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06/29/94 AIRTITE v. DPR LIMITED PARTNERSHIP

June 29, 1994

AIRTITE, A DIVISION OF AIRTEX CORP., AN ILLINOIS CORPORATION, PLAINTIFF-APPELLEE,
v.
DPR LIMITED PARTNERSHIP, DEFENDANT-APPELLANT, AND EMPIRE DEVELOPMENT COMPANY, A DELAWARE CORPORATION, MUTUAL BENEFIT LIFE INSURANCE COMPANY, PIPCO COMPANIES, LTD., AND UNKNOWN OWNERS, DEFENDANTS.



Appeal from Circuit Court of McLean County. No. 88CH69. Honorable Luther H. Dearborn, Judge Presiding.

Released for Publication August 24, 1994. As Corrected September 6, 1994.

Honorable James A. Knecht, J., Honorable Carl A. Lund, J., Concurring, Honorable Robert W. Cook, J., Specially Concurring.

The opinion of the court was delivered by: Knecht

JUSTICE KNECHT delivered the opinion of the court:

Airtite, a subcontractor, sought to foreclose a mechanic's lien against all defendants, including DPR Limited Partners (DPR). A hearing was held and the trial court found in favor of Airtite and entered a judgment for foreclosure and sale. DPR appeals, arguing the doctrine of res judicata should have been applied to bar the action in its entirety and, alternatively, the grant of foreclosure was erroneous. We affirm.

In June 1988, Airtite filed its complaint to foreclose mechanic's lien against DPR, Empire Development Company (Empire), Mutual Benefit Life Insurance Company (Mutual Benefit), and unknown owners. Sometime later, Airtite filed its first-amended complaint. Defendant Mutual Benefit then filed a motion to dismiss the first-amended complaint, which was granted. Airtite did not further amend its complaint to include Mutual Benefit. Both defendant unknown owners and defendant Empire were found in default. Defendant DPR filed a motion to dismiss based on res judicata, which was denied by the trial court. Defendant DPR then filed its answer to the first-amended complaint and pleaded affirmative defenses, including (1) res judicata; (2) the claim for lien did not meet statutory requirements; and (3) a previous settlement entitled it to release of the lien. Defendant Pipco Companies, Ltd. (Pipco), also filed an answer to the first-amended complaint. A hearing was held on the merits of the complaint and affirmative defenses. The trial court found in favor of Airtite and a judgment for foreclosure was entered on September 30, 1993. DPR then filed this appeal.

DPR was awarded a lease with the General Services Administration (GSA) which provided it was to erect a facility in Bloomington, Illinois, to be occupied by the Internal Revenue Service. DPR contracted with Empire for the erection of the facility. Airtite was awarded a subcontract in November 1985 to provide access flooring for the facility. The contract was based on a bid developed by Airtite pursuant to specifications given it by the architect for the project and provided the floor panels would include a wood particle-board core panel for a cost of $106,000.

In March 1986, Airtite delivered the floor panels to the jobsite. However, Airtite was told the floor panels were unacceptable due to GSA specifications. A new contract was entered between Empire and Airtite in May 1986, which provided for steel raised flooring with carpet tiles for a sum of $136,000. The installation of the steel floor was completed by Airtite; Airtite retrieved the unacceptable wood-core flooring from the jobsite and placed it in its inventory. Airtite sent an invoice to Empire for the completed work. In July 1986, when a portion of the invoice still had not been paid, Airtite prepared a subcontractor's 30-day notice of lien, claiming a lien in the amount of $64,510.68.

In August 1986, Airtite filed a four-count complaint in the United States District Court for the Northern District of Illinois, Eastern Division, case No. 86-C-5893 (Federal case) against DPR, Empire, and Floyd Sack, the primary owner of Empire. The four-count suit included a count for foreclosure of mechanic's lien, as well as counts based on the contract, on a promissory note, and in quantum meruit. An order of reference was filed on January 27, 1987, which provided the case would be submitted to arbitration and the district court would retain jurisdiction for the sole purpose of enforcing the decision of the arbitrator. An arbitration hearing was held in November 1987. Thereafter, the arbitrator signed an opinion and award which was later confirmed by the district court. However, Airtite still did not receive full payment, so it filed this complaint to foreclose mechanic's lien.

I. RES JUDICATA

DPR's first contention is res judicata applies to bar proceedings in this action. The trial court denied DPR's motion to dismiss filed under section 2-619(a)(4) of the Code of Civil Procedure. (Ill. Rev. Stat. 1991, ch. 110, par. 2-619(a)(4).) DPR argues the trial court erred in denying the motion to dismiss because the foreclosure of mechanic's lien was part of the Federal case previously arbitrated. Airtite maintains the trial court did not err in finding res judicata does not apply.

Under the doctrine of res judicata, a final judgment rendered on the merits by a court of competent jurisdiction is conclusive as to the rights of the parties and their privies and, as to them, constitutes an absolute bar to a subsequent action involving the same claim, demand, or cause of action. Torcasso v. Standard Outdoor Sales, Inc. (1993), 157 Ill. 2d 484, 490, 626 N.E.2d 225, 228, 193 Ill. Dec. 192; People v. Kidd (1947), 398 Ill. 405, 408, 75 N.E.2d 851, 853.

Airtite brought the Federal case against DPR, as well as other defendants. The pleadings in the Federal case contained four counts. Only counts III and IV made mention of defendant DPR. Count III was brought for foreclosure of mechanic's lien against DPR; count IV was brought in quantum meruit against DPR. The Federal courtentered an order of reference stating the case would be heard by an arbitrator and dismissed the case, retaining jurisdiction for the sole purpose of enforcing the decision of the arbitrator. None of the named defendants were present at the arbitration hearing and the proceeding commenced without their presence. After the hearing the arbitrator entered his opinion and award. The arbitrator found in favor of Airtite and against Empire and Sack, the other defendants in the case, on all substantive issues. The award contains no reference whatsoever to any foreclosure claim. The only mention of DPR in the award was "no award is made against Defendant DPR." The Federal court then allowed Airtite's motion to confirm the arbitrator's award and judgment. Airtite later filed this cause of action. Airtite's first-amended complaint contains almost identical allegations against DPR as count III of its Federal case.

Initially, we note the Federal court dismissed the Federal case on January 27, 1987. This order effectively dismissed the entire case, including the foreclosure claim. It was then up to the parties to present those issues they desired arbitrated to the arbitrator. The record does not contain a complete transcript of the arbitration proceeding. It is the appellant's burden to present a record demonstrating the error complained of; any incompleteness will be resolved against the appellant. ( Foutch v. O'Bryant (1984), 99 Ill. 2d 389, 459 N.E.2d 958, 76 Ill. Dec. 823.) Insofar as the record before us shows, the only issue presented was the contract claim. We cannot say other issues or evidence was submitted by Airtite on any other claims. Since the defendants, including DPR, failed to appear for the arbitration hearing, no evidence was presented on their behalf. This situation is analogous to the situation which arises when a case is dismissed from one court, i.e., a voluntary withdrawal of the case from Federal court, and then refiled in another court, i.e., a State court; but, upon refiling the plaintiff chooses not to include one of the original claims in its new complaint ...


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