Opinion ID: 732305
Heading Depth: 2
Heading Rank: 3

Heading: Breach of Fiduciary Duty/Aiding and Abetting

Text: George and India also alleged that Starns, as the trustee of Tom and Ida Lou's trust, breached his fiduciary duty by selling the family home, a piece of trust property, to a third party without first giving George the option to buy it. They asserted a derivative claim against Burt for aiding and abetting this alleged fiduciary breach. The district court held that these interrelated fiduciary-duty claims are barred by res judicata. [6] Res judicata applies if there is (1) a final judgment on the merits in an earlier action; (2) an identity of the causes of action; and (3) an identity of parties or their privies. River Park, Inc. v. City of Highland Park, 184 Ill.2d 290, 234 Ill.Dec. 783, 703 N.E.2d 883, 889 (1998). All three requirements are satisfied here. The parties are identical. The state-court suit pitted George and India against Starns and Burt, and the federal suit pits George and India against Starns, Burt, and Burt's law firm, with which he was in privity at the time the house was sold. See Purmal v. Robert N. Wadington & Assocs., 354 Ill. App.3d 715, 289 Ill.Dec. 578, 820 N.E.2d 86, 94-95 (2004). The causes of action share a common identity in that they arise from a single group of operative facts. River Park, 234 Ill.Dec. 783, 703 N.E.2d at 893. Here, as in the state-court litigation, George and India allege that Starns had a duty to offer George the option to buy the Ennenga family home before selling it to a third party. Finally, the state court dismissed George and India's case for failure to state a claim after the home was sold and they abandoned their claim. This was a final judgment on the merits. See ILL. SUP.CT. R. 273 (Unless. . . otherwise specifie[d], an involuntary dismissal of an action, other than a dismissal for lack of jurisdiction, for improper venue, or for failure to join an indispensable party, operates as an adjudication upon the merits.). George and India insist that their state-court action for equitable relief cannot preclude this federal action for money damages because the former did not give them access to a jury. For support they rely on Weisman v. Schiller, Ducanto & Fleck, 314 Ill.App.3d 577, 248 Ill.Dec. 143, 733 N.E.2d 818 (2000), but that case is inapplicable. Weisman involved a law firm's petition under the Illinois Marriage and Dissolution of Marriage Act to recover fees for services rendered in a client's divorce. Id., 248 Ill.Dec. 143, 733 N.E.2d at 820. To avoid paying the legal fees, the client alleged that the lawyer had been negligent. Id. In a later suit for legal malpractice, the Illinois Appellate Court held that although the elements of res judicata were technically met, the second suit was not precluded. Id., 248 Ill.Dec. 143, 733 N.E.2d at 820-21. The court gave two reasons. First, the client could not have counterclaimed for legal malpractice in the fee-petition action because the court lacked subject-matter jurisdiction to entertain such a claim. Id., 248 Ill.Dec. 143, 733 N.E.2d at 821. Second, because the Illinois Marriage Dissolution Act explicitly bars jury trials, 750 ILL. COMP. STAT. 5/103, applying res judicata would have denied the client a fundamental right under the Illinois constitution, Weisman, 248 Ill.Dec. 143, 733 N.E.2d at 821-22. Neither of these reasons applies here. George and India could have litigated their substantive arguments in full in the original state-court action. They were free to assert their claims for breach of fiduciary duty and seek money damages in that case; had they done so, they would have had access to a jury. Here, in contrast to Weisman, there was no jurisdictional impediment to suit or statutory bar to a jury trial. Because all the elements of res judicata are met, and George and India could have raised their fiduciary-duty claims in their state-court action, the district court correctly held that they were precluded from doing so here. See Chi. Title Land Trust Co. v. Potash Corp., 664 F.3d 1075, 1080 (7th Cir.2011) ([I]f the three elements necessary to invoke res judicata are present, res judicata will bar not only every matter that was actually determined in the first suit, but also every matter that might have been raised and determined in that suit.) (applying Illinois law).