Court of Appeals of Illinois, First District, Third Division
GEORGE VENTURELLA, Individually, and Derivatively on Behalf of ABBEY MEDCO, LLC, Plaintiff-Appellant,
DAVID A. DREYFUSS, M.D., Defendant-Appellee.
from the Circuit Court of Cook County. No. 2014 L 006000 The
Honorable Patrick J. Sherlock, Judge Presiding.
PRESIDING JUSTICE FITZGERALD SMITH delivered the judgment of
the court, with opinion. Justices Lavin and Pucinski
concurred in the judgment and opinion.
FITZGERALD SMITH PRESIDING JUSTICE
1 Appellant George Venturella, individually, and derivatively
on behalf of Abbey Medco, LLC, appeals from the dismissal
pursuant to section 2-619 of the Code of Civil Procedure
(Code) (735 ILCS 5/2-619 (West 2014)) of his lawsuit against
appellee David A. Dreyfuss, M.D. On appeal, Venturella
contends that the circuit court erred in dismissing his
derivative claim under the doctrine of res judicata
and the rule against claim-splitting because another court in
a previous case expressly reserved the claim. Specifically,
Venturella does not argue that the elements of res
judicata are not met, but instead claims that his case
falls into an exception to res judicata: that the
circuit court expressly reserved his right to maintain the
second action. For the following reasons, we affirm.
2 I. BACKGROUND
3 This action arises from a failed real estate development.
Plaintiff Venturella is a real estate developer. Defendant
Dreyfuss is a plastic surgeon. Together, they were
co-managers and fifty-percent interest-holders of Abbey
Medco, LLC, a limited liability company formed in May 2008
and registered in the State of Illinois specifically for the
purpose of developing and constructing a new office complex.
The parties intended to build an office complex on land that
Venturella owned. Venturella and Dreyfuss both agreed to
contribute funds to the project, and Dreyfuss agreed to have
his surgical practice sign a lease for space in a building
controlled by Venturella. The parties apparently made a
series of oral and written agreements regarding the planned
transactions for the project.
4 On January 25, 2008, Abbey Medco entered into a written
contract with Abbey Woods Office Park (Woods LLC), an entity
solely owned by Venturella. Under the contract, Woods LLC
would build office buildings on the land and sell the land
and buildings to Abbey Medco. Abbey Medco's down payment
was $1, 280, 000, or $640, 000 per partner. Dreyfuss paid
$300, 000 but not the remaining balance of $340,
5 Eventually, the deal fell apart and litigation ensued. One
of the many issues of controversy between the parties was
Dreyfuss's failure to make the rest of the $340, 000 down
6 In 2009, Dreyfuss, Abbey Medco, and Plastic Surgery
Specialists, Inc. filed a lawsuit in Chancery against
Venturella and Woods LLC concerning matters related to the
development and construction project (the prior suit, or the
2009 case). By that suit, Dreyfuss alleged Venturella had
"represented that he was a successful and sophisticated
commercial real estate developer" who was looking for a
partner to develop an office building in the Abbey Woods
development in Frankfort, Illinois. According to Dreyfuss, he
and Venturella orally agreed that (1) they would form Abbey
Medco, to be owned 50/50 by Dreyfuss and Venturella, but
managed by Venturella who would advise Dreyfuss of "all
business developments"; (2) Venturella "would cause
Abbey Medco to have all necessary and proper documentation
prepared to fully protect the interest of Dreyfuss; (3)
Venturella would contribute the real property and the
development rights, as well as secure the permits and
licenses as part of his capital contribution to Abbey Medco,
and would oversee and manage the development as well as the
day-to-day business of Abbey Medco; (4) Dreyfuss would move
the surgical practice into an adjacent building owned by
Venturella, and the surgical practice "would be charged
a monthly rental price which was inflated, but that was
intended to generate higher income figures for that separate
project of Venturella, so that when that project was examined
by Venturella's bank, the bank would promptly make all
necessary loans in connection with the proposed project for
Abbey Medco, " and these inflated payments would be
considered as part of Dreyfuss' capital contribution; (5)
the surgical practice would not build out to its desired
specifications, and could cancel its lease at any time
without penalty or obligation; (6) Dreyfuss would contribute
$300, 000 to fund the operations of Abbey Medco to complete
the development of the anticipated project, and Venturella
would meet with Dreyfuss and discuss the project and Abbey
Medco business in detail if the project required more
funding. If they agreed, Dreyfuss would contribute up to an
additional $300, 000 to Abbey Medco; and (7) the project was
to be completed by September 2009.
7 Dreyfuss further alleged that he moved the surgical
practice into Venturella's other building at great
expense, and he tendered $300, 000 to Abbey Medco, but that
Venturella never furnished him a receipt for the $300, 000 or
other necessary documents.
8 The first count alleged conversion as to Venturella and
Abbey Woods, the second count alleged fraud as to Venturella
and Abbey Woods, the third count alleged breach of fiduciary
duty as to Venturella, the fourth count alleged breach of
contract as to Venturella and Abbey Woods, and the fifth
count requested injunctive relief against Venturella,
terminating his ownership of and participation in Abbey Woods
and requiring him to return funds to Dreyfuss.
9 In August 2009, Abbey Woods filed a three-count
counterclaim against Abbey Medco,  Plastic Surgery Specialists
of Illinois, d/b/a Dreyfuss, and Gelman Plastic Surgery over
Dreyfuss' failure to pay the $340, 000. By that
counterclaim, Abbey Woods alleged (1) "breach of build
to suit purchase agreement, " where Abbey Medco and
Abbey Woods entered into a build to suit purchase agreement
in 2008 by which Abbey Medco was to deposit $1, 280, 000 as
earnest money, but breached the agreement when "Dreyfuss
tendered only three $100, 000 installment payments"; (2)
another "breach of build to suit purchase
agreement" count, whereby Abbey Woods alleged incurred
damages in the amount of $3, 313, 234 because of the
above-mentioned breach; and (3) "breach of lease, "
by which Abbey Woods alleged it had incurred damages in the
amount of $54, 076 in unpaid rent, taxes, attorney fees, and
court costs due to the breach of the lease agreement.
10 In the months leading up to trial, Venturella's
counsel withdrew. In July 2013, the court set a trial date
for October 30, 2013. A new law firm came on to represent
Venturella on October 16, 2013.
11 Two days before the scheduled trial date, on October 28,
2013, Venturella's counsel sought leave to amend the
counterclaim. Specifically, Abbey Woods and Venturella sought
to withdraw two of the three counts and to include a
derivative claim on behalf of Abbey Medco and against
Dreyfuss individually for failure to pay the $340, 000. It
stated that "Counts I and II of the Counterclaim allege
damages that were sustained but which may not be recoverable,
whereas a new claim for $340, 000 against Dreyfuss, while a
lower amount, is owed and should be recovered." Further,
"Count III, for breach of the lease agreement, contained
outdated information relating to the lease between Abbey
Woods and Plastic Surgery." Therefore, leave was sought
to amend the counterclaim to withdraw counts I and II and
update the facts contained in count III, as well as add a
derivative claim. The proposed derivative claim itself
acknowledged that Abbey Medco was owned by Dreyfuss and
Venturella as sole owners and co-managing members, each
owning a 50% share of the LLC. It described the alleged
agreements of the parties, the alleged subsequent breach of
the agreements by Dreyfuss, and the resulting damages. It
alleged that "Abbey Medco has suffered as a result of
Dreyfuss' refusal to pay his capital contribution"
and that, as Medco was "now winding up, "
"Venturella is entitled to a distribution of the unpaid
$340, 000, net of attorneys fees."
12 On the day of trial, after hearing detailed arguments on
the motion by both parties, the court denied the motion to
amend the counterclaim. The court ruled:
"THE COURT: Having reviewed the plaintiff's
counterclaim, which carries Venturella's motion for leave
to amend the counterclaim and having read the original
counterclaim, the motion for leave to amend is denied as well
at this time. What other motions do you have?
[MR. PATTERSON, ATTORNEY FOR DEFENDANT] A. Your Honor, could
I ask that this-does your Honor intend that to have res
judicata effect or is it just denied at this time as a
procedural matter so if I want to and it's timely I could
commence a new lawsuit on it.
THE COURT: It's denied at this time.
MR. PATTERSON: At this time, but not res ...