Conceding a Battle But Winning the War?

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Yesterday, the Illinois Supreme Court posted its docket for the upcoming September term [pdf]. Today, we begin a series of previews of civil cases scheduled to be argued this term, starting with the first civil argument on the docket: Hernandez v. Bernstein.

In 2005, the plaintiffs sued the defendants, his former attorneys, alleging that they negligently failed to advise his to sue other potentially liable parties in connection with his workers’ compensation claim. The defendants moved to dismiss, pointing out that the underlying claims the plaintiffs were relying on had been time-barred before the defendants began representing the plaintiffs. The trial court agreed and dismissed without prejudice. But the plaintiffs amended, alleging that the defendants should have advised them to sue the firm that represented plaintiffs while the underlying claims were still viable. The trial court refused to dismiss, but in April 2009, the plaintiffs voluntarily dismissed the lawsuit without prejudice.

Five months later, the plaintiffs were back, filing a one-count complaint against plaintiffs, alleging both that defendants should have advised them to sue their former lawyers, and the underlying time-barred claims. The trial court dismissed the suit as res judicata, and the plaintiffs appealed.

Hernandez revolves around two principal issues. Were the allegations arising from the underlying injury, on the one hand, and the allegations arising from the failure to sue the former lawyers, on the other, one claim or two? And even though the plaintiffs dismissed the first suit without prejudice, did that make the trial court’s dismissal final for res judicata purposes?

The distinction between a “claim” and a “theory” can occasionally be a somewhat slippery one, particularly for young lawyers and law students. The issue seems to be attracting some interest on the Court at the moment; in another case likely to be argued later in the year, Wilson v. Edward Hospital, the Court will consider whether actual and apparent agency are separate claims for res judicata purposes.

Before the Appellate Court, the defendants insisted that the case involved two separate “claims” – negligence in failing to sue the additional parties potentially responsible for the underlying injuries, and negligence in failing to sue the original lawyers. If true, this would have rendered the earlier order disposing of the allegations regarding other tortfeasors “final” for purposes of res judicata. But the Appellate Court disagreed, holding that only one “claim” was brought – legal negligence – and the dismissal order had merely allowed the plaintiffs to plead additional facts.

So if the earlier dismissal wasn’t final when it was entered, did it become final when the plaintiffs voluntarily dismissed the first suit? This question involves a debate between two of the Court’s earlier cases, Hudson v. City of Chicago, 228 Ill.2d 462 (2008) and Rein v. David A. Noyes & Co., 172 Ill.2d 325, 334 (1996).  Both Hudson and Rein hold that a voluntary dismissal can, under certain circumstances, have res judicata effect, and both will be central once again later in the year in Wilson. In Hernandez, the Appellate Court distinguished both Hudson and Rein, reading the earlier cases as relating to the effect of a dismissal on otherwise final earlier orders.

Hernandez will be argued at the 9:00 session of the Court on Thursday, September 13, 2012, and will likely be decided within two to four months.

Join us back here tomorrow for a preview of the argument in Center Partners, Ltd. v. Growth Head GP, LLC.