First District Finds Abuse of Discretion in Dismissal Based on Parallel Action
In Whittmanhart, Inc. v. CA, Inc., No. 1-09-3136, 2010 WL 2521018 at *1 (1st Dist. June 22, 2010), the court issued an opinion that should serve as a reminder that dismissal under 735 ILCS 5/2-619(a)(3) - based on the presence of another pending action between the same parties for the same cause - is entirely discretionary, and simply satisfying the statutory elements might not be sufficient to sustain dismissal on appeal, even under an abuse-of-discretion standard of review. In Whittmanhart, in fact, the appellate court found that the defendant had readily proved that a case pending in New York involved the same parties and the same cause - as the statute requires - and made very clear that it was only permitted to review the trial court’s decision to dismiss the case for abuse of discretion, yet still found that the case should not have been dismissed and the parallel actions should have been permitted to proceed simultaneously.
The case’s procedural background reads like a law-school exam. There was no clear winner in the race to the courthouse. The defendant filed first, in federal court in New York. It announced plans to dismiss that case due to lack of diversity, but before doing so, it filed an action in New York state court. It then dismissed the federal action about an hour later, and, approximately forty minutes after that, the plaintiff filed its complaint in the Circuit Court of Cook County. Adding to the complexity, the New York state action was dismissed for lack of jurisdiction and a second New York state action was filed two days later. The defendants filed a notice of appeal, as to dismissal of the first New York state action, and then successfully moved to dismiss the action in Cook County.
In Whittmanhart, the appellate court gave an overview of the law which suggested that the trial court’s decision to dismiss the case in favor of another action would be difficult to overturn on appeal. First, the court noted that, under 735 ILCS 5/2-619(a)(3), a court is permitted to grant a motion to dismiss if there is “another action pending between the same parties for the same cause.” And the court concluded – as had the trial court – that these elements had been easily satisfied in Whittmanhart. 2010 WL 2521018 at *3. However, the court cautioned that simply proving the statutory elements is not sufficient and that a court should consider a number of discretionary factors to determine whether dismissal would be appropriate. 2010 WL 2521018 at *3 (noting that court should consider “(1) comity; (2) the prevention of multiplicity, vexation, and harassment; (3) the likelihood of obtaining complete relief in a foreign jurisdiction; and (4) the res judicata effect of a foreign judgment in the local forum”) citing Combined Insurance Co. v. Certain Underwriters at Lloyd’s London, 356 Ill.App.3d 749, 826 N.E.2d 1089, 292 Ill.Dec. 653 (1st Dist. 2005). The appellate court also found in Whittmanhart that the trial court had, in fact, considered such factors and made findings with respect to them in a written opinion granting the motion to dismiss. 2010 WL 2521018 at *2. Finally, the appellate court made very clear that, in contrast to its review of other motions to dismiss which are subject to de novo review, dismissals under 735 ILCS 5/2-619(a)(3) were subject to review for abuse of discretion. 2010 WL 2521018 at *3.
The framework outlined above - satisfaction of the statutory elements for dismissal, trial-court review of discretionary factors, and abuse-of-discretion appellate review - suggests that the decision to dismiss would likely have been upheld, however, the appellate court concluded that the trial court had abused its discretion and the case should not have been dismissed. The abuse-of-discretion standard, of course, affords a great deal of deference to the trial court. See, e.g., Certain Underwriters at Lloyd’s, London v. Boeing Co., 385 Ill.App.3d 23, 895 N.E.2d 940, 952, 324 Ill.Dec. 225 (1st Dist. 2008) (“Under the abuse-of-discretion standard, a reviewing court does not decide whether it agrees with the circuit court’s decision but, rather, determines whether the circuit court ‘acted arbitrarily without the employment of conscientious judgment, or, in view of all the circumstances, exceeded the bounds of reason and ignored recognized principles of law so that substantial prejudice resulted.’ ” Quoting Estate of Bass v. Katten, 375 Ill.App.3d 62, 871 N.E.2d 914, 313 Ill.Dec. 187 (1st Dist. 2007).) Nothing in the appellate court’s analysis of the discretionary factors suggests that it believed the trial court had made an error as grave as that which would seem to justify reversal under this standard. It did not highlight any single area where it believed the trial court had caused “substantial prejudice” after “exceeding] the bounds of reason.” Rather, the court simply seemed to analyze each of the discretionary factors in turn, and then determine whether they “weighed” in favor or against dismissal. The court concluded that more factors favored denying the motion to dismiss than granting it, and found that the trial court had therefore abused its discretion.
Ultimately, Whittmanhart offers a worthwhile lesson about the discretionary factors that inform a motion to dismiss based on a parallel action. No analysis at the trial-court level is complete without consideration of such factors. Even if a defendant satisfies the statutory elements – the presence of a parallel matter involving the same parties and the same cause – the trial court must still consider the discretionary factors before dismissing the case. Despite the language in 735 ILCS 5/2-619(a)(3), courts regard the “same-parties-and-same-cause” requirement as a mere “threshold” element of a motion to dismiss. Whittmanhart, supra, 2010 WL 2521018 at *3. Moreover, even after those factors are accounted for, abuse-of-discretion review will not necessarily shield the dismissal from scrutiny on appeal - and possible reversal - as Whittmanhart demonstrates. There, even after technically filing first in New York and later persuading the trial court that the discretionary factors weighed in favor of dismissal, the defendant still found itself forced to litigate in two separate venues simultaneously.
