Richter v. Prairie Farms Dairy
2016 IL 119518
| Ill. | 2016Background
- Michael and Denise Richter (d/b/a Rich-Lane Farms) were members of Prairie Farms Cooperative; defendant terminated their membership and tendered $15 for their stock after they temporarily ceased milk production in 2005.
- Richter I (filed Oct. 2006) alleged shareholder remedies, Consumer Fraud Act, and common-law fraud; the trial court dismissed the fraud counts but granted leave to amend and the shareholder-remedy claim remained.
- Plaintiffs never amended Richter I and, after delays and counsel changes, voluntarily dismissed the action in Sept. 2012 under 735 ILCS 5/2-1009.
- Richter II (refiled Sept. 6, 2013) reasserted shareholder remedies and added misrepresentation, fraud, and breach of fiduciary duty claims arising from the same 2005 events.
- The trial court dismissed Richter II under 735 ILCS 5/2-619 for res judicata and statute of limitations; the appellate court reversed, holding Richter I’s 2007 dismissal with leave to amend was not a final judgment and section 13-217 saved the refiling deadline.
- The Illinois Supreme Court affirmed the appellate court: Richter I’s dismissal with leave to amend was nonfinal, claim-splitting/res judicata did not apply, section 13-217 saved the refiled claims, and laches was left for the trial court to consider on remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Richter II is barred by res judicata | Richter I’s dismissal with leave to amend was nonfinal; no prior final judgment bars refiling | Richter I’s dismissal became final (by operation) when plaintiffs failed to amend, so refiling is barred | Dismissal with leave to amend is nonfinal; defendant failed to show a final judgment, so res judicata does not apply |
| Whether claim-splitting forbids refiling additional claims in Richter II | Voluntary dismissal terminated Richter I; refiling under §13‑217 may include all theories arising from same facts | Plaintiffs improperly split claims—only the surviving shareholder claim should have been refilled | Voluntary dismissal under §2‑1009 ends the action; Rein/Hudson inapplicable because Richter I had no final adjudication |
| Whether the claims in Richter II are time‑barred | §13‑217 (limitations savings) preserves the right to refile within one year after voluntary dismissal; refiling Sept. 6, 2013 was timely | Plaintiffs lost §13‑217 protection because Richter I was effectively terminated earlier by the 2007 dismissal with leave to amend | §13‑217 saved plaintiffs’ claims; refiled action was within the one‑year savings period |
| Whether laches bars Richter II | (implicit) plaintiffs relied on statutory savings and procedural rights to refile | Defendant asserts equitable laches based on delay and prejudice | Court did not decide laches on appeal; allowed defendant to raise it on remand and left factual determination to trial court |
Key Cases Cited
- Board of Managers of the Village Centre Condominium Ass’n v. Wilmette Partners, 198 Ill. 2d 132 (Ill. 2001) (standards for accepting pleadings as true on a §2‑619 dismissal)
- Wilson v. Edward Hospital, 2012 IL 112898 (Ill. 2012) (elements and scope of res judicata)
- Hernandez v. Pritikin, 2012 IL 113054 (Ill. 2012) (finality requirement for res judicata and burden on party invoking it)
- Smith v. Central Illinois Regional Airport, 207 Ill. 2d 578 (Ill. 2003) (interpretation of leave‑to‑amend periods and voluntary dismissal rights)
- Rein v. David A. Noyes & Co., 172 Ill. 2d 325 (Ill. 1996) (limits on using voluntary dismissal to split claims)
- Hudson v. City of Chicago, 228 Ill. 2d 462 (Ill. 2008) (Res judicata and voluntary dismissal interplay)
- DeLuna v. Treister, 185 Ill. 2d 565 (Ill. 1999) (effect of dismissal orders and Rule 273)
- Dubina v. Mesirow Realty Development, Inc., 178 Ill. 2d 496 (Ill. 1997) (refiled actions under §13‑217 are new actions; savings statute purpose)