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03/05/98 CAROL WILSON v. M.G. GULO & ASSOCIATES

CAROL WILSON, PLAINTIFF-APPELLANT,
v.
M.G. GULO & ASSOCIATES, INC., A PROFESSIONAL CORPORATION, AND MICHAEL F. GULO, DEFENDANTS-APPELLEES.



IN THE APPELLATE COURT OF ILLINOIS THIRD DISTRICT A.D., 1997

Appeal from the Circuit Court for the 13th Judicial Circuit, LaSalle County, Illinois No. 95--L--23 Honorable James J. Wimbiscus Judge, Presiding

The opinion of the court was delivered by: Justice Breslin delivered the opinion of the court:

At issue in this appeal is whether the doctrine of res judicata precludes a legal malpractice action when the action was filed after the defendant attorneys litigated a petition for fees in the underlying case. The defendants, M.G. Gulo & Associates, Inc. and Michael Gulo (defendants), contend that the issues raised in both the petition for fees and the subsequent malpractice claim are identical, thus the trial court correctly applied the res judicata doctrine to bar the subsequent action. Based on the facts of this case, we disagree. We hold that the issues raised by plaintiff Carol Wilson in her legal malpractice action are not barred by the doctrine of res judicata. Accordingly, we reverse.

FACTS

Wilson engaged the defendants to represent her in a divorce proceeding against her husband. Following the entry of the Judgement for dissolution, Wilson refused to pay the defendants for their services. Consequently, the defendants filed a petition for fees. Wilson did not file an answer or raise any affirmative defenses in response to the petition.

During the fee petition hearing, Wilson only contested the number of hours billed by the defendants. She supported her position by introducing her own records of the number of hours the defendants worked on her case. However, during cross-examination of defendant Michael Gulo, Wilson tried to introduce an independent pension appraisal to demonstrate the defendants' failure to competently assess the value of her husband's pension. Upon Wilson's reference to the defendants' misevaluation, the court stated:

"ou are not objecting to the hourly rate. The question is then did he spend the hours. Now I don't see what relevance this has to do with whether he spent the hours ***, the expertise of the attorney doesn't go toward the number of hours he's entitled to bill for but rather goes to the hourly rate."

The court found that the pension records were irrelevant and sustained the defendants' objection. At the Conclusion of the hearing, the court ordered Wilson to pay the defendants, but reduced the amount of fees recoverable to reflect the number of hours the defendants actually worked on Wilson's case.

A year and a half later, Wilson instituted a legal malpractice proceeding against the defendants, claiming negligent representation in the underlying dissolution action. Relying on Bennett v. Gordon, 282 Ill. App. 3d 378, 668 N.E.2d 109 (1996), the trial court declared the suit barred under the doctrine of res judicata and granted the defendants' motion for summary judgment. Wilson appeals.

DISCUSSION

The sole issue on appeal is whether the legal malpractice action is barred by the Judgement on the petition for fees rendered in the underlying divorce proceeding.

Under the doctrine of res judicata, a final Judgement on the merits by a court of competent jurisdiction is conclusive as to the rights of the parties involved and their privies and constitutes an absolute bar to subsequent actions brought by the same parties or their privies concerning the same claims or demands. People ex rel. Burris v. Progressive Land Developers, Inc., 151 Ill. 2d 285, 602 N.E.2d 820 (1992). The essential elements of res judicata are: (1) a final judgment on the merits rendered by a court of competent jurisdiction; (2) an identity of causes of action; and (3) an identity of parties or their privies. Progressive Land Developers, Inc., 151 Ill. 2d 285, 602 N.E.2d 820.

Illinois courts have adopted two separate tests to determine whether a cause of action is the same for purposes of res judicata. Under the first test, res judicata bars a second suit if the evidence necessary to sustain that suit is the same evidence required to sustain the first suit. This is called the "same evidence" test. Rodgers v. St. Mary's Hospital of Decatur, 149 Ill. 2d 302, 597 N.E.2d 616 (1992). The second test, the "transactional" test, considers whether both suits arise out of the same transaction, incident, or factual situation. Pfeiffer v. William Wrigley Jr. Co., 139 Ill. App. 3d 320, 484 N.E.2d 1187 (1985). This test provides that if a single core of operative facts give rise to both actions, the second action is barred under the principles of res judicata. Rodgers, 149 Ill. 2d at 312, 597 N.E.2d at 621.

The doctrine of res judicata extends not only to those claims fully litigated in the first proceeding, but also to those issues that could have been raised or decided. LaSalle National Bank v. Board of School Trustees, 61 Ill. 2d 524, 337 N.E.2d 19 (1975). However, there are no compulsory counterclaims in Illinois. 735 ILCS 5/2--608(a)(West 1996); Bennett v. Gordon, 282 Ill. App. 3d 378, 668 N.E.2d 109 (1996); Torcasso v. Standard Outdoor Sales, Inc., 232 Ill. App. 3d 500, 503, 597 N.E.2d 772, 775 (1992). Section 2--608 of the Code of Civil Procedure provides that a defendant seeking Judgement against any party to a lawsuit may assert a counterclaim (emphasis ...


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