Background
Homeowners Jennifer Mason and Sherman Marek contracted with Airoom to remodel their Lake Forest home. After Marek canceled the project and sought return of $35,000 in payments, Airoom issued a termination accounting that claimed $31,581 in costs and a $3,419 credit.
After Marek formed Illinois Homeowners Against Fraud, Inc., the corporation sued as the homeowners’ assignee, alleging consumer-fraud and related claims. Airoom had already initiated AAA arbitration against the homeowners and moved to compel the assignee to participate. The circuit court compelled arbitration, while striking “confidential” from the clause, preserving Consumer Fraud Act remedies, and requiring AAA Home Construction Arbitration Rules.
The Court’s Holding
The appellate court affirmed. It held that the trial court’s limited changes cured any arguable substantive unconscionability in the arbitration provision. Unlike the clause invalidated in Bain v. Airoom, the provision did not categorically bar punitive damages or attorney fees, did not give Airoom unilateral control over the arbitral forum, and—after severance—did not impose a confidentiality requirement.
The court also held that the buyers’ termination of the remodeling contract did not extinguish arbitration. The lawsuit challenged amounts associated with the termination fee, which the contract expressly preserved for Airoom after termination. Airoom had not waived arbitration: it initiated arbitration against the buyers, reserved its right to compel arbitration, and filed its motion after the trial court directed it to do so at plaintiff’s request.
Key Takeaways
- A court may sever or narrowly modify problematic arbitration terms when a severability clause supports enforcing the lawful remainder.
- Contract termination did not eliminate arbitration where the dispute concerned the contract’s surviving termination-fee right.
- A party does not waive arbitration merely by challenging standing while expressly preserving arbitration and promptly moving to compel when directed.
Why It Matters
The decision distinguishes the earlier Airoom arbitration ruling in Bain by focusing on the current clause’s language and the trial court’s targeted protections for consumer remedies and homeowner-specific AAA procedures.
The order was issued under Illinois Supreme Court Rule 23(b) and is nonprecedential except as allowed by Rule 23(e)(1).