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04/13/95 ARLIE J. REIN v. DAVID A. NOYES AND

April 13, 1995

ARLIE J. REIN, BRENDA H. REIN, ROBERT H. MILLER, DONALD C. MILLER AND LORRAINE FEHRMANN, PLAINTIFFS-APPELLANTS AND CROSS-APPELLEES,
v.
DAVID A. NOYES AND COMPANY, JOHN F. RATH, AND RONALD E. AINSWORTH, DEFENDANTS-APPELLEES AND CROSS-APPELLANTS.



Appeal from the Circuit Court of Kane County. No. 93-CH-0092. Honorable R. Peter Grometer, Judge, Presiding.

The Honorable Justice Doyle delivered the opinion of the court: Bowman, J., concurs. Justice Rathje, dissenting

The opinion of the court was delivered by: Doyle

JUSTICE DOYLE delivered the opinion of the court:

Plaintiffs, Arlie J. Rein, Brenda H. Rein, Robert H. Miller, Donald C. Miller and Lorraine Fehrmann, appeal from a trial court order dismissing their multicount complaint against defendants, David A. Noyes & Company, John F. Rath and Ronald E. Ainsworth, pursuant to section 2-619 of the Code of Civil Procedure (the Code) (735 ILCS 5/2-619 (West 1992)). Defendants cross-appeal from the trial court's denial of their request for sanctions pursuant to Supreme Court Rule 137 (134 Ill. 2d R. 137).

This constitutes the second appeal stemming from the purchase of securities by the plaintiffs from defendants. (See Rein v. David A. Noyes & Co. (1992), 230 Ill. App. 3d 12, 172 Ill. Dec. 204, 595 N.E.2d 565 (Rein I).) The facts involved in this controversy were set forth in Rein I, and, as the parties are fully acquainted with them, we will set forth only those facts necessary to an understanding of the present disposition.

The complaint in Rein I consisted of counts seeking rescission of plaintiffs' securities purchases pursuant to section 13 of the Illinois Securities Law of 1953 (Act) (815 ILCS 5/12 (West 1992)) (hereinafter statutory counts). They also sought recovery under theories of common-law fraud, breach of fiduciary duty, and failure to register the securities and requested punitive damages (hereinafter common-law counts). The trial court granted defendants' motion to dismiss the statutory counts as barred by the applicable statute of limitations (815 ILCS 5/13 (West 1992)). The trial court refused to make a Rule 304(a) finding (134 Ill. 2d R. 304(a)). On August 23, 1991, plaintiffs voluntarily dismissed the common-law counts of the complaint and brought an appeal. On appeal, this court affirmed the decision of the trial court. Rein I, 230 Ill. App. 3d 12, 172 Ill. Dec. 204, 595 N.E.2d 565.

Over one year later, on March 17, 1993, plaintiffs filed a multicount complaint against defendants, again alleging the purchase and sale of securities and again raising the rescission and common-law counts. Defendants filed a motion to dismiss the new complaint pursuant to section 2-619 of the Code (735 ILCS 5/2-619 (West 1992)). In their motion, defendants alleged that the rescission counts were barred by the doctrine of res judicata, as the result of this court's decision in Rein I. Defendants further alleged that the common-law counts were barred by the five-year statute of limitations set forth in section 13-205 of the Code of Civil Procedure (735 ILCS 5/13-205 (West 1992)), as well as by the doctrine of res judicata. Defendants also sought sanctions pursuant to Supreme Court Rule 137 (134 Ill. 2d R. 137).

The trial court granted defendants' motion to dismiss both the statutory counts and the common-law counts based upon the doctrine of res judicata and the applicable statute of limitations. The trial court denied plaintiffs' motion to make the final judgment more specific. The trial court also denied defendants' motion for sanctions pursuant to Rule 137, stating as follows:

"I haven't imposed sanctions since I left divorce court some four years ago. There is some pause that I might have as to whether or not this case had a basis in fact that would avoid the -- or in lawthat would avoid the imposition of 137 sanctions as established by the record, and therefore, I will deny the request for sanctions."

This appeal and cross-appeal followed.

During the pendency of this appeal, defendants filed a motion for sanctions pursuant to Supreme Court Rule 375(b) (134 Ill. 2d R. 375(b)). We ordered that motion taken with the case.

Curiously, following oral argument in this case, plaintiffs filed a motion for leave to file response to unanswered questions on oral argument. Defendants filed objections to plaintiffs' motion. Plaintiffs, in turn, filed a motion for leave to respond to defendants' objections, to which defendants filed objections. Finally, plaintiffs filed a motion to strike defendants' defenses for want of jurisdiction.

We deny all motions filed by plaintiffs following oral arguments in this case.

The sole issue raised on the direct appeal is whether the trial court erred in dismissing plaintiffs' complaint.

STATUTORY COUNTS

Plaintiffs contend that the issue raised and determined in Rein I was that their claims were time barred by section 137.13 of the Act, whereas the issue they raise in their present lawsuit is whether the principle of equitable estoppel overrides the statute of limitations defense. Thus, plaintiffs maintain that the doctrine of res judicata would not bar the rescission counts in the present suit. We disagree.

The doctrine of res judicata provides that a final judgment on the merits rendered by a court of competent jurisdiction bars any future actions between the same parties or their privies on the same cause of action. ( Elliott v. LRSL Enterprises, Inc. (1992), 226 Ill. App. 3d 724, 728, 168 Ill. Dec. 674, 589 N.E.2d 1074.) The doctrine prohibits the relitigation not only of those issues which were actually raised in the first proceeding but also any issue that might have been raised. ( Elliot, 226 Ill. App. 3d at 728.) The doctrine serves to promote judicial economy by requiring parties to litigate, in one case, all rights arising out of the same set of operative facts and further prevents the unjust burden that ...


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