The opinion of the court was delivered by: James Moran, Senior District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff Mary Anne Zurn brought this suit against defendants Aldo E. Botti (Botti), Botti, Marinaccio & Tameling, Ltd. (Botti firm), and Moran, Morehouse & Bruno (Moran firm) alleging unjust enrichment Defendants filed a six-count counter-complaint against plaintiff seeking attorney's fees and expenses. Plaintiff and defendants each filed cross-motions for summary judgment pursuant to Federal Rule of Civil Procedure 56. For the following reasons, plaintiff's motion is granted as to her claims against defendants and denied for now as to the counterclaims; defendants' motion is denied. Defendants also filed a motion to strike three of plaintiff's affirmative defenses to their counterclaims, which is also denied for now.
This litigation began over a decade ago when Mary Anne Zurn filed a lawsuit against Botti and the Botti firm in DuPage County alleging intentional infliction of emotional distress and battery. On May 9, 1994, the state court dismissed the counts and assessed attorney's fees, Page 2 costs and punitive sanctions against plaintiff for a total of $64,490.40. While this initial lawsuit was pending, the Botti firm and Moran firm filed suit against Zurn seeking to recover fees and costs arising from unrelated legal work. On July 11, 1994, the state court entered a default judgment against Zurn on all counts and ordered her to pay $84,332.36 plus prejudgment interest and costs. Plaintiff consolidated the cases and appealed both decisions.
On March 16, 1995, while the appeals were pending, Zurn voluntarily filed for bankruptcy in the Northern District of Illinois. She sought removal of the state court appeals to the bankruptcy court On August 17, 1995, on the motion of defendants, the bankruptcy court opted to abstain and the pending appeals were remanded to the Illinois Appellate Court On October 13, 1996, this decision was affirmed by the district court On November 15, 1995, the bankruptcy court affirmed Zurn's liquidation plan, requiring her to pay defendants' claims in full. In March 1996, she did so, paying $178,735.67 to the Botti firm and $7,442.01 to the Moran firm.
Plaintiff continued to pursue her consolidated appeals in the Illinois Appellate Court On March 12, 1998, that court issued an order affirming the dismissal of Zurn's tort claims against the Botti firm; remanding the battery claim against Botti for further proceedings; reversing the order of sanctions against Zurn with leave for the lower court to reinstate them; and reversing and remanding the default judgment against Zurn on the claim for fees and costs. Botti and the Botti firm filed a petition seeking to appeal this order to the Illinois Supreme Court, which petition was denied on November 9, 1998.
On November 18, 2000, plaintiff Zurn filed a petition to reopen the bankruptcy case, seeking reimbursement of the money she paid defendants. The petition to reopen the case was Page 3 granted but the motion for reimbursement was denied. This decision was affirmed by the district court and by the Seventh Circuit, which found that plaintiff needed to pursue state law claims for reimbursement rather than dragging the issue into the federal bankruptcy forum. In re Zurn. 290 F.3d 861, 864 (7th Cir. 2002).
In January 2002, over 14 months after the appellate court's order, plaintiff filed a petition to reinstate the tort case against Botti. This petition was denied by the DuPage County Court, which determined that the delay was unjustified and that plaintiff had therefore abandoned her claim. Because defendants have still failed to reimburse the money that she paid them pursuant to her liquidation plan, she brought this diversity action alleging a state law claim of unjust enrichment. In their counterclaim defendants assert a right to the fees and costs that were the subject of the second state court litigation.
Our function in ruling on a motion for summary judgment is merely to determine if there is a genuine Issue of material fact for trial. Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 249 (1986). Only if the evidence on file shows that no such issue exists and that the moving party is entitled to judgment as a matter of law will we grant the motion. Celotex Corp. v Catrett, 477 U.S. 317, 322-23 (1986); Bennett v. Roberts. 295 F.3d 687, 694 (7th Cir. 2002).
It is well established that when a party obtains a financial benefit resulting from an erroneous decree or judgment, that party has a duty, after a reversal, to make restitution. Buzz Barton & Assoc., Inc. v. Giannone, 108 Ill.2d 373, 381-82, 483 N.E.2d 1271, 1275 (Ill. 1985); Barnard v. Michael, 392 III. 130, 134, 63 N.E.2d 858, 861 (Ill. 1945). Defendants concede Page 4 that they still have the money obtained in the two state court judgments in their possession. When the appellate court reversed the judgments of the lower court, those decisions no longer had any legal force and the defendants no longer had a claim to the money. As a result, they had an affirmative duty to reimburse the plaintiff, which they have failed to fulfill.
Defendants argue that no such duty exists because the plaintiff never elected to reinstate the case as required by Illinois Supreme Court Rule 369. Rule 369 however plays no role in this dispute. Plaintiff is not asking us to rule on the tort claims or the attorney's fees claims because she has no desire to see these claims reinstated. Instead, she filed this entirely independent claim for unjust enrichment, which is clearly allowed by Illinois law, as we recognized in a Memorandum Opinion and Order of March 5, 2003, and the Court of Appeals recognized in Zurn v. Botti. 290 F.3d 861 (7th Cir., 2002); see Liberty Mutual Ins. Co. v. Zambole, 141 Ill. App.3d 803, 491 N.E.2d 132 (2nd Dist. 1986). The undisputed facts show that plaintiff is entitled to reimbursement by defendants.
Defendants' affirmative defenses provide them no relief from this conclusion as they are largely dependent on the argument that plaintiff had a duty to reinstate the state court action, which she did not First, plaintiff did not waive her claim by failing to reinstate the attorney's fees case in state court Second, there is no laches in this case as any Increase in interest is a result of defendants' own failure to fulfill their duty and reimburse the plaintiff. Third, defendants produce no evidence of any unclean hands by the plaintiff relating to their failure to reimburse. Fourth, there can be no res judicata pertaining to the unjust enrichment claims because plaintiff has never previously filed such a claim. Finally, the Rooker-Feldman doctrine is irrelevant because plaintiff's claim is simply a diversity action — she is not seeking Page 5 to review the judgment of a state court.
Unlike plaintiff's claim, which is separate from those previously litigated in state court, defendants' counterclaim appears to seek to litigate the state court issues. As the second state court case stands now, the Illinois Appellate Court issued a final order reversing the default judgment against Zurn. As such, defendants have no legal claim to the fees and costs that they seek to recover. Even if defendants are correct in contending that plaintiff should have borne the burden of refiling the case if she wanted it reinstated, nothing prevented them from doing the same. While knowing that plaintiff would have no incentive to reinstate a claim for ...