Nancy Harl, D/B/A Public House v. The City of La Salle and Mayor Aloysius A. Gunia, Liquor Commissioner

679 F.2d 123, 1982 U.S. App. LEXIS 19011

• Court: Court of Appeals for the Seventh Circuit
• Decided: May 24, 1982
• Docket: 81-1147
• Status: Published

Opinions

CUDAHY, Circuit Judge.

Plaintiff Nancy Harl (“Harl”) brought this action under 42 U.S.C. § 1983 (1976) alleging that the defendants violated her rights to due process and equal protection by revoking her liquor license without providing notice or a hearing. The district court, 506 F.Supp. 1067, granted defendants’ motion to dismiss, holding that Harl’s action here was barred under principles of res judicata because an Illinois state court had dismissed Harl’s claims on the merits in an earlier proceeding. We believe the district court misapplied Illinois law governing dismissals and their res judicata consequences and therefore reverse.

I.

On January 21, 1980, Harl filed a complaint in LaSalle County, Illinois, Circuit Court alleging that the defendants revoked her liquor license in violation of both state law and the United States Constitution. Defendants subsequently moved for a dismissal of the complaint on four grounds: 1) failure to state a cause of action; 2) failure to allege exhaustion of administrative remedies under state law; 3) failure to provide statutory notice to the municipality; and 4) preclusion under the Illinois Tort Immunity Act. On July 10, 1980, the state trial court judge granted the defendants’ motion to dismiss. The order entered by the court did not specify the ground or grounds for the dismissal.¹ Moreover, the order expressly allowed Harl until August 15, 1980, to amend the complaint.

Harl did not amend the complaint within the time allowed by the court’s order. On September 3, 1980, the trial court sua sponte entered an order dismissing Harl’s complaint. The text of that handwritten order reads:

This matter coming on court's own motion and it appearing that an order of dismissal having been entered on July 10, 1980 and plaintiff not having filed additional pleadings within time allowed by that order[,]

It is ordered that the order of July 10, 1980 dismissing said suit is confirmed.²

On September 12, 1980, Harl filed this action in federal court. The district court granted defendants’ motion for summary judgment on December 24,1980, and denied plaintiff’s subsequent motion for reconsideration. In granting summary judgment, the court first reasoned that the September 3 order was a final judgment on the merits under Illinois Supreme Court Rule 273, 111. Rev.Stat. ch. 110A, 1273 (1979), and thus must be given res judicata effect. The court then compared Harl’s state court complaint to her federal complaint and concluded that the latter was barred by res judicata since either the federal claims were actually raised in the state court action or these claims could have been raised in the state court action.

II.

The dispositive issue in this case is whether the order entered by the Illinois trial court on September 3 is a final order on the merits. Under Illinois law, only a final order is res judicata for subsequent litigation. See People v. Kidd, 398 Ill. 405, 75 N.E.2d 851 (1947); Schmitt v. Woods, 73 Ill.App.3d 498, 29 Ill.Dec. 498, 392 N.E.2d 55 (5th Dist. 1979). Under the Rules of Decision Act, 28 U.S.C. § 1738 (1976), we are bound to give the prior Illinois judgment the same res judicata effect as would be provided by Illinois courts. See Gilbert v. Braniff International Corp., 579 F.2d 411, 413 (7th Cir. 1978). Thus, only if we find that the state court order is a final adjudication on the merits (and treated as res judicata by Illinois courts) would we then proceed to the further steps of determining whether the parties and claims in the first litigation are the same as the parties and claims present here for purposes of res judicata.

The district court held that the September 3 order is a final order on the merits as defined in Illinois Supreme Court Rule 273. That rule provides:

Unless the order of dismissal or a statute of this state otherwise specifies, an involuntary dismissal of an action, other than a dismissal for lack of jurisdiction, for improper venue, or for failure to join an indispensable party, operates as an adjudication upon the merits.

Ill.Rev.Stat. ch. 110A, 1273 (1979) (emphasis supplied). The court found that the September 3 order fell neither within any of the three stated exceptions to the rule nor did the order of dismissal “otherwise specif[y],” and thus the order was a final adjudication. But the district court did not fully or correctly consider whether the September 3 order constituted a dismissal for want of prosecution under Illinois law and thus was governed by a “statute ... [which] otherwise specifies.”³ See, infra, note 4.

The statute which we believe “otherwise specifies” is section 24 of the Illinois Limitations Act. That section states, inter alia, that if an “action is dismissed for want of prosecution, ... the plaintiff ... may commence a new action within one year or within the remaining period of limitation, whichever is greater .... ” Ill.Ann.Stat. ch. 83, 124a (Smith-Hurd 1981 Supp.) (emphasis supplied). Illinois decisions have squarely held that section 24 is one of the statutes which may “otherwise specif[y]” in the terms of Rule 273. Kutnick v. Grant, 65 Ill.2d 177, 2 Ill.Dec. 313, 315, 357 N.E.2d 480, 482 (1976); O’Reilly v. Gerber, 95 Ill. App.3d 947, 51 Ill.Dec. 11, 13-14, 420 N.E.2d 425, 427-28 (1st Dist. 1981); Mages Sports Arenas, Inc. v. Winston Park Shopping Center, Inc., 112 Ill.App.2d 409, 251 N.E.2d 334, 336-37 (1st Dist. 1969). Moreover, “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 .... ” O’Reilly v. Gerber, 95 Ill.App.3d 947, 51 Ill.Dec. 11, 13, 420 N.E.2d 425, 427 (1st Dist. 1981).⁴ Thus, the issue before us ultimately becomes one of whether the September 3 order of dismissal is one “for want of prosecution.”

We believe that the only fair interpretation of the September 3 order is that it was a dismissal for want of prosecution. Although the order does not explicitly state that the dismissal is for want of prosecution, we do not find this deficiency conclusive in this case because the order fails to state any ground for the dismissal.⁵ Moreover, it is undisputed that the trial court entered the September 3 order only after Harl did not amend her complaint pursuant to the trial court’s July 10 order. In fact, the court’s September 3 order clearly stated that its renewed interest in the complaint was specifically prompted by Harl’s failure to amend the complaint after almost two months. We think this amounts to a dismissal for lack of prosecution.

Our conclusion in this respect is inescapable under the Illinois Appellate Court’s recent decision in O’Reilly v. Gerber, 95 Ill.App.3d 947, 51 Ill.Dec. 11, 420 N.E.2d 425 (1st Dist. 1981). In O’Reilly, the trial court granted defendant’s motion to strike the plaintiff’s complaint but allowed plaintiff 28 days to file an amended complaint. Plaintiff did not file an amended complaint and defendant subsequently gave notice that he would move for a dismissal in 10 days. Several days later, plaintiff gave notice that she would seek a voluntary dismissal of the action on the same day defendant sought a dismissal. The trial court heard both motions on the same day and, notwithstanding that plaintiff could still dismiss her case at this point if she paid costs, the trial court granted the defendant’s motion with prejudice “because ‘the plaintiff has no complaint on file having failed to comply with this court’s order of November 22,1978.’ ” 51 Ill.Dec. at 12, 420 N.E.2d at 426.

The appellate court held that the trial court correctly refused plaintiff’s request for voluntary dismissal since plaintiff refused to tender costs. 51 Ill.Dec. at 12, 420 N.E.2d at 426. But the appellate court held that the trial court incorrectly granted defendant’s motion for dismissal with prejudice because the only plausible ground for the dismissal was want of prosecution. And a dismissal for want of prosecution, since it is not a final order, must be without prejudice. The appellate court explained:

The trial court did not use the words “dismissal for want of prosecution” in its order. However, a suit may be dismissed for want of prosecution for the failure or refusal to file an amended complaint (3 Nichols Illinois Civil Practice § 2848), and it seems clear that was what the court was doing here. Thus, it seems equally clear that the dismissal should have been without prejudice.

51 Ill.Dec. at 13, 420 N.E.2d at 427. The O’Reilly court’s analysis is closely in point to the instant case. In both cases, the trial courts did not use the magic words, “dismissal for want of prosecution.” Instead, these courts both noted in their orders that the. dismissals were entered only after plaintiff failed to amend pleadings within the time allowed in a previous order. In the absence of a more explicit order,⁶ we, like the O’Reilly court, have no basis for concluding that the dismissal is for a reason other than want of prosecution. Cf. Bruer v. Livingston County Board of Zoning Appeals, 66 Ill.App.3d 938, 23 Ill.Dec. 145, 383 N.E.2d 1016 (4th Dist. 1978) (trial court dismissed action with prejudice after plaintiff failed to amend complaint; held, where plaintiff experienced delay in filing complaint, dismissal should have been for want of prosecution).

Brainerd v. First Lake County National Bank, 1 Ill.App.3d 780, 275 N.E.2d 468 (1st Dist. 1971), which was distinguished in O’Reilly, see, 51 Ill.Dec. at 14, 420 N.E.2d at 428, does not change our analysis. In Brainerd, the trial court dismissed plaintiff’s first complaint for failure to state a cause of action but allowed plaintiff additional time to file an amended complaint. Plaintiff did not amend that complaint, and the trial court subsequently dismissed the action for failure to amend. Thereafter, plaintiff unsuccessfully appealed. Brainerd v. First Lake County National Bank, 109 Ill.App.2d 251, 248 N.E.2d 542 (1st Dist. 1969). A second suit was then instituted by plaintiff against the same defendant on the same claim. Defendant moved to dismiss under Ill.Rev.Stat. ch. 110, § 48(l)(d), on the grounds that the suit was barred by the previous judgment, and the trial court granted the motion. On appeal, plaintiff contended that the dismissal in the first case was not a final adjudication on the merits and thus should not bar the second action. The appellate court disagreed, noting that a dismissal of a pleading, after an election to stand on the pleading, was a final order and a res judicata bar to subsequent suits, under Rule 273 and under Illinois common law, 275 N.E.2d at 469-70.

Defendants here incorrectly assert with respect to the instant case “that a dismissal for failure to file an amended complaint after the original is dismissed constitutes an election on plaintiff’s part to stand on his original, stricken complaint.” Brief and Argument for Defendants-Appellees at 16. There is nothing to indicate, however, that Harl elected to stand on her complaint after the September 3 order of dismissal. Brainerd, on the other hand, suggests that it is not the failure to amend but rather the taking of an appeal or other action challenging the trial court decision that constitutes an election to stand on a stricken complaint. Cf. People ex rel. Scott v. Carriage Way West, Inc., 88 Ill.App.3d 297, 43 Ill.Dec. 384, 387-88, 410 N.E.2d 384, 387-88 (1st Dist. 1980), rev’d on other grounds, 88 Ill.2d 300, 58 Ill.Dec. 754, 430 N.E.2d 1005 (1981) (state elected to stand on its complaint by bringing mandamus action after court struck complaint); Campbell v. Harrison, 16 Ill.App.3d 570, 306 N.E.2d 643, 644-45 (1st Dist. 1973) (plaintiff elected to stand on dismissed complaint by bringing appeal).

Defendants also contend here that the September 3 order of dismissal is a final adjudication on the merits because the order was entered for failure to comply with an order of the trial court. We believe that this contention misconstrues the Illinois cases holding that a dismissal for failure to comply with a court order is given res judicata effect. In Keilholz v. Chicago & Northwestern Railway Co., 59 Ill.2d 34, 319 N.E.2d 46 (1974), for example, plaintiff’s case was dismissed, pursuant to the discovery sanction provisions of Ill.Rev.Stat. ch. 110A, 11218 & 219, after plaintiff failed to attend in person a pretrial conference. The Illinois Supreme Court held that a dismissal for failure to obey discovery orders was not a dismissal for want of prosecution under section 24 and thus would be given res judicata effect. Accord Brewer v. Moore, 67 Ill.App.3d 487, 24 Ill.Dec. 306, 385 N.E.2d 73 (1st Dist. 1978). The instant case is, therefore, quite distinguishable since the statutory basis for the dismissal in Keilholz permits a court to dismiss with prejudice only for a violation of discovery orders and not for want of prosecution (through failure to amend the complaint). See Ill.Rev.Stat. ch. 110A, 11218(d), 219(c) (1979).⁷

III.

We therefore hold that the September 3 order was a dismissal for want of prosecution and thus is not a res judicata bar to Harl’s action in the federal court.

Reversed and Remanded.

1 . The handwritten order simply stated, “[d]efendant’s motion to dismiss is allowed, plaintiff given to August 15, 1980 to [a]mend her pleadings.” Plaintiff’s Brief at A-2.

2 . Plaintiffs Brief at A-l.

3 . Defendants argue that Harl never raised the dismissal for want of prosecution argument in the court below and thus, is precluded from raising that argument here, citing Lambert v. Conrad, 536 F.2d 1183, 1186 (7th Cir. 1976). Lambert makes clear, however, that it is within the court’s discretion to consider an argument not raised below. We believe that in this case, it is not an abuse of discretion to consider this argument because the Illinois decision we find controlling — O’Reilly v. Gerber, 95 Ill.App.3d 947, 51 Ill.Dec. 11, 420 N.E.2d 425 (1st Dist. 1981) — was rendered after the district court decision in the instant case.

4 . Because Rule 273 is modeled after Fed.R. Civ.P. 41(b), the district court mistakenly determined that case authority under the federal rule could be helpful to resolve the question of the res judicata effect of a dismissal for want of prosecution. The res judicata effect of this dismissal is governed by state law, see 28 U.S.C. § 1738 (1976), and state law here is clearly inconsistent with federal cases construing the res judicata effect of dismissals for want of prosecution in federal courts. Cf. Lesser v. Migden, 328 F.2d 47, 50 (2d Cir. 1964) (court applied New York law under which dismissal for failure to prosecute is not adjudication on merits). Whatever may be the wisdom of the federal rule, cf. Restatement Second of Judgments § 19(1981) (adopting rule of preclusion for want of prosecution dismissals), we are bound to apply Illinois law on this point.

5 . The ambiguous order, after first stating that the plaintiff failed to amend her complaint within the time prescribed, concludes by stating that the previous July 10 order was “confirmed.” However, the July 10 order likewise fails to specify which (if any) of the four possible grounds offered by the defendants governed the original dismissal of Harl’s complaint. Of the four grounds raised by the defendants, at least two — failure to exhaust and failure to provide notice — would, if they were the basis for the dismissal, constitute a dismissal for lack of jurisdiction and thus fall within one of the other exceptions to Rule 273. See Luker v. Nelson, 341 F.Supp. Ill, 114-15 (N.D.Ill.1972). Moreover, we are hesitant to interpret the September 3 order as a final order solely because it “confirmed” the previous July 10 dismissal when it is undisputed that the July 10 order was not itself a final order. Cf. Bradley v. Burrell, 97 Ill.App.3d 979, 53 Ill.Dec. 602, 424 N.E.2d 15 (1st Dist. 1981) (trial court lacks jurisdiction to modify a final order after thirty days).

6 . We agree with the district court in the instant case that no weight is to be accorded the self-serving affidavit of the state trial judge filed by Harl, in which the trial court judge asserts that his September 3 order was entered without prejudice.

7 . Defendants’ reliance on Swedien v. Hadley School for the Blind, 70 Ill.App.3d 466, 27 Ill.Dec. 14, 388 N.E.2d 977 (1st Dist. 1979), and Shroat v. Robins, 7 Ill.App.3d 293, 287 N.E.2d 157 (5th Dist. 1972), is also misplaced. The issue in those cases was whether a plaintiff would be allowed to amend a complaint after a dismissal even though the time granted for filing an amended complaint had expired. In both cases, the courts held that it was a matter of discretion for the trial courts to accept late pleadings, and that a court might dismiss a case rather than accept a late amended complaint. That issue is not present in the instant case as Harl is not attempting to file an amended complaint in the Illinois trial court.