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FIRST DIVISION
NOVEMBER 13, 2000

No. 1-98-3520

Defendants appeal from the circuit court's denial of theirmotion to dismiss plaintiff's complaint as violative of Illinois'single-refiling rule (735 ILCS 5/13-217 (West 1998)), as well asthe principles of res judicata and collateral estoppel.

For the reasons which follow, we reverse.

In April 1995, plaintiff filed a complaint in the UnitedStates District Court for the Northern District of Illinoisnaming as defendants Jeffrey Grossman, Donald Grauer, BarbaraLux, Midwestern Financial Consultants, Ltd., Quinlan & TysonRealty Partners Ltd., and Highland Park Corporation (hereinafterreferred to as Case I). The complaint alleged civil RacheteerInfluenced and Corrupt Organizations Act 18 U.S.C.S 1964violations as well as several state common law claims includingfraud, conspiracy, and breach of fiduciary relationships.

Plaintiff subsequently filed first and second amendedcomplaints. The second amended complaint named as additionaldefendants the Kimberly Anne Grossman Trust, the Trina ElyseGrossman Trust, the Kimberly Anne Grossman Subchapter S Trust, Trina Elyse Grossman Subchapter S Trust, Allen Engerman, MichaelMandell, Bette Grossman, Eagle partners, Ltd., 2780 RidgeCorporation, 1255 Building Corporation, Churchill Capital, Ltd.,ENP II, ENP II, Ltd., Churchill Venture One, Ltd., Magnolia HomesCorporation, Magnolia Estates Corporation, Oxford Funding Group,Ltd., Churchill Venture, Ltd., and Executive Travel. The secondamended complaint contained counts alleging mail and wire fraud,RICO, unjust enrichment and accounting, and common law fraud.

On March 12, 1997, a dispositive order was entered thatstated, "plaintiff voluntarily dismisses with prejudice theclaims brought under RICO. The remaining claims are dismissedwithout prejudice with leave to re-file them in the state court."

In March 1996, while Case I remained pending, plaintifffiled a complaint in the circuit court of Lake County, Illinois,against defendants Eagle Partners, Riverwoods Partnership, 2780Ridge Corporation, Bette Grossman, as trustee of the Trina ElyceGrossman Family Trust and as trustee of the Kimberly AnneGrossman Family Trust, Donald Grauer, Jeffrey Grossman, LarryKanar, and American National Bank and Trust Company of Chicago (hereinafter referred to as Case II). The complaint sought toenjoin the sale of certain real estate and a declarationnullifying the loan guarantee because the signature purporting tobe plaintiff's was, in fact, a forgery.

On January 10, 1997, plaintiff amended his complaint setting forth allegations of common law fraud, conspiracy, use of themails and interstate wires in furtherance of a scheme andartifice to defraud, breaches of fiduciary relationships, and foran accounting. The claims set forth in the original complaintwere completely absent from the amended complaint.

On February 5, 1997, the defendants removed the matter tothe federal District Court for the Northern District of Illinois. The case was dismissed on February 13, 1997, as duplicative ofCase I. Specifically, the order stated: "The court grantsdefendants' motion to dismiss and dismisses plaintiff's cause ofaction before this court as duplicative of the cause of actionpending before Judge Marovich in case No. 95 C 2214. The courtdenies defendants' motion to consolidate as moot."

On April 2, 1996, plaintiff filed a complaint againstdefendants ENP II, Ltd., Donald Grauer and Jeffrey Grossman inthe circuit court of Cook County (hereinafter referred to as CaseIII). Count I alleged breach of a promissory note against ENP II,Ltd., and count II alleged breach of promise to guarantee thenote by defendants Grossman and Grauer. The promissory note wasexecuted by ENP, II., Ltd., on July 10, 1995 in the amount of$271,667. Defendants filed a motion to dismiss contending thefacts alleged in this case arose from the same core of operativefacts as Case I pending in federal court. Plaintiff's motion fora voluntary dismissal was granted on October 10, 1996, prior tothe court ruling on defendants' motion to dismiss.

On March 27, 1997, plaintiff filed yet another complaint inthe circuit court of Cook County, which is the subject of theinstant appeal (hereinafter referred to as Case IV). Thecomplaint named the same defendants as were named in the secondamended complaint in Case I and stated causes of action fortortious conspiracy to commit fraud, unjust enrichment andaccounting, fraud, negligence, and punitive damages.

On June 26, 1997, defendants filed a motion to dismisspursuant to sections 2-619(a)(4) and (a)(9) of the Code of CivilProcedure (735 ILCS 5/2-619(a)(4), (a)(9) (West 1998)) arguingthe claims were barred by Illinois' single-refiling rule (735ILCS 5/13-217 (West 1998)) and the doctrines of res judicata andcollateral estoppel. The court originally granted defendants'motion and dismissed plaintiff's complaint on November 17, 1997. However, upon entertaining plaintiff's motion to reconsider, thecourt reversed itself and entered an order denying defendants'motion to dismiss.

In its memorandum opinion, the circuit court reasoned thatCase II was "not a new action because no judgment was entered andthe Marovich action [Case I] was not dismissed for lack ofjurisdiction or improper venue at that time." Further, the courtdetermined that although the single-refiling statute does notdefine what a new action is, "logic dictates that a new action isa re-filing of an action that was dismissed for lack ofjurisdiction or improper venue or one that resulted in ajudgment. *** This case [Case IV] is the first re-filing afterboth the dismissal by Judge Alesia in federal court and the voluntary dismissal and dismissal by Judge Marovich. Therefore,the pending case [Case IV] is not an impermissible second re-filing."

Defendants filed a timely motion for certification pursuantto Supreme Court Rule 308(a) (155 Ill. 2d 308(a)) of thefollowing two questions:

1. Did the trial court err in declining to grantdefendants' motion to dismiss based on a violation of the"one refiling rule"?

2. Did the trial court err in refusing to dismiss thecomplaint based on the principles of res judicata andcollateral estoppel?

This court granted defendants' application for leave toappeal on December 8, 1998.

Section 13-217 of the Code of Civil Procedure is a savingprovision which allows plaintiffs to refile a cause of action ifits prior disposition was based on the reasons outlined in thestatute. 735 ILCS 5/13-217 (West 1998); Timberlake v. IlliniHospital, 175 Ill. 2d 159, 162 (1997). Its purpose is tofacilitate the disposition of litigation upon the merits and toavoid its frustration upon grounds that are unrelated to themerits. Gendek v. Jehangir, 119 Ill. 2d 338, 343 (1988). Section13-217 provides in pertinent part:

"In the actions specified in Article XIII ofthis Act or any other act or contract wherethe time for commencing an action is limited,if *** the action is dismissed by a UnitedStates District Court for lack ofjurisdiction, or the action is dismissed by aUnited States District Court for impropervenue, then, whether or not the timelimitation for bringing such action expiresduring the pendency of such action, theplaintiff *** may commence a new actionwithin one year or within the remainingperiod of limitation, whichever is greater,after *** the action is dismissed by a UnitedStates District Court for lack ofjurisdiction, or the action is dismissed bythe United States District court for impropervenue."

Section 13-217 allows a plaintiff to refile of a cause ofaction within one year of its dismissal or the remaining periodof limitations, whichever is greater. Gendek v. Jehangir, 119Ill. 2d 338, 340 (1988). However, our supreme court hasinterpreted section 13-217 as permitting only one additionalfiling of a claim, even where the applicable statute oflimitations has not yet expired. Flesner v. Youngs DevelopmentCo., 145 Ill. 2d 252, 254 (1991); Timberlake v. IllinoisHospital, 175 Ill. 2d at 163.

On appeal, defendants argue that plaintiff's Case IV isbarred by the mandates of section 13-217 as it constitutes arefiling of Cases I, II and III. Conversely, plaintiff maintainsCase II should not be considered a second filing because it wascommenced during the pendency and not following the dismissal ofCase I and therefore cannot be properly characterized as a"refiling" of Case I. As to Case III, plaintiff argues it was acompletely different action than Cases I, II and IV and thereforenot a relevant factor in determining the applicability of section13-217.

We first consider whether Case II constitutes a "new action"or "refiling" for purposes of section 13-217. This court hasheld the filing of a complaint is considered a "refiling" of apreviously filed complaint if it contains the same cause ofaction as defined by res judicata principles. D'Last Corp. v.Ugent, 288 Ill. App. 3d 216, 220 (1997). Separate claims areconsidered the same cause of action for purposes of res judicataif they arise from a single group of operative facts. RiverPark, Inc. v. City of Highland Park, 184 Ill. 2d 290, 310-11.

In the instant case, the trial court acknowledged and theparties did not dispute that the claims set forth in Cases I, IIand IV arose out of the same core of operative facts. Yet thetrial court concluded Case II was not a "new action" because itwas dismissed prior to the dismissal of Case I and there had beenno adjudication of the merits of either Case I or II at the timeCase IV was filed. Thus, the trial court's decision hinged uponthe timing and character of the dismissal of both cases. Webelieve such a narrow interpretation of the boundaries of section13-217 is contrary to the case law as well as the spirit of thestatute.

A nearly identical argument was advanced and rejected inRockford Mutual Insurance Co. v. Blaase, 246 Ill. App. 3d 498(1993). In that case, Rockford filed a suit sounding innegligence against defendants in the circuit court of DouglasCounty. The following year, Rockford filed a second claimagainst defendants in the circuit court of Douglas Countyalleging breach of contract and breach of fiduciary duty. Thissecond claim was subsequently voluntarily dismissed pursuant tosection 2-1009 of the Code of Civil Procedure (Ill. Rev. Stat.1985, ch. 110, par. 2-1009 (now 735 ILCS 5/2-1009 (West 1998))).In 1990, Rockford filed a third claim against defendants; thistime in the chancery division of the circuit court of CookCounty. On the motion of defendant, the trial court dismissedplaintiff's claim as duplicative of the first filed case stillpending in Douglas County. Ill. Rev. Stat. 1989, ch. 110, par.2-619(a)(3) (now 735 ILCS 5/2-619(a)(3) (West 1998)). In 1991,Rockford filed yet another case against defendants in the circuitcourt of Douglas County. The trial court dismissed the caseholding it was an impermissible second refiling pursuant tosection 13-217 under the rationale of Flesner v. YoungsDevelopment Co., 145 Ill. 2d 252 (1991).

On appeal in Rockford Mutual, the plaintiff argued that adismissal pursuant to section 2-619(a)(3) of the Code of CivilProcedure was not a ground listed in section 13-217 and thereforedid not prohibit a refiling under that section. This courtrejected plaintiff's argument and held that "Flesner directs thata plaintiff has only one opportunity to refile. If the refiledcase is involuntarily dismissed by the trial court, plaintiff isnot entitled to a second opportunity to refile the action." Rockford Mutual, 246 Ill. App. 3d at 501.

In its memorandum opinion, the trial court in this casedistinguished Rockford. Specifically, it stated:

"Although the Cook County Circuit Court'sdismissal pursuant to 2-619(a)(3) in RockfordMutual is similar to Judge Alesia's dismissalof Schrager's case in federal district courtbecause of duplicative litigation, the factis that there has been no adjudication of anyof Schrager's cases. In other words, in allof the foregoing cases including RockfordMutual, the filings at issue occurred aftersome adjudication by the courts, whether itwas for lack of jurisdiction, involuntarydismissals or voluntary dismissal by theplaintiffs." (Emphasis in original.)

We disagree with the trial court's analysis. Our supremecourt in Timberlake v. Illini Hospital, 175 Ill. 2d 159 (1997),stated:

"Under the statute, the reason a cause ofaction was originally dismissed is importantin determining whether a plaintiff cansubsequently refile, but after the case hasbeen filed a second time, the reason for thesecond dismissal is of no consequence at all. No matter why the second dismissal tookplace, the statute does not give plaintiffthe right to refile again. As this courtexpressly held in Flesner, 145 Ill. 2d 252,section 13-217 permits one, and only one,refiling of a claim." Timberlake v. IllinoisHospital, 175 Ill. 2d at 165.

This issue was also addressed in Koffski v. Village of NorthBarrington, 988 F.2d 41 (7th Cir. 1993). The district court, inanalyzing section 13-217, concluded the cause of the previousdismissals was irrelevant as was the order in which theyoccurred. Koffski, 988 F.2d at 44. "To the contrary, the courtquite clearly intended to announce a general rule when it stated,'[w]e interpret the language of section 13-217 as providing forone and only one refiling....'" Koffski, 988 F.2d at 44, quotingFlesner, 145 Ill. 2d at 253.

Thus, Case II, arising out of the same core of operativefacts, is unquestionably a "new action" as contemplated bysection 13-217. Furthermore, the fact that Case II was thesecond claim filed but the first to be dismissed has no bearingon the determination of whether plaintiff has fully availedhimself of the opportunity afforded by the statute to refile. Itis clear plaintiff filed two separate, although identical, claimsagainst defendants in two separate forums and both cases wereinvoluntarily dismissed. Plaintiff now attempts to secure athird bite of the apple because the first bite turned sour. Unfortunately for plaintiff, the statute prohibits a third bite.

Defendants additionally contend the trial court erred inholding Case III arose from facts unrelated to those giving riseto the filings in Cases I, II and IV. We agree. `Although asingle group of operative facts may give rise to the assertion ofmore than one kind of relief or more than one theory of recovery,assertions of different kinds or theories of relief arising outof a single group of operative facts constitute but a singlecause of action.' River Park, Inc. v. City of Highland Park, 184Ill. 2d at 315, quoting Torcasso v. Standard Outdoor Sales, Inc.,157 Ill. 2d 484, 490-91 (1993). Applying the test set forth inRiver Park, we believe the claims asserted in Case III arose fromthe same factual bases as the other three filings⁽¹⁾.

In Case III, plaintiff filed a complaint seeking damages forbreach of a promissory note and guaranty with a principal amountof $271,667. Defendants filed a motion to dismiss the complaintpursuant to section 2-619(a)(3) of the Code of Civil Procedureasserting the same claim was included in the complaint in Case I,then pending in federal court.

The salient portion of the complaint in Case I states:

"It was further a part of said scheme andartifice to defraud that the Defendants andco-schemers in or about June, 1993 inducedthe Plaintiff in reliance upon the false andfraudulent misrepresentations by theDefendants and co-schemers to purchase NorthAmerican Insurance Company Bonds with a facevalue of $270,000.00 for Two Hundred Forty-Four Thousand Five Hundred Dollars($244,500.00) with the assurance of theDefendants and co-schemers that the bonds infact existed and that the total amount paidby the Plaintiff would be used to purchasesaid bonds, though no such bonds existed orwere purchased."

This exact same paragraph is also contained in the amendedcomplaint in Case II and the complaint in Case IV.

The face of the promissory note included the followingparagraph:

"Mirror of Note. This note mirrors principal andinterest payments of Surplus Notes issued by North AmericanInsurance through its owner, Encore Financial Corp. SaidNotes from Encore are being held custodially for ENP for thebenefit of its holders."

Additionally, plaintiff himself referred to the promissorynote and the existence of the North American bonds as beingcomponents of the same transaction. In a discovery depositiontaken in Case I, plaintiff stated, "I think I bought notes backedby an equivalent amount of bonds." Defendants' motion arguesthat the only difference between the complaints in Cases I andIII were the claimed theories of recovery. Therefore, defendantsmaintain Case III was a refiling of Case I for purposes of asection 13-217 analysis.

Conversely, plaintiff argues the bond transaction referredto in Case I and the defaulted note in Case III are completelydifferent causes of action and cites Torcasso v. Standard OutdoorSales Inc.,, 157 Ill. 2d 484 (1993), for the proposition that "acause of action in contract is not the same as a cause of actionsounding in fraud." While we do not dispute the validity of thisobservation, we find it to be a tortured interpretation of theholding in Torcasso. In Torcasso, the supreme court held that abroker's successful suit to recover a leasing commission on alease which commenced in October 1995 was not a res judicata barto the sign owner's suit under the same brokerage agreement forbreach of that contract and for fraud for the period of timebetween April 1984 and March 1985 as there was no factual nexusbetween the allegations in the two suits. In summary, suitsinvolving different theories of relief may constitute the samecause of action. Torcasso, 157 Ill. 2d at 490-91; River Park,184 Ill. 2d 290 at 315.

We find the facts in Torcasso inapposite to the facts in theinstant case. Whether plaintiff believed he bought the bonds orloaned defendants a sum of money on a note that was secured bythe bonds is a factual question. The relevant consideration indetermining whether the claims are identical for purposes of resjudicata is whether the parties are the same and both theories ofrelief arise out of a single core of operative facts. Torcasso,157 Ill. 2d at 490-91; River Park, 184 Ill. 2d at 315. Here, thestate claim addresses the default on the note whereas the federalclaim addresses defendants' fraudulent conduct inducing plaintiffto purchase the note. Clearly, there is one transaction composedof one set of facts which gives rise to both of these claims. Consequently, we hold the trial court erred in concluding thatCase III was a separate and distinct cause of action⁽²⁾.

Having found a factual nexus between the claims contained inCases I and III, which was voluntarily dismissed prior to thefederal court's dismissal of either Case I or II, we necessarilyconclude plaintiff is barred from filing yet another case.

Because we have resolved this case based upon the firstquestion alone, we need not address the second question.

In light of the foregoing, we reverse the judgment of thecircuit court of Cook County and dismiss plaintiff's complaint.

Reversed.

McNULTY, P.J., and O'MARA FROSSARD, J.,⁽³⁾ concur.

1. Plaintiff urges this court to utilize the "same evidencetest" to analyze whether Case III is the same claim for purposesof res judicata. We decline to do so. Both the "same evidencetest" and the "transactional test" were valid prior to thesupreme court's decision in River Park, Inc. v. Highland Park,184 Ill. 2d 290, 313 (1998), wherein the supreme court adoptedthe transactional test in lieu of the same evidence test and thetrial court seemed to have applied the transactional test infinding that Case III "arose from a substantially differenttransaction and occurrence." Consequently, we find no prejudiceto plaintiff from this court's application of the transactionalanalysis to the facts of this case.

2. Plaintiff additionally contends defendants waived thisentire argument based upon one remark made by defense counselbefore the trial court at the hearing on defendants' motion toreconsider. Defense counsel said, "I've got a simple analysisfor you. Let's pretend that never happened. [The filing of CaseIII.] We are willing to set that aside." We reject plaintiff'sargument on this point and find it to be a strained constructionof the waiver doctrine. Defendants have maintained throughoutthe entire course of all of this litigation that Case III was arelevant component in determining the applicability of section13-217 to the final filing.

3. Justice Rakowski heard oral argument on this case. Uponhis retirement, Presiding Justice McNulty was substituted and hasreviewed the record, briefs and audio recordings of the oralargument.