Van C. Argiris v. Pain/Wetzel: Disputes Between Association Members Required Arbitration per Agreement

In Van C. Argiris & Co. v. Pain/Wetzel & Assoc., Inc., the Plaintiff, (Argiris) sought a court order asking that a dispute between itself, several Board-member brokers, and the Kelly-Springfield Co. (a non-member broker) be deemed unsuitable for Board arbitration. The Appellate Court of Illinois held that issues between Board members required arbitration, but that disputes between members and non-members could be litigated.

Greisser filed a Request for Arbitration with the Board over a money dispute which arose while he was employed by Argiris. Argiris subsequently filed suit, naming Greisser as a defendant, alleging that Argiris had an exclusive listing agreement with Kelly-Springfield for the leasing or sub-leasing of warehouse space. Argiris claimed that through its efforts, other brokers became aware of the availability of the warehouse space. Argiris contended that these brokers, during the existence, and with full knowledge of the exclusive listing agreement between Argiris and Kelly-Springfield, conferred with Kelly-Springfield, and caused them to terminate and not renew its exclusive listing agreement with Argiris.

As a result of a petition by the other brokers and Kelly-Springfield, Argiris' lawsuit was dismissed. The court ruled that under the Board's bylaws, the Board-member parties were bound to arbitrate. However, regarding Kelly-Springfield, the court allowed Argiris to amend its complaint and pursue further court action at a later date. Argiris appealed the dismissal, arguing that because the dispute between itself and Greisser arose while he was an employee, it should not be subject to Board arbitration. Argiris cited the pertinent Article of the Code of Ethics and argued that the Article provided an exception from Board arbitration for those disputes which arise between employer and employee.

The Court disagreed with Argiris' contention regarding employer/employee relations, stating that nothing in the language of the Code of Ethics prohibited Board members from agreeing to arbitrate classes of disputes not specifically referred to in the Code of Ethics. The court noted that the arbitration section of the Board's bylaws were binding in Illinois under the Uniform Arbitration Act. The court ruled that disputes between an employer-broker and its employee-broker were subject to arbitration.

The Court also refuted Argiris' claim that the action against the others brokers, for interference with its client (Kelly-Springfield), could not be arbitrated under the Board's bylaws. Argiris argued that the Board's arbitration provisions were generic, non-specific, and broad, and that there was no indication that these types of matters could be submitted to arbitration. The court held that under the bylaws, an allegation by one broker regarding interference by another broker with a contractual relationship of the first broker and an owner of real estate was a controversy relating to matters arising out of their business as brokers or agents. Thus, the court affirmed the that Argiris and the other member brokers must arbitrate their dispute before the Board.

Argiris also raised the issue of the Board's jurisdiction over the interference with contract action, claiming that Kelly-Springfield was a necessary party to that action. The Appellate Court of Illinois noted that the trial court granted Argiris the opportunity to litigate its claim against Kelly-Springfield in the circuit court, and its claim against the remaining parties in arbitration. Further, Argiris could call any of the those parties as witnesses in either proceeding.

Van C. Argiris & Co. v. Pain/Wetzel & Assoc., Inc., 63 Ill. App. 3d 993, 380 N.E.2d 825 (1978).