POM 1250 N. Milwaukee, LLC v. F.C.S.C., Inc.

Illinois Official Reports
Appellate Court
POM 1250 N. Milwaukee, LLC v. F.C.S.C., Inc., 2014 IL App (1st) 132098Appellate Court POM 1250 N. MILWAUKEE, LLC, Plaintiff-Appellee, v. F.C.S.C.,
Caption INC., Defendant-Appellant.
District & No. First District, Third Division
Docket No. 1-13-2098
Filed May 28, 2014
Where plaintiff appealed the award of attorney fees to defendant in
Held
plaintiff’s action for breach of a real estate contract, but did not seek a
(Note: This syllabus
stay of enforcement or post an appeal bond, and defendant proceeded
constitutes no part of the
opinion of the court but to collect the award by garnishing the title company holding the
has been prepared by the earnest money plaintiff deposited while the appellate court reversed
Reporter of Decisions the award of attorney fees without a remand and then plaintiff returned
for the convenience of to the trial court and obtained an order requiring defendant to return
the reader.) the garnished funds, the appellate court, pursuant to defendant’s
appeal, affirmed the trial court’s order requiring defendant to return
the earnest money to plaintiff, notwithstanding defendant’s
contentions that the reversal of the fee award without a remand
deprived the trial court of jurisdiction and that the doctrine of
res judicata barred plaintiff’s action contesting the award, since the
trial court, pursuant to Supreme Court Rule 369(b), was revested with
jurisdiction when the fee award was reversed as part of the appellate
court’s decision affirming in part and reversing in part the trial court’s
judgment, and res judicata did not apply because the garnishment
order was nullified by the reversal of the underlying fee award.
Decision Under Appeal from the Circuit Court of Cook County, No. 06-CH-23543; the
Review Hon. Thomas R. Allen, Judge, presiding.
Judgment Affirmed.
Counsel on Edward P. Freud and Brandon R. Freud, both of Ruff, Weidenaar &
Appeal Reidy, Ltd., of Chicago, for appellant.
David A. Epstein, of Brown Udell Pomerantz & Delrahim, Ltd., of
Chicago, for appellee.
Panel PRESIDING JUSTICE HYMAN delivered the judgment of the court,
with opinion.
Justices Neville and Mason concurred in the judgment, and opinion.
OPINION
¶1 Plaintiff appealed an award of attorney fees entered against it, but decided to neither
seek a stay of enforcement nor post a bond. While the appeal proceeded, defendant engaged
in postjudgment remedies and collected the entire judgment. (This saved plaintiff from
possibly having to pay postjudgment interest.) Plaintiff succeeded in its appeal, and this court
reversed the judgment. Plaintiff, of course, wanted defendant to return its money so went
back to the trial court, which ordered defendant to pay up. Defendant, however, contends
plaintiff put itself in a win-lose predicament, that is, plaintiff won the appeal, but the trial
court exceeded its authority in ordering defendant to give back the money.
¶2 Defendant raises two issues for us to consider: (i) the trial court did not have jurisdiction
over plaintiff’s motion because the appellate court reversed the award of attorney fees
without remand; and (ii) the doctrine of res judicata bars plaintiff from seeking return of the
money. We reject both arguments. Remand was unnecessary because under Supreme Court
Rule 369(b), after a reviewing court affirms all or part of a judgment, jurisdiction revests in
the trial court to enforce the judgment and for other proceedings to go on as if no appeal had
been taken. Ill. S. Ct. R. 369(b) (eff. July 1, 1982). As to the doctrine of res judicata,
enforcement of a judgment merely continues or supplements the original case and does not
constitute a separate or subsequent action. The trial court appropriately and properly handled
the case after the appeal, and so we affirm.
¶3 BACKGROUND
¶4 To understand this appeal, we need to review the earlier appeal.
¶5 In June 2006, F.C.S.C., Inc. (FCSC), entered a $1.9 million contract to sell a building in
Chicago to POM 1250 N. Milwaukee, LLC (POM). In the contract, FCSC agreed to send
-2-
POM plans, engineering reports, and environmental surveys by July 7, 2006. In November
2006, POM sued FCSC for failing to send the promised documents and complete the sale. In
response to FCSC’s motion to dismiss, the trial court dismissed three counts with prejudice
and struck another with leave to replead. The trial court allowed an immediate appeal from
the dismissal of the first three counts under Illinois Supreme Court Rule 304(a) (eff. Feb. 26,
2010). POM filed a notice of appeal but never filed briefs, and the appellate court dismissed
the appeal. Later, after efforts by the trial court to help the parties settle the case failed, POM
moved for voluntary dismissal of the case, which the trial court granted on May 1, 2009.
¶6 On May 11, 2009, FCSC filed two postjudgment motions: one for sanctions under Illinois
Supreme Court Rule 137 (eff. Feb. 1, 1994) for filing false pleadings, and a second motion
for attorney fees and costs based on a contract provision for payment of fees to the prevailing
party. On October 22, 2010, the trial court denied the motion for Rule 137 sanctions but
awarded FCSC attorney fees in the amount of $54,145.28. POM appealed the award of
attorney fees, and FCSC cross-appealed the amount of the fee award and the denial of
sanctions.
¶7 While the appeals proceeded, FCSC pursued a supplemental proceeding by serving a
garnishment summons on Guaranty Title Company, which held POM’s earnest money. On
December 21, 2010, the trial court entered an order directing Guaranty to turn over to FCSC
$50,750.07, which it did. POM did not appeal the turnover order.
¶8 On April 18, 2012, the appellate court affirmed in part and reversed in part the trial
court’s October 22, 2010 order. The court affirmed the trial court’s finding that Rule 137
sanctions were not warranted against POM, but reversed the trial court’s award of attorney
fees to FCSC on jurisdictional grounds because FCSC had never filed a pleading seeking an
award of attorney fees. POM 1250 N. Milwaukee, LLC v. F.C.S.C., Inc., 2012 IL App (1st)
103466-U. The appellate court order did not remand the case for further proceedings.
¶9 On October 12, 2012, six months after the appellate court order reversing the attorney fee
award, POM filed a motion for the trial court “to vacate the $50,750.07 turnover order
entered in this supplemental proceeding on December 12, 2010, and to enter a turnover order
against Defendant [FCSC,] directing it to pay over to the plaintiff the sum of $50,750.07 plus
9% postjudgment interest.” POM titled the motion a “reverse turnover motion.” FCSC
moved to dismiss, arguing the trial court lacked jurisdiction to decide POM’s reverse
turnover motion because the appellate court had not remanded the case.
¶ 10 On February 19, 2013, the trial court denied FCSC’s motion to dismiss for lack of
jurisdiction, and, after a hearing, ordered FCSC to turn over to POM $50,750.07. The trial
court found the appellate court’s order reversing the award of attorney fees to FCSC voided
both the money judgment from which POM appealed, and the turnover order based on the
money judgment. FCSC filed a motion to reconsider. The trial court denied the motion to
reconsider but vacated the order as to codefendant Republic Bank of Chicago and corrected
other errors in the order.
¶ 11 FCSC appeals from both the February 19 order and the order denying the motion to
reconsider, arguing that: (i) the trial court lacked jurisdiction to decide POM’s postappeal
motion because after reversing the appellate court had not remanded for further proceedings,
and (ii) POM’s posttrial motion was barred by res judicata.
-3-
¶ 12 ANALYSIS
¶ 13 Trial Court’s Jurisdiction in the Absence of Remand
¶ 14 FCSC contends when the appellate court reversed the trial court’s fees award, it did not
remand to the trial court and, hence, the trial court was without jurisdiction to hear POM’s
reverse turnover motion. FCSC points to Illinois Supreme Court Rule 369 (eff. July 1, 1982),
and argues that after reversing a trial court order, the appellate court must remand the case to
revest jurisdiction in the trial court. POM responds that the trial court acquired jurisdiction:
(i) under the circuit court’s inherent constitutional power, (ii) under common law restitution
principles, and (iii) because it filed a citation proceeding to enforce the appellate court
judgment under section 2-1402 of the Illinois Code of Civil Procedure (735 ILCS 5/2-1402
(West 2010)). The parties agree that where the circuit court decided issues of jurisdiction
without an evidentiary hearing, the decision is reviewed de novo. Commerce Trust Co. v. Air
1st Aviation Cos., 366 Ill. App. 3d 135, 140 (2006).
¶ 15 Supreme Court Rule 369 provides for the filing of a mandate in the circuit court after a
decision has issued from a reviewing court. Relevant to this appeal are subsections (b) and
(c) of Rule 369, which provide:
“(b) Dismissal or Affirmance. When the reviewing court dismisses the appeal or
affirms the judgment and the mandate is filed in the circuit court, enforcement of the
judgment may be had and other proceedings may be conducted as if no appeal had
been taken.
(c) Remandment. When the reviewing court remands the case for a new trial or
hearing and the mandate is filed in the circuit court, the case shall be reinstated
therein upon 10 days’ notice to the adverse party.” Ill. S. Ct. R. 369(b), (c) (eff. July
1, 1982).
¶ 16 FCSC asserts that under the language of Rule 369 (b) and (c), jurisdiction revests with the
trial court after an appeal only if (i) the appeal is affirmed or dismissed or (ii) the case is
remanded. Because the appellate court reversed the trial court but did not remand, the trial
court has no jurisdiction to consider any other proceedings. To support its argument, FCSC
relies on Watkins v. Dunbar, 318 Ill. 174 (1925) and Dalan/Jupiter, Inc. v. Draper & Kramer,
Inc., 372 Ill. App. 3d 362 (2007). In Watkins, the trial court entered a judgment in the
plaintiff’s favor, granting an order of replevin against the sheriff, who had levied on property
belonging to the plaintiff. Watkins, 318 Ill. at 175-76. The appellate court reversed and found
that the sheriff was entitled to possession of the property by virtue of his levy. Id. at 176.
After the appellate court’s reversal, the trial court, on motion, ordered the property to be
returned to the sheriff and granted costs. Id. Our supreme court held that that trial court did
not have jurisdiction to enter the turnover order. Id. at 177. The court noted that if an appeal
is dismissed or a judgment affirmed, the case may be reinstated in the trial court and
execution may issue or other proceedings may be had on the original judgment, and if a
judgment is reversed and the case is remanded for a new trial, the case is reinstated in the
trial court on the filing of the remand order. Id. But “[w]here the judgment is reversed and
there is no order remanding the case, it cannot be re-instated in the court which entered the
judgment from which the appeal was taken.” Id. The court further stated, “[T]he power to
make a valid order cannot survive the loss of jurisdiction. There was no case pending in the
circuit court *** when the judgment for a return of the property in question and for costs was
-4-
entered against appellant, and the order entered by the circuit court is coram non judice.” Id.
at 178.
¶ 17 In Dalan/Jupiter, Inc. v. Draper & Kramer, Inc., 372 Ill. App. 3d 362 (2007), this court
reaffirmed the holding in Watkins. In Dalan/Jupiter, the plaintiff filed a breach of contract
claim against defendant. After a bench trial, the trial court awarded plaintiff $550,252.22,
including attorney fees. Id. at 364. The appellate court reversed, finding defendant did not
breach the contract. The case was not remanded. Id. After the mandate was filed, defendant
filed a petition in the trial court for attorney fees and costs. Id. The trial court denied the
petition, finding it had no jurisdiction. Id. Defendant then filed a new complaint against
plaintiff alleging breach of contract, subrogation, and unjust enrichment, and seeking
attorney fees and costs in the amount of $318,020.89. Id. at 365. The trial court granted
plaintiff’s motion for summary judgment on res judicata grounds and defendant appealed.
Id. at 365-66. Defendant contended that because the trial court said it did not have
jurisdiction to consider the merits of its previous fee petition, the earlier order can have no
res judicata effect on a separate lawsuit alleging the same claim for fees. Id. at 367. The
appellate court rejected that argument, observing that “Rule 369(b) embodies the Illinois
Supreme Court’s holding in Watkins v. Dunbar, 318 Ill. 174, 149 N.E. 14 (1925). [Citation.]
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).”
Id. at 367-68. The panel saw no reason to depart from the holding in Watkins. Id. at 368.
¶ 18 FCSC asserts that, similarly, because the appellate court did not dismiss the appeal or
affirm the award of attorney fees, the trial court lacked jurisdiction under Rule 369(b) and
jurisdiction was not warranted under Rule 369(c) without remand. Therefore, the trial court’s
order granting POM’s reverse turnover motion was void for lack of jurisdiction.
¶ 19 The rule set forth in Watkins and restated in Dalan/Jupiter was recently examined in
McNeil v. Ketchens, 2011 IL App (4th) 110253. In McNeil, plaintiff homeowners brought an
action seeking a declaratory judgment against their neighbor and to quiet title to a small
sliver of property on which part of the plaintiffs’ driveway sat, after defendant blocked
access to the driveway. Id. ¶ 5. After a bench trial, the circuit court entered judgment for the
defendant, and plaintiffs appealed. The appellate court affirmed the trial court’s finding that
plaintiffs had not acquired title to that portion of the driveway by deed when they purchased
the property but reversed the trial court’s finding that plaintiffs had not carried their burden
of proving adverse possession for 20 years. Id. ¶ 9. The circuit court then entered judgment
that the defendant had no ownership interest in the property and the plaintiff homeowners
acquired title by adverse possession. Id. ¶ 12. Defendant appealed, relying on Watkins and
Dalan/Jupiter to argue that because the appellate court had not remanded the case, the trial
court lacked jurisdiction to enter any further orders. The appellate court disagreed, noting
that its earlier decision “was more than a reversal: it was an affirmance in part and a reversal
in part.” Id. ¶ 21. The court further stated, “Rule 369(b) (eff. July 1, 1982) presupposes that
after an affirmance, the trial court has jurisdiction over the subject matter and the
parties–even absent a remand–because without such jurisdiction the court would be
precluded from entering any order at all, including an order relating to the affirmance, and
Rule 369(b) contemplates further proceedings relating to the affirmance.” Id.
¶ 20 We agree with the holding in McNeil. When a reviewing court affirms all or part of a
circuit court judgment, Rule 369(b) provides that “enforcement of the judgment may be had
-5-
and other proceedings may be conducted as if no appeal had been taken.” (Emphasis added.)
Ill. S. Ct. R. 369(b) (eff. July 1, 1982). In its order on POM’s appeal of the trial court’s award
of attorney fees to FCSC and FCSC’s cross-appeal of the denial of Rule 137 sanctions, the
appellate court reversed in part and affirmed in part. POM 1250 N. Milwaukee, LLC v.
F.C.S.C., Inc., 2012 IL App (1st) 103466-U. By affirming in part, the appellate court
necessarily revested the trial court with jurisdiction over the case and permitted the court to
conduct “other proceedings,” namely, POM’s postappeal motion for a reverse turnover order.
(POM might have avoided this appeal had it also appealed the turnover order and
consolidated that appeal with the appeal of the attorney fee order, but we do not believe POM
was obligated to pursue this course of action to preserve its ability to recover funds from
defendant on a judgment that is no longer in existence.) Therefore, the trial court did not err
in finding it had jurisdiction to grant the motion.
¶ 21 Res Judicata
¶ 22 “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.) Hudson v. City of
Chicago, 228 Ill. 2d 462, 467 (2008). “Res judicata is an equitable doctrine designed to
prevent the multiplicity of lawsuits between the same parties and involving the same facts
and the same issues.” Murneigh v. Gainer, 177 Ill. 2d 287, 299 (1997). The bar extends to all
matters that were offered to sustain or defeat a claim in the first action, as well as to all
matters that could have been offered. Arvia v. Madigan, 209 Ill. 2d 520, 533 (2004).
¶ 23 FCSC contends that by failing to appeal the trial court’s December 21, 2010, turnover
order, which was a final and appealable order under Supreme Court Rule 304(b)(4),
res judicata applied. Rule 304(b) provides that certain orders are appealable without a special
finding, including a “final judgment or order entered in a proceeding under section 2-1402 of
the Code of Civil Procedure.” Ill. S. Ct. R. 304(b)(4) (eff. Feb. 26, 2010). Because POM did
not timely appeal the trial court’s turnover order, FCSC contends res judicata barred POM
from challenging the order.
¶ 24 FCSC relies on Busey Bank v. Salyards, 304 Ill. App. 3d 214 (1999). In Busey, the
plaintiff, Busey Bank, obtained a money judgment against the Salyards. Id. at 216. To collect
the judgment, Busey Bank served a garnishment summons on Farmers Merchants National
Bank, which answered that the Salyards had $2,573 in savings and $18,046.99 in an
individual retirement account (IRA). Id. Busey Bank obtained a turnover order in its favor for
all of the IRA funds, but Farmers Merchants never paid those funds to Busey Bank. Id. The
Salyards later filed for bankruptcy protection and the bankruptcy court voided the turnover
order because it included exempt IRA assets. Id. Six months after the turnover order was
entered, Farmers Merchants relinquished the IRA funds to the Salyards. Id. On motion by
Busey Bank, the trial court entered an order of contempt and sanctions against Farmers
Merchants for failing to pay the funds to Busey Bank as required by the turnover order. Id. In
appealing the contempt order, Farmers Merchants contended that because the turnover order
was voided, the contempt order was also invalid. Id. at 217-18. The appellate court found that
it did not have jurisdiction to review the merits of the turnover order because Farmers
Merchants had not appealed that order. Id. at 218. The court stated, “In postjudgment
garnishment proceeding, orders that terminate all or part of the garnishment proceeding are
-6-
appealable pursuant to Supreme Court Rule 304(b)(4) [citation]. [Citations.] When a party
has failed to take a timely appeal from an order that is final for purposes of appeal, the
appellate court is without jurisdiction to consider the propriety of that earlier final order in an
appeal from a subsequent order, even in the same case. [Citation.]” Id. According to FCSC,
POM may not seek to vacate a turnover order it never challenged on appeal.
¶ 25 Busey Bank, though, is inapposite. As the court there stated, “Farmers Merchants attempts
to attack the turnover order in an appeal from an order entered in a subsequent, independent
proceeding, to wit, the contempt proceeding.” Id. POM does not seek to collaterally attack
the turnover order entered in the garnishment proceeding but to effectuate this court’s
judgment reversing the attorney fee award in the same proceeding.
¶ 26 There having been no “subsequent action,” res judicata does not apply. Under section
2-1402 of the Code of Civil Procedure (735 ILCS 5/2-1402 (West 2010)), “[a] judgment
creditor *** is entitled to prosecute supplementary proceedings for the purposes of
examining the judgment debtor or any other person to discover assets or income of the debtor
not exempt from the enforcement of the judgment, a deduction order or garnishment, and of
compelling the application of non-exempt assets or income discovered toward the payment of
the amount due under the judgment. A supplementary proceeding shall be commenced by the
service of a citation issued by the clerk.” 735 ILCS 5/2-1402(a) (West 2010).
“ ‘[S]upplementary proceedings to collect, of whatever nature, must derive their support from
the main judgment, and if the main judgment fails the right to collect in such proceedings
must also fail.’ ” People ex rel. Scott v. Police Hall of Fame, Inc., 69 Ill. App. 3d 501, 503
(1979) (quoting Alsen v. Stoner, 114 Ill. App. 2d 216, 224-25 (1969)).
¶ 27 FCSC’s garnishment proceeding was supplementary to the underlying breach of contract
case, not a separate or subsequent action. When this court reversed the trial court’s fee award
order, the garnishment order necessarily failed. Therefore, the doctrine of res judicata did not
apply to bar return of fees this court found to have been improperly awarded to FCSC.
¶ 28 Affirmed.
-7-