Appellate court reverses Kardis decision

Steve Gonzalez May 4, 2005, 7:59am

Melissa Chapman

Appellate Justices’ Melissa Chapman, Clyde Kuehn and James Donovan reversed a motion to compel arbitration that Madison County Circuit Judge Philip Kardis denied in October 2003 in a class action case against Cingular Wireless.

Donna M. Kinkel sued Cingular on Aug. 8, 2002, alleging that its early termination fee constituted a breach of the service agreement and statutory fraud under the Illinois Consumer Fraud and Deceptive Business Practices Act.

“The trial court found the arbitration provision to be substantively unconscionable both because it precludes class relief and because it limits the authority of arbitrators to award relief provided for under the Consumer Fraud Act," Chapman wrote.

When Kardis ruled that the dispute did not fall within the scope of the arbitration clause in Kinkel's service agreement.

"The effect of the provisions purporting to limit the authority of arbitrators to award punitive damages and other damages 'not measured by the prevailing party's actual damages' is a matter of contract interpretation to be decided by an arbitrator," Chapman stated in the appellate court's three-judge panel opinion.

"Thus, we cannot decide at this time whether this provision is enforceable. We note that in remanding the cause for arbitration, we are staying, not dismissing, the plaintiff's lawsuit.”

In July 2001, Kinkel began her cellular service with Cingular in which she chose a two-year service commitment.

In April 2002, she notified Cingular that she wished to terminate her service. The defendant charged her the early-termination fee of $150, which she paid under protest.

A month after Kinkel's class action was filed it was removed to federal court on Sept. 9, 2002. On Nov. 8, 2002, it was remanded back to Madison County.

On May 21, 2003, Cingular filed a motion to compel arbitration and stay the litigation. However, on Sept. 11, 2003, Kinkel filed her first amended complaint, which prompted Cingular to file a renewed motion to compel arbitration.

“...We must keep in mind the strong policy in favor of enforcing arbitration agreements, which is best served by allowing the valid portions of the arbitration agreement to remain in force while severing the unconscionable provision," Chapman wrote.

"We therefore conclude that the arbitration provision can be enforced absent the unconscionable ban on class arbitrations.”

Kinkel is represented by Timothy O'Sullivan of the Lakin Law Firm, he could not be reached for comment.

Cingular is represented by Thompson Coburn of Belleville.

02 L 1087

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