This is a diversity action brought by appellant Brace Golden [Golden] appealing the district court’s finding that the appellees David Barenborg [Barenborg] and Salomon Brothers, Inc. [Salomon], were not vicariously liable for the actions of Coldwell Banker [Coldwell] in the sale of Barenborg’s home to Golden. Golden first sued Coldwell alleging Coldwell misrepresented material facts about the home’s condition, which if disclosed would have dissuaded him from purchasing the residence. Specifically, Golden alleged fraud, negligent misrepresentation, and consumer fraud pursuant to Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2 et seq. (Smith-Hurd 1995), formerly cited as Ill.Rev.Stat. ch. 121}£, para. 262 et seq. (1991). Golden subsequently settled and released his claim against Coldwell. Golden then pursued the matter *867 in a new suit against the appellees contending the appellees were vicariously liable under the same claims because Coldwell acted as their agent. In the second suit, Golden additionally alleged the appellees were vicariously liable for Coldwell’s breach of an addendum to the Golden-Coldwell sale contract and breach of warranty against Barenborg. The Magistrate Judge held the claims were barred by res judicata. On appeal, the district court found res judicata was not applicable because no settlement stipulation of dismissal with prejudice had been filed. 1 The district court, however, affirmed the Magistrate Judge on the grounds that under Illinois law the appellees were not vicariously liable for the actions of Coldwell whether or not Coldwell was considered an agent. Golden appeals.
I.
In the fall of 1990, Barenborg was employed by Salomon Brothers. When Salo-mon transferred Barenborg from Illinois to New York, Salomon engaged Coldwell to sell Barenborg’s home. Pursuant to an ongoing agreement, Coldwell Banker Relocation Management Services purchased residences of relocated Salomon employees at fair market value, subject to additional payment if the home was resold at a higher price. Coldwell Banker Real Estate, Inc., would then re-market the residences.
Coldwell purchased Barenborg’s home for $330,000.00 by Warranty Deed, but left blank the portion of the deed for the naming of a future grantee. The contract of sale between Barenborg and Coldwell provided that legal title would pass directly from Barenborg to the ultimate buyer. On April 1,1991, Golden purchased Barenborg’s residence through Coldwell for $280,000.00. Soon after buying the home, Golden alleged he discovered several latent defects in the structure and condition of the home. In June 1991, Golden brought suit against Coldwell alleging common law fraud (Count I), negligent misrepresentation (Count II), and a violation of the Illinois Consumer Fraud and Deceptive Business Practice Act, 815 ILCS 505/2 et seq. (Smith-Hurd 1995), formerly cited as III. Rev.Stat. ch. 121% para. 262 et seq. (Count III).
Golden claimed that Coldwell knowingly made misrepresentations to him concerning the condition of the home in an effort to induce Golden to buy the home. Specifically, he alleged that Coldwell represented Baren-borg was employed by AT & T and was not reachable; that plans and specifications for prior remodeling work on the home were not available; and that Coldwell had no inspection reports or other documents it had not already provided to Golden. Further, Golden claimed that Coldwell was aware of material facts which it had an affirmative duty to disclose pursuant to the Illinois Real Estate License Act of 1983, 225 ILCS 455/1 et seq. (Smith-Hurd 1995), formerly cited as III. Rev.Stat. ch. Ill, §§ 5801 et seq. He alleged that Coldwell failed to disclose that the home had no concrete floor in the basement or concrete foundation; that it had extensive termite damage; that Coldwell had commissioned an inspection report incident to the purchase from Barenborg which disclosed most of the defects and violations of the City of Chicago building code; and that the report “strongly recommended” a structural analysis of the foundation be conducted. Golden claimed reasonable diligence would not have disclosed the defects because the damage was hidden in new flooring, exterior siding, and interior walls. Golden asserted that if the home’s true condition had been disclosed, he would not have purchased it.
In Golden’s complaint he requested actual damages in excess of $80,000.00, but on the eve of the trial, Coldwell and Golden settled for $60,000.00. In exchange, Golden executed a Mutual Release 2 agreeing to dismiss his *868 complaint with prejudice against Coldwell. The parties informed the court they were settling and the court issued an order terminating the case. 3 Neither party, however, filed with the court the stipulated dismissal of the suit with prejudice.
Approximately a month after the settlement, Golden initiated this action against the appellees Salomon Brothers and Barenborg. Golden alleged the same claims he previously did against Coldwell, but now contended that Barenborg and Salomon were vicariously liable because Coldwell acted as their agent. Specifically the complaint alleged common law fraud (Count I), negligent misrepresentation (Count II), and a violation of the Consumer Fraud Act (Count III). Golden also alleged that Coldwell had breached an addendum to its real estate contract with Golden (Count IV). The addendum provided that if Golden notified Coldwell of unacceptable defects within fourteen days of signing the contract, Coldwell would repurchase the house or reimburse Golden for repair costs. Golden claimed he notified Coldwell within the fourteen days and Coldwell did not perform as required under the addendum. In regards to the first four counts, Golden claimed Coldwell acted as an agent for the appellees, and therefore the appellees were vicariously liable for Coldwell’s failure to disclose the aforementioned defects in the home and for breach of contract. Golden added a fifth claim against Barenborg for breach of warranty (Count V). Golden alleged that in the contract of sale between Barenborg and Coldwell, Barenborg warranted the home was free of termite damage. Golden claimed he was a third party beneficiary of the contract because Barenborg knew that the intended and direct beneficiary of the warranty was the ultimate purchaser of the home.
Appellees filed a joint motion to dismiss Golden’s complaint pursuant to Rule 12(b)(6). The Magistrate Judge granted appellee’s motion, which she treated as a motion for summary judgment. Under the doctrine of res judicata, the Magistrate Judge found that Counts I-V were barred.
Golden v. Barenborg,
No. 91 C 5359,
II.
Golden contends that because the Magistrate Judge’s stay of discovery was never lifted, the district court consequently found that Golden had shown no facts to establish the appellees had acted unlawfully independent of Coldwell. Therefore, Golden’s argument centers on the lack of discovery which he claims could have changed the outcome of the case. We find, however, that Golden is barred by the principles of res judicata in maintaining this action against the appellees. The district court determined that under
McCall-Bey v. Franzen,
Here, the stipulation of dismissal contained in the release signed by Mr. Golden, stated the agreement of the parties to dismiss the suit before Judge Duff. That release explicitly stated that the dismissal was to be with prejudice.
Golden,
Further, ' Magistrate Judge Bucklo was aware that in the transcripts of the proceedings before Judge Duff, who presided over the Coldwell-Golden suit, Judge Duff stated on the record that he understood the dismissal to be with prejudice.
5
Golden,
III.
For res judicata to apply in federal court three requirements must be met: (1) an identity of the causes of actions; (2) an identity of the parties or their privies; and (3) a final judgment on the merits.
Matter of Energy Co-op., Inc.,
The mere fact Golden brings two additional claims against the appellees offers Golden no reprieve. In Count IV, Golden asserts the appellees are liable because Cold-well breached the fourteen day addendum that was executed when he bought the home. Count V, only against Barenborg, alleges that the seller is liable for breach of warranty because Golden was an intended third party beneficiary of the Coldwell-Barenborg contract of sale. Golden also asserts that the district court erred in not considering the Seller’s Statement contemporaneously with the sales contract because the Seller’s Statement contains direct misrepresentations by Barenborg. Res judicata, however, operates
*870
not only as a bar to the further litigation of matters decided in the prior action, but also to any issues which could have been raised.
Brzostowski v. Laidlaw Waste Sys., Inc.,
The warranty at issue in Count V refers to the contract of sale between Cold-well and Barenborg in which Barenborg warranted that the home was free of termite damage. Golden argues that he was an intended third party beneficiary of the Cold-well-Barenborg sales contract because Bar-enborg knew the beneficiary was the ultimate purchaser of the home. Magistrate Judge Bucklo and the district court both found Barenborg was not a third party beneficiary. Under Illinois law, a person is considered a third party beneficiary only when the benefit to him is intended and he may therefore sue for breach of the contract.
Carson Pirie Scott v. Parrett,
Even if the Seller’s Statement was contemporaneously considered with the Coldwell-Barenborg sales contract, Golden’s breach of warranty claim would still fail. Golden argues that the district court erred in not considering the Seller’s Statement with the sales contract because the Seller’s Statement contained a direct misrepresentation by Bar-enborg. This theory would avoid the issue of preclusion because Coldwell did not act as Barenborg’s agent in this respect; however, Golden does not assert he either saw or relied on the Seller’s Statement. Golden complains that lack of discovery impeded his case, but the absence of discovery is no impediment to Golden having set out in his own affidavit what had occurred. The record shows that there is no evidence, even on the basis of Golden’s own affidavit, that he either saw or relied on the Seller’s Statement. Therefore, Golden’s complaint under Count V must fail. A party may not frustrate the application of res judicata “by cloaking the same cause of action in the language of a theory of recovery untried in the previous litigation.”
Harper Plastics v. Amoco Chemicals Corp.,
The second requirement of res judicata, identity of parties, is also satisfied. The Mutual Release did not mention Salomon *871 Brothers or Barenborg. Therefore, the issue is whether the appellees can nonetheless be considered the same party for res judicata purposes. The Magistrate Judge found that because Coldwell acted as an agent for Bar-enborg and Salomon, the appellees were the same parties for purposes of this litigation. Without deciding whether Coldwell, Salomon and Barenborg were in an agency relationship, the district court held that under Illinois law Golden would fail in either relationship setting. We likewise find that in any event Barenborg and Salomon are considered the same parties for purposes of res judica-ta. 7
Coldwell was acting on behalf of Salomon and Barenborg pursuant to arrangements each appellee had with Coldwell in effectuating the sale of Barenborg’s home. Therefore, through an agency-principal relationship, Coldwell was granted the authority to sell Barenborg’s home to Golden. In finding that Coldwell was an agent, the broad settlement agreement releasing Coldwell would also release the appellees as principals. As the district court explained, in the recent case of
American Nat’l Bank & Trust Co. v. Columbus-Cuneo-Cabrini Medical Center,
The third requirement, final judgment on the merits, is also satisfied. As we previously discussed, the filing of the stipulation of dismissal was not necessary in the circumstances of this case. Golden knew when he signed the Mutual Release that the suit would be dismissed with prejudice and cannot now disregard what he signed and pursue the same cause of action against the appellees. We conclude that the prior dismissal, known to both judges and the parties, was with prejudice pursuant to Rule 41(a)(l)(ii). 8 Therefore it was a final judgment on the merits.-
Because the three requirements of res ju-dicata are met, Golden’s complaint against the appellees is barred.
AFFIRMED.
Notes
. The parties in this case consented to an appeal from Magistrate Judge Bucklo’s ruling to the district court, rather than appealing directly to the Court of Appeals for the Seventh Circuit, pursuant to 28 U.S.C. § 636(c)(4). This court then granted leave to appeal under § 636(c)(5).
. The Mutual Release is very broad and in pertinent part states:
I. Release executed in October, 1991, by BRUCE P. GOLDEN AND JODY (ROSEN-BAUM) GOLDEN (hereinafter referred to as RELEASORS) of Chicago, Cook County, Illinois to COLDWELL BANKER RESIDENTIAL *868 REAL ESTATE (INC.), a California corporation, (CBRE) its officers, directors, employees, agents (including real estate salespersons and brokers), independent contracting real estate salespersons and brokers (whether designated as such by contract or otherwise), attorneys and assigns, COLDWELL BANKER RELOCATION MANAGEMENT SERVICES, INC., a New York corporation, (CBMS) its officers, directors, employees, agents (including real estate salespersons and brokers), independent contracting real estate salespersons and brokers (whether designated as such by contract or otherwise), attorneys and assigns, and ETHEL ROCKI DEVOY, (DEVOY) and ROBIN L. LEMER (LEMER), their successors, assigns, executives, heirs and personal representative, (hereinafter referred to as the RELEASED PARTIES).
. Judge Duff presided over the initial suit between Coldwell and Golden.
. In addition, the Magistrate Judge found that under Illinois law the Count V breach of warranty claim failed. Id. at *5. Golden was not an intended beneficiary of the sale contract between Barenborg and Coldwell. Id.
. After the settlement was executed and the case dismissed, counsel to Coldwell filed a motion to enforce the settlement agreement before Judge Duff. Coldwell argued that the settlement was not being enforced because Golden had recently filed suit in the district court. Judge Duff responded that the' matter should be addressed before the district court because it was not related to the prior Coldwell-Golden suit due to the fact it was dismissed with prejudice.
. A Seller’s Statement is a disclosure report made by the seller which represents the seller’s knowledge concerning certain conditions of the property. 765 ILCS 77/10 et seq. (Smith-Hurd 1995). The disclosure is required pursuant to the Residential Property Disclosure Act. In cases, however, where the property is transferred from an entity who has taken title from the seller pursuant to a relocation agreement, the Act is not applicable so long as the entity has provided to all prospective buyers a copy of the disclosure form furnished to the entity from the seller. 765 ILCS 77/15(7) (Smith-Hurd 1995).
. Since the application of federal or Illinois law would yield the same result, it is not necessary to choose which law disposes of the issue.
Lowell Stoats Mining Co. v. Pioneer Uravan, Inc.,
. Under the Federal Rules of Civil Procedure Rule 41(a)(l)(ii), a plaintiff may voluntarily dismiss an action by filing a stipulation of dismissal signed by all parties who have appeared in the action. The stipulation will be considered without prejudice unless otherwise stated.