Court Opinion

ID: 3142304
Source: CourtListenerOpinion
Date Created: 2015-10-22 17:56:04.291032+00
Date Added: 2024-06-11T09:48:08.601909
License: Public Domain

ILLINOIS OFFICIAL REPORTS
                                        Appellate Court

  Board of Trustees of the Rend Lake Conservancy District v. City of Sesser, 2011 IL App
                                      (5th) 110110

Appellate Court            THE BOARD OF TRUSTEES OF THE REND LAKE
Caption                    CONSERVANCY DISTRICT, an Illinois River Conservancy District,
                           Plaintiff and Counterdefendant-Appellee, v. THE CITY OF SESSER, an
                           Illinois Municipal Corporation, Defendant and Counterplaintiff-
                           Appellant.

District & No.             Fifth District
                           Docket No. 5-11-0110

Filed                      November 3, 2011

Held                       Pursuant to a question certified under Supreme Court Rule 308(a), the
(Note: This syllabus       appellate court held that the damages sought by defendant in its
constitutes no part of     counterclaim was not limited to $50,000 because plaintiff filed its initial
the opinion of the court   complaint as an “LM” case in an action arising from a dispute over the
but has been prepared      amount of water used by defendant city and the amount due plaintiff
by the Reporter of         conservancy district for the water, since limiting the damages sought by
Decisions for the          defendant in such a manner would result in gamesmanship that would
convenience of the         violate the principle of judicial economy, and therefore, the trial court’s
reader.)
                           order limiting the damages recoverable by defendant on its counterclaim
                           to $50,000 was reversed and the cause was remanded with directions to
                           redocket the case as an “L” case and proceed accordingly.

Decision Under             Appeal from the Circuit Court of Franklin County, No.10-LM-06; the
Review                     Hon. Barry L. Vaughan, Judge, presiding.
Judgment                   Reversed and remanded with directions.

Counsel on                 Robert C. Wilson and Kreig B. Taylor, both of Law Office of Robert C.
Appeal                     Wilson, of Harrisburg, for appellant.

                           J. Lawrence Sanders, of Benton, for appellee.

Panel                      JUSTICE WELCH delivered the judgment of the court, with opinion.
                           Justices Goldenhersh and Stewart concurred in the judgment and opinion.

                                             OPINION

¶1          Before us is an interlocutory appeal pursuant to Supreme Court Rule 308(a) (eff. Feb. 26,
        2010), from the circuit court of Franklin County, which certified the following question for
        our review: whether the amount of damages sought by a defendant/counterplaintiff in its
        counterclaim is limited to $50,000 because the plaintiff/counterdefendant filed the initial
        complaint as an “LM” case. Although this case has a fairly convoluted procedural history,
        we summarize the facts as simply as possible.
¶2          The plaintiff/counterdefendant, the Board of Trustees of the Rend Lake Conservancy
        District (the Board), treats water and distributes it to more than 30 municipalities and water
        districts in southern Illinois. One of those municipalities is the defendant/counterplaintiff,
        the City of Sesser (the City). A dispute arose between the parties as to the amount of water
        being used by the City and the amount of money due from the City to the Board for that
        water. The City alleged that the water meter provided by the Board, and required to be
        properly maintained by the Board, was defective and malfunctioning, resulting in the City
        being billed for more water than it used. The Board denied this allegation and alleged that
        the City had not paid for all of the water it had used.
¶3          We note that the time periods during which the City claimed the meter was
        malfunctioning and the months during which the Board claimed the City did not pay its bill
        in full do not coincide. Nevertheless, the claims are related in that the City claims it
        underpaid current bills in order to recoup some of the monies it overpaid in previous years
        when the meter was malfunctioning. Thus, the two claims may arise out of the same set of
        operative facts, and certainly the parties are the same.
¶4          On December 29, 2009, the City filed an action in the circuit court of Franklin County
        against the Board alleging breach of contract and seeking damages for the Board’s failure to
        properly maintain the water meter. The complaint alleged and sought damages in the amount
        of $201,782.96 and was docketed as No. 09-L-62.

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¶5         On January 14, 2010, the Board filed a separate action against the City seeking monies
       due for water provided to the City. This complaint sought damages in the amount of
       $32,991.11 and was docketed as No. 10-LM-06.
¶6         On May 6, 2010, the City filed a motion to consolidate the two actions into No. 09-L-62.
       The Board objected and the motion was denied.
¶7         On June 7, 2010, the City filed its answer to the Board’s complaint and a counterclaim
       that raised the same claim as the City had raised in its separate action, No. 09-L-62. The
       counterclaim sought damages in the amount of $201,782.96.
¶8         On July 6, 2010, the Board filed a motion to dismiss the City’s counterclaim because the
       same action between the same parties was already pending in No. 09-L-62. In response, on
       August 24, 2010, the City voluntarily dismissed No. 09-L-62, leaving only its counterclaim.
       Accordingly, the Board’s motion to dismiss the counterclaim was denied.
¶9         On September 10, 2010, the City filed a motion to have the case redocketed from an
       “LM” case to an “L” case because the amount in controversy in the counterclaim exceeds
       $50,000. Ultimately, the circuit court refused to redocket the case as an “L” case and entered
       an order limiting damages on the counterclaim to an amount not to exceed $50,000. The City
       filed a motion pursuant to Supreme Court Rule 308(a), asking the circuit court to certify a
       question of law for interlocutory appeal. Over the Board’s objection the court did so. We
       allowed the appeal.
¶ 10       We address first the standard of review. Generally, an appeal under Supreme Court Rule
       308 is limited to the question that is identified by the circuit court. Adams v. Harrah’s
       Maryland Heights Corp., 338 Ill. App. 3d 745, 747 (2003). When, as in the case at bar, the
       circuit court has not heard testimony, the standard of review for a permissive interlocutory
       appeal of a certified question is de novo. Adams, 338 Ill. App. 3d at 747. On this the parties
       agree.
¶ 11       Neither the parties nor the court was able to find any Illinois cases on point. Nevertheless,
       we answer the certified question in the negative: the amount of damages sought by a
       defendant/counterplaintiff in its counterclaim is not limited to $50,000 just because the
       plaintiff/counterdefendant filed the initial complaint as an “LM” case. Neither common
       sense, public policy, judicial economy, nor fairness and justice would allow such a result.
       The plaintiff cannot, by rushing to file its complaint first, limit the damages recoverable in
       a counterclaim against it by the defendant. To allow such a result would result in
       gamesmanship of the highest order, would violate the principle of judicial economy by
       disallowing counterclaims in cases where the party with lower damages files first, and would
       encourage litigation instead of negotiation and settlement by forcing parties to rush to the
       courthouse to limit the other party’s damages. To answer the question in the affirmative
       would also result in undue prejudice to a defendant’s right to present a counterclaim,
       particularly in a case where the claim would otherwise be barred by the statute of limitations,
       a right preserved in section 13-207 of our Code of Civil Procedure (735 ILCS 5/13-207
       (West 2010)). Accordingly, we reverse the order of the circuit court of Franklin County that
       limited damages recoverable on the counterclaim to $50,000. The case should have been
       redocketed as an “L” case.

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¶ 12       As the City writes in its brief on appeal:
                “The limitation of Counterclaims to $50,000 would encourage parties with lesser
           claims to ‘lay in the weeds’ until the other party’s larger claim was subject to a statute
           of limitations defense and then file the lesser claim knowing that the larger claim (on
           which the statute of limitations had run) would be limited to the smaller amount. That
           is not a just result. That result discourages parties from tacitly settling their differences
           and requires the party holding the larger claim to instigate litigation to protect its ability
           to maintain the larger claim. The limitation of Counterclaims to $50,000 compels a party
           with a larger claim to initiate litigation for self protection. Tacit settlements in which
           each party chooses to ‘go their own way’ are made hazardous and thereby litigation is
           encouraged. It is not good public policy to allow gamesmanship to prevail in these
           situations. Informal settlements in which determinations are made to ‘leave it alone’ will
           become a thing of the past if Counterclaims are limited to the amount stated in the
           Complaint.”
       We could not agree more.
¶ 13       Furthermore, there are cases in which the filing of a counterclaim is a defendant’s only
       means of bringing its claim. For instance, under section 13-207 of our Code of Civil
       Procedure (735 ILCS 5/13-207 (West 2010)), a defendant may bring a counterclaim against
       the plaintiff even if that claim would otherwise be barred by the statute of limitations. That
       statutory section has been construed by our courts in such a way as to prevent precisely the
       type of gamesmanship which is at issue in the case at bar. The stated purpose of section 13-
       207 is to prevent plaintiffs from intentionally filing their claims as late as possible in order
       to preclude defendants from a reasonable opportunity to file their counterclaim within the
       original limitations period. Cameron General Corp. v. Hafnia Holdings, Inc., 289 Ill. App.
       3d 495, 506 (1997). Similarly, a plaintiff should not be permitted to race to the courthouse
       in order to file its lesser claim first, thereby limiting the amount of damages a
       defendant/counterclaimant can recover through its counterclaim. To limit the
       counterclaimant’s damages to less than $50,000 just because the plaintiff had brought the
       action as an LM case is contrary to the intent of section 13-207.
¶ 14       It is especially important that a defendant be allowed to file a counterclaim seeking the
       full amount of damages, rather than a separate lawsuit, where the counterclaim arises from
       the same set of operative facts as does the plaintiff’s complaint. This is because res judicata
       would bar the separate suit if successful prosecution of that action would in effect nullify the
       judgment entered in the prior action. Fuller Family Holdings, LLC v. Northern Trust Co.,
       371 Ill. App. 3d 605, 617 (2007). If the defendant’s claim involves the same operative facts
       as the plaintiff’s claim, res judicata may bar the defendant from raising his claim in a
       subsequent action. Fuller Family Holdings, LLC, 371 Ill. App. 3d at 617. To limit the
       defendant’s damages simply because the plaintiff filed its claim first would cause undue
       prejudice to the defendant and is not in the interest of justice or fairness. The defendant’s
       damages should not be limited by the plaintiff’s claim simply because the plaintiff filed its
       complaint first.
¶ 15       Finally, in many cases, the interests of judicial economy favor trying both of the parties’

                                                  -4-
       claims against each other in the same lawsuit instead of in separate actions. This is especially
       true where the parties’ claims arise in whole or in part from the same set of facts. To limit
       the defendant’s damages simply because the plaintiff filed its claim first is contrary to this
       important interest of judicial economy.
¶ 16        The amount of damages sought by a defendant/counterplaintiff in its counterclaim is not
       limited to $50,000 just because the plaintiff/counterdefendant filed the initial complaint as
       an “LM” case. Accordingly, we reverse the order of the circuit court of Franklin County that
       limited the damages on the City’s counterclaim to an amount not to exceed $50,000. We
       remand this cause to the circuit court with directions that it redocket the case as an “L” case
       and proceed accordingly.
¶ 17        For the foregoing reasons, the order of the circuit court is hereby reversed and this cause
       is remanded with directions.

¶ 18      Reversed and remanded with directions.

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