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Hapag-Lloyd (America), Inc. v. Home Insurance Co.

March 31, 2000


Appeal from the Circuit Court of Cook County No. 99 CH 6275 The Honorable Albert Green, Judge Presiding.

The opinion of the court was delivered by: Justice Greiman

Plaintiff, Hapag-Lloyd (America), Inc. (Hapag-Lloyd), was a co-defendant with Three I Truck Line (Three I) in an underlying tort action brought by defendants Diane Vasilion, William Vasilion, Richard Wegner, and Ragina Wegner (Vasilion/Wegner parties). Hapag-Lloyd brought suit seeking a declaration that insurance policies issued by Home Insurance Company (Home), Connecticut Indemnity Company (Connecticut), and Federal Insurance Company (Federal) all provide coverage for the adverse judgment entered against Hapag-Lloyd and Three I in the underlying tort action, where they were found to be jointly and severably liable for $42 million. *fn1 Prior to this action, Home filed a lawsuit in the United States District Court for the Northern District of Illinois (the Federal Action) seeking a declaration that it was not required to provide insurance coverage to Three I for the underlying tort judgments because Three I failed to provide Home timely notice of its claim. Both Home and Three I moved to dismiss or stay Hapag-Lloyd's complaint, pursuant to section 2-619(a)(3) of the Code of Civil Procedure (735 ILCS 5/2-619(a)(3) (West 1998)), on the basis that Home had already filed the Federal Action.

On June 30, 1999, the trial court granted Home and Three I's motion to stay and ruled that Three I's interests in the Federal Action were "substantially similar" to Hapag-Lloyd's interest in the state action and, therefore, that the two actions involved the "same parties." The trial court also found that because the Federal Action involved some of the same facts as the state action, the two were for the "same cause."

Hapag-Lloyd appeals, claiming that the circuit court erred in granting the motion to stay because the state action does not involve the same parties or the same cause as the Federal Action. Furthermore, Hapag-Lloyd claims that the trial court abused its discretion in not properly addressing factors which, if given appropriate considerations, would have weighed against a stay. For the reasons that follow, we reverse the trial court's order granting Home and Three I's motion to stay and remand the matter to the circuit court.

Generally, we will apply a de novo standard of review to a motion to dismiss because the motion does not require the trial court to weigh facts or determine credibility. Miller v. Thomas, 275 Ill. App. 3d 779, 786 (1995), citing Federal Insurance Co. v. St. Paul Fire & Marine Insurance Co., 271 Ill. App. 3d 1117, 1121 (1995), and Cruz v. Illinois Masonic Medical Center, 271 Ill. App. 3d 383, 384 (1995). However, when such a motion to dismiss is inherently procedural, such as a section 2-619(a)(3) motion seeking dismissal because another action is pending between the same parties for the same cause, the motion urges the trial court to weigh several factors to determine if it is appropriate for an action to proceed. Miller, 275 Ill. App. 3d at 786; see also Katherine M.. v. Ryder, 254 Ill. App. 3d 479, 487 (1993); Kellerman v. MCI Telecommunications Corp., 112 Ill. 2d 428, 447 (1986). Due to this weighing of evidence, the courts in both Katherine M. and Kellerman considered their motions to dismiss under an abuse of discretion standard, the required alternative. Katherine M.., 254 Ill. App. 3d at 487; Kellerman, 112 Ill. 2d at 447 (both citing A.E. Staley Manufacturing Co. v. Swift & Co., 84 Ill. 2d 245, 252-53 (1980)). Here, the record reflects that the trial court did weigh the factors in determining whether extrinsic facts surrounding the motion could justify a stay. As a result, the standard we are to use in making our determination is whether the trial court abused its discretion in deciding to grant the stay. Kaden v. Pucinski, 263 Ill. App. 3d 611, 615 (1994), citing Zurich Insurance Co. v. Raymark Industries, Inc., 213 Ill. App. 3d 591, 594-95 (1991).

Plaintiff asserts that Home and Three I have not established the two threshold requirements necessary for the trial court to grant section 2-619(a)(3) relief and that the trial court ignored critical discretionary factors.

This statute provides:

" 2-619 Involuntary dismissal based upon certain defects or defenses. (a) Defendant may, within the time for pleading, file a motion for dismissal of the action or for other appropriate relief upon any of the following grounds. If the grounds do not appear on the face of the pleading attacked the motion shall be supported by affidavit:

(3) That there is another action pending between the same parties for the same cause." 735 ILCS 5/2-619 (West 1998).

It is, therefore, the burden of every section 2-619(a)(3) movant to demonstrate through clear and convincing evidence that the two actions involve both the same parties and the same cause. Yet even if a movant has met its burden and established both the same parties and the same cause requirements, "the decision to grant or deny defendant's [movant's] section 2-619(a)(3) motion is discretionary with the trial court." Kellerman, 112 Ill. 2d at 447, citing People ex rel. Department of Public Aid v. Santos, 92 Ill. 2d 120, 125 (1982).

In its discretion, the trial court should consider four factors:

(1) comity; (2) the prevention of multiplicity, vexation, and harassment; (3) the likelihood of obtaining complete relief in a foreign jurisdiction; and (4) the res judicata effect of a foreign judgment in the local forum. Kellerman, 112 Ill. 2d at 447-48, citing Santos, 92 Ill. 2d at 130.

To the extent that the Federal Action and the state action did not involve the same parties, we note first that this requirement does not mean that the parties to both litigations must be identical. Schnitzer v. O'Connor, 274 Ill. App. 3d 314, 318 (1995), citing Skipper Marine Electronics, Inc. v. Cybernet Marine Products, 200 Ill. App. 3d 692, 695-96 (1990). Rather, all that is necessary is that the litigants' interests are sufficiently similar, even though the litigants differ in name or number. Katherine M. v. Ryder, 254 Ill. App. 3d at 487; Schnitzer, 274 Ill. App. 3d at 318 (both citing Skipper Marine, 200 Ill. App. 3d at 695-96). We are mindful that such differences in name and number should not be totally overlooked, but observe that they are not determinative of different parties.

It is uncontested that the Federal Action literally does not involve the same parties as the state action because Hapag-Lloyd, Connecticut, Federal, and the Vasilion/Wegner parties were all unnamed in the Federal Action. However, by itself, this fact is not enough to dissuade Illinois courts from a finding of same parties. Katherine M., 254 Ill. App. 3d at 487. For example, in Kapoor v. Fujisawa Pharmaceutical Co., 298 Ill. App. 3d 780, 788-89 (1998), the plaintiff filed suit in a state court against two corporations and a number of individuals, while the two corporations had a prior suit pending against him in federal court. The court held that the parties were the same even though the individual defendants were not parties in the federal action. Furthermore, in West Bend Mutual Insurance Co. v. Salemi, 158 Ill. App. 3d 241, 251 (1987), a co-insured plaintiff brought suit in federal court against ...

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