Dancor Construction, Inc. v. FXR Construction, Inc. , 2016 IL App (2d) 150839 ( 2016 )

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Appellate Court Date: 2016.12.08
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Dancor Construction, Inc. v. FXR Construction, Inc., 2016 IL App (2d) 150839Appellate Court DANCOR CONSTRUCTION, INC., Plaintiff and Counterdefendant-
Caption Appellant and Cross-Appellee, v. FXR Construction, Inc., and
DENNIS E. VITA, Defendants-Appellees and Cross-Appellants
(FXR Construction, Inc., Counterplaintiff).
District & No. Second District
Docket No. 2-15-0839
Filed September 29, 2016
Decision Under Appeal from the Circuit Court of Kane County, No. 12-L-487; the
Review Hon. James R. Murphy, Judge, presiding.
Judgment Affirmed.
Counsel on Matthew D. Robinson, of Law Office of Matthew Robinson, of
Appeal Geneva, for appellant.
Peter M. Storm, of Cooper, Storm & Piscopo, of Geneva, for
appellees.
Panel JUSTICE SPENCE delivered the judgment of the court, with opinion.
Presiding Justice Schostok and Justice McLaren concurred in the
judgment and opinion.
OPINION
¶1 Plaintiff, Dancor Construction, Inc. (Dancor), brought suit against defendants, FXR
Construction, Inc. (FXR) and its owner, Dennis E. Vita, in Kane County pursuant to the
forum-selection clause in the parties’ contract. Dancor brought breach-of-contract and tort
claims against defendants related to a construction project in New York. Meanwhile, in a New
York court, FXR filed a mechanic’s lien on the property and brought suit for breach of contract
and unjust enrichment against Dancor, among others. The New York case was later dismissed.
¶2 Defendants moved to dismiss or transfer the Kane County case, arguing in part that New
York was the better forum for the dispute. The circuit court denied defendants’ motion, finding
that the forum-selection clause designating Kane County was valid and enforceable.
¶3 Dancor filed amended and second amended complaints. Defendants moved to dismiss
each, and the circuit court granted their motions in part, dismissing Dancor’s tort counts for
injurious falsehood and slander of title related to the construction project.
¶4 FXR then moved to dismiss or transfer the case or to reconsider the circuit court’s prior
order denying the motion to dismiss or transfer the case. FXR argued that New York law
rendered the forum-selection clause void and unenforceable and that New York was the only
proper forum. The circuit court agreed and dismissed the case to allow the action to be refiled
in New York. This appeal followed. We affirm.
¶5 I. BACKGROUND
¶6 Dancor filed its complaint in Kane County on September 10, 2012. The complaint alleged
as follows. Dancor was the general contractor for the construction of an AutoZone store (the
Project) in Bronx County, New York, and it employed FXR as a subcontractor on the Project.
The subcontract was for $169,826.61. Dancor removed FXR from the Project and brought in a
replacement subcontractor to complete construction. After paying FXR, FXR’s replacement,
and other subcontractors, Dancor had spent a total of $176,481.88, or about $6600 more than
the agreed-upon contract price. FXR recorded a mechanic’s lien against the Project property
on August 29, 2012, seeking $104,544.11.
¶7 Dancor attached the parties’ contract to the complaint. Section XXIX of the contract, titled
“Venue and Choice of Law” (the forum-selection clause), provided that the parties agreed that
the contract was executed in Kane County and that it would be governed by Illinois law.
Further, it stated that “[a]ny claims, lawsuits, disputes or claims arising out of or relating to this
agreement shall be litigated in Kane County, Illinois.”
¶8 Dancor’s three-count complaint alleged breach of contract (count I) and two torts, injurious
falsehood (count II) and interference with prospective business advantage (count III). In count
I, Dancor alleged that FXR failed to meet reasonable deadlines, provide sufficient manpower,
and timely complete tasks on the Project. Consequently, Dancor removed FXR and hired
another firm to complete the Project. In count II, Dancor alleged that defendants recorded a
lien against the Project site for unpaid work completed. Dancor alleged that the lien’s
statement regarding the amount unpaid ($104,544.11) was not true, that defendants made the
statement knowing that it was false, and that they made the statement with the intent that others
rely on it. Dancor further alleged that a reasonable person or company would be “highly
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offended” by an accusation that it failed to pay in excess of $100,000 and that defendants
intended the publication of the lien to result in pecuniary harm to Dancor.
¶9 Shortly after Dancor filed its complaint, FXR filed its complaint in New York on October
24, 2012, against, inter alios, Dancor, to foreclose its mechanic’s lien (the New York action).
FXR alleged that, as a subcontractor, it had agreed to provide certain services for Dancor on
the Project. FXR continued that it completed its performance of the contract and was owed a
total of $171,926.61. It had received $67,382.50 and alleged that Dancor still owed
$104,544.11. Dancor breached their contract and was unjustly enriched in the amount of
$104,544.11 by not paying FXR the full amount owed.
¶ 10 Back in the Kane County litigation, on December 26, 2012, defendants filed a motion to
dismiss Dancor’s complaint or transfer the case. In their motion, defendants alleged that New
York law required that the action be brought in a New York court. Defendants further argued
that the defendants in the New York action, aside from Dancor, did not have minimum contacts
with Illinois sufficient to bring the case here. Finally, defendants argued that Bronx County in
New York was the best forum to resolve the legal issues related to the Project, and under the
doctrine of forum non conveniens, they sought that the case be transferred to New York.
¶ 11 Dancor responded by citing the forum-selection clause that designated Kane County.
Dancor argued that both New York and Illinois public policy favor enforcement of
forum-selection clauses in contracts and that the forum-selection clause here was reasonable
and should be enforced.
¶ 12 The circuit court held a hearing on the motion to dismiss or transfer. Thereafter, on
February 20, 2013, it denied the motion, finding that the forum-selection clause in the parties’
contract was valid and that venue in Kane County was appropriate.
¶ 13 On April 26, 2013, defendants moved to dismiss counts II and III of the complaint. They
argued that count II was based on insufficient conclusions by Dancor, not well-pled facts. They
argued that count III, which was based on the allegations of count II, was likewise defective.
On June 6, 2013, the circuit court granted defendants’ motion to dismiss counts II and III and
granted Dancor leave to amend its complaint.
¶ 14 Dancor filed an amended complaint on June 18, 2013. The amended complaint again
contained three counts: count I for breach of contract, count II for injurious falsehood, and
count III for interference with prospective business advantage. Under count III, Dancor alleged
that defendants claimed they were owed $104,544.11, that they knew they were not actually
owed that amount, and that they declared they were owed that amount with intent that Dancor
incur pecuniary harm.
¶ 15 Around this time, the New York court heard a motion to dismiss FXR’s complaint in the
New York action. On July 18, 2013, it entered an order dismissing the complaint, explaining as
follows:
“Here, the Plaintiff contracted the venue for lawsuits and failed to meet its burden in
establishing it was unreasonable, unjust, in contravention of public policy, invalid due
to fraud or overreaching, or it is shown that a trial in the selected forum would be so
gravely difficult that the challenging party would, for all practical purposes, be
deprived of its day in court.”
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The New York court continued that an action to determine the obligations under the
mechanic’s lien and to determine the appropriateness of the forum-selection clause in the
parties’ contract had been commenced in Kane County before the New York action was filed.
¶ 16 Back in Kane County, defendants moved to dismiss Dancor’s amended complaint. On
September 5, 2013, the circuit court dismissed count I as to Vita, dismissed count II without
prejudice, informed Dancor that if it repled count II, it should replead it as a “slander of title”
claim, and dismissed count III with prejudice.
¶ 17 Dancor filed a second amended complaint on November 13, 2013. The second amended
complaint contained six counts. Counts I and II were for breach of contract against FXR and
Vita, respectively; counts III and IV were for slander of title against FXR and Vita,
respectively; and counts V and VI were related to mechanic’s-lien liability under New York
law against FXR and Vita, respectively. In counts III and IV, Dancor alleged that FXR did not
complete its contractual duties and that Dancor had to bring in a replacement subcontractor to
complete the Project, costing Dancor $95,106. Regarding defendants’ mechanic’s lien against
the Project property for money they claimed they were owed under the contract, Dancor
alleged that the statement of the amount owed was false. Dancor alleged that defendants knew
or should have known that it was false because they knew or should have known that they did
not complete their work on the Project. Yet, Dancor alleged, defendants published the
mechanic’s lien when they knew or should have known that the lien would result in pecuniary
damage to Dancor. The mechanic’s lien clouded the title to $115,000 of Dancor’s funds.
¶ 18 On December 20, 2013, defendants moved to strike and dismiss the second amended
complaint. In part, the motion argued that counts III and IV failed to state a claim for slander of
title, because the counts failed to allege facts showing that the lien was false or malicious, that
Dancor incurred special damages, or that the lien made any statements about real property
owned by Dancor. Rather, defendants argued, Dancor again relied on insufficient conclusions,
not well-pled facts.
¶ 19 On February 14, 2014, the circuit court ruled on defendants’ motion to strike and dismiss
the second amended complaint. It denied the motion as to count I (breach of contract against
FXR). It granted the motion with prejudice as to counts II through VI and, pursuant to Illinois
Supreme Court Rule 304(a) (eff. Feb. 26, 2010), found no reason to delay enforcement or
appeal of its order.
¶ 20 On March 13, 2014, Dancor moved to (1) vacate the Rule 304(a) language in the February
14, 2014, order and (2) grant Dancor leave to file an amended complaint to incorporate its
previously dismissed injurious-falsehood count, which it had not included in the second
amended complaint. On the same day, the court entered an order vacating the Rule 304(a)
language. On March 26, after argument on the issue, the court denied leave to reassert the
injurious-falsehood count.
¶ 21 FXR answered count I of the second amended complaint on April 25, 2014. Along with its
answer, FXR filed a counterclaim alleging that Dancor was unjustly enriched and breached
their contract. The case proceeded to discovery, and a bench trial was eventually scheduled for
August 26 and 27, 2015.
¶ 22 On May 15, 2015, FXR moved to dismiss or transfer the case pursuant to sections
2-619(a)(1) and (a)(9) of the Code of Civil Procedure (735 ILCS 5/2-619(a)(1), (a)(9) (West
2014)). FXR argued that New York law rendered the forum-selection clause void and
unenforceable. It also pointed out that Illinois law substantially mirrored New York law on the
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enforcement of forum-selection clauses in construction contracts. Accordingly, FXR requested
that the circuit court transfer the case to New York or, in the alternative, dismiss the case
without prejudice.
¶ 23 Dancor responded to the motion to dismiss or transfer by arguing, in part, that the
enforceability of the forum-selection clause had already been decided in 2013, when the New
York action was dismissed and the New York court held that the forum-selection clause was
valid and enforceable. Dancor therefore argued that FXR was collaterally estopped from
relitigating the issue of the forum-selection clause’s validity and enforceability.
¶ 24 Before the circuit court ruled on FXR’s motion to dismiss or transfer, FXR moved to
reconsider the circuit court’s February 20, 2013, order, which had denied defendants’ first
motion to dismiss or transfer. FXR argued that the court had erred in finding the
forum-selection clause valid and enforceable.
¶ 25 On July 20, 2015, the circuit court entered an order addressing both FXR’s motion to
dismiss or transfer and its motion to reconsider. The court found that, with respect to the
original motion to dismiss or transfer, it had not been advised by either party of section 757 of
the New York General Business Law (N.Y. Gen. Bus. Law § 757 (McKinney 2012)), which
declares void and unenforceable any choice-of-law or forum-selection provision requiring
application of another state’s law to a New York construction contract. It rejected Dancor’s
argument that the New York court’s order collaterally estopped FXR’s challenge to the
forum-selection clause, stating that the order did not have a binding effect on this or any other
action. Rather, it reasoned, the New York court deferred to Illinois and was similarly
uninformed of section 757. The circuit court found that section 757 applied to the contract
between Dancor and FXR and that, consequently, the forum-selection clause was void and
unenforceable. While it found that the clause could be severed under the terms of the contract,
it also found that the case would be more appropriately and conveniently litigated in New
York.
¶ 26 The circuit court acknowledged that trial was set to commence within the next 60 days1
and that the circuit court’s local rules generally required dispositive motions to be filed no later
than 60 days before trial. Here, both parties incurred costs preparing for trial in Illinois, and
therefore both sides would be prejudiced by further delay. Nevertheless, the court reasoned, its
prior order was in error because of a misapplication, or lack of citation, of applicable law, and
the order was interlocutory and could be corrected at any time before trial. Accordingly, the
court granted FXR’s motion to dismiss so that the case could be refiled in New York.
¶ 27 Dancor filed a timely notice of appeal on August 12, 2015, pursuant to Illinois Supreme
Court Rule 301 (eff. Feb. 1, 1994). Defendants timely cross-appealed.
1
On June 18, 2015, the trial was rescheduled from August 26 and 27 to September 9 and 10, 2015.
We note, however, that the local rule requires dispositive motions to be filed no later than 120 days
prior to trial, not 60. 16th Judicial Cir. Ct. R. 6.06(a) (May 5, 2008). Sixty days is required for
counterclaims, actions over, contribution claims, and third-party complaints. 16th Judicial Cir. Ct. R.
6.06(b) (May 5, 2008).
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¶ 28 II. ANALYSIS
¶ 29 A. Jurisdiction
¶ 30 Defendants assert that this court lacks jurisdiction to hear Dancor’s appeal. This court has
an obligation to consider its jurisdiction at any time, and if jurisdiction is lacking, we must
dismiss the appeal. Anderson Dundee 53, L.L.C. v. Terzakis, 363 Ill. App. 3d 145, 152-53
(2005). Our obligation to consider whether we possess jurisdiction would exist even if
defendants had not raised the issue. Little Texas, Inc. v. Buchen, 319 Ill. App. 3d 78, 81 (2001).
¶ 31 Dancor filed its notice of appeal pursuant to Rule 301, which allows appeals from final
orders. Likewise, its statement of jurisdiction on appeal invokes Rule 301. Defendants argue
that the circuit court’s July 20, 2015, order was not a final order because it dismissed the case
under forum non conveniens, with leave to refile the case in New York. Defendants therefore
contend that Dancor had to appeal pursuant to Illinois Supreme Court Rule 306(a)(2) (eff. July
1, 2014), which provides that a party may petition for leave to appeal from an order allowing or
denying a motion to dismiss on the grounds of forum non conveniens.
¶ 32 Contrary to defendants’ assertion, the circuit court did not dismiss the case pursuant to the
doctrine of forum non conveniens. Rather, the circuit court granted a section 2-619 motion to
dismiss based on an affirmative matter, that is, applicable law that rendered the
forum-selection clause void and unenforceable and required that the case be brought in New
York. Whether to dismiss based on a forum-selection clause—which requires consideration of
contract principles—is a separate issue from the noncontractual considerations of forum non
conveniens, and to permit an appeal under Rule 306(a)(2) on a forum-selection issue would
impermissibly expand the scope of the rule by usurping the supreme court’s rulemaking
authority. Ferguson v. Bill Berger Associates, Inc., 302 Ill. App. 3d 61, 69 (1998). Rather, a
dismissal pursuant to a forum-selection clause is a final order for purposes of Rule 301. Fabian
v. BGC Holdings, LP, 2014 IL App (1st) 141576, ¶¶ 12-13 (dismissal based on
forum-selection clause, even without prejudice to refiling in another state, was a final order
because it terminated the plaintiff’s right to bring those claims in Illinois). Accordingly, we
have jurisdiction.
¶ 33 B. Dancor’s Arguments on Appeal
¶ 34 Dancor raises several issues on appeal. Those issues are (1) whether the New York court’s
order precluded litigation of the forum-selection clause, (2) whether the circuit court erred in
dismissing the case under forum non conveniens, (3) whether the circuit court erred in granting
a dispositive motion less than 120 days before trial, in violation of the circuit court’s local
rules, and (4) whether the circuit court erred in dismissing Dancor’s tort claims for injurious
falsehood and slander of title.
¶ 35 Dancor’s first issue concerns the New York action. The New York court dismissed that
case on July 18, 2013, in an order granting the defendants’ (including Dancor’s) motion to
dismiss FXR’s complaint, on the basis of the forum-selection clause. In its order, the New
York court reasoned as follows. A contractual forum-selection clause is prima facie valid and
enforceable unless shown by the challenging party to be unreasonable, unjust, in contravention
of public policy, or invalid due to fraud or overreach, or unless the selected forum would
effectively deprive the challenging party of its day in court. The court cited section 41 of New
York’s Lien Law (N.Y. Lien Law § 41 (McKinney 2012)). FXR had contracted for venue to be
in Illinois, and it had not met its burden to show that the contract’s forum-selection clause was
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unreasonable, unjust, in contravention of public policy, or invalid due to fraud or overreach, or
that it would be effectively deprived of its day in court.
¶ 36 Dancor argues that the New York court’s order held that the forum-selection clause was
valid and enforceable. Dancor further argues that the New York court did not dismiss based on
the pendency of this case and could not defer to the circuit court, which had yet to issue a final
order on the issue of the forum-selection clause’s validity.
¶ 37 Dancor continues that the New York court’s order has preclusive effect under the doctrine
of collateral estoppel. According to Dancor, Illinois law requires only three elements for the
application of collateral estoppel: (1) identical issues, (2) a final judgment on the merits, and
(3) that the party against whom estoppel is asserted was a party to the prior adjudication.
Dancor asserts that here the parties were the same, the New York order was a final order, and
the issue—that is, the validity and enforceability of the forum-selection clause—was the same.
Dancor concludes that the parties are therefore bound by the New York court’s holding on the
issue of the forum-selection clause’s validity and that FXR was collaterally estopped from
raising the issue again in the circuit court.
¶ 38 Dancor turns to its second argument, that the circuit court erred in dismissing this case
under the doctrine of forum non conveniens. Dancor argues as follows. FXR’s motion to
dismiss did not contain any analysis of the public- and private-interest factors that would favor
New York as the proper forum. Nor did the circuit court analyze these factors in its order
granting FXR’s motion. Because no factors supported a transfer to New York, the dismissal on
the basis of forum non conveniens was in error. Moreover, New York law holds that, where a
litigant has “bonded over” a lien on real property, the subject of the litigation is not the
property but rather the bond, to which the lien is now attached. See Shepherd Showcase, Inc. v.
Pekala, 526 N.Y.S.2d 294, 294 (App. Div. 1988). Under Pekala, then, the situs of the real
property in this case—New York—does not determine the proper forum.
¶ 39 With respect to the third argument, that the circuit court improperly granted a dispositive
motion less than 120 days before trial, Dancor argues as follows. Local Rule 6.06 requires that
any dispositive motion be brought no later than 120 days prior to trial. FXR violated this rule
when it filed its motion to dismiss or transfer on May 15, 2015, and trial was set to begin on
August 26, 2015. Local rules are meant to be followed and are not mere suggestions or
guidelines. Rather, they have the force of statutes and are binding on courts and parties.
¶ 40 Finally, Dancor argues that the circuit court erred in dismissing its tort claims. Dancor
argues as follows. First, it stated a claim for injurious falsehood under the Restatement
(Second) of Torts. A defendant is liable for a false statement harmful to the pecuniary interest
of another if the defendant either intended or knew that the publication was likely to result in
harm and the defendant either knew that the statement was false or recklessly disregarded the
truth. See Contract Development Corp. v. Beck, 255 Ill. App. 3d 660, 665 (1994). Here,
Dancor alleged that the statement in the mechanic’s lien was knowingly false, alleged that
defendants intended that the publication of the statement cause Dancor pecuniary harm, and
alleged facts supporting these elements, including the payments that were made under the
contract and defendants’ publication of the statement.
¶ 41 Dancor acknowledges that Illinois has not expressly adopted the tort of injurious
falsehood. However, Dancor urges that, if necessary, this court should adopt the tort, noting
that some legal scholars have recommended its adoption.
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¶ 42 Dancor continues that, in addition to stating a claim for injurious falsehood, it stated a
claim for slander of title. Illinois courts follow the Restatement (Second) of Torts to specify the
elements necessary for a prima facie case of slander of title. See id. The three elements of
slander of title are (1) a false and malicious publication (2) of words that disparage a person’s
title to property (3) that result in special damages. Id. Dancor argues that it pled a false and
malicious publication when it alleged that defendants’ statement that Dancor owed them
$104,544.11 was knowingly false. Dancor also pled that defendants used words that
disparaged its title to property. Defendants’ lien was detached from the real property and
attached to Dancor’s bond, and Dancor was consequently forced to put up $115,000 pursuant
to its contract with AutoZone. The lien on Dancor’s bond also clouded the title to these funds.
Moreover, Dancor pled special damages in the sum of $115,000—the money it had to place in
escrow to “bond over” the lien.
¶ 43 Last, Dancor argues that it stated a claim of “prima facie tort.” Dancor argues that the
concept of “prima facie tort” provides a remedy for tort injuries that do not conveniently fit
into a defined category. Citing English common law from the 1800s, Dancor argues that it is a
well-established common-law principle that a cause of action will lie for maliciously giving
false information. Dancor continues that Illinois follows the common-law prima facie tort
doctrine, as evidenced by our supreme court’s approving citation of Aikens v. Wisconsin, 195
U.S. 194 (1904), and statement that it is a “basic concept in the law that one who intentionally
harms another without excuse is liable for the harm.” Knierim v. Izzo, 22 Ill. 2d 73, 83 (1961).
Here, Dancor alleged that defendants knowingly and purposefully recorded a false lien in order
to harm Dancor in retaliation for removing them from the Project. Accordingly, Dancor
argues, this was enough to avoid a motion to dismiss for failure to state a cause of action in tort.
¶ 44 Defendants respond as follows. First, the circuit court acted within its discretion when it
dismissed the case in favor of a New York forum. In particular, defendants argue that section
757 of the New York General Business Law (N.Y. Gen. Bus. Law § 757 (McKinney 2012))
rendered the forum-selection clause void and unenforceable. The forum-selection clause reads
as follows:
“The parties agree that this agreement was executed in Kane County, Illinois and shall
be governed by the law of the State of Illinois. Any claims, lawsuits, disputes or claims
arising out of or relating to this agreement shall be litigated in Kane County, Illinois.”
¶ 45 Defendants note that, despite the language of the forum-selection clause, the very next
page of the contract states that the agreement was executed in Santa Rosa Beach, Florida, not
in Kane County, Illinois. In any event, defendants argue that the clause violates section 757(1)
of the New York General Business law, which reads as follows:
“The following provisions of construction contracts shall be void and unenforceable:
1. A provision, covenant, clause or understanding in, collateral to or affecting a
construction contract, with the exception of a contract with a material supplier, that
makes the contract subject to the laws of another state or that requires any litigation,
arbitration or other dispute resolution proceeding arising from the contract to be
conducted in another state.” N.Y. Gen. Bus. Law § 757(1) (McKinney 2012).
Defendants cite HVS, LLC v. Fortney & Weygandt, Inc., 17 N.Y.S.3d 285, 286 (Sup. Ct. 2015),
where a New York trial court enforced section 757 to hold a forum-selection provision for
Cuyahoga County, Ohio, void and unenforceable.
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¶ 46 Defendants note that their contract with Dancor concerned construction that took place in
New York. Therefore, defendants argue, section 757 applied and rendered the forum-selection
clause void and unenforceable. Although the circuit court initially found the forum-selection
clause valid, it reconsidered its order and dismissed the case on the basis that the
forum-selection clause was void.
¶ 47 Defendants continue that Illinois law is nearly identical to New York law on the
enforceability of forum-selection clauses in construction contracts. They cite section 10 of the
Building and Construction Contract Act (Building Act) (815 ILCS 665/10 (West 2014)),
which provides:
“A provision contained in or executed in connection with a building and construction
contract to be performed in Illinois that makes the contract subject to the laws of
another state or that requires any litigation, arbitration, or dispute resolution to take
place in another state is against public policy. Such a provision is void and
unenforceable.”
Defendants argue that section 10 of the Building Act demonstrates that Illinois law, just like
New York law, prohibits the litigation of construction contracts outside of the state where the
construction took place. To treat the New York law differently would be “quite anomalous and
a violation of comity.”
¶ 48 Defendants turn from section 757’s applicability to Dancor’s reasons why the forum
selection clause should be upheld regardless. First, defendants argue that the New York court’s
order does not collaterally estop litigation of the forum selection-clause here. Defendants point
to the New York court’s order, in which it stated that “the action to determine the payment
objections under the Mechanics’ Lien and whether the forum selection in Illinois is appropriate
was commenced prior and/or determined to [sic] the filing in New York.” They also deny that
the New York court found the forum-selection clause valid. Instead, they argue, the court
merely found that the forum-selection clause was not unreasonable, in contravention of public
policy, or otherwise invalid. Defendants postulate that, had the New York court been presented
with section 757, it would have concluded differently.
¶ 49 Defendants continue that there is no case law requiring that an Illinois court honor the
decision of another state court dismissing a case under forum non conveniens or pursuant to a
forum-selection clause. They argue that a court from one state lacks the power to transfer a
case to another state’s court system. See Fennell v. Illinois Central R.R. Co., 2012 IL 113812,
¶ 13. Accordingly, New York could not have transferred the case to Illinois. Furthermore,
collateral estoppel can apply only to separate and consecutive actions. Nowak v. St. Rita High
School, 197 Ill. 2d 381, 389-90 (2001). Yet, they argue that this case is not separate from the
New York action. Rather, the two proceedings are two stages of one action.
¶ 50 Further, defendants argue that the New York court’s order was not a final judgment on the
merits, which is one of the necessary elements for collateral estoppel to apply. They argue that
a dismissal based upon a forum-selection clause is not an adjudication on the merits. Further, a
final judgment is a determination of the issue presented that ascertains and fixes absolutely the
rights of the parties. See Hernandez v. Pritiskin, 2012 IL 113054, ¶ 47. Defendants argue that,
simply, an order declining jurisdiction is not a final judgment. They assert that the New York
court’s order did nothing more than decline to exercise jurisdiction, in the erroneous belief that
the forum-selection clause was valid and enforceable. The order did not bear on whether
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Dancor was liable to FXR under FXR’s mechanic’s lien claim or determine the rights of any
party. Thus, collateral estoppel did not apply.
¶ 51 Defendants also argue that the circuit court had discretion to grant the motion to dismiss
less than 120 days prior to trial. Local Rule 6.06 provides that “[a]ll case or claim dispositive
motions, other than those arising during trial, will be filed for *** setting no longer than 120
days before the designated trial date except by leave of court upon good cause shown.” 16th
Judicial Cir. Ct. R. 6.06(a) (May 5, 2008). Defendants argue that the rule gave the circuit court
discretion to hear FXR’s motion to dismiss. Nevertheless, defendants also argue that the
motion to dismiss was not really a dispositive motion—rather it was a motion to reconsider and
transfer. The circuit court did not dismiss the case with prejudice, and therefore its decision
was not on the merits. Defendants further argue that Dancor was not prejudiced because it had
time to respond to FXR’s motion. Illinois courts have held that a violation of a local notice rule
does not prejudice a party who had sufficient time to respond. See Premier Electrical
Construction Co. v. American National Bank of Chicago, 276 Ill. App. 3d 816, 834 (1995)
(holding that a 6-day delay between service and hearing on motion for summary judgment—as
opposed to 10 days required by local rule—was not substantial and affirming despite the
technical violation).
¶ 52 Defendants turn next to the application of forum non conveniens. Defendants argue that
both the private- and public-interest factors under forum non conveniens favored a transfer to
New York and that, contrary to Dancor’s contention, FXR did analyze the private- and
public-interest factors. With respect to the private-interest factors, it was undisputed that the
case’s only connection to Illinois was Dancor’s office in the state. All of the construction was
performed in New York. The witnesses (including the other subcontractors) and documents,
the property, and the building are all in New York. Thus, the private-interest factors clearly
favored New York as the proper forum. The public-interest factors likewise favored New
York. New York has an interest in adjudicating a construction dispute that occurred within its
borders. Section 507 of the New York Civil Practice Law and Rules (N.Y. C.P.L.R. 507
(McKinney 2012)) provides that, where the judgment demanded would affect the title, use, or
possession of real property, the trial should take place in a county in which any part of the
subject of the action is situated. A mechanic’s lien encumbers real property, and therefore an
action to foreclose such a lien must be brought in the county where the real property is located.
Edward Joy Co. v. McGuire & Bennett, Inc., 608 N.Y.S.2d 26, 26 (App. Div. 1993). Further,
section 757 of the New York General Business Law evinces a strong public policy to litigate in
New York any dispute over New York construction projects. N.Y. Gen. Bus. Law § 757(McKinney 2012).
¶ 53 Defendants argue that, in contrast to section 757 of the New York General Business Law,
section 41 of the New York State Lien Law is not relevant to this case. Section 41 is not a
venue statute but rather allows a claimant to enforce a mechanic’s lien against either the
property or the “person liable for the debt upon which the lien is founded” in any court that has
jurisdiction. N.Y. Lien Law § 41 (McKinney 2012). Therefore, section 757 of the New York
General Business Law controls.
¶ 54 Defendants turn to the circuit court’s section 2-615 dismissal of Dancor’s tort claims. They
argue that the dismissals were proper as follows. First, Dancor waived its claim for injurious
falsehood by failing to replead or incorporate that count in its second amended complaint.
They argue that, nevertheless, that count failed to state a claim for injurious falsehood. Illinois
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has not formally recognized the tort of injurious falsehood. Pursuant to section 623A of the
Restatement (Second) of Torts, the tort is intended to protect economic interests, that is, it is
directed against disparaging comments about the quality of what the plaintiff sells or the
character of its business. Restatement (Second) of Torts § 623A (1977); Kolegas v. Heftel
Broadcasting Corp., 217 Ill. App. 3d 803, 811 (1991). Here, Dancor did not allege that
defendants made any disparaging comments about its business, products, or services. Even if
the tort were recognized and had a broader definition, Dancor failed to allege facts to support
that defendants knew that the statement in the mechanic’s lien they filed was false.
¶ 55 With respect to Dancor’s slander-of-title claim, defendants continue that Dancor again
failed to plead the elements necessary to maintain a cause of action. A slander-of-title claim
requires that a plaintiff prove a false and malicious publication that disparages a person’s title
to property and results in special damages. However, Dancor pled only a conclusion that
defendants did not have a reasonable belief that they were entitled to a lien. Further, Dancor
did not own the real property at issue in this case. Dancor cannot claim slander of title when it
did not have title to the property. Moreover, Dancor did not incur special damages. The bond
that Dancor posted and held in escrow would be returned to it if the lien were ultimately found
unwarranted. The cost of posting the lien and litigating its merits are ordinary expenses, not
special damages.
¶ 56 Finally, with respect to Dancor’s prima facie tort argument, defendants respond that
Dancor failed to raise this claim in the circuit court. Even if not forfeited, the claim is a
facsimile of its injurious-falsehood and slander-of-title claims, which were not supported by
sufficient pleadings.
¶ 57 C. Resolution of Dancor’s Appeal
¶ 58 The circuit court dismissed various counts of Dancor’s amended and second amended
complaints, under sections 2-615 and 2-619, on September 5, 2013, and February 14, 2014,
respectively. It also granted a section 2-619 motion to dismiss the case on July 20, 2015,
holding that the forum-selection clause was void and unenforceable. A section 2-615 motion
admits all well-pled facts and attacks the legal sufficiency of the complaint, whereas a section
2-619 motion admits the legal sufficiency of the complaint but raises defects, defenses, or
other affirmative matters. La Salle National Bank v. City Suites, Inc., 325 Ill. App. 3d 780, 789
(2001). We review a dismissal under either section de novo. Provenzale v. Forister, 318 Ill.
App. 3d 869, 874 (2001).
¶ 59 We first address whether the New York court’s order precluded the circuit court from
dismissing the case based on the forum-selection clause. In other words, the issue is whether
FXR was collaterally estopped from challenging the validity and enforceability of the
forum-selection clause.
¶ 60 Collateral estoppel, also known as issue preclusion, is a branch of res judicata. Wakehouse
v. Goodyear Tire & Rubber Co., 353 Ill. App. 3d 346, 351 (2004). Collateral estoppel is an
affirmative defense and is forfeited on appeal if not raised below. Midwest Physician Group,
Ltd. v. Department of Revenue, 304 Ill. App. 3d 939, 952 (1999); cf. People v. Anderson, 2013
IL App (2d) 121346, ¶¶ 13-14 (normally, collateral estoppel is an affirmative defense that is
forfeited if not pled, but it may be first raised on appeal if unavailable in the trial court). The
doctrine, if it applies, bars relitigation of issues decided in a prior action. Wakehouse, 353 Ill.
App. 3d at 351.
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¶ 61 In order for collateral estoppel to apply, the party seeking to apply it must establish that (1)
the issue at hand is identical to the one in a prior action, (2) there was a prior, final adjudication
on the merits, and (3) the party against whom preclusion is sought was a party to or in privity
with a party to the prior action. In re A.W., 231 Ill. 2d 92, 99 (2008). Moreover, the issue had to
have been actually and necessarily litigated in the prior action. LaSalle Bank National Ass’n v.
Village of Bull Valley, 355 Ill. App. 3d 629, 636 (2005). Collateral estoppel is an equitable
doctrine, and even if the threshold elements are established, the doctrine will not be applied if it
would result in injustice. Edmonds v. Illinois Workers’ Compensation Comm’n, 2012 IL App
(5th) 110118WC, ¶ 21. The party against whom estoppel is sought must have had both a full
and fair opportunity and an incentive to litigate the issue in the prior proceeding. Id.¶ 62 Here, in response to FXR’s motion to dismiss, Dancor argued that the New York action
precluded litigation of the forum-selection clause’s validity and enforceability. Dancor
therefore has not forfeited its argument on appeal. Dancor argues that all three elements of
collateral estoppel are met here, but the crucial determination is whether the New York court
issued a final judgment on the merits. If the New York action did not produce a final judgment
on the merits, there was no basis to preclude litigation of the forum-selection clause in the
circuit court.
¶ 63 Under the full faith and credit clause of the United States Constitution (U.S. Const., art. IV,
§ 1 (“Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial
Proceedings of every other State.”)), the doctrine of collateral estoppel extends to judgments
entered in foreign states. Allianz Insurance Co. v. Guidant Corp., 387 Ill. App. 3d 1008, 1021
(2008). This clause requires that we give the judgment of another state “at least the res judicata
effect that the sister state rendering the judgment would give to it.” Morris B. Chapman &
Associates, Ltd. v. Kitzman, 193 Ill. 2d 560, 565 (2000). We must look to the forum state’s res
judicata law to determine what preclusive effect, if any, that state would give the judgment. Id.(looking to Missouri law). However, at least one court has held that the full faith and credit
clause does not necessarily prevent Illinois from according greater effect to a foreign state’s
judgment. Finley v. Kesling, 105 Ill. App. 3d 1, 7 (1982). That is, the full faith and credit clause
does not bar Illinois from applying its own rules of collateral estoppel to preclude relitigation
of an issue where, for example, New York would not. Id.¶ 64 Under New York law, collateral estoppel precludes a party from relitigating an issue
“ ‘clearly raised in a prior action or proceeding and decided against that party or those in
privity.’ ” Church v. New York State Thruway Authority, 791 N.Y.S.2d 676, 678-79 (App. Div.
2005) (quoting Ryan v. New York Telephone Co., 467 N.E.2d 487, 500 (N.Y. 1984)). The party
seeking to apply the doctrine must show that the identical issue was necessarily decided in the
prior action, and the party opposing application of the doctrine may demonstrate the absence of
a full and fair opportunity to contest the prior determination. Id. at 679. A final judgment is
necessary for collateral estoppel to apply. Id.
¶ 65 Importantly, New York applies collateral estoppel only to issues of fact, not law. Abreu v.
Coughlin, 555 N.Y.S.2d 889, 891 (App. Div. 1990); In re Department of Personnel v. City
Civil Service Comm’n, 462 N.Y.S.2d 878, 879 (App. Div. 1983). Further, New York has held
that the issue of a forum-selection clause’s applicability is a question of law and is therefore
not barred by the doctrine of collateral estoppel. Sterling National Bank v. Eastern Shipping
Worldwide, Inc., 826 N.Y.S.2d 235, 237 (App. Div. 2006). Interpretations of unambiguous
contract provisions, such as the forum-selection clause in Sterling National Bank, are
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questions of law. Id.; Taussig v. Clipper Group, L.P., 787 N.Y.S.2d 10, 11 (App. Div. 2004)
(“The interpretation of an unambiguous contract is a question of law for the court ***.”).
Accordingly, under New York law, the issue of whether the forum-selection clause here was
valid and enforceable was a question of law and cannot be the basis for collateral estoppel.
Sterling National Bank, 826 N.Y.S.2d at 237; see Lischinskaya v. Carnival Corp., 865
N.Y.S.2d 334, 337 (App. Div. 2008) (forum-selection clause’s enforceability under federal
maritime law was a question of law).
¶ 66 Nor does Illinois law provide greater effect and preclude litigation of the forum-selection
clause. Collateral estoppel in Illinois requires a final judgment on the merits, but a dismissal for
improper venue is not a final judgment on the merits. Ill. S. Ct. R. 273 (“[A]n involuntary
dismissal of an action, other than a dismissal for lack of jurisdiction, for improper venue, or for
failure to join an indispensable party, operates as an adjudication on the merits.” (Emphases
added.)); see Richter v. Prairie Farms Dairy, Inc., 2015 IL App (4th) 140613, ¶ 34 (a dismissal
order that otherwise specified that it was not on the merits was not on the merits). Therefore,
there is no basis in New York or Illinois law to hold that the New York action precluded
litigation of the forum-selection clause.
¶ 67 Having held that the circuit court was free to examine the validity and enforceability of the
forum-selection clause, we turn to examine whether, in fact, the circuit court was correct in
holding that the clause was void and unenforceable.
¶ 68 Dancor argues that the clause was valid and enforceable, citing section 41 of the New York
Lien Law (N.Y. Lien Law § 41 (McKinney 2012)). Defendants counter that the controlling law
is actually section 757 of the New York General Business Law (N.Y. Gen. Bus. Law § 757(McKinney 2012)), which, they argue, renders the clause void and unenforceable.
¶ 69 Forum selection and choice of law are separate issues. Brandt v. MillerCoors, LLC, 2013
IL App (1st) 120431, ¶ 15. Under Illinois law, we may void a forum-selection clause if it
would violate a fundamental Illinois public policy. Maher & Associates, Inc. v. Quality
Cabinets, 267 Ill. App. 3d 69, 75 (1994). Generally, to determine whether a forum-selection
clause is enforceable, Illinois courts have applied a multifactor test to determine whether the
clause is reasonable. See IFC Credit Corp. v. Rieker Shoe Corp., 378 Ill. App. 3d 77, 86 (2007)
(considering (1) the law governing the formation and construction of the contract, (2) the
residency of the parties, (3) the place of execution or performance of the contract, (4) the
location of the parties, (5) the inconvenience of the location, and (6) the parties’ relative
bargaining positions); Calanca v. D&S Manufacturing Co., 157 Ill. App. 3d 85, 88 (1987)
(same).
¶ 70 In Rieker Shoe Corp., the court addressed both whether the parties’ forum-selection clause
was invalid and whether its enforceability should be construed under another state’s law.
Rieker Shoe Corp., 378 Ill. App. 3d at 85-86, 93-94. Applying the multifactor reasonableness
test, the court found the forum-selection clause valid in Illinois. Id. at 86. Separately, it
disagreed that Illinois’s choice-of-law rules dictated the application of New Jersey law, under
which a forum selection-clause such as the one between the parties was not enforceable. Id. at
93. The court cited the parties’ agreement, which provided that it was governed by Illinois law
“ ‘without regard to such State’s choice of law considerations.’ ” Id. at 94. Therefore, the court
found, Illinois law applied and, under the reasonableness test it had already performed, the
forum-selection clause was enforceable. Id.
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¶ 71 Here, the parties chose Illinois as the forum state. Unlike in Rieker, there is no clause
requiring that we ignore Illinois choice-of-law rules. Therefore, to examine whether New York
law applies to interpreting the forum-selection clause, we turn to Illinois’s choice-of-law rules.
See Western States Insurance Co. v. Zschau, 298 Ill. App. 3d 214, 223 (1998) (Illinois courts
apply Illinois choice-of-law rules). Defendants have not argued that the forum-selection clause
violates Illinois public policy or is unreasonable under Illinois law, only that New York law
applies to render the clause void and unenforceable.
¶ 72 Choice-of-law considerations arise only if there is an actual conflict of law among the
states with an interest in a particular dispute. Allianz Insurance Co. v. Guidant Corp., 373 Ill.
App. 3d 652, 658 (2007). An actual conflict exists if application of one state’s law will yield a
different result than the application of another’s, that is, if it will affect the outcome of the
dispute. Id.; Gleim v. Roberts, 395 Ill. App. 3d 638, 639 (2009). Illinois generally follows the
Restatement (Second) of Conflict of Laws (1971) in making choice-of-law decisions. Hall v.
Sprint Spectrum L.P., 376 Ill. App. 3d 822, 825 (2007). But see Maher & Associates, Inc., 267
Ill. App. 3d at 77 (the Restatement is a guide for courts, “not black-letter law to be upheld
against all other considerations”).
¶ 73 Section 187 of the Restatement applies when, as here, the parties have made an express
choice of law in their contract. Restatement (Second) of Conflict of Laws § 187 (1971); Hall,
376 Ill. App. 3d at 825; Maher & Associates, Inc., 267 Ill. App. 3d at 76. In particular, section
187(2) provides:
“The law of the state chosen by the parties to govern their contractual rights and duties
will be applied *** unless either
(a) the chosen state has no substantial relationship to the parties or the
transaction and there is no other reasonable basis for the parties’ choice, or
(b) application of the law of the chosen state would be contrary to a
fundamental policy of a state which has a materially greater interest than the chosen
state in the determination of the particular issue and which, under the rule of § 188,
would be the state of the applicable law in the absence of an effective choice of law
by the parties.” Restatement (Second) of Conflict of Laws § 187(2) (1971).
To ascertain the public policy of a state, we look to its constitution, legislative enactments, and
judicial decisions. Hall, 376 Ill. App. 3d at 826.
¶ 74 Accordingly, our task is to first determine whether there is a conflict between New York
and Illinois law. The plain language of section 757 provides that a construction contract
provision that requires litigation, arbitration, or other dispute resolution arising from the
contract to be conducted in another state is void and unenforceable. N.Y. Gen. Bus. Law
§ 757(1) (McKinney 2012). Here, we have a construction contract for a New York
construction project. Exceptions to section 757’s applicability, such as an exception for a
contract with a material supplier, do not apply. Defendants are correct that section 757, by its
plain language, requires that if you build in New York, you litigate in New York. See HVS,
LLC, 17 N.Y.S.3d at 286 (enforcing section 757 to invalidate forum-selection clause, which
required litigation in Ohio, in a contract for a construction project located in New York); see
also Welsbach Electric Corp. v. MasTec North America, Inc., 859 N.E.2d 498, 502 n.8 (App.
Div. 2006) (section 757 was enacted to render void any provision that makes a construction
contract subject to the laws of another state).
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¶ 75 In Illinois, a forum-selection clause in a contract is prima facie valid and should be
enforced unless the opposing party shows that enforcement would be unreasonable under the
circumstances. Rieker Shoe Corp., 378 Ill. App. 3d at 85-86. A forum-selection clause reached
through arm’s-length negotiation should be honored and enforced by the courts, absent a
compelling and countervailing reason not to enforce it. Mellon First United Leasing v. Hansen,
301 Ill. App. 3d 1041, 1045 (1998). Defendants have not argued that the forum-selection
clause is void and unenforceable under Illinois law. Because the forum-selection clause is
prima facie valid under Illinois law but void under New York law, the forum-selection-clause
issue would be decided differently depending on which forum’s law applies. Accordingly, we
have a conflict and proceed with a choice-of-law analysis.
¶ 76 Guided by the Restatement, we will apply Illinois law to interpret the forum-selection
clause unless one of the following applies: (1) Illinois has no substantial relationship to the
parties or the transaction, and there is no other reasonable basis for the parties’ choice; or (2)
application of Illinois law would be contrary to a fundamental New York policy, and New
York has a materially greater interest than Illinois in the determination of this issue. See Old
Republic Insurance Co. v. Ace Property & Casualty Insurance Co., 389 Ill. App. 3d 356, 363
(2009). The basic reasoning behind these exceptions is that, in addition to fulfillment of the
parties’ expectation, regard must also be had for state interests and for state regulation.
Restatement (Second) of Conflict of Laws § 187 cmt. g (1971).
¶ 77 The first exception does not apply, because there was a reasonable basis to choose Illinois
as the forum state. Dancor is an Illinois corporation with a place of business in Illinois, which
is generally sufficient to satisfy the “reasonable basis” for a choice of law. See International
Surplus Lines Insurance Co. v. Pioneer Life Insurance Co. of Illinois, 209 Ill. App. 3d 144, 154
(1990) (citing Restatement (Second) of Conflict of Laws § 187 cmt. f (1971)).
¶ 78 On the other hand, we hold that the second exception does apply to this particular case. We
explain as follows. Section 187 of the Restatement requires that the New York policy be
“fundamental.” Restatement (Second) of Conflict of Laws § 187 (1971). The comments do not
define “fundamental” but do state that the policy must be “a substantial one.” Restatement
(Second) of Conflict of Laws § 187, cmt. g (1971). For example, a fundamental policy must
relate to more than mere formalities in a contract. Id. Fundamental policies include state
statutes that make certain contracts illegal or are designed to protect a person from another with
superior bargaining power. Id. Statutes involving the rights of an individual insured against an
insurance company would qualify. Id.
¶ 79 We have held that an Illinois statute that declared void any attempted contractual waiver of
the statute was a fundamental public policy. Maher & Associates, Inc., 267 Ill. App. 3d at 76
(interpreting the Sales Representative Act (820 ILCS 120/2 (West 1992)), and explaining that
the difference between “void” and “void against public policy” was merely semantic).
Similarly, we hold that section 757 of the New York General Business Law is a fundamental
public policy in New York. A state’s legislative enactments reveal a state’s public policy. Hall,
376 Ill. App. 3d at 826. Here, section 757 of the New York General Business Law clearly
evinces New York’s public policy that construction contracts for New York construction
projects be litigated in New York. See supra ¶ 73. Section 757 declares void and unenforceable
specific provisions of construction contracts so that New York maintains an interest in
construction within its borders. To enforce the forum-selection clause would be to disregard
section 757 and New York’s public policy regarding construction contracts.
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¶ 80 Additionally, New York has a materially greater interest in the determination of the
forum-selection clause issue. The subject matter of the contract, the AutoZone building, is in
New York. Performance of the contract took place in New York. Defendants are from New
York. Although the parties’ contract states in section XXIX that the contract was executed in
Kane County, the very next page (and the first page of the contract) contradict this statement,
stating that the contract was executed in Florida. The only connection Illinois has to the
litigation is Dancor’s incorporation and place of business here, and we cannot say that this
counterbalances New York’s connections. Cf. Old Republic Insurance Co., 389 Ill. App. 3d at
363 (Illinois did not have a materially greater interest in the litigation than Nebraska where
litigation involved insurance companies from Nebraska and an agreement negotiated in
Nebraska); Maher & Associates, Inc., 267 Ill. App. 3d at 76 (applying the Restatement, Illinois
did not have a materially greater interest than Texas where defendant was incorporated in
Texas, had its primary place of business in Texas, and the contract at issue was a Texas
contract; plaintiff had its primary place of business in Illinois but was incorporated in
Minnesota and did business in multiple states); Hall, 376 Ill. App. 3d at 826 (Illinois did not
have a materially greater interest in the litigation than Kansas or Missouri in multistate suit
against telecommunications corporations incorporated in Kansas and Missouri).
¶ 81 We are mindful that the Restatement is a guide, not black-letter law. Maher & Associates,
267 Ill. App. 3d at 77. Illinois follows the modern approach to choice-of-law questions, placing
the greatest importance on the public policy of the state in which the case is brought. Id.
Nevertheless, this is a situation where New York has a clear public policy and Illinois does not
have a competing interest in the litigation. In fact, Illinois implicitly shares New York’s
interest, as Illinois has a similar public policy that contracts for Illinois construction be litigated
in Illinois.2
¶ 82 Nevertheless, Dancor argues that, if we apply New York law, section 41 of the New York
Lien Law controls. We disagree. That section provides that a mechanic’s lien on real property
may be enforced against such property or against a person liable for the debt upon which the
lien is founded in any of the following: the New York supreme court or a county court,
regardless of the amount of the debt, or any court with jurisdiction in an action founded on a
contract for a sum of money equivalent to the amount of such debt. N.Y. Lien Law § 41(McKinney 2012). This general provision does not obviate consideration of the more specific
section 757 of the New York General Business Law. Section 41 merely permits enforcement of
mechanic’s liens in various courts other than New York supreme or county courts, with some
limitation on the sum of money sought. In contrast, section 757 speaks specifically to the
validity and enforceability of forum-selection clauses in construction contracts. As we
explained, supra ¶¶ 78-80, section 757 renders the forum-selection clause void and
unenforceable.
2
Section 10 of the Building Act provides that an Illinois construction contract provision that
requires “any litigation, arbitration, or dispute resolution to take place in another state is against public
policy. Such a provision is void and unenforceable.” 815 ILCS 665/10 (West 2014). The plain language
is clear that if you build in Illinois, you litigate in Illinois. Cf. Foster Wheeler Energy Corp. v. LSP
Equipment, LLC, 346 Ill. App. 3d 753, 762 (2004) (holding that because section 10 of the Building Act
substantively changed the law on forum-selection provisions, it would not apply retroactively to void
the parties’ forum-selection provision).
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¶ 83 Accordingly, the circuit court did not err in applying New York law to find the
forum-selection clause void and unenforceable.
¶ 84 Dancor and defendants next argue over whether dismissing the case under forum non
conveniens was appropriate. However, we have already held that the circuit court properly
dismissed the case after finding that the forum-selection clause was void and unenforceable.
The circuit court’s order does not analyze the application of the forum non conveniens
doctrine, because its order is based on the affirmative matter of the applicability of New York
law. Accordingly, we do not further address the forum non conveniens arguments.
¶ 85 We further hold that the circuit court did not err in granting FXR’s motion to dismiss less
than 120 days before trial. Local Rule 6.06 does not bar dispositive motions filed less than 120
days before trial. Rather, it permits such motions upon leave of court for good cause shown.
16th Judicial Cir. Ct. R. 6.06 (May 5, 2008) (“All case or claim dispositive motions *** will be
filed for setting no longer than 120 days before the designated trial date except by leave of
court upon good cause shown.”). Here, the circuit court acknowledged the local rule in its
order granting FXR’s motion to dismiss. However, it effectively provided that there was good
cause for the motion, in that its prior order allowing the case to proceed in Illinois was in error.
The court had not been apprised of the applicable law providing that New York was the proper
forum and that the forum-selection clause was void and unenforceable. We agree that this was
good cause to hear the motion to dismiss. Moreover, the court’s prior order was interlocutory,
FXR’s motion to dismiss was, in part, a motion to reconsider, and the court could reconsider its
prior order at any time before trial.
¶ 86 The final issues are whether the circuit court properly dismissed Dancor’s tort counts for
injurious falsehood and slander of title. It dismissed these counts before its July 20, 2015,
order, which held that, as to the entire action, the forum-selection clause was void and
unenforceable. Dancor’s injurious-falsehood count was part of its amended complaint, and the
circuit court dismissed it without prejudice, informing Dancor that, if it sought to replead the
count, it should do so as slander of title. In Dancor’s second amended complaint, it did not
replead an injurious-falsehood count but instead took the circuit court’s admonishment to
plead two counts of slander of title. The circuit court dismissed the slander-of-title counts in
the second amended complaint with prejudice. Dancor thereafter moved to incorporate the
prior injurious-falsehood count into the second amended complaint, but the circuit court
denied its motion.
¶ 87 We need not review the dismissal of Dancor’s tort counts. We have already determined that
the circuit court properly dismissed the case pursuant to its interpretation of the
forum-selection clause, finding that it was void and unenforceable. Accordingly, Dancor is
free to refile this action in New York, where the New York court will address its complaint.
Although the circuit court’s dismissal was a final order, it was not on the merits. We do not
address whether Dancor’s tort counts, if it chooses to refile them, would state causes of action
under New York law.
¶ 88 C. Defendants’ Arguments on Cross-Appeal
¶ 89 On cross-appeal, defendants argue that the circuit court should have granted their original
motion to dismiss the case based on forum non conveniens. They note that, if we affirm the
circuit court’s order on Dancor’s appeal, the cross-appeal is unnecessary. Because that is
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precisely what we have done, we do not address their cross-appeal.
¶ 90 III. CONCLUSION
¶ 91 The forum-selection clause in the parties’ contract was void and unenforceable, and
therefore the circuit court did not err in dismissing the case in order that it may be refiled in
New York. Dancor’s arguments with respect to the dismissal of its tort counts are mooted by
our determination that New York is the proper forum to adjudicate the parties’ claims. Further,
our holdings render defendants’ cross-appeal moot. Therefore, the judgment of the circuit
court of Kane County is affirmed.
¶ 92 Affirmed.
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