ARLIE J. REIN et al., Plaintiffs-Appellants and Cross-Appellees, v. DAVID A. NOYES AND COMPANY et al., Defendants-Appellees and Cross-Appellants.
No. 2-93-1454
Second District
April 13, 1995
271 Ill. App. 3d 768
William J. Foote and David W. Schopp, both of Dreyer, Foote, Streit, Furgason & Slocum, P.A., of Aurora, for appellees.
Plaintiffs, Arlie J. Rein, Brenda H. Rein, Robert H. Miller, Donald C. Miller and Lorraine Fehrmann, appeal from a trial court order dismissing their multicount сomplaint against defendants, David A. Noyes & Company, John F. Rath and Ronald E. Ainsworth, pursuant to
This constitutes the second appeal stemming from the purchase of securities by the plaintiffs from defendants. (See Rein v. David A. Noyes & Co. (1992), 230 Ill. App. 3d 12 (Rein I).) The facts involved in this controversy were set forth in Rein I, and, as the parties are fully acquainted with them, we will set forth only those facts necessary to an understanding of the рresent disposition.
The complaint in Rein I consisted of counts seeking rescission of plaintiffs’ securities purchases pursuant to
Over one year later, on March 17, 1993, plaintiffs filed a multicount complaint against defendants, again alleging the purchase and sale of securities and again raising the rescission and common-law counts. Defendants filed a motion to dismiss the new complaint pursuant to
The trial court granted defendants’ motion to dismiss both the statutory counts and the common-law counts based upon the doctrine of res judicata and the applicable statute of limitations. The trial court denied plaintiffs’ motion to make the final judgment more specific. The trial court also denied defendants’ motion for sanctions pursuant to Rule 137, stating as follows:
“I haven‘t imposed sanctions since I left divorce court some four years ago. There is some pause that I might have as to whether or not this case had a basis in fact that would avoid the—or in law
that would avoid the imposition of 137 sanctions as established by the record, and therefore, I will deny the request for sanctions.”
This appeal and cross-appeal followed.
During the pendency of this appeal, defendants filed a motiоn for sanctions pursuant to
Curiously, following oral argument in this case, plaintiffs filed a motion for leave to file response to unanswered questions on oral argument. Defendants filed objections to plaintiffs’ motion. Plaintiffs, in turn, filed a motion for leave to respond to defendants’ objections, to which defendants filed objections. Finally, plaintiffs filed a motion to strike defendants’ defenses for want of jurisdiction.
We deny all motions filed by plaintiffs following oral arguments in this case.
The sole issue raised on the direct appeal is whether the trial court erred in dismissing plaintiffs’ complaint.
STATUTORY COUNTS
Plaintiffs contend that the issue raised and determined in Rein I was that their claims were time barred by
The doctrine of res judicata provides that a final judgment on the merits rendered by a court of competent jurisdiction bars any future actions between the same parties or their privies on the same cause of action. (Elliott v. LRSL Enterprises, Inc. (1992), 226 Ill. App. 3d 724, 728.) The doctrine prohibits the relitigation not only of those issues which were actually raised in the first proceeding but also any issue that might hаve been raised. (Elliott, 226 Ill. App. 3d at 728.) The doctrine serves to promote judicial economy by requiring parties to litigate, in one case, all rights arising out of the same set of operative facts and further prevents the unjust burden that would result if a party would be forced to litigate continually what is essentially the same case. Knodle v. Jeffrey (1989), 189 Ill. App. 3d 877, 885.
Plaintiffs clearly could have raised the principle of equitable estoppel in response to the statute of limitations defense raised by defendants in Rein I. Therefore, the trial court properly dismissed the statutory counts.
COMMON-LAW COUNTS
In Rein I, after the trial court denied plaintiffs’ motion for a Rule
In response, defendants argue that plaintiffs’ voluntary dismissal and subsequent refiling of the common-law counts amounts to claim splitting. Like most States, as a matter of public policy, Illinois generally doеs not permit the splitting of a cause of action. Thorleif Larsen & Son, Inc. v. PPG Industries, Inc. (1988), 177 Ill. App. 3d 656, 662.
The rule against claim splitting is closely related to the doctrine of res judicata. (Thorleif Larsen & Son, Inc., 177 Ill. App. 3d at 662.) The policies underlying the doctrine of res judicata are the protection of the defendant from harassment and of the public from multiple litigation. The rule against splitting a cause of action has been relaxed where there was an omission due to ignorance, mistake, or fraud, or where it would be inequitаble to apply the rule. 177 Ill. App. 3d at 662.
In Airtite v. DPR Ltd. Partnership (1994), 265 Ill. App. 3d 214, the court held that res judicata did not apply to bar an independent claim of part of the same cause of action under certain circumstances, two of which were: (1) where the parties have agreed in terms or in effect that the plaintiff may split his claim, or the defendant has acquiesced therein; or (2) the court in the first action expressly reserves the plaintiff‘s right to mаintain the second action. Airtite, 265 Ill. App. 3d at 219.
In the present case, nothing in the record indicates that the parties stipulated to plaintiffs’ refiling of the common-law counts. Nor is this a situation such as existed in Airtite where the defendants by their failure to appear at a proceeding were deemed to have acquiesced to Airtite‘s apparent decision to split its claims. Here, defеndants were present at the time plaintiffs moved for a voluntary dismissal of their common-law counts. The fact that defendants did not object to plaintiffs’ motion cannot be deemed an acquiescence to plaintiffs’ later attempt to split their claim. Until such time as plaintiffs attempted to refile the common-law counts, no reason existed for defendants to object. In fаct, defendants objected at the proper time, i.e., when plaintiffs attempted to refile the counts as a new action. Moreover, the court‘s routine granting, under section
Res judicata bars a second suit if the matter could have been decided in the first. (Best Coin-Op, Inc. v. Paul F. Ilg Supply Co. (1989), 189 Ill. App. 3d 638, 657.) Where a demand or right of action is in its nature entirely indivisible, it cannot be split into several causes of action and made the basis of many separate suits. (189 Ill. App. 3d at 657.) An assertion of different kinds of theories of relief still constitutes a single cause of action if a single group of operative facts gives rise to the claim for relief. (Radosta v. Chrysler Corp. (1982), 110 Ill. App. 3d 1066, 1069.) In this case, plaintiffs asserted different theories of relief in their rescission and cоmmon-law counts, but all counts were based on the same operative facts. Thus, upon final adjudication of the rescission counts in Rein I, the doctrine of res judicata barred the litigation of plaintiffs’ common-law counts because those counts could have been raised and litigated in Rein I.
Under the rule against claim splitting, a plaintiff is not permitted to sue for part of a claim in one action and then sue for the remainder in another action. (Best Coin-Op, 189 Ill. App. 3d at 657.) To allow otherwise is to permit a plaintiff to engage in piecemeal litigation, which is generally not permitted in Illinois as a matter of public policy (Radosta, 110 Ill. App. 3d at 1068). This rule is founded upon the plainest and most substantial justice, that litigation should have an end and that no person shall be unnecessarily harassed with a multiplicity of lawsuits. 110 Ill. App. 3d at 1069.
If a plaintiff were permitted to рroceed as plaintiffs have attempted here, he or she could file an action with multiple counts and theories, dismiss some but not all theories, carry the undismissed counts to a final conclusion, and, if unsuccessful, refile the previously dismissed counts. Such a practice would not only impair judicial economy but would also force a party to litigate repeatedly what is essentially the same case. It would defeat the public policy principles upon which the doctrine of res judicata was founded.
We recognize that reasonable minds might perceive an incongruity between the principle of claim splitting, as we have applied it, and the language of
We believe plaintiffs were precluded by the doctrine of res judicata from refiling the common-law counts after their unsuccessful appeal of the rescission counts. To avoid the claim splitting, which occurred here, plaintiffs might have proceeded to a decision on the merits on the common-law counts and, if unsuccessful, appealed both that result and the court‘s previous dismissal of their rescission counts. By failing to proceed on the common-law counts, plaintiffs relinquished their right to raise those counts in a subsequent action.
In light of our disposition of the common-law counts on res judicata grounds, it is unnecessary for us to address plaintiffs’ statute of limitations issue pertaining to the common-law counts.
We now turn to the issue raised by defendants’ cross-appeal, i.e., whether the trial court erred in refusing to award sanctions to defendants pursuant to
The fact that this court determined that plaintiffs could have argued equitable estoppel in Rein I and that the common-law counts were not timely filed does not automatically require the imposition of sanctions. The test to be applied in determining whether the rule has been violated is an objective standard of what is reasonable under the circumstances at the time the assertions were made. Wittekind v. Rusk (1993), 253 Ill. App. 3d 577, 580.
Finally, we turn to defendants’ motion for sanctions pursuant to
The sanctions provided in Rule 375(b) are penal in nature and should be applied only to those cases falling strictly within the terms of the rule. (Beverly v. Reinert (1992), 239 Ill. App. 3d 91, 101.) While we believe some of the issues raised on appeal in the present case were easily resolvable, the issue of claim splitting involved an unusual procedural question. Therefore, we decline to impose sanctions.
For thе reasons given above, we affirm the judgment of the circuit court of Kane County.
Affirmed.
BOWMAN, J., concurs.
JUSTICE RATHJE, dissenting:
I respectfully dissent from that portion of the majority opinion concluding that the common-law counts are barred by the doctrine of res judicata. I believe that the majority has misconstrued the relationship between res judicata,
The majority concludes that
The majority further concludes that
“The plaintiff may, at any time before trial or hearing begins, upon notice to each party who has appeared or each party‘s attorney, and upon payment of costs, dismiss his or her action or any part thereof as to any defendant, without prejudice, by order filed in the cause.” (Emphasis added.) (
735 ILCS 5/2-1009 (West 1992) .)
Moreover, the voluntary dismissal pursuant to
The majority cites Best Coin-Op, Inc. v. Paul F. Ilg Supply Co. (1989), 189 Ill. App. 3d 638, for the proposition that res judicata bars a second suit if the matter could have been decided in the first suit. (Best Coin-Op, Inc., 189 Ill. App. 3d at 657.) However, unlike the case at bar, that case involved an “involuntary” dismissal, which this court held was a final adjudication on the merits. (189 Ill. App. 3d at 648-49.) The majority‘s reliance on Radosta v. Chrysler Corp. (1982), 110 Ill. App. 3d 1066, is equally misplaced, since in that сase a second suit was filed after an appeal in the first suit. The majority cites no case applying res judicata where the cause of action or a part thereof was voluntarily dismissed pursuant to
The rule against claim splitting is closely related to the doctrine of res judicata. (Thorleif Larsen & Son, Inc. v. PPG Industries, Inc. (1988), 177 Ill. App. 3d 656, 662.) The policies underlying the doctrine of res judicata are protection of the defendant from harassment and of the public from multiple litigation; the rule against claim splitting
Res judicata will not apply to bar an independent claim of part of the same cause of action where: (1) the parties have agreed in terms or in effect that plaintiff may split his claim, or the defendant has acquiesced therein; or (2) thе court in the first action expressly reserved the plaintiff‘s right to maintain the second action. Airtite v. DPR Ltd. Partnership (1994), 265 Ill. App. 3d 214, 219.
The majority concludes that neither of these exceptions is applicable here. Yet there is no indication in the record that defendants objected, on the basis of claim splitting or anything else, to the motion for voluntary dismissal. Without citation to authority, the majority concludes thаt the lack of objection did not mean acquiescence on the part of defendants to the voluntary dismissal and that the objection was properly made when the plaintiffs attempted to refile the common-law counts, as prior to that time there was no reason for the defendants to object. This reasoning seems to suggest that defendants were taken by surprise by the refiling attempt. The reason for obtaining a voluntary dismissal pursuant to
The majority also concludes that the trial court‘s granting of the motion for voluntary dismissal could not immunize the plaintiffs against any defenses to the attempted refiling of the common-law counts. Again, the majority cites no authority in support of this conclusion. Yet, the trial court‘s order, which provided that the dismissal was “without prejudice,” is certainly a reservation of “the plaintiff‘s right to maintain the second action.” (Airtite, 265 Ill. App. 3d at 219.) I also note that in Rein I, this court stated, “[t]he plaintiffs obtained a valid voluntary dismissal of the remaining counts of their comрlaints.” (Emphasis added.) Rein, 230 Ill. App. 3d at 14-15.
None of the cases relied on by the majority holds that res judicata or claim splitting bars a plaintiff from refiling a cause of action or a part thereof that was voluntarily dismissed pursuant to
As a practical note, there is no doubt many attorneys have utilized the voluntary dismissal provisions of
In this case, the cure is more harmful than the disease itself. I therefore dissent.