Background
Capital Developmental Board (CDB) and Baysinger Architects entered into a professional services contract in 2015 for design and architectural services related to roof replacement at Shawnee Correctional Center. In 2020, CDB discovered the roof was defective and unsuitable for use, allegedly due to deficiencies in Baysinger’s design and the contractor’s installation. CDB filed suit in February 2024 against Baysinger, general contractor Evrard-Strang, and the performance surety Travelers, seeking damages for the cost of dismantling and replacing the roof.
The service contract contained a mandatory alternative dispute resolution (ADR) clause requiring parties to submit disputes to ADR before filing litigation. The clause expressly excluded arbitration as a form of ADR and defined permissible ADR methods as mediation, mini-trials, dispute resolution boards, or expert opinion. Baysinger moved to dismiss under section 2-619(a)(9) of the Illinois Code of Civil Procedure, arguing that CDB had failed to exhaust the contractual ADR requirement before filing suit. CDB responded that ADR was futile because Evrard and Travelers, though essential to resolution, had refused to participate in mediation. CDB requested alternatively that the court stay proceedings pending ADR.
The Court’s Holding
The Illinois Appellate Court affirmed the circuit court’s denial of the motion to dismiss and its issuance of a stay pending ADR. The court rejected Baysinger’s reliance on cases requiring exhaustion of contractual remedies, finding that CDB had made a good-faith attempt to engage in ADR, supported by affidavit evidence showing CDB had offered mediation to all parties and Evrard and Travelers had declined. This satisfied the futility exception to the ADR condition precedent, as the necessary parties’ refusal to participate made strict compliance impossible.
The court emphasized that a stay of proceedings was an appropriate remedy for enforcing ADR clauses and did not waive any legal rights, distinguishing between the contractual promise not to waive rights through ADR participation and the court’s discretionary power to manage its docket through stays. The court noted that now that all parties were before the court through litigation, meaningful ADR could occur. However, the court reversed and remanded on one critical point: the circuit court had erred by ordering the parties to participate in “arbitration” when the contract expressly excluded arbitration from permissible ADR methods. The remand directed the circuit court to clarify which parties must participate in ADR going forward.
Key Takeaways
- ADR clauses can be enforced through a stay of proceedings rather than outright dismissal, allowing courts to compel participation once all necessary parties are before the court.
- A good-faith attempt to comply with an ADR requirement, supported by documentary evidence, can defeat a motion to dismiss based on failure to exhaust ADR—the futility exception applies when essential parties refuse to participate.
- Contract language excluding specific dispute resolution methods must be strictly honored; courts cannot order arbitration when the contract expressly excludes it from ADR options.
- Courts have inherent discretion to stay proceedings to enforce contractual ADR obligations without waiving substantive rights or tolling legal remedies.
Why It Matters
This decision clarifies the remedies available when parties dispute whether an ADR clause has been satisfied. Rather than treating ADR requirements as jurisdictional barriers requiring dismissal, courts may use stays to facilitate meaningful dispute resolution while preserving parties’ legal rights. The decision is particularly important for construction and professional services contracts, which commonly include ADR provisions to manage disputes cost-effectively.
The ruling also reinforces that contractual limitations on dispute resolution methods—such as excluding arbitration—are binding on courts. Practitioners relying on ADR clauses must ensure such clauses are drafted with precision, as courts will enforce them as written. The decision suggests that once all necessary parties are before a court through litigation, the ADR obligation can be more readily fulfilled, even if initial pre-suit efforts failed due to some parties’ refusal to participate.