NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except 

in the limited circumstances allowed under Rule 23(e)(1).

2024 IL App (3d) 230208-U

Order filed May 10, 2024 

____________________________________________________________________________ 

IN THE

APPELLATE COURT OF ILLINOIS

THIRD DISTRICT

2024 

LAW OFFICES OF EDWARD P. GRAHAM, )

LTD., ) 

 ) 

Plaintiff-Appellant, ) 

 ) 

 v. ) 

 ) 

JAMES KORNESCZUK, as Trustee of the ) 

Kornesczuk Family Trust, ) 

 ) 

Defendant-Appellee. )

Appeal from the Circuit Court

of the 18th Judicial Circuit, 

Du Page County, Illinois, 

Appeal No. 3-23-0208 

Circuit No. 22-SC-5531 

Honorable 

Thomas A. Else, 

Judge, Presiding.

____________________________________________________________________________

JUSTICE DAVENPORT delivered the judgment of the court. 

Justice Holdridge specially concurred.

Justice Albrecht dissented. 

____________________________________________________________________________

ORDER

¶ 1 Held: The trial court’s prior adjudication of a billing dispute does not bar attorney’s 

current action to recover unpaid legal fees where former client’s nonpayment of 

fees persisted after the prior judgment’s entry. Upon modifying the original bill, the 

prior judgment renewed the former client’s money obligation and thereby renewed

the attorney’s right to collect.

¶ 2 Plaintiff, the Law Offices of Edward P. Graham, Ltd., appeals the dismissal of its complaint 

to recover unpaid fees against defendant and former client, James Kornesczuk, in his capacity as
2 

trustee of the Kornesczuk Family Trust (Trust). The parties dispute whether res judicata bars 

plaintiff’s complaint, where plaintiff withdrew a counterclaim in a prior action stemming from the 

same contractual relationship underlying plaintiff’s current complaint. Because defendant’s 

nonpayment persisted after judgment was entered in the prior action, res judicata was improperly 

applied. Accordingly, we reverse and remand.

¶ 3 I. BACKGROUND

¶ 4 In August 2017, defendant retained plaintiff to represent the Trust in a guardianship case

involving his mother, Nora Kornesczuk. Defendant signed an engagement agreement and paid an 

initial retainer of $2500 to be applied toward plaintiff’s fees. Thereafter, from August through 

September 2017, plaintiff represented defendant in the guardianship case and sent him a series of 

invoices, billing him $12,815.03. Defendant paid plaintiff a total of $4000 in September and 

October 2017. Defendant did not remit any payments thereafter. 

¶ 5 Plaintiff continued to represent defendant until November 1, 2017, and subsequently billed

defendant $1,681.09 for services rendered through that date. (Thus, plaintiff billed defendant a 

total of $14,496.12, and defendant paid plaintiff a total of $6500.) Plaintiff’s final invoice sought 

an outstanding balance of $7,996.12. Thereafter, between March 2018 and June 2019, plaintiff 

periodically sent defendant invoices for the outstanding balance of $7,996.12.1

 

¶ 6 A. Case I

¶ 7 In August 2019, defendant pro se filed a small claims complaint against plaintiff and its 

owner, attorney Edward P. Graham, claiming Graham and his law practice were indebted to him 

in the amount of $10,000. Defendant alleged Graham delegated the guardianship matter to an 

1

Each invoice was addressed to “Estate of Nora Kornesczuk c/o Mr. James Kornesczuk,” 

corresponding to the parties’ engagement agreement, which misidentified the client as the Estate of Nora 

Kornesczuk, rather than the Trust.
3 

inexperienced attorney whose poor representation resulted in an unfavorable outcome for the 

Trust. In September 2019, plaintiff pro se filed a counterclaim for $7,996.12, the outstanding 

balance of its legal fees, in addition to accrued interest and court costs. Plaintiff alleged 

Kornesczuk had individually agreed, through a series of promises, to pay plaintiff’s fees. Attached 

as exhibits to plaintiff’s counterclaim were copies of (1) the engagement agreement, (2) invoices 

sent to defendant, and (3) an August 2017 email addressed to Graham and his associate attorney. 

In the email, defendant stated, “I will see to it that you are paid, but without any cash and without 

any way to get out cash without liability ***, we may need a different [billing and payment] 

arrangement.”

¶ 8 In March 2020, defendant, through counsel, filed an amended complaint for breach of 

contract and fraud. Defendant alleged plaintiff breached the engagement agreement by overbilling

him in the amount of $7619. Under the fraud count, defendant alleged Graham induced him to 

enter an engagement agreement by representing that his practice specialized in guardianship 

litigation, only to then assign the case to an associate attorney with no experience in guardianship 

matters. Under both counts, defendant alleged damages in the amount of $7619 (i.e., the sum of 

the alleged excessive billing charges) and requested “an award of prejudgment interest, costs, and 

attorney’s fees, and for such further relief as [the trial court] deems equitable and just.” According 

to the amended complaint, plaintiff’s invoices totaled $14,496.12, of which defendant had paid

$6500. 

¶ 9 In April 2020, plaintiff retained counsel and filed an amended counterclaim seeking the 

outstanding balance of $7,996.12 (i.e., $14,496.12 reduced by $6500), in addition to accrued 

interest, in the amount of $2,133.32, and legal costs. The amended counterclaim’s allegations 

identified Kornesczuk as “the trustee of the KORNESCZUK FAMILY TRUST” but its caption 
4 

did not do so, despite the amended claim being brought by Kornesczuk in his capacity as trustee.

Much like the original counterclaim, the amended counterclaim attached plaintiff’s invoices and 

the parties’ engagement agreement as exhibits; however, the amended counterclaim did not attach

the August 2017 email as an exhibit. 

¶ 10 A trial was held on the matter. The court heard evidence on April 27 and May 19, 2021, 

and issued its decision on August 27, 2021. Plaintiff voluntarily dismissed its amended 

counterclaim in early July 2021, before the court issued its ruling. On July 6, 2021, the court 

entered an order setting the matter for a final decision and stating, “On the oral motion of the 

counter plaintiff, the amended counter complaint is dismissed with prejudice and without costs 

over the objection of the counter defendant.” 

¶ 11 On August 27, 2021, the court issued its decision in open court: 

“I find that the hourly rate of Mr. Graham in the amount of $350 per hour is 

reasonable and that of his associate *** of $300 per hour is likewise reasonable 

based on what other lawyers in DuPage County with similar background charge for 

the same or similar services. 

I further find that the fees charged for clerical and paralegal services are 

reasonable and de minimis. *** 

With the exception of what I’m about to discuss, I find that the services 

performed by Mr. Graham’s office were fair and necessary.

 * * * 

So, in sum, the following fees are disallowed: August 1st, 2017, $1,070; 

August 17th, $900; August 31st, 2017, $870; November 1st, 2017, $1,050; the 

amount billed after the withdrawal [of representation] of $116. The total judgment 
5 

in favor of [Kornesczuk, as trustee] and against [Graham’s office] is $4,006, and I 

will prepare that judgment.”

The court entered a written order the same day. The order provided, “For the reasons stated on the 

record, Count II of the Plaintiff’s Amended Complaint [fraud] is dismissed with prejudice. With 

respect to Count I [breach of contract], judgment is entered for Plaintiff and against the Defendant 

in the amount of $4006.00 plus costs of suit.” 

¶ 12 Plaintiff filed a motion to reconsider, disputing the court’s reduction of its attorney fees for 

August 17, 2017, by $900. The court denied plaintiff’s motion on November 23, 2021. Plaintiff 

did not appeal the denial of its motion to reconsider or the court’s August 27, 2021, decision. 

¶ 13 B. Current Case

¶ 14 On November 15, 2022, plaintiff filed a breach of contract suit against defendant, claiming 

defendant had not paid the outstanding legal fees after crediting defendant for the $6500 already 

paid and the $4006 disallowed in Case I. According to plaintiff, the outstanding balance was now 

$3,916.72. 

¶ 15 Defendant moved to dismiss under section 2-619(a)(4) of the Code of Civil Procedure (735 

ILCS 5/2-619(a)(4)) (West (2022)) (Code), arguing res judicata barred plaintiff’s claim. On April 

6, 2023, the court granted defendant’s motion. Its oral ruling provided as follows: 

 “This case was first heard by this Court several years ago. The plaintiff in 

the first case, hereinafter referred to as ‘Graham One,’ was James Kornesczuk, the 

trustee of the Kornesczuk Family Trust. 

In sum, the complaint alleged that the defendant, the Law Offices of Edward 

Graham, had overbilled the plaintiff. Defendant Graham filed a countercomplaint 

and an amended countercomplaint, which was dismissed with prejudice on July 
6 

5th, 2021 on the oral motion of the counter-plaintiff, Graham, without costs, over 

the objection of the — over the objection of the counter-defendant. 

That countercomplaint sought legal fees against the counter-defendant and 

plaintiff, James Kornesczuk, and is, for practical purposes, a mirror image of the 

complaint filed in this case, except that the complaint in this case documents the 

proceedings at the previous trial.

 At the conclusion of the first trial, the Court ruled in favor of the plaintiff 

for the reasons stated on the record, entered judgment in the amount of $4,006, plus 

costs of suit. The defendant in Graham One filed a motion for reconsideration, 

which was denied. The case was not appealed.

The current complaint alleges, in sum, that there were legal fees owed to 

Graham over and above the 4,006 judgment entered for Kornesczuk. The argument 

goes thusly: Graham is allegedly owed $7,922.72, or thereabouts, pursuant to a fee 

agreement. The Court’s judgment order of $4,006 is a set-off against that amount, 

leaving a balance of $3,916.72, plus interest, et cetera, to which Graham is entitled.

The problem that the plaintiff in this case has is that the countercomplaint, 

which was dismissed with prejudice at his request, was the identical cause of action 

which is pleaded in this case in every way. The reason that there was no judgment 

entered for Graham in Graham One was that Graham withdrew his 

countercomplaint, for whatever reason, with prejudice. 

Graham now argues that said dismissal should not count because the 

Court’s ruling was an advisory opinion. The Court’s ruling was not an advisory 

opinion, it was a money judgment for what the Court found was a partial breach of 
7 

contract. If Graham had wanted a money judgment in Graham One, he should not 

have dismissed his countercomplaint with prejudice. 

Res judicata is a well-known legal concept that a further recitation in this 

ruling is unnecessary. Graham had the chance to litigate this issue in the prior case, 

but for reasons known only to him and his attorney decided not to. Res judicata

demands that the defendant’s motion be granted. Case dismissed.” 

¶ 16 The court entered a written order providing, “For the reasons stated on the record, the

motion to dismiss filed by the defendant is granted. Case dismissed with prejudice. Strike future

dates. Case closed.” This appeal followed.

¶ 17 II. ANALYSIS

¶ 18 A section 2-619 motion to dismiss asserts affirmative matter to avoid or defeat a claim

while admitting the complaint’s legal sufficiency, all well-pled facts, and the reasonable inferences 

to be drawn from those facts. 735 ILCS 5/2-619 (West 2022). When ruling on a motion to dismiss, 

all pleadings and supporting documents are viewed in a light most favorable to the nonmoving 

party. Lucas v. Taylor, 349 Ill. App. 3d 995, 998 (2004). We review the complaint’s dismissal

de novo. Bouton v. Bailie, 2014 IL App (3d) 130406, ¶ 7. 

¶ 19 “One defense that a defendant may raise in a section 2-619 motion is that a prior judgment 

bars the plaintiff’s cause of action, i.e., that the prior judgment has res judicata effect in the 

subsequent lawsuit.” Kasny v. Coonen & Roth, Ltd., 395 Ill. App. 3d 870, 873 (2009) (citing 735 

ILCS 5/2-619(a)(4) (West 2008)). “The doctrine of res judicata provides that a final judgment on 

the merits rendered by a court of competent jurisdiction acts as an absolute bar to a subsequent 

action between the same parties or their privies involving the same claim, demand, or cause of 

action.” Wilson v. Edward Hospital, 2012 IL 112898, ¶ 9. “The bar extends not only to all matters 
8 

that were actually decided but also to those matters that could have been decided in the prior 

action.” Id. The party invoking res judicata bears the burden of demonstrating its application. 

Kasny, 395 Ill. App. 3d at 873. “[R]es judicata is an equitable doctrine that should be applied only 

as fairness and justice require.” McHenry Savings Bank v. Moy, 2021 IL App (2d) 200099, ¶ 38. 

“Equity dictates that the doctrine of res judicata should not be technically applied if to do so would 

be fundamentally unfair or would create inequitable or unjust results.” Id. Our review of a 

complaint’s dismissal on res judicata grounds is de novo. Buchanan v. Legan, 2017 IL App (3d) 

170037, ¶ 22. 

¶ 20 Plaintiff argues defendant’s res judicata defense does not apply. According to plaintiff, its 

counterclaim in Case I was not identical to its current claim because while its counterclaim was 

filed against Kornesczuk individually, this claim was filed against Kornesczuk as trustee. Plaintiff 

further argues its breach of contract claim does not seek to nullify the judgment in Case I, which 

was merely a declaratory judgment against plaintiff. Finally, plaintiff argues the “ongoing harm” 

and “extraordinary reason” exceptions to res judicata apply to prevent what would amount to a 

“windfall double recovery” for defendant. 

¶ 21 In response, defendant maintains this case satisfies each of the elements of res judicata and 

does not fall into any of the doctrine’s established exceptions. He argues plaintiff’s election to file 

a counterclaim in Case I, rather than a third-party complaint, suggests it intended to bring a claim 

against the Trust rather than defendant in his individual capacity. Defendant further argues the 

outcome of Case I was not a declaratory judgment, but rather a $4006 monetary judgment. Finally, 

defendant argues res judicata applies because plaintiff could have litigated its claims against the 

Trust in Case I yet chose not to do so. 
9 

¶ 22 Res judicata applies if the following three requirements are met: (1) a final judgment on 

the merits by a court of competent jurisdiction, (2) identity of cause of action, and (3) identity of 

parties or their privies. Wilson, 2012 IL 112898, ¶ 9. 

¶ 23 A. Final Judgment on the Merits 

¶ 24 Defendant argues plaintiff’s voluntary dismissal of its counterclaim in Case I was a final 

judgment on the merits. He cites Illinois Supreme Court Rule 273, which states that, except in a 

few circumstances, “an involuntary dismissal of an action *** operates as an adjudication upon 

the merits.” Ill. S. C. R. 273 (eff. Jan. 1, 1967). This rule is inapplicable here as plaintiff has 

voluntarily dismissed its counterclaim. “Rule 273 applies only to an involuntary dismissal of an 

action.” Rein v. David A. Noyes & Co., 172 Ill. 2d 325, 335 (1996). Even so, plaintiff’s voluntary 

dismissal was with prejudice. Generally, a “dismissal with prejudice is an adjudication on the 

merits for purposes of the application of the doctrine of res judicata.” Mann v. Rowland, 342 Ill. 

App. 3d 827, 836 (2003); see also Van Slambrouck v. Marshall Field & Co., 98 Ill. App. 3d 485, 

487 (1981) (“A dismissal with prejudice is tantamount to an adjudication on the merits.”). 

¶ 25 Plaintiff argues its voluntary dismissal with prejudice should not bar its present claim 

against defendant, Kornesczuk as trustee, because its decision to voluntarily dismiss its 

counterclaim was motivated by a realization that Kornesczuk was not individually liable for the 

failure to pay plaintiff’s invoices. Plaintiff’s argument, which implicates res judicata’s identityof-parties requirement, is unavailing. “An attorney’s subjective motivation in taking a voluntary 

dismissal is not part of a res judicata analysis.” Hudson v. City of Chicago, 228 Ill. 2d 462, 478 

(2008). 

¶ 26 Moreover, even if plaintiff’s voluntary dismissal of its counterclaim did not constitute a 

final judgment, the court’s adjudication of defendant’s claim following a bench trial is a final 
10 

judgment on the merits for purposes of res judicata. The first requirement of res judicata is thus 

met.

¶ 27 B. Identity of Cause of Action

¶ 28 Next, the parties dispute the existence of an identity of cause of action. “In determining 

whether there is an identity of causes of action for purposes of res judicata, Illinois courts apply a 

transactional test.” (Internal quotation marks omitted.) Ross Advertising, Inc. v. Heartland Bank 

& Trust Co., 2012 IL App (3d) 110200, ¶ 34. “Under this test, separate claims will be considered 

the same cause of action if they arise from a single group of operative facts, regardless of whether 

they assert different theories of relief.” Id. We approach this inquiry “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.” (Internal quotation marks omitted.) First 

Midwest Bank v. Cobo, 2018 IL 123038, ¶ 19.

¶ 29 Plaintiff’s claim in this case and his counterclaim in Case I both request unpaid legal fees 

arising from the same engagement agreement, executed in August 2017. However, while the 

counterclaim sought an outstanding balance based solely on plaintiff’s invoices, the current claim

seeks a reduced amount that purports to account for the trial court’s judgment in Case I.

¶ 30 1. Nature of Prior Judgment 

¶ 31 The parties fundamentally disagree as to the nature of the trial court’s judgment in Case I. 

Plaintiff maintains the court issued a declaratory judgment, disallowing $4006 of the $14,496.12 

billed by plaintiff and thereby reducing the remaining balance owed from $7,922.72 to $3,916.72. 

Defendant, in contrast, maintains the trial court upheld only $2500 of the $14,496.12 billed by 

plaintiff. According to him, plaintiff’s “billing practices were so egregious” that the trial court not 
11 

only absolved plaintiff of any liability on the unpaid fees, but also required plaintiff to repay the 

Trust $4006 of the $6500 previously paid.2

¶ 32 The record overwhelmingly supports plaintiff’s interpretation. In Case I, the court 

summarized its ruling as follows:

 “So, in sum, the following fees are disallowed: August 1st, 2017, $1,070; 

August 17th, $900; August 31st, 2017, $870; November 1st, 2017, $1,050; the 

amount billed after the withdrawal [of representation] of $116. The total judgment 

in favor of [Kornesczuk, as trustee] and against [Graham’s office] is $4,006[.]”

The court expressly disallowed a total of $4006 in legal fees. It is no coincidence that the 

disallowed fees—in the amounts of $1070, $900, $870, $1050, and $116—yield a sum of $4006. 

The judgment was “in favor of” defendant, therefore, because it reduced the Trust’s total liability 

by $4006. 

¶ 33 Yet defendant insists plaintiff’s “billing practices were so egregious” that the court decided 

plaintiff should not have received more than $2500 for all of its work on the guardianship case. 

Such an interpretation finds no support in the record. First, it would necessitate the court to have 

disallowed nearly $12,000 of the $14,496.12 billed by plaintiff. Second, it contradicts the court’s 

findings that (1) plaintiff’s hourly rates were reasonable, (2) plaintiff’s fees for clerical and 

paralegal services were reasonable and de minimus, and (3) except for services linked to the 

disallowed fees, plaintiff’s services were fair and necessary. Third, it is contradicted by 

defendant’s own admission at oral argument that he did not attempt to collect a “repayment” after 

Case I’s termination. In view of the record, we see no indication the trial court intended to absolve 

2

 $6500 less $4006 yields $2494, just shy of $2500. 
12 

defendant of all liability on the outstanding fees, let alone to transfer defendant’s liability onto 

plaintiff. 

¶ 34 We acknowledge the trial court, in its oral ruling on the motion to dismiss, stated its 

judgment in Case I was a money judgment, and not an advisory opinion. We agree in part. “An 

opinion is advisory if it is impossible for [the] court to grant effectual relief to either party.” In re 

Marriage of O’Brien, 2011 IL 109039, ¶ 20. The court’s prior judgment was not an advisory 

opinion where it granted defendant effectual relief by reducing the Trust’s money obligation to 

plaintiff. Having said that, we fail to see how the prior judgment was a money judgment. A money 

judgment is defined as a “judgment for damages subject to immediate execution.” Black’s Law 

Dictionary (11th ed. 2019). Although the court called its prior judgment a money judgment, it did 

not go so far as to say it was for damages or that it required plaintiff to pay (or repay) the Trust. In 

fact, the court never contradicted plaintiff’s understanding that the $4006 judgment was a set-off 

against the original balance of unpaid fees. 

¶ 35 Plaintiff argues the judgment in Case I was a declaratory judgment. A “declaratory 

judgment” is defined as “[a] binding adjudication that establishes the rights and other legal 

relations of the parties without providing for or ordering enforcement.” Black’s Law Dictionary 

(11th ed. 2019). Here, the trial court’s judgment (1) established the parties’ rights in relation to 

plaintiff’s invoices by disallowing $4006 in fees (2) without requiring either party to pay a 

specified sum to the other side. Thus, while the judgment could be loosely termed a “money 

judgment” to the extent it adjudicated a money obligation, it was a textbook example of a 

declaratory judgment. 

¶ 36 “The declaratory judgment procedure allows the court to take hold of a controversy one 

step sooner than normally—that is, after the dispute has arisen, but before steps are taken which 
13 

give rise to claims for damages or other relief.” (Internal quotation marks omitted.) Ludwig, 376 

Ill. App. 3d at 101. In his motion to dismiss, defendant stated, “When [plaintiff] continued to bill 

Defendant exorbitant amounts *** Defendant took the proactive step of requesting the Circuit 

Court to decide whether the amounts claimed by [plaintiff] were meritorious.” (Emphasis added.) 

Defendant’s characterization of his lawsuit in Case I as a “proactive step” is consistent with the 

facts of this case and with the nature of a declaratory judgment action. 

¶ 37 The essential requirements of a declaratory judgment action are (1) a plaintiff with a legal 

tangible interest, (2) a defendant having an opposing interest, and (3) an actual controversy 

between the parties concerning such interests. Brandt Construction Co. v. Ludwig, 376 Ill. App. 

3d 94, 101 (2007). A legal tangible interest is “some personal claim, status, or right which is 

capable of being affected by the grant of [declaratory] relief.” Greer v. Illinois Housing 

Development Authority, 122 Ill. 2d 462, 493 (1988). The parties’ billing dispute in Case I meets 

all three requirements of a declaratory judgment action. 

¶ 38 Nevertheless, defendant contends his claim did not seek declaratory relief because the 

conduct giving rise to the claim—plaintiff’s representation of the Trust—occurred well before he 

filed his claim, and there was no chance of future conduct that could serve as the basis for a 

declaratory judgment. He cites the principle that declaring nonliability for past conduct is not a 

function of a declaratory judgment action. See Howlett v. Scott, 69 Ill. 2d 135, 143 (1977). We 

reject defendant’s attempt to apply the “nonliability for past conduct” principle to plaintiff’s

conduct in representing the Trust rather than to defendant’s ongoing payment delinquency, which 

continued after he filed his complaint in Case I. Where defendant’s nonpayment persisted through 

the date of filing, it was not past conduct. 
14 

¶ 39 Finally, defendant’s contention fails even assuming his flawed interpretation of the 

“nonliability for past conduct” principle. The principle does not define a declaratory judgment; 

instead, it states a criterion for a properly entered declaratory judgment. In other words, whether 

the court should have issued a declaratory judgment does not change the fact that its prior judgment 

was a declaratory judgment.3 

¶ 40 Through its declaratory judgment, the court modified and authoritatively established the 

Trust’s liability as it related to plaintiff’s legal fees. By disallowing only some of plaintiff’s fees, 

the court necessarily allowed the rest of plaintiff’s fees, which the court found were based on 

reasonable rates and services that were “fair and necessary.” Thus, upon final judgment in Case I, 

the Trust owed plaintiff the outstanding balance of fees that the court had implicitly allowed to 

stand. 

¶ 41 2. Separate Causes of Action

¶ 42 Having established the nature of the judgment in Case I, we return to the second 

requirement of res judicata—identity of cause of action. “Under res judicata principles, a 

defendant’s continuing course of conduct, even if related to conduct complained of in an earlier 

action, creates a separate cause of action.” (Internal quotation marks omitted.) Wilmington Savings 

Fund Society, FSB v. Barrera, 2020 IL App (2d) 190883, ¶ 19. “Put another way, one course of 

conduct may give rise to a second cause of action when that conduct persists after the original 

judgment.” Id. “Thus, an earlier judgment relating to a course of conduct does not bar claims for 

3

Moreover, defendant’s recitation of the principle overlooks its reasoning. The principle states, “A 

declaratory judgment action is not the vehicle for a declaration of nonliability for past conduct, as it deprives 

the potential plaintiff of his right to determine whether he will file, and, if so, when and where.” (Emphasis 

added and internal quotation marks omitted.) Travelers Indemnity Co. of America v. Townes of Cedar Ridge 

Condominium Ass’n, 2022 IL App (3d) 200542, ¶ 10. By taking a “proactive step” to limit the Trust’s 

liability with respect to plaintiff’s invoices, defendant conceivably deprived plaintiff of its right to 

determine whether to file, and if so, when and where.
15 

continuing conduct complained of in the second lawsuit that occur[s] after judgment has been 

entered in the first lawsuit.” (Internal quotation marks omitted.) Id.

¶ 43 After judgment was entered in Case I, defendant continued to disregard its (now reduced) 

debt to plaintiff. Defendant’s “continuing course of conduct” in failing to pay the outstanding 

balance of plaintiff’s legal fees created a separate cause of action for purposes of res judicata. Id.

The second requirement of res judicata is therefore not met. 

¶ 44 The dissent opines that “the claims asserted in the previous action, including plaintiff’s 

original counterclaim, arise from the same group of operative facts as the claim in the instant case.”

Infra ¶ 62; see Ross Advertising, Inc., 2012 IL App (3d) 110200, ¶ 34 (separate claims are

considered the same cause of action if they arise from a single group of operative facts). Crucially, 

the dissent’s position overlooks the practical implications of the trial court’s prior judgment. Cobo, 

2018 IL 123038, ¶ 19 (res judicata’s transactional test is a pragmatic inquiry). By disallowing 

some of plaintiff’s fees, the judgment abrogated plaintiff’s invoices such that plaintiff could no 

longer rely on those invoices as self-contained evidence of debt. From that point forward, 

plaintiff’s right to collect was no longer based on its invoices alone, but on a judgment that had 

modified the invoices and authoritatively established the Trust’s liability. 

¶ 45 In short, plaintiff’s counterclaim and the current complaint did not arise from the same 

group of operative facts. While plaintiff’s invoices constituted the chief “operative facts” 

underlying its counterclaim in Case I, plaintiff’s current complaint goes beyond its invoices in

seeking to enforce the court’s declaratory judgment—a judgment that did not exist when plaintiff 

filed its counterclaim. In deciding whether separate claims are the same cause of action, courts 

consider whether the claims’ operative facts are “related in time, space, origin, or motivation.” Id.

Here, plaintiff’s invoices and the trial court’s declaratory judgment are disconnected in time, 
16 

origin, and motivation. A pragmatic assessment of the operative facts confirms that plaintiff’s 

claims constituted separate causes of action.

¶ 46 This conclusion aligns with the principles of fairness and justice underlying the doctrine of 

res judicata. See Moy, 2021 IL App (2d) 200099, ¶ 38. By merely reducing the original bill, the 

court’s prior judgment renewed the Trust’s money obligation and, in turn, conferred on plaintiff a 

renewed right to collect. 

¶ 47 Where res judicata’s second requirement is not met, we need not address the doctrine’s 

identity-of-parties requirement or its “ongoing harm” and “extraordinary reason” exceptions. 

Defendant’s motion to dismiss was improvidently granted. 

¶ 48 III. CONCLUSION

¶ 49 The judgment of the circuit court of Du Page County is reversed and remanded for further 

proceedings. 

¶ 50 Reversed and remanded.

¶ 51 JUSTICE HOLDRIDGE, specially concurring:

¶ 52 I concur with the majority’s ruling that res judicata should not bar the claim at issue, 

however, I would reach this conclusion because it would be fundamentally unfair to do otherwise.

¶ 53 As the majority points out, “res judicata is an equitable doctrine that should be applied 

only as fairness and justice require.” McHenry Savings Bank v. Moy, 2021 IL App (2d) 200099, ¶ 

38. “Equity dictates that the doctrine of res judicata should not be technically applied if to do so 

would be fundamentally unfair or would create inequitable or unjust results.” Id.

¶ 54 Illinois has adopted Section 26(1) of the Restatement (Second) of Judgments which lists 

the various exceptions to res judicata. Hudson v. City of Chicago, 228 Ill. 2d 462, 472-73 (2008) 

(citing Rein v. David A. Noyes & Co., 172 Ill. 2d 325, 341 (1996)). Under Section 26(1), 
17 

res judicata would not bar a second action if: (1) the parties have agreed in terms or effect that the 

plaintiff may split his claim or the defendant has acquiesced therein; (2) the court in the first action 

expressly reserved the plaintiff's right to maintain the second action; (3) the plaintiff was unable 

to obtain relief on his claim because of a restriction on the subject-matter jurisdiction of the court 

in the first action; (4) the judgment in the first action was plainly inconsistent with the equitable 

implementation of a statutory scheme; (5) the case involves a continuing or recurrent wrong; or 

(6) it is clearly and convincingly shown that the policies favoring preclusion of a second action are 

overcome for an extraordinary reason. Hudson, 228 Ill. 2d at 472-73. 

¶ 55 It has not been suggested by anyone that exceptions (1) through (4) should apply. The 

plaintiff and the majority have stated that section (5) should apply because there is a recurrent 

wrong which is still ongoing, i.e., the continued nonpayment of attorneys’ fees owed to the plaintiff 

by the defendant. Whether this could or should be considered an ongoing wrong is obviously 

debatable, however, I believe that exception (6) provides a simpler, more straightforward method 

to ensure justice is achieved in the present case.

¶ 56 The Restatement (Second) of Judgments states that res judicata should not preclude 

relitigation of a cause of action if “[i]t is clearly and convincingly shown that the policies favoring 

preclusion of a second action are overcome for an extraordinary reason, such as the apparent 

invalidity of a continuing restraint or condition having a vital relation to personal liberty or the 

failure of the prior litigation to yield a coherent disposition of the controversy.” (Emphasis added.) 

Restatement (Second) of Judgments § 26(1)(f) (1982). “Such an exception is not lightly to be found 

and must be based on a clear and convincing showing of need.” Id., n.i. “Confined within proper 

limits, this concept is central to the fair administration of the doctrine of res judicata.” Id. 
18 

¶ 57 The plaintiff and the majority state that the record suggests the trial court did not intend to 

absolve the defendant of all liability on the outstanding fees. I agree. There was nothing in the 

record to suggest that the trial court found the Trust is not liable for the remaining attorney fees 

after the money damages judgment of $4,006.00 for partial breach of contract was deducted from 

the remaining balance of $7,996.12. As the majority points out, there was ample evidence that the 

trial court intended that the Trust should pay the remainder of the plaintiff’s attorney fees. 

¶ 58 When the trial court delivered its judgment in Graham I, it was still unknown whether the 

Trust would pay the remaining balance of attorney fees, and the plaintiff did not need a judgment 

at that time to be owed or to collect the remaining balance. However, because of the unusual 

procedural history of the case, if the Trust did not pay the remainder of its legal fees, and we know 

it did not, res judicata would apply, potentially barring the plaintiff from bringing a suit seeking 

to collect from the Trust. Yet on August 27, 2021, when the trial court gave its judgment in 

Graham I, it gave every indication that it did not intend to absolve the Trust of all liability on the 

outstanding fees, but at that time there was no way for the plaintiff to know whether the Trust was 

going to pay until it was too late to seek a judgment from the court. The plaintiff was in a situation 

where he could not collect once he knew for certain that the defendant was not going to pay. 

¶ 59 For the reasons listed in the majority’s opinion and mentioned above, there was a failure 

of the prior litigation to yield a coherent disposition of the controversy, and for this reason I believe 

the present appeal involves an extraordinary reason to overcome res judicata. Upholding the 

dismissal of Graham II due to res judicata would (1) allow the trustee to avoid paying a balance 

of attorneys’ fees that was effectively set by the trial court, and (2) allow the Trust to reap a double 

recovery of damages at the plaintiff’s expense. The reason it would be a double recovery is that, if 

the plaintiff is not allowed to proceed in Graham II, the ruling of the trial court has not only reduced 
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the plaintiff’s invoices by $4,006.00, but it has then additionally required the plaintiff to pay 

$4,006.00 to the Trust. To force this outcome in order to adhere to a rigid application of 

res judicata would be fundamentally unfair and is precisely why exceptions were made for the 

rule.

¶ 60 JUSTICE ALBRECHT, dissenting: 

¶ 61 I respectfully dissent from the majority’s ruling that res judicata does not bar the claim at 

issue. I disagree with the majority’s analysis that identity of a cause of action does not exist and

would hold that all three requirements of res judicata have been met, barring plaintiff from 

pursuing this claim. 

¶ 62 The second requirement of res judicata, identity of a cause of action, establishes that if the 

claim involves the same operative facts as a claim in the original proceeding, res judicata may bar 

a party from raising his or her claim in a subsequent action. Torcasso v. Standard Outdoor Sales, 

Inc., 232 Ill. App. 3d 500, 503-04 (1993). Here, the claims asserted in the previous action, 

including plaintiff’s original counterclaim, arise from the same group of operative facts as the 

claim in the instant case. 

¶ 63 The majority recognizes that the continuing course of conduct exception may provide a 

party relief from res judicata and applies this exception to the case before us. Supra ¶ 42. However, 

there is no “course of conduct” here. Repeated action or a series of acts demonstrating continuity 

of purpose creates a course of conduct, not the single, yet ongoing, act of not paying an invoice. 

¶ 64 A continuing course of conduct suggests more than one act is necessary, which shows an 

intent to continue the violating conduct. See e.g., Feltmeier v. Feltmeier, 207 Ill. 2d 263, 278 

(2003) (continuing violations are the continued acts, not the continuation of a single wrong). The 

recurring wrong in the “course of conduct” exception allows for a subsequent claim because the 
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continuing conduct creates a successive injury that constitutes a separate cause of action. See 

Kidney Cancer Ass’n v. North Shore Community Bank and Trust Co., 373 Ill. App. 3d 396, 400 

(2007) (continuing course of conduct is numerous separate transactions, not one continuing 

transaction). Further, the precedent utilizing this doctrine demonstrates that “course of conduct” 

refers to repeated activity constituting separate claims, such as continuing to default on installment 

payments and continued actions that constitute harassment or nuisance violations. See e.g., 

Wilmington Savings Fund Society, FSB, 2020 IL App (2d) 190883 (installment payments); Raabe 

v. Messiah Evangelical Lutheran Church, 245 Ill. App. 3d 539 (1993) (continuing nuisance); 

Green v. Illinois Department of Transportation, 609 F. Supp. 1021 (1985) (continuing 

harassment). The continued conduct in these cases resulted in either a new injury or compounded 

the injury already received. 

¶ 65 Here, there is one single act – lack of payment on an attorney’s invoice. No additional work 

was performed after litigation of the first proceeding that would create a new bill or further injury. 

With no new services being performed that would add to the invoice, there will always only be 

one single action of nonpayment. This single action is not a continuing course of conduct and does 

not create a new injury from which plaintiff may recover. See Kidney Cancer Ass’n, 373 Ill. App. 

3d at 400. 

¶ 66 The last requirement of res judicata, identity of parties or their privity, is clearly met here 

as well. See Indian Harbor Ins. Co. v. MMT Demolition, Inc., 2014 IL App (1st) 131734, ¶ 41. 

Privity exists between “parties that adequately represent the same legal interests.” Oshana v. FCL 

Builders, Inc., 2013 IL App (1st) 120851, ¶ 23. “It is the identity of interest that controls in 

determining privity, not the nominal identity of the parties.” People ex rel. Burris v. Progressive

Land Developers, Inc., 151 Ill. 2d 285, 296 (1992). While plaintiff names defendant as the trustee 
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of the Kornesczuk trust in the current claim, instead of individually as in his original counterclaim, 

the two parties are one in the same. The legal interest between defendant as an individual or as 

trustee is identical—the obligation to pay for work performed for the benefit of the trust. Thus, the 

identity of parties requirement is clearly met.

¶ 67 The purpose of res judicata is to prevent the multiplicity of lawsuits between causes of 

action that involve the same parties and the same facts and issues. See Murneigh v. Gainer, 177 

Ill. 2d 287, 299 (1997). It acts to bar the parties from relitigating causes of action that were raised 

in an earlier lawsuit and also those claims that could have been raised in the earlier litigation. 

Hudson, 228 Ill. 2d at 467 (2008). Here, not only could plaintiff’s claim be raised in the earlier 

lawsuit, it was, in fact, raised in the form of a counterclaim. Plaintiff chose to voluntarily dismiss 

that claim with prejudice, barring him from raising it again now. I would therefore conclude that 

all three requirements implicating res judicata are met and would affirm the circuit court’s ruling.