Hernandez v. Bernstein

2011 IL App (1st) 102,646

956 N.E.2d 558

353 Ill.Dec. 696

Jesse E. HERNANDEZ and Yolanda Hernandez, Plaintiffs–Appellants,

v.Isadore BERNSTEIN, John L. Grazian, Richard S. Volpe, and Bernstein and Grazian, P.C., Defendants–Appellees.

No. 1–10–2646.

Appellate Court of Illinois, First District, Fifth Division.

Aug. 19, 2011.

Donald L. Johnson, Julie A. Boynton, Joseph Gentleman, Chicago, for Appellants.Hinshaw & Culbertson LLP, Chicago (Matthew R. Henderson, Timothy G. Shelton), for Appellees John L. Grazian, Richard S. Volpe.Donohue, Brown, Mathewson & Smyth, Chicago, for Appellees Isadore Bernstein, Bernstein and Grazian, P.C.

OPINION

Judge EPSTEIN delivered the judgment of the court, with opinion.

¶ 1 Plaintiffs, Jesse and Yolanda Hernandez, maintain the trial court erroneously dismissed their complaint pursuant to section 2–619 (a)(4) of the Illinois Code of Civil Procedure (735 ILCS 5/2–619(a)(4) (West 2008)), as barred by res judicata. We reverse and remand.

¶ 2 BACKGROUND

¶ 3 In 2005, plaintiffs filed a legal negligence action against Jesse Hernandez's former attorneys, defendants Isadore Bernstein, John L. Grazian, Richard S. Volpe, and Bernstein and Grazian, P.C., a professional corporation engaged in the practice of law. Jesse hired defendants in 1999 to represent him with respect to injuries he sustained at work. Plaintiffs claimed in their lawsuit:

“8. Upon undertaking the representation of plaintiffs the defendants owed a duty to exercise ordinary case and skill in the representation.

9. The defendants owed plaintiffs a duty to inform them of all potential claims and causes of action they possessed or which might arise from the injuries in question.

10. In March 1999 the defendants filed a worker[s'] compensation application for Jesse Hernandez.

11. However, the defendants: (a) failed to advise plaintiffs that they might have claims against parties other than Jesse Hernandez's employer to recover for the injuries Jesse Hernandez suffered at work; (b) failed to file an action against others who had contributed to the events and conditions which caused injuries to Jesse Hernandez; and (c) or to advise plaintiffs that they needed to retain other counsel to file an action against others who had contributed to the events and conditions which caused injuries to Jesse Hernandez.”

Defendants moved to dismiss plaintiffs' complaint, arguing, inter alia, that the underlying third-party claims expired prior to the commencement of defendants' representation in 1999. Defendants maintained, and the trial court agreed, that the underlying claims had a two-year statute of limitations that began to run in 1995 while Jesse was represented by Spector & Lenz for a social security disability claim. Plaintiffs responded defendants were nonetheless liable for legal negligence because they did not advise plaintiffs to sue Spector & Lenz for not filing the underlying claims or advising plaintiffs to seek other counsel for those claims. In August 2007, the trial court dismissed plaintiffs' complaint without prejudice (August Order). Plaintiffs filed an amended complaint adding their Spector & Lenz allegations and reasserting the time-barred underlying claims. The trial court denied defendants' motion to dismiss the amended complaint. It also declined to revisit the statute of limitations issue. In April 2009, plaintiffs voluntarily dismissed their lawsuit without prejudice pursuant to section 2–1009 (735 ILCS 5/2–1009 (West 2008)).

¶ 4 In September 2009, plaintiffs filed the instant legal negligence lawsuit. They refiled a single-count complaint against defendants, reasserting their Spector & Lenz allegations, as well as the time-barred underlying claims. Defendants moved to dismiss the complaint, arguing the statute of limitations and res judicata bar plaintiffs' refiled action. The trial court dismissed plaintiffs' complaint with prejudice based on res judicata. Plaintiffs appeal.

¶ 5 ANALYSIS

¶ 6 A motion to dismiss pursuant to section 2–619 presents a question of law reviewed de novo. DeLuna v. Burciaga, 223 Ill.2d 49, 59, 306 Ill.Dec. 136, 857 N.E.2d 229 (2006). Such a motion “admits the legal sufficiency of the complaint but asserts affirmative matter to avoid or defeat the claim.” Giannini v. Kumho Tire U.S.A., Inc., 385 Ill.App.3d 1013, 1015, 325 Ill.Dec. 816, 898 N.E.2d 1095 (2008). “One defense that a defendant may raise in a section 2–619 motion is that a prior judgment bars the plaintiff's cause of action, i.e., that the prior judgment has res judicata effect in the subsequent lawsuit.” Kasny v. Coonen & Roth, Ltd., 395 Ill.App.3d 870, 873, 338 Ill.Dec. 577, 924 N.E.2d 1103 (2009). “ 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, 226 Ill.Dec. 614, 685 N.E.2d 1357 (1997). It “applies to bar issues that were actually decided in the first action, as well as matters that could have been decided.” Lane v. Kalcheim, 394 Ill.App.3d 324, 329, 333 Ill.Dec. 572, 915 N.E.2d 93 (2009). “Under the doctrine of res judicata, a final judgment on the merits rendered by a court of competent jurisdiction bars any subsequent actions between the same parties or their privies on the same cause of action.” Id. “A ruling which is not a final order does not in any manner affect or determine any subsequent proceeding.” Arnold Schaffner, Inc. v. Goodman, 73 Ill.App.3d 729, 732, 29 Ill.Dec. 818, 392 N.E.2d 375 (1979). At issue here is whether the August Order bars the instant litigation. It does not.

¶ 7 “An order is final and thus appealable if it either terminates the litigation between the parties on the merits or disposes of the rights of the parties, either on the entire controversy or a separate branch thereof.” Hull v. City of Chicago, 165 Ill.App.3d 732, 733, 117 Ill.Dec. 369, 520 N.E.2d 720 (1987). It is undisputed the August Order did not terminate the initial litigation.

“An order disposes of a separate branch of a controversy when the bases for recovery of the counts which are dismissed are different from those which are left standing. [Citations.] This may occur when the grounds for recovery under the various counts arise from different statutes or common law doctrines or when different elements are required to recover under different theories.” Rice v. Burnley, 230 Ill.App.3d 987, 991, 172 Ill.Dec. 826, 596 N.E.2d 105 (1992).

Defendants maintain the August Order was final because it allegedly disposed of one of plaintiffs' two grounds for recovery:

“[P]laintiffs here alleged two separate negligence theories: that the Bernstein defendants were negligent in failing to bring a products liability or chemical exposure case and that the Bernstein defendants were negligent in failing to advise plaintiffs with respect to suing Spector & Lenz for failing to bring a products liability or chemical exposure case.”

We disagree. Plaintiffs have alleged only a single theory of recovery: legal negligence. To state such a claim, one must plead:

“(1) the existence of an attorney-client relationship which establishes a duty on the part of the attorney; (2) a negligent act or omission constituting a breach of that duty; (3) proximate cause establishing that ‘but for’ the attorney's negligence, the plaintiff would have prevailed in the underlying action; and (4) damages.” Ignarski v. Norbut, 271 Ill.App.3d 522, 525, 207 Ill.Dec. 829, 648 N.E.2d 285 (1995).

Plaintiffs maintain that during the course of their representation, defendants owed them “a duty to inform them of all potential claims and causes of action they possessed or which might arise from the injuries in question.” Plaintiffs originally claimed that duty was breached when

“defendants: (a) failed to advise plaintiffs that they might have claims against parties other than Jesse Hernandez's employer to recover for the injuries Jesse Hernandez suffered at work; (b) failed to file an action against others who had contributed to the events and conditions which caused injuries to Jesse Hernandez; and (c) or to advise plaintiffs that they needed to retain other counsel to file an action against others who had contributed to the events and conditions which caused injuries to Jesse Hernandez.”

The trial court disagreed, holding these alleged breaches could not sustain plaintiffs' negligence complaint because the underlying claims expired prior to the commencement of defendants' representation. The trial court declined to dismiss plaintiffs' negligence claim with prejudice, however, granting them leave to replead:

“THE COURT: * * * I'm going to say the statute of limitations began to run, at the latest, his last date of employment, which is in '95.

According to those numbers then, the defendant should prevail on his motion, right? Am I right?

[PLAINTIFFS' COUNSEL]: Yeah, he would prevail on that, except for the fact that if you're making a specific finding that it ran in 1995, then I would amend my complaint to add allegations of negligence for these defendants failing to tell my client to sue the lawyer who was involved representing [ sic ] him in the Social Security claim.

So I would like leave to file—amend the complaint because they should have filed a malpractice case against them under those circumstances because the statute wouldn't have run against them at that point.

So if that's what your ruling is, then I would ask leave to file the amended complaint to add those allegations of negligence.

THE COURT: I suppose—

[DEFENDANTS' COUNSEL]: Judge, if you're inclined to give him leave to amend, I guess our motion to dismiss is with prejudice, but it's your discretion if you're going to give him another shot.

THE COURT: Based on my finding here, I'll allow him to bring that.”

The trial court's order did not alter plaintiffs' theory of recovery-negligence. It simply allowed them to plead new facts in support of that...