POM 1250 N. Milwaukee, LLC v. F.C.S.C., Inc.

2014 IL App (1st) 132098, 12 N.E.3d 798, 382 Ill. Dec. 519, 2014 Ill. App. LEXIS 361

• Court: Appellate Court of Illinois
• Decided: May 28, 2014
• Docket: 1-13-2098
• Status: Unpublished

Opinion

2014 IL App (1st) 132098 No. 1-13-2098 Opinion filed May 28, 2014 Third Division ______________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

FIRST DISTRICT

______________________________________________________________________________

POM 1250 N. MILWAUKEE, LLC, ) Appeal from the Circuit Court ) of Cook County. Plaintiff-Appellee, ) ) v. ) No. 06 CH 23543 ) F.C.S.C., INC., ) ) The Honorable Defendant-Appellant. ) Thomas R. Allen, ) Judge, presiding.

______________________________________________________________________________

PRESIDING JUSTICE HYMAN delivered the judgment of the court, with opinion. Justices Neville and Mason concurred in the judgment, and opinion

OPINION

¶1 Plaintiff appealed an award of attorney fees entered against it, but decided to neither

seek a stay of enforcement nor post a bond. While the appeal proceeded, defendant engaged in

postjudgment remedies and collected the entire judgment. (This saved plaintiff from possibly

having to pay postjudgment interest.) Plaintiff succeeded in its appeal, and this court reversed

the judgment. Plaintiff, of course, wanted defendant to return its money so went back to the trial

court, which ordered defendant to pay up. Defendant, however, contends plaintiff put itself in a 1-13-2098

win-lose predicament, that is, plaintiff won the appeal, but the trial court exceeded its authority

in ordering defendant to give back the money.

¶2 Defendant raises two issues for us to consider: (i) the trial court did not have jurisdiction

over plaintiff's motion because the appellate court reversed the award of attorney fees without

remand; and (ii) the doctrine of res judicata bars plaintiff from seeking return of the money. We

reject both arguments. Remand was unnecessary because under Supreme Court Rule 369(b),

after a reviewing court affirms all or part of a judgment, jurisdiction revests in the trial court to

enforce the judgment and for other proceedings to go on as if no appeal had been taken. Ill. S.

Ct. R. 369(b) (eff. July 1, 1982). As to the doctrine of res judicata, enforcement of a judgment

merely continues or supplements the original case and does not constitute a separate or

subsequent action. The trial court appropriately and properly handled the case after the appeal,

and so we affirm.

¶3 BACKGROUND

¶4 To understand this appeal, we need to review the earlier appeal.

¶5 In June 2006, F.C.S.C., Inc. (FCSC) entered a $1.9 million contract to sell a building in

Chicago to POM 1250 N. Milwaukee, LLC (POM). In the contract, FCSC agreed to send POM

plans, engineering reports, and environmental surveys by July 7, 2006. In November 2006,

POM sued FCSC for failing to send the promised documents and complete the sale. In response

to FCSC's motion to dismiss, the trial court dismissed three counts with prejudice and struck

another with leave to replead. The trial court allowed an immediate appeal from the dismissal of

the first three counts under Illinois Supreme Court Rule 304(a) (eff. Feb. 26, 2010). POM filed a

notice of appeal but never filed briefs, and the appellate court dismissed the appeal. Later, after

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efforts by the trial court to help the parties settle the case failed, POM moved for voluntary

dismissal of the case, which the trial court granted on May 1, 2009.

¶6 On May 11, 2009, FCSC filed two postjudgment motions: one for sanctions under

Illinois Supreme Court Rule 137 (eff. Feb. 1, 1994) for filing false pleadings, and a second

motion for attorney fees and costs based on a contract provision for payment of fees to the

prevailing party. On October 22, 2010, the trial court denied the motion for Rule 137 sanctions

but awarded FCSC attorney fees in the amount of $54,145.28. POM appealed the award of

attorney fees, and FCSC cross-appealed the amount of the fee award and the denial of sanctions.

¶7 While the appeals proceeded, FCSC pursued a supplemental proceeding by serving a

garnishment summons on Guaranty Title Company, which held POM's earnest money. On

December 21, 2010, the trial court entered an order directing Guaranty to turn over to FCSC

$50,750.07, which it did. POM did not appeal the turnover order.

¶8 On April 18, 2012, the appellate court affirmed in part and reversed in part the trial

court's October 22, 2010 order. The court affirmed the trial court's finding that Rule 137

sanctions were not warranted against POM, but reversed the trial court's award of attorney fees

to FCSC on jurisdictional grounds because FCSC had never filed a pleading seeking an award of

attorney fees. POM 1250 N. Milwaukee, LLC v. F.C.S.C., Inc., 2012 IL App (1st) 103466-U.

The appellate court order did not remand the case for further proceedings.

¶9 On October 12, 2012, six months after the appellate court order reversing the attorney fee

award, POM filed a motion for the trial court "to vacate the $50,750.07 turnover order entered in

this supplemental proceeding on December 12, 2010, and to enter a turnover order against

Defendant [FCSC,] directing it to pay over to the plaintiff the sum of $50,750.07 plus 9%

postjudgment interest." POM titled the motion a "reverse turnover motion." FCSC moved to

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dismiss, arguing the trial court lacked jurisdiction to decide POM's reverse turnover motion

because the appellate court had not remanded the case.

¶ 10 On February 19, 2013, the trial court denied FCSC's motion to dismiss for lack of

jurisdiction, and, after a hearing, ordered FCSC to turnover to POM $50,750.07. The trial court

found the appellate court's order reversing the award of attorney fees to FCSC voided both the

money judgment from which POM appealed, and the turnover order based on the money

judgment. FCSC filed a motion to reconsider. The trial court denied the motion to reconsider

but vacated the order as to codefendant Republic Bank of Chicago and corrected other errors in

the order.

¶ 11 FCSC appeals from both the February 19 order and the order denying the motion to

reconsider, arguing that: (i) the trial court lacked jurisdiction to decide POM's postappeal motion

because after reversing the appellate court had not remanded for further proceedings, and (ii)

POM's posttrial motion was barred by res judicata.

¶ 12 ANALYSIS

¶ 13 Trial Court's Jurisdiction in the Absence of Remand

¶ 14 FCSC contends when the appellate court reversed the trial court's fees award, it did not

remand to the trial court and, hence, the trial court was without jurisdiction to hear POM's

reverse turnover motion. FCSC points to Illinois Supreme Court Rule 369 (eff. July 1, 1982),

and argues that after reversing a trial court order, the appellate court must remand the case to

revest jurisdiction in the trial court. POM responds that the trial court acquired jurisdiction: (i)

under the circuit court's inherent constitutional power, (ii) under common law restitution

principles, and (iii) because it filed a citation proceeding to enforce the appellate court judgment

under section 2-1402 of the Illinois Code of Civil Procedure (735 ILCS 5/2-1402 (West 2010)).

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The parties agree that where the circuit court decided issues of jurisdiction without an

evidentiary hearing, the decision is reviewed de novo. Commerce Trust Co. v. Air 1st Aviation

Cos., Inc., 366 Ill. App. 3d 135, 140 (2006).

¶ 15 Supreme Court Rule 369 provides for the filing of a mandate in the circuit court after a

decision has issued from a reviewing court. Relevant to this appeal are subsections (b) and (c) of

Rule 369, which provide:

"(b) Dismissal or Affirmance. When the reviewing court dismisses the appeal or

affirms the judgment and the mandate is filed in the circuit court, enforcement of the

judgment may be had and other proceedings may be conducted as if no appeal had

been taken.

(c) Remandment. When the reviewing court remands the case for a new trial or

hearing and the mandate is filed in the circuit court, the case shall be reinstated

therein upon 10 days' notice to the adverse party." Ill. S. Ct. R. 369(b), (c) (eff. July

1, 1982).

¶ 16 FCSC asserts that under the language of Rule 369 (b) and (c), jurisdiction revests with the

trial court after an appeal only if (i) the appeal is affirmed or dismissed or (ii) the case is

remanded. Because the appellate court reversed the trial court but did not remand, the trial court

has no jurisdiction to consider any other proceedings. To support its argument, FCSC relies on

Watkins v. Dunbar, 318 Ill. 174 (1925) and Dalan/Jupiter, Inc. v. Draper & Kramer, Inc., 372

Ill. App. 3d 362 (2007). In Watkins, the trial court entered a judgment in the plaintiff's favor,

granting an order of replevin against the sheriff, who had levied on property belonging to the

plaintiff. Id. at 175-76. The appellate court reversed and found that the sheriff was entitled to

possession of the property by virtue of his levy. Watkins, 318 Ill. at 176. After the appellate

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court's reversal, the trial court, on motion, ordered the property to be returned to the sheriff and

granted costs. Id. Our supreme court held that that trial court did not have jurisdiction to enter

the turnover order. Id. at 177. The court noted that if an appeal is dismissed or a judgment

affirmed, the case may be reinstated in the trial court and execution may issue or other

proceedings may be had on the original judgment and if a judgment is reversed and the case is

remanded for a new trial, the case is reinstated in the trial court on the filing of the remand order.

Id. But "[w]here the judgment is reversed and there is no order remanding the case, it cannot be

reinstated in the court which entered the judgment from which the appeal was taken." Id. The

court further stated, "[T]he power to make a valid order cannot survive the loss of jurisdiction.

There was no case pending in the circuit court *** when the judgment for a return of the

property in question and for costs was entered against appellant, and the order entered by the

circuit court is coram non judice." Id. at 178.

¶ 17 In Dalan/Jupiter, Inc. v. Draper & Kramer, Inc., 372 Ill. App. 3d 362 (2007), this court

reaffirmed the holding in Watkins. In Dalan/Jupiter, the plaintiff filed a breach of contract claim

against defendant. After a bench trial, the trial court awarded plaintiff $550,252.22, including

attorney fees. Id. at 364. The appellate court reversed, finding defendant did not breach the

contract. The case was not remanded. Id. After the mandate was filed, defendant filed a petition

in the trial court for attorney fees and costs. Id. The trial court denied the petition finding it had

no jurisdiction. Id. Defendant then filed a new complaint against plaintiff alleging breach of

contract, subrogation, and unjust enrichment, and seeking attorney fee and costs in the amount of

$318,020.89. Id. at 365. The trial court granted plaintiff's motion for summary judgment on res

judicata grounds and defendant appealed. Id. at 365-66. Defendant contended that because the

trial court said it did not have jurisdiction to consider the merits of its previous fee petition, the

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earlier order can have no res judicata effect on a separate lawsuit alleging the same claim for

fees. Id. at 367. The appellate court rejected that argument, observing that "Rule 369(b)

embodies the Illinois Supreme Court's holding in Watkins v. Dunbar, 318 Ill. 174, 149 N.E. 14

(1925). [Citation.] It does not apply to reversal without remand. Rule 369(c) provides for

reinstatement of a case in the circuit court following remand for a new trial or hearing. 134 Ill. 2d

R. 369(c)." Id. at 367-68. The panel saw no reason to depart from the holding in Watkins. Id. at

368.

¶ 18 FCSC asserts that similarly, because the appellate court did not dismiss the appeal or

affirm the award of attorney fees, the trial court lacked jurisdiction under Rule 369(b) and

jurisdiction was not warranted under Rule 369(c) without remand. Therefore, the trial court's

order granting POM's reverse turnover motion was void for lack of jurisdiction.

¶ 19 The rule set forth in Watkins and restated in Dalan/Jupiter was recently examined in

McNeil v. Ketchens, 2011 IL App (4th) 110253. In McNeil, plaintiff homeowners brought an

action seeking a declaratory judgment against their neighbor and to quiet title to a small sliver of

property on which part of the plaintiffs' driveway sat, after defendant blocked access to

driveway. Id. ¶ 5. After a bench trial, the circuit court entered judgment for the defendant, and

plaintiffs appealed. The appellate court affirmed the trial court's finding that plaintiffs had not

acquired title to that portion of the driveway by deed when they purchased the property but

reversed the trial court's finding that plaintiffs had not carried their burden of proving adverse

possession for 20 years. Id. ¶ 9. The circuit court then entered judgment that the defendant had

no ownership interest in the property and the plaintiffs homeowners acquired title by adverse

possession. Id. ¶ 12. Defendant appealed, relying on Watkins and Dalan/Jupiter to argue that

because the appellate court had not remanded the case, the trial court lacked jurisdiction to enter

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any further orders. The appellate court disagreed, noting that its earlier decision "was more than

a reversal: it was an affirmance in part and a reversal in part." Id. ¶ 21. The court further stated,

"Rule 369(b) (eff. July 1, 1982) presupposes that after an affirmance, the trial court has

jurisdiction over the subject matter and the parties—even absent a remand—because without

such jurisdiction the court would be precluded from entering any order at all, including an order

relating to the affirmance, and Rule 369(b) contemplates further proceedings relating to the

affirmance." Id.

¶ 20 We agree with the holding in McNeil. When a reviewing court affirms all or part of a

circuit court judgment, Rule 369(b) provides that "enforcement of the judgment may be had and

other proceedings may be conducted as if no appeal had been taken." (Emphasis added). Ill. S.

Ct. R. 369(b) (eff. July 1, 1982). In its order on POM's appeal of the trial court's award of

attorney fees to PCSC and PCSC's cross-appeal of the denial of Rule 137 sanctions, the appellate

court reversed in part and affirmed in part. POM 1250 N. Milwaukee. LLC v. F.C.S.C., Inc.,

2012 IL App (1st) 103466-U. By affirming in part, the appellate court necessarily revested the

trial court with jurisdiction over the case and permitted the court to conduct "other proceedings,"

namely POM's postappeal motion for a reverse turnover order. (POM might have avoided this

appeal had it also appealed the turnover order and consolidated that appeal with the appeal of the

attorney fee order, but we do not believe POM was obligated to pursue this course of action to

preserve its ability to recover funds from defendant on a judgment that is no longer in existence.)

Therefore, the trial court did not err in finding it had jurisdiction to grant the motion.

¶ 21 Res Judicata

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

court of competent jurisdiction bars any subsequent actions between the same parties or their

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privies on the same cause of action." (Internal quotation marks omitted.) Hudson v. City of

Chicago, 228 Ill. 2d 462, 467 (2008). “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). The bar extends to all matters that

were offered to sustain or defeat a claim in the first action, as well as to all matters that could

have been offered. Arvia v. Madigan, 209 Ill. 2d 520, 533 (2004).

¶ 23 FCSC contends that by failing to appeal the trial court's December 21, 2010, turnover

order, which was a final and appealable order under Supreme Court Rule 304(b)(4), res judicata

applied. Rule 304(b) provides that certain orders are appealable without a special finding,

including a "final judgment or order entered in a proceeding under section 2-1402 of the Code of

Civil Procedure." Ill. S. Ct. R. 304(b)(4) (eff. Feb. 26, 2010). Because POM did not timely

appeal the trial court's turnover order, FCSC contends res judicata barred POM from challenging

¶ 24 FCSC relies on Busey Bank v. Salyards, 304 Ill. App. 3d 214 (1999). In Busey, the

plaintiff, Busey Bank, obtained a money judgment against the Salyards. Id. at 216. To collect

the judgment, Busey Bank served a garnishment summons on Farmers Merchant National Bank,

which answered that the Salyards had $2,573 in savings and $18,046.99 in an individual

retirement account. Id. Busey Bank obtained a turnover order in its favor for all of the IRA

funds, but Farmers Merchant never paid those funds to Busey Bank. Id. The Salyards later filed

for bankruptcy protection and the bankruptcy court voided the turnover order because it included

exempt IRA assets. Id. Six months after the turnover order was entered, Farmers Merchant

relinquished the IRA funds to the Salyards. Id. On motion by Busey Bank, the trial court

entered an order of contempt and sanctions against Farmers Merchant for failing to pay the funds

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to Busey Bank as required by the turnover order. Id. In appealing the contempt order, Farmers

Merchant contended that because the turnover order was voided, the contempt order was also

invalid. Id. at 217-18. The appellate court found that it did not have jurisdiction to review the

merits of the turnover order because Farmers Merchant had not appealed that order. Id. at 218.

The court stated, "In postjudgment garnishment proceedings, orders that terminate all or part of

the garnishment proceedings are appealable pursuant to Supreme Court Rule 304(b)(4).

[Citation] *** When a party has failed to take a timely appeal from an order that is final for

purposes of appeal, the appellate court is without jurisdiction to consider the propriety of that

earlier final order in an appeal from a subsequent order, even in the same case. [Citation.]" Id.

According to FCSC, POM may not seek to vacate a turnover order it never challenged on appeal.

¶ 25 Busey Bank, though, is inapposite. As the court there stated, "Farmers Merchant attempts

to attack the turnover order in an appeal from an order in a subsequent, independent proceeding,

to wit, the contempt proceeding." Id. POM does not seek to collaterally attack the turnover

order entered in the garnishment proceeding but to effectuate this court's judgment reversing the

attorney fee award in the same proceeding.

¶ 26 There having been no "subsequent action," res judicata does not apply. Under section 2-

1402 of the Code of Civil Procedure (735 ILCS 5/2-1402 (West 2010)), "[a] judgment creditor

*** is entitled to prosecute supplementary proceedings for the purposes of examining the

judgment debtor or any other person to discover assets or income of the debtor not exempt from

the enforcement of the judgment, a deduction order or garnishment, and of compelling the

application of non-exempt assets or income discovered toward the payment of the amount due

under the judgment. A supplementary proceeding shall be commenced by the service of a

citation issued by the clerk. " 735 ILCS 5/2-1402(a) (West 2010). “ '[S]upplementary

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proceedings to collect, of whatever nature, must derive their support from the main judgment,

and if the main judgment fails the right to collect in such proceedings must also fail.' ” People ex

rel. Scott v. Police Hall of Fame, Inc., 69 Ill. App. 3d 501, 503 (1979) (quoting Alsen v. Stoner,

114 Ill. App. 2d 216, 224-25 (1969)).

¶ 27 FCSC's garnishment proceeding was supplementary to the underlying breach of contract

case, not a separate or subsequent action. When this court reversed the trial court's fee award

order, the garnishment order necessarily failed. Therefore, the doctrine of res judicata did not

apply to bar return of fees this court found to have been improperly awarded to FCSC.

¶ 28 Affirmed.

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