Opinion ID: 2110780
Heading Depth: 1
Heading Rank: 6

Heading: The Standard of Analysis

Text: On appeal, Skyline and Daiwa Bank contend that the appellate court misapprehended the standard of analysis utilized in determining whether to enjoin a party from proceeding with litigation in another State. Skyline and Daiwa argue that the appellate court recognizes a dual standard. Where the action in the other jurisdiction is instituted before the Illinois action, the court may only enjoin a litigant from instituting or proceeding with a foreign suit which will result in fraud, gross wrong or oppression. (See Block & Co. v. Storm Printing Co. (1976), 40 Ill.App.3d 92, 95, 351 N.E.2d 271; Lowe v. Norfolk & Western Ry. Co. (1981), 96 Ill.App.3d 637, 644, 52 Ill.Dec. 108, 421 N.E.2d 971.) Conversely, where the action in the other jurisdiction is instituted after the Illinois action, Skyline and Daiwa contend, a lesser standard applies and the court may enjoin a litigant merely if the foreign action appears oppressive, vexatious, annoying, harassing, or unduly interfere with the progress of a prior instituted local action. (See Block & Co., 40 Ill.App.3d at 95-96, 351 N.E.2d 271; Lowe, 96 Ill.App.3d at 645, 52 Ill.Dec. 108, 421 N.E.2d 971; National Hockey League v. Intermart, Inc. (1984), 127 Ill.App.3d 1072, 1077, 83 Ill.Dec. 246, 470 N.E.2d 1; Wells v. Wells (1976), 36 Ill.App.3d 91, 93, 343 N.E.2d 215.) Daiwa further contends that in making the determination of the propriety of injunctive relief in these circumstances, courts are to look to whether complete relief can be obtained in the Illinois action, and if so, the filing of a foreign suit on the same issues will be deemed vexatious and harassing. See National Hockey League, 127 Ill.App.3d at 1078, 83 Ill.Dec. 246, 470 N.E.2d 1; Lowe, 96 Ill. App.3d at 645, 52 Ill.Dec. 108, 421 N.E.2d 971. Chrysler and the Hourani defendants assert that the appellate court correctly recognized that controlling precedent has established but one standard of analysis, i.e., the issuance of an injunction where the foreign proceeding will result in fraud, gross wrong or oppression, regardless of any priority of filing suit. Royal League v. Kavanagh (1908), 233 Ill. 175, 183, 84 N.E. 178; Illinois Life Insurance Co. v. Prentiss (1917), 277 Ill. 383, 386, 115 N.E. 554; see Chicago & Eastern Illinois R.R. Co. v. Reserve Insurance Co. (1978), 59 Ill.App.3d 206, 209, 17 Ill.Dec. 108, 376 N.E.2d 1; American Re-Insurance Co. v. MGIC Investment Corp. (1979), 73 Ill. App.3d 316, 322, 29 Ill.Dec. 269, 391 N.E.2d 532. It has long been established in Illinois that a court of equity has the power to restrain a person over whom it has jurisdiction from instituting a suit ( Harris v. Pullman (1876), 84 Ill. 20, 28) or proceeding with suit in a foreign State ( James v. Grand Trunk Western R.R. Co. (1958), 14 Ill.2d 356, 363, 152 N.E.2d 858; Crawley v. Bauchens (1974), 57 Ill.2d 360, 366, 312 N.E.2d 236). Courts do not, in such cases, pretend to direct or control the foreign court, but the decree acts solely upon the party. The jurisdiction rests on the authority vested in courts of equity over persons within the limits of their jurisdiction and who are amenable to process, to stay acts contrary to equity and good conscience. Royal League v. Kavanagh (1908), 233 Ill. 175, 183, 84 N.E. 178. The exercise of such power by equity courts in Illinois is considered to be a matter of great delicacy, to be invoked with great restraint to avoid distressing conflicts and reciprocal interference with jurisdiction. James, 14 Ill.2d at 363, 152 N.E.2d 858; cf. Cole v. Cunningham (1889), 133 U.S. 107, 121, 10 S.Ct. 269, 274, 33 L.Ed. 538, 544-45 (extreme delicacy, however, should not deter the court from controlling the conduct of a party within its jurisdiction to prevent oppression or fraud, as no rule of interstate comity forbids such exercise). In Royal League, 233 Ill. at 183, 84 N.E. 178, a fraternal insurance society filed a bill for an injunction in the circuit court of Cook County, seeking to restrain a beneficiary from instituting an action in Missouri to recover benefits under the policy. At the time the bill was filed in Illinois, there was no previously filed and pending action in Missouri. This court established a standard of analysis by its statements that courts possessed the undoubted authority to restrain a litigant from prosecuting a foreign action which would result in fraud, gross wrong or oppression, but that a litigant ought not be restrained unless a clear equity is presented requiring the interposition of the court to prevent a manifest wrong and injustice. ( Royal League, 233 Ill. at 183, 84 N.E. 178.) To justify equitable interposition it must be made to appear that an equitable right will otherwise be denied the party seeking relief. ( Royal League, 233 Ill. at 183, 84 N.E. 178.) The Royal League court thus affirmed the denial of injunctive relief on the basis that it was not inequitable for a litigant to pursue an action in a forum which could afford him a better remedy. In Illinois Life Insurance Co. v. Prentiss (1917), 277 Ill. 383, 115 N.E. 554, the beneficiary of an insurance policy first filed suit in the circuit court of Cook County to recover benefits under the policy. The insurance company then sought to enjoin the beneficiary from filing suit in Missouri to recover benefits under the policy. In determining the appropriateness of an injunction, Prentiss reiterated the standard of analysis enunciated in Royal League. ( Prentiss, 277 Ill. at 385-86, 115 N.E. 554.) The court relied upon the Royal League standard even though the Illinois action was filed first. The court then applied Royal League and determined that injunctive relief was inappropriate, as the application of the more favorable Missouri procedural law in the foreign suit did not constitute a manifest wrong or oppression. Daiwa contends that Royal League and Prentiss did not concern the situation where successively filed actions which are pending simultaneously were maintainable, as in the present case. We believe that distinction is irrelevant, considering that in Prentiss the first action was then pending in Illinois and this court, nonetheless, applied the Royal League standard. Furthermore, contrary to Daiwa's assertions, Prentiss touched upon the issue of priority of suit. The Prentiss court noted, The bare fact that a suit on this policy has been begun and is now pending in this State, in the absence of equitable considerations, furnishes no ground to enjoin appellant from pursuing his claim in a foreign jurisdiction   . ( Prentiss, 277 Ill. at 387-88, 115 N.E. 554.) Thus, this court did not allow any possible deference shown to prior-acquired jurisdiction, even that of an Illinois court, to diminish the requirement that a clear equity be presented before injunctive relief was appropriate. Older Illinois appellate decisions have also relied upon the standard established by Royal League and Prentiss, regardless of whether suit was first filed in Illinois or the foreign State. In Catherwood v. Hokanson (1916), 201 Ill.App. 462, suit was filed in Illinois seeking the construction of a will creating a trust. Defendants filed an action in Indiana. The plaintiffs then sought to enjoin the defendants from proceeding with the Indiana action. The Indiana action essentially duplicated the Illinois action, but also requested a partition of certain real property located in Indiana. Quoting verbatim the standard established by Royal League, the court held that the facts did not justify enjoining the defendants, and so reversed the grant of injunctive relief. In Brinkerhoff v. Huntley (1921), 223 Ill.App. 580, the defendants filed a suit to quiet title in South Dakota. The plaintiff then filed a bill in Illinois, seeking to enjoin the defendants from proceeding with their South Dakota action. The appellate court reversed the trial court's grant of an injunction on the basis that the standard established by Royal League had not been met and complete relief was obtainable in South Dakota. The court did not give any consideration to the fact that a prior action was pending in South Dakota. A trio of divorce cases further illustrates that the Royal League standard has been consistently applied by our appellate court without consideration to priority of filing suit. See Kahn v. Kahn (1945), 325 Ill. App. 137, 146-47, 59 N.E.2d 874 ( Royal League relied upon as standard of analysis in affirming the denial of a motion to dissolve an injunction, where an Illinois action commenced first and plaintiff sought to enjoin defendant from instituting a second action in Nevada); Russell v. Russell (1946), 329 Ill.App. 580, 586, 70 N.E.2d 70 ( Royal League relied upon in affirming the grant of an injunction, where Illinois action commenced first and plaintiff sought to enjoin defendant from proceeding with a subsequently filed Nevada action); Kleinsckmidt v. Kleinschmidt (1951), 343 Ill.App. 539, 547, 99 N.E.2d 623 ( Royal League relied upon to reverse the grant of an injunction, where first divorce action was filed by husband in Florida and wife filed second divorce action in Illinois, which action also sought to enjoin the husband from proceeding in Florida). It is Skyline and Daiwa's position that a dual standard was developed in James v. Grand Trunk Western R.R. Co. (1958), 14 Ill.2d 356, 152 N.E.2d 858. In James, the plaintiff filed a wrongful death action in Illinois against the defendant railroad company. The defendant, however, obtained a temporary injunction in Michigan, where the plaintiff resided, restraining her from prosecuting the Illinois action. Plaintiff moved in the Illinois action for a counterinjunction, a temporary injunction enjoining the enforcement of the Michigan injunction. The motion was denied and plaintiff appealed. Following plaintiff's arrest by Michigan authorities for contempt and the issuance of a second injunction by the Michigan court, this court entered orders restraining defendant from proceeding in Michigan. On appeal, the court viewed the case as involving two issues, the operative effect of the foreign injunction on the pending Illinois litigation, and the propriety of the issuance of the counterinjunction. In discussing the effect of the foreign injunction, the court made the statement upon which Skyline, Daiwa and subsequent appellate decisions so heavily rely to support a dual standard. Illinois has consistently followed the course of refusing to restrain the prosecution of a prior instituted action pending in a sister State unless a clear equity is presented requiring the interposition of the court to prevent a manifest wrong and injustice   . (Emphasis added.) ( James, 14 Ill.2d at 363, 152 N.E.2d 858.) The opinion indicates that considerations of comity form the basis for this practice by Illinois courts. The opinion then concludes that comity does not, however, conversely compel an Illinois court to recognize a foreign injunction restraining litigants from prosecuting a previously instituted Illinois case. The statement upon which Skyline and Daiwa so heavily rely occurs in the context of the James court's discussion of whether to yield to considerations of comity and afford recognition to the Michigan injunction. We do not believe that the court intended by this statement that an application of the Royal League standard should turn upon any priority in filing suit. The court's discussion, rather, indicates that principles of comity, more so than equity, prevent Illinois courts from granting injunctive relief under circumstances where there exists a prior instituted foreign action. (See Annot., 6 A.L.R.2d 896, 899 (1949).) To say that Illinois will refrain because of comity from restraining a party when a sister State has first acquired jurisdiction is not to say that our courts should enjoin actions based on something less than the prevention of manifest wrong and oppression whenever Illinois acquires jurisdiction first. James does not stand for the proposition that the Royal League standard is diminished and a less stringent equitable analysis is appropriate where a foreign action is filed after an Illinois action. The James court then discussed the second issue before it, the propriety of a counterinjunction restraining the defendant railroad. The James court cited the basic principle that a court has the authority to enjoin proceedings in another court in order to protect its jurisdiction. ( James, 14 Ill.2d at 368, 152 N.E.2d 858.) The court determined that it could not ignore the strong factual evidence of coercion in the record before it and recognized that the intended effect of the Michigan injunction was to wrest jurisdiction from the Illinois court. [T]he Michigan injunction was in everything but form an order restraining the Illinois court and determining the cases it may properly try. ( James, 14 Ill.2d at 368, 152 N.E.2d 858.) The court, accordingly, reversed and remanded for issuance of an injunction. James represents a strong remedy in the face of equally strong circumstances: the jurisdiction of an Illinois court was threatened by foreign injunction, not by the mere institution of the foreign action. Accordingly, James does not support the proposition that the mere institution of a subsequent foreign action threatens the first-acquired jurisdiction of Illinois courts sufficient to justify an injunction. Crawley v. Bauchens (1974), 57 Ill.2d 360, 312 N.E.2d 236, further confirms our view that James did not develop a dual standard. In Crawley, a divorce decree was granted in Illinois, awarding custody of the couple's minor child to the former wife. She and her new spouse subsequently instituted adoption proceedings in Panama, where they and the child resided. Upon the former wife's visit to Illinois, the former husband filed post-divorce proceedings, requesting that his ex-wife be held in contempt and seeking to restrain her from removing the child from Illinois and proceeding with the Panama adoption. Citing Prentiss, this court stated that an injunction is called for only when the prosecution of the action in another jurisdiction would result in fraud, gross wrong or oppression. ( Crawley, 57 Ill.2d at 366, 312 N.E.2d 236.) Despite that the Panamanian action was instituted after the Illinois divorce proceeding, this court did not consider that that fact allowed for a less stringent standard of analysis. Skyline and Daiwa, however, cite to several appellate decisions which interpret James as developing a dual standard on the basis of the priority of filing suit. Block & Co. v. Storm Printing Co. (1976), 40 Ill. App.3d 92, 351 N.E.2d 271, is the seminal case. The court in Block & Co. wrongly interpreted James' emphasis on the policy of protecting first-acquired jurisdiction and its statement concerning a prior instituted action as a justification to reject the Royal League standard. Citing no Illinois decisions, Block & Co. concludes that in cases where the foreign action is instituted after the Illinois action, it is appropriate to enjoin a litigant merely on the basis that the foreign action appears to be oppressive, vexatious, annoying, harassing, or unduly interfere] with the progress of a prior instituted local action. Block & Co., 40 Ill.App.3d at 95, 351 N.E.2d 271; see Lowe v. Norfolk & Western Ry. Co. (1981), 96 Ill.App.3d 637, 645, 52 Ill.Dec. 108, 421 N.E.2d 971; National Hockey League v. Intermart, Inc. (1984), 127 Ill.App.3d 1072, 1077, 83 Ill.Dec. 246, 470 N.E.2d 1 (injunction appropriate when foreign action either likely to result in fraud or gross wrong or oppression, or appears to be oppressive, vexatious, annoying, or harassing, or [causes] undue interference). Indeed, our appellate court has considered the oppressive, vexatious or harassing character of a subsequent foreign action as a consideration in the standard of analysis. (See Catherwood v. Hokanson (1916), 201 Ill.App. 462, 466 (court relied upon the Royal League standard of analysis, acknowledging as well that when complete relief can be had where litigation is pending, the institution of foreign proceedings will be regarded `as a vexatious harassing of the opposite party'); see Lowe v. Norfolk & Western Ry. Co. (1981), 96 Ill.App.3d 637, 52 Ill.Dec. 108, 421 N.E.2d 971; Wells v. Wells (1976), 36 Ill.App.3d 91, 93, 343 N.E.2d 215 (where the court looked to the Royal League standard for its overriding analysis and considered the nature of subsequent proceedings (vexatious harassing) as a factor in that analysis); Chicago & Eastern Illinois R.R. Co. v. Reserve Insurance Co. (1978), 59 Ill.App.3d 206, 209, 17 Ill.Dec. 108, 376 N.E.2d 1 ( Royal League relied upon as standard of analysis and grant of injunction reversed as no substantial evidence of harassing litigation was presented).) However, these cases do not support Skyline and Daiwa's view that a court need not look to the more stringent Royal League standard simply on the basis that the Illinois action is instituted before the foreign action, or that complete relief can be had in the pending litigation. See 42 Am.Jur.2d Injunctions § 221 (1969). We conclude that the appropriate standard for determining whether to restrain a party from prosecuting an out-of-state action is stated in Royal League. An injunction in such circumstances is appropriate only when prosecution of the foreign action would result in fraud or gross wrong or oppression, or when a clear equity is presented which requires such restraint to prevent a manifest wrong and injustice. ( Royal League, 233 Ill. at 183, 84 N.E. 178.) This standard is appropriate regardless of whether the foreign action is filed before or after the Illinois action. The fact that a subsequent foreign action may be vexatious and harassing is but a consideration in the overriding standard of analysis, as opposed to being a standard in and of itself.