Matejczyk v. City of Chicago: Illinois Appellate Court Revisits the Doctrine of Res Judicata and Exceptions to the Claim-Splitting Rule.
The First District of the Illinois Appellate Court recently examined two elements of the res judicata doctrine. In Matejczyk v. City of Chicago, No. 1-08-1208, 2009 WL 4981047 (1st Dist. Dec. 21, 2009), the appellate court considered the following issues: (1) whether a final judgment on the merits was rendered when the trial court dismissed Count II of the previous action as time-barred and the plaintiff failed to replead that count; and (2) whether any of the exceptions to the prohibition against claim-splitting applied.
In Matejczyk, after allegedly sustaining injuries from falling in a hole on a public sidewalk, the plaintiff filed a one-count negligence complaint against the City of Chicago. The plaintiff alleged that the hole was created after a traffic signal was removed on February 8, 1985, and that the City negligently failed to fill the hole, post any warnings, or barricade the surrounding area. Seven months later, the plaintiff filed a two-count first amended complaint, repeating the same allegations but with Count I alleging that the hole was created “[s]ometime after 1996” and Count II alleging that the hole was created on February 8, 1985. 2009 WL 4981047 at *1. The City filed a motion to dismiss pursuant to §2-619(a)(9) of the Code of Civil Procedure (735 ILCS 5/2-619(a)(9)), arguing, inter alia, that Count II was barred by the applicable statute of limitations. On August 31, 2007, the circuit court judge granted the City’s motion to dismiss and gave the plaintiff leave to refile Count II within 28 days. The order did not contain Supreme Court Rule 304(a) language, and the plaintiff did not attempt to appeal the ruling.
On September 5, 2007, rather than refiling Count II, the plaintiff filed a second amended complaint with one count, repeating the same allegations and claiming that the hole was created “prior to November 26, 2005.” 2009 WL 4981047 at *2. He voluntarily dismissed that complaint the following day.
On September 18, 2007, twelve days later, the plaintiff filed a lawsuit under a new circuit court number, again repeating the same allegations and claiming that the hole was created “prior to November 26, 2005.” Id. In the complaint, the plaintiff acknowledged that it was a refiling of the prior lawsuit. The City filed a motion to dismiss pursuant to §2-619(a)(4) of the Code, arguing that the new complaint was barred by res judicata. The circuit court judge granted the City’s motion, and the plaintiff appealed.
Res Judicata: What Constitutes a “Final Judgment on the Merits.”
The plaintiff first challenged the circuit court judge’s ruling by arguing that res judicata did not apply because no final order on the merits was entered in the initial lawsuit.
Citing Hudson v. City of Chicago, 228 Ill.2d 462, 889 N.E.2d 210, 213, 321 Ill.Dec. 306 (2008), the court reiterated that the doctrine of res judicata bars a subsequent cause of action if the following three requirements are satisfied: (1) a final judgment on the merits was rendered by a court of competent jurisdiction; (2) the parties or their privies are identical in both causes of action; and (3) there is an identity of cause of action. “Res judicata bars not only what was actually decided in the first action but also whatever could have been decided.” Id. Here, the plaintiff conceded that the second and third elements of res judicata were met. The plaintiff contended, however, that the first element was not satisfied because the prior lawsuit did not end with a final judgment on the merits as it was a single cause of action for negligence, which he dismissed voluntarily.
The court rejected the plaintiff’s argument and affirmed the trial court’s decision. Pursuant to S.Ct. Rule 273, “[u]nless the order of dismissal or a statute of this State 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.” See also Rein v. David A. Noyes & Co., 172 Ill.2d 325, 665 N.E.2d 1199, 1204 – 1205, 216 Ill.Dec. 642 (1996). Here, the circuit court judge dismissed Count II of the plaintiff’s lawsuit based on the applicable statute of limitations. Thus, that decision operated as a final judgment on the merits for purposes of res judicata.
The plaintiff further argued that the judge did not specify that the dismissal of Count II was “with prejudice.” The court found this argument unconvincing, noting that the use of “without prejudice” language does not protect a plaintiff against the bar of res judicata as the effect of a dismissal order is not determined by any particular magical words but rather by its substance. 2009 WL 4981047 at *3, quoting Kiefer v. Rust-Oleum Corp., 394 Ill.App.3d 485, 916 N.E.2d 22, 30, 333 Ill.Dec. 903 (1st Dist. 2009). See also Hudson, supra, 889 N.E.2d at 216 n.2. The trial court dismissed Count II because it violated the applicable statute of limitations due to the date alleged in that count. Thus, the dismissal of Count II, in substance, operated as a dismissal with prejudice because the plaintiff could not replead Count II with the same date, which was the only difference between the plaintiff’s two counts.
The trial court’s order did not affect Count I and thus did not dispose the entire case. The order merely dismissed Count II and gave the plaintiff leave to refile that count within 28 days. The plaintiff chose, however, to file a second amended complaint with a single count. Upon filing that second amended complaint, the plaintiff could have pursued that to final judgment. He did not do so.
The doctrine of res judicata prohibits parties from seeking relief on the basis of issues that could have been resolved in a previous lawsuit and serves to prohibit parties from splitting their claims into multiple actions. Hudson, supra, 889 N.E.2d at 216. The rule against claim-splitting “prohibits a plaintiff from suing for part of a claim in one action and then suing for the remainder in another action.” 2009 WL 4981047 at *5, quoting Rein, supra, 665 N.E.2d at 1206. By voluntarily dismissing his second amended complaint, the plaintiff exposed his subsequent refiled complaint to a possible res judicata bar based on the prohibition against claim-splitting. 2009 WL 4981047 at *4, citing Hudson, 889 N.E.2d at 216.
The Limited Exceptions to the Prohibition Against Claim-Splitting.
The plaintiff further challenged the trial court’s ruling that the plaintiff had engaged in claim-splitting. “[A] plaintiff who splits his claims by voluntarily dismissing and refiling part of an action after a final judgment has been entered on another part of the case subjects himself to a res judicata defense.” 2009 WL 4981047 at *5, citing Hudson, 889 N.E.2d at 217. Here, the trial court ruled that the plaintiff had engaged in claim-splitting by voluntarily dismissing his one-count, second amended complaint after Count II had been dismissed and then refiling both claims in a later lawsuit.
Reviewing the trial court’s decision de novo, the court affirmed. “[A] dismissal on the merits by the circuit court of one or more counts in a complaint puts the plaintiff on notice that, should he elect to take a voluntary dismissal . . . for whatever reason, he risks triggering the res judicata bar to refiling.” 2009 WL 4981047 at *6. The doctrine of res judicata prevents repetitive litigation and protects parties from the burden of relitigating the same case. Courts disfavor the splitting of claims or causes of action because such behavior is contrary to the doctrine’s policy of promoting finality. Therefore, “a final judgment on the merits of an involuntarily dismissed count of a multicount complaint will render a voluntary dismissal of all remaining counts equally final to the dismissed count.” 2009 WL 4981047 at *7. Here, the circuit court judge’s dismissal of Count II rendered the voluntary dismissal of the second amended complaint a final judgment on the merits, which precluded the plaintiff from refiling the same claims in the subsequent lawsuit.
The plaintiff argued that certain exceptions to the rule against claim-splitting applied to his case. Under Illinois law, even if res judicata otherwise bar would the second action, the rule against claim-splitting does not bar the second action in the following limited circumstances:
(1) the parties have agreed in terms or in effect that plaintiff may split his claim or the defendant has acquiesced therein; (2) the court in the first action expressly reserved the plaintiff's right to maintain the second action; (3) the plaintiff was unable to obtain relief on his claim because of a restriction on the subject-matter jurisdiction of the court in the first action; (4) the judgment in the first action was plainly inconsistent with the equitable implementation of a statutory scheme; (5) the case involves a continuing or recurrent wrong; or (6) it is clearly and convincingly shown that the policies favoring preclusion of a second action are overcome for an extraordinary reason. Rein, supra, 665 N.E.2d at 1207.
The plaintiff contended that his case met the first listed exception because the order voluntarily dismissing the original lawsuit was titled an “agreed order.” 2009 WL 4981047 at *7. The court found this argument unpersuasive. Nothing in the order indicated that the City intended to permit the plaintiff to refile his claim in a later lawsuit, and the City was not required to object specifically to any future refilings before the plaintiff refiled the lawsuit. The plaintiff also argued that the second listed exception to claim-splitting applied because the circuit court judge expressly ordered that the plaintiff was granted leave to refile Count II within 28 days. Rejecting this final argument, the court noted that nothing in the trial court record indicated the judge granted the plaintiff the right to file a subsequent lawsuit seeking identical relief. Without an express order reserving the plaintiff’s right to refile, the second exception does not apply.
The court concluded that, if the plaintiff desired review of the circuit court judge’s order dismissing Count II as time-barred, the plaintiff should have litigated the remainder of the lawsuit (Count I) to judgment and then appealed the earlier dismissal of Count II. Instead, by electing to voluntarily dismiss Count I, the only remaining claim, the doctrine of res judicata barred the plaintiff from refiling those claims that he could (and should) have litigated in his original suit.
