Baird & Warner, Inc. v. Addison Indus. Park, Inc.

• Decision Date: 01 March 1979
• Docket Number: No. 78-1117,78-1117
• Citation: 387 N.E.2d 831,70 Ill.App.3d 59,26 Ill.Dec. 1
• Court: United States Appellate Court of Illinois
• Parties: , 26 Ill.Dec. 1 BAIRD & WARNER, INC., a corporation, Plaintiff-Appellant, v. ADDISON INDUSTRIAL PARK, INC., a corporation, Bliss & Laughlin Industries, Inc., a corporation, and Arnold Ruud, Defendants-Appellees.

Page 831

387 N.E.2d 831

70 Ill.App.3d 59, 26 Ill.Dec. 1

BAIRD & WARNER, INC., a corporation, Plaintiff-Appellant, v. ADDISON INDUSTRIAL PARK, INC., a corporation, Bliss &amp Laughlin Industries, Inc., a corporation, and Arnold Ruud, Defendants-Appellees.

No. 78-1117.

Appellate Court of Illinois, First District, Fourth Division.

March 1, 1979.

Rehearing Denied April 17, 1979.

Sidley & Austin, Chicago (Henry A. Preston and Dale R. Crider, Chicago, of counsel), for plaintiff-appellant.

Schiff, Hardin & Waite, Chicago (Roger P. Pascal, John J. Voortman, Craig N. Oren, Chicago, of counsel), for defendants-appellees, Indus. Park, Inc. and Bliss & Laughlin Industries, Inc.

ROMITI, Justice:

The principal issues in this case are first, whether various claims for tortious interference with contractual relations, breach of a brokerage contract, Quantum meruit and fraud are barred by a determination in a prior suit (affirmed in Baird & Warner, Inc. v. Ruud (1977), 45 Ill.App.3d 223, 3 Ill.Dec. 886, 359 N.E.2d 745), between the same parties that the plaintiff was not entitled to commissions in connection with the sale of certain stock and that two defendants were not guilty of tortious interference with contractual relations; and second, whether claims previously dismissed voluntarily from the first suit can be refiled more than one year after their dismissal but less than one year from the date of final judgment, the activities complained of all occurring more than five years prior to the time the present suit was filed. We hold that the trial court correctly dismissed the claims against Ruud and Bliss & Laughlin but erred in holding that the claim against Addison for breach of contract in rejecting certain offers to purchase specified lots was barred by the prior litigation.

The plaintiff, Baird & Warner, Inc. (Baird) is a real estate broker. On January 23, 1968, it entered into a brokerage agreement with Addison Industrial Park, Inc. (Addison). Arnold Ruud (Ruud), as president of Addison, signed the agreement as Addison's agent. Under the agreement, Baird was to receive a 10 per cent brokerage commission if any or all of the sixty-six lots owned by Addison were sold during the lifetime of the listing agreement; these lots were Addison's sole asset. Each of the lots was listed in an addendum to the agreement by lot number, size, price per square foot, and total estimated selling price. Under the contract, Addison was entitled to raise or lower these prices in accordance with the market conditions. This agreement could be terminated by either party on December 1, 1969, after notice, and was the only agreement in effect between the parties and any of the other parties to this lawsuit at any time after January 23, 1968. (Baird & Warner, Inc. v. Ruud (1977), 45 Ill.App.3d 223, 3 Ill.Dec. 886, 359 N.E.2d 745.) Indeed, it is expressly stated in the listing agreement that there were no oral agreements concerning the subject matter thereof.

While at one time Ruud owned only 30 per cent of Addison, sometime before August 7, 1969, he had acquired all of the stock in the corporation. On that date he entered into an agreement with Bliss and Laughlin (Bliss) by which he exchanged all of his shares in Addison for shares in Bliss. Baird & Warner was not the procuring agent.

As pointed out in Baird & Warner, subsequent to the stock transfer, Baird continued to treat the agreement as in effect and tendered to Addison an offer (at below contract price) to purchase certain lots. The tender was refused. The exclusive agreement was then terminated by Addison as of December 1, 1969 pursuant to the terms of the contract.

On October 16, 1970, Baird filed suit against Addison, Ruud and Bliss. The suit was in ten counts, only four of which are material to the present litigation. Count II basically was a claim against Addison and Ruud, under the listing agreement, for a 10 per cent commission on the sale of the stock to Bliss. Baird's theory was that the sale of the stock constituted a sale of the real estate and fell under the express provisions of the listing agreement. However, Count II also incorporated by reference the principal allegations of Count I. Count I had alleged in part that Ruud had been the principal shareholder of Addison and had exercised effective control of Addison and directed all of its activities; that Addison and Ruud engaged Baird's services in 1966 and orally agreed that it would be compensated for its services, such compensation to be in the form of a commission if the property were sold, or for the fair value of such service if other disposition was made such as a sale or exchange of the controlling stock of Addison; and that because of this agreement Baird performed valuable services, enumerated in the complaint, all of which services were of great value to Addison and Ruud and enhanced the value of the Addison tract; and that the fair value of such services, together with the amount of the expenses incurred, was in excess of $400,000. Count V of the complaint was against Ruud alone. That count alleged that Ruud, as president of Addison and its alter ego, rejected certain offers procured by Baird in the spring of 1969 although the offered purchase price was in excess of those set forth in the schedule; that Ruud raised the prices listed in the schedule although not justified by market conditions and that conduct and his conduct in dealing directly with Bliss constituted a knowing, deliberate, unlawful and wrongful interference with contractual relations between Baird and Addison. Count IX of the complaint was against Bliss and alleged that after the stock transfer in August, 1969, Bliss notified Baird that the prices listed in the original schedule were no longer acceptable, and that subsequently Bliss rejected an offer for three lots at the prices stated in the original schedule and that such conduct constituted a knowing, deliberate, unlawful and wrongful interference with contractual relations.

On May 20, 1974, summary judgment was granted for the defendant Bliss on Count IX, and it was dismissed from the case. (Counts VIII and X, the only other counts against that defendant had already been dismissed.) On January 22, 1975, Counts I, III, IV, VII and IX were dismissed without prejudice over the objections of the defendants. However, the summary judgment on Count IX was never vacated and, of course, became final when the remaining counts were resolved. This happened on March 4, 1975, when a jury returned a verdict for the defendants on both Counts II and V. The judgment was affirmed in Baird & Warner, Inc. v. Ruud (1977), 45 Ill.App.3d 223, 3 Ill.Dec. 886, 359 N.E.2d 745.

On February 2, 1976, Baird refiled the counts which had been dismissed on January 22, 1975, as well as Count V which had been adjudicated on March 4, 1975. (Because of the complexity of the allegations and the issues, the specific nature of these allegations will be discussed later in this opinion.) Not surprisingly, the defendants were unhappy about having to relitigate the issues. Accordingly, they moved to dismiss, claiming that the present action was barred by the prior adjudication; Ruud further claims that the claims were barred by the statute of limitations and that they did not state a cause of action. The court ruled that all of the counts were barred by the prior judgment and that all counts against Bliss, Counts I and II against Ruud and Counts IV, V, VI and VII against Addison and Ruud were barred by the statute of limitations.

I.

The first issue before this court is whether the present action is barred by the prior adjudication.

It is well established in Illinois that a voluntary dismissal is not a bar to another suit for the same cause, assuming, of course, that the second action is timely filed. (Pratt v. Baker (1967), 79 Ill.App.2d 479, 223 N.E.2d 865, Cert. den. 389 U.S. 874, 88 S.Ct. 165, 19 L.Ed.2d 157.) However, here the plaintiff dismissed only some of its claims; others went to judgment. Generally, a plaintiff cannot divide an entire demand or cause of action so as to maintain several actions for his recovery. As stated by Justice Schwartz in Prochotsky v. Union Central Life Insurance Co. (1971), 2 Ill.App.3d 354, at 356, 357, 276 N.E.2d 388, 390:

"The law requires that both in law and in equity a plaintiff must present all grounds of recovery he may have. He cannot preserve the right to bring a second action after loss of the first merely by limiting the theories of recovery opened by the pleadings in the first action. (F. L. Mendez & Co. v. General Motors Corp. (7 Cir. 1947), 161 F.2d 695; Ernest Freeman & Co. v. Robert G. Regan Co., 332 Ill.App. 637, 76 N.E.2d 514; Setliff v. Reinbold, 73 Ill.App.2d 208, 218 N.E.2d 814; Pratt v. Baker, 79 Ill.App.2d 479, 223 N.E.2d 865; Phelps v. City of Chicago, 331 Ill. 80, 85, 162 N.E. 119, 122.) In Phelps, supra, the court said (p. 85, 162 N.E. 119):

'The rule of Res judicata embraces not only what actually was determined in the former case between the same parties or their privies, but it extends to any other matters properly involved which might have been raised and determined.'

In Freeman, supra, the court explicitly clarified the doctrine set down in Phelps and held that where a demand or right of action is in its nature entire and indivisible, it cannot be split up into several causes of action and sued piecemeal or made the basis of many separate suits. The court said (p. 645, 76 N.E.2d p. 517):

'A judgment on the merits as to one part will bar a subsequent action for the whole, the residue, or another part. It is immaterial that the form of the second action is different from the first. (W)hether or not a judgment is a bar to a subsequent action under the rule against splitting causes of action depends on whether the entire amount claimed to be due plaintiff arises out of one and the same act or contract, or whether the several parts arise from distinct...