No. 02 C 7314 Page 4

that they still have the money obtained in the two state court judgments in their possession.
‘When the appellate court reversed the judgments of the lower court, those decisions no longer
had any legal force and the defendants no longer had a claim to the money. As a result, they
had an affirmative duty to reimburse the plaintiff, which they have failed to fulfill.

Defendants argue that no such duty exists because the plaintiff never elected to reinstate
the case as required by Illinois Supreme Court Rule 369. Rule 369 however plays no role in
this dispute, Plaintiff is not asking us to rule on the tort claims or the attorney’s fees claims
because she has no desire to see these claims reinstated. Instead, she filed this entirely
independent claim for unjust enrichment, which is clearly allowed by Illinois law, as we
recognized in a Memorandum Opinion and Order of March 5, 2003, and the Court of Appeals
recognized in Zurn v. Botti, 290 F.3d 861 (7" Cir., 2002); see Liberty Mutual Ins. Co. v.
Zambole, 141 Nl. App. 3d 803, 491 N.E.2d 132 (2TM Dist. 1986). The undisputed facts show that
plaintiff is entitled to reimbursement by defendants.

Defendants’ affirmative defenses provide them no relief from this conclusion as they
are largely dependent on the argument that plaintiff had a duty to reinstate the state court
action, which she did not. First, plaintiff did not waive her claim by failing to reinstate the
attorney’s fees case in state court. Second, there is no laches in this case as any increase in
interest is a result of defendants’ own failure to fulfill their duty and reimburse the plaintiff.
Third, defendants produce no evidence of any unclean hands by the plaintiff relating to their
failure to reimburse. Fourth, there can be no res judicata pertaining to the unjust enrichment
claims because plaintiff has never previously filed such a claim. Finally, the Rooker-Feldman

doctrine is irrelevant because plaintiff's claim is simply a diversity action — she is not seeking


No. 02 C 7314 Page3

granted but the motion for reimbursement was denied. This decision was affirmed by the
district court and by the Seventh Circuit, which found that plaintiff needed to pursue state law
claims for reimbursement rather than dragging the issue into the federal bankruptcy forum.
In re Zurn, 290 F.3d 861, 864 (7 Cir. 2002).

In January 2002, over 14 months after the appellate court’s order, plaintiff filed a
petition to reinstate the tort case against Botti. This petition was denied by the DuPage County
Court, which determined that the delay was unjustified and that plaintiff had therefore
abandoned her claim. Because defendants have still failed to reimburse the money that she
paid them pursuant to her liquidation plan, she brought this diversity action alleging a state
law claim of unjust enrichment. In their counterclaim defendants assert a right to the fees and
costs that were the subject of the second state court litigation.

SSIO)

Our function in ruling on a motion for summary judgment is merely to determine if
there is a genuine issue of material fact for trial. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 249 (1986). Only if the evidence on file shows that no such issue exists and that the
moving party is entitled to judgment as a matter of law will we grant the motion. Celotex
Corp. v Catrett, 477 U.S. 317, 322-23 (1986); Bennett v, Roberts, 295 F.3d 687, 694 (7 Cir.
2002).

It is well established that when a party obtains a financial benefit resulting from an
erroneous decree or judgment, that party has a duty, after a reversal, to make restitution.
Buzz Barton & Assoc., Inc. y. Giannone, 108 Ti1.2d 373, 381-82, 483 N.E.2d 1271, 1275 dil.

1985); Barnard v. Michael, 392 Ill. 130, 134, 63 N.E.2d 858, 861 (ill. 1945). Defendants concede



No, 02 C 7314 Page 5

to review the judgment of a stafe court.

Unlike plaintiff's claim, which is separate from those previously litigated in state court,
defendants’ counterclaim appears to seek to litigate the state court issues. As the second state
court case stands now, the linois Appellate Court issued a final order reversing the default
judgment against Zurn. As such, defendants have no legal claim to the fees and costs that they
seek to recover. Even if defendants are correct in contending that plaintiff should have borne
the burden of refiling the case if she wanted it reinstated, nothing prevented them from doing
the same. While knowing that plaintiff would have no incentive to reinstate a claim for
damages against her, defendants allowed the case to remain closed. We doubt that they could
now turn to federal court to litigate claims abandoned by them in state court.

However, we decline to grant summary judgment in favor of the plaintiff as to the
counterclaims at this time. The parties agree that the defendants performed legal work for
Zurn. The parties also agree that there is little chance of defendants successfully reinstating
the state court action for the fees. While we are inclined to agree with plaintiff that defendants
could not initiate their state Jaw claims in this court, and further agree that Zurn had no duty
to reinstate the state court claims, we are, in a real sense, dealing here with an offset to a claim
for unjust enrichment. We question whether plaintiff can use res judicata to prevent
defendants from raising these claims in their effort to set off the total amount of plaintiff's
recovery. To find otherwise would allow Zura to use an unjust enrichment action to reclaim
the money and entirely avoid paying the attorneys’ fees. To the extent that defendants seek
to establish that they have a valid claim to some amount of the money in their possession, we

deny for now plaintiff’s summary judgment motion as to the counterclaims. The issue has not


‘Minute Qrder Form (0657)

United States District Court, Northern District of Ilinois

C2)

ay

Nevoe Magistrate Judge James B. Moran “then Assigned Jude
CASE NUMBER 02 C 7314 DATE 9/3/2003
CASE Mary Anne Zurn vs. Aldo E. Botti et al.
TITLE
[in the following box (a) indicate the party filing the motion, ¢.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented.)
Memorandum Opinion and Order
DOCKET ENTRY:
03) i] Filed motion of { use listing in “Motion” box above.]
(2) a Brief in support of motion due
(3) a Answer brief to motion due__. Reply to answer briefdue___.
(4) a Ruling/Hearing on setfor at
(5) oOo Status hearing(held/continued to] (set for/re-set for]on__setfor____—at
6) a Pretrial conference(held/continued to] (set for/re-set for]on__—s setfor__ at.
(7) o Trial[set for/re-set for}on_ at
(8) a [Bench/Jury trial] [Hearing] held/continuedto__—__aat
(9) o This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to}
QUFRCP4(m) OLocalRule 41.1 OFRCP4i(a\(1) CO FRCP41(a)(2).
(10) MM [Other docket entry) Enter Memorandum Opinion and Order. For the foregoing reasons, plaintiff's

motion for summary judgment on her claim is granted and her motion for summary judgment on the
counterclaim is denied for now. Defendants’ motion for summary judgment is denied. Status hearing set

for September 18, 2003 at 9:15am.

a (For further detail see order attached to the original minute order.]

No notices required, advised in open court.

No notices required. eros

Notices mailed by judge's staff.
me SEP 0 4 2003
Notified counsel by telephone. A

Docketing to mail notices.

Mail AO 450 form, 48N09 LIWISIO'S" om
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No. 02 C 7314 Page 6

yet been sufficiently developed.
CONCLUSION
For the foregoing reasons, plaintiff's motion for summary Judgment on her claim is
granted and her motion for summary judgment on the counterclaim is denied for now.

Defendants’ motion for summary judgment is denied.

Are 8, Mero

JAMES B. MORAN
Se Judge, U. S. District Court

Wg. 3, 2003.


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

MARY ANNE ZURN,
Plaintiff,
vs. No. 02 C 7314
ALDO E. BOTTI, BOTTI MARINACCIO &
TAMELING, LTD. (n/k/a Botti, Marinaccio &

DeLongis, Ltd.), and MORAN, MOREHOUSE
& BRUNO,

DOCKETED

SEP 0 4 agg

wwe ewer ewe wee

Defendants.

MEMORANDUM OPINION AND ORDER

Plaintiff Mary Anne Zurn brought this suit against defendants Aldo E. Botti (Botti),
Botti, Marinaccio & Tameling, Ltd. (Botti firm), and Moran, Morehouse & Bruno (Moran
firm) alleging unjust enrichment. Defendants filed a six-count counter-complaint against
plaintiff seeking attorney’s fees and expenses. Plaintiff and defendants each filed cross-
motions for summary judgment pursuant to Federal Rule of Civil Procedure 56. For the
following reasons, plaintiff's motion is granted as to her claims against defendants and denied
for now as to the counterclaims; defendants’ motion is denied. Defendants also filed a motion
to strike three of plaintiff’s affirmative defenses to their counterclaims, which is also denied
for now.

BACKGRO'

This litigation began over a decade ago when Mary Anne Zurn filed a lawsuit against

Botti and the Botti firm in DuPage County alleging intentional infliction of emotional distress

and battery. On May 9, 1994, the state court dismissed the counts and assessed attorney’s fees,



No. 02 C 7314 Page2

costs and punitive sanctions against plaintiff for a total of $64,490.40. While this initial lawsuit
was pending, the Botti firm and Moran firm filed suit against Zurn seeking to recover fees and
costs arising from unrelated legal work. On July 11, 1994, the state court entered a default
Judgment against Zurn on all counts and ordered her to pay $84,332.36 plus prejudgment
interest and costs. Plaintiff consolidated the cases and appealed both decisions.

On March 16, 1995, while the appeals were pending, Zurn voluntarily filed for
bankruptcy in the Northern District of Illinois. She sought removal of the state court appeals
to the bankruptcy court. On August 17, 1995, on the motion of defendants, the bankruptcy
court opted to abstain and the pending appeals were remanded to the Illinois Appellate Court.
On October 13, 1996, this decision was affirmed by the district court. On November 15, 1995,
the bankruptcy court affirmed Zurn’s liquidation plan, requiring her to pay defendants’
claims in full. In March 1996, she did so, paying $178,735.67 to the Botti firm and $7,442.01
to the Moran firm.

Plaintiff continued to pursue her consolidated appeals in the Illinois Appellate Court.
On March 12, 1998, that court issued an order affirming the dismissal of Zurn’s tort claims
against the Botti firm; remanding the battery claim against Botti for further proceedings;
reversing the order of sanctions against Zurn with leave for the lower court to reinstate them;
and reversing and remanding the default judgment against Zurn on the claim for fees and
costs. Botti and the Botti firm filed a petition seeking to appeal this order to the Illinois
Supreme Court, which petition was denied on November 9, 1998.

On November 18, 2000, plaintiff Zurn filed a petition to reopen the bankruptcy case,

seeking reimbursement of the money she paid defendants. The petition to reopen the case was