ADR and Mediation

Plaintiffs and their business entities sued accounting firm and law firms for their alleged "investment strategies" to form various sham entities as tax shelters. Contract provided that accounting firm would prepare tax returns, and consult as to negotiations and transactions, for fee of $1.58 million, but was not providing investment advice or services. Contract included arbitration clause, but parties did not clearly and unmistakably agree that the arbitrator would decide the question of the arbitrability of a given claim; thus, arbitrability question is for the courts to decide. References in arbitration clause to Illinois and New York laws relate to how, not whether, arbitration is to be conducted, and thus the procedural rules of those states apply. Plaintiffs' claims for bad investment advice or bad legal advice do not fall within the scope of the firm's performance, per the contract, and are thus not within the scope of the arbitration clause. (STEIGMANN, concurring; TURNER, specially concurring in part and dissenting in part.)

Award of $1.55 million in damages plus interest and attorney fees awarded by arbitration panel per Section 155 of Insurance Code for underlying reinsurance claim. Award vacated, as arbitrators lacked authority to award attorney fees per Section 155, as such award is contrary to clear Illinois law. Illinois does not recognize bad-faith exception to "American" rule for attorney fees.

Plaintiff entered into contract with Defendant accounting firm to manage accounting for her investment accounts, and later a separate, oral investment advisory agreement. Plaintiff sued based on her dissatisfaction with investment services. Written contract for accounting contained arbitration provision. Court properly denied Defendants' petition to compel arbitration. Engagement letters for two contracts and written contract's arbitration clause do not indicate intent that arbitration would apply to investment services, thus scope of arbitration clause is limited to accounting disputes only, and does not apply to separate dispute over investment services.

Federal Arbitration Act preempts the provisions of Nursing Home Care Act that purport to nullify resident's waiver of right to commence court action and to jury trial. Nursing home resident, whose daughter signed agreement for her nursing home admission, is barred from pursuing suit for injuries sustained there. Nursing home admission involved interstate commerce and is thus subject to FAA, and agreement provided that any disputes would be resolved through arbitration as governed by FAA.

Federal Arbitration Act preempts California state law vesting jurisdiction in its Labor Commissioner rather than an arbitration proceeding. Thus, California court lacked subject matter jurisdiction over employment contract which contained arbitration clause, and which provided that Illinois law would govern over disputes. California default judgment against employer was properly vacated by Cook County circuit court.