                           ILLINOIS OFFICIAL REPORTS
                                         Appellate Court




                   BankFinancial, FSB v. Tandon, 2013 IL App (1st) 113152




Appellate Court            BANKFINANCIAL, FSB, Successor in Interest to Success National
Caption                    Bank, Plaintiff-Appellant, v. JAGDISH TANDON and AMITRON, INC.,
                           an Illinois Corporation, Defendants-Appellees.



District & No.             First District, Third Division
                           Docket No. 1-11-3152


Filed                      March 13, 2013
Rehearing denied           April 12, 2013


Held                       In an action for foreclosure, breach of contract and breach of guaranty, the
(Note: This syllabus       dismissal without prejudice of the count seeking foreclosure in plaintiff’s
constitutes no part of     first complaint and the dismissal of the remaining counts of that
the opinion of the court   complaint for want of prosecution were not final orders and, therefore,
but has been prepared      the complaint refiled by plaintiff within one year of the initial dismissal
by the Reporter of         order pursuant to section 13-217 of the Code of Civil Procedure based on
Decisions for the          two of the breaches alleged in the first complaint was not barred by the
convenience of the         doctrine of res judicata or the rule against claim-splitting.
reader.)


Decision Under             Appeal from the Circuit Court of Cook County, No. 09-L-01162; the
Review                     Hon. Daniel J. Pierce, Judge, presiding.



Judgment                   Reversed and remanded.
Counsel on                    John F. Sullivan and James M. Crowley, both of Crowley & Lamb, P.C.,
Appeal                        of Chicago, for appellant.

                              Daniel P. Dawson, William A. Walker, and Brittany E. Kirk, all of Nisen
                              & Elliott, LLC, of Chicago, for appellee Jagdish Tandon.

                              Michelle J. Rozovics, of Rozovics Law Firm, LLC, of Chicago, for
                              appellee Amitron, Inc.


Panel                         JUSTICE HYMAN delivered the judgment of the court, with opinion.
                              Presiding Justice Neville and Justice Sterba concurred in the judgment
                              and opinion.


                                                OPINION

¶1           Plaintiff, BankFinancial, FSB, successor by merger to Success National Bank, appeals
        the trial court’s order granting defendants’ cross-motions for summary judgment based on
        the equitable doctrine of res judicata and the rule against claim-splitting. Plaintiff filed a
        five-count1 complaint against defendants, Jagdish Tandon and Amitron, Inc. (BankFinancial
        I), seeking: (1) foreclosure of a leasehold mortgage; (2) breach of contract against defendant
        Tandon related to a promissory note in the amount of $1.2 million; (3) breach of guaranty
        against defendant Amitron, Inc., related to the same promissory note; (4) breach of contract
        against Tandon related to a promissory note in the amount of $80,000; and (5) breach of
        contract against Tandon related to a promissory note in the amount of $66,400. On
        September 8, 2006, plaintiff orally requested that count I be nonsuited and the matter was
        transferred from the chancery division to the law division for all further proceedings. The
        remaining counts were dismissed for want of prosecution in an order dated February 4, 2008
        (DWP Order). The DWP Order was never vacated.
¶2           On January 30, 2009, plaintiff filed a new action (BankFinancial II), within one year of
        the DWP Order as permitted by section 13-217 of the Illinois Code of Civil Procedure (735
        ILCS 5/13-217 (West 2008)). BankFinancial II contained counts II and III, pled in
        BankFinancial I: breach of promissory note for $1.2 million by Tandon and breach of the
        guaranty on the same promissory note by Amitron. The trial court granted defendants’ cross-
        motion for summary judgment, holding the doctrine of res judicata barred BankFinancial
        II. The trial court held that as a matter of law the September 8, 2006, order in BankFinancial
        I voluntarily dismissing count I without prejudice became final and appealable when the
        DWP Order was not vacated within 30 days, despite plaintiff’s timely filing of


               1
                   Plaintiff contends the 2003 original complaint only contained three counts.

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     BankFinancial II under section 13-217. The trial court held the voluntary dismissal order
     constituted a final judgment as to count I of the original action sufficient to bar the second
     action under the doctrine of res judicata and rule against claim-splitting as articulated in Rein
     v. David A. Noyes & Co., 172 Ill. 2d 325 (1996), and Hudson v. City of Chicago, 228 Ill. 2d
     462 (2008).
¶3        The September 8, 2006, order dismissing, without prejudice, count I of BankFinancial
     I is not a final order because it does not terminate the litigation between the parties on the
     merits. Plaintiff voluntarily decided not to further pursue count I, the leasehold mortgage
     foreclosure cause of action, after discovery revealed the cause of action to be ill-founded.
     Hence, the dismissal of the foreclosure count was not a final order because it was the
     intended voluntary act of plaintiff and not relief sought by either defendant. The February 4,
     2008, order that dismissed counts II, III, IV and V for want of prosecution was not a final
     order because it did not terminate the litigation between the parties on the merits or
     adjudicate the rights of the parties on the entire controversy or a separate branch thereon.
     Plaintiff’s timely filing of BankFinancial II under section 13-217 did not alter the September
     8, 2006, order’s interlocutory nature. Therefore, because the September 6, 2006, order that
     dismissed count I and the February 4, 2008, order that dismissed counts II, III, IV and V for
     want of prosecution were not final orders, BankFinancial II implicated neither the doctrine
     of res judicata nor the rule against claim-splitting. Accordingly, we reverse the trial court’s
     order granting summary judgment and remand for further proceedings.


¶4                                     BACKGROUND
¶5       On September 8, 2006, plaintiff took a voluntary nonsuit of count I of BankFinancial I,
     a claim for foreclosure of a leasehold mortgage. The order entered by the court stated that
     count I was “stricken without prejudice.” The breach of contract and breach of guaranty
     claims remained. The case was then transferred to the law division. The following was
     written on the transfer order as the reason for the transfer, “Plaintiff non-suited its mortgage
     foreclosure claim. Breach of contract claims remain pending.”
¶6       Following transfer to the law division, dismissals for want of prosecution were repeatedly
     entered over the next year and a half, followed by repeated timely motions to vacate the
     dismissals. From October 23, 2006, to February 4, 2008, four DWP orders were entered. On
     March 4, 2008, plaintiff filed a motion to vacate the fourth DWP order, claiming it missed
     court due to misdocketing the court date. Plaintiff’s motion was never noticed up or
     presented to the court. No other activity took place during this time.
¶7       On January 30, 2009, plaintiff filed BankFinancial II, which was amended on December
     30, 2009. Plaintiff alleged breach of contract against Tandon on the $1.2 million note (count
     I) and against Amitron, breach of contract for guaranty of the same note (count II). Other than
     the interest amounts, all other allegations against the parties were identical to the claims as
     raised in BankFinancial I. Plaintiff did not refile count I of BankFinancial I, foreclosure of
     a leasehold mortgage, because plaintiff had determined there was no basis in law or fact for


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       refiling that claim.
¶8         On April 12, 2010, while defending against plaintiff’s motion to strike its affirmative
       defenses and for summary judgment, defendant Amitron filed a cross-motion for summary
       judgment as to its first affirmative defense, res judicata, and its third affirmative defense,
       laches. Plaintiff filed a response to Amitron’s cross-motion and at the same time filed its
       reply to its own dispositive motions. Amitron replied to plaintiff’s response.
¶9         On February 16, 2011, the trial court heard argument. When the parties raised the issue
       of res judicata, the court asked them to submit supplemental briefs addressing: (1) claim-
       splitting under Hudson v. City of Chicago, 228 Ill. 2d 462 (2008), and (2) the finality of the
       September 8, 2006, order, striking, without prejudice, count I of BankFinancial I.
¶ 10       On September 20, 2011, the trial court heard the parties’ arguments, and held, as
       defendants had urged, that the voluntary dismissal of count I of BankFinancial I on
       September 8, 2006, together with the February 4, 2008, DWP Order, constituted an
       adjudication sufficient for res judicata once the deadline for vacating the DWP Order expired
       and, therefore, granted defendants’ motion for summary judgment. The court stated, “once
       the DWP–the fourth DWP was entered, all BankFinancial’s problems started at that point.”
       The trial court also held that plaintiff’s subsequent filing of BankFinancial II gave rise to
       issues claim-splitting, as discussed in Hudson and its progeny. The court noted that res
       judicata and claim-splitting issues all arose because BankFinancial did nothing until it filed
       BankFinancial II.
¶ 11       Plaintiff timely appealed.


¶ 12                                        ANALYSIS
¶ 13                                Contentions of the Parties
¶ 14       Plaintiff argues that because the dismissal of the leasehold mortgage claim was its
       intended voluntary act, not involuntary relief sought by any defendant, it could not be a final
       judgment. Plaintiff further argues its timely refiling of BankFinancial II under the savings
       provision of section 13-217, resulted in all orders entered in BankFinancial I, “remaining
       forever interlocutory in nature.” See 735 ILCS 5/13-217 (West 2010). Plaintiff argues there
       was never an adjudication on the merits of “any” BankFinancial I cause of action and all of
       the cases relied on by defendants to hold BankFinancial II was barred by res judicata,
       Hudson v. City of Chicago, 228 Ill. 2d 462 (2008), and its progeny, are distinguishable as
       each involved involuntary dismissal under Illinois Supreme Court Rule 273. See Rein v.
       David A. Noyes & Co., 172 Ill. 2d 325 (1996) (involuntary dismissal of rescission counts
       based on statute of limitation); Hudson, 228 Ill. 2d at 465 (trial court granted defense motion
       to dismiss negligence claim on immunity grounds); Matejczyk v. City of Chicago, 397 Ill.
       App. 3d 1 (2009) (involuntary dismissal of negligence claim based on statute of limitations).
       Plaintiff contends that because it filed BankFinancial II, a new action as permitted under
       section 13-217, the September 8, 2006, interlocutory order dismissing count I of


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       BankFinancial I (1) was not converted into a final order with the expiration of the refiling
       period and (2) was not a final order that would satisfy the first element of res judicata.
¶ 15       Defendants contend the trial court properly entered summary judgment as a consequence
       of plaintiff having engaged in impermissible claim splitting by allowing dismissal for want
       of prosecution of its breach of contract claims from BankFinancial I, refiled in
       BankFinancial II, after the foreclosure count had been stricken.


¶ 16                                    Summary Judgment
¶ 17        “Res judicata is an equitable doctrine designed to prevent the multiplicity of lawsuits
       between the same parties and involving the same facts and the same issues.” Murneigh v.
       Gainer, 177 Ill. 2d 287, 299 (1997). It “applies to bar issues that were actually decided in the
       first action, as well as matters that could have been decided.” Lane v. Kalcheim, 394 Ill. App.
       3d 324, 329 (2009). “Under the doctrine of res judicata, a final judgment on the merits
       rendered by a court of competent jurisdiction bars any subsequent actions between the same
       parties or their privies on the same cause of action.” Id.
¶ 18       An order is final and thus appealable if it either terminates the litigation between the
       parties on the merits or disposes of the rights of the parties, either on the entire controversy
       or a separate branch thereof. Wilson v. Edward Hospital, 2012 IL 112898, ¶ 19 (citing Hull
       v. City of Chicago, 165 Ill. App. 3d 732, 733 (1987)). “A ruling which is not a final order
       does not in any manner affect or determine any subsequent proceeding.” Arnold Schaffner,
       Inc. v. Goodman, 73 Ill. App. 3d 729, 732 (1979).
¶ 19       The party asserting res judicata as a preclusion to the second action bears the burden of
       showing with clarity and certainty what was determined by the prior judgment. People ex rel.
       Scott v. Chicago Park District, 66 Ill. 2d 65, 68 (1976); Redfern v. Sullivan, 111 Ill. App. 3d
       372, 377 (1983). This is a heavy burden of proof. Gale v. Transamerica Corp., 65 Ill. App.
       3d 553 (1978).
¶ 20        Summary judgment is proper where there are no genuine issues of material fact and the
       moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1005 (West 2010). The
       trial court may grant summary judgment after considering the pleadings, depositions,
       admissions, exhibits, and affidavits on file in the case and construing that evidence in favor
       of the nonmoving party. Purtill v. Hess, 111 Ill. 2d 229, 240 (1986). We review the circuit
       court’s decision to grant summary judgment de novo. Outboard Marine Corp. v. Liberty
       Mutual Insurance Co., 154 Ill. 2d 90, 102 (1992).
¶ 21       The Latin phrase res judicata means “a thing adjudicated.” Black’s Law Dictionary 1425
       (9th ed. 2009). At the core of res judicata is the intent “[t]o preclude parties from contesting
       matters that they have had a full and fair opportunity to litigate.” Montana v. United States,
       440 U.S. 147, 153 (1979). “[A] full and fair opportunity to litigate” requires a final judgment
       adjudicated on the merits. See, e.g., Philips Electronics N.V. v. New Hampshire Insurance
       Co., 312 Ill. App. 3d 1070, 1080 (2000) (res judicata applies to a claim fully litigated in an


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       earlier proceeding).
¶ 22       If a plaintiff voluntarily dismisses his or her case pursuant to section 2-1009 of the Code
       (735 ILCS 5/2-1009 (West 2010)) or if a plaintiff’s action is dismissed for want of
       prosecution, section 13-217 of the Code permits a plaintiff to refile the action within one year
       or within the remainder of the statute of limitations, whichever is greater. 735 ILCS 5/13-217
       (West 2010). “Section 13-217 operates as a savings clause, with the purpose of facilitating
       disposal of the litigation on the merits and to avoid its frustration upon grounds unrelated to
       the merits.” S.C. Vaughan Oil Co. v. Caldwell, Troutt & Alexander, 181 Ill. 2d 489, 497
       (1998) (citing Gendek v. Jenhangir, 119 Ill. 2d 338, 343-44 (1988)).
¶ 23       The trial court in BankFinancial II expressly found the dismissal of count I of
       BankFinancial I did not constitute an involuntary dismissal of an action and, therefore, found
       inapplicable Rule 273, pertaining to the effect of an involuntary dismissal. In the transfer
       order in BankFinancial I, the court documented that count I was voluntarily “non-suited” by
       plaintiff. Moreover, on the face of the order, the court stated the dismissal of count I was
       “without prejudice.”
¶ 24       Defendants make a point of the use of the word “strike,” instead of “dismissal,” in the
       September 8, 2006, order. They argue that “strike” should be interpreted as alluding to a
       substantive decision by plaintiff on the merits. Yet, nothing in the record indicates that
       “strike” has a meaning other than its common meaning, “to delete something.” Merriam-
       Webster Online Dictionary, http://www.merriam-webster.com/dictionary/strike. Also,
       notably, the order was drafted by one of defendants’ counsel, plaintiff’s counsel having left
       the courtroom.
¶ 25       In Hudson, the supreme court dealt with the dangers of claim-splitting. The plaintiffs in
       Hudson filed a two-count wrongful death complaint. Hudson, 228 Ill. 2d at 466. Following
       the involuntary dismissal of its negligence claim (the court granted defendant’s motion to
       dismiss on the ground that the City and its employees were immune from liability), the
       plaintiffs voluntarily dismissed their remaining willful and wanton misconduct claim under
       section 2-1009(a) of the Code (735 ILCS 5/2-1009(a) (West 2000)). Hudson, 228 Ill. 2d at
       466. Later, plaintiffs refiled their wrongful death action setting out a single count for willful
       and wanton misconduct. Hudson, 228 Ill. 2d at 466. The Hudson court held that the
       plaintiffs’ refiling of its willful and wanton count was barred by res judicata because the
       court, in the underlying case, dismissed the negligence count with prejudice before the
       voluntary dismissal of the willful and wanton count. Hudson, 228 Ill. 2d at 471. In affirming,
       the supreme court reasoned that the underlying court’s dismissal of the negligence count with
       prejudice extinguished one entire theory of the case, and the plaintiff’s voluntary dismissal,
       and subsequent refiling, of the remaining willful and wanton claim resulted in impermissible
       claim-splitting. Hudson, 228 Ill. 2d at 471; see also Wilson, 2012 IL 112898, ¶ 12 (claim-
       splitting occurs when the same set of facts is necessary to maintain and prove both cases).
¶ 26       Hudson also clarified the supreme court’s earlier decision in Rein v. David A. Noyes &
       Co., 172 Ill. 2d 325 (1996), in which the supreme court addressed for the first time the issue
       of whether a plaintiff can inadvertently bar its own action under the doctrine of res judicata

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       when the plaintiff’s pleading is stricken and later plaintiff voluntarily dismisses the pleading.
       The Hudson court clarified its position as follows:
           “If a plaintiff uses sections 2–1009 and 13–217 to voluntarily dismiss and refile a claim
           after another part of the cause of action has gone to final judgment in a previous case,
           that plaintiff will have engaged in claim-splitting. Thus, in Rein, this court acknowledged
           a plaintiff’s rights under sections 2–1009 and 13–217 but stated that ‘we do not believe
           that these sections should be read to automatically immunize a plaintiff against the bar
           of res judicata or other legitimate defenses a defendant may assert in response to the
           refiling of voluntarily dismissed counts.’ Rein, 172 Ill. 2d at 342-43.” (Emphasis added.)
           Hudson, 228 Ill. 2d at 482.
¶ 27       We agree with plaintiff that Hudson and its progeny are inapplicable. The doctrine of res
       judicata cannot apply because the court’s order disposing of count I of BankFinancial I was
       not an involuntary dismissal based on an infirmity in plaintiff’s case, but a voluntary
       dismissal based on section 2-1009 of the Code of Civil Procedure. 735 ILCS 5/2-1009 (West
       2010). Accordingly, the September 8, 2006, order was not an adjudication on the merits of
       any of plaintiff’s claims in BankFinancial I.
¶ 28       In SC Vaughan Oil Co., the supreme court warned:
           “[P]laintiffs ignore the fact that they are in control of their own litigation and are left with
           the choice as to whether and when to refile their case once they suffer a DWP. As this
           court has previously observed in both Flores and Wold, plaintiffs are statutorily afforded
           the option of refiling under section 13-217 and the choice of litigation tactics is left to
           plaintiffs. However, if plaintiffs err and fail to meet the statutorily prescribed time
           limitations, then their dilemma is a result of their own doing. Once a DWP becomes
           final, in order to revest the trial court with jurisdiction the plaintiff must meet the
           requirements to vacate that order under section 2-1401.” SC Vaughan Oil Co. v.
           Caldwell, Troutt & Alexander, 181 Ill. 2d 489, 506-07 (1998).
¶ 29        The February 4, 2008, order dismissing the remaining counts, counts I, III, IV and V of
       BankFinancial I, for want of prosecution was not a final judgment because it did not
       terminate the litigation between the parties on the merits. Wilson, 2012 IL 112898, ¶ 19; see
       also O’Reilly v. Gerber, 95 Ill. App. 3d 947, 950 (1981) (“it is clear from a perusal of
       [Illinois] cases that a dismissal for want of prosecution has always been considered not to be
       an adjudication on the merits, not to prejudice the case of the party against whom it is
       entered, and not to act as a bar to a subsequent suit on the same issues”).
¶ 30       Here, plaintiff properly took advantage of its statutorily afforded option of refiling under
       section 13-217 by filing BankFinancial II within one year of the fourth DWP order of
       BankFinancial I. That count I of BankFinancial I was voluntarily dismissed before the DWP
       order is of no consequence and certainly could not and, did not, cause the DWP order to
       become a final judgment, when plaintiff filed BankFinancial II without the foreclosure
       count. A DWP order only becomes a final order after the one-year right to refile expires. See
       SC Vaughan Oil Co. v. Caldwell, Troutt & Alexander, 181 Ill. 2d 489, 502 (1998) (“at the


                                                   -7-
       time the refiling period expires [under section 13-217], the DWP constitutes a final judgment
       because, at this juncture, the order effectively ‘ascertains and fixes absolutely and finally the
       rights of the parties in the lawsuit’ ” (quoting Flores v. Dugan, 91 Ill. 2d 108, 112 (1982)));
       see also LaSalle National Trust, N.A. v. Lamet, 328 Ill. App. 3d 729, 733 (2002) (dismissal
       of plaintiff’s cause for want of prosecution is not final and appealable unless plaintiff’s
       opportunity to refile under section 13-217 has expired). Hence, when plaintiff filed
       BankFinancial II on January 30, 2009, within one year of the DWP Order, dated February
       4, 2008, there had been no final determination on the merits, including the September 8,
       2006, order, which could have triggered the doctrine of res judicata and issues of claim-
       splitting.
¶ 31       Defendants’ argument under Hudson hinges on there having been a final judgment
       entered on one of the counts in BankFinancial I. Here neither the September 8, 2006 order
       dismissing count I nor the February 4, 2008, DWP order dismissing counts II, III, IV and V
       terminated the litigation on the merits so there was no final judgment on any portion of
       plaintiff’s claims in BankFinancial I (Wilson, 2012 IL 112898, ¶ 19), and there was no claim-
       splitting because a different set of facts would be required to prove the foreclosure claim in
       count I and the breach of contract claims in counts II, III, IV and V (Wilson, 2012 IL 112898,
       ¶ 12).
¶ 32       In filing BankFinancial II, plaintiff properly invoked the savings statute of section 13-
       217 to refile its claims from BankFinancial I. 735 ILCS 5/13-217 (West 2010). Accordingly,
       the trial court erred when it entered an order granting summary judgment in favor of
       defendants predicated on Hudson and its progeny.


¶ 33                                  Constitutional Argument
¶ 34       Plaintiff also contends the trial court’s decision violates Illinois’ separation of powers
       provisions set forth in article 2, section 1, of the Illinois Constitution (Ill. Const. 1970, art.
       II, § 1). Article 2, section 1, of the Illinois Constitution provides that the legislative,
       executive, and judicial branches must not exercise powers that belong to another; each
       branch is to operate separately. Plaintiff contends the trial court’s decision infringes the
       separation of powers provision by allowing the judicial branch to “effectively vitiate the
       savings statute” enacted by the legislative branch and embodied in section 13-217.
¶ 35       We decline to address plaintiff’s constitutional arguments as doing so is not necessary
       to the disposition of this case and the supreme court has repeatedly stated its preference that
       “cases should be decided on nonconstitutional grounds whenever possible, reaching
       constitutional issues only as a last resort.” In re E.H., 224 Ill. 2d 172, 178 (2006).


¶ 36                                       CONCLUSION
¶ 37     Plaintiff voluntarily dismissed count I, an action that did not, and could not, result in the
       DWP Order becoming final. The DWP Order on the remaining counts could only become

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       final with the passage of one year from the time the order was entered. Accordingly, there
       is no basis to find claim-splitting.


¶ 38      Reversed and remanded.




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