Opinion
1-20-0265
06-30-2021
MODESTO MARTINEZ, as the Supervised Administrator to Collect for the ESTATE OF MODESTO M. RODRIGUEZ, Plaintiff-Appellant, v. JUDE MARTINEZ, STEFANIE LINARES and RASCIA & HIMEL LTD. f/k/a RASCIA& DECASTRO, MARTIN J. SALZMAN LTD., an Illinois corporation, MARTIN J. SALZMAN, individually, and LIBERTY MUTUAL GROUP, INC. d/b/a LIBERTY MUTUAL INSURANCE COMPANY Defendants-Appellees.
This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).
Appeal from the Circuit Court of Cook County. No. 18 L 009386 Honorable Daniel T. Kubasiak, Judge, presiding.
PRESIDING JUSTICE WALKER delivered the judgment of the court. Justices Hyman and Coghlan concurred in the judgment.
ORDER
WALKER PRESIDING JUSTICE
¶ 1 Held: When a plaintiff offers a non-abusive reason for seeking voluntary dismissal of complaint, the parties have not engaged in extensive discovery, and the dismissal would not prejudice defendants, the trial court abuses its discretion if it addresses a potentially dispositive motion and refuses to grant the motion for voluntary dismissal.
¶ 2 In 2018, Modesto Martinez Rodriguez (Modesto Jr.), acting in the capacity of Supervised Administrator to Collect for the Estate of Modesto M. Rodriguez (Estate), sued Jude Ricardo Martinez Baldenegro, Stefanie Linares and Rascia & Himel, Ltd., alleging that Jude, with the assistance of his attorneys, wrongfully acquired estate assets. After Jude moved to dismiss the complaint on grounds of res judicata, the Estate moved to voluntarily dismiss the action pursuant to 735 ILCS 5/2-1009 (West 2018). The circuit court denied the Estate's motion for voluntary dismissal and granted Jude's motion to dismiss the complaint with prejudice. The circuit court later imposed sanctions against the Estate pursuant to Supreme Court Rule 137 (Ill. S.Ct. R. 137 (eff. Jan. 1, 2018)). On appeal, the Estate argues that res judicata does not apply, and the circuit court erred in denying its motion for voluntary dismissal and imposing sanctions. We agree and find that the Estate's motion for voluntary dismissal should have been granted.
¶ 3 I. BACKGROUND
¶ 4 Modesto Martinez Rodriguez married Arcadia Santiago. They had two children, Modesto Martinez and Maribel Martinez, before they divorced. Modesto Sr. later married Norma Baldenegro Arbukle, and adopted her son, Jude Ricardo Martinez Baldenegro. Modesto Sr. and Norma owned a house in Chicago (house) as joint tenants. By 2004, Modesto Sr. suffered from severe dementia. In 2007, Jude paid the 2006 property taxes for the house, but subsequent property taxes went unpaid and in 2008, Fair Deal, Inc., acquired a tax sale certificate for the house in a public sale for delinquent property taxes.
Due to the repetition of last names, we will refer to most parties by first name. To distinguish Modesto Martinez Rodriguez from his son, we will refer to the father as Modesto Sr. and to the son as Modesto Jr., although neither used those designations.
¶ 5 On March 31, 2011, Jude, represented by Stefanie Linares and Rascia & Himel, Ltd., filed a petition asking the Circuit Court Probate Division to appoint him as Modesto Sr.'s guardian, alleging that Modesto Sr. was suffering from severe dementia. In May 2011, Modesto Sr. and Norma signed a quitclaim deed, prepared by Linares and Rascia & Himel, making Jude a co-owner in joint tenancy of the house. On June 9, 2011, the probate court appointed Jude as the plenary guardian of the person and Estate of Modesto Sr. In August 2011, an inventory of Modesto Sr.'s property was approved by the probate court, listing the house and a vacation property in Puerto Rico as estate assets. The value of the house was listed as $400,000 on the inventory. Fair Deal obtained a tax deed for the house at the end of the redemption period in September 2011. Jude retained Martin Salzman to file an indemnification action against the Cook County Treasurer's Indemnification Fund for the loss of the house (see 35 ILCS 200/21-305 (West 2012)), which was filed in the Circuit Court County Division in February 2012.
¶ 6 Modesto Sr. died on March 31, 2012. On November 20, 2012, pursuant to a settlement reached by the parties, an agreed judgment was entered in the county division indemnity action in favor of the petitioners (Modesto Sr., Norma, and Jude) in the amount of $199,000. The property was later conveyed back to Norma by the tax purchaser in a land trust, in exchange for Jude and Norma assigning the $199,000 judgment to the tax purchaser and Norma executing a $20,000 installment note. In 2015, after Norma died, Jude sold the home for $399,000.
¶ 7 Jude also filed a petition in Puerto Rico in June 2015, in which he swore that Modesto Sr. "did not have any other natural, legitimate, adoptive or any other kind of descendant, except for [Jude]." The court in Puerto Rico granted Jude's petition by a resolution dated July 23, 2015.
¶ 8 In 2016, Maribel filed a "Motion Regarding Fraud" in Puerto Rico, alleging that she and Modesto Jr. were heirs of Modesto Sr. The court granted the motion and declared the resolution of July 23, 2015, "null and void since it is based on false information regarding the heirs of the decedent, Modesto M. Rodriguez."
¶ 9 In 2017, Modesto Jr. and Maribel, in their individual capacities, filed a complaint in the Cook County Chancery Division against Jude, Linares, and Rascia & Himel, alleging that their rights to share in the proceeds from the sale of the house had been violated. The Estate was not a party to the chancery action.
¶ 10 Jude, Linares, and Rascia & Himel moved to dismiss the complaint. Chancery Judge Kathleen Pantle found that Modesto Sr. had no interest in the house at the time of his death by virtue of the tax deed issued in September 2011. Judge Pantle held that the quitclaim deed was "irrelevant because it was ineffective," that Jude acquired partial title to the house when he and Norma purchased it, and after Norma's death, he acquired sole title as Norma's only heir. Judge Pantle granted the motion to dismiss the complaint on March 9, 2018.
¶ 11 On May 25, 2018, the probate court issued letters of office to Modesto Jr. to act as Supervised Administrator to Collect for Modesto Sr.'s Estate. In July 2018, he sought leave of the probate court to file a second amended complaint in the chancery division against Jude, Linares, Rascia & Himel, adding the Estate and Salzman as parties to the action, and alleging that Modesto Sr.'s interest in the indemnity action succeeded to his estate upon death. The chancery court ultimately denied the Estate leave to file the second amended complaint for lack of jurisdiction. The plaintiffs did not appeal.
Upon Judge Pantle's retirement, Judge Loftus was assigned this case.
¶ 12 The complaint at issue in this case was subsequently filed in the Cook County Law Division by Modesto Jr., acting on behalf of the Estate, against Jude, Linares, Rascia & Himel, Salzman, and Liberty Mutual Insurance Company. The complaint repeated many of the allegations set forth in the second amended complaint that the Estate had attempted to file in the chancery case. Jude, Linares, and Rascia & Himel filed motions to dismiss the law division complaint on the grounds of res judicata.
The probate court approved a surety bond posted on behalf of Jude by Liberty Mutual in the guardianship matter pursuant to 755 ILCS 5/12-5.
¶ 13 Plaintiffs subsequently moved to voluntarily dismiss the complaint pursuant to section 2-1009 of the Code of Civil Procedure. 735 ILCS 5/2-1009 (West 2018). The circuit court denied the plaintiffs' motion for voluntary dismissal and dismissed the complaint with prejudice, but without any explanation for its rulings.
¶ 14 Defendants moved for Rule 137 sanctions against the Estate and its attorney. In its order granting the motion for sanctions, the circuit court offered a partial explanation for its prior rulings:
" [T] he filing of this action against Jude and other defendants warrants sanctions as the matter at issue has already been conclusively determined and ruled upon by Judge Pantle. Judge Pantle found that plaintiffs lacked an interest in the subject property because, by virtue of the Tax Deed, Modesto Sr. had no interest in the property when he died, and when the delinquent real estate taxes were not redeemed, the prior quit claim deed was rendered ineffective, and therefore, any potential interests Plaintiffs had in the Property were terminated. ***
The court cannot find that Modesto [Jr.] and [his attorney's] actions in filing the verified amended complaint *** was reasonable at the time it was filed."
¶ 15 The court awarded Jude $22,758 in attorney fees, to be paid by the Estate and its attorney. The Estate now appeals.
¶ 16 II. ANALYSIS
¶ 17 The Estate argues the circuit court erred by (1) denying the motion for voluntary dismissal; (2) entering judgment in favor of the defendants on grounds of res judicata; and (3) awarding sanctions under Rule 137.
¶ 18 In Gibellina v. Handley, 127 Ill.2d 122, 138 (1989), our supreme court established that "the trial court may hear and decide a motion which has been filed prior to a section 2-1009 motion when that motion, if favorably ruled on by the court, could result in a final disposition of the case." (Emphasis in original). The Gibellina court explained:
"An ever-increasing number of plaintiffs are using a section 2-1009 motion to avoid a potential decision on the 'merits' or to avoid an adverse ruling as opposed to using it to correct a procedural or technical defect. [Citations.] It has become clear that the allowance of an unrestricted right to dismiss and refile an action in the face of a potentially dispositive motion is not only increasing the burden on the already crowded dockets of our courts but is also infringing on the authority of the judiciary to discharge its duties fairly and expeditiously." Gibellina, 127 Ill.2d at 137.
¶ 19 We will not reverse a decision on whether to address a dispositive motion before allowing a motion for voluntary dismissal unless the circuit court abused its discretion. Mizell v. Passo, 147Ill.2d 420, 425 (1992). In Patsis v. Zion-Benton Township High School, No. 126, 234 Ill.App.3d232 (1992), the appellate court found the circuit court abused its discretion when it denied the plaintiff's motion for voluntary dismissal. The Patsis court ruled:
"[P]laintiff did not file his motion to dismiss for any abusive purpose. He noted that another action was pending which was a better, if not required, forum for the consideration of his claim and that the consideration of his claim in that action would serve judicial economy. *** [If the defendant] has a valid statute of limitations defense, [the defendant] can raise it just as well in the other action; thus, plaintiff was not abusively avoiding an adverse ruling by seeking a nonsuit. *** This was not a case
where the parties conducted extensive discovery, incurred substantial costs, or suffered undue prejudice from the proceedings prior to the motion for a nonsuit. [Citation.] Therefore, we hold that the trial court abused its discretion in considering [the defendant's] motion to dismiss prior to plaintiff's right to nonsuit his cause." Patsis, 234 Ill.App.3d at 237-38.
¶ 20 The considerations raised in Patsis comport with the factors federal courts consider in deciding whether to grant a plaintiff's motion for voluntary dismissal after a defendant has filed a potentially dispositive motion. Federal courts look to "the defendant's effort and expense of preparation for trial, excessive delay and lack of diligence on the part of the plaintiff in prosecuting the action, [and] insufficient explanation for the need to take a dismissal," among other factors. Pace v. Southern Express Co., 409 F.2d 331, 334 (7th Cir.1969); see Phillips USA, Inc. v. Allflex USA, Inc., 77 F.3d 354, 358 (10th Cir. 1996).
¶ 21 The record here does not show that "the parties conducted extensive discovery, incurred substantial costs, or suffered undue prejudice from the proceeding prior to the motion for a nonsuit." See Patsis, 234 Ill.App.3d at 237-38. In fact, a dismissal would not prejudice Jude as he can still plead res judicata if plaintiffs refile the lawsuit. In addition, the Estate offered a legitimate reason for the decision to voluntarily dismiss (i.e., cost of litigation would likely exceed value of contested estate assets).
¶ 22 The record similarly does not support Jude's argument that the Estate was harassing him with meritless litigation. The expiration of the redemption period for the home terminated joint tenancy in the house (see Jackson v. Lacey, 408 Ill. 530 (1951)), but Modesto Sr. retained his right to file an indemnification action. See In re Application of the County Collector, 217 Ill.2d 1, 28 (2005) rev'don other grounds, 225 Ill.2d 208 (2007). When Modesto Sr. died, his indemnity rights arguably survived as an asset of his estate. See In re Estate of Hoffman, 6 Ill.App.3d438, 440 (1972). ¶ 23 The law division judge found that res judicata barred all the Estate claims raised in the complaint, but the complaint dismissed by Judge Pantle addressed only the claims of Maribel and Modesto Jr., not the Estate's claims.
¶ 24 Modesto Jr. was denied leave to file a second amended complaint adding the Estate as a party and/or raising an indemnity claim on behalf of the Estate. The chancery court dismissed the claims raised in the second amended complaint for lack of jurisdiction. A dismissal for lack of jurisdiction does not determine the merits of a complaint and does not have res judicata effect. A. W. Wendell & Sons, Inc. v. Qazi, 254 Ill.App.3d 97, 108 (1993).
¶ 25 For all the reasons set forth herein, we find that the circuit court abused its discretion in denying the Estate's motion for voluntary dismissal. We reverse the circuit court's judgment and remand for entry of an order granting the motion for voluntary dismissal, with an award of costs. See 735 ILCS 5/2-1009 (West 2018). We vacate the order for sanctions under Supreme Court Rule 137. On remand, the court should "exercise its broad equitable discretion *** to weigh the relevant equities and do justice between the parties in each case, imposing such costs and attaching such conditions to the dismissal as are deemed appropriate." McCants v. Ford Motor Co., Inc., 781 F.2d 855, 857 (11th Cir. 1986).
¶ 26 Finally, the Estate asks us to direct the circuit court to assign the case to a different judge on remand. We find nothing in the record that shows the trial judge incapable of rendering a just assessment of costs awardable under section 2-1009. We deny the request for reassignment.
¶ 27 III. CONCLUSION
¶ 28 Accordingly, we reverse the circuit court's judgment, vacate the award of sanctions under Rule 137, release the appeal bond, and remand for the assessment of costs pursuant to the voluntary dismissal.
¶ 29 Reversed and remanded.