Oshana v. FCL Builders, Inc.
994 N.E.2d 77
Ill. App. Ct.2013Background
- FCL is a general contractor; Suburban is a steel subcontractor; JAK Iron Works sub-subcontracted steel work; Oshana was injured and sued in a tort action against FCL and Suburban.
- FCL amended its tort-action pleadings with a counterclaim for contribution against Suburban and a breach-of-contract counterclaim related to Suburban’s insurance requirements.
- Westfield Insurance defended JAK under a CGL policy and was sued in a declaratory judgment action by FCL seeking to determine coverage duties.
- The declaratory judgment court held FCL was not an additional insured; Suburban was not a party to that action; FCL later sought to assert a breach-of-contract counterclaim in the tort action, which the circuit court dismissed as barred by res judicata.
- The appellate court reversed, holding that res judicata does not bar FCL’s breach-of-contract counterclaim because there was no identity of parties or cause of action with the declaratory judgment action and no identity with the tort-action summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is FCL’s breach-of-contract counterclaim barred by res judicata? | FCL argues no identity of cause of action or parties with prior judgments. | Suburban argues res judicata bars based on prior final judgments. | No; not barred by res judicata. |
| Was Suburban in privity with Westfield in the declaratory judgment action? | FCL contends lack of privity with Westfield defeats res judicata. | Suburban asserts privity as an insured-party beneficiary relationship. | Suburban not in privity with Westfield in the declaratory judgment action. |
| Do the declaratory judgment action and the breach-of-contract counterclaim share identity of action? | Counterclaim arises from Suburban’s contract to procure insurance for FCL. | Declaratory judgment addressed different issue (additional insured status under Westfield’s policy). | No identity of cause of action. |
| Does res judicata apply based on the tort-action summary judgment? | Counterclaim not coextensive with tort claims adjudicated earlier. | Previous summary judgment disposed of related issues. | No identity of cause of action; not barred. |
Key Cases Cited
- River Park, Inc. v. City of Highland Park, 184 Ill. 2d 290 (1998) (transactional approach to res judicata; factors for same transaction)
- Nowak v. St. Rita High School, 197 Ill. 2d 381 (2001) (restatement guidance on res judicata collateral estoppel)
- Hudson v. City of Chicago, 228 Ill. 2d 462 (2008) (three elements of res judicata; final judgment on merits; identity of cause and parties)
- Restatement (Second) of Judgments § 75, Restatement (Second) of Judgments (1982) () (privity categories for preclusion)