908 F.3d 248
7th Cir.2018Background
- Dvorak filed three sequential suits about alleged mishandling of a capital call that caused him to lose his partnership interest: first in federal court (diversity), dismissed by stipulation; second in Illinois state court, partly dismissed on the merits and then voluntarily dismissed by Dvorak; third refiled in federal court omitting the partnership and one theory lost in state court.
- The core procedural question: Illinois statute 735 ILCS 5/13-217 permits only one refiling after certain dismissals; Dvorak’s third suit is challenged as a second refiling (thus barred).
- Dvorak argues the initial federal dismissal was by all-party stipulation and therefore not a "voluntary dismissal by the plaintiff" under §13-217; he contends that the stipulation should not trigger the one-refiling rule.
- Federal Rule of Civil Procedure 41(a)(1) treats both unilateral notices and stipulations signed by all parties as voluntary dismissals by the plaintiff and ordinarily without prejudice; Rule 41(a)(1)(B) converts later dismissals into adjudications on the merits if there was a prior dismissal of the same claim.
- The Seventh Circuit held that federal law characterizes the first dismissal (stipulation) as a voluntary dismissal by the plaintiff, Illinois law (Gendek) treats stipulated dismissals as voluntary for §13-217, and therefore the third suit is barred; one claim against Radzik not arising from the same transaction was dismissed as time-barred under Illinois’s five-year negligence statute.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an all-party stipulation of dismissal in federal court counts as a "voluntary dismissal by the plaintiff" for Rule 41 and Illinois §13-217 | Stipulation is a mutual dismissal, not a unilateral voluntary dismissal by the plaintiff, so it should not count under §13-217 | Rule 41(a)(1) treats stipulations as voluntary dismissals by the plaintiff; Illinois law (Gendek) treats stipulated dismissals the same for §13-217 | Held: A stipulation is a voluntary dismissal by the plaintiff under Rule 41 and, per Gendek, counts under §13-217. |
| Whether Dvorak’s third suit is barred under Illinois’s one-refiling statute §13-217 given the prior federal and state dismissals | The initial stipulated federal dismissal shouldn’t trigger §13-217, so the third suit is permissible | The federal stipulated dismissal counts as a first dismissal and the subsequent state dismissal as the one refiling; the third suit is a prohibited second refiling | Held: §13-217 applies; the third suit is barred. |
| Whether defendants not named in the first suit (Radzik, Lehman) are nonetheless protected by §13-217 | Dvorak: new defendants were not parties to earlier suits, so statute should not bar claims against them | Defs: §13-217 bars refiling against persons who could have been named if claim arises from same transaction/core facts | Held: New defendants are barred for claims arising from the same transaction/core facts. |
| Whether the negligence claim against Radzik (based on 2008 advice) is time-barred | Dvorak: alleges later wrongful acts by Radzik so limitations run from last wrongful act | Defs: discrete acts accrued when each act occurred; 2008 advice accrued then and is barred by the five-year limitations period | Held: Claim accrued in 2008 and is time-barred; later discrete acts do not revive limitations for the 2008 negligence claim. |
Key Cases Cited
- Carden v. Arkoma Associates, 494 U.S. 185 (U.S. 1990) (partnership’s citizenship is the citizenship of each partner for diversity jurisdiction)
- Gendek v. Jehangir, 119 Ill. 2d 338 (Ill. 1988) (Illinois treats stipulated dismissal as a voluntary dismissal by the plaintiff for §13-217)
- Jenkins v. Maywood, 506 F.3d 622 (7th Cir. 2007) (characterized stipulated dismissal as a voluntary dismissal for purposes of Rule 41 timing)
- Evans v. Lederle Laboratories, 167 F.3d 1106 (7th Cir. 1999) (applied Gendek’s treatment of stipulated dismissals under §13-217)
- Muhammad v. Oliver, 547 F.3d 874 (7th Cir. 2008) (analysis on application of one-refiling rule to persons who could have been named originally)
- Belleville Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc., 199 Ill. 2d 325 (Ill. 2002) (distinguishes discrete wrongs from cumulative wrongs for limitations accrual)
- National Railroad Passenger Corp. v. Morgan, 536 U.S. 101 (U.S. 2002) (discrete wrongs each carry their own limitations period)
A FFIRMED