motion to lift the stay of arbitration. The matter is remanded with directions to

compel arbitration.

¶ 43 Affirmed in part; cause remanded with directions.

4

We are likewise unpersuaded by Fuqua’s argument that the SVOX defendants waived the right to

arbitrate.

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