Colagrossi v. The Royal Bank of Scotland
57 N.E.3d 601
Ill. App. Ct.2016Background
- Colagrossi, a futures-desk manager, moved his book to ABN AMRO (AAI) in 2005 after alleged promises by John Murphy of continued control and a 50/50 split of EFP referral revenue; he signed a written employment offer containing integration and nonreliance clauses.
- ABN AMRO sold its futures business (AAI) to UBS in 2006; Colagrossi later signed a UBS employment letter also containing an integration clause and was terminated in 2007.
- Colagrossi sued in 2008 (claims against UBS and AAI) for fraudulent inducement and unpaid referral fees; the federal district court granted summary judgment for UBS based on the integration clause, and this court affirmed as to AAI.
- In 2011 Colagrossi filed a new suit against The Royal Bank of Scotland N.V. (RBS), alleged successor/renamed ABN AMRO, asserting the same fraudulent inducement and wage-payment claims.
- While both state cases were pending before the same judge (Judge Tailor), the judge granted summary judgment in the earlier-related case; nine days later Colagrossi moved for a substitution of judge as of right in the 2011 case. The trial court denied substitution and later dismissed the 2011 complaint under section 2-619, holding the integration/nonreliance clause barred the claims (and noting res judicata).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether substitution of judge as of right was timely | Colagrossi: motion was absolute and timely because the 2011 case is distinct and RBS was not a party in the earlier ruling | RBS: motion was tardy and constituted judge-shopping after judge had materially ruled in the related 2008 case | Denied — court found impermissible "testing the waters"/judge-shopping; motion untimely after substantial rulings |
| Whether integration/nonreliance clause barred fraud-in-the-inducement claim | Colagrossi: oral promises (50/50 split; AAI not for sale) induced his move and were actionable fraud | RBS: written employment agreement (and later UBS agreement) contained integration/nonreliance and modification clauses precluding reliance on alleged oral promises | Dismissed — integration and nonreliance clauses precluded justifiable reliance; claim barred |
| Whether res judicata bars relitigation | Colagrossi: claims against RBS are distinct because defendant names differ and some claims were not adjudicated against RBS | RBS: same operative facts, same parties in privity (ABN AMRO → RBS), and prior final judgments bar relitigation | Dismissed — res judicata would bar the claim because parties/privity, identical causes, and prior final judgment |
| Whether plaintiff waived or delayed claims (statute/waiver defenses) | Colagrossi: procedural posture and separate filing defeat waiver/time-bar defenses | RBS: prior litigation, failure to timely object to nonpayment, and related rulings support waiver/time-bar defenses | Court did not need to reach all alternate defenses but noted waiver/timeliness were additional grounds available |
Key Cases Cited
- River Park, Inc. v. City of Highland Park, 184 Ill. 2d 290 (Ill. 1998) (res judicata bars later suits arising from same cause of action)
- Aetna Casualty & Surety Co. v. Kerr-McGee Chemical Corp., 875 F.2d 1252 (7th Cir. 1989) (corporate parent and subsidiaries may satisfy "same parties" prong for res judicata)
- Philips Electronics, N.V. v. New Hampshire Insurance Co., 295 Ill. App. 3d 895 (Ill. App. Ct. 1998) (sufficient congruence of interests among related corporate parties can satisfy res judicata)
- Belleville Nat'l Bank v. Rose, 119 Ill. App. 3d 56 (Ill. App. Ct. 1983) (fraud in inducement is barred where complainant had the opportunity to read and was charged with the terms of an integrated written instrument)
- Bowman v. Ottney, 2015 IL 119000 (Ill. 2015) (a party may not use serial filings to "test the waters"; substitution of judge can be denied where earlier substantial rulings by the same judge make the motion untimely)