Opinion
No. 1-15-1584
03-31-2016
GK DEVELOPMENT, INC., an Illinois Corporation, and COLLEGE SQUARE MALL DEVELOPMENT, LLC, a Delaware Limited Liability Company, Plaintiffs-Appellants, v. IOWA MALLS FINANCING CORPORATION, a Delaware Corporation, COLLEGE SQUARE MALL ASSOCIATES, LLC, a Delaware Limited Liability Company, and CHICAGO TITLE AND TRUST COMPANY, an Illinois Corporation, as escrowee, Defendants-Appellees.
NOTICE: This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1).
Appeal from the Circuit Court of Cook County.
No. 14 CH 15065
Honorable Neil H. Cohen, Judge Presiding.
JUSTICE HOWSE delivered the judgment of the court.
Justices Fitzgerald Smith and Lavin concurred in the judgment.
ORDER
¶ 1 Held: Where the trial court dismissed Buyer's parking lot claims as moot, thus resulting in an involuntary dismissal, and where on appeal no argument was made in the appellate briefs pertaining to the parking lot claims, all issues pertaining to the parking lot claims were waived on appeal and Buyer was barred from refiling a new case based on those claims.
¶ 2 This is the third appeal arising out of the sale of several shopping malls by Iowa Malls Financing Corporation and College Square Mall Associates, LLC (collectively, Seller) to GK Development, Inc. and College Square Mall Development, LLC (collectively, Buyer). Buyer filed a lawsuit against Seller, 06 CH 3427, bringing claims for declaratory judgment and specific performance, and seeking recovery of the $4.3 million Holdback. Seller filed a countersuit against Buyer, 06 CH 3586, bringing claims for declaratory judgment and unjust enrichment, and also seeking recovery of the Holdback. These cases were consolidated in the circuit court of Cook County. Buyer later filed a separate suit against Seller for breach of contract regarding the parking lot and certain improvements that Buyer had to make to the parking lot, totaling $530,294.86 in damages. The parking lot case and the liquidated damages cases were heard by the same judge in a simultaneous trial.
¶ 3 After the trial court entered a judgment finding Seller was entitled to the entire Holdback, the trial court dismissed Buyer's parking lot case as moot because under the contract, any damages from the parking lot claims would have been deducted from the Holdback and the court had already awarded Buyer the entire Holdback. On appeal, we reversed the trial court's judgment granting Buyer the entire Holdback after determining that $4.3 million in liquidated damages functioned as an unenforceable penalty clause. We remanded the action to the trial court to determine actual damages as a result of the Seller's breach. We also remanded Seller's claim to attorney fees and costs.
¶ 4 While the case was on remand, Buyer refiled the parking lot case it had against Seller, which the trial court had previously dismissed as moot. The refiled parking lot case was transferred to the judge handling the remanded action. Seller sought dismissal of the parking lot case, and the trial court judge granted the dismissal. Buyer appealed the trial court's ruling dismissing its parking lot claims and also filed a motion to stay the proceedings in the remanded action until the parking lot claims were resolved on appeal. The trial could granted the stay, and we affirmed that stay in the second appeal in this matter.
¶ 5 In this third appeal, we are asked to determine whether the trial court erred in granting Seller's motion to dismiss Buyer's parking lot claims. For the reasons that follow, we affirm the trial court's ruling.
¶ 6 I. BACKGROUND
¶ 7 In the prior appeal in this case, Seller appealed the trial court's ruling that Buyer was entitled to the entire $4.3 million Holdback from Seller's proceeds. In the notice of appeal, Seller indicated that it was appealing the trial court's ruling relating to the holdback in the consolidated cases. Seller's notice of appeal listed the parking lot case as a "related" case and further asked the appellate court to reverse the trial court's dismissal of that case as moot. Buyer separately appealed the trial court's ruling, but only with respect to the trial court judge's denial of postjudgment interest.
¶ 8 On December 19, 2013, we issued an opinion finding that the $4.3 million liquidated damages provision was an unenforceable penalty clause. In doing so, we remanded the matter to the trial court with instructions that stated: "Upon remand, the trial court is directed to afford Buyer an opportunity to prove actual damages it suffered as a result of the 91-day delay, deduct such damages from the escrow to be awarded to Buyer, and order the release of the remaining
funds to Seller. Seller's claim concerning attorney fees is also remanded to the trial court with instructions to decide the issue of breach by Buyer, including the issue of attorney fees and costs." The parties did not present any argument in their briefs relating to the parking lot claims in the prior appeal and, accordingly, we did not address the parking lot claims in our opinion.
¶ 9 Following remand, Buyer filed a lawsuit seeking declaration that they had satisfied their contractual obligations with regard to the parking lot and were thus entitled to $530,294.86 from the Holdback, plus interest, fees, and costs. Buyer also sought specific performance, seeking the same amount from the Holdback. On Buyer's motion, the parking lot case was transferred to the same docket where the remanded action was being heard, where it was considered a "related" case but was not consolidated with the remanded action.
¶ 10 The trial court judge hearing the remanded action and the related new parking lot action directed the parties to submit briefs on whether he had jurisdiction to consider Buyer's parking lot claims in the remanded action. Following briefing, the trial court found that the parking lot claims were not part of the case on remand and anticipated that Seller would file a motion to dismiss the parking lot claims.
¶ 11 Seller filed an amended motion to dismiss Buyer's parking lot claims arguing that those claims did not sound in equity. Seller also argued that the remanded action was limited to the scope of the instructions given by the appellate court upon remand, and that the parking lot claims fell outside that scope. Seller further argued that Buyer's claims were barred by the rule of waiver, doctrine of laches, the rule against claim-splitting, and the law-of-the-case.
¶ 12 Buyer responded by arguing that their claims in the parking lot case, which included specific performance, were equitable and of the type regularly used in real estate cases where an escrowee is holding disputed funds. Buyer argued that dividing the claims between two different
courts would be an inefficient use of judicial resources. Buyer further argued that our remand did not preclude the trial court from addressing its parking lot claims in the remanded action because those parking lots claims were not addressed on appeal and were not at issue on appeal. Specifically, Buyer argued that it could not have appealed the trial court's order on the issue of the parking lot claims because Buyer was not prejudiced by the trial court's order since Buyer was awarded the entire $4.3 million Holdback, which would have included the funds at issue in the parking lot claims. Buyer also argued that it could not waive issues on appeal that it legally could not pursue on appeal in the first place, that the doctrine of laches and rule against claim-splitting did not apply in this case, and there was no applicable law-of-the-case because the merits of Buyer's parking lot claims were never decided.
¶ 13 On May 15, 2015, the trial court judge issued an order granting Seller's motion to dismiss pursuant to section 2-619(a)(1) of the Code of Civil Procedure (Code) (735 ILCS 5/2-619(a)(1) (West 2012)) with prejudice. The court found that because Seller's notice of appeal in the prior appeal referenced the parking lot action as being "related," Seller "specifically sought reversal of the dismissal" of Buyer's parking lot claims and, accordingly, Buyer's dismissed parking lot claims were "properly before the appellate court on Seller's appeal." Upon issuing our remand order, which reversed the trial court's ruling that Buyer was entitled to the entire Holdback, the trial court judge stated that Buyer should have raised their parking lot claims in a Supreme Court Rule 367 petition for rehearing, which Buyer did not do. The trial court judge further found that his jurisdiction was limited by our remand. As such, because the remand instructed the trial court to determine Buyer's actual damages and Seller's right to attorney fees and costs, the trial court judge could not decide other issues, including Buyer's parking lot claims.
¶ 14 On June 1, 2015, Buyer filed a notice of appeal challenging the trial court's ruling dismissing their parking lot claims with prejudice. Upon filing its appeal, Buyer also filed a motion to stay the proceedings in the remanded action pending the disposition of the appeal on Buyer's parking lot claims. After the trial court granted the stay, Seller filed an appeal on that issue, and we have since upheld the stay of those claims. In this appeal, we must determine whether the trial court erred when it dismissed Buyer's parking lot claims based on a lack of subject matter jurisdiction resulting from our remand mandate in the first appeal. For the reasons that follow, we affirm the trial court's ruling.
¶ 15 II. ANALYSIS
¶ 16 Buyer argues that the trial court erred in dismissing its parking lot claims based on a lack of subject matter jurisdiction because: (1) Buyer could not have appealed the parking lot claims in the first appeal because those claims had been dismissed as moot by the trial court and, therefore, there was never a ruling on the merits with respect to those claims; (2) Buyer could not have appealed the parking lot claims in the first appeal because Buyer was the prevailing party in the trial court and was not prejudicially effected by the trial court's ruling; and (3) the trial court judge's rationale that it was precluded from ruling on issues outside the appellate court's remand mandate is misplaced where the appellate court never had jurisdiction over the parking lot claims in the first appeal and, accordingly, never ruled on the parking lot claims in the first appeal.
¶ 17 Seller, in turn, argues that the trial court properly dismissed the parking lot claims based on a lack of jurisdiction because: (1) the appellate court's mandate on remand was specific and did not include any mention of the parking lot claims; therefore, the trial court could not rule on the parking lot claims as those claims fell outside the court's remand mandate; and (2) Buyer's parking lot claims were forfeited where it failed to raise the parking lot claims as an alternative
argument in the first appeal or in a petition for rehearing following the appellate court's ruling in the first appeal. Additionally, Seller argues that Buyer's parking lot claims we properly dismissed because allowing the trial court to address those claims would be prohibited by the rule against claim splitting, the rule-of-the-case doctrine and the doctrine of laches. Seller also argues that Buyer's parking lot claims fail to state claims for equitable relief where it only seeks money damages thereby stripping the court of jurisdiction over those claims.
¶ 18 Our standard of review on a motion to dismiss under section 2-619 of the Code is de novo. Krilich v. American National Bank & Trust Co. of Chicago, 334 Ill. App. 3d 563, 569 (2002). "[W]e may affirm the judgment of the trial court on any basis in the record, regardless of whether the trial court relied upon that basis or whether the trial court's reasoning was correct." Alpha School Bus Co. v. Wagner, 391 Ill. App. 3d 722, 734 (2009).
¶ 19 Preliminarily, we find that the parking lot case, 06 CH 26662, was properly before us in the first appeal. Seller's notice of appeal seeks reversal of the trial court's August 24, 2011 order, including "[t]he August 24, 2011 Findings of Fact and Conclusions of Law, which *** (d.) dismissed case number 06 CH 26662 as moot." Seller's notice of appeal further states: "By this appeal, Defendants-Appellants will ask the Appellate Court to reverse the order of August 24, 2011 and remand this cause with direction to reinstate all counts of the complaints in case number 06 CH 3426, 06 CH 3586, and 06 CH 26662 for trial on the merits as to all claims, or for such other relief as the Appellate Court may deem proper." "Illinois courts have held that a notice of appeal confers jurisdiction on a court of review to consider only the judgments or parts thereof specified in the notice of appeal." People v. Smith, 228 Ill. 2d 95, 104 (2008); Ill. S. Ct. R. 303(b)(2) (eff. June 4, 2008) (notice of appeal "shall specify the judgment or part thereof or other orders appealed from and the relief sought from the reviewing court."). Case number 06
CH 26662 was clearly specified in Seller's notice of appeal without any objection; therefore, the parking lot case was properly before the appellate court in the first appeal. However, neither party presented any arguments with respect to the parking lot case during the first appeal. "Points not argued are waived and shall not be raised in the reply brief, in oral argument, or on petition for rehearing." Ill. S. Ct. R. 341(h)(7) (eff. Feb. 6, 2013). As such, the claims relating to the parking lot case were waived, and this court could provide no further relief from the dismissal of the parking lot case because we lost jurisdiction after we issued our opinion and the mandate was issued.
¶ 20 When Buyer refiled the parking lots claims in case number 14 CH 15065, the trial court properly dismissed the case as it was barred by res judicata. For the doctrine of res judicata to apply, three requirements must be met: (1) there was a final judgment on the merits rendered by a court of competent jurisdiction; (2) there was an identity of cause of action; and (3) there was an identity of parties or their privies. Downing v. Chicago Transit Authority, 162 Ill. 2d 70, 73-74 (1994). Buyer argues that res judicata does not bar the refiling of it parking lot case because there was no final judgment on the merits. We disagree.
¶ 21 The trial court's sua sponte dismissal of the parking lot case as moot, as opposed to for a lack of jurisdiction, improper venue, or failure to join an indispensable party, amounted to an involuntary dismissal of those claims. Ill. S. Ct. R. 273 (eff. Jan. 1, 2016) ("[A]n 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.").
"Rule 273 is intended to curb the number of times a plaintiff can resurrect a dismissed action. Leow v. A & B Freight Line, Inc., 175 Ill. 2d 176, 186 (1997). If a plaintiff's action is involuntarily
dismissed for a reason not expressly excepted by the rule, and if plaintiff does not procure leave of court to refile the complaint, or if a statute does not guaranty [sic] that opportunity to the plaintiff, then the rule deems the dismissal a dismissal on the merits. That is the purpose of the rule." (Emphasis in original.) DeLuna v. Treister, 185 Ill. 2d 565, 575 (1999).
Therefore, pursuant to Illinois Supreme Court Rule 273 (eff. Jan. 1, 2016), the trial court's dismissal of the parking lot case was a final adjudication upon the merits and all the elements of res judicata were present when Buyer refiled its parking lot case. As such, that case was barred. See Downing, 162 Ill. 2d at 73-74.
¶ 22 Even if we were to assume arguendo that the trial court's dismissal for mootness was not an involuntary dismissal, for purposes of res judicata, our supreme court has found that where a trial court enters an order that includes a final judgment as to some claims, it acts as a final judgment as to all other claims addressed in that matter, even if the other claims were not resolved on the merits. See Rein v. David A. Noyes, 172 Ill. 2d 325 (1996).
¶ 23 In Rein, the plaintiffs filed rescission claims as well as common law claims against the defendants in an initial lawsuit. Rein, 172 Ill. 2d at 337. When the trial court dismissed the plaintiff's recession claims with prejudice, the plaintiffs voluntarily dismissed their common law claims to proceed on appeal with respect to their rescission claims. Id. Following the unsuccessful appeal to the appellate court of the dismissal of the rescission counts, plaintiffs attempted to file in a second action their common law claims contending that they had a right, by virtue of section 2-1009, to refile those common law counts. Id. The trial court dismissed the
common law counts as being barred by res judicata and the applicable statute of limitations, and the appellate court affirmed. Id. Our supreme court affirmed on appeal and explained:
"As previously discussed, for res judicata to bar a subsequent action, three requirements must be met: (1) there was a final judgment on the merits rendered by a court of competent jurisdiction; (2) there was an identity of cause of action; and (3) there was an identity of parties or their privies. Downing, 162 Ill. 2d at 73-74. The first element of res judicata is met here because the dismissal of the rescission counts with prejudice in Rein I operates as an adjudication on the merits for purposes of res judicata, as explained earlier. Although there was not an adjudication on the merits of the common law counts in Rein I, the concept of res judicata is broader than plaintiffs suggest. If the three elements necessary to invoke res judicata are present, res judicata will bar not only every matter that was actually determined in the first suit, but also every matter that might have been raised and determined in that suit. Torcasso v. Standard Outdoor Sales, Inc., 157 Ill. 2d 484, 490 (1993). Therefore, if the three requirements of res judicata are met and the common law counts could have been determined in Rein I, plaintiffs will be barred from
litigating the common law counts in Rein II." Id. as 337-38.
As such, even if we were to assume arguendo that the trial court's dismissal of the parking lot case was not an involuntary dismissal, like the common law claims in Rein, the trial court's order dismissing Buyer's parking lot case as moot was a final judgment on the merits. For all the reasons stated above, we affirm the trial court's order dismissing the parking lot case with prejudice.
¶ 24 CONCLUSION
¶ 25 For the reasons about, we affirm the trial court's dismissal of Buyer's parking lot case.
¶ 26 Affirmed.