Torres v. Rebarchak

• Citation: 814 F.2d 1219
• Decision Date: 23 March 1987
• Docket Number: No. 86-1591,86-1591
• Parties: Rose TORRES, d.b.a. Legal Secretarial Services, Plaintiff-Appellant, v. Steve REBARCHAK, et al., Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 1219

814 F.2d 1219

Rose TORRES, d.b.a. Legal Secretarial Services, Plaintiff-Appellant, v. Steve REBARCHAK, et al., Defendants-Appellees.

No. 86-1591.

United States Court of Appeals Seventh Circuit.

Argued Sept. 30, 1986.

Decided March 23, 1987.

Ronald A. Stearney, Chicago, Ill., for plaintiff-appellant.

Don E. Glickman, Rudnik & Wolfe, Chicago, Ill., for defendants-appellees.

Before CUDAHY and COFFEY, Circuit Judges, and PELL, Senior Circuit judge.

CUDAHY, Circuit Judge.

This appeal raises issues involving the preclusive effect of a state court consent judgment on a subsequent civil rights suit brought in federal court. The district court dismissed the suit on the basis of res judicata and the Illinois rule prohibiting the splitting of a cause of action. We affirm in part and reverse in part.

I. FACTS

Rose Torres is a black woman who owns and operates a 24-hour telephone answering and secretarial service called Legal Secretarial Services. In 1970 she began leasing space for her business in a building at 100 North LaSalle Street in Chicago, Illinois. The defendant, Strobeck, Reiss, & Co. ("Strobeck"), manages this building for the lessor, 100 LaSalle Partnership Limited (the "LaSalle Partnership"). In 1978 Torres signed a five-year lease with Strobeck. But when defendant, Steve Rebarchak, began managing the building for Strobeck in 1978, he informed Torres that Strobeck would not honor the lease agreement. The parties disagree over whether this conflict arose because of Torres' race or because she breached the terms of her lease.

In 1979 Torres sued Strobeck and Rebarchak in the Chancery Division of the Circuit Court of Cook County in a case entitled Torres v. Strobeck, Reiss & Co., No. 79 CH 8446. Her amended complaint alleged that the defendants wrongfully breached their lease agreement with the plaintiff and engaged in a "continuing campaign of abuse and harassment" designed to unlawfully evict her from the building and interfere with her business. Among other things, Torres claimed that the defendants had turned off the electricity and heat in her suite, disrupted her switchboard service, attempted to change the locks on the doors to her suite, threatened and harassed both her and her employees and demanded rent before it was due. In addition, she asserted that the defendants had misused legal process by filing forcible entry and detainer actions against her. She contended that Rebarchak wanted to replace her with a "nice white girl." Count I sought an injunction against Rebarchak for interfering with Torres' lease agreement. Count II requested a declaratory judgment interpreting a clause in the lease dealing with escalation for increased operating expenses. Count III sought injunctive, compensatory and punitive relief against Rebarchak and Strobeck for breach of the lease agreement and interference with prospective business relations. Finally, Count IV requested an injunction and compensatory damages against Strobeck and Rebarchak for misappropriating Torres' business name for commercial purposes.

After an in camera conference, the parties agreed to compromise and settle the case. The final order of July 10, 1980 entered by the Chancery Court provided in pertinent part that:

This cause coming on to be heard for trial, the parties having appeared and indicated to the court after an in camera conference, that they have agreed to compromise and settle the issues herein raised, the court being fully advised;

It is hereby ordered, without either party in any way admitting to the truth of any of the allegations herein made, as follows:

* * *

* * *

B. All prayers contained in Counts I through IV of the First Amended Complaint, are dismissed. All prayers for equitable relief are dismissed with prejudice. All prayers for damages are dismissed without prejudice. (emphasis added).

C. The complaint in forcible entry and detainer filed by defendants originally encaptioned case No. 80MI-733709 and all pleadings filed under said caption shall proceed to trial, and said cause is hereby transferred to the Chief Judge for reassignment to the Chief Judge of the Municipal Department--First District, for further proceedings.

* * *

* * * F. Plaintiff shall pay to Defendant as use-and-occupancy the sum of $712. per month for every month commencing August, 1980 on or before the 1st day of each month, and an additional sum equal to utility charges billed each month within 5 days after receipt thereof; and in default whereof, Defendant shall be entitled to pursue lawful remedies therefor. (emphasis in original).

Order, July 10, 1980, pp. 1 & 2.

In 1981 Strobeck filed its final forcible entry and detainer action against Torres for failure to pay 1979 escalation charges. ¹ On June 10, 1981, the court found that Strobeck was entitled to possession of the suite Torres had been renting at 100 North LaSalle. The order was expressly described as final and indicated that there was no just reason to delay enforcement.

Meanwhile, in December 1980, Torres brought this action in the district court against Strobeck, Rebarchak, LaSalle Partnership, Dan Anderson (vice-president of Strobeck), Lowell Roseman (Strobeck's building manager), Marc Lipinski (attorney for Strobeck and Rebarchak) and the LaSalle Street Real Estate Investment Trust (the "LaSalle Trust"), the owner of record of the property at 100 North LaSalle. In her six-count third amended complaint Torres sought injunctive, compensatory and punitive relief for alleged violations of 42 U.S.C. Secs. 1981 (Count I), 1982 (Count II), 1985 (Count IV) and the Fair Housing Act, 42 U.S.C. Sec. 3604 (Count III). Count V stated a pendent claim for malicious prosecution and Count VI sought to have the court foreclose a mechanic's lien for improvements made to the property. Torres' third amended complaint involved essentially the same facts as her 1979 Chancery Court suit and alleged that these facts demonstrated discrimination on the basis of sex and race.

The defendants counterclaimed for damages allegedly arising from Torres' breach of the lease agreement. They also moved to dismiss her suit arguing, among other things, that the suit was barred by res judicata. The district judge held that the additional defendants in the federal suit were in privity with the defendants named in the earlier state suit. In addition, he found that Torres' claims were based upon the same facts as her earlier state suit and that any "novel" grounds of recovery could have been presented in the state court suit. The district judge dismissed Torres' claims for equitable relief as barred by res judicata. He also dismissed Count III of her complaint because it failed to state a claim under the Fair Housing Act. Count V was dismissed for failure to state a claim because Torres had not won any of the forcible entry and detainer suits. The district court dismissed all claims against LaSalle Trust because it had no connection with any of Torres' allegations. ² Finally, it dismissed, on the basis of the state court order of June 10, 1981, any claim that the plaintiff had a right to possess the premises. The district judge, however, refused to dismiss Torres' claims for money damages with respect to the remaining counts because the consent judgment had expressly stated that Torres' damage claims were dismissed without prejudice.

The lawsuit was ultimately assigned to Judge Holderman who granted the defendants' renewed motion for summary judgment on the basis of res judicata, relying upon the Illinois rule that prohibits a litigant from splitting a cause of action for legal and equitable relief. He also declined to exercise pendent jurisdiction over the state law mechanic's lien claim.

Torres filed a motion to amend the judgment seeking to limit the res judicata effect to the period before the July 10, 1980 consent judgment. Torres argued that the defendants had continued to violate her civil rights after the state court judgment, particularly in February 1981, when they constructively evicted her. She argued that the state court judgment could not bar a suit involving these subsequent actions. The district court denied the motion citing the res judicata and collateral estoppel doctrines. ³ Torres appeals.

II. RES JUDICATA

The defendants assert that Torres is barred from requesting equitable relief in federal court since the equitable claims were adjudicated on the merits in both the Chancery and forcible entry and detainer actions. They also contend that she is barred from seeking damages in federal court by the Illinois rule against splitting a cause of action. Torres argues that neither the equitable claims nor the damage claims should be barred.

Under 28 U.S.C. Sec. 1738, a federal court must give the judgments of state courts "the same full faith and credit ... as they have by law or usage in the courts of such State...." See Marrese v. American Academy of Orthopaedic Surgeons, 470 U.S. 373, 380, 105 S.Ct. 1327, 1331, 84 L.Ed.2d 274 (1985); Kremer v. Chemical Construction Corp., 456 U.S. 461, 481-82, 102 S.Ct. 1883, 1897-98, 72 L.Ed.2d 262 (1982); Allen v. McCurry, 449 U.S. 90, 96, 101 S.Ct. 411, 415, 66 L.Ed.2d 308 (1980). A state judgment must be given the same res judicata effect in federal court that it would be given in the court of the rendering state. Parsons Steel, Inc. v. First Alabama Bank, 474 U.S. 518, 106 S.Ct. 768, 772, 88 L.Ed.2d 877 (1986); Migra v. Warren City School District Board of Education, 465 U.S. 75, 81, 104 S.Ct. 892, 896, 79 L.Ed.2d 56 (1984); Hagee v. City of Evanston, 729 F.2d 510, 512 (7th Cir.1984). Res judicata applies with full force to civil rights actions. Migra, 465 U.S. at 82, 104 S.Ct. at 896. The question whether Torres' claims are barred, therefore, turns upon the preclusive effect of the state judgments under Illinois law.

In Illinois, a final judgment on the merits rendered by a court of competent jurisdiction bars the same parties or their...