Case Title: Dubina v. Mesirow Realty Development, Inc.

Citation: 

Docket Number: 81860

State: illinois

Court: Illinois Supreme Court

Date: 1997-09-18T00:00:00Z

Document:
Dubina v. Mesirow Realty Development, Inc., No.81860 (9/18/97)_ 
 
NOTICE: Under Supreme Court Rule 367 a party has 21 days after the 
filing of the opinion to request a rehearing. Also, opinions are 
subject to modification, correction or withdrawal at anytime prior 
to issuance of the mandate by the Clerk of the Court. Therefore, 
because the following slip opinion is being made available prior to 
the Court's final action in this matter, it cannot be considered 
the final decision of the Court. The official copy of the following 
opinion will be published by the Supreme Court's Reporter of 
Decisions in the Official Reports advance sheets following final 
action by the Court. 
 
                Docket No. 81860--Agenda 21--March 1997. 
     MICHAEL DUBINA et al., v. MESIROW REALTY DEVELOPMENT, INC., et 
    al. (Mesirow Realty Development, Inc., et al., Appellees; Litgen 
             Concrete Cutting & Coring Company, Appellant). 
                    Opinion filed September 18, 1997. 
 
     JUSTICE NICKELS delivered the opinion of the court: 
     The issue presented in this appeal is whether defendant Litgen 
Concrete Cutting & Coring Company (Litgen) may appeal certain final 
orders entered in a suit that was voluntarily dismissed where the 
action was later refiled in the circuit court. The appellate court 
held that, because the suit was refiled by plaintiffs, it lost 
jurisdiction to entertain Litgen's appeal. 283 Ill. App. 3d 36. 
This court allowed Litgen's petition for leave to appeal (155 Ill. 
2d R. 315), and the Illinois Appellate Lawyers Association filed a 
brief as amicus curiae in support of Litgen. We reverse and remand 
to the appellate court for further proceedings consistent with this 
opinion. 
 
                                BACKGROUND 
     Plaintiffs brought numerous separate actions in the circuit 
court of Cook County. These separate suits were later consolidated 
by the circuit court. In these suits, plaintiffs sought to recover 
damages for fire losses incurred on April 15, 1989, when a Chicago 
building, housing multiple art galleries, was damaged by fire. Most 
plaintiffs were either artists or art gallery owners, and the 
property damage claims related generally to works of art damaged or 
destroyed by the fire. At the time of the fire, the building was 
under renovation. 
     Most complaints involved the same group of defendants. These 
defendants included: the owners and managers of the building, the 
general contractors retained to perform renovation work on the 
building, and the subcontractors involved in that renovation work. 
In general, each defendant was alleged to have been negligent in 
either causing the fire or contributing to the spread of the fire. 
Each defendant filed an answer in the circuit court denying 
liability. Most, if not all, defendants also filed third-party 
claims for contribution against the other defendants. 
     Before trial, plaintiffs collectively settled their suits with 
all defendants, except defendant Litgen. The multiple settlement 
agreements provided that plaintiffs would release their claims 
against all defendants, except Litgen.[fn1]  They further provided 
that plaintiffs would assign their direct claims against Litgen to 
some of the settling defendants. Pursuant to the settlement 
agreements, plaintiffs assigned their claims against Litgen to 
Mesirow Realty Development and certain other settling defendants 
(the Mesirow parties). Based on this assignment, the Mesirow 
parties, not plaintiffs, are now the real parties in interest with 
respect to the claims against Litgen. 
     In separate orders, on June 14, 1994, July 19, 1994, and July 
26, 1994, the circuit court found that the settlement agreements 
were made in good faith, as required by the Joint Tortfeasor 
Contribution Act. 740 ILCS 100/2 (West 1992). Based on these good- 
faith findings, the circuit court dismissed the contribution claims 
between Litgen and the settling defendants with prejudice. 740 ILCS 
100/2 (West 1992). Plaintiffs' direct claims against Litgen 
remained pending in the circuit court. After the entry of the good- 
faith settlement orders, plaintiffs filed a motion to voluntarily 
dismiss their direct claims against Litgen, and these claims were 
dismissed without prejudice. The circuit court then dismissed the 
remaining claims pending in the circuit court. 
     After the voluntary dismissal, Litgen appealed to the 
appellate court. Litgen appealed the orders finding the settlements 
to have been made in good faith and dismissing its contribution 
claims. While the appeal was still pending, plaintiffs filed a new 
action against Litgen in the circuit court, as permitted by 
statute. See 735 ILCS 5/13--217 (West 1992).[fn2]  Based on this 
refiling, the Mesirow parties filed a motion in the appellate court 
to dismiss Litgen's appeal for lack of subject matter jurisdiction. 
     The appellate court held that it lacked jurisdiction to 
consider Litgen's appeal. The court stated that, although it 
initially had jurisdiction over Litgen's appeal, it was divested of 
jurisdiction by the refiling. Because of the refiling, the 
dismissal and good-faith orders were transformed from final orders 
into nonfinal ones. The appellate court also found that, although 
the contribution claims were dismissed with prejudice, Litgen would 
not be barred by res judicata from filing its contribution claims 
in the second action. The court therefore found that Litgen would 
not be prejudiced by waiting for the conclusion of the second 
action before being allowed to appeal. 
 
                                 ANALYSIS 
     Initially, we note that Litgen does not seek to appeal the 
order of voluntary dismissal itself. Instead, Litgen seeks to 
appeal the orders finding that the settlements were made in good 
faith and dismissing Litgen's contribution claims with 
prejudice.[fn3]  Litgen argues that these were final orders 
because they disposed of Litgen's third-party claims. According to 
Litgen, once the case was voluntarily dismissed, these orders 
became appealable. Litgen further argues that plaintiffs' refiling 
of the action against Litgen did not alter this final and 
appealable status and that the appellate court therefore had 
jurisdiction to consider the merits of the appeal. 
     Resolution of this appeal requires consideration of Supreme 
Court Rules 301 and 304 (155 Ill. 2d Rs. 301, 304). Rule 301 allows 
appeals from final judgments as a matter of right. See also Ill. 
Const. 1970, art. VI, sec. 6. A judgment or order is "final" if it 
disposes of the rights of the parties, either on the entire case or 
on some definite and separate part of the controversy. Village of 
Niles v. Szczesny,  13 Ill. 2d 45 , 48 (1958); see Waters v. 
Reingold, 278 Ill. App. 3d 647, 651 (1996); Citicorp Savings v. 
First Chicago Trust Co., 269 Ill. App. 3d 293, 296-97 (1995). A 
dismissal with prejudice is usually considered a final judgment, 
including the dismissal of claims in a complaint (J. Eck & Son, 
Inc. v. Reuben H. Donnelley Corp., 188 Ill. App. 3d 1090 (1989)) or 
third-party action (Geier v. Hamer Enterprises, Inc., 226 Ill. App. 
3d 372, 379-81 (1992)). 
     The dismissal of a claim with prejudice, however, is not 
always immediately appealable. Supreme Court Rule 304(a) provides: 
               "If multiple parties or multiple claims for relief 
          are involved in an action, an appeal may be taken from a 
          final judgment as to one or more but fewer than all of 
          the parties or claims only if the trial court has made an 
          express written finding that there is no just reason for 
          delaying either enforcement or appeal or both. *** In the 
          absence of such a finding, any judgment that adjudicates 
          fewer than all the claims or the rights and liabilities 
          of fewer than all the parties is not enforceable or 
          appealable and is subject to revision at any time before 
          the entry of a judgment adjudicating all the claims, 
          rights, and liabilities of all the parties." 155 Ill. 2d 
          R. 304(a). 
Without a Rule 304(a) finding, a final order disposing of fewer 
than all of the claims in an action is not instantly appealable. 
Such an order does not become appealable until all of the claims in 
the multiclaim litigation have been resolved. Once the entire 
action is terminated, all final orders become appealable under Rule 
301. Marsh v. Evangelical Covenant Church,  138 Ill. 2d 458 , 464 
(1990); see Ratkovich v. Hamilton, 267 Ill. App. 3d 908, 912 
(1994). 
     In the instant case, the circuit court entered good-faith 
findings and, accordingly, dismissed Litgen's contribution claims 
with prejudice. These dismissal orders were "final" orders because 
they terminated Litgen's third-party claims. The circuit court did 
not enter a Rule 304(a) finding. Because other claims were still 
pending at the time of the dismissal, these final orders were not 
immediately appealable. 
     Later, plaintiffs voluntarily dismissed the action, as 
permitted by statute. See 735 ILCS 5/2--1009 (West 1992). The 
voluntary dismissal terminated the action in its entirety. All 
pending claims were dismissed. The order of voluntary dismissal, 
because it disposed of all matters pending before the circuit 
court, rendered all orders which were final in nature, but which 
were not previously appealable, immediately final and appealable. 
It is well settled that final orders entered in a case become 
appealable following a voluntary dismissal. See Maggini v. OSF 
Healthcare System, 256 Ill. App. 3d 551, 552-53 (1994); Rein v. 
David A. Noyes & Co., 230 Ill. App. 3d 12, 15 (1992); Howard v. 
Druckemiller, 238 Ill. App. 3d 937, 940-41 (1992); Edward E. Gillen 
Co. v. City of Lake Forest, 221 Ill. App. 3d 5, 9-10 (1991); Reagan 
v. Baird, 140 Ill. App. 3d 58, 62-63 (1985); cf. Saddle Signs, Inc. 
v. Adrian, 272 Ill. App. 3d 132 (1995) (denial of motion to dismiss 
was not a final order and could not be appealed after entry of 
voluntary dismissal). 
     Nevertheless, the appellate court held that it lacked 
jurisdiction to consider Litgen's appeal because, while the appeal 
was pending, the action had been refiled in the circuit court. The 
appellate court relied heavily on Kleiman v. Northwestern Memorial 
Hospital, 253 Ill. App. 3d 47 (1993). In Kleiman, the plaintiffs 
were the ones who sought to appeal a final order after taking a 
voluntary dismissal. The Kleiman court stated that the plaintiffs' 
refiling of the action, while the appeal was pending, transformed 
final orders into nonfinal ones and that it therefore had no 
jurisdiction. The Kleiman court further stated that to hold 
otherwise would allow litigants to take piecemeal appeals and would 
hinder judicial economy. 
     We reject the reasoning of the appellate court in the instant 
case and in Kleiman. The definition of "final," for purposes of 
Rule 301, is well settled, and application of Rule 301 is 
relatively straightforward. We note that the refiled action is an 
entirely new and separate action, not a reinstatement of the old 
action. Swisher v. Duffy,  117 Ill. 2d 376 , 379 (1987); Kahle v. 
John Deere Co.,  104 Ill. 2d 302 , 306 (1984); see Neuman v. 
Burstein, 230 Ill. App. 3d 33, 36 (1992); Lyon v. Hasbro 
Industries, Inc., 156 Ill. App. 3d 649, 656 (1987). Section 13--217 
of the Code of Civil Procedure provides that following a voluntary 
dismissal, a plaintiff "may commence a new action." (Emphasis 
added.) 735 ILCS 5/13--217 (West 1992). The original and refiled 
actions are completely distinct actions. Because they are distinct 
actions, when the original action was terminated, the circuit court 
lost jurisdiction of the original action and all final orders 
became appealable under Rule 301. We decline to create a special 
exception to Rule 301 that plaintiffs' refiling of the action in 
the circuit court transforms final orders into nonfinal ones. 
     This court's recent decision in Rein v. David A. Noyes & Co., 
172 Ill. 2d 325 (1996), illustrates how final orders are treated 
where a case is later dismissed voluntarily. There were two sets of 
appeals in the Rein litigation. In the first round, the plaintiffs 
alleged that the defendants fraudulently misrepresented the nature 
of certain securities purchased by the plaintiffs. The complaint 
consisted of counts that sought rescission of the purchase and 
other counts seeking common law remedies. The circuit court ruled 
that the rescission counts were barred by the pertinent statute of 
limitations. The circuit court denied a request for a Rule 304(a) 
finding, which would have allowed an immediate appeal. The 
plaintiffs therefore took a voluntary dismissal of the remainder of 
the action but only appealed the dismissal of the rescission counts 
under Rule 301. Initially, on appeal, the appellate court 
determined that it had jurisdiction because the voluntary dismissal 
terminated all claims pending in the circuit court. Rein v. David 
A. Noyes & Co., 230 Ill. App. 3d 12, 15 (1992). The appellate court 
then determined that the rescission counts were barred by the 
statute of limitations and affirmed the circuit court. Rein, 230 
Ill. App. 3d at 15-18. 
     In the second round of litigation, the plaintiffs refiled 
their action in its entirety. In the complaint, the plaintiffs 
again raised the rescission counts and the common law counts. The 
circuit court dismissed both sets of counts based on res judicata, 
and the appellate court affirmed (Rein v. David A. Noyes & Co., 271 
Ill. App. 3d 768 (1995)). In affirming the appellate court, this 
court first stated the requirements for application of res 
judicata: (1) a final judgment on the merits in the first suit, (2) 
an identity of cause of action, and (3) an identity of parties or 
their privies. This court determined that the dismissal of the 
rescission counts, which was the subject of the first appeal, met 
these requirements. The rescission counts were therefore barred by 
res judicata. See Rein, 172 Ill. 2d  at 334-36. 
     This court then determined that the common law counts, which 
were not the subject of the first appeal, were also barred by res 
judicata. This court found that although the common law counts were 
not actually litigated in the first proceeding, they could have 
been because they arose out of the same operative facts as the 
rescission counts. Res judicata will not only bar any matter 
actually litigated in the first suit but will also bar any matter 
that might have been raised and determined in that suit. To avoid 
res judicata, after their rescission counts were dismissed, the 
plaintiffs should have proceeded to a decision on the merits on the 
common law counts and then appealed the determinations involving 
both the rescission and common law counts in one appeal. See Rein, 
172 Ill. 2d  at 336-43. 
     In Rein, this court treated the dismissals of the counts in 
the first action as final judgments for the purpose of res judicata 
in the second action. Final judgments entered in the first suit are 
not treated as a nullity--they have consequences. In Rein, final 
judgments followed by a voluntary dismissal were treated the same 
as final judgments entered in other actions. The filing of a new 
action did not make orders entered in the first suit any less 
"final," as that term is used in Rules 301 and 304. It makes no 
difference to the analysis in Rein whether the action is refiled 
while the appeal is pending in the appellate court or after the 
appellate court has issued a decision. 
     Because Rule 301 allows an appeal as of right, the appellate 
court may not decline to consider an appeal under Rule 301 when it 
believes that it would be more expedient for the appellant to take 
the appeal at a later time. Litgen has a right under Rule 301 to 
appeal now, whatever the reasons. Once the requisites of the rules 
were satisfied, the appellate court had jurisdiction. Litgen 
appealed in a timely manner and a controversy still existed between 
the parties. 
     We further note that the appellate court's decision would 
create uncertainty about appellate jurisdiction. If a plaintiff 
refiled an action at any point during the appeal of the original 
action, this refiling would destroy appellate jurisdiction. A 
plaintiff could therefore defeat jurisdiction by strategically 
choosing to refile the action at any point in the appellate 
process. This court will not permit such procedural maneuvering to 
involuntarily deprive Litgen of its right to appeal now, as 
permitted by Rule 301. 
     The appellate court also stated that the policy of Rule 304(a) 
is to discourage piecemeal appeals and that policy is violated by 
allowing Litgen to appeal now. We find this concern unpersuasive 
for three reasons. First, as noted, section 13--217 of the Code of 
Civil Procedure, which permits the refiling of an action after a 
voluntary dismissal, was recently amended and reduces the 
likelihood of piecemeal appeals. The amendment makes it more 
difficult for a plaintiff to file a new action after a voluntary 
dismissal. See 735 ILCS 5/13--217 (West 1996). Second, the 
situation involved in the instant case is unusual and unlikely to 
encourage piecemeal appeals. In most circumstances, the plaintiff 
would be the party seeking to appeal a final order after taking a 
voluntary dismissal. Here, in contrast, one of the defendants (not 
one of the plaintiffs) is seeking to appeal after plaintiffs took 
a voluntary dismissal. Plaintiffs themselves created this unusual 
situation by taking a voluntary dismissal that terminated all 
claims pending in the circuit court. Third and most significantly, 
the decision in Rein shows that a plaintiff seeking to split his 
claims and appeal in a piecemeal manner may be barred by res 
judicata. The doctrine of res judicata is the proper mechanism to 
discourage piecemeal appeals, rather than a conclusion that the act 
of refiling transforms final orders into nonfinal orders. 
     Finally, the Mesirow parties argue that Litgen has no need to 
appeal at this time because its third-party contribution claims are 
contingent upon liability in the underlying action. They argue that 
considerations of judicial economy militate against jurisdiction. 
Specifically, the Mesirow parties argue that the contribution 
claims may become moot if plaintiffs are unsuccessful in their 
direct action against Litgen. They argue that the issue is not ripe 
for appeal and that the appellate court would be required to give 
an advisory opinion on an abstract question of law. 
     The contingent nature of the appeal generally does not make 
the orders any less final and does not affect appellate 
jurisdiction under Rule 301. The question of finality of judgments 
under Rule 301 is a separate consideration from the contingent 
nature of the appeal. Ordinarily, the contingent nature of an 
appeal is a factor the circuit court considers in determining 
whether to allow a discretionary appeal under Rule 304. See Geier 
v. Hamer Enterprises, Inc., 226 Ill. App. 3d 372, 379-80 (1992) 
(circuit court conducts two-step analysis of whether the judgment 
is final and whether certain discretionary factors, such as the 
contingent nature of a third-party claim for contribution, favor 
appealability under Rule 304); see also Curtiss-Wright Corp. v. 
General Electric Co.,  446 U.S. 1 , 7, 64 L. Ed. 2d 1, 11, 100 S. Ct. 1460, 1464 (1980) (same approach under the federal counterpart to 
Rule 304). Neither the circuit court nor the appellate court has 
any such discretion under Rule 301. At this juncture, the appeal is 
not moot and an actual controversy exists. Litgen remains subject 
to liability in tort and the legal consequences of the settlement 
agreements. 
 
                                CONCLUSION 
     The orders finding the settlements to have been made in good 
faith and dismissing Litgen's contribution claims with prejudice 
were final orders. Absent a Rule 304 finding, these final orders 
were not appealable until the entire action was terminated. These 
final orders became appealable under Rule 301 when the voluntary 
dismissal terminated the action. Accordingly, the appellate court 
has jurisdiction under Rule 301. We reverse the judgment of the 
appellate court and remand this cause to the appellate court for 
further proceedings consistent with this opinion. 
 
                                         Appellate court judgment reversed; 
                                                            cause remanded. 
 
     JUSTICE BILANDIC took no part in the consideration or decision 
of this opinion. 
 
[fn1] One other defendant, Gelick Foran Associates, Inc., also did 
not settle with plaintiffs. The circuit court later granted summary 
judgment in favor of Gelick, and it is not involved in this appeal. 
 
[fn2] The statute was amended in 1995. Prior to the amendment, the 
statute allowed a plaintiff to file a new action within one year of 
a voluntary dismissal or within the remaining period of limitation, 
whichever was greater. 735 ILCS 5/13--217 (West 1992). Pursuant to 
the amendment, a plaintiff may file a new action following a 
voluntary dismissal only within the remaining period of limitation. 
735 ILCS 5/13--217 (West 1996). Thus, the amendment limits the 
circumstances under which a plaintiff can file a new action 
following a voluntary dismissal. The amendment, however, expressly 
applies only to actions that accrue after March 9, 1995, the 
effective date of the amendment. This action accrued before that 
date. Accordingly, as the parties acknowledge, the amendment does 
not apply to the instant case. 
 
[fn3] The good-faith findings and the dismissal of contribution 
claims are inextricably linked. Once the circuit court entered 
orders finding the settlements to have been made in good faith, the 
contribution claims had to be dismissed by operation of law. See 
740 ILCS 100/2 (West 1992).