SUPREME COURT OF ILLINOIS
533 N.E.2d 901, 126 Ill. 2d 186, 127 Ill. Dec. 819 1988.IL.1840
Appeal from the Appellate Court for the Fourth District; heard in that court on appeal from the Circuit Court of Greene County, the Hon. John W. Russell, Judge, presiding.
CHIEF JUSTICE MORAN delivered the opinion of the court. JUSTICE MILLER took no part in the consideration or decision of this case. JUSTICE STAMOS, Dissenting.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE MORAN
Norman and Lula Mae Suttles (Suttles) brought a cross-action in the circuit court of Greene County seeking to impose a constructive trust upon 426 acres of farmland owned by Peter and Gerda Vogel (Vogels). The circuit court entered a default judgment against the Vogels as a sanction for failing to comply with discovery rules and denied their motion to vacate the default judgment. The Vogels appealed.
On appeal, the appellate court affirmed, finding: (1) the Suttles' amended counterclaim stated a cause of action for constructive trust; (2) the circuit court's entry of default judgment as a discovery sanction against the Vogels and its subsequent refusal to vacate such judgment were within the circuit court's discretion; and (3) the doctrines of res judicata and collateral estoppel were inapplicable in the present action. (160 Ill. App. 3d 464.) This court granted the Vogels' petition for leave to appeal (107 Ill. 2d R. 315).
The issues presented for review are: (1) whether the Suttles' amended counterclaim states a cause of action for constructive trust; (2) if so, whether the circuit court's entry of default judgment as a discovery sanction against the Vogels and its subsequent refusal to vacate such judgment constitute an abuse of discretion; and (3) whether the doctrines of res judicata or collateral estoppel bar the present action.
This case derives from the outcome of a previous forcible entry and detainer action brought by the Vogels against the Suttles (Ill. Rev. Stat. 1981, ch. 110, par. 9-102), which was decided by this court in Vogel v. Dawdy (1985), 107 Ill. 2d 68 (Vogel I). We summarize the facts in Vogel I as they pertain to this action. I. VOGEL I -- PRIOR FORCIBLE ENTRY AND DETAINER ACTION
On March 14, 1979, the Vogels entered into a contract to sell 811 acres of farmland to Jim and Carolyn Dawdy. The Vogels' contract with the Dawdys contained nonassignability, insurance maintenance and tax assumption clauses. The contract provided that a breach of any provision would be considered a default, warranting forfeiture. Two days later, on March 16, 1979, the Dawdys entered into a contract to sell 426 of the 811 acres to the Suttles. (The Dawdys also contracted to sell the remaining 385 acres to Norwood and Barbara Ashley.) The Vogels later learned of the Dawdys' division and sale of the 811 acres and demanded that the Dawdys cure the breaches.
The Dawdys failed to remedy the breaches, and on June 11, 1980, the Vogels filed suit against the Suttles, among others, in the circuit court of Greene County pursuant to the forcible entry and detainer statute (Ill. Rev. Stat. 1981, ch. 110, par. 9-102), seeking possession of the entire 811 acres of land.
After a bench trial, judgment was entered June 28, 1983, granting the Vogels possession of the 426 acres of farmland held by the Suttles. The Suttles appealed the circuit court's decision, which was affirmed by both the appellate court (Vogel v. Dawdy (1984), 123 Ill. App. 3d 356) and this court (Vogel v. Dawdy (1985), 107 Ill. 2d 68). II. SUTTLES v. VOGEL -- PRESENT CONSTRUCTIVE TRUST ACTION
On March 31, 1983, the State Bank of Jerseyville filed suit to foreclose a mortgage, executed by the Vogels, on the 811 acres of farmland. The Bank's suit named the Vogels and the Suttles, among others, as defendants. On May 5, 1983, after the forcible entry and detainer action in Vogel I was filed, but before final judgment was entered in that case, the Suttles answered and filed three counterclaims, including one against the Vogels, and a third-party complaint against their former attorneys, including Leo Carroll.
On July 22, 1983, the State Bank of Jerseyville moved to dismiss the foreclosure suit, because the Vogels cured the default. On September 14, 1983, the circuit court dismissed the foreclosure suit, leaving only the Suttles' counterclaims and third-party complaint.
On April 23, 1984, the Suttles filed an amended count II of the counterclaim against the Vogels. At that time, the Vogels had received $800,000 in payments from the Dawdys pursuant to their land sale contract. The Suttles' amended counterclaim alleged that the Dawdys received $600,000 in payments from the Suttles pursuant to their land sale contract. The counterclaim also alleged that of the $800,000 the Vogels received from the Dawdys, $600,000 is "attributable" to payments the Dawdys received from the Suttles. The counterclaim further alleged that the Vogels have been "unjustly enriched" because they recovered the 426 acres of farmland from the Suttles in Vogel I and retained the $600,000 in payments "attributable" to the Suttles. The Suttles finally allege that they are owed $600,000 and seek to impose a constructive trust upon the 426 acres of farmland which the Vogels recovered from them in Vogel I.
Count II of the Suttles' amended counterclaim, which is the subject of the present case, provides in part:
"3. That [the Vogels] . . . knew that [the Suttles] were purchasing the property from Jim G. and Carolyn S. Dawdy and were making the payments under said contract and were ...