Camper v. Burnside Construction Co. ( 2013 )

ILLINOIS OFFICIAL REPORTS
Appellate Court
Camper v. Burnside Construction Co., 2013 IL App (1st) 121589
Appellate Court MICHAEL CAMPER, Plaintiff, v. BURNSIDE CONSTRUCTION
Caption COMPANY, an Illinois Corporation, BURNSIDE CONSTRUCTION
MANAGEMENT COMPANY, an Illinois Corporation, and WELCH
BROTHERS, INC., an Illinois Corporation, Defendants (Welch Brothers,
Inc., Third-Party Plaintiff-Appellant; Neptune Construction Company,
Third-Party Defendant-Appellee).
District & No. First District, First Division
Docket No. 1-12-1589
Rule 23 Order filed September 30, 2013
Rule 23 Order
withdrawn October 17, 2013
Opinion filed October 28, 2013
Held In an action for the injuries suffered when plaintiff fell while working in
(Note: This syllabus a sanitary manhole manufactured by third-party plaintiff, the trial court’s
constitutes no part of dismissal of the counts of third-party plaintiff’s complaint seeking
the opinion of the court contribution and indemnification from plaintiff’s employer, a
but has been prepared subcontractor, after plaintiff settled and dismissed his claims against his
by the Reporter of employer and the general contractors was affirmed, since the order
Decisions for the dismissing plaintiff’s action raised a res judicata bar to third-party
convenience of the plaintiff’s claims.
reader.)
Decision Under Appeal from the Circuit Court of Cook County, No. 10-L-01656; the
Review Hon. Randye A. Kogan, Judge, presiding.
Judgment Affirmed.
Counsel on Busse, Busse & Grassé, P.C., of Chicago (Edward K. Grassé, Troy S.
Appeal Radunsky, and Michael T. Peterson, of counsel), for appellant.
Cassiday Schade, LLP, of Chicago (Thomas P. Boylan and Matthew S.
Sims, of counsel), for appellee.
Panel JUSTICE CUNNINGHAM delivered the judgment of the court, with
opinion.
Presiding Justice Connors and Justice Hoffman concurred in the
judgment and opinion.
OPINION
¶1 This appeal arises from the December 21, 2011, February 27, 2102 and May 11, 2012
orders entered by the circuit court of Cook County, which collectively dismissed with
prejudice a third-party action filed by third-party plaintiff Welch Brothers, Inc. (Welch),
against third-party defendant Neptune Construction Company (Neptune). On appeal, Welch
argues that: (1) the circuit court erred in dismissing with prejudice the contribution count of
the third-party complaint; and (2) the circuit court erred in dismissing with prejudice the
indemnification count of the third-party complaint. For the following reasons, we affirm the
judgment of the circuit court of Cook County.
¶2 BACKGROUND
¶3 In January 2006, Michael Camper (Camper), an employee of Neptune, fell and sustained
injuries while working in a sanitary manhole on a construction site in Elgin, Illinois. On
January 16, 2007, Camper filed a four-count complaint against general contractors Burnside
Construction Company and Burnside Construction Management Company (collectively,
Burnside), and Welch (case No. 07 L 0517) (Camper I). In Camper I, Camper alleged causes
of action for construction negligence (count I) and premises liability (count II) against
Burnside, and alleged two counts of product liability against Welch, as manufacturer of the
manhole, under the theories of strict liability (count III) and negligence (count IV).
¶4 On December 3, 2007, Welch filed a third-party action for contribution against Neptune
under the Joint Tortfeasor Contribution Act (740 ILCS 100/0.01 et seq. (West 2008)),
alleging that, in the event that Welch is found liable to Camper, Welch is entitled to
contribution from Neptune for its negligent actions. The Camper I third-party action did not
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allege an indemnification claim or breach of contract claim against Neptune. Thereafter,
Welch also filed a counterclaim for contribution against Burnside.
¶5 On November 20, 2008, Camper settled his claims against Burnside and Neptune for a
total of $550,000. The settlement agreement stated that Neptune agreed to waive its claim
for reimbursement under the Workers’ Compensation Act (820 ILCS 305/5(b) (West 1994)).1
¶6 On December 12, 2008, Burnside filed a motion for a good-faith finding, requesting the
court to find that the settlement agreement was made in good faith and to bar or dismiss any
actions of contribution against the settling tortfeasors. On February 10, 2009, Welch filed a
motion to conduct an evidentiary hearing prior to the court’s ruling on Burnside’s motion for
a good-faith finding, in order to determine whether wrongful conduct occurred during the
settlement process and whether there was a basis to enter a good-faith finding in favor of
Burnside.
¶7 On February 13, 2009, following a hearing on the parties’ arguments, the circuit court
denied Welch’s motion to conduct an evidentiary hearing and, over Welch’s objection,
granted Burnside’s motion for a good-faith finding. The court’s February 13, 2009 order
expressly stated that the settlement between Camper, Burnside, and Neptune was made in
good faith pursuant to the Joint Tortfeasor Contribution Act; that Camper’s action against
Burnside, and Welch’s third-party action against Neptune, are dismissed with prejudice; and
that the court “bars any actions for contribution by any other defendants or tortfeasors against
Burnside or Neptune.” The court further denied Welch’s motion to amend its pleadings
against Neptune to include other causes of action, and stated that Camper’s cause of action
shall continue against Welch as the sole nonsettling defendant in Camper I. No Supreme
Court Rule 304(a) language (Ill. S. Ct. R. 304(a) (eff. Jan. 1, 2006)) was included in the
order.
¶8 On April 22, 2009, Camper voluntarily dismissed his complaint against Welch without
prejudice (735 ILCS 5/2-1009 (West 2008)). The circuit court’s order voluntarily dismissing
Camper’s action against Welch expressly stated that Camper had reserved his right to
maintain his cause of action “upon refiling of this matter in accordance with [s]ection 13-217
of the Illinois Code of Civil Procedure (735 ILCS 5/13-217) and there shall be no res
judicata effect upon any claim.”
¶9 On February 5, 2010, within one year of the April 22, 2009 voluntary dismissal of
Camper I, Camper refiled his cause of action against Welch only, by alleging the same two
counts of product liability based on strict liability (count I) and negligence (count II) (case
No. 10 L 01656) (Camper II). The Camper II complaint contained nearly identical
allegations against Welch as in the Camper I complaint. The Camper II complaint alleged
that Camper was employed by Neptune when he fell and sustained injuries while working
in a manhole in 2006; that the rungs used to ascend and descend the manhole were
improperly or negligently designed, manufactured and assembled; that one or more rungs
1
Based on the language of the settlement agreement, it is reasonable to infer, though neither
party expressly states this in the briefs on appeal, that Camper made workers’ compensation claims
against his employer, Neptune, as a result of the injuries suffered in the course of his employment.
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were missing or inadequately secured; and that Welch failed to warn of the dangers
associated with these defects.
¶ 10 On May 19, 2010, Welch filed a two-count third-party action, seeking contribution (count
I) and “indemnification/breach of contract” (indemnification claim) (count II) against
Neptune. Count I alleged that Neptune, as Camper’s employer, owed Camper a duty to
provide a safe work environment, adequately inspect manholes used by its employees, and
train its employees on the proper use of manholes. Count II alleged that Neptune and Welch
entered into a purchase order agreement pursuant to which Neptune agreed to indemnify
Welch. Specifically, count II alleged that “[i]f Welch is found partly or wholly responsible
for any of the injuries alleged in [Camper’s] complaint, which liability Welch denies and
does not hereby waive its denial, Neptune should indemnify and hold harmless Welch
pursuant to the terms of the [a]greement set forth herein.” The relevant language of the
purchase order agreement is set forth as follows:
“[Neptune] shall indemnify and hold [Welch] harmless against any and all claims,
demands, liabilities, losses, damages and injuries of whatsoever kind or nature, and all
attorneys fees, costs and expenses relating to, or in any way arising out of the ordering,
acquisition, delivery, installation, possession, maintenance, use, operation, control, loss,
damage, destruction, return or surrender, sale or other disposition of any material
supplied by [Welch]. This indemnity shall not be affected by any termination of this
[a]greement with respect to said materials.”
¶ 11 On November 5, 2010, Camper settled his claims against Welch in Camper II, and a
court order was entered dismissing Camper’s action against Welch with prejudice. The
general release form signed by Camper contained language that Welch “reserves and retains
all claims, demands, causes of action, defenses, counter-claims, third party claims including
[Welch’s] third party complaint against [Neptune], motions, pending or otherwise and
damages, including attorneys fees and costs, consultants’ fees and costs relating to any
remaining claim raised in the [l]awsuit against any remaining [p]arty.”
¶ 12 Subsequently, Welch filed a motion to modify the court’s November 5, 2010 dismissal
order, requesting a modification of the order to reflect that Welch’s third-party complaint
against Neptune remained pending.
¶ 13 On December 6, 2010, the circuit court entered an agreed order, which vacated the
November 5, 2010 dismissal order and ordered Welch’s third-party complaint against
Neptune for contribution and indemnification to remain pending and not be dismissed.
¶ 14 On March 1, 2011, Welch filed a motion for a good-faith finding, requesting, inter alia,
that the court enter an order finding that the settlement agreement between Camper and
Welch was made in good faith, that all claims against Camper2 be dismissed with prejudice,
and that, pursuant to the court’s December 6, 2010 order, Welch’s third-party complaint
against Neptune remain pending and not dismissed.
2
This is likely a typographical error and instead could have stated that all claims against
“Welch” be dismissed with prejudice.
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¶ 15 On April 12, 2011, Neptune filed a section 2-619 motion to dismiss Welch’s third-party
complaint for contribution and indemnification on the basis that the claims were barred by
res judicata, and filed an objection to Welch’s March 1, 2011 motion for a good-faith
finding.
¶ 16 On June 2, 2011, Welch filed a response to Neptune’s motion to dismiss and objection
to Welch’s motion for a good-faith finding, arguing that, inter alia, its third-party claims
against Neptune for contribution and indemnification were not barred by res judicata.
Attached to the response as Exhibit B was a May 19, 2011 bystander’s report filed by
Welch’s counsel, Troy Radunsky (Attorney Radunsky), which stated that during the February
13, 2009 hearing in Camper I, the court purportedly informed him that Welch was free to file
a claim of indemnification or breach of contract against Neptune in a separate lawsuit and
that such a claim was not barred by res judicata.
¶ 17 On July 15, 2011, Neptune filed a motion to strike Attorney Radunsky’s bystander’s
report (motion to strike), arguing that the bystander’s report “[stood] in sharp contrast to both
[the court’s] February 13, 2009 [o]rder in the underlying Camper I action and the transcript
of the proceedings created at Welch’s request.” On that same day, July 15, 2011, Neptune
also filed a reply in support of its motion to dismiss the third-party complaint and in support
of its objection to Welch’s motion for a good-faith finding.
¶ 18 On July 25, 2011, the circuit court denied Neptune’s motion to strike the bystander’s
report and continued the matter. On December 21, 2011, the circuit court granted Welch’s
motion for a good-faith finding and granted Neptune’s motion to dismiss with prejudice the
contribution claim (count I) of Welch’s third-party complaint. The circuit court’s December
21, 2011 order stated that Neptune’s motion to dismiss the indemnification claim (count II)
of the third-party complaint would be continued to February 27, 2012 for the court to enter
a written ruling. On December 27, 2011, Welch filed a “motion to reconsider, clarify and/or
strike” (motion to reconsider) the portion of the circuit court’s December 21, 2011 order
which dismissed with prejudice Welch’s contribution claim (count I) against Neptune in the
third-party action.
¶ 19 On February 27, 2012, the circuit court denied Welch’s motion to reconsider, finding,
inter alia, that res judicata barred Welch’s contribution claim (count I) against Neptune in
the third-party action, and that count I should remain dismissed with prejudice. However, the
circuit court denied Neptune’s motion to dismiss the indemnification count (count II) of
Welch’s third-party complaint. The court again found that the settlement between Camper
and Welch was made in good faith.
¶ 20 On March 28, 2012, Neptune filed a motion to reconsider the circuit court’s February 27,
2012 order denying its motion to dismiss the indemnification claim (count II) of Welch’s
third-party complaint. In an order dated April 11, 2012, the circuit court stated that Welch
“waives any written response to Neptune’s motion to reconsider [the February 27, 2012
order] and will rely on prior briefs submitted to court.”
¶ 21 On May 11, 2012, the circuit court granted Neptune’s motion to reconsider the February
27, 2012 order, and dismissed Welch’s indemnification claim (count II) with prejudice; thus,
dismissing Camper II in its entirety.
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¶ 22 On June 5, 2012, Welch filed a notice of appeal.
¶ 23 ANALYSIS
¶ 24 We determine the following issues on appeal: (1) whether the circuit court erred in
dismissing with prejudice the contribution count (count I) of Welch’s third-party complaint
against Neptune in Camper II; and (2) whether the circuit court erred in dismissing with
prejudice the indemnification count (count II) of Welch’s third-party complaint against
Neptune in Camper II.
¶ 25 We first determine whether the circuit court erred in dismissing with prejudice the
contribution count (count I) of Welch’s third-party complaint against Neptune in Camper II,
which we review de novo. See Krilich v. American National Bank & Trust Co. of Chicago,
334 Ill. App. 3d 563, 569 (2002).
¶ 26 Welch argues that the doctrine of res judicata did not apply to bar the contribution count
(count I) of its third-party action against Neptune in Camper II, where Camper’s voluntary
dismissal of his cause of action against Welch in Camper I had no impact on Welch’s third-
party action against Neptune. Welch further contends that the elements of res judicata were
not satisfied and thus, the doctrine was inapplicable to bar its contribution claim against
Neptune.
¶ 27 Neptune counters that the circuit court properly dismissed with prejudice Welch’s
contribution count (count I) in Camper II, because it was barred by the res judicata effect of
the circuit court’s February 13, 2009 order dismissing Welch’s action for contribution against
Neptune in Camper I. Specifically, Neptune contends that all three elements of the doctrine
of res judicata were satisfied.
¶ 28 As discussed, in Camper I, on February 13, 2009, the circuit court expressly held that the
settlement between Camper, Burnside and Neptune was made in good faith pursuant to the
Joint Tortfeasor Contribution Act; that Camper’s action against Burnside and Welch’s third-
party contribution action against Neptune were dismissed with prejudice; and that the court
“bars any actions for contribution by any other defendants or tortfeasors against Burnside or
Neptune.” On April 22, 2009, Camper voluntarily dismissed without prejudice his complaint
against Welch, as the sole nonsettling tortfeasor, and subsequently refiled his cause of action
against Welch in Camper II. On May 19, 2010, Welch filed the instant Camper II third-party
action against Neptune, seeking contribution (count I) and indemnification (count II). On
December 21, 2011, the circuit court granted Neptune’s section 2-619 motion to dismiss the
contribution claim in the third-party complaint with prejudice, and, in the court’s written
ruling on February 27, 2012, denied Welch’s motion to reconsider the dismissal of the
contribution count by finding, inter alia, that res judicata barred the claim.
¶ 29 Under section 2-619 of the Illinois Code of Civil Procedure (the Code), an action may
be involuntarily dismissed on the bases that “the cause of action is barred by a prior
judgment” under a theory of res judicata, or that “the claim asserted against the defendant
is barred by other affirmative matter avoiding the legal effect of or defeating the claim.” 735
ILCS 5/2-619(a)(4), (a)(9) (West 2010). The term “affirmative matter” under section 2-
619(a)(9) “has been defined as a type of defense that either negates an alleged cause of action
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completely or refutes crucial conclusions of law or conclusions of material fact unsupported
by allegations of specific fact contained in or inferred from the complaint.” Krilich, 334 Ill.
App. 3d at 570. A section 2-619 motion to dismiss “admits the legal sufficiency of the
complaint and raises defects, defenses, or other affirmative matters that appear on the face
of the complaint or are established by external submissions that act to defeat the claim.” Id.
at 569-70. In ruling on such a motion, a court must construe the pleadings and supporting
documents in a light most favorable to the nonmoving party. Valdovinos v. Tomita, 394 Ill.
App. 3d 14, 17 (2009). Even if the circuit court dismissed on an improper basis, a reviewing
court may affirm the dismissal on any proper ground supported by the record. American
Service Insurance Co. v. City of Chicago, 404 Ill. App. 3d 769, 776-77 (2010).
¶ 30 The doctrine of res judicata provides that “a final judgment on the merits rendered by a
court of competent jurisdiction bars any subsequent actions between the same parties or their
privies on the same cause of action.” (Internal quotation marks omitted.) Kiefer v. Rust-
Oleum Corp., 394 Ill. App. 3d 485, 489 (2009). Three requirements must be satisfied in order
for res judicata to apply: “(1) a final judgment on the merits has been reached by a court of
competent jurisdiction; (2) an identity of cause of action exists; and (3) the parties or their
privies are identical in both actions.” Id. Res judicata bars not only what was actually
decided in the first action, but also those matters that could have been decided in that lawsuit.
River Park, Inc. v. City of Highland Park, 184 Ill. 2d 290, 302 (1998).
¶ 31 We note that Welch first argues that res judicata did not apply to bar the instant Camper
II third-party contribution claim (count I) against Neptune because Camper’s choice to
voluntarily dismiss his Camper I cause of action against Welch had no impact on Welch’s
third-party action against Neptune. However, the record shows that the dismissal of Welch’s
third-party contribution action against Neptune with prejudice in Camper I arose out of the
settlement of Camper’s claims against Burnside and Neptune, rather than Camper’s voluntary
dismissal of Camper I. The record reveals that, on February 13, 2009, two months prior to
Camper’s voluntary dismissal of his cause of action against Welch, the circuit court found
that the settlement between Camper, Burnside and Neptune was made in good faith pursuant
to the Joint Tortfeasor Contribution Act. In the February 13, 2009 order, the circuit court
dismissed Welch’s Camper I third-party action for contribution against Neptune with
prejudice. It was not until two months later, on April 22, 2009, that Camper voluntarily
dismissed without prejudice its cause of action against Welch, who was then the sole non-
settling defendant in Camper I. Thus, we find Welch’s argument to be misplaced.
¶ 32 Turning to the elements of res judicata, we note that, with regard to the dismissal of
Welch’s Camper II contribution claim (count I) against Neptune, Welch does not dispute that
the second and third requirements of res judicata are satisfied here. Thus, we need only
address Welch’s challenge to the first requirement.3
3
We note that Welch’s arguments against the application of res judicata in its opening brief
before us interweaves both arguments pertaining to the dismissal of its Camper II contribution count
(count I) and indemnification count (count II) against Neptune. Nonetheless, in resolving the issues
on appeal, this court will address arguments pertaining to the dismissal of count I and count II
separately.
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¶ 33 The first element of res judicata requires that there be a “final judgment on the merits.”
See Kiefer, 394 Ill. App. 3d at 489. Welch argues that this element had not been satisfied
because the circuit court’s February 13, 2009 order granting a good-faith finding in favor of
the settling parties (Camper, Burnside and Neptune) in Camper I did not constitute an
adjudication on the merits for the purposes of res judicata. Neptune counters that the circuit
court’s February 13, 2009 order in Camper I constituted a final judgment on the merits.
¶ 34 Generally, orders dismissing an action with prejudice constitutes a final judgment on the
merits for the purposes of res judicata. See Nelson v. Chicago Park District, 408 Ill. App.
3d 53, 61 (2011) (order dismissing a prior case with prejudice upon the execution of a
termination agreement was a final judgment on the merits that satisfied the first element of
res judicata); Board of Education of Sunset Ridge School District No. 29 v. Village of
Northbrook, 295 Ill. App. 3d 909, 915 (1998) (a dismissal of an action with prejudice
constituted an adjudication of that action on the merits); see also Keim v. Kalbfleisch, 57 Ill.
App. 3d 621, 624 (1978) (“a dismissal ‘with prejudice’ is as conclusive of the rights of the
parties as if the suit had been prosecuted to a final adjudication,” and “the dismissal with
prejudice of plaintiff’s first complaint, pursuant to a settlement agreement, is a final
judgment on the merits”).
¶ 35 Supreme Court Rule 273 provides the following concerning the effect of involuntary
dismissals: “Unless the order of dismissal or a statute of this [s]tate otherwise specifies, an
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 upon
the merits.” Ill. S. Ct. R. 273.
¶ 36 In SDS Partners, Inc. v. Cramer, a plaintiff sued the defendants alleging that the
defendants built a dam on their property that caused water to improperly divert water onto
the plaintiff’s property. SDS Partners, Inc. v. Cramer, 305 Ill. App. 3d 893, 894 (1999). The
parties thereafter entered into a settlement agreement, which the circuit court found to be fair,
and it dismissed the plaintiff’s cause of action with prejudice. Id. at 894-95. Several years
later, SDS Partners, Inc. (SDS), as the subsequent transferee of the property owned by the
plaintiff, filed a new lawsuit against the defendants alleging that the dam which they
constructed wrongfully diverted water onto SDS’ property. Id. at 895. The defendants moved
to dismiss SDS’ complaint, by attaching a copy of the settlement order to the pleadings. Id.
The circuit court then dismissed SDS’ action, holding that it was identical to the original
action filed by the plaintiff. Id. On appeal, SDS argued that its action was not barred by res
judicata because the prior dismissal did not amount to an adjudication on the merits, where
it was settled by the parties and never tried. Id. at 896. In rejecting SDS’ argument, the
reviewing court found that the settlement order in the original action was a final judgment
on the merits, stating that the parties agreed to a resolution and the circuit court dismissed
the action with prejudice–thereby, concluding the rights of the parties as if the matter had
proceeded to trial and been resolved by final judgment. Id.
¶ 37 Likewise, in Avery v. Auto-Pro, Inc., plaintiffs brought a negligence lawsuit against
defendant, alleging that the defendant negligently repaired an automobile that subsequently
crashed and injured the plaintiffs. Avery v. Auto-Pro, Inc., 313 Ill. App. 3d 747, 748 (2000).
The defendant then later filed a counterclaim for contribution against the plaintiffs, alleging
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that the plaintiffs’ negligent conduct contributed to their own injuries. Id. Upon motion by
the plaintiffs, the circuit court dismissed the counterclaim with prejudice on the basis that the
counterclaim was untimely filed. Id. The defendant never sought to appeal the dismissal of
its counterclaim for contribution. Id. Subsequently, the plaintiffs voluntarily dismissed the
lawsuit and refiled the case against the defendant within one year of the voluntary dismissal.
Id. at 749. After the plaintiffs refiled the new lawsuit, the defendant again brought a
counterclaim for contribution against the plaintiffs. Id. The plaintiffs then moved to dismiss
the new counterclaim, arguing that the new counterclaim, which was identical to the original
counterclaim, was barred by the dismissal of the original counterclaim. Id. The circuit court
denied the plaintiffs’ motion to dismiss, but certified the following question for interlocutory
review: “Can a counterclaim plaintiff file a counterclaim for contribution based on
negligence following the refilling [sic] of an original action that was voluntarily dismissed,
when the negligence counterclaim for contribution had originally been dismissed before the
voluntary dismissal?” (Internal quotation marks omitted.) Id. On interlocutory appeal, the
reviewing court held that the circuit court should have granted the motion to dismiss the new
counterclaim, finding that, under the plain language of Rule 273, the prior involuntary
dismissal of the defendant’s counterclaim operated as a final judgment on the merits and
thus, satisfied the first element of res judicata. Id. at 750.
¶ 38 Applying the plain language of Rule 273 and the principles of Cramer and Avery to the
instant case, we find that the first element of res judicata was satisfied. Welch’s original
third-party contribution claim in Camper I was dismissed for a reason other than for lack of
jurisdiction, improper venue, or failure to join an indispensable party. It is undisputed that
after Burnside filed a motion for a good-faith finding in Camper I on December 12, 2008,
Welch filed pleadings to oppose the motion. Thereafter, on February 13, 2009, following a
hearing on the parties’ arguments, the circuit court entered an order finding, over Welch’s
objection, that the settlement between Camper, Burnside and Neptune was made in good
faith pursuant to the Joint Tortfeasor Contribution Act; dismissing Camper’s Camper I action
against Burnside with prejudice; dismissing Welch’s Camper I contribution action against
Neptune with prejudice; and barring “any actions for contribution by any other defendants
or tortfeasors against Burnside or Neptune.” Thus, we find that the February 13, 2009
dismissal with prejudice of Welch’s Camper I third-party contribution action against
Neptune was an “involuntary” dismissal under Rule 273 and, thus, operated as an
adjudication upon the merits. Further, like the settlement agreement in Cramer, Camper’s
settlement with Burnside and Neptune in Camper I was a final judgment on the merits for
the purposes of res judicata, where the parties agreed to a resolution and the circuit court,
on February 13, 2009, dismissed with prejudice Camper’s action against Burnside and
Welch’s original contribution claim against Neptune. We find that, like the defendant in
Avery, Welch never sought to appeal the dismissal with prejudice of its Camper I third-party
contribution action against Neptune, nor did it request the court to include Rule 304(a)
language in the February 13, 2009 order. Like the plaintiffs in Avery, Camper voluntarily
dismissed his cause of action against Welch and refiled a subsequent new lawsuit against
Welch, after which Welch again brought a new third-party action against Neptune. We find
that, under the plain language of Rule 273 and the holdings in Cramer and Avery, the prior
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involuntary dismissal of Welch’s third-party contribution action operated as a final judgment
on the merits.
¶ 39 Nonetheless, Welch cites Downing v. Chicago Transit Authority, 162 Ill. 2d 70 (1994),
and Leow v. A&B Freight Line, Inc., 175 Ill. 2d 176 (1997), in support of its argument that
the February 13, 2009 order granting a good-faith finding regarding Camper’s settlement
with Burnside and Neptune, and dismissing Welch’s third-party contribution action against
Neptune with prejudice, was not an adjudication on the merits. We find Welch’s reliance on
Downing and Leow to be misplaced. Those cases each involved a personal injury lawsuit
filed by a plaintiff against an employee driver and the driver’s employer, and our supreme
court held that the dismissal with prejudice or the disposition by summary judgment of the
claims against the individual driver did not bar the plaintiff’s claims against the separate
defendant–driver’s employer–under res judicata. Unlike Neptune here, whose obligations
were resolved by settlement in Camper I and against whom Welch’s Camper I third-party
action was dismissed with prejudice, the causes of action against the employers in Downing
and Leow were not similarly resolved. Rather, only the causes of action against the employee
drivers were resolved, which the Downing and Leow courts found had no res judicata effect
upon the causes of action against the employers, as separate defendants in the plaintiff’s
lawsuits.
¶ 40 We further reject Welch’s characterization of this court’s findings in Cellini v. Village
of Gurnee, 403 Ill. App. 3d 26, 39 (2010), in support of its argument that the February 13,
2009 rulings did not constitute adjudication on the merits. Welch quotes certain language out
of context from the Cellini opinion, which does nothing to advance its argument. Welch
neglects to mention that in Cellini, this court affirmed the circuit court’s finding that the
plaintiff and the settling defendant entered into a good-faith settlement agreement, and
affirmed the circuit court’s dismissal with prejudice of all counterclaims for contribution
against the settling defendant. See Cellini, 403 Ill. App. 3d at 42. These facts are analogous
to the facts of Camper I, where the circuit court made a finding of good faith with regard to
the settlement between Camper, Burnside and Neptune, and dismissed Welch’s Camper I
third-party contribution action against Neptune with prejudice. We find Welch’s reliance on
Cellini to be inapposite. Therefore, we find that the first element of res judicata was
satisfied.
¶ 41 With respect to the second and third elements of res judicata, there cannot be any serious
dispute that these elements were satisfied. There is no dispute that Welch’s Camper I
contribution claim against Neptune and Welch’s Camper II contribution claim (count I)
against Neptune involved the same parties and identical allegations against Neptune. Thus,
we find that the second and third elements of res judicata were satisfied. Therefore, we hold
that res judicata applied to bar Welch’s Camper II contribution claim (count I) against
Neptune. Accordingly, we hold that the circuit court did not err in dismissing with prejudice
Welch’s Camper II contribution count (count I) against Neptune.
¶ 42 We next determine whether the circuit court erred in dismissing with prejudice the
indemnification count (count II) of Welch’s third-party complaint against Neptune in Camper
II, which we review de novo. See Krilich, 334 Ill. App. 3d at 569. We can affirm the circuit
court’s dismissal on any proper ground supported by the record. See American Service
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Insurance Co., 404 Ill. App. 3d at 776-77.
¶ 43 The doctrine of res judicata extends not only to what was actually decided in the original
action, but also to matters which could have been decided in that lawsuit. Rein v. David A.
Noyes & Co., 172 Ill. 2d 325, 334-35 (1996). As noted, Welch only sought a claim for
contribution against Neptune in Camper I and did not allege a count for indemnification until
Welch filed its third-party complaint against Neptune in Camper II. Thus, if all three
elements of res judicata are met and Welch’s Camper II indemnification claim (count II)
could have been determined in Camper I, Welch will be barred from litigating the
indemnification claim (count II) in Camper II. See id. at 338. Because this court has already
determined that the circuit court’s February 13, 2009 rulings constituted a final adjudication
on the merits, and the parties in Welch’s Camper I and Camper II third-party actions were
identical, we find that the first and third requirements of res judicata have been met.
Therefore, we need only determine if the second element has been satisfied–that is, whether
the indemnification claim (count II) sought by Welch in Camper II has an “identity of cause
of action” with the contribution claim sought by Welch in Camper I.
¶ 44 Welch argues that the second element of res judicata was not satisfied because there was
no identity of cause of action between its Camper I contribution claim against Neptune and
its Camper II indemnification claim against Neptune. Specifically, Welch contends that the
Camper I contribution action was a cause of action arising out of potential tort liability, while
the Camper II indemnification claim was based upon contract liability. Welch further asserts
that the contribution claim and the indemnification claim relied upon two different sets of
factual allegations for support.
¶ 45 Neptune counters that Welch forfeited for review on appeal any arguments relating to the
second element (the identity of cause of action) of res judicata, because Welch never made
such arguments before the circuit court. Notwithstanding forfeiture, Neptune argues that an
identity of cause of action exists between Welch’s Camper I contribution claim and Welch’s
Camper II indemnification claim against Neptune, where, although they assert different
theories of relief, they arose from a single group of operative facts. In support of its
argument, Neptune cites Peregrine Financial Group, Inc. v. Trademaven, L.L.C., 391 Ill.
App. 3d 309 (2009), and Radosta v. Chrysler Corp., 110 Ill. App. 3d 1066 (1982).
¶ 46 As an initial matter, we address Neptune’s assertion that Welch forfeited any arguments
pertaining to the second element of res judicata, on the basis that Welch failed to make such
arguments before the circuit court. See Mabry v. Boler, 2012 IL App (1st) 111464, ¶ 24
(“arguments not raised before the circuit court are forfeited and cannot be raised for the first
time on appeal”). However, based on our review of the record, Welch’s June 2, 2011
pleadings before the circuit court alleged that its indemnification claim against Neptune was
not barred by res judicata, and all three elements of res judicata were generally enumerated
in the pleadings. Thus, we find that Welch has not forfeited its challenges to the second
element of res judicata on appeal.
¶ 47 Illinois applies the more liberal “transactional test” in determining whether identity of
cause of action exists for the purposes of res judicata. River Park, Inc., 184 Ill. 2d at 310-12.
Under the transactional test, “separate claims will be considered the same cause of action for
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purposes of res judicata if they arise from a single group of operative facts, regardless of
whether they assert different theories of relief.” Id. at 311. To determine whether there is an
identity of cause of action between the first and second lawsuits, a court “ ‘must look to the
facts that give rise to plaintiffs’ right to relief, not simply to the facts which support the
judgment.’ ” Id. at 309-10 (quoting Rein, 172 Ill. 2d at 338-39). An identity of cause of
action is established “if two claims are based on the same, or nearly the same, factual
allegations.” Peregrine Financial Group, 391 Ill. App. 3d at 314.
¶ 48 In Peregrine Financial Group, a company sued Peregrine Financial Group (Peregrine)
and TradeMaven, LLC (TradeMaven), for patent infringement in federal court. Id. at 309-10.
The federal lawsuit was resolved when Peregrine and TradeMaven each entered into a
settlement agreement with the suing company, and all three parties agreed to a consent
judgment. Id. at 310. Subsequently, Peregrine filed suit against TradeMaven in state court
to recover damages for, inter alia, indemnification. Id. The indemnification claim sought to
recover $416,081.22 in attorney fees and costs Peregrine incurred in the federal patent
litigation. Id. at 311-12. The circuit court then granted TradeMaven’s motion for summary
judgment on the indemnification claim, finding that it was precluded by res judicata. Id. at
312. On appeal, this court found that the patent litigation and the indemnification claim both
arose out of a licensing agreement between Peregrine and TradeMaven. Id. at 315. Pursuant
to the licensing agreement, Peregrine acquired the rights to use TradeMaven’s software,
which resulted in the federal patent infringement lawsuit, and TradeMaven agreed to
indemnify Peregrine against such claims. Id. The reviewing court held that, because
Peregrine’s claim for indemnification arose out of the “same incident, events, transaction,
circumstances, or other factual nebula” as the patent litigation, there existed an identity of
causes of action between the two cases. (Internal quotation marks omitted.) Id. at 319. Thus,
because the indemnification claim was not, but could have been, raised in the patent
litigation, the reviewing court concluded that it was barred by res judicata. Id.
¶ 49 In Radosta, a truck driver lost control of his truck and collided with a car driven by the
plaintiff. Radosta, 110 Ill. App. 3d at 1067. The plaintiff then filed a negligence lawsuit
against the truck driver, and also sued the manufacturer and dealer of the truck for strict
liability, negligence, and willful and wanton conduct. Id. The truck driver filed a
counterclaim for negligence and strict liability against the manufacturer and dealer for the
damage to the truck, but did not file any indemnification claims against the dealer or
manufacturer for his potential liability to the plaintiff. Id. A jury verdict was rendered in
favor of the plaintiff against all three defendants, and in favor of the truck driver on his
counterclaim against the manufacturer and dealer for the damage to his truck. Id.
Subsequently, the truck driver filed an indemnification action against the dealer and
manufacturer, which the circuit court dismissed on the basis of res judicata. Id. at 1067-68.
The reviewing court affirmed the circuit court’s dismissal, finding that the indemnification
claim was barred by res judicata because it arose out of the same group of operative facts in
the first action and could have been raised at that time. Id. at 1068. The reviewing court
specifically found that the truck driver’s claim in both actions was based on the claim that
the manufacturer and dealer sold him a vehicle with defective steering which caused an
accident, and that they should be liable for damages resulting from the accident. Id. at 1069.
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The reviewing court further found immaterial that the truck driver sought different damages
in the second action from those sought in the first action, stating that the assertion of
different kinds of relief or damages still constituted a single cause of action where a single
group of operative facts gave rise to the assertion of relief. Id. In its holding, the reviewing
court noted Illinois public policy against claim splitting and piecemeal litigation. Id. at 1068-
69.
¶ 50 Like Peregrine Financial Group and Radosta, Welch’s Camper II indemnification claim
against Neptune arose from the same group of operative facts as its Camper I contribution
action against Neptune. Both actions arose out of the injures suffered by Camper when he
allegedly fell while working in a sanitary manhole on a construction site in January 2006,
which gave rise to Camper’s subsequent product liability claims against Welch, as
manufacturer of the manhole, in Camper I and Camper II. Regardless of the fact that
Welch’s contribution claim in Camper I and the indemnification claim in Camper II assert
different theories of relief against Neptune, both actions relied upon the circumstances
surrounding Camper’s accident that gave rise to the assertions of relief. Like the Radosta
truck driver who did not include an indemnification claim in his counterclaim in the first
action, Welch did not raise, but could have raised, the indemnification claim against Neptune
in its third-party complaint in Camper I. Instead, Welch waited to bring a claim for
indemnification against Neptune for the first time in Camper II. Thus, we find that an
identity of cause of action existed between Welch’s contribution action against Neptune in
Camper I and Welch’s indemnification action against Neptune in Camper II. Therefore,
because all three elements were satisfied, we hold that the indemnification count (count II)
in Welch’s third-party complaint against Neptune in Camper II was barred by res judicata.
¶ 51 Nonetheless, Welch argues that, even if the elements of res judicata were satisfied,
exceptions applied to circumvent the preclusion of its third-party claims against Neptune in
Camper II. Welch contends that the circuit court’s February 13, 2009 order and April 22,
2009 order, which voluntarily dismissed Camper’s action against Welch in Camper I, as well
as the May 19, 2011 bystander’s report filed by Attorney Radunsky, expressly reserved
Welch’s right to maintain the third-party action against Neptune in Camper II. Welch further
asserts that policies favoring preclusion of Welch’s third-party action against Neptune in
Camper II were overcome by extraordinary reasons.
¶ 52 Neptune counters that the circuit court’s February 13, 2009 order and Attorney
Radunsky’s bystander’s report did not expressly reserve for Welch a right to maintain the
third-party action against Neptune in Camper II. Neptune further argues that Welch forfeited
its arguments concerning the April 22, 2009 order, which are raised for the first time on
appeal. Forfeiture aside, Neptune contends that the April 22, 2009 order did not operate as
a reservation to allow Welch to file a new third-party action against Neptune in Camper II.
Neptune further asserts that Welch forfeited review of its claim that “extraordinary reasons”
precluded the application of res judicata to bar its third-party actions against Neptune in
Camper II, and, notwithstanding forfeiture, Welch failed to show by clear and convincing
evidence that any such extraordinary reasons existed to apply this exception.
¶ 53 Our supreme court has set forth six exceptions to the rule against claim-splitting, even
when the elements of res judicata are met, including, inter alia, circumstances where “(2)
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the court in the first action expressly reserved the plaintiff’s right to maintain the second
action; *** or (6) it is clearly and convincingly shown that the policies favoring preclusion
of a second action are overcome for an extraordinary reason.” Rein, 172 Ill. 2d at 341.
¶ 54 We find that the February 13, 2009 order and the May 19, 2011 bystander’s report filed
by Attorney Radunsky did not expressly reserve for Welch a right to maintain the third-party
action against Neptune in Camper II. As noted, in Camper I, the February 13, 2009 order
expressly stated that the settlement between Camper, Burnside and Neptune was made in
good faith; that both Camper’s action against Burnside, and Welch’s third-party action
against Neptune, be dismissed with prejudice; and that any actions for contribution filed by
any other defendants or tortfeasors against Burnside and Neptune were barred by the court.
The court’s order further denied Welch’s motion to amend its pleadings against Neptune to
include other causes of action, and stated that Camper’s cause of action shall continue against
Welch as the sole nonsettling defendant in Camper I. Welch now argues that its right to bring
causes of action against Neptune in Camper II was reserved by the court’s February 13, 2009
order, on the basis that the court did not deny Welch’s right to bring subsequent additional
causes of action against Neptune with prejudice and the order did not contain any Rule
304(a) language. We find this argument to be without merit, where the omissions by the
court as suggested by Welch cannot be considered an “express reservation” under the
exceptions to preclude res judicata effect upon Welch’s subsequent third-party action against
Neptune in Camper II. Rather, the plain language of the February 13, 2009 order expressly
dismissed Welch’s Camper I third-party action against Neptune with prejudice, denied
Welch leave to amend its pleadings against Neptune to include other causes of action, and
barred any actions for contribution against Neptune by any other defendants or tortfeasors.
Nothing in the transcript of the February 13, 2009 proceedings or the February 13, 2009
order suggests that the circuit court expressly reserved for Welch a future right to file another
third-party action against Neptune in Camper II. Further, while the February 13, 2009 order
did not contain any Rule 304(a) language, Welch did not ask the court for inclusion of the
language or seek to appeal the order following Camper’s voluntary dismissal of Camper I
on April 22, 2009. It is important to note that at the time the February 13, 2009 order was
entered, there was no way either the circuit court or Welch possibly could have known that
Camper would voluntarily dismiss his remaining claims against Welch in Camper I two
months later in April 2009, or whether Camper would refile his cause of action against
Welch within the one-year statutory requirements. Thus, we reject Welch’s contention that
the February 13, 2009 order expressly reserved Welch’s right to maintain the Camper II
third-party action against Neptune.
¶ 55 Welch directs this court’s attention to a May 19, 2011 bystander’s report filed by
Attorney Radunsky, which was attached as Exhibit B to Welch’s June 2, 2011 response to
Neptune’s motion to dismiss the third-party action in Camper II, in support of its argument
that the court had expressly reserved Welch’s right to file a new third-party action against
Neptune in Camper II. The crux of the bystander’s report stated that, during the February 13,
2009 hearing in Camper I, the circuit court purportedly informed Attorney Radunsky that
Welch was free to file a claim of indemnification or breach of contract against Neptune in
a separate lawsuit and that such a claim was not barred by res judicata. We reject this
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contention. Supreme Court Rule 323 provides that a bystander’s report may be provided by
an appellant where “no verbatim transcript of the evidence of proceedings is obtainable.” Ill.
S. Ct. R. 323(c) (eff. Dec. 13, 2005). However, a bystander’s report may not be based solely
upon the drafter’s own interpretation of the evidence and memory as to what happened
during the proceedings, without acknowledgment by the opposing party and certification by
the circuit court. City of Pekin v. Mann, 44 Ill. App. 3d 1, 2 (1976). We find that a verbatim
transcript of the February 13, 2009 proceedings was provided to this court on appeal and,
thus, under Rule 323, the bystander’s report could not be used to supplement the record.
Further, our review of the record shows that, while Neptune filed a motion to strike the
bystander’s report on July 15, 2011 and the circuit court thereafter denied the motion to strike
on July 25, 2011, the record is devoid of any indication that the circuit court actually certified
the bystander’s report or that Attorney Radunsky, as counsel for Welch, complied with other
procedural requirements set forth in Rule 323. See Ill. S. Ct. R. 323(c) (eff. Dec. 13, 2005);
see Foutch v. O’Bryant, 99 Ill. 2d 389, 391-92 (1984) (appellant has the burden to provide
a complete record on appeal, and thus, any doubts which may arise from the incompleteness
of the record will be resolved against the appellant). Indeed, the bystander’s report, which
was created over two years after the February 13, 2009 hearing and bears only the signature
of Attorney Radunsky, was more akin to an attorney’s affidavit than a bystander’s report. See
Smith v. Central Illinois Public Service Co., 176 Ill. App. 3d 482, 497 (1988) (“an attorney’s
affidavit cannot be used to supplement the record in lieu of a transcript or a bystander’s
report”); Mann, 44 Ill. App. 3d at 2-3 (appellant may not proceed on a purported “bystander’s
report” which was only signed by the appellant’s attorney and was based solely upon the
attorney’s interpretation of the evidence). Thus, we find that the express reservation
exception to the doctrine of res judicata did not apply on this basis.
¶ 56 Welch further argues that exceptions to res judicata applied in the instant case because
the circuit court’s April 22, 2009 order, which voluntarily dismissed Camper’s action against
Welch in Camper I, expressly reserved Welch’s right to maintain the third-party action
against Neptune in Camper II. Welch further argues that policies favoring preclusion of
Welch’s third-party action against Neptune in Camper II were overcome by extraordinary
reasons. We find these arguments to be forfeited for review because they are raised for the
first time by Welch on appeal. See Mabry, 2012 IL App (1st) 111464, ¶ 24 (“arguments not
raised before the circuit court are forfeited and cannot be raised for the first time on appeal”).
¶ 57 Forfeiture aside, we find that the April 22, 2009 order did not expressly reserve for
Welch a future right to file another third-party action against Neptune in Camper II. As
discussed, the April 22, 2009 order voluntarily dismissed Camper’s action against Welch in
Camper I and expressly stated that Camper had reserved his right to maintain his cause of
action “upon refiling of this matter in accordance with [s]ection 13-217 of the Illinois Code
of Civil Procedure (735 ILCS 5/13-217) and there shall be no res judicata effect upon any
claim.” Based on our review of the entirety of the April 22, 2009 order, we find nothing in
the plain language of the order to suggest that the court was expressly reserving Welch a
right to file a subsequent third-party action against Neptune, against whom all pending claims
had been terminated by the circuit court approximately two months earlier on February 13,
2009. See Kiefer, 394 Ill. App. 3d at 494 (circuit court orders must be interpreted from the
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entire context in which they were entered, with reference to other parts of the record
including the pleadings, motions and issues before the court and the arguments of counsel;
orders must be construed in a reasonable manner to give effect to the apparent intent of the
circuit court). Welch points to isolated phrases in the April 22, 2009 order, such as that
Camper’s voluntary dismissal was entered “without prejudice and costs to any party” and that
“there shall be no res judicata effect upon any claim,” as bases for its arguments that the
circuit court expressly reserved Welch’s right to file a later third-party action against Neptune
in Camper II. We reject this argument, and find that the April 22, 2009 order, when viewed
in the entire context in which the order was entered, clearly pertained only to Camper’s
voluntary dismissal of his action against Welch in Camper I and the reservation of Camper’s
statutory rights to refile his claims against Welch within one year of the voluntary dismissal.
Thus, the express reservation exception of res judicata did not apply on this basis. Likewise,
forfeiture aside, we find that Welch, in pointing out its powerlessness to prevent Camper
from voluntarily dismissing his cause of action in Camper I, has not clearly and convincingly
shown any extraordinary reasons that could overcome policies favoring preclusion of
Welch’s third-party action against Neptune in Camper II. Thus, we find that no exception
to res judicata should apply on this basis. Therefore, we hold that the doctrine of res judicata
barred the contribution count (count I) and indemnification count (count II) of Welch’s third-
party action against Neptune in Camper II.
¶ 58 Moreover, we find that the indemnification count (count II) of Welch’s third-party action
against Neptune in Camper II was properly dismissed with prejudice by the circuit court for
the additional reason that it violated the Construction Contract Indemnification for
Negligence Act (the Anti-Indemnity Act) (740 ILCS 35/1 et seq. (West 2010)). The Anti-
Indemnity Act provides:
“With respect to contracts or agreements, either public or private, for the construction,
alteration, repair or maintenance of a building, structure, highway bridge, viaducts or
other work dealing with construction, or for any moving, demolition or excavation
connected therewith, every covenant, promise or agreement to indemnify or hold
harmless another person from that person’s own negligence is void as against public
policy and wholly unenforceable.” (Emphases added.) 740 ILCS 35/1 (West 2010).
As discussed, the relevant language of the purchase order agreement between Welch and
Neptune sought to indemnify Welch against “any and all claims *** arising out of the
ordering, acquisition, delivery, installation, possession, maintenance, use, operation, control,
loss, damage, destruction, return or surrender, sale or other disposition of any material
supplied by [Welch].” The affidavit of Welch’s general manager, Nick Martinec, attests that
Welch manufactured and delivered the manhole by unloading it from a truck and setting it
on the ground at the construction site. Based on this evidence, we find that the work
performed by Welch constituted “other work dealing with construction” and “for any moving
*** connected therewith” within the scope of the Anti-Indemnity Act. Thus, we find that the
indemnification clause of the purchase order agreement, which sought to indemnify Welch
for “any and all claims” arising out of the enumerated conduct, was void as against public
policy under the Anti-Indemnity Act. Therefore, because the indemnification clause was void
and unenforceable, the circuit court properly dismissed Welch’s indemnification claim (count
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II) against Neptune with prejudice in Camper II. Accordingly, we need not address
Neptune’s alternative arguments for relief on appeal.
¶ 59 For the foregoing reasons, we affirm the judgment of the circuit court of Cook County.
¶ 60 Affirmed.
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