Illinois Official Reports 

Appellate Court

BMO Harris Bank, N.A. v. K&K Holdings, LLC, 2016 IL App (2d) 150923

Appellate Court 

Caption

BMO HARRIS BANK, N.A., Plaintiff-Appellee, v. K AND K 

HOLDINGS, LLC, 666-121-1613 NORT-WOOD-INV, LLC, 

UNKNOWN OWNERS, and NONRECORD CLAIMANTS,

Defendants (Frank Kaldis and John Karagiannis, DefendantsAppellees).

District & No. Second District

Docket No. 2-15-0923

Filed May 31, 2016

Decision Under 

Review

Appeal from the Circuit Court of Du Page County, No. 12-CH-1728; 

the Hon. Bonnie M. Wheaton, Judge, presiding.

Judgment Affirmed.

Counsel on

Appeal

Patrick M. Griffin and Richard L. Williams, both of Griffin Williams 

LLP, of Geneva, for appellant.

Thomas H. Peckham and Mark A. Silverman, both of Lowis & Gellen 

LLP, of Chicago, for appellees.

Panel JUSTICE BIRKETT delivered the judgment of the court, with 

opinion.

Justices Burke and Hudson concurred in the judgment and opinion.
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 OPINION 

¶ 1 Defendants Frank Kaldis and John Karagiannis appeal from an order of the circuit court 

of Du Page County granting summary judgment against them on claims that they breached a 

written guaranty. They contend that the claims against them, which arose out of the same 

guaranty that provided the basis for similar claims against them in Kane County, are barred 

by res judicata. Because the claims, although based on the same guaranty, arose out of 

separate transactions, res judicata does not apply, and we affirm. 

¶ 2 I. BACKGROUND 

¶ 3 Plaintiff, BMO Harris Bank, N.A., filed an eight-count complaint in the circuit court of 

Du Page County against defendants, K&K Holdings, LLC (K&K), 666-121-1613 

Nort-Wood-Inv, LLC, unknown owners, nonrecord claimants, Kaldis, and Karagiannis. 

Counts I through III each sought relief against K&K for breach of one of three separate loan 

agreements related to property located in Du Page County.1 Counts IV and V sought relief, 

respectively, against Kaldis and Karagiannis for breach of a written guaranty. Counts VI 

through VIII sought foreclosure of separate mortgages, each related to one of the three loans. 

Plaintiff moved for summary judgment on all counts. 

¶ 4 The following facts are taken from the materials related to the motion for summary 

judgment. On January 12, 2012, before initiating its action in this case, plaintiff filed a 

four-count complaint in the circuit court of Kane County. Count I sought relief against K&K 

for breach of a loan agreement related to property located in Kane County. Counts II and III 

alleged, respectively, that Kaldis and Karagiannis breached a written guaranty. Count IV 

sought to foreclose a mortgage on the loan. 

¶ 5 On August 10, 2012, plaintiff filed its complaint in this case. Pertinent to this appeal, 

counts IV and V relied on the same guaranty as that relied on in counts II and III of the Kane 

County action. The guaranty, executed by both Kaldis and Karagiannis, provides, in pertinent 

part, that it is a “continuing guaranty” under which each guarantees the “payment,

performance and satisfaction of the indebtedness of borrower to lender, now existing or 

hereafter arising or acquired, on an open and continuing basis.” The guaranty further 

provides that each guarantor waives “any defenses given to guarantors at law or in equity 

other than actual payment and performance of the indebtedness.” Finally, each guarantor 

“warrants and agrees that [the waivers are] made with [g]uarantor’s full knowledge of [their] 

significance and consequences and that, under the circumstances, the waivers are reasonable 

and not contrary to public policy or law.”

¶ 6 On November 5, 2014, the trial court in the Kane County case entered summary 

judgment in favor of plaintiff as to all of its claims. On March 30, 2015, the court entered a 

final judgment in that case. 

¶ 7 On February 25, 2015, the trial court in this case entered summary judgment in favor of 

plaintiff on all counts. On May 6, 2015, after the final judgment in the Kane County case had 

been entered, but before the February 25 order in this case became final and appealable, 

 

1Any action to foreclose a mortgage must be brought in the county in which the property is situated. 

735 ILCS 5/2-103(b) (West 2012). 
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Kaldis and Karagiannis filed a motion to reconsider the summary-judgment order. In doing 

so, they asserted that res judicata barred the claims under the guaranty, because plaintiff had 

obtained final relief against them on that same guaranty in the Kane County case. 

¶ 8 The trial court found that, under the terms of the guaranty, plaintiff was entitled to bring a 

separate action for each alleged breach of the guaranty. Thus, the court denied the motion to 

reconsider and entered deficiency judgments against both Kaldis and Karagiannis in the 

amount of $6,458,865.88. Kaldis and Karagiannis then filed a timely notice of appeal. 

¶ 9 II. ANALYSIS 

¶ 10 On appeal, Kaldis and Karagiannis contend that, under the transactional test for assessing 

whether there is an identity of causes of action for purposes of res judicata, the signing of the 

guaranty constituted a single transaction, and thus the guaranty claims in this case and the 

Kane County case arose out of that same transaction. Plaintiff responds, among other things, 

that, because the guaranty was continuing, and thus applicable to multiple loan transactions, 

the claims in this case are distinct from those in the Kane County case. 

¶ 11 Summary judgment may be granted only when the pleadings, depositions, admissions, 

and affidavits, when viewed in the light most favorable to the nonmoving party, show that 

there is no genuine issue of material fact and that the moving party is entitled to judgment as 

a matter of law. Gurba v. Community High School District No. 155, 2015 IL 118332, ¶ 10. 

Our review of an order granting summary judgment is de novo.

2

 See Gurba, 2015 IL 

118332, ¶ 10. Here, because there are no issues of material fact, only a question of law is 

involved. See Gurba, 2015 IL 118332, ¶ 10. 

¶ 12 Under res judicata, a final judgment rendered by a court of competent jurisdiction bars a 

subsequent suit between the same parties and involving the same cause of action. River Park, 

Inc. v. City of Highland Park, 184 Ill. 2d 290, 302 (1998). The bar includes not only claims 

actually decided in the prior action, but those that could have been decided. River Park, Inc., 

184 Ill. 2d at 302. For the doctrine to apply, the following requirements must be satisfied: (1) 

a final judgment on the merits by a court of competent jurisdiction, (2) an identity of causes 

of action, and (3) an identity of the parties or their privies. River Park, Inc., 184 Ill. 2d at 302. 

Here, the only issue is whether, in this case and the Kane County case, there is an identity of 

the causes of action related to the guaranty. 

¶ 13 Illinois courts apply a transactional test in determining whether there is an identity of 

actions. River Park, Inc., 184 Ill. 2d at 310. Under that approach, separate claims will be 

considered the same cause of action for purposes of res judicata if they arose from a single 

group of operative facts, regardless of whether they assert different theories of relief. River 

Park, Inc., 184 Ill. 2d at 311. Under the transactional analysis, the nature of the evidence 

needed to prove the claims is relevant for purposes of demonstrating that the claims arose 

from the same group of operative facts. River Park, Inc., 184 Ill. 2d at 311. However, the 

transactional test permits claims to be considered part of the same cause of action even if 

there is not a substantial overlap of evidence, so long as they arose from the same transaction. 

River Park, Inc., 184 Ill. 2d at 311. What factual grouping constitutes a transaction or series 

 

2

It does not follow that, when a party files a motion to reconsider the entry of summary judgment, 

what would otherwise be de novo review is transformed into the more deferential abuse-of-discretion 

review. CNB Bank & Trust, N.A. v. Rosentreter, 2015 IL App (4th) 140141, ¶ 121. 
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of transactions is to be determined pragmatically, giving weight to such considerations as 

whether the facts are related in time, space, origin, or motivation; whether they form a 

convenient trial unit; and whether their treatment as a unit conforms to the parties’ 

expectations or business understanding or usage. River Park, Inc., 184 Ill. 2d at 312. 

¶ 14 Accordingly, the applicability of res judicata in this case depends on what constitutes the 

operative transaction. Undoubtedly, Kaldis and Karagiannis executed a single guaranty. 

However, the language of the guaranty shows that the parties contemplated that there would 

be multiple loan transactions, each of which would trigger potential liability under the 

guaranty. Indeed, material to each of those transactions was the existence of the guaranty. 

Therefore, when K&K entered into an additional loan agreement with plaintiff, Kaldis and 

Karagiannis became obligated anew as guarantors of that separate loan transaction. That 

being the case, although there was only one guaranty, each loan constituted a distinct 

transaction implicating the guaranty. Therefore, the operative transaction for purposes of 

res judicata was each of the loans. 

¶ 15 Our conclusion that each loan agreement constituted a separate transaction for purposes 

of res judicata is reinforced by the pragmatic considerations set forth by our supreme court. 

See River Park, Inc., 184 Ill. 2d at 312. It is evident that when the parties entered into the 

original loan agreement, including the guaranty, they anticipated future loan transactions, 

including the need for an additional guaranty as to each. Rather than having Kaldis and 

Karagiannis enter into a new guaranty for each such loan, they opted for a continuing 

guaranty that would create a new obligation for Kaldis and Karagiannis for each new loan. 

Therefore, treatment of each loan as including a distinct guaranty conforms to the parties’ 

business expectations. Additionally, the facts underlying all the loan transactions would not 

form a convenient trial unit, as the terms of the various loan agreements, the facts related to 

the breaches thereof, and the potential liability under the guaranty would be unique to each 

case. Nor are the facts as to the loans related in time, space, origin, or motivation. As 

discussed, each loan would be unique as to the amount, payment, and other terms. Similarly, 

the property related to each loan would likely be unique in its value, purpose, and location. 

More importantly, the potential liability under the guaranty would vary greatly with the terms 

of each loan. When we weigh the various pragmatic factors, they strongly support our 

conclusion that the operative transactions in this case were the separate loan transactions, 

each of which incorporated the guaranty. 

¶ 16 Kaldis and Karagiannis, however, assert that, because they entered into only one 

guaranty, there was only a single transaction related to the guaranty regardless of how many 

loans were transacted. That view, however, is entirely inconsistent with the express language 

of the guaranty. As noted, the guaranty provides, in pertinent part, that the guarantors agree 

to guarantee payment and satisfaction on the indebtedness of K&K, whether existing or in 

the future, and to do so on an “open and continuing basis.” The plain meaning of that 

language is that Kaldis and Karagiannis agreed to guarantee all loans from plaintiff to K&K, 

including any that arose after the guaranty was executed. Thus, Kaldis and Karagiannis’s 

characterization runs counter to the parties’ intent as reflected in the guaranty. Indeed, if we 

were to adopt the position of Kaldis and Karagiannis, they could assert res judicata to block 

any subsequent claim under the guaranty. That would render the continuing-obligation 

language meaningless. See Telegraph Savings & Loan Ass’n v. Guaranty Bank & Trust Co., 

67 Ill. App. 3d 790, 796 (1978) (a guaranty, as an instrument serving the uses and 
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convenience of commercial intercourse, should be construed according to what may fairly be 

said to be the understandings of the parties). 

¶ 17 Because the operative transactions were the various loan agreements, each of which 

uniquely implicated the guaranty, there was not an identity of cause of action between this 

case and the Kane County case. Therefore, the trial court in this case did not err in granting 

summary judgment on plaintiff’s claims under the guaranty. Because we affirm on that basis, 

we need not reach plaintiff’s alternative arguments.

¶ 18 III. CONCLUSION 

¶ 19 For the reasons stated, we affirm the judgment of the circuit court of Du Page County. 

¶ 20 Affirmed.