MICHAEL RICHTER and DENISE RICHTER, d/b/a RICH-LANE FARMS, Plaintiffs-Appellants, v. PRAIRIE FARMS DAIRY, INC., Defendant-Appellee, and THE BOARD OF DIRECTORS OF PRAIRIE FARMS DAIRY, INC., and EDWARD MULLINS, Defendants.
No. 4-14-0613
Appellate Court of Illinois, Fourth District
June 4, 2015
2015 IL App (4th) 140613
PRESIDING JUSTICE POPE delivered the judgment of the court, with opinion. Justices Turner and Steigmann concurred in the judgment and opinion.
Appeal from the Circuit Court of Macoupin County, No. 14-L-4; the Hon. Patrick J. Londrigan, Judge, presiding.
Todd W. Sivia and Paul A. Marks (argued), both of Sivia Law, of Edwardsville, for appellants.
Donald K. Shoemaker (argued) and Andrew J. Tessman, both of Greensfelder, Hemker & Gale, P.C., of Swansea, for appellee.
¶ 1 In October 2006, plaintiffs, Michael and Denise Richter, doing business as Rich-Lane Farms, filed suit against defendant, Prairie Farms Dairy, Inc., in Madison County case No. 06-L-892 (Richter I). Count I of plaintiffs’ complaint alleged shareholder remedies under
¶ 2 On September 7, 2012, the circuit court allowed plaintiffs’ motion to voluntarily dismiss the suit pursuant to
¶ 3 Plaintiffs appeal, arguing their refiled complaint is not barred by res judicata or the statute of limitations. We agree, and we reverse and remand for further proceedings.
¶ 4 I. BACKGROUND
¶ 5 The following facts are taken from the parties’ pleadings, orders of record, and docket entries contained in the record on appeal. Defendant is a cooperative organized under the
¶ 6 In a letter dated October 6, 2005, defendant notified plaintiffs it was terminating the Milk Marketing Agreement as well as plaintiffs’ membership in the cooperative. The letter explained plaintiffs “were no longer marketing milk as an active producer of Prairie Farms, as set forth in the By-Laws, at the end of the fiscal year ending 9/30/05.” Defendant tendered $15 to plaintiffs to redeem the shares of common stock, but plaintiffs have rejected the payment.
¶ 7 A. Plaintiffs’ Original Lawsuit—Richter I
¶ 8 In October 2006, plaintiffs filed a three-count complaint, seeking recovery for damages they sustained as a result of defendant‘s decision to terminate the Milk Marketing Agreement and plaintiffs’ membership in the cooperative. Count I alleged defendant acted in an illegal or
¶ 9 Defendant moved to dismiss all three counts pursuant to
“Defendant‘s Motion to Dismiss as to Counts I, II, and III are heard and argued.
Defendant‘s motion as to Count I is denied.
Defendant‘s Motion to Dismiss as to Counts II and III are granted.
Plaintiff[s] given leave to file amended complaint within 30 days.
Defendant given leave to file response to amended complaint within 30 days after plaintiff‘s filing of the same.
Defendant to answer Count I within 30 day of todays order.”
On October 24, 2007, plaintiffs sought an extension of time to file an amended complaint. On November 28, 2007, the circuit court granted plaintiffs an extension of 120 days; however, plaintiffs never filed an amended complaint. Instead, plaintiffs chose to proceed on their sole remaining claim for shareholder remedies.
¶ 10 In June 2008, the case was reassigned to Madison County circuit judge David Hylla.
¶ 11 In June 2011, the circuit court entered an order allowing plaintiffs’ attorney to withdraw. The court stayed discovery deadlines and granted plaintiffs a continuance to find a new attorney. In November 2011, Todd Sivia entered an appearance on plaintiffs’ behalf. Beginning in February 2012, counsel for plaintiffs sought extensions of time to disclose additional experts and comply with outstanding discovery requests. The court entered an order on July 13, 2012, granting plaintiffs 30 days to disclose additional experts. On August 13, 2012, plaintiffs filed a motion for an extension of two weeks to disclose expert witnesses.
¶ 12 On September 7, 2012, Judge Hylla denied plaintiffs’ request for a continuance. After the circuit court denied plaintiffs’ request for a continuance, plaintiffs moved to voluntarily dismiss their cause of action, without prejudice, pursuant to
¶ 13 B. Plaintiffs’ Second Lawsuit—Richter II
¶ 14 On September 6, 2013, plaintiffs refiled their action under
¶ 15 In December 2013, Madison County circuit judge A.A. Matoesian granted defendant‘s motion to transfer venue to Macoupin County.
¶ 17 On June 2, 2014, following a hearing on the motion to dismiss, Macoupin County circuit judge Patrick J. Londrigan granted defendant‘s motion to dismiss by way of docket entry:
“Cause called for hearing. Mr. Marks present for plaintiff. Mr. Shoemaker present for defendant. Defendant‘s Motions to Dismiss argued. Case Authority reviewed. Prior Madison County case reviewed including all docket entries. The Court grants the defendant‘s Motion to Dismiss pursuant to 2-619(4) and 2-619(5). In addition, Mr. Edward Mullins is dismissed as a party defendant. Case dismissed; cause stricken. The Court finds no reason to delay the appeal in this matter. Clerk is directed to send a copy of this docket entry to attorneys of record.”
No written order, transcript, or bystander‘s report of the hearing is contained in the record on appeal.
¶ 18 This appeal followed.
¶ 19 II. ANALYSIS
¶ 20 Plaintiffs argue the circuit court erred in dismissing their refiled complaint on the ground of res judicata because the order dismissing the fraud counts in Richter I was not a final judgment. Plaintiffs further argue the court erred in dismissing their refiled complaint as time-barred because it was a timely refiled new cause of action pursuant to
¶ 21 A. Res Judicata
¶ 22 The first issue in this case is whether the dismissal of plaintiffs’ fraud claims and subsequent voluntary dismissal of their shareholder-remedies claim in Richter I barred the refiling of their lawsuit in Richter II under the doctrine of res judicata. We review a section 2-619 dismissal de novo. Citizens Opposing Pollution v. ExxonMobil Coal U.S.A., 2012 IL 111286, ¶ 22, 962 N.E.2d 956. Likewise, whether a claim is barred under the doctrine of res judicata is a question of law, which we review de novo. Arvia v. Madigan, 209 Ill. 2d 520, 526, 809 N.E.2d 88, 93 (2004).
¶ 23 ” ‘The doctrine of res judicata provides that a final judgment on the merits rendered by a court of competent jurisdiction bars any subsequent actions between the same parties or their privies on the same cause of action.’ ” Hudson v. City of Chicago, 228 Ill. 2d 462, 467, 889 N.E.2d 210, 213 (2008) (quoting Rein v. David A. Noyes & Co., 172 Ill. 2d 325, 334, 665 N.E.2d 1199, 1204 (1996)). ”Res judicata bars not only what was actually decided in the first action but also whatever could have been decided.” Id. “Three requirements must be satisfied for res judicata to apply: (1) a final judgment on the merits has been rendered by a court of competent jurisdiction; (2) an identity of cause of action exists; and (3) the parties or their privies are identical in both actions.” Id. “The burden of showing that res judicata applies is on the party invoking the doctrine.” Hernandez v. Pritikin, 2012 IL 113054, ¶ 41, 981 N.E.2d 981.
¶ 24 Here, plaintiffs do not dispute the second and third elements of res judicata are met. Plaintiffs contend, however, the first element is not satisfied because the order dismissing the fraud counts in Richter I was not a final judgment as it was made without prejudice and granted plaintiffs leave to amend.
¶ 25 “A final judgment has been defined as ‘a determination by the court on the issues presented by the pleadings which ascertains and fixes absolutely and finally the rights of the parties in the lawsuit.’ ” (Emphasis omitted.) Id. ¶ 47, 981 N.E.2d 981 (quoting Flores v. Dugan, 91 Ill. 2d 108, 112, 435 N.E.2d 480, 482 (1982)). An order dismissing a complaint but granting leave to replead is not final until the trial court enters an order dismissing the suit with prejudice. Id. ¶¶ 46-47, 981 N.E.2d 981; Smith v. Central Illinois Regional Airport, 207 Ill. 2d 578, 587, 802 N.E.2d 250, 256 (2003).
¶ 26 In this case, the September 26, 2007, order states, “counts II and III are dismissed and plaintiff is given 30 days to file an amended complaint.” The dismissal was based on a pleading deficiency pursuant to
¶ 27 Defendant argues even though the dismissal order granted plaintiffs leave to amend, plaintiffs’ failure to do so within the time allowed by the circuit court operates as a final adjudication upon the merits. Defendant cites Smith in support of its argument.
¶ 28 In Smith, the trial court granted the plaintiff 60 days to amend the complaint. The plaintiff did not amend, but he instead filed a motion to voluntarily dismiss under section 2-1009 of the Code within the 60-day period. Our supreme court held the trial court should have allowed the plaintiff‘s voluntary dismissal because it was within the period given for leave to amend. The court noted because the order expressly left the suit pending for further proceedings, the plaintiff was allowed not only to amend the complaint, but also to pursue any other option available during the 60-day time frame, including standing on the complaint and seeking an order to dismiss with prejudice in order to obtain a final judgment. Id. at 588, 802 N.E.2d at 256. The plaintiff “also could have elected, as he did here, to voluntarily dismiss the count
¶ 29 Defendant‘s narrow reading of Smith goes beyond the precedential scope of the decision. In Apollo Real Estate Investment Fund, IV, L.P. v. Gelber, 398 Ill. App. 3d 773, 785, 935 N.E.2d 949, 960 (2009), the First District explained as follows:
“One might conclude from [the] language [in Smith] that, conversely, in situations manifested by the facts at bar where parties file a voluntary dismissal after the expiration of the leave to amend period, the dismissal order would be considered with prejudice and a final adjudication. However, the supreme court did not reach the precise issue presented here. Further, it has not overruled the prior Illinois cases holding that dismissal orders granting leave to replead are not final until the trial court enters an order dismissing the suit with prejudice, and where the time to amend expires the trial court still retains jurisdiction.”
We further note, although the circuit court set a deadline for plaintiffs to file their amended complaint, it was within the court‘s discretion to extend that deadline, even well after the original deadline. See Richardson v. Economy Fire & Casualty Co., 109 Ill. 2d 41, 46, 485 N.E.2d 327, 329 (1985) (Since an order dismissing a complaint with leave to amend is not a final order, “the trial court retained jurisdiction to permit the filing of the amended complaint, even though the time limit set by the court had long since passed.“). Indeed, the circuit court in this case had previously granted plaintiffs a 120-day extension. For all we know, the court might even have allowed plaintiffs more time to amend had plaintiffs sought leave to do so. Accordingly, the order dismissing the fraud counts did not automatically become a final judgment simply because plaintiffs failed to file an amended complaint.
¶ 30 In urging this court to affirm the dismissal of plaintiffs’ complaint in Richter II on the basis of res judicata, defendant contends this case is governed by our supreme court‘s decisions in Rein, 172 Ill. 2d at 331, 665 N.E.2d at 1202, and Hudson, 228 Ill. 2d at 465-66, 889 N.E.2d at 212-13. We find Rein and Hudson distinguishable.
¶ 31 In Rein, the plaintiffs’ complaint sought recovery under a variety of theories, including common-law fraud and rescission. The trial court dismissed the rescission counts with prejudice and the plaintiffs moved to voluntarily dismiss their remaining common-law claims. Rein, 172 Ill. 2d at 329-30, 665 N.E.2d at 1202. In Hudson, the plaintiffs filed a complaint against the municipal defendants, alleging negligence and willful and wanton misconduct in responding to an emergency call regarding their son. The trial court dismissed the negligence count with prejudice and later granted the plaintiffs’ motion to voluntarily dismiss the willful and wanton misconduct count. Hudson, 228 Ill. 2d at 465-66, 889 N.E.2d at 212. In both Rein and Hudson, the supreme court held a plaintiff who splits his claims by voluntarily dismissing and refiling part of an action after a final judgment has been entered on another part of the case subjects himself to a res judicata defense. Id. at 467-68, 889 N.E.2d at 213-14; Rein, 172 Ill. 2d at 337-39, 665 N.E.2d at 1205-06. Thus, as in Rein, the plaintiffs in Hudson commenced a new action after part of their original cause of action had gone to final judgment in a previous case and res judicata barred the plaintiffs’ refiled complaint. Hudson, 228 Ill. 2d at 483-84, 889 N.E.2d at 223.
¶ 32 We find the reasoning in Rein and Hudson inapplicable. As discussed above, the doctrine of res judicata cannot apply in this case because, unlike in Rein and Hudson, the circuit court‘s
¶ 33 We further reject defendant‘s assertion the dismissal order became a final judgment when the circuit court granted plaintiffs’ motion to voluntarily dismiss their remaining shareholder-remedies count in Richter I. “While Hudson stands for the proposition that a voluntary dismissal terminates the suit in its entirety, rendering all final orders immediately appealable (Hudson, 228 Ill. 2d at 468, 889 N.E.2d at 214), we find no authority for the proposition that a nonfinal order becomes final upon voluntary dismissal of a suit.” Piagentini v. Ford Motor Co., 387 Ill. App. 3d 887, 895, 901 N.E.2d 986, 995 (2009) (citing Jackson v. Victory Memorial Hospital, 387 Ill. App. 3d 342, 352, 900 N.E.2d 309, 318 (2008)). Defendant‘s argument conflicts with the rule articulated in Hudson and Rein, which provides the doctrine of res judicata will bar a later action to litigate unresolved claims that were voluntarily dismissed after part of the plaintiffs’ cause of action has proceeded to final judgment. Hudson, 228 Ill. 2d at 473, 889 N.E.2d at 217; Rein, 172 Ill. 2d at 337-39, 665 N.E.2d at 1205-06. Here, the voluntary dismissal did not occur following the entry of a final judgment. Since the September 26, 2007, order was not an adjudication on the merits of any of plaintiff‘s claims in Richter I, the doctrine of res judicata cannot apply.
¶ 34 We also reject defendant‘s argument, pursuant to
¶ 35 We note although nearly five years elapsed between the time plaintiffs were given leave to file an amended complaint and their voluntary dismissal, defendant did not take any steps to put a definitive end to the case by filing a motion to dismiss the fraud counts with prejudice. Defendant‘s inaction in the circuit court and failure to obtain a definitive ruling does not merit the application of res judicata. See id. ¶ 41, 981 N.E.2d 981 (“a movant has the responsibility to obtain a definitive ruling” (emphasis omitted)).
¶ 36 In sum, we find defendant, as the party seeking to invoke the doctrine of res judicata, and as the litigant responsible for obtaining rulings on its motions, has failed to carry its burden of proving a final judgment was entered upon the merits. Since the dismissal order in Richter I was not a final order, res judicata does not bar plaintiffs’ refiled suit against defendant.
¶ 37 B. Statute of Limitations
¶ 38 We next address whether the circuit court erred when it granted defendant‘s section 2-619(a)(5) motion to dismiss Richter II as barred by the five-year statute of limitations (
¶ 39 Plaintiffs assert their refiled claims are saved by
¶ 40 Section 13-217 operates as a limitations savings statute, with the purpose of facilitating the disposition of litigation on the merits and avoiding frustration upon grounds unrelated to the merits. Case v. Galesburg Cottage Hospital, 227 Ill. 2d 207, 215, 880 N.E.2d 171, 176 (2007).
¶ 41 Here, counts II through IV of plaintiffs’ complaint in Richter II alleged causes of action sounding in fraud, which permits a statute of limitations period of five years from the date the cause of action accrued.
¶ 42 Defendant argues “plaintiffs could only refile a new action as to those claims that were voluntarily dismissed,” and since plaintiffs’ claim for common-law fraud was involuntarily dismissed and never reinstated, that claim is not subject to refiling under section 13-217. We disagree. As already discussed, the fraud claims in Richter I were dismissed without prejudice and, thus, remained viable. We also reject defendant‘s argument plaintiffs may not raise new claims in a refiled action. A refiled action under
¶ 44 In sum, we find plaintiffs’ 2013 complaint was a permissible refiling of the cause of action under
¶ 45 III. CONCLUSION
¶ 46 For the foregoing reasons, we reverse the circuit court‘s judgment and remand the matter for further proceedings.
¶ 47 Reversed and remanded.