Hullverson & Hullverson, L.C. v. Thomas C. Hullverson, Stephen Ringkamp, Thomas Burke, Mark Becker, & the Hullverson Law Firm, P.C.
| Decision Date | 15 April 2016 |
| Docket Number | NO. 5-15-0226,5-15-0226 |
| Citation | 2016 IL App (5th) 150226 -U |
| Parties | HULLVERSON & HULLVERSON, L.C., Plaintiff-Appellant, v. THOMAS C. HULLVERSON, STEPHEN RINGKAMP, THOMAS BURKE, MARK BECKER, and THE HULLVERSON LAW FIRM, P.C., Defendants-Appellees. |
| Court | United States Appellate Court of Illinois |
NOTICE
Decision filed 04/15/16. The text of this decision may be changed or corrected prior to the filing of a Petition for Rehearing or the disposition of the same.
NOTICE
This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1).
Appeal from the Circuit Court of St. Clair County.
¶ 1 Held: The res judicata effect of a prior federal court proceeding that involved federal question jurisdiction is determined by federal preclusion law, not state preclusion law; under the facts of the present case, the voluntary dismissal of a prior federal court proceeding pursuant to Rule 41(a)(1)(A)(i) of the Federal Rules of Civil Procedure had no preclusive effect in a subsequent lawsuit filed in the Illinois circuit court; the plaintiff's complaint failed to state a cause of action under the Attorney Act and the Legal Business Solicitation Act; the timeliness of the plaintiff's claims under the Lanham Act is governed by the three-year statute of limitations set forth in the Illinois Consumer Fraud and Deceptive Business Practices Act; the plaintiff's Lanham Act claims did not fall under the doctrine of continuing violation for purposes of applying the three-year statute of limitations; the plaintiff's cyberpiracy claims under section 43(d) of the Lanham Act were time-barred under the three-year statute of limitations; and the Consumer Fraud and Deceptive Business Practices Act does not apply to the practice of law, including claims based on attorneys' alleged false or misleading advertisements for legal services.
¶ 2 The plaintiff, Hullverson & Hullverson, L.C., filed a complaint against the defendants, Thomas C. Hullverson, Stephen Ringkamp, Thomas Burke, Mark Becker, and The Hullverson Law Firm, P.C., alleging claims stemming from the defendants' advertising of legal services. The plaintiff alleged that the defendants' advertising violated the Attorney Act (705 ILCS 205/0.01 et seq. (West 2012)); the Legal Business Solicitation Act (705 ILCS 210/0.01 et seq. (West 2012)); the Lanham Act (15 U.S.C. § 1051 et seq. (2012)); the Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/1 et seq. (West 2012)); and the Uniform Deceptive Trade Practices Act (815 ILCS 510/1 et seq. (West 2012)).
¶ 3 The defendants filed a combined motion to dismiss the plaintiff's complaint under sections 2-615 and 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-615, 2-619 (West 2012)). They argued numerous grounds in support of dismissing the complaint, including that the entire complaint was barred under principles of res judicata. They also argued, alternatively, that certain claims failed to state a cause of action, were filed in an improper venue, were barred by the applicable statute of limitations, and that the plaintiff lacked standing to bring some of the claims.
¶ 4 The circuit court conducted a hearing on the motion to dismiss on August 27, 2014, and took the matter under advisement. On May 8, 2015, the circuit court entered an order dismissing the complaint. The court did not articulate any basis for its ruling other than to state that it granted the motion "for the reasons set forth in Defendants'Motion to Dismiss Plaintiff's Complaint and Defendants' Reply to Plaintiff's Response to Motion to Dismiss Plaintiff's Complaint." The plaintiff now appeals the circuit court's judgment dismissing its complaint. For the following reasons, we affirm in part, reverse in part, and remand for further proceedings.
¶ 6 Defendant The Hullverson Law Firm, P.C., is a law firm that was established in 1922. Defendant Thomas C. Hullverson is a former principal of The Hullverson Law Firm. He was licensed to practice law in Missouri but went on inactive status on January 4, 2008. He currently resides in Arizona. The remaining defendants, Ringkamp, Becker, and Burke, are current principals of The Hullverson Law Firm and licensed to practice law in Missouri. Becker and Burke are also licensed to practice law in Illinois. The plaintiff, Hullverson & Hullverson, L.C., is a law firm established by James E. Hullverson Jr. in 1988. Prior to establishing Hullverson & Hullverson, L.C., James E. Hullverson Jr. was an employee of The Hullverson Law Firm from 1975 to 1998. He is the nephew of defendant Thomas C. Hullverson.
¶ 7 The plaintiff filed its complaint on December 12, 2013. It alleged that the defendants have improperly used Thomas C. Hullverson's name on signage and in advertising for legal services in Illinois after Thomas C. Hullverson became inactive and no longer qualified to practice law in Missouri. The plaintiff also alleged that the defendants improperly used the name of another attorney, John E. Hullverson, who is not a party to this lawsuit. John E. Hullverson was employed by The Hullverson Law Firm as a lawyer from 1996 until 1999 when he moved to California and began practicing lawin that state. The plaintiff alleged that the defendants improperly used John E. Hullverson's name on signage and in their telephone book advertising after he was no longer employed by The Hullverson Law Firm, was no longer practicing law in Missouri, and was living and practicing law in California. The plaintiff alleged claims against each defendant based on the Attorney Act, the Legal Business Solicitation Act, the Lanham Act, the Consumer Fraud Act, and the Uniform Deceptive Trade Practices Act.
¶ 8 On March 7, 2014, the defendants filed a combined motion to dismiss pursuant to sections 2-615, 2-619, and 2-619.1 of the Code (735 ILCS 5/2-615, 2-619, 2-619.1 (West 2012)). The defendants' primary argument raised in the motion was that the plaintiff's complaint was barred under the doctrine of res judicata because of an adverse ruling in a prior federal court lawsuit.
¶ 9 Prior to the filing of the complaint in the present case, the plaintiff's founder, James E. Hullverson Jr., individually, filed a lawsuit against the defendants in the United States District Court for the Eastern District of Missouri, alleging damages based on the same advertising at issue in the present case. His complaint included counts against each defendant, Thomas C. Hullverson, Ringkamp, Becker, Burke, and The Hullverson Law Firm.1 In each count, he requested the court to "Order, Adjudge, Declare and Decree" that the defendants had violated (1) the Missouri Rules of Professional Conduct and (2)the Lanham Act. He requested the court to order each defendant to "account for and pay as damages to the plaintiff all profits and advantages gained from Rule violations and Lanham Act violations."
¶ 10 The United States District Court for the Eastern District of Missouri entered an order dismissing James E. Hullverson Jr.'s request for damages based on alleged violations of the Missouri Rules of Professional Conduct. Hullverson v. Hullverson, et al., 4:12-cv-144 (E.D. Mo. Dec. 3, 2012). The court held that violations of the Missouri Rules of Professional Conduct cannot be a basis of a civil cause of action. Id. Therefore, the court dismissed "the allegations concerning purported violations of the Missouri Rules of Professional Conduct" and struck all references to those rules from the complaint. Id. The court denied the defendants' request to dismiss the claims under the Lanham Act, concluding that those claims contained enough facts to state plausible claims for false or misleading advertising under the Lanham Act. Id. After the federal court entered this adverse interlocutory order, James E. Hullverson Jr. filed a notice under Rule 41(a)(1)(A)(i) of the Federal Rules of Civil Procedure, dismissing the remaining Lanham Act claims without prejudice.
¶ 11 In the present case, the defendants argued that the plaintiff's Illinois lawsuit was barred under the doctrine of res judicata as a result of the federal court's adverse ruling followed by James E. Hullverson Jr.'s voluntary dismissal of the federal lawsuit. The defendants asked the circuit court to apply Illinois law in determining the preclusive effect of the federal court proceeding. Specifically, the defendants argued that, under Illinois law's prohibition against claim splitting, the plaintiff was barred from bringingclaims in the present case that could have been litigated in the federal court case. See Hudson v. City of Chicago, 228 Ill. 2d 462, 467, 889 N.E.2d 210, 213 (2008).
¶ 12 In addition to the doctrine of res judicata, the defendants also argued in their motion to dismiss: that the Attorney Act claims should be dismissed for failure to state a cause of action, for improper venue, and because the plaintiff lacked standing; that the Consumer Fraud Act claims should be dismissed for failure to state a cause of action, as untimely pursuant to the applicable statute of limitations, because the Consumer Fraud Act is inapplicable to the practice of law, for improper venue, and because the plaintiff lacked standing; that the Legal Business Solicitation Act claims should be dismissed for failure to plead a recognized cause of action; and that the Lanham Act claims should be dismissed because they were untimely under the applicable statute of limitations. Other than their res judicata argument, which was directed at the entire complaint, the defendants' motion to dismiss did not articulate any specific grounds for dismissing the Uniform Deceptive Trade Practices Act claims.
¶ 13 On August 27, 2014, the circuit court conducted a hearing on the defendants' motion to dismiss...
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