Dalan/Jupiter v. Draper and Kramer ( 2007 )

SECOND DIVISION
March 30, 2007
Nos. 1-06-1274 and 1-06-2637, Consolidated
DALAN/JUPITER, INC., for the use and ) Appeal from the
benefit of JRC MIDWAY MARKETPLACE, ) Circuit Court of
L.P., ) Cook County.
)
Plaintiff-Appellant, )
)
v. )
)
DRAPER AND KRAMER, INC., ) Honorable
) Stuart A. Nudelman,
Defendant-Appellee. ) Judge Presiding.
PRESIDING JUSTICE WOLFSON delivered the opinion of the
court:
In law, as in life, missed opportunities can prove costly.
Here, the question is whether the appellant’s failure to raise
the issue of its entitlement to attorney fees and costs in a
contract dispute in this court bars it from asking the trial
court to award fees and costs provided for in the contract.
We hold the doctrine of res judicata bars the appellant’s
claim for fees and costs. In the second issue in this
consolidated appeal, we affirm the trial court’s award of
attorney fees to the appellee for a discovery sanction, but
modify the amount.
FACTS
Res Judicata
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In 1994, Draper and Kramer, Inc. (Draper) filed a breach of
contract action against Dalan/Jupiter, Inc. (Dalan) and Trammell
Crow Company Houston, Inc. (Trammell), alleging Dalan and
Trammell failed to pay a commission due under a mortgage
brokerage agreement. After a bench trial, the trial court ruled
in favor of Draper against both defendants and awarded it
$550,252.22, including attorney fees. Dalan did not request
attorney fees in any of its pleadings in that lawsuit.
On appeal, this court reversed, finding the defendants did
not breach the agreement. There was no remand. Draper & Kramer,
Inc. v. Dalan/Jupiter, No. 1-00-3592 (2001) (unpublished order
under Supreme Court Rule 23). In its briefs in this court, Dalan
did not request a remand to decide the issue of attorney fees.
Nor did it file a petition to request a remand within 21 days of
the reversal. Draper’s petition for leave to appeal to the
Supreme Court was denied. The mandate was filed in the trial
court on January 9, 2002.
Within 30 days of the filing of the mandate, Trammell filed
a petition for fees and costs under the prevailing party clause
of its contract with Draper. The clause states:
"[i]n the event of any controversy, claim or
dispute between the undersigned parties
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arising out of or relating to this agreement
or the breach hereof, the prevailing party
shall be entitled to recover from the losing
party, reasonable expenses, attorneys’ fees
and costs."
On April 16, 2002, Dalan filed its own petition in the trial
court for attorney fees and costs "for the use of JRC Midway
Marketplace, L.P." Dalan based its petition on the prevailing
party clause in the agreement between Draper and Trammell.
Draper filed a motion for summary judgment, contending, among
other things, Dalan never was a party to the agreement, its
petition was not timely filed, and it waived the right to seek
fees and costs.
On February 21, 2003, the trial court entered an order
stating:
"This matter coming to be heard on Draper and
Kramer’s motion for summary judgment denying
the Petition of Dalan/Jupiter for the use of
JRC Midway Marketplace for Attorneys’ Fees
and Costs, it is ordered:
1. That the Court finds that it does not have
jurisdiction over Dalan/Jupiter’s Petition
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because it was not timely filed, and thus
sees no reason to pass on the other issues
presented by Draper and Kramer’s petition
and, on that basis denies Dalan/Jupiter’s
Petition;
2. This Court makes no findings through this
Order against [Trammell].
3. This matter is set for case management
status on March 26, 2003 at 9:20 a.m."
Dalan did not file a motion for reconsideration of the order.
On March 20, 2003, Dalan filed a notice of appeal of the
February 21, 2003, order. Dalan did not seek a Rule 304(a)
finding to allow for the immediate appeal of the order. Draper
moved to dismiss the appeal on the grounds that the order was
neither final nor appealable because Trammell’s fee petition was
pending. On June 2, 2003, this court dismissed Dalan’s appeal
and remanded to the circuit court.
On July 13, 2005, the trial court entered an order
dismissing with prejudice the underlying litigation.
Earlier, on May 20, 2003, Dalan had filed a lawsuit against
Draper. This is the lawsuit that gives rise to this appeal. On
April 8, 2004, it filed its First Amended Complaint, including
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separate counts for breach of contract, subrogation, and unjust
enrichment. All three counts are based on the prevailing party
clause in the February 18, 1991, Engagement Agreement between
Draper and "TCC," defined in the agreement as "Trammell Crow
Company, its successors, assigns and/or related entities." In
its brief, Dalan admits its lawsuit alleges "the same claims pled
in its fee petition in the Prior Lawsuit but adding as Count III
a claim for unjust enrichment." (Emphasis added.) In the unjust
enrichment count, Dalan alleges Draper would be unjustly enriched
if it were not required to pay all the attorney fees and costs
Dalan incurred in defending Trammell, including fees and costs
incurred by Dalan and paid by JRC. Dalan requests attorney fees
and costs in the amount of $318,020.89, plus costs and fees
incurred in the instant lawsuit.
On November 23, 2004, Draper filed a motion for summary
judgment, contending Dalan had admitted before the court there
was no contract between it and Draper, and the absence of
separate counsel for Trammell could not be deemed a benefit that
Draper voluntarily accepted.
On February 3, 2005, the court granted Draper’s motion as to
the unjust enrichment count, but denied the motion as to the
breach of contract and subrogation counts.
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On October 26, 2005, Draper filed a motion for summary
judgment based on res judicata. On the same date, Dalan filed a
motion for summary judgment as to liability on Counts I and II of
its First Amended Complaint.
On April 6, 2006, the court entered an order granting
Draper’s motion for summary judgment based only on res judicata
and denying Dalan’s motion for summary judgment on liability.
On April 27, 2006, Dalan filed its notice of appeal from the
April 6, 2006, order, requesting that this court reverse the
grant of summary judgment for Draper, grant summary judgment as
to liability in favor of Dalan on Count I, and remand to the
circuit court.
Discovery Violation Sanction
On January 4, 2005, Draper filed a motion to bar witnesses
at trial based on Dalan’s failure to identify any witnesses who
would testify at trial, despite two court orders requiring it to
do so.
On March 21, 2005, the court entered an order: (1) allowing
Dalan to designate Henry Krasnow as its expert witness and
allowing Draper to take Krasnow’s deposition within 30 days; (2)
allowing Dalan to designate Michael Pompizzi and Henry Krasnow as
its Rule 213 witnesses; and (3) ordering Dalan to pay as a
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sanction the attorney fees and costs for bringing Draper’s motion
and Draper’s deposition of Krasnow. Pursuant to the order,
Draper filed its petition for fees and costs.
At the hearing on the petition, Draper’s attorney, Steven
Roeder, testified about the basis for the fees and offered his
opinion about the reasonableness of the fees. Dalan’s counsel
did not cross-examine Roeder, nor did Dalan present any witnesses
to rebut the evidence. The court granted Draper’s fee petition
in its entirety, awarding Draper $15,928.35 in fees and costs.
Dalan filed a notice of appeal from the order, asking this
court to reverse the fee award to Draper. In the same notice of
appeal, Dalan asked this court to reverse the trial court’s
February 3, 2005, entry of summary judgment for Draper on Count
III of Dalan’s First Amended Complaint. Dalan’s two notices of
appeal were consolidated.
DECISION
I. Res Judicata
Our review of the trial court’s grant of summary judgment is
de novo. Chatham Foot Specialists, P.C. v. Health Care Service
Corp., 216 Ill. 2d 366, 376, 837 N.E.2d 48 (2005). We may affirm
the trial court’s judgment on any ground appearing in the record,
regardless of the actual reasoning or grounds relied on by the
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court. Kostal v. Pinkus Dermatopathology Laboratory, P.C., 357
Ill. App. 3d 381, 384, 827 N.E.2d 1031 (2005).
"The doctrine of res judicata provides that a final judgment
rendered by a court of competent jurisdiction on the merits is
conclusive as to the rights of the parties and their privies,
and, as to them, constitutes an absolute bar to a subsequent
action involving the same claim, demand or cause of action."
Nowak v. St. Rita High School, 197 Ill. 2d 381, 389, 757 N.E.2d
471 (2001). Res judicata is conclusive as to any matter that was
offered to sustain or defeat the claim or demand, as well as any
other matter that might have been offered for that purpose.
Nowak, 197 Ill. 2d at 389; Housing Authority for LaSalle County
v. YMCA of Ottawa, 101 Ill. 2d 246, 251-52, 461 N.E.2d 959(1984); Sarno v. Thermen, 239 Ill. App. 3d 1034, 1045, 608 N.E.2d
11 (1992).
For the doctrine to apply, three requirements must be met:
(1) a final judgment on the merits rendered by a court of
competent jurisdiction; (2) an identity of causes of action; and
(3) an identity of parties or their privies. Nowak, 197 Ill. 2d
at 390.
A judgment is not res judicata unless it is rendered on the
merits. Russell v. Klein, 46 Ill. App. 3d 660, 663, 361 N.E.2d
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65 (1977). A judgment is not on the merits when it is based
solely on a lack of subject matter jurisdiction. River Park,
Inc. v. City of Highland Park, 184 Ill. 2d 290, 303, 703 N.E.2d
883 (1998).
The parties agree there is an identity of parties and an
identity of causes of action--at least for the breach of contract
and subrogation counts. The issue is whether there was a final
judgment on the merits rendered by a court of competent
jurisdiction. Dalan contends that because the trial court said
it did not have jurisdiction to consider the merits of its fee
petition, the court’s February 23, 2003, order can have no res
judicata effect on a separate lawsuit alleging the same claims
for fees.
The February 23, 2003, order does not control this case.
When we reversed the trial court’s judgment in 2001, we did not
remand the case to the trial court. The trial court had no
jurisdiction to consider Dalan’s fee petition or any other
matters pertaining to the case. Supreme Court Rule 369(b)
provides "other proceedings may be conducted" on the filing of
the mandate in the circuit court following dismissal of an appeal
or an affirmance by the reviewing court. 134 Ill. 2d R. 369(b).
Rule 369(b) embodies the Illinois Supreme Court’s holding in
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Watkins v. Dunbar, 318 Ill. 174, 149 N.E. 14 (1925). See Russell
v. Klein, 46 Ill. App. 3d 660, 664-65, 361 N.E.2d 65 (1977). It
does not apply to reversal without remand. Rule 369(c) provides
for reinstatement of a case in the circuit court following remand
for a new trial or hearing. 134 Ill. 2d R. 369(c).
In Watkins, the court held that where a judgment is
reversed, and the cause remanded, the case is reinstated by
filing a transcript of the remanding order with the clerk of
court. Watkins, 318 Ill. at 177. However, where a judgment is
reversed with no order remanding the case, "it cannot be
reinstated in the court which entered the judgment from which the
appeal was taken***" (Emphasis added.) Watkins, 318 Ill. at
177. In other words, following a reversal without remand, the
trial court is not revested with jurisdiction over the case.
We see no reason to depart from the holding in Watkins. See
Russell, 46 Ill. App. 3d at 664 (noting Rule 369(b) embodies the
principle of law enunciated by the court in Watkins); Perrin v.
Pioneer National Title Insurance Co., 108 Ill. App. 3d 181, 185,
438 N.E.2d 1359 (1982) (same); but see Coldwell Banker Havens,
Inc. v. Renfro, 288 Ill. App. 3d 442, 445, 679 N.E.2d 1299(1997), where the court allowed a fee petition to go forward
where it was filed within 30 days of the appellate court’s
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reversal without remand, the party having requested fees in its
counterclaim. We believe the court in Coldwell Banker misread
Rule 369(b).
We find this case fits squarely within the doctrine of res
judicata, for a reason different from that relied on by Draper
and by the trial court. The trial court’s February 21, 2003,
order was not a "final judgment on the merits by a court of
competent jurisdiction" because by that time the court had lost
subject matter jurisdiction over the case. However, our July 25,
2001, decision was a final decision on the merits.
In the first appeal, following the trial court’s judgment in
favor of Draper, Dalan could have requested that this court
remand the case to the trial court to consider Dalan’s claim for
fees. We take judicial notice of Dalan’s briefs in that appeal.
Dalan asked only to "reverse the judgment of the trial court and
remand with directions to enter judgment in favor of Dalan."
There was no mention of Dalan’s fees. Furthermore, Dalan argued
in its briefs that both parties were prevailing parties and were
not entitled to fees. Then it argued that neither party was a
prevailing party. Its arguments were directed solely at the
attorney fees awarded to Draper. Dalan never indicated it might
be entitled to fees.
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Then, Dalan had an opportunity, within 21 days of our
reversal, to file a petition for rehearing requesting that we
amend our mandate to remand the case for consideration of
attorney fees. Instead, Dalan waited to file its petition in the
trial court until three months after our mandate had been filed.
See People v. Lyles, 217 Ill. 2d 210, 216-17, 840 N.E.2d 1187(2005) (following the elapse of the time for filing a petition
for rehearing, an appellate court is without jurisdiction to take
further action in the case). Then, when the trial court
dismissed its petition, Dalan tried for another "bite at the
apple" by filing a collateral complaint directed at the same
fees. See Peregrine Financial Group, Inc. v. Ambuehl, 309 Ill.
App. 3d 101, 109, 722 N.E.2d 723 (1999). We decline to allow
Dalan this opportunity. See Mann v. Rowland, 342 Ill. App. 3d
827, 835, 795 N.E.2d 924 (2003) (proper recourse to challenge
voluntary dismissal in a federal district court was in the
district court or a federal appeals court, not in a subsequent
state court suit).
Res judicata is an equitable doctrine designed to prevent a
multiplicity of lawsuits between the same parties where the facts
and issues are the same. Piagentini v. Ford Motor Co., 366 Ill.
App. 3d 395, 398, 852 N.E.2d 356 (2006). The doctrine "promotes
judicial economy by preventing repetitive litigation and also
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protects parties from being forced to bear the unjust burden of
relitigating essentially the same case." Arvia v. Madigan, 209
Ill. 2d 520, 533, 809 N.E.2d 88 (2004). Allowing Dalan to take
advantage of the trial court’s loss of jurisdiction to file a
separate claim for fees is not consistent with equitable
principles.
Our decision does not rest on Dalan’s failure to file a
counterclaim for fees in the first lawsuit. We recognize
counterclaims in Illinois are permissive, not mandatory. 735
ILCS 5/2-608(a) (West 2000). We rely on the failure to raise the
fees issue in the first appeal, before and after our decision to
reverse without remand. Our supreme court, applying the
transactional test for res judicata, has held a party’s failure
to raise claims it could have raised in another, substantially
identical case, even though there was a chance the claims might
have been dismissed for lack of jurisdiction, raises the bar of
res judicata for those claims. River Park, Inc. v. City of
Highland Park, 184 Ill. 2d 290, 318-19, 703 N.E.2d 883 (1998).
We affirm the trial court’s grant of summary judgment as to
Counts I and II of Dalan’s First Amended Complaint.
We find Count III of Dalan’s First Amended Complaint, for
unjust enrichment, also is barred by res judicata. To determine
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whether there is an identity of causes of action, Illinois courts
employ a "transactional" test. Under this test, separate claims
will be considered the same cause of action for purposes of res
judicata if they arise from a single group of operative facts,
regardless of whether they assert different theories of relief.
River Park, 184 Ill. 2d at 307; Corcoran-Hakala v. Dowd, 362 Ill.
App. 3d 523, 526, 840 N.E.2d 286 (2005).
The unjust enrichment count of Dalan’s complaint seeks the
same relief, based on the same set of operative facts, as the
breach of contract and subrogation counts. There was nothing to
prevent Dalan from raising an unjust enrichment claim in the
first appeal.
II. Discovery Violation
Whether a party is guilty of a discovery violation is an
issue of law, which we review de novo. People v. Hood, 213 Ill.
2d 244, 256, 821 N.E.2d 258 (2004). A trial court’s decision as
to the appropriate sanction for a discovery violation is subject
to review for an abuse of discretion. Hood, 213 Ill. 2d at 256.
Dalan contends it did not commit a discovery violation for
which sanctions were warranted. The trial court imposed
sanctions pursuant to Supreme Court Rule 219(c) for violating
Rule 213(f), which provides: "Upon written interrogatory, a party
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must furnish the identities and addresses of witnesses who will
testify at trial." Official Reports Advance Sheet No. 8 (April
17, 2002), R. 213(f), eff. July 1, 2002. Parties must identify
the subjects on which lay witnesses and expert witnesses will
testify, and, for expert testimony, the opinions the party
expects to elicit.
Supreme Court Rule 213 disclosures are mandatory and must be
strictly followed, both by the parties and by the court imposing
the rules. Foley v. Fletcher, 361 Ill. App. 3d 39, 46-47, 836
N.E.2d 667 (2005); McGovern v. Kaneshiro, 337 Ill. App. 3d 24,
34, 785 N.E.2d 108 (2003). The goals of these discovery rules
are "to avoid surprise and discourage tactical gamesmanship."
McGovern, 337 Ill. App. 3d at 34.
Dalan challenges the validity of Supreme Court Rule 213(f),
contending it expressly conflicts with section 2-1003(c) of the
Code of Civil Procedure. Section 2-1003(c) provides: "A party
shall not be required to furnish the names or addresses of his or
her witnesses, except that upon motion of any party disclosure of
the identity of expert witnesses shall be made***" 735 ILCS 5/2-
1003(c) (West 2004).
We reject Dalan’s contention. It is well settled in
Illinois that where a supreme court rule conflicts with a statute
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on the same subject, "the rule will prevail." O’Connell v. St.
Francis Hospital, 112 Ill. 2d 273, 281, 492 N.E.2d 1322 (1986);
People v. Cox, 82 Ill. 2d 268, 274, 412 N.E.2d 541 (1980).
Alternatively, Dalan contends that even if its failure to
identify its trial witnesses was a violation of discovery rules,
the trial court abused its discretion in imposing sanctions
because Draper was not prejudiced. The appropriate sanction, if
any, to be imposed for a party’s failure to list a witness in
response to a proper interrogatory is within the discretion of
the trial court. Boatmen’s National Bank of Belleville v.
Martin, 155 Ill. 2d 305, 314, 614 N.E.2d 1194 (1993). In its
answers to Draper’s First Set of Interrogatories and Requests to
Produce, Dalan was asked to identify the witnesses it intended to
call at trial. Dalan answered: "Plaintiff has not yet determined
what witnesses it intends to call at the trial of this case."
Dalan says its answer to another question was sufficient to
apprise Draper of the witnesses it intended to call at trial. It
identified E. Michael Pompizzi and Henry C. Krasnow as
"individuals with any knowledge about any allegations of the
complaint, or any aspects of defendant’s answer, or any defense."
We disagree. Dalan failed to answer the question that was asked-
-which witnesses it intended to call at trial. We find no error
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in the trial court’s decision to award sanctions. Rule 213 is
mandatory, and Dalan failed to strictly comply with the rule by
refusing to answer the interrogatory until it essentially was
forced to do so.
Dalan contends the trial court abused its discretion in
awarding Draper the exact amount of fees it requested. Given
that Dalan declined to cross-examine Draper’s witness at the
hearing, and failed to present any evidence to rebut the evidence
offered by Draper, we find no abuse of discretion in the trial
court’s decision--with one exception. As the petitioning party,
the burden of proof was on Draper to establish the value of its
attorney fees, and it did so. We do find the court abused its
discretion in awarding $4,000 for the deposition of Krasnow. We
believe that amount was disproportional to the discovery
violation by Dalan. A more appropriate amount would have been
$1,000. Accordingly, we modify the court’s award, reducing the
amount of fees and costs awarded to Draper by $3,000, for a total
of $12,928.35.
Conclusion
We affirm the trial court’s grant of summary judgment in
favor of Draper on Dalan’s complaint. We decline to rule on
Dalan’s claim it should have been granted summary judgment as to
liability on Count I. We modify the court’s order awarding
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attorney fees to Draper, changing the total amount to $12,928.35.
Affirmed as modified.
HOFFMAN, and SOUTH, JJ., concur.
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