Schrager v. Grossman
| Decision Date | 13 November 2000 |
| Docket Number | No. 1-98-3520.,1-98-3520. |
| Citation | 321 Ill. App.3d 750,256 Ill.Dec. 456,752 N.E.2d 1 |
| Parties | Barry SCHRAGER, Plaintiff-Appellee, v. Jeffrey GROSSMAN, Donald Grauer, Barbara Lux, Midwestern Financial Consultants, Ltd., an Illinois Corporation, Highland Park Corporation, an Illinois Corporation, The Kimberly Anne Grossman Trust, The Trina Elyse Grossman Trust, The Kimberly Anne Grossman Subchapter S Trust, The Trina Elyse Grossman Subchapter S Trust, Allen Engerman, Michael Mandell, Bette Grossman, Eagle Partners, Ltd., 2780 Ridge Corporation, 1255 Building Corporation, Churchill Capital, Ltd., ENP II, an Illinois Limited Partnership, Churchill Venture One, Ltd., Magnolia Homes Corporation, Magnolia Estates Corporation, Oxford Funding Group, Ltd., Churchill Venture Ltd., and Executive Travel, Defendants-Appellants. |
| Court | United States Appellate Court of Illinois |
David A. Novoselsky and Linda A. Bryceland, of David A. Novoselsky & Associates, Chicago, for Plaintiff-Appellee.
William J. Harte, Edward L. Foote, of Winston & Strawn, Fred Foreman, David V. Goodsir, of Freeborn & Peters, and Harry A. Young, Jr., of Young, Rosen, Dolgin & Finkel, Ltd., Chicago, for Defendants-Appellants.
Defendants appeal from the circuit court's denial of their motion to dismiss plaintiff's complaint as violative of Illinois' single-refiling rule (735 ILCS 5/13-217 (West 1998)), as well as the principles of res judicata and collateral estoppel.
For the reasons which follow, we reverse.
In April 1995, plaintiff filed a complaint in the United States District Court for the Northern District of Illinois naming as defendants Jeffrey Grossman, Donald Grauer, Barbara Lux, Midwestern Financial Consultants, Ltd., Quinlan & Tyson Realty Partners Ltd., and Highland Park Corporation (hereinafter referred to as Case I). The complaint alleged civil Racketeer Influenced and Corrupt Organizations Act 18 U.S.C. § 1964 violations as well as several state common law claims including fraud, conspiracy, and breach of fiduciary relationships.
Plaintiff subsequently filed first and second amended complaints. The second amended complaint named as additional defendants the Kimberly Anne Grossman Trust, the Trina Elyse Grossman Trust, the Kimberly Anne Grossman Subchapter S Trust, Trina Elyse Grossman Subchapter S Trust, Allen Engerman, Michael Mandell, Bette Grossman, Eagle Partners, Ltd., 2780 Ridge Corporation, 1255 Building Corporation, Churchill Capital, Ltd., ENP II, ENP II, Ltd., Churchill Venture One, Ltd., Magnolia Homes Corporation, Magnolia Estates Corporation, Oxford Funding Group, Ltd., Churchill Venture, Ltd., and Executive Travel. The second amended complaint contained counts alleging mail and wire fraud, RICO, unjust enrichment and accounting, and common law fraud.
On March 12, 1997, a dispositive order was entered that stated,
In March 1996, while Case I remained pending, plaintiff filed a complaint in the circuit court of Lake County, Illinois, against defendants Eagle Partners, Riverwoods Partnership, 2780 Ridge Corporation, Bette Grossman, as trustee of the Trina Elyse Grossman Family Trust and as trustee of the Kimberly Anne Grossman Family Trust, Donald Grauer, Jeffrey Grossman, Larry Kanar, and American National Bank and Trust Company of Chicago (hereinafter referred to as Case II). The complaint sought to enjoin the sale of certain real estate and a declaration nullifying the loan guarantee because the signature purporting to be plaintiff's was, in fact, a forgery.
On January 10, 1997, plaintiff amended his complaint setting forth allegations of common law fraud, conspiracy, use of the mails and interstate wires in furtherance of a scheme and artifice to defraud, breaches of fiduciary relationships, and for an accounting. The claims set forth in the original complaint were completely absent from the amended complaint.
On February 5, 1997, the defendants removed the matter to the federal District Court for the Northern District of Illinois. The case was dismissed on February 13, 1997, as duplicative of Case I. Specifically, the order stated:
On April 2, 1996, plaintiff filed a complaint against defendants ENP II, Ltd., Donald Grauer and Jeffrey Grossman in the circuit court of Cook County (hereinafter referred to as Case III). Count I alleged breach of a promissory note against ENP II, Ltd., and count II alleged breach of promise to guarantee the note by defendants Grossman and Grauer. The promissory note was executed by ENP, II, Ltd., on July 10, 1995 in the amount of $271,667. Defendants filed a motion to dismiss contending the facts alleged in this case arose from the same core of operative facts as Case I pending in federal court. Plaintiff's motion for a voluntary dismissal was granted on October 10, 1996, prior to the court ruling on defendants' motion to dismiss.
On March 27, 1997, plaintiff filed yet another complaint in the circuit court of Cook County, which is the subject of the instant appeal (hereinafter referred to as Case IV). The complaint named the same defendants as were named in the second amended complaint in Case I and stated causes of action for tortious conspiracy to commit fraud, unjust enrichment and accounting, fraud, negligence, and punitive damages.
On June 26, 1997, defendants filed a motion to dismiss pursuant to sections 2-619(a)(4) and (a)(9) of the Code of Civil Procedure (735 ILCS 5/2-619(a)(4), (a)(9) (West 1998)) arguing the claims were barred by Illinois' single-refiling rule (735 ILCS 5/13-217 (West 1998)) and the doctrines of res judicata and collateral estoppel. The court originally granted defendants' motion and dismissed plaintiff's complaint on November 17, 1997. However, upon entertaining plaintiff's motion to reconsider, the court reversed itself and entered an order denying defendants' motion to dismiss.
In its memorandum opinion, the circuit court reasoned that Case II was "not a new action because no judgment was entered and the Marovich action [Case I] was not dismissed for lack of jurisdiction or improper venue at that time." Further, the court determined that although the single-refiling statute does not define what a new action is, Defendants filed a timely motion for certification pursuant to Supreme Court Rule 308(a) (155 Ill.2d 308(a)) of the following two questions:
This court granted defendants' application for leave to appeal on December 8, 1998.
I
Section 13-217 of the Code of Civil Procedure is a saving provision which allows plaintiffs to refile a cause of action if its prior disposition was based on the reasons outlined in the statute. 735 ILCS 5/13-217 (West 1998); Timberlake v. Illini Hospital, 175 Ill.2d 159, 162, 221 Ill.Dec. 831, 676 N.E.2d 634 (1997). Its purpose is to facilitate the disposition of litigation upon the merits and to avoid its frustration upon grounds that are unrelated to the merits. Gendek v. Jehangir, 119 Ill.2d 338, 343, 116 Ill.Dec. 230, 518 N.E.2d 1051 (1988). Section 13-217 provides in pertinent part:
"In the actions specified in Article XIII of this Act or any other act or contract where the time for commencing an action is limited, if * * * the action is dismissed by a United States District Court for lack of jurisdiction, or the action is dismissed by a United States District Court for improper venue, then, whether or not the time limitation for bringing such action expires during the pendency of such action, the plaintiff * * * may commence a new action within one year or within the remaining period of limitation, whichever is greater, after * * * the action is dismissed by a United States District Court for lack of jurisdiction, or the action is dismissed by the United States District Court for improper venue."
Section 13-217 allows a plaintiff to refile a cause of action within one year of its dismissal or the remaining period of limitations, whichever is greater. Gendek v. Jehangir, 119 Ill.2d 338, 340, 116 Ill.Dec. 230, 518 N.E.2d 1051 (1988). However, our supreme court has interpreted section 13-217 as permitting only one additional filing of a claim, even where the applicable statute of limitations has not yet expired. Flesner v. Youngs Development Co., 145 Ill.2d 252, 254, 164 Ill.Dec. 157, 582 N.E.2d 720 (1991); Timberlake v. Illini Hospital, 175 Ill.2d at 163, 221 Ill.Dec. 831, 676 N.E.2d 634.
On appeal, defendants argue that plaintiff's Case IV is barred by the mandates of section 13-217 as it constitutes a refiling of Cases I, II and III. Conversely, plaintiff maintains Case II should not be considered a second filing because it was commenced during the pendency and not following the dismissal of Case I and therefore cannot be properly characterized as a "refiling" of Case I. As to Case III, plainti...
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