OKM v. Sweports, LTD

Opinion

2026 IL App (1st) 242364-U FIRST DISTRICT, SIXTH DIVISION July 17, 2026

No. 1-24-2364

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

IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT _____________________________________________________________________________ ) O’ROURKE, KATTEN & MOODY, an Illinois ) Appeal from the Law Partnership, ) Circuit Court of Cook County, Illinois. ) Plaintiff and Counterdefendant-Appellee, ) ) No. 2020 L 000626 v. ) ) SWEPORTS, LTD., a Delaware Corporation, ) ) The Honorable Daniel J. Kubasiak, Defendant and Counterplaintiff-Appellant. ) Judge Presiding. )

_____________________________________________________________________________

JUSTICE GAMRATH delivered the judgment of the court. Presiding Justice C.A. Walker and Justice Pucinski concurred in the judgment.

ORDER

¶1 Held: We affirm summary judgment for plaintiff on its conversion claim and for defendant’s professional negligence counterclaim. Additionally, we affirm the trial court’s interlocutory orders, addressing defendant’s asserted errors.

¶2 This case arises from a long-running dispute over unpaid legal fees spanning two

decades. In July 2006, defendant-appellant Sweports, Ltd. retained plaintiff-appellee O’Rourke,

Katten & Moody (OKM) to provide legal services, which Sweports did not pay. On December No. 1-24-2364

31, 2006, OKM accepted 125 shares of Sweports stock as payment for $107,500 in outstanding

legal fees. In April and June 2007, Sweports, acting through its majority shareholder George

Clarke, issued two Informal Actions unilaterally rescinding OKM’s stock in Sweports.

¶3 OKM filed this action in June 2007, challenging the unilateral rescission of its stock. The

matter is now before us on OKM’s fifth amended complaint, which asserts a single claim for

stock conversion. Sweports counterclaimed for professional negligence. The trial court granted

summary judgment in favor of OKM on its conversion claim and Sweports’ negligence

counterclaim. Sweports appeals, arguing the court erred by (1) finding OKM’s conversion claim

timely, (2) granting summary judgment to OKM on the conversion claim, and (3) granting

summary judgment to OKM on Sweports’ professional negligence counterclaim. We affirm. 1

¶4 I. BACKGROUND

¶5 Sweports holds patents and licenses for antimicrobial technology and owns UMF

Corporation (UMF), which manufactures and sells products using those patents. George Clarke

serves as the majority owner, officer, and board member of both entities. In 2005 and 2006,

Sandbox Industries, LLC (Sandbox) loaned substantial sums to UMF, prompting discussions

about a potential merger between UMF and Sweports. On July 12, 2006, Sweports retained

OKM to provide legal services related to the merger, and OKM devoted significant time to those

efforts. The merger stalled in September 2006 when Sandbox threatened to demand repayment of

its loans. OKM negotiated a settlement with Sandbox in November 2006.

¶6 That same month, Sweports executed a Loan Guaranty and Stock Purchase Agreement

(LGSPA) with Michael O’Rourke, Michael Moody, John Dore, A.G. Chenelle, and Lee Abrams

1 This appeal was fully briefed on November 10, 2025, but issuance of this decision was delayed due to a random panel reassignment in April 2026. -2- No. 1-24-2364

(the individual shareholders), providing each with an ownership interest in Sweports and options

to purchase additional shares. The shareholders collectively loaned Sweports $500,000,

evidenced by a promissory note.

¶7 Despite receiving ongoing legal services from OKM, Sweports did not pay OKM’s fees.

On December 31, 2006, OKM and Sweports executed a Stock Purchase Agreement (SPA), under

which OKM exchanged $107,500 in unpaid fees for 1.25% of Sweports’ common stock, and

OKM received 125 shares. Sweports continued using OKM’s services into early 2007, accruing

an additional $150,000 in unpaid fees. The relationship deteriorated in spring 2007, culminating

in Clarke issuing Informal Actions in April and June 2007 rescinding the stock held by OKM

and the individual shareholders.

¶8 A. Initial Proceedings

¶9 OKM initiated this case on June 7, 2007, seeking a declaration that Sweports’ actions, in

“declaring OKM’s services of no value and repudiating its stock interest *** are unlawful and

invalid,” and seeking repayment of $150,000 in legal fees. OKM’s April 2008 first amended

complaint added a claim for stock conversion. However, this claim was removed from the

September 2008 second amended complaint. Sweports filed counterclaims for breach of

fiduciary duty, professional negligence, and fraud.

¶ 10 Simultaneously, a separate action was proceeding between the individual shareholders

and Sweports for Sweports’ alleged breach of the LGSPA and promissory note. Dore v.

Sweports, Ltd., 2014 IL App (1st) 121980-U, ¶ 6. Sweports filed counterclaims for professional

negligence, breach of fiduciary duty, and fraud in that case as well. The trial court dismissed

Sweports’ professional negligence counterclaim under section 2-619(a)(3) of the Code of Civil

Procedure (Code) (735 ILCS 5/2-619(a)(3)), because an identical counterclaim was already

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pending in this case. The remaining counterclaims were dismissed under sections 2-606 and 2-

603 of the Code. Id. ¶ 11.

¶ 11 UMF also filed a lawsuit against the shareholders alleging fraud, negligence, and breach

of fiduciary duty while this case and Dore were pending. UMF Corp. v. Dore, 2013 IL App (1st)

12286-U, ¶ 5. The trial court dismissed UMF’s action under section 2-619(a)(3) due to its

similarity to Dore, and we affirmed. Id. ¶¶ 7-8. In December 2014, Dore, O’Rourke, and Moody

sued Sweports in Delaware seeking indemnification for costs incurred in Dore and UMF Corp.

¶ 12 B. Partial Settlement on OKM’s Third Amended Complaint

¶ 13 On October 3, 2014, OKM filed its third amended complaint asserting multiple claims,

including stock conversion. Sweports refiled its counterclaims for professional negligence,

breach of fiduciary duty, and fraud. OKM moved to dismiss those counterclaims under res

judicata, as identical counterclaims had already been dismissed in Dore and UMF Corp. The

trial court agreed and dismissed Sweports’ counterclaims in June 2015.

¶ 14 The parties reached a partial settlement agreement on September 16, 2017. Sweports

agreed to pay $100,000 for unpaid legal fees not exchanged for stock, and OKM agreed to

dismiss its conversion claim without prejudice and with the “right to refile.” A September 21,

2017 Agreed Order dismissed OKM’s conversion claim without prejudice and with “leave to

refile.” Sweports reserved its right to appeal the dismissal of its counterclaims, and the parties

reserved all other claims, defenses, and counterclaims.

¶ 15 C. Sweports Appeals Dismissal of Counterclaims and Files New Complaint

¶ 16 Sweports appealed the dismissal of its counterclaims on October 19, 2017. While that

appeal was pending, Sweports filed a new complaint against OKM on June 1, 2018, alleging

abuse of process, tortious interference with prospective economic advantage, and conspiracy, all

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arising from the same transaction and occurrence at issue in this case. The trial court dismissed

the 2018 complaint, and this court affirmed the dismissal of all counts for failure to state a claim

under section 2-615 of the Code (735 ILCS 5/2-615). Sweports, Ltd. v. Abrams, 2021 IL App

(1st) 200139-U, ¶ 73.

¶ 17 In Sweports’ appeal in this case, we affirmed the dismissal of the breach of fiduciary duty

and fraud counterclaims under res judicata, as identical counterclaims were previously dismissed

on their merits in Dore. O’Rourke, Katten & Moody v. Sweports, Ltd., 2019 IL App (1st)

172607-U, ¶ 19. However, we reversed the dismissal of Sweports’ professional negligence

counterclaim, because that claim was dismissed in Dore solely due to its pendency in this action.

Id. ¶ 18.

¶ 18 D. Fourth and Fifth Amended Complaints, Counterclaim, and Affirmative Defenses

¶ 19 On February 5, 2021, OKM filed its fourth amended complaint under a new case number,

which did not include a conversion claim. Sweports moved to dismiss. On November 19, 2021,

the court dismissed the fourth amended complaint with prejudice except for an indemnification

claim, which was dismissed without prejudice and with leave to replead. On January 4, 2022,

OKM withdrew its indemnification claim and sought leave to file a fifth amended complaint

asserting conversion, a claim the parties had “reserved in their Settlement Agreement.” The court

granted leave.

¶ 20 Sweports moved to dismiss the fifth amended complaint, arguing that OKM’s conversion

claim was barred by the five-year statute of limitations because it was “refiled in October 2014,

seven *** plus years after it accrued in June 2007.” The trial court rejected this argument, citing

the 2017 Agreed Order, which expressly dismissed the conversion claim “without prejudice and

with leave to refile.”

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¶ 21 On June 27, 2022, Sweports filed affirmative defenses based on rescission, res judicata,

and the statute of limitations, and refiled its professional negligence counterclaim. OKM moved

to dismiss the affirmative defenses and counterclaim under res judicata. On December 19, 2022,

the court dismissed Sweports’ rescission-based affirmative defenses, finding OKM could not be

restored to the status quo, and dismissed the statute of limitations defense because the allegations

in the fifth amended complaint “all relate back to the June 2007 informal action taken by

Sweports toward OKM,” and Sweports “has been on notice since the case’s beginning in 2007

that OKM was suing based on a stock transaction with Sweports.”

¶ 22 The trial court declined to dismiss any matters under res judicata due to disputes

regarding the case’s procedural history. Sweports’ only remaining defense was its res judicata

argument based on a November 14, 2008 order allegedly dismissing the individual shareholders’

conversion claim in Dore “with prejudice.” Sweports does not identify the grounds for that

dismissal, and the order is not included in the record on appeal. Sweports also relied on a January

19, 2016 order entered in this case declining to strike Sweports’ rescission-based affirmative

defense to OKM’s third amended complaint.

¶ 23 In October 2023, the court ordered all experts to be disclosed by December 15, 2023, and

deposed by February 2, 2024. Sweports did not disclose its Rule 213(f)(3) experts until February

5 and 6, 2024. OKM moved to strike Sweports’ expert disclosures as untimely and inadequate.

¶ 24 On February 22, 2024, OKM moved for summary judgment on its conversion claim and

on Sweports’ negligence counterclaim, arguing the counterclaim was barred by res judicata

because Sweports raised the same allegations in its 2018 complaint, which was dismissed for

failure to state a claim and affirmed in Abrams, 2021 IL App (1st) 200139-U, ¶ 73. OKM

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submitted a 22-page comparison showing the overlap between Sweports’ 2018 complaint and its

negligence counterclaim.

¶ 25 That same day, Sweports moved for partial summary judgment on its professional

negligence counterclaim, asking the trial court to adopt the factual findings of the Delaware

chancery court in the 2014 indemnification action. Sweports also filed a “rescission-based”

motion for summary judgment, asserting OKM’s alleged judicial admission that Sweports

“rescinded” its stock defeated the conversion claim as a matter of law. The trial court denied

both motions, finding the Delaware action irrelevant and noting that Sweports’ rescission-based

defenses had already been dismissed.

¶ 26 On May 3, 2024, the court struck Sweports’ 213(f)(3) expert disclosures as untimely,

conclusory, irrelevant, and lacking foundation. That same day, the court granted summary

judgment for OKM on its conversion claim. The court rejected Sweports’ res judicata defense,

finding Sweports had “fail[ed] to provide any evidence that OKM has brought a conversion

claim, of this nature” previously, and further concluding the January 19, 2016 order “was not a

ruling on the merits of the [rescission] defense.” The court held that Sweports’ “unilateral

attempt to rescind the 1.25% equity interest held by OKM in exchange for the $107,500

reduction in outstanding legal fees, was without authority and a breach of the SPA,” and that

Sweports identified no genuine dispute of material fact.

¶ 27 The court also granted summary judgment for OKM on Sweports’ negligence

counterclaim because (1) without expert testimony, Sweports could not prove breach of the duty

of care or damages, and (2) the counterclaim was barred by res judicata in light of the final

adjudication of Sweports’ 2018 complaint in Abrams, 2021 IL App (1st) 200139-U, which

involved “virtually identical allegations which arise out of the same operative facts as the

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pending negligence counterclaim.” The court denied Sweports’ motions to reconsider and

entered final judgment on October 31, 2024. Sweports appeals.

¶ 28 II. ANALYSIS

¶ 29 A. OKM’s Conversion Claim

¶ 30 1. Statute of Limitations

¶ 31 Sweports contends the trial court erred in denying its motion to dismiss based on the

statute of limitations and in striking its statute of limitations affirmative defense. Both rulings are

reviewed de novo (see Maggi v. RAS Development, Inc., 2011 IL App (1st) 091955, ¶ 21;

CitiMortgage, Inc. v. Bukowski, 2015 IL App (1st) 140780, ¶ 15), and we may affirm on any

basis appearing in the record, regardless of the trial court’s reasoning. Fifth Third Bank v.

Brazier, 2019 IL App (1st) 190078, ¶ 13.

¶ 32 We agree with the trial court that OKM’s conversion claim is not barred by the five-year

statute of limitations (735 ILCS 5/13-205 (West 2024)) because the claim relates back to the

original June 2007 complaint. Section 2-616(b) of the Code sets forth the relation-back doctrine:

“The cause of action *** set up in any amended pleading shall not be barred by lapse of

time under any statute or contract prescribing or limiting the time within which an action

may be brought or right asserted, if the time prescribed or limited had not expired when

the original pleading was filed, and if it shall appear from the original and amended

pleadings that the cause of action asserted *** in the amended pleading grew out of the

same transaction or occurrence set up in the original pleading, *** an amendment to any

pleading shall be held to relate back to the date of the filing of the original pleading so

amended.” 735 ILCS 5/2-616(b) (West 2024).

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Because the purpose of section 2-616(b) is to prevent the loss of claims through technical

pleading defects unrelated to the merits, the statute must be “liberally construe[d] *** to allow

resolution of litigation on the merits [and] avoid elevating questions of form over substance.”

Porter v. Decatur Memorial Hospital, 227 Ill. 2d 343, 355 (2008).

¶ 33 OKM filed its initial complaint in June 2007, within the five-year limitations period,

seeking a declaration that Sweports’ rescission of OKM’s stock through the Informal Action was

illegal and invalid. OKM then asserted a conversion claim in both its first and third amended

complaints. Sweports did not raise a statute of limitations defense to the conversion claim when

it appeared in the October 2014 third amended complaint, despite that pleading also being filed

after the limitations period. Under the parties’ September 2017 partial settlement agreement, the

conversion claim in the third amended complaint was dismissed without prejudice and with

“leave to refile.” OKM filed a fourth amended complaint in February 2021, which omitted the

conversion claim, and filed its fifth amended complaint in January 2022, which reinstated it.

¶ 34 Section 2-616(b) directs courts to compare the original pleading with any amended

pleading at issue. The operative fifth amended complaint asserts conversion based on the same

transaction or occurrence as the initial complaint, namely, Sweports’ unilateral rescission of all

OKM’s stock in Sweports. Thus, the fifth amended complaint relates back to the initial

complaint and is timely.

¶ 35 Sweports’ argument, based on Porter v. Decatur Memorial Hospital, 227 Ill. 2d 343

(2008), is that the relation-back doctrine does not apply because it can operate only when an

amended pleading asserts a “new legal theory,” and OKM’s conversion claim is not “new.” But

nothing in Porter suggests that relation back is limited to amended complaints asserting new

theories. To the contrary, Porter addressed when “new factual additions” may relate back to an

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original pleading, even where the cause of action remains the same. Id. at 359. The doctrine

contains no requirement that an amended pleading introduce a different legal theory.

¶ 36 Importantly, Sweports cannot show prejudice. Sweports has always been on notice that

OKM was challenging the unilateral rescission of its stock, regardless of whether OKM framed

its claim as breach of contract, interference, or conversion. See Boatmen’s National Bank of

Belleville v. Direct Lines, Inc., 167 Ill. 2d 88, 102 (1995) (quoting Simmons v. Hendricks, 32 Ill.

2d 489, 495 (1965)) (“a defendant will not be prejudiced by an amendment so long as ‘his

attention was directed, within the time prescribed or limited, to the facts that form the basis of

the claim asserted against him’ ”). Applying the relation back doctrine in this case also advances

its central purpose: ensuring resolution on the merits and preventing the loss of claims due to

technical pleading defects. See Bryson v. News America Publications, Inc., 174 Ill. 2d 77, 106

(1996) (section 2-616(b) was enacted “to facilitate the disposition of litigation upon the merits

and to protect plaintiffs from losing a cause of action because of a technical default unrelated to

the merits”). Because OKM’s conversion claim arises from the same transaction or occurrence

described in its June 2007 complaint, it is not time-barred, and the court did not err in denying

Sweports’ motion to dismiss or striking its statute of limitations affirmative defense.

¶ 37 2. Denial of Sweports’ Recission-Based Motion for Summary Judgment

¶ 38 The remainder of Sweports’ arguments challenge the trial court’s rulings on various

motions for summary judgment. Summary judgment is appropriate “if the pleadings, depositions,

and admissions on file, together with the affidavits, if any, show that there is no genuine issue as

to any material fact and that the moving party is entitled to a judgment as a matter of law.” 735

ILCS 5/2-1005(c) (West 2024). The court must construe the record strictly against the movant

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and grant summary judgment only when the movant’s right to judgment is clear and free from

doubt. Seymour v. Collins, 2015 IL 118432, ¶ 42. We review the trial court’s rulings de novo. Id.

¶ 39 Sweports moved for summary judgment on OKM’s conversion claim, asserting that

OKM’s acknowledgment that Sweports “rescinded” its stock constitutes a judicial admission that

OKM never owned stock in the first place. This argument strains both law and logic.

¶ 40 Rescission is the cancellation of a contract intended to return the parties to their

pre-contract positions. Horwitz v. Sonnenschein Nath & Rosenthal LLP, 399 Ill. App. 3d 965,

974 (2010). A party seeking rescission “must restore the other party to the status quo existing at

the time the contract was made,” which requires returning any consideration received and

accounting for any benefits obtained. Puskar v. Hughes, 179 Ill. App. 3d 522, 528 (1989). Here,

OKM cannot be restored to the status quo because Sweports received and retained the benefit of

$107,500 in legal services that were exchanged for stock. Accepting Sweports’ theory would

allow Sweports to unilaterally erase its legal fee obligation simply by declaring the stock

rescinded. The trial court properly rejected this position and denied Sweports’ rescission-based

motion for summary judgment.

¶ 41 3. Summary Judgment for OKM on Conversion Claim

¶ 42 Sweports argues the trial court erred in granting summary judgment for OKM on its

conversion claim. We disagree. To establish conversion, a plaintiff must show: (1) a right to the

property; (2) an absolute and unconditional right to immediate possession of the property; (3)

that the defendant wrongfully and without authorization assumed control, dominion, or

ownership over the property; and (4) that the plaintiff made a demand for its return. Weisberger

v. Weisberger, 2011 IL App (1st) 101557, ¶ 45.

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¶ 43 It is undisputed that OKM exchanged $107,500 in outstanding legal fees for 125 shares

of Sweports stock. It is likewise undisputed that Sweports, acting through Clarke, unilaterally

rescinded all OKM’s shares, denied owing OKM any legal fees, and refused to return the stock

upon demand. Although Sweports submitted a list of supposedly contested facts in response to

OKM’s summary judgment motion, none of those facts are material to any element of

conversion. And while Sweports denied that its conduct was “wrongful,” it offered no

explanation, legal or factual, to justify its unilateral repudiation. See Horwitz v. Holabird & Root,

212 Ill. 2d 1, 8 (2004) (“While the nonmoving party in a summary judgment motion is not

required to prove his or her case, the nonmovant must present a factual basis arguably entitling

that party to a judgment.”).

¶ 44 Sweports further argues that OKM’s conversion claim fails because it is “nothing more

than a lawsuit seeking to enforce an obligation to pay money,” relying on Sandy Creek

Condominium Ass’n v. Stolt and Egner, Inc., 267 Ill. App. 3d 291 (1994). Sandy Creek is

inapposite. There, the alleged conversion rested on an estimated debt calculation rather than

concrete evidence and specific funds. Id. at 295. Here, the $107,500 in unpaid legal fees was not

an estimate; it was converted into stock pursuant to a written agreement, creating specific chattel

capable of conversion. See Restatement (Second) of Torts § 242 cmt. b (1965) (recognizing

conversion of stock certificates is conversion of a document for tortious conversion); The Film

and Tape Works, Inc. v. Junetwenty Films, Inc., 368 Ill. App. 3d 462, 475 (2006) (“Money may

be the subject of conversion, but it must be capable of being described as a specific chattel”

(internal quotation marks omitted)); Guice v. Sentinel Technologies, Inc., 294 Ill. App. 3d 97,

113 (1997) (reversing dismissal of claim for conversion of stock certificate).

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¶ 45 Sweports also challenges the trial court’s rejection of its res judicata defense. Res

judicata bars a subsequent action if there is (1) a final judgment on the merits by a court of

competent jurisdiction; (2) an identity of causes of actions; and (3) an identity of the parties or

their privies. Hudson v. City of Chicago, 228 Ill. 2d 462, 467 (2008).

¶ 46 Sweports argued below that OKM’s conversion claim is barred by a November 14, 2008

order that allegedly dismissed the individual shareholders’ conversion claim in Dore “with

prejudice,” though Sweports did not identify the grounds for the dismissal. Because this order is

not included in the record on appeal, we cannot determine whether it was a final judgment on the

merits. We therefore must construe the incomplete record against Sweports and presume that the

trial court’s ruling had an adequate basis and conforms with the law. See Foutch v. O’Bryant, 99

Ill. 2d 389, 391-92 (1984).

¶ 47 Sweports also relies on the trial court’s January 19, 2016 order in this case, which

declined to strike Sweports’ rescission-based affirmative defense to OKM’s third amended

complaint. Sweports contends this constituted a final adjudication on the merits because the court

allowed the defense to stand and OKM did not appeal. This is incorrect. The order was plainly

interlocutory and did not resolve the merits of the defense. See Zenith Vending Corp. v. Village

of Schaumburg, 180 Ill. App. 3d 354, 360 (1989) (final judgment on the merits decides

“contested rights in a conclusive and definitive manner”); Camp v. Chicago Transit Authority, 82

Ill. App. 3d 1107, 1110 (1980) (denial of motion to strike or dismiss is not a final appealable

order).

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¶ 48 B. Sweports’ Professional Negligence Counterclaim

¶ 49 1. Denial of Sweports’ Motion for Partial Summary Judgment

¶ 50 Sweports also challenges the denial of its motion for partial summary judgment on its

professional negligence counterclaim. Rather than presenting evidence of OKM’s alleged

negligence, Sweports asked the trial court to adopt the factual findings of the Delaware chancery

court in an entirely separate indemnification action. That proceeding addressed only whether the

individual shareholders were entitled to indemnification for litigating prior actions under

Sweports’ amended bylaws. It has no bearing on, and is analytically unrelated to, Sweports’

negligence counterclaim. The trial court had no obligation to import factual findings from an

unrelated case and properly declined to do so.

¶ 51 2. Summary Judgment for OKM on Sweports’ Counterclaim

¶ 52 The trial court granted summary judgment for OKM on Sweports’ counterclaim under res

judicata because the same core of operative facts had already been raised in Sweports’ 2018

complaint against OKM, which was dismissed for failure to state a claim and affirmed by this

court in Abrams, 2021 IL App (1st) 200139-U. As noted above, res judicata requires: (1) a final

judgment on the merits by a court of competent jurisdiction; (2) an identity of causes of action;

and (3) an identity of the parties or their privies. Hudson, 228 Ill. 2d at 467. The doctrine bars not

only issues actually decided but also those that could have been decided. Id.

¶ 53 Using a “pragmatic” approach, “separate claims will be considered the same cause of

action for purposes of res judicata if they arise from a single group of operative facts, regardless

of whether they assert different theories of relief.” River Park, Inc. v. City of Highland Park, 184

Ill. 2d 290, 311 (1998). Under this inquiry, the claim is viewed in “factual terms” and deemed

coterminous with the underlying transaction, “regardless of the number of substantive theories,

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or variant forms of relief flowing from those theories.” Id. at 309. Even so, res judicata should

not apply if doing so would result in fundamental unfairness. Nowak v. St. Rita High School, 197

Ill. 2d 381, 390 (2001).

¶ 54 Here, each element of res judicata is satisfied. In June 2018, while the appeal of its

dismissed negligence counterclaim was pending, Sweports filed a new complaint against OKM

alleging abuse of process, tortious interference of prospective economic advantage, and

conspiracy. Each claim arose from the same core of operative facts underlying Sweports’

negligence counterclaim. The trial court dismissed the 2018 complaint under section 2-615, and

we affirmed. A dismissal under section 2-615 is a final adjudication on the merits. See Abrams,

2021 IL App (1st) 200139-U, ¶ 73; Nowak, 197 Ill. 2d at 390 (dismissal for failure to state a

claim is an adjudication on the merits).

¶ 55 Although Sweports styled its theories differently, both the 2018 complaint and the

negligence counterclaim arise from the same factual nucleus: OKM’s representation of Sweports

in its dealings with Sandbox; OKM’s drafting of the promissory note, LGSPA, and amended

bylaws; and Sweports’ allegation that OKM and its partners conspired to exclude Clarke and

take control of the companies. Both pleadings traced the alleged wrongdoing through the

Informal Actions and subsequent litigation brought by OKM, O’Rourke, and Moody. Indeed,

Sweports’ counterclaim expressly identifies fees incurred in defending the Delaware

indemnification action and Dore, which is the same “vexatious litigation” alleged in the 2018

complaint, as an “integral component *** of its counterclaim.”

¶ 56 Sweports responds that because this case was filed before the 2018 action, its

counterclaim cannot be barred by res judicata. Not so. “It is the timing of the judgment, not the

timing of the filing, which controls the doctrine.” Greenfield v. Ray Stamm, Inc., 242 Ill. App. 3d

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320, 327 (1993). The question is whether a final judgment on the merits was entered by a court

of competent jurisdiction. Here, the dismissal of Sweports’ 2018 complaint, affirmed on June 21,

2021, constitutes such a judgment. See Abrams, 2021 IL App (1st) 200139-U, ¶ 73. That

judgment preceded the trial court’s decision in this case. The only reason Abrams became final

first is because Sweports filed a new complaint based on the same core of operative facts as its

counterclaim while its appeal in this case remained pending.

¶ 57 Nor is there any unfairness to Sweports. A final judgment has already been entered

involving the same parties and the same operative transaction. For nearly two decades, Sweports

has pursued multiple claims and counterclaims arising from this dispute without success.

Continuing this litigation would be unfair to OKM and a needless drain of resources. Having

unilaterally rescinded the stock it had issued to OKM less than six months earlier in lieu of

payment of fees, Sweports cannot now complain about the result. Accordingly, we affirm the

court’s entry of summary judgment in OKM’s favor on Sweports’ counterclaim under res

judicata. Because this disposition is dispositive, we need not address the striking of Sweports’

Rule 213(f)(3) expert disclosures.

¶ 58 C. OKM’s Request for Sanctions

¶ 59 Finally, we reject OKM’s request to impose Illinois Supreme Court Rule 375(b) (eff. Feb.

1, 1994) sanctions against Sweports for filing a frivolous appeal. Our disagreement with

Sweports’ position does not render this appeal frivolous.

¶ 60 III. CONCLUSION

¶ 61 For the foregoing reasons, we affirm the judgment of the circuit court of Cook County.

¶ 62 Affirmed.

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