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December 20, 2000

No. 2--99--0554

IN THE

APPELLATECOURT OF ILLINOIS

SECONDDISTRICT

JUSTICE COLWELL delivered the opinion of the court:

Plaintiff, Altair Corporation (Altair), filed a two-count complaint alleging breach of contract in connection with the sale ofreal estate located in Waukegan. Count I of Altair's complaint sought damages in excess of $50,000 from defendantsGrand Premier Trust and Investment, Inc.; Mark Jackson; Thomas Rosenquist; and Luther G. Otterson (collectively, GrandPremier). Count II of the complaint sought the return of $25,000 in earnest money held by Tri-State Realty (Tri-State). Grand Premier filed a complaint to recover the earnest money, which was consolidated with Altair's complaint. The circuitcourt of Lake County dismissed Altair's complaint pursuant to section 2--619 of the Code of Civil Procedure. 735 ILCS5/2--619 (West 1998). The trial court found that plaintiff's claim was barred by the doctrines of res judicata and election ofremedies. Plaintiff now appeals. Grand Premier has submitted a motion to strike portions of plaintiff's brief, which wehave taken with the case. We affirm.

BACKGROUND

On July 29, 1997, Altair, the buyer, and Grand Premier, the seller, entered into a contract for the sale of two parcels of realproperty located in the City of Waukegan. The contract contained the following provision:

"Seller will obtain a letter from the City of Waukegan through the date of the closing stating that construction of a newbuilding on Lot PIN: 07-01-301-033 located directly behind the 4050 Joseph Drive building will not require a retention ordetention area to be built. Seller agrees that in the event that a retention or detention area has to be built, then Seller agreesto pay to the Purchaser the amount of said cost and expense. Seller will pay said cost and expense within ten (10) days ofreceiving the invoice and/or estimate from the Purchaser."

The contract also provided as follows:

"The property will be vacant and the property and surroundings will be cleaned up and ready for occupancy. In the eventthe building is not vacant, the purchase price will be reduced at the rate of $20,000 per month, pro-rated only for the firstmonth and in full for each succeeding month or any fraction thereof. The closing to be deferred at the option of Purchaseruntil the building is legally vacant. In the event the property and surroundings are not cleaned up, the cost of clean up willbe deducted from the purchase price."

The contract was to close within 60 days; however, the parties agreed to close on September 29, 1997.

On September 20, 1997, Altair sent Grand Premier a letter requesting that Grand Premier place $665,674.89 in an escrowaccount to fund the construction of a retention pond. The actual cost of building the retention pond was $545,674.89, and$120,000 represented a diminution in the value of the property caused by the construction of the pond. In its letter, Altairasserted that it was clear by that time that Grand Premier would not be able to produce a letter from the City of Waukeganstating that such a pond would not be necessary. Grand Premier responded on September 25, 1997. Grand Premierquestioned the estimated cost of the retention pond and the size of the pond Altair was proposing to build. Grand Premierrequested that Altair provide it with the construction plans upon which the estimated cost was based. Grand Premier alsostated that there was no basis in the contract for Altair's request for compensation for diminution in the value of theproperty.

On September 29, 1997, the agreed closing date, the parties did not close the transaction. Grand Premier did not providethe requested letter from the City of Waukegan. Altair also alleges that debris remained on the property in violation of thecontract.

On September 26, 1997, Altair filed its first complaint in this matter. Altair alleged that defendants had anticipatorilybreached the contract. Altair contended that defendant's letter of September 25, 1997, constituted a refusal to pay theconstruction costs of the retention pond. On November 20, 1997, Judge Emilio Santi dismissed Altair's first complaint. Altair appealed the dismissal of this complaint, and this court affirmed on November 4, 1998.

On November 25, 1998, Altair filed the instant complaint. In the present action, Altair alleges that defendants breached thecontract by failing to provide a letter at the closing from the City of Waukegan stating that no retention pond was necessary. Altair further alleged that various debris remained on the property in violation of the contract. On May 11, 1999, JudgeJack Hoogasian dismissed Altair's second complaint, finding it barred by the doctrines of res judicata and election ofremedies.

ANALYSIS

The defense of res judicata is properly asserted through a section 2--619 motion to dismiss. 735 ILCS 5/2--619(a)(4) (West1998). All well-pleaded facts are taken as true and viewed in the light most favorable to the nonmoving party. SaxonMortgage, Inc. v. United Financial Mortgage Corp., 312 Ill. App. 3d 1098, 1104 (2000). Review is de novo. SaxonMortgage, Inc., 312 Ill. App. 3d at 1104.Res judicata precludes subsequent litigation between parties on the same claim after a court of competent jurisdictionrenders final judgment on a matter. Torcasso v. Standard Outdoor Sales, Inc., 157 Ill. 2d 484, 490 (1993). A plaintiffcannot maintain a subsequent action if the following conditions are met: (1) a final judgment on the merits was rendered bya court of competent jurisdiction; (2) there is an identity of parties or their privies; and (3) there is an identity of cause ofaction. Downing v. Chicago Transit Authority, 162 Ill. 2d 70, 73-74 (1994). Res judicata precludes not only those issuesthat were actually raised in the earlier proceeding but also those that could have been raised. Rein v. David A. Noyes &Co., 172 Ill. 2d 325, 334-35 (1996). The principle is "founded upon the plainest and most substantial justice, that litigationshould have an end and that no person should be unnecessarily harassed with a multiplicity of suits." Baird & Warner, Inc.v. Addison Industrial Park, Inc., 70 Ill. App. 3d 59, 64 (1979). It also promotes the conservation of judicial resources bybarring repetitive litigation. Pacemaker Food Stores, Inc. v. Seventh Mont Corp., 143 Ill. App. 3d 781, 784 (1986). Theonly dispute regarding count I of the complaint is whether an identity of cause of action exists with the earlier action.

Our supreme court recently adopted the more liberal transactional test over the same evidence test for assessing whether anidentity of cause of action exists. River Park, Inc. v. City of Highland Park, 184 Ill. 2d 290, 310 (1998). Under thetransactional test, a valid final judgment bars further action by the plaintiff regarding any part of a transaction or series ofconnected transactions from which the claim arose. River Park, Inc., 184 Ill. 2d at 311, citing Restatement (Second) ofJudgments