Karris v. Keybank National Ass'n

2024 IL App (1st) 231471-U

• Court: Appellate Court of Illinois
• Decided: August 15, 2024
• Docket: 1-23-1471
• Status: Unpublished

Opinion

2024 IL App (1st) 231471-U Order filed: August 15, 2024

FIRST DISTRICT FOURTH DIVISION

No. 1-23-1471

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1). ______________________________________________________________________________

IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT ______________________________________________________________________________

HOLLY SOFIA KARRIS, individually and ) Appeal from the as parent and next friend of Zoe Karris Koch, ) Circuit Court of a minor, and Yannick Karris Koch, a minor, ) Cook County and as representative of the August 7, 1997 ) Nicholas A. Karris Declaration Of Trust, ) ) No. 2019 L 013888 Plaintiff-Appellant, ) ) v. ) ) KEYBANK NATIONAL ASSOCIATION, ) MARY ANN KARRIS and NICK KARRIS, JR., ) Honorable ) Thomas Donnelly, Defendants-Appellees. ) Judge, presiding. ______________________________________________________________________________

PRESIDING JUSTICE ROCHFORD delivered the judgment of the court. Justices Hoffman and Martin concurred in the judgment.

ORDER

¶1 Held: We reversed the dismissal of plaintiff’s third amended complaint on res judicata grounds and remanded for further proceedings.

¶2 Plaintiff, Holly Sofia Karris, individually and as parent and next friend of Zoe Karris Koch,

a minor, and Yannick Karris Koch, a minor, and as representative of the August 7, 1997, Nicholas

A. Karris Declaration of Trust, filed an 11-count, third amended complaint in the circuit court of No. 1-23-1471

Cook County against defendants KeyBank National Association (KeyBank), Mary Ann Karris,

and Nick Karris, Jr. The counts alleged breach of trust, breach of fiduciary duty, fraud, conversion,

and tortious interference with an inheritance expectancy. The Cook County circuit court granted

defendants’ motion to dismiss the third amended complaint pursuant to section 2-619(a)(4) of the

Code of Civil Procedure (Code) (735 ILCS 5/2-619(a)(4) (West 2022)) on res judicata grounds

because the claims asserted by plaintiff already had been litigated to final judgments in the DuPage

County circuit court. Plaintiff appeals the dismissal order. We reverse and remand.

¶3 Nicholas A. Karris, Sr. (Karris Sr.), a resident of DuPage County, died on December 1,

2012, and was survived by his wife, Mary Ann Karris (Mary Ann), and two adult children,

Nicholas Karris, Jr. (Nick) and Holly Karris (Holly). Karris Sr.’s last will appointed Mary Ann as

the sole executor of his estate and left his estate to the Nicholas A. Karris Trust dated August 7,

1997 (1997 Trust). Mary Ann and KeyBank are co-trustees of the 1997 Trust, which is

administered from offices located in Chicago. The 1997 Trust created sub-trusts: Marital Trust A,

Marital Trust B, and two residuary trusts. Mary Ann is the beneficiary of the marital trusts; Holly

and Nick are the remainder beneficiaries. Mary Ann, Holly, and Nick are the beneficiaries of the

residuary trusts.

¶4 The marital trusts provide for mandatory net income distributions to Mary Ann, while the

residuary trusts provide for income and principal distributions pursuant to a “best interests”

standard. The size of the estate is vast. At the beginning of 2016, the estate consisted of over 30

commercial and residential properties, over 30 different limited liability corporations and was

valued in excess of $300 million.

¶5 During Karris Sr.’s life, the 1997 Trust owned membership interests in Water Tower

Capital Partners LLC (WTCP), which, in turn, owned a 99-year ground lease under a commercial -2- No. 1-23-1471

property located at 679 North Michigan Avenue in Chicago. We refer to this commercial property

as the Apple property because 679 North Michigan Avenue was under lease to Apple, Inc. for its

flagship retail store. The Apple property made up over 99% of Marital Trust A and was appraised

at $42 million in 2014.

¶6 On December 26, 2014, KeyBank transferred the Apple property from Marital Trust A to

Mary Ann. On December 29, 2014, Mary Ann sold the Apple property in equal halves to two new

trusts, the Holly S. Karris Gift Trust and the Nicholas P. Karris Gift Trust, for $2,145,000 in cash

and a $19,300,00 promissory note from each trust. Mary Ann subsequently assigned her interest

in the promissory notes to two additional trusts created in August 2015: the Holly S. Karris

Promissory Note Trust and the Nicholas P. Karris Promissory Note Trust. According to Holly, the

transfer of the Apple property to Mary Ann and the subsequent creation of the four new trusts were

not contemplated by Karris Sr. in either his will or the 1997 Trust.

¶7 On April 13, 2016, Holly filed an amended petition in the circuit court of DuPage County

to remove KeyBank as co-trustee of the 1997 Trust for violating its fiduciary duties and acting in

opposition to Karris Sr.’s intent. Specifically, Holly complained that KeyBank breached its

fiduciary duties as co-trustee by: failing to timely transfer assets from Karris Sr.’s estate to the

1997 Trust; treating Holly differently from Mary Ann with respect to discretionary distributions

from the residuary trusts; proposing a “sham” sale of certain properties; transferring the Apple

property to Mary Ann and creating the four new trusts; and relinquishing control of major decisions

related to estate properties to Nick and failing to provide information about the estate to Holly.

¶8 Following an evidentiary hearing, the DuPage County circuit court issued a written

decision on August 26, 2016. First, the court found that KeyBank did not breach any fiduciary

-3- No. 1-23-1471

duties by taking 18 months to transfer assets from Karris Sr.’s estate to the 1997 trust. The court

stated:

“Here, it is clear, and both parties acknowledge, that the estate of Mr. Karris is extensive

and complex. KeyBank was appointed in September of 2014 and it was at that time ***

required to ascertain the terms of the trust and what properties could potentially be involved

in the transfer. Absent any real evidence that KeyBank was acting improperly or not in

good faith, and given this estate’s size and complexity, the court finds that 18 months is

not an unreasonable amount of time to make such examinations and perform its due

diligence.”

¶9 Second, the court found that Holly was not treated unfairly with respect to discretionary

distributions. The court stated: “Here, there has not been sufficient evidence to prove that KeyBank

committed fraud, abuse of discretion, or bad faith when making these distributions and the court

finds no breach of duty on the part of KeyBank regarding this matter.”

¶ 10 Third, the court found that KeyBank did not engage in a sham sale of properties, stating:

“Although Holly claims she will be harmed by the sale of [certain assets] and is

being treated unfairly, the court is not so convinced. *** [T]he actions taken by KeyBank

are clearly manifested in the 1997 Trust, particularly in sections 10.1(a), 10.1(b), 10.1(c),

and 10.1(g). All these sections allow the trustee to manage the properties in a way to

maximize their value with the intent to benefit the beneficiaries. KeyBank has a duty to

maximize the value of the properties and KeyBank feels the procedure it has laid out does

just this. It is within KeyBank’s discretion as co-trustee to sell and manage the properties

as it sees fit and the court will not substitute that discretion absent some form of

malfeasance.” -4- No. 1-23-1471

¶ 11 Fourth, the court found that KeyBank did not fail to provide information about the estate

to Holly, stating:

“Holly has received financial information regarding the trust, including an annual

accounting and monthly statements, even on trusts which she has no present right to receive

income. *** As to the allegations of failing to provide information to Holly, the court finds

that there was no breach of fiduciary duty committed by KeyBank.”

¶ 12 The court further found that Nick’s management of the estate properties was proper:

“It is clear that [Nick] worked extremely close with his father in running and managing the

Karris properties and holds an MBA from the University of Chicago. The fact that [Nick]

worked with his father for over 10 years and went to graduate school to presumably

continue to help his father, shows Mr. Karris would have no objection, and it indeed

appears to be his intent, that his son continue to manage the properties. *** There has been

no convincing evidence that [Nick] has been mismanaging the properties (in fact, quite the

contrary) and the appointment of [Nick] to manage the properties is within the confines of

the trust document.”

¶ 13 Fifth, with respect to the transfer of the Apple property to Mary Ann (the Apple transaction)

and the subsequent creation of four new trusts (the Apple trusts), the court stated:

“The court finds the Apple [t]ransaction to be the most troubling of the issues

brought before the court requesting removal of KeyBank. After carefully examining the

Will, the 1997 Trust, and the Apple [t]rusts, the court finds these newly created Apple

[t]rusts were clearly not contemplated by Mr. Karris when forming his estate plan and the

creation of these trusts changed the distribution method Mr. Karris intended. Specifically,

the fact that Mary Ann would get outright ownership of the Apple [p]roperty if the -5- No. 1-23-1471

promissory notes were to go into default is of concern. *** Thus, the court finds KeyBank

breached its fiduciary duty as to the Apple [t]ransaction by acting outside the intent of Mr.

Karris.”

¶ 14 Based on KeyBank’s breach of fiduciary duty with respect to the Apple transaction, the

court granted Holly’s amended petition to remove KeyBank as co-trustee of the 1997 Trust.

¶ 15 KeyBank and Mary Ann brought motions to reconsider, arguing that the court made a

mistake of fact because Mary Ann would not receive outright ownership of the Apple property in

the event of a default on the promissory notes. Rather, the promissory notes were assigned to the

promissory note trusts, and in the event of a default, ownership would go to those trusts.

¶ 16 On December 12, 2016, the court granted the motions to reconsider, explaining that it had

misunderstood the effect of a default on the promissory notes and mistakenly believed that Mary

Ann would receive ownership of the Apple property in the event of a default. The court concluded

that it had erred in its discretionary decision to remove KeyBank as co-trustee because Holly had

failed to show any fraud, self-dealing, dishonesty or bad faith on the part of KeyBank.

¶ 17 Holly filed a notice of appeal on January 11, 2017, from the December 2016 order. On

March 24, 2017, Holly moved to voluntarily dismiss the appeal, and the Second District appellate

court granted her motion on March 29, 2017.

¶ 18 Meanwhile, on March 1, 2017, Holly filed a petition in the DuPage County circuit court

for a citation to discover and recover assets against Mary Ann, KeyBank, and Nick (defendants).

Holly asked the court to require defendants to produce a representative “to be examined regarding

documents and information in [defendants’] possession and control that are necessary to determine

the full extent of the [defendants’] liability for engaging in and actively participating in the illegal

and void Apple [t]ransaction, and to determine all other improper distributions from the trust estate -6- No. 1-23-1471

of [Karris Sr.] in violation of the express terms of his [w]ill and the [1997 Trust].” Holly also

requested that “this Citation determine title of property improperly concealed, converted, or

embezzled assets belonging to the trust estate of [Karris Sr.], currently in possession, ownership

or control of [defendants] or other third parties.” Holly also sought to “restore [Karris Sr.’s] estate

and 1997 Trust with the Apple [i]nterest, as well as any other assets, funds, and property

determined to be improperly concealed, converted, or embezzled, which are currently in the

possession, ownership or control of the [defendants] or other third parties.” On October 10, 2017,

the court denied Holly’s petition for a citation, finding that the petition was “premature.”

¶ 19 Mary Ann also filed an amended petition in the DuPage County circuit court to reform the

promissory note trusts and gift trusts to allow for the Apple transaction. On February 6, 2019, the

court denied Mary Ann’s amended petition to reform the trusts and granted Holly’s motion to

strike and dismiss the amended petition. The court stated that the primary reason the Apple

transaction was done was for tax and saving purposes, but the transaction did not comply with

section 9.2 of the 1997 Trust, and “the bottom line is that the distribution of the Apple property to

[Mary Ann] was improper.” The court further stated that the Apple transaction was “flawed from

the get-go,” and reiterated that it violated the terms of the 1997 Trust and Karris Sr.’s donative

intent.

¶ 20 Following the denial of Mary Ann’s amended petition to reform the promissory note trusts

and gift trusts, Holly filed a second petition in the DuPage County circuit court seeking the removal

of Mary Ann and KeyBank from their roles as co-trustees. Holly argued that Mary Ann and

KeyBank were in such “a conflicted position vis -a-vis the [1997 Trust] and the beneficiaries that

Illinois law requires their removal.” Holly relied on the February 2019 order, arguing that the

circuit court’s determination that the Apple transaction was “flawed from the get-go” created a -7- No. 1-23-1471

claim against Mary Ann and KeyBank to fully restore the trust estate to its position prior to the

Apple transaction. Holly argued that this created an “impossible conflict” because, on the one

hand, Mary Ann and KeyBank would want to maximize the value of the 1997 Trust, but on the

other hand, they also would want to minimize their own costs and liabilities arising out of their

breach of fiduciary duty. Holly further provided a list of 21 supplemental allegations of breaches

of fiduciary duties committed by Mary Ann and KeyBank, “any one of which adds to [their]

conflicting dual loyalties.” Several of these “supplemental” allegations merely repeated the claims

that Mary Ann and KeyBank breached their fiduciary duties by approving the transfer of the Apple

property to Mary Ann.

¶ 21 The court denied Holly’s second removal petition on June 13, 2019. The court noted its

previous finding that the Apple transaction violated the terms of the 1997 Trust, but it also stated

that Mary Ann and KeyBank had not acted in bad faith or with any ill intent and thus they were

not in conflict with the estate or with the other beneficiaries such that they should be removed as

co-trustees.

¶ 22 Holly moved to vacate and reconsider the order denying her second removal petition. On

September 5, 2019, the court entered a written order denying the motion to vacate and reconsider,

but stating that the “ruling is without prejudice to Holly Karris’s right to pursue damages as a result

of the Apple [t]ransaction or the unwinding thereof.”

¶ 23 Holly appealed the June and September orders denying her second removal petition and

denying her motion to vacate and reconsider. Mary Ann and KeyBank moved to dismiss the appeal

on the basis that the September 5 order was not a final judgment. The Second District appellate

court (appellate court) denied the motion on January 6, 2020, ruling that the September 5 judgment

-8- No. 1-23-1471

denying the motion to vacate and reconsider was final “despite doing so without prejudice to

appellant’s right to raise an independent claim for damages.”

¶ 24 On November 16, 2021, the appellate court affirmed the judgment denying the second

removal petition. The appellate court began its analysis by noting that the issue before it was the

same issue ripe for appeal from the 2016 order denying the original removal petition: whether the

Apple transaction merited removal of a co-trustee of the 1997 Trust. In re Estate of Karris, 2021

IL App (2d) 190865-U, ¶ 34. The appellate court stated:

“The trial court had already determined in December 2016 that the Apple transaction was

improper but did not warrant removal of a co-trustee. Holly appealed from the denial of

her original removal petition in January 2017 but chose to dismiss that appeal. Her second

removal petition did not present new evidence of wrongdoing but instead relied upon the

same Apple transaction and the set terms of the 1997 [T]rust.” Id. ¶ 37.

¶ 25 The appellate court further stated:

“We also reject Holly’s argument that the original removal petition did not present

the same issue because it was not directed at Mary Ann. While Holly had not sought to

remove Mary Ann in her original removal petition, she had the opportunity to do so, and

the original removal petition alleged that KeyBank agreed to aid Mary Ann in her

‘wrongful scheme’ to rewrite the 1997 [T]rust.” Id. ¶ 38.

¶ 26 Accordingly, the appellate court affirmed the denial of the second removal petition and the

denial of the motion to vacate and reconsider, finding that the law-of-the-case doctrine precluded

Holly from relitigating Mary Ann and KeyBank’s removal based on the Apple transaction. Id. ¶¶

29, 40.

-9- No. 1-23-1471

¶ 27 On February 27, 2020, Holly filed a 15-count, first amended complaint in the circuit court

of Cook County against defendants related to their alleged mismanagement of the 1997 Trust

including, but not limited to, the Apple transaction. The counts alleged breach of the trust

agreement, fraudulent transfers, dissipation and defunding the trust, breach of fiduciary duty,

conversion, fraud, civil conspiracy, tortious interference with an inheritance expectancy,

intentional infliction of emotional distress, and loss of consortium. Defendants sought dismissal

on collateral estoppel grounds pursuant to section 2-619 of the Code (735 ILCS 5/2-619 (West

2020)), arguing that the claims raised in the first amended complaint already had been litigated

and ruled on in the DuPage County circuit court when it considered and rejected the removal

petitions. Defendants also sought dismissal under section 2-615 (735 ILCS 5/2-615 (West 2020)).

The Cook County circuit court (Judge Brennan) denied the section 2-619 motions, finding that the

DuPage County circuit court had not ruled on the damages claims raised in the first amended

complaint and, in fact, had specifically stated that its denial of the removal petitions did not

preclude Holly’s right to pursue damages as a result of the Apple transaction. Judge Brennan

granted the section 2-615 motions without prejudice.

¶ 28 Holly filed her 11-count third amended complaint in the circuit court of Cook County on

December 10, 2021, against defendants again related to their alleged mismanagement of the 1997

Trust including, but not limited to, the Apple transaction. The counts alleged breach of trust, breach

of fiduciary duty, fraud, conversion, and tortious interference with an inheritance expectancy.

Holly also sought an accounting and inventory of the financial condition of the 1997 Trust.

Defendants moved to dismiss pursuant to section 2-619 on res judicata grounds, arguing that the

causes of action in the third amended complaint involved the same parties and causes of action as

in the DuPage County litigation. Defendants also sought dismissal under section 2-615. -10- No. 1-23-1471

¶ 29 The motions were argued before Judge Snyder. During the hearing, Judge Snyder stated

that res judicata did not apply because Holly was alleging continuing harm that occurred after the

rulings made by the DuPage County circuit court. Prior to Judge Snyder’s ruling, though, the case

was reassigned to Judge Donnelly, who issued a written order on July 19, 2023, granting

defendants’ section 2-619)(a)(4) motions to dismiss the third amended complaint based on res

judicata. Judge Donnelly found that the claims in Holly’s third amended complaint involved the

same causes of action as had been asserted in the removal petitions and litigated to a final judgment

in the DuPage County circuit court. Holly now appeals the July 19, 2023, dismissal order.

¶ 30 A section 2-619 motion to dismiss admits the legal sufficiency of the pleading but asserts

an affirmative defense or other matter that avoids or defeats the claim. Barber v. American Airlines,

Inc., 241 Ill. 2d 450, 455 (2011). Section 2-619(a)(4) allows a defendant to file a motion for

dismissal on the basis that the cause of action is barred by a prior judgment, i.e., res judicata. See

Illinois Non-Profit Risk Management Ass’n v. Human Service Center of Southern Metro-East, 378

Ill. App. 3d 713, 719 (2008) (noting that section 2-619(a)(4) incorporates the doctrine of res

judicata). We review de novo a dismissal under section 2-619. DeLuna v. Burciaga, 223 Ill. 2d 49,

59 (2006). Further, the determination of whether a claim is barred by the doctrine of res judicata

is a question of law subject to de novo review. Lutkauskas v. Ricker, 2015 IL 117090, ¶ 43.

¶ 31 The doctrine of res judicata provides that a final judgment on the merits rendered by a

court of competent jurisdiction bars any later actions between the same parties or their privies on

the same cause of action. Young v. Wilkinson, 2022 IL App (4th) 220302, ¶ 34. Res judicata not

only bars what actually was decided in the first action but also any matters that could have been

decided. Id.

-11- No. 1-23-1471

¶ 32 For res judicata to apply, three elements must be met: (1) an identity of parties or their

privies; (2) a final judgment on the merits rendered by a court of competent jurisdiction; and (3)

an identity of cause of action. Id. ¶ 36. Illinois law uses the “transactional test” to determine

whether two causes of action are identical for the purposes of res judicata. River Park, Inc. v. City

of Highland Park, 184 Ill. 2d 290, 310-11 (1998). Under the transactional test, the court must

determine whether the claims arise from the same transaction, i.e., from a single group of operative

facts. Id. at 311. This depends on a pragmatic consideration of whether the facts are related in time,

space, origin, or motivation and form a convenient trial unit. Trackman v. Michela, 2019 IL App

(2d) 190131, ¶ 15.

¶ 33 Subject to certain exceptions discussed later in this order, res judicata precludes a plaintiff

from splitting her claims arising from the same transaction into multiple actions. Quintas v. Asset

Management Group, Inc., 395 Ill. App. 3d 324, 328 (2009). Under the rule against claim-splitting,

where a cause of action is entire and indivisible, plaintiff cannot divide it so as to maintain separate

lawsuits. Id. Thus, plaintiff may not sue for part of a claim in one action and then sue for the

remainder in another action. Id. at 328-29.

¶ 34 Defendants argue that in the present case, Holly engaged in improper claim-splitting.

Defendants contend that the claims in Holly’s third amended complaint, which sought damages

for defendants’ alleged breach of fiduciary duty and fraud relating to the Apple transaction, arose

out of the same set of operative facts underlying the removal petitions and, as such, constituted a

single cause of action that could not be split apart. In other words, according to defendants, all of

Holly’s claims in the removal petitions seeking the removal of the co-trustees for their role in the

Apple transaction, as well as all of the claims for damages in the third amended complaint arising

out of the Apple transaction, constituted a single cause of action that could only be brought in one -12- No. 1-23-1471

lawsuit. Holly’s failure to raise the damages claims in her removal petitions filed in DuPage

County now prevents her from raising those claims in the subsequently-filed, third amended

complaint filed in Cook County.

¶ 35 We disagree with defendants’ argument, as an exception to the general rule against claim-

splitting applies here. Specifically, our supreme court has adopted the exceptions to the rule against

claim-splitting set forth in section 26(1) of the Restatement (Second) of Judgments (Restatement

(Second) of Judgments § 26(1) (1982)). See Hudson v. City of Chicago, 228 Ill. 2d 462, 472 (2008).

The relevant exception provides that the res judicata prohibition against claim-splitting does not

apply where: “The court in the first action has expressly reserved the plaintiff’s right to maintain

the second action.” Restatement (Second) of Judgments, § 26(1), at 233 (1982).

¶ 36 In the instant case, the DuPage County circuit court expressly stated that its rulings denying

the removal petitions were “without prejudice” to Holly’s right to pursue her cause of action for

damages against defendants related to their conduct in the Apple transaction (Apple-related

damages). The Second District appellate court acknowledged that the circuit court’s rulings on the

removal petitions were made “without prejudice to [Holly’s] right to raise an independent claim

for damages.” The circuit court’s express reservation of Holly’s right to pursue her damages action

placed it squarely within the exception to the application of res judicata. Therefore, we find that

the rule against claim-splitting does not apply in the instant case to preclude the Apple-related

damages claims raised in the third amended complaint.

¶ 37 Defendants argue that a dismissal order “without prejudice” is generally not the equivalent

of an express reservation of a right to maintain a second action sufficient to overcome the res

judicata prohibition against claim-splitting. See e.g., Rein v. David A. Noyes & Co., 172 Ill. 2d

325, 342 (1996). However, in the present case, the DuPage County circuit court did not simply -13- No. 1-23-1471

deny the removal claims “without prejudice,” but specifically stated that Holly retained the right

to “pursue damages as a result of the Apple [t]ransaction or the unwinding thereof,” thereby

expressly reserving her right to maintain the second action.

¶ 38 Defendants contend that res judicata is an equitable doctrine, and that “equity compels

dismissal” of Holly’s damages claims in her third amended complaint. Defendants’ argument

appears to be premised on the mistaken notion that when denying the removal petitions, the

DuPage County circuit court found in defendants’ favor on all issues related to their conduct in the

Apple transaction, such that Holly should not now be allowed to “take a second bite of the Apple

transaction” and relitigate their liability therefor. However, as recounted earlier in this order, the

court actually found that the Apple transaction was “flawed from the get-go” and that it violated

the terms of the 1997 Trust and Karris Sr.’s donative intent. The court further stated that its denial

of the removal petitions “was not a blessing of the Apple transaction.” Therefore, the court

expressly noted that its rulings were “without prejudice” to Holly’s right to pursue damages as a

result of the Apple transaction or the unwinding thereof. We find nothing inequitable in requiring

defendants to litigate, for the first and only time, the issue of whether they are liable for damages

resulting from their participation in the Apple transaction.

¶ 39 We further note that many of the claims in the third amended complaint filed in the Cook

County circuit court seek damages for conduct occurring after the litigation of the removal

petitions, i.e., they involve allegedly improper, continuous breaches of fiduciary duties committed

after the Apple transaction that have decreased the value of the 1997 Trust from over $300,000,000

in 2016 to less than $150,000,000 to date. Counts IX and XI further seek the appointment of a

special fiduciary to take possession and control of the 1997 Trust estate pending resolution of the

claims of continuing breaches of fiduciary duties. Defendants argue that res judicata precludes the -14- No. 1-23-1471

raising of all these damages claims as well as the claims seeking the appointment of a special

fiduciary. We disagree. The rule in Illinois is that “res judicata extends only to the facts and

conditions as they were at the time a judgment was rendered. When new facts or conditions

intervene before a second action, establishing a new basis for the claims and defenses of the parties

respectfully, the issues are no longer the same, and the former judgment cannot be pleaded as a

bar in a subsequent action.” Northern Illinois Medical Center v. Home State Bank of Crystal Lake,

136 Ill. App. 3d 129, 144 (1985). Also, under res judicata principles, “a defendant’s continuing

course of conduct, even if related to conduct complained of in an earlier action, creates a separate

cause of action.” D’Last Corp. v. Ugent, 288 Ill. App. 3d 216, 222 (1997). Therefore, an earlier

judgment relating to a course of conduct “does not bar claims for continuing conduct complained

of in the second lawsuit that occur[s] after judgment has been entered in the first lawsuit.” Id.

Applying these principles here, we find that the claims in the third amended complaint seeking

damages and the appointment of a special fiduciary due to defendants’ continuing course of

misconduct vis-à-vis the maintenance of the 1997 Trust are not barred by the earlier judgments

rendered by the DuPage County circuit court on the removal petitions.

¶ 40 Defendants also contend that various counts in the third amended complaint failed to state

a cause of action pursuant to section 2-615 of the Code and, further, that the fraud claims are barred

by the statute of limitations. Defendants additionally contend that the DuPage County circuit

court’s ruling on the citation petitions acts as a res judicata bar to Holly’s third amended complaint.

The circuit court of Cook County never ruled on any of these issues when dismissing the third

amended complaint and therefore we remand for a hearing thereon.

-15- No. 1-23-1471

¶ 41 For all the foregoing reasons, we reverse the Cook County circuit court’s order dismissing

the third amended complaint and remand for further proceedings. As a result of our disposition of

this case, we need not address the other arguments on appeal.

¶ 42 Reversed and remanded.

-16-