Appeal from the United States District Court for Northern District of Illinois, Eastern Division, No. 80 C 6454, James F. Holderman, Judge.
Cudahy and Coffey, Circuit Judges, and Pell, Senior Circuit Judge.
This appeal raises issues involving the preclusive effect of a state court consent judgment on a subsequent civil rights suit brought in federal court. The district court dismissed the suit on the basis of res judicata and the Illinois rule prohibiting the splitting of a cause of action. We affirm in part and reverse in part.
Rose Torres is a black woman who owns and operates a 24-hour telephone answering and secretarial service called Legal Secretarial Services. In 1970 she began leasing space for her business in a building at 100 North LaSalle Street in Chicago, Illinois. The defendant, Strobeck, Reiss, & Co. ("Strobeck"), manages this building for the lessor, 100 LaSalle Partnership Limited (the "LaSalle Partnership"). In 1978 Torres signed a five-year lease with Strobeck. But when defendant, Steve Rebarchak, began managing the building for Strobeck in 1978, he informed Torres that Strobeck would not honor the lease agreement. The parties disagree over whether this conflict arose because of Torres' race or because she breached the terms of her lease.
In 1979 Torres sued Strobeck and Rebarchak in the Chancery Division of the Circuit Court of Cook County in a case entitled Torres v. Strobeck, Reiss & Co., No. 79 CH 8446. Her amended complaint alleged that the defendants wrongfully breached their lease agreement with the plaintiff and engaged in a "continuing campaign of abuse and harassment" designed to unlawfully evict her from the building and interfere with her business. Among other things, Torres claimed that the defendants had turned off the electricity and heat in her suite, disrupted her switchboard service, attempted to change the locks on the doors to her suite, threatened and harassed both her and her employees and demanded rent before it was due. In addition, she asserted that the defendants had misused legal process by filing forcible entry and detainer actions against her. She contended that Rebarchak wanted to replace her with a "nice white girl." Count I sought an injunction against Rebarchak for interfering with Torres' lease agreement. Count II requested a declaratory judgment interpreting a clause in the lease dealing with escalation for increased operating expenses. Count III sought injunctive, compensatory and punitive relief against Rebarchak and Strobeck for breach of the lease agreement and interference with prospective business relations. Finally, Count IV requested an injunction and compensatory damages against Strobeck and Rebarchak for misappropriating Torres' business name for commercial purposes.
After an in camera conference, the parties agreed to compromise and settle the case. The final order of July 10, 1980 entered by the Chancery Court provided in pertinent part that:
This cause coming on to be heard for trial, the parties having appeared and indicated to the court after an in camera conference, that they have agreed to compromise and settle the issues herein raised, the court being fully advised;
It is hereby ordered, without either party in any way admitting to the truth of any of the allegations herein made, as follows: . . .
B. All prayers contained in Counts I through IV of the First Amended Complaint, are dismissed. All prayers for equitable relief are dismissed with prejudice. All prayers for damages are dismissed without prejudice. (emphasis added).
C. The complaint in forcible entry and detainer filed by defendants originally encaptioned case No. 80MI-733709 and all pleadings filed under said caption shall proceed to trial, and said cause is hereby transferred to the Chief Judge for reassignment to the Chief Judge of the Municipal Department -- First District, for further proceedings. . . .
F. Plaintiff shall pay to Defendant as use-and-occupancy the sum of $712. per month for every month commencing August, 1980 on or before the 1st day of each month, and an additional sum equal to utility charges billed each month within 5 days after receipt thereof; and in default whereof, Defendant ...