Appeal from the Circuit Court of Cook County; the Hon. Thomas
J. O'Brien, Judge, presiding.
PRESIDING JUSTICE BUCKLEY DELIVERED THE OPINION OF THE COURT:
This appeal arises out of an action brought in the circuit court of Cook County by plaintiff, Leonard Bronstein, against his former attorneys, Michael W. Kalcheim, Kalcheim & Kalcheim, Ltd., and Charles I. Calisoff. Plaintiff alleged that he incurred tax liabilities as a result of his reliance on allegedly negligent advice he received from defendants in a divorce proceeding. The trial court dismissed the action on grounds that it was barred by the dismissal with prejudice of a prior lawsuit brought by plaintiff against the defendants. Plaintiff appeals the dismissal. We affirm.
The record shows that plaintiff has attempted three times to sue these same defendants on the same cause of action. In each of the three lawsuits, plaintiff alleged that defendants represented him in a divorce action, and that they gave him incorrect advice regarding the tax consequences of a proposed settlement for the divorce. Specifically, in each suit plaintiff alleged that defendants, as his attorneys, advised him that if he would agree to pay the sum of $14,000 to his wife, Lenore Bronstein (Lenore) as part of their divorce settlement, the payment would constitute income to her and would thus be deductible from plaintiff's gross income in the year paid. The complaint further alleged that at the time this advice was given defendants knew that the $14,000 payment would actually be used by Lenore to satisfy certain attorney fees and unpaid marital debts and therefore would not be tax deductible to plaintiff.
The complaints further alleged that plaintiff, relying upon defendants' advice, made the $14,000 payment and deducted it on his income tax return for the year in question. When he subsequently was audited by the Internal Revenue Service, the deduction was disallowed on the basis that it was not the type of payment contemplated by the applicable section of the Internal Revenue Code. As a result, a deficiency in the amount of $7,252.05 was assessed against plaintiff. On June 19, 1981, the United States Tax Court upheld the determination by the Internal Revenue Service.
Plaintiff filed his first lawsuit against defendants, referred to now as Bronstein I, in January 1979, which was prior to the tax court's ruling. This suit was predicated on an implied indemnity theory. The one-count amended complaint alleged that defendants had, by their acts, impliedly indemnified him to the extent of the tax savings he would have had if his deduction was allowed. Additionally, plaintiff prayed in the amended complaint "that defendants be found to have been negligent and to pay the plaintiff all damages arising out of such negligence." Defendants filed a motion to strike and dismiss the amended complaint on grounds that plaintiff had not pleaded facts sufficient to establish breach of duty and damages.
In September 1979, the trial court granted defendants' motion and dismissed Bronstein I with prejudice. In November 1980, the dismissal was affirmed on appeal. (Bronstein v. Kalcheim & Kalcheim, Ltd. (1980), 90 Ill. App.3d 957, 414 N.E.2d 96.) This court stated that it need not reach the issue of defendants' alleged negligence because plaintiff's action was premature in that his tax liability had not yet been determined in the tax court. (90 Ill. App.3d 957, 959-60.) The court proceeded to hold, however, that the trial court properly dismissed the amended complaint because no theory of indemnity was applicable. 90 Ill. App.3d 957, 960.
Plaintiff filed his second suit, Bronstein II, *fn1 in December 1979, which was only two months after the dismissal of Bronstein I and was prior to this court's above mentioned decision. Defendants filed a motion to dismiss Bronstein II on res judicata grounds. In June 1980, the trial court granted the motion and dismissed Bronstein II with prejudice. Plaintiff never appealed the dismissal.
In June 1982, two years after the dismissal of Bronstein II, plaintiff filed his third lawsuit, Bronstein III. It is this third lawsuit which forms the basis for the present appeal. The allegations in the complaint filed in Bronstein III are based on the same operative facts as those set forth in the two previous suits. However, there is a difference in legal theories: in Bronstein I, plaintiff sued on a theory of implied indemnity; in Bronstein II, plaintiff sued for implied indemnity as well as for negligence and wilful misconduct, while only these two latter theories are set forth in Bronstein III. Additionally, when the first two cases were filed and decided, the tax court had not yet ruled against plaintiff, although the Internal Revenue Service had disallowed the deduction at issue.
Defendants filed motions to dismiss Bronstein III on inter alia res judicata grounds. The trial court granted the motion in a written opinion, holding that the dismissal with prejudice of Bronstein II constituted a bar to the bringing of any subsequent action involving the same parties and the same cause of action. The trial court dismissed Bronstein III with prejudice, and this appeal followed.
• 1 On appeal, plaintiff argues that the trial court erred in finding that Bronstein III was barred under the doctrine of res judicata. This doctrine provides that a dismissal on the merits rendered by a court of competent jurisdiction is conclusive of the parties and their privies, and as to them constitutes an absolute bar to a subsequent action involving the same claim or cause of action. (Towns v. Yellow Cab Co. (1978), 73 Ill.2d 113, 122, 382 N.E.2d 1217.) Hence, the dismissal of Bronstein II operates as a bar to the instant suit if: (1) both suits involve the same parties or privies and the same cause of action; and (2) the dismissal of Bronstein II was an adjudication on the merits. Here, plaintiff concedes that Bronstein I, II and III all involve the same parties or their privies and the same cause of action. He disagrees, however, that the dismissals of Bronstein I and II were adjudications on the merits.
• 2 Supreme Court Rule 273 specifies what constitutes an adjudication on the merits. It 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." (58 Ill.2d R. 273.)
Therefore, under this rule involuntary dismissals are deemed adjudications on the merits unless one of two sets of exceptions apply. The first exception requires that a statute or the order itself specify that the dismissal is not on the merits. The second exception identifies three bases for dismissal which shall not constitute adjudications on the merits — lack of jurisdiction, improper venue or failure to join an indispensable party. Here, the dismissals of Bronstein I and II were involuntary and did not fall within these two exceptions. Accordingly, the dismissals were adjudications on the merits under Supreme Court Rule 273. Moreover, the dismissals in each case were with prejudice. This court has made it clear that a dismissal with prejudice is an adjudication on the merits (Van Slambrouck v. Marshall Field & Co. (1981), 98 Ill. App.3d 485, 487, 424 N.E.2d 679), and is deemed to be conclusive of the rights of the parties as if the matter had proceeded to trial and had been resolved by a final judgment adverse to the plaintiff (Morris v. Union Oil Co. (1981), 96 Ill. App.3d 148, 156, 421 N.E.2d 278).
We note that plaintiff erroneously relies on Kutnick v. Grant (1976), 65 Ill.2d 177, 357 N.E.2d 480, and Gilbert v. Braniff International Corp. (7th Cir. 1978), 579 F.2d 411. Neither case involved a disposition on the merits. In Kutnick, a statute specified that the plaintiff's suit could be refiled. In Gilbert, the order of dismissal itself specified that plaintiff could amend his complaint. Therefore, both cases fall ...